ARE 10-Q
Alexandria Real Estate Equities, Inc. (ARE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-12993
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 95-4502084 | |
|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer Identification Number) |
385 East Colorado Boulevard, Suite 299, Pasadena, California 91101
(Address of principal executive offices) (Zip code)
(626) 578-0777
(Registrant’s telephone number, including area code)
N/A(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer x | Accelerated filer o |
|---|---|
| Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of August 7, 2012, 62,775,477 shares of common stock, par value $.01 per share, were outstanding.
PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Alexandria Real Estate Equities, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Assets | |||||
| Investments in real estate, net | 6,208,354 | 6,008,440 | |||
| Cash and cash equivalents | 80,937 | 78,539 | |||
| Restricted cash | 41,897 | 23,332 | |||
| Tenant receivables | 6,143 | 7,480 | |||
| Deferred rent | 155,295 | 142,097 | |||
| Deferred leasing and financing costs, net | 151,355 | 135,550 | |||
| Investments | 104,454 | 95,777 | |||
| Other assets | 93,304 | 82,914 | |||
| Total assets | 6,841,739 | 6,574,129 | |||
| Liabilities, Noncontrolling Interests, and Equity | |||||
| Secured notes payable | 719,977 | 724,305 | |||
| Unsecured senior notes payable | 549,783 | 84,959 | |||
| Unsecured senior line of credit | 379,000 | 370,000 | |||
| Unsecured senior bank term loans | 1,350,000 | 1,600,000 | |||
| Accounts payable, accrued expenses, and tenant security deposits | 348,037 | 325,393 | |||
| Dividends payable | 38,357 | 36,579 | |||
| Total liabilities | 3,385,154 | 3,141,236 | |||
| Commitments and contingencies | |||||
| Redeemable noncontrolling interests | 15,817 | 16,034 | |||
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity: | |||||
| Series C Preferred Stock | – | 129,638 | |||
| Series D Convertible Preferred Stock | 250,000 | 250,000 | |||
| Series E Preferred Stock | 130,000 | – | |||
| Common stock | 622 | 616 | |||
| Additional paid-in capital | 3,053,269 | 3,028,558 | |||
| Accumulated other comprehensive loss | (37,370 | ) | (34,511 | ) | |
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 3,396,521 | 3,374,301 | |||
| Noncontrolling interests | 44,247 | 42,558 | |||
| Total equity | 3,440,768 | 3,416,859 | |||
| Total liabilities, noncontrolling interests, and equity | 6,841,739 | 6,574,129 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Alexandria Real Estate Equities, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Revenues: | |||||||||
| Rental | 110,683 | 109,248 | 218,267 | 215,300 | |||||
| Tenant recoveries | 34,041 | 33,147 | 68,563 | 66,008 | |||||
| Other income | 9,381 | 926 | 12,010 | 1,703 | |||||
| Total revenues | 154,105 | 143,321 | 298,840 | 283,011 | |||||
| Expenses: | |||||||||
| Rental operations | 44,506 | 40,595 | 87,888 | 81,630 | |||||
| General and administrative | 12,324 | 10,764 | 22,685 | 20,258 | |||||
| Interest | 17,922 | 16,567 | 34,149 | 34,377 | |||||
| Depreciation and amortization | 52,316 | 40,173 | 95,682 | 76,716 | |||||
| Total expenses | 127,068 | 108,099 | 240,404 | 212,981 | |||||
| Income from continuing operations before loss on early extinguishment of debt | 27,037 | 35,222 | 58,436 | 70,030 | |||||
| Loss on early extinguishment of debt | (1,602 | ) | (1,248 | ) | (2,225 | ) | (3,743 | ) | |
| Income from continuing operations | 25,435 | 33,974 | 56,211 | 66,287 | |||||
| Income from discontinued operations, net | 206 | 337 | 341 | 649 | |||||
| Gain on sale of land parcel | – | – | 1,864 | – | |||||
| Net income | 25,641 | 34,311 | 58,416 | 66,936 | |||||
| Net income attributable to noncontrolling interests | 851 | 938 | 1,562 | 1,867 | |||||
| Dividends on preferred stock | 6,903 | 7,089 | 14,386 | 14,178 | |||||
| Preferred stock redemption charge | – | – | 5,978 | – | |||||
| Net income attributable to unvested restricted stock awards | 271 | 298 | 506 | 540 | |||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 17,616 | 25,986 | 35,984 | 50,351 | |||||
| Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted: | |||||||||
| Continuing operations | 0.29 | 0.43 | 0.57 | 0.88 | |||||
| Discontinued operations, net | – | 0.01 | 0.01 | 0.01 | |||||
| Earnings per share – basic and diluted | 0.29 | 0.44 | 0.58 | 0.89 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Alexandria Real Estate Equities, Inc.
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Net income | 25,641 | 34,311 | 58,416 | 66,936 | |||||
| Other comprehensive income: | |||||||||
| Unrealized gains (losses) on marketable securities: | |||||||||
| Unrealized holding (losses) gains arising during the period | (107 | ) | (501 | ) | 567 | 12 | |||
| Reclassification adjustment for losses (gains) included in net income | 238 | – | (686 | ) | – | ||||
| Unrealized gains (losses) on marketable securities, net | 131 | (501 | ) | (119 | ) | 12 | |||
| Unrealized gains (losses) on interest rate swaps: | |||||||||
| Unrealized interest rate swap losses arising during the period | (3,091 | ) | (5,555 | ) | (7,164 | ) | (5,255 | ) | |
| Reclassification adjustment for amortization of interest expense included in net income | 5,895 | 5,302 | 11,670 | 10,741 | |||||
| Unrealized gains (losses) on interest rate swap agreements, net | 2,804 | (253 | ) | 4,506 | 5,486 | ||||
| Foreign currency translation (losses) gains | (17,192 | ) | 1,676 | (7,233 | ) | 6,559 | |||
| Total other comprehensive (loss) income | (14,257 | ) | 922 | (2,846 | ) | 12,057 | |||
| Comprehensive income | 11,384 | 35,233 | 55,570 | 78,993 | |||||
| Less: comprehensive income attributable to noncontrolling interests | (875 | ) | (939 | ) | (1,574 | ) | (1,861 | ) | |
| Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 10,509 | 34,294 | 53,996 | 77,132 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Alexandria Real Estate Equities, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests
(Dollars in thousands)
(Unaudited)
| Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Series C Preferred Stock | Series D Convertible Preferred Stock | Series E Preferred Stock | Number of<br>Common<br>Shares | Common Stock | Additional Paid- In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | Redeemable Noncontrolling Interests | ||||||||||||||
| Balance at December 31, 2011 | 129,638 | 250,000 | – | 61,560,472 | 616 | 3,028,558 | – | (34,511 | ) | 42,558 | 3,416,859 | 16,034 | ||||||||||||
| Net income | – | – | – | – | – | – | 56,854 | – | 1,151 | 58,005 | 411 | |||||||||||||
| Unrealized loss on marketable securities | – | – | – | – | – | – | – | (119 | ) | – | (119 | ) | – | |||||||||||
| Unrealized gain on interest rate swap agreements | – | – | – | – | – | – | – | 4,506 | – | 4,506 | – | |||||||||||||
| Foreign currency translation (loss) gain | – | – | – | – | – | – | – | (7,246 | ) | 11 | (7,235 | ) | 2 | |||||||||||
| Contributions by noncontrolling interests | – | – | – | – | – | – | – | – | 1,125 | 1,125 | – | |||||||||||||
| Distributions to noncontrolling interests | – | – | – | – | – | – | – | – | (598 | ) | (598 | ) | (630 | ) | ||||||||||
| Issuance of common stock, net of offering costs | – | – | – | 538,086 | 5 | 39,856 | – | – | – | 39,861 | – | |||||||||||||
| Issuance of Series E Preferred Stock, net of offering costs | – | – | 130,000 | – | – | (5,132 | ) | – | – | – | 124,868 | – | ||||||||||||
| Issuances pursuant to stock plan | – | – | – | 151,415 | 1 | 10,196 | – | – | – | 10,197 | – | |||||||||||||
| Redemption of Series C Preferred Stock | (129,638 | ) | – | – | – | – | 5,978 | (5,978 | ) | – | – | (129,638 | ) | – | ||||||||||
| Dividends declared on common stock | – | – | – | – | – | – | (62,348 | ) | – | – | (62,348 | ) | – | |||||||||||
| Dividends declared on preferred stock | – | – | – | – | – | – | (14,715 | ) | – | – | (14,715 | ) | – | |||||||||||
| Distributions in excess of earnings | – | – | – | – | – | (26,187 | ) | 26,187 | – | – | – | – | ||||||||||||
| Balance at June 30, 2012 | – | 250,000 | 130,000 | 62,249,973 | 622 | 3,053,269 | – | (37,370 | ) | 44,247 | 3,440,768 | 15,817 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Alexandria Real Estate Equities, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended | |||||
|---|---|---|---|---|---|
| June 30, | |||||
| 2012 | 2011 | ||||
| Operating Activities | |||||
| Net income | 58,416 | 66,936 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation and amortization | 95,760 | 77,070 | |||
| Loss on early extinguishment of debt | 2,225 | 3,743 | |||
| Gain on sale of land parcel | (1,864 | ) | – | ||
| Gain on sale of real estate | (2 | ) | – | ||
| Amortization of loan fees and costs | 4,857 | 4,605 | |||
| Amortization of debt premiums/discounts | 289 | 2,504 | |||
| Amortization of acquired above and below market leases | (1,578 | ) | (7,580 | ) | |
| Deferred rent | (13,991 | ) | (9,592 | ) | |
| Stock compensation expense | 6,567 | 5,105 | |||
| Equity in loss related to investments | 26 | – | |||
| Gain on sales of investments | (11,126 | ) | (2,579 | ) | |
| Loss on sales of investments | 1,089 | 1,768 | |||
| Changes in operating assets and liabilities: | |||||
| Restricted cash | (610 | ) | 110 | ||
| Tenant receivables | 1,366 | 1,005 | |||
| Deferred leasing costs | (13,791 | ) | (40,424 | ) | |
| Other assets | (9,331 | ) | 8,539 | ||
| Accounts payable, accrued expenses, and tenant security deposits | 24,318 | (982 | ) | ||
| Net cash provided by operating activities | 142,620 | 110,228 | |||
| Investing Activities | |||||
| Proceeds from sale of property | 1,905 | – | |||
| Additions to properties | (258,573 | ) | (161,762 | ) | |
| Purchase of properties | (42,171 | ) | (307,839 | ) | |
| Change in restricted cash related to construction projects | (11,532 | ) | (4 | ) | |
| Distributions from unconsolidated real estate entity | 22,250 | – | |||
| Contributions to unconsolidated real estate entity | (4,918 | ) | (2,038 | ) | |
| Additions to investments | (16,344 | ) | (12,721 | ) | |
| Proceeds from investments | 17,559 | 8,581 | |||
| Net cash used in investing activities | (291,824 | ) | (475,783 | ) | |
| Financing Activities | |||||
| Principal reductions of secured notes payable | (4,525 | ) | (16,297 | ) | |
| Proceeds from issuance of unsecured senior notes payable | 544,649 | – | |||
| Repurchase of unsecured senior convertible notes | (84,801 | ) | (98,590 | ) | |
| Principal borrowings from unsecured senior line of credit and unsecured senior bank term loan | 529,147 | 1,708,317 | |||
| Repayments of borrowings from unsecured senior line of credit | (520,147 | ) | (1,631,317 | ) | |
| Repayment of unsecured senior bank term loan | (250,000 | ) | – | ||
| Redemption of Series C Preferred Stock | (129,638 | ) | – | ||
| Proceeds from issuance of Series E Preferred Stock | 124,868 | – | |||
| Proceeds from issuance of common stock | 37,385 | 451,538 | |||
| Change in restricted cash related to financings | (7,714 | ) | 4,824 | ||
| Deferred financing costs paid | (15,739 | ) | (18,126 | ) | |
| Proceeds from exercise of stock options | 155 | 1,165 | |||
| Dividends paid on common stock | (60,791 | ) | (49,896 | ) | |
| Dividends paid on preferred stock | (14,178 | ) | (14,178 | ) | |
| Distributions to redeemable noncontrolling interests | (630 | ) | (622 | ) | |
| Contributions by noncontrolling interests | 1,125 | – | |||
| Distributions to noncontrolling interests | (598 | ) | (1,468 | ) | |
| Net cash provided by financing activities | 148,568 | 335,350 | |||
| Effect of exchange rate changes on cash and cash equivalents | 3,034 | (102 | ) | ||
| Net increase (decrease) in cash and cash equivalents | 2,398 | (30,307 | ) | ||
| Cash and cash equivalents at beginning of period | 78,539 | 91,232 | |||
| Cash and cash equivalents at end of period | 80,937 | 60,925 | |||
| Supplemental Disclosure of Cash Flow Information | |||||
| Cash paid during the period for interest, net of interest capitalized | 23,154 | 25,992 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Alexandria Real Estate Equities, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Background
As used in this quarterly report on Form 10-Q, references to the “Company,” “Alexandria,” “we,” “our,” and “us” refer to Alexandria Real Estate Equities, Inc. and its subsidiaries.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), a self-administered and self-managed real estate investment trust (“REIT”), is the largest and leading investment-grade REIT focused principally on owning, operating, redeveloping, developing, and acquiring high-quality, sustainable real estate for the broad and diverse life science industry. Founded in 1994, Alexandria was the first REIT to identify and pursue the laboratory niche and has since had the first-mover advantage in every core life science cluster location including Greater Boston, San Francisco Bay, San Diego, New York City, Seattle, Suburban Washington, D.C., and Research Triangle Park. Alexandria’s high-credit client tenants span the life science industry, including renowned academic and medical institutions, multinational pharmaceutical companies, public and private biotechnology entities, United States government research agencies, medical device companies, clean technology companies, venture capital firms, and life science product and service companies. As the recognized real estate partner of the life science industry, Alexandria has a superior track record in driving client tenant productivity and innovation through its best-in-class laboratory and office space, collaborative locations adjacent to leading academic and medical institutions, unparalleled life science real estate expertise and services, and longstanding and expansive network in the life science community, which we believe result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria Real Estate Equities, Inc., please visit www.are.com.
2. Basis of presentation
We have prepared the accompanying interim condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, the interim condensed consolidated financial statements presented herein reflect all adjustments that are necessary to fairly present the interim condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2011.
The accompanying condensed consolidated financial statements include the accounts of Alexandria Real Estate Equities, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated.
We hold interests, together with certain third parties, in companies that we consolidate in our financial statements. We consolidate the companies because we exercise significant control over major decisions of these entities, such as investing activity and changes in financing.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
2. Basis of presentation (continued)
Investments in real estate, net, and discontinued operations
We recognize assets acquired (including the intangible value of above or below market leases, acquired in-place leases, tenant relationships, and other intangible assets or liabilities), liabilities assumed, and any noncontrolling interest in an acquired entity at their fair value as of the acquisition date. The value of tangible assets acquired is based upon our estimation of value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated carrying costs during the hypothetical lease-up period and other costs that would have been incurred to execute similar leases, considering market conditions at the acquisition date of the acquired in-place lease. We assess the fair value of tangible and intangible assets based on numerous factors, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property. We also recognize the fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100% interest when the acquisition constitutes a change in control of the acquired entity. Acquisition-related costs and restructuring costs are expensed as incurred.
The values allocated to land improvements, tenant improvements, equipment, buildings, and building improvements are depreciated on a straight-line basis using an estimated life of 20 years for land improvements, the respective lease term for tenant improvements, the estimated useful life for equipment, and the shorter of the term of the respective ground lease and up to 40 years for buildings and building improvements. The values of acquired above and below market leases are amortized over the lives of the related leases and recorded as either an increase (for below market leases) or a decrease (for above market leases) to rental income. The values of acquired in-place leases are included in other assets in the accompanying condensed consolidated balance sheets, and amortized over the remaining terms of the related leases.
We are required to capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance, and other costs directly related and essential to the acquisition, development, redevelopment, or construction of a project. Capitalization of development, redevelopment, and construction costs is required while activities are ongoing to prepare an asset for its intended use. Fluctuations in our development, redevelopment, and construction activities could result in significant changes to total expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Should development, redevelopment, or construction activity cease, interest, property taxes, insurance, and certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred.
A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) the sale of the property is probable and is expected to be completed within one year; (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”; its operations, including any interest expense directly attributable to it, are classified as discontinued operations in our condensed consolidated statements of income; and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. Depreciation of assets ceases upon designation of a property as “held for sale.”
Long-lived assets to be held and used, including our rental properties, land held for future development, construction in progress, and intangibles, are individually evaluated for impairment when conditions exist that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Impairment indicators for long-lived assets to be held and used, including our rental properties, land held for future development, and construction in progress, are assessed by project and include, but are not limited to, significant fluctuations in estimated net operating income, occupancy changes, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, historical operating results, known trends, market/economic conditions that may affect the property, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recorded to reduce the carrying amount to its estimated fair value. If an impairment loss is not required to be recorded, the recognition of depreciation is adjusted prospectively, as necessary, to reduce the carrying amount of the real estate to its estimated disposition value over the remaining period that the real estate is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or redeveloped prior to the end of their useful lives.
2. Basis of presentation (continued)
We use a “held for sale” impairment model for our properties classified as “held for sale.” The “held for sale” impairment model is different from the held and used impairment model. Under the “held for sale” impairment model, an impairment loss is recognized if the carrying amount of the long-lived asset classified as “held for sale” exceeds its fair value less cost to sell.
Investments
We hold equity investments in certain publicly traded companies and privately held entities primarily involved in the life science industry. All of our investments in publicly traded companies are considered “available for sale” and are recorded at fair value. Fair value has been determined based upon the closing price as of each balance sheet date, with unrealized gains and losses shown as a separate component of comprehensive income. The classification of each investment is determined at the time each investment is made, and such determination is reevaluated at each balance sheet date. The cost of each investment sold is determined by the specific identification method, with net realized gains or losses included in other income. Investments in privately held entities are generally accounted for under the cost method when our interest in the entity is so minor that we have virtually no influence over the entity’s operating and financial policies. Additionally, we limit our ownership percentage in the voting stock of each individual entity to less than 10%. As of June 30, 2012, and December 31, 2011, our ownership percentage in the voting stock of each individual entity was less than 10%.
Individual investments are evaluated for impairment when changes in conditions may indicate an impairment exists. The factors that we consider in making these assessments include, but are not limited to, market prices, market conditions, available financing, prospects for favorable or unfavorable clinical trial results, new product initiatives, and new collaborative agreements. If there are no identified events or changes in circumstances that would have an adverse effect on our cost method investments, we do not estimate the investment’s fair value. For all of our investments, if a decline in the fair value of an investment below the carrying value is determined to be other than temporary, such investment is written down to its estimated fair value with a non-cash charge to current earnings. For a description of the methodology we use to determine the fair value of privately held entities, refer to Note 7, Fair Value of Financial Instruments.
Income taxes
We are organized and qualify as a REIT pursuant to the Internal Revenue Code of 1986, as amended (the “Code”). Under the Code, a REIT that distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and that meets certain other conditions is not subject to federal income taxes, but is subject to certain state and local taxes. We generally distribute 100% or more of our taxable income. Therefore, no provision for federal income taxes is required. We file tax returns, including returns for our subsidiaries, with federal, state, and local jurisdictions, including jurisdictions located in the United States, Canada, China, India, and other international locations. Our tax returns are subject to examination in various jurisdictions for the calendar years 2007 through 2011.
We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. The measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority having full knowledge of all the relevant information. As of June 30, 2012, there were no unrecognized tax benefits. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.
Interest expense and penalties, if any, would be recognized in the first period the interest or penalty would begin accruing, according to the provisions of the relevant tax law at the applicable statutory rate of interest. We did not incur any tax-related interest expense or penalties for the three and six months ended June 30, 2012 and 2011.
Interest income
Interest income was approximately $0.8 million, and less than $10,000, during the three months ended June 30, 2012 and 2011, respectively. Interest income was approximately $1.4 million and $0.1 million during the six months ended June 30, 2012 and 2011, respectively. Interest income is classified in other income in the accompanying condensed consolidated statements of income.
2. Basis of presentation (continued)
Recognition of rental income and tenant recoveries
Rental income from leases with scheduled rent increases, free rent, incentives, and other rent adjustments is recognized on a straight-line basis over the respective lease terms. We include amounts currently recognized as income, and expected to be received in later years, in deferred rent receivable in the accompanying condensed consolidated balance sheets. Amounts received currently, but recognized as income in future years, are included in accounts payable, accrued expenses, and tenant security deposits in the accompanying condensed consolidated balance sheets. We commence recognition of rental income at the date the property is ready for its intended use and the tenant takes possession of or controls the physical use of the property.
Tenant recoveries related to reimbursement of real estate taxes, insurance, utilities, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred.
We maintain an allowance for estimated losses that may result from the inability of our tenants to make payments required under the terms of the lease and for tenant recoveries due. If a tenant fails to make contractual payments beyond any allowance, we may recognize additional bad debt expense in future periods equal to the amount of unpaid rent and unrealized deferred rent. As of June 30, 2012, and December 31, 2011, we had no allowance for estimated losses.
As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Approximately 96% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed or based on a consumer price index or another index. Additionally, approximately 92% of our leases (on a rentable square footage basis) provided for the recapture of certain capital expenditures.
Impact of recently issued accounting standards
In May 2011, the FASB issued an Accounting Standards Update (“ASU”) to substantially converge the guidance in GAAP and International Financial Reporting Standards (“IFRS”) on fair value measurements and disclosures. The ASU changes several aspects of the fair value measurement guidance in FASB Accounting Standards Codification 820, Fair Value Measurement, including (1) the application of the concepts of highest and best use and valuation premise; (2) the introduction of an option to measure groups of offsetting assets and liabilities on a net basis; (3) the incorporation of certain premiums and discounts in fair value measurements; and (4) the measurement of the fair value of certain instruments classified in stockholders’ equity. In addition, the ASU includes several new fair value disclosure requirements, such as information about valuation techniques and significant unobservable inputs used in fair value measurements and a narrative description of the fair value measurements’ sensitivity to changes in significant unobservable inputs. The ASU is effective for public companies during the interim and annual periods, beginning after December 15, 2011. We adopted the ASU as of January 1, 2012. The adoption of the ASU did not impact our condensed consolidated financial statements or related disclosures.
In June 2011, the FASB issued an ASU to make presentation of items within other comprehensive income (“OCI”) more prominent. Entities are required to present items of net income, items of OCI, and total comprehensive income either in a single continuous statement or in two separate but consecutive statements. There no longer exists the option to present OCI in the statement of changes in stockholders’ equity. In December 2011, the FASB decided to defer the requirement that companies present reclassification adjustments for each component of accumulated other comprehensive income (“AOCI”) in both net income and OCI on the face of the financial statements. Reclassifications out of AOCI will be either presented on the face of the financial statement in which OCI is presented or disclosed in the notes to the financial statements. This deferral does not change the requirement to present items of net income, items of OCI, and total comprehensive income in either one continuous statement or two separate consecutive statements. The ASU is effective for public companies during the interim and annual periods, beginning after December 15, 2011. We adopted this guidance as of January 1, 2012, and have presented the condensed consolidated statements of comprehensive income separately from the condensed consolidated statements of income.
3. Investments in real estate
Our investments in real estate, net, consisted of the following as of June 30, 2012, and December 31, 2011 (in thousands):
| June 30, 2012 | December 31, 2011 | ||||
|---|---|---|---|---|---|
| Land (related to rental properties) | 520,593 | 510,630 | |||
| Buildings and building improvements | 4,600,499 | 4,417,093 | |||
| Other improvements | 184,209 | 185,036 | |||
| Rental properties | 5,305,301 | 5,112,759 | |||
| Less: accumulated depreciation | (822,369 | ) | (742,535 | ) | |
| Rental properties, net | 4,482,932 | 4,370,224 | |||
| Construction in progress (“CIP”)/current value-added projects: | |||||
| Active development in North America | 290,289 | 198,644 | |||
| Active redevelopment in North America | 275,086 | 281,555 | |||
| Generic infrastructure/building improvement projects in North America | 80,877 | 92,338 | |||
| Active development and redevelopment in Asia | 97,744 | 106,775 | |||
| 743,996 | 679,312 | ||||
| Subtotal | 5,226,928 | 5,049,536 | |||
| Land/future value-added projects: | |||||
| Land held for future development in North America | 324,586 | 305,981 | |||
| Land undergoing preconstruction activities (additional CIP) in North America | 569,805 | 574,884 | |||
| Land held for future development/land undergoing preconstruction activities (additional CIP) in Asia | 60,161 | 35,697 | |||
| 954,552 | 916,562 | ||||
| Investment in unconsolidated real estate entity | 26,874 | 42,342 | |||
| Investments in real estate, net | 6,208,354 | 6,008,440 |
All values are in US Dollars.
Land held for future development represents real estate we plan to develop in the future but on which, as of each period presented, no construction or preconstruction activities were ongoing. As a result, interest, property taxes, insurance, and other costs are expensed as incurred. Additionally, as of June 30, 2012, and December 31, 2011, we held land in North America supporting an aggregate of 2.4 million and 2.7 million rentable square feet of future ground-up development, respectively, undergoing preconstruction activities (consisting of Building Information Modeling [BIM or 3-D virtual modeling], design development and construction drawings, sustainability and energy optimization review, budgeting, planning for future site and infrastructure work, and other activities prior to commencement of vertical construction of aboveground shell and core improvements) that are also classified as construction in progress. Our objective with preconstruction is to reduce the time it takes to deliver projects to prospective tenants. Project costs are capitalized as a cost of the project during periods when activities necessary to prepare an asset for its intended use are in progress. We generally will not commence ground-up development of any parcels undergoing preconstruction activities without first securing pre-leasing for such space. If vertical aboveground construction is not initiated at completion of preconstruction activities, the land parcel will be classified as land held for future development. The two largest projects included in preconstruction consisted of our 1.6 million developable square foot site at Alexandria Center™ at Kendall Square in Cambridge, Massachusetts, and our 407,000 developable square foot site for the second tower at Alexandria Center™ for Life Science – New York City.
3. Investments in real estate (continued)
Real estate asset sales
The following table summarizes our real estate asset disposition activities for the six months ended June 30, 2012 (dollars in thousands):
| Date | Rentable | Gain | Disposition | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Real Estate Asset Sales | of Sale | Location | Square Feet | on Sale | Amount | ||||||
| 5110 Campus Drive | May 2012 | Pennsylvania | 21,000 | 2 | 1,800 | (1) | |||||
| Land parcel | March 2012 | Greater Boston | (2) | 1,864 | 31,360 |
All values are in US Dollars.
| (1) | Represents a sale in May 2012 to a tenant that occupied 28% of the property on the date of sale. |
|---|---|
| (2) | In March 2012, we sold one-half of our 55% interest in a land parcel supporting a 414,000 rentable square feet project for $31 million (including closing costs), or approximately $275 per rentable square foot. See discussion at Note 3, Investments in Real Estate. |
Sale of land parcel
In March 2012, we contributed our 55% ownership interest in a land parcel supporting a future 414,000 rentable square feet building in the Longwood Medical Area of the Greater Boston market to a newly formed joint venture (the “Restated JV”) with National Development and Charles River Realty Investors, and admitted as a 50% member, Clarion Partners, LLC, resulting in a reduction of our ownership interest from 55% to 27.5%. The transfer of one-half of our 55% ownership interest in this real estate venture to Clarion Partners, LLC, was accounted for as an in-substance partial sale of an interest in the underlying real estate. In connection with the sale of one-half of our 55% ownership interest in the land parcel, we received a special distribution of approximately $22.3 million, which included the recognition of a $1.9 million gain on sale of land and approximately $5.4 million from our share of loan refinancing proceeds. The land parcel we sold in March 2012 did not meet the criteria for discontinued operations since the parcel did not have any significant operations prior to disposition. Pursuant to the presentation and disclosure literature on gains/losses on sales or disposals by REITs required by the SEC, gains or losses on sales or disposals by a REIT that do not qualify as discontinued operations are classified below income from discontinued operations in the income statement. Accordingly, we classified the $1.9 million gain on sale of land below income from discontinued operations, net, in the condensed consolidated statements of income. Our 27.5% share of the land was sold at approximately $31 million (including closing costs), or approximately $275 per rentable square foot. Upon formation of the Restated JV, the existing $38.4 million secured loan was refinanced with a seven-year (including two one-year extension options) non-recourse $213 million secured construction loan with initial loan proceeds of $50 million. As of June 30, 2012, the outstanding balance on the construction loan was $51.1 million. We do not expect our share of capital contributions through the completion of the project to exceed the approximate $22.3 million in net proceeds received in this transaction. Construction of this $350 million project commenced in April 2012, with an initial occupancy date in the fourth quarter of 2014, and the project is 37% pre-leased to Dana-Farber Cancer Institute, Inc. In addition, Dana-Farber Cancer Institute, Inc. has an option to an additional two floors approximating 99,000 rentable square feet, or 24% of the total rentable square feet of the project. We expect to earn development and other fees of approximately $3.5 million through 2015, and recurring annual property management fees thereafter. For the three and six months ended June 30, 2012, we recognized approximately $0.2 million of development fees. These fees are classified in other income in the condensed consolidated statements of income.
We do not qualify as the primary beneficiary of the Restated JV since we do not have the power to direct the activities of the entity that most significantly impacts its economic performance. The decisions that most significantly impact the entity’s economic performance require both our consent and that of our partners, for all major operating, investing, and financing decisions, as well as decisions involving major expenditures. As of June 30, 2012, and December 31, 2011, our investment in the unconsolidated real estate entity of approximately $26.9 million and $42.3 million, respectively, was classified as an investment in real estate in the accompanying condensed consolidated balance sheets.
Our investment in the unconsolidated real estate entity is adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. Distributions, profits, and losses related to this entity are allocated in accordance with the operating agreement. When circumstances indicate that there may have been a reduction in value of an equity investment, we evaluate the equity investment and any advances made for impairment by estimating our ability to recover our investment from future expected cash flows. If we determine the loss in value is other than temporary, we recognize an impairment charge to reflect the equity investment and any advances made at fair value.
4. Investments
We hold equity investments in certain publicly traded companies and privately held entities primarily involved in the life science industry. Investments in “available for sale” securities with gross unrealized losses as of June 30, 2012, had been in a continuous unrealized loss position for less than 12 months. We have the ability and intent to hold these investments for a reasonable period of time sufficient for the recovery of our investment. We believe that these unrealized losses are temporary, and accordingly we have not recognized an other-than-temporary impairment related to “available for sale” securities as of June 30, 2012. As of June 30, 2012, and December 31, 2011, there were no unrealized losses in our investments in privately held entities.
The following table summarizes our investments in securities (in thousands):
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Available-for-sale securities, cost basis | 3,605 | 2,401 | |||
| Gross unrealized gains | 3,807 | 4,206 | |||
| Gross unrealized losses | (92 | ) | (372 | ) | |
| Available-for-sale securities, at fair value | 7,320 | 6,235 | |||
| Investments accounted for under cost method | 97,128 | 89,510 | |||
| Investments accounted for under equity method | 6 | 32 | |||
| Total investments | 104,454 | 95,777 |
All values are in US Dollars.
5. Secured and unsecured senior debt
The following table summarizes our secured and unsecured senior debt and their respective principal maturities, as of June 30, 2012 (in thousands):
| Fixed Rate/Hedged Variable Rate | Unhedged Variable Rate | Total Consolidated | Percentage of<br>Total | Weighted Average<br>Interest Rate at<br>End of Period (1) | Weighted Average<br>Remaining Term<br>(Years) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Secured notes payable (2) | 643,377 | 76,600 | 719,977 | 24.0 | % | 5.76 | % | 3.5 | |||||||
| Unsecured senior notes payable (2) | 549,783 | – | 549,783 | 18.3 | 4.61 | 9.7 | |||||||||
| Unsecured senior line of credit (3) | 100,000 | 279,000 | 379,000 | 12.7 | 1.51 | 4.8 | |||||||||
| 2016 Unsecured Senior Bank Term Loan (4) | 750,000 | – | 750,000 | 25.0 | 3.29 | 4.0 | |||||||||
| 2017 Unsecured Senior Bank Term Loan (5) | 600,000 | – | 600,000 | 20.0 | 3.84 | 4.6 | |||||||||
| Total debt | 2,643,160 | 355,600 | 2,998,760 | 100.0 | % | 4.01 | % | 5.1 | |||||||
| Percentage of total debt | 88% | 12% | 100% |
All values are in US Dollars.
| (1) | Represents the contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate hedge agreements. The weighted average interest rate excludes bank fees and amortization of loan fees. |
|---|---|
| (2) | Represents amounts net of unamortized premiums/discounts. |
| (3) | Total commitments available for borrowing aggregate $1.5 billion under our unsecured senior line of credit. As of June 30, 2012, we had approximately $1.1 billion available for borrowings under our unsecured senior line of credit. Weighted average remaining term assumes we exercise our sole option to extend the stated maturity date of April 30, 2016, by six months, twice, to April 30, 2017. |
| (4) | Assumes we exercise our sole option to extend the stated maturity date of June 30, 2015, by one year, to June 30, 2016. |
| (5) | Assumes we exercise our sole option to extend the stated maturity date of January 31, 2016, by one year, to January 31, 2017. |
5. Secured and unsecured senior debt (continued)
The following table summarizes fixed rate/hedged variable and unhedged variable rate debt and their respective principal maturities, as of June 30, 2012 (in thousands):
| Debt | Stated Rate | Effective<br>Interest<br>Rate (1) | Maturity<br>Date | 2012 | 2013 | 2014 | 2015 | 2016 | Thereafter | Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Secured notes payable | ||||||||||||||||||||||
| San Diego | 6.21 | % | 6.21 | % | 3/1/13 | 156 | 7,934 | – | – | – | – | 8,090 | ||||||||||
| Suburban Washington, D.C. | 6.36 | 6.36 | 9/1/13 | 268 | 26,093 | – | – | – | – | 26,361 | ||||||||||||
| San Francisco Bay | 6.14 | 6.14 | 11/16/13 | – | 7,527 | – | – | – | – | 7,527 | ||||||||||||
| Greater Boston | 5.26 | 5.59 | 4/1/14 | 1,846 | 3,839 | 208,683 | – | – | – | 214,368 | ||||||||||||
| Suburban Washington, D.C. | 2.24 | 2.24 | 4/20/14 | – | – | 76,000 | – | – | – | 76,000 | ||||||||||||
| San Diego | 6.05 | 4.88 | 7/1/14 | 55 | 142 | 6,458 | – | – | – | 6,655 | ||||||||||||
| San Diego | 5.39 | 4.00 | 11/1/14 | 70 | 177 | 7,495 | – | – | – | 7,742 | ||||||||||||
| Seattle | 6.00 | 6.00 | 11/18/14 | 120 | 240 | 240 | – | – | – | 600 | ||||||||||||
| Suburban Washington, D.C. | 5.64 | 4.50 | 6/1/15 | 51 | 130 | 138 | 5,788 | – | – | 6,107 | ||||||||||||
| Greater Boston, San Francisco Bay, and San Diego | 5.73 | 5.73 | 1/1/16 | 767 | 1,616 | 1,713 | 1,816 | 75,501 | – | 81,413 | ||||||||||||
| Greater Boston, San Diego, and Greater NYC | 5.82 | 5.82 | 4/1/16 | 412 | 878 | 931 | 988 | 29,389 | – | 32,598 | ||||||||||||
| San Francisco Bay | 6.35 | 6.35 | 8/1/16 | 1,075 | 2,332 | 2,487 | 2,652 | 126,715 | – | 135,261 | ||||||||||||
| San Diego, Suburban Washington, D.C., and Seattle | 7.75 | 7.75 | 4/1/20 | 635 | 1,345 | 1,453 | 1,570 | 1,696 | 110,301 | 117,000 | ||||||||||||
| San Francisco Bay | 6.50 | 6.50 | 6/1/37 | 8 | 16 | 17 | 17 | 19 | 801 | 878 | ||||||||||||
| Average/Total | 5.70 | 5.77 | 5,463 | 52,269 | 305,615 | 12,831 | 233,320 | 111,102 | 720,600 | |||||||||||||
| 1.5 Billion unsecured senior line of credit | LIBOR+1.20 | 1.51 | 4/30/17 (2) | – | – | – | – | – | 379,000 | 379,000 | ||||||||||||
| 2016 Unsecured Senior Bank Term Loan | LIBOR+1.65 | 3.29 | 6/30/16 (3) | – | – | – | – | 750,000 | – | 750,000 | ||||||||||||
| 2017 Unsecured Senior Bank Term Loan | LIBOR+1.50 | 3.84 | 1/31/17 (4) | – | – | – | – | – | 600,000 | 600,000 | ||||||||||||
| Unsecured senior notes payable (5) | 4.60 | 4.61 | 4/1/22 | – | – | 250 | – | – | 550,000 | 550,250 | ||||||||||||
| Average/Subtotal | 4.01 | 5,463 | 52,269 | 305,865 | 12,831 | 983,320 | 1,640,102 | 2,999,850 | ||||||||||||||
| Unamortized discounts | – | (223 | ) | (464 | ) | (78 | ) | (12 | ) | (44 | ) | (269 | ) | (1,090 | ) | |||||||
| Average/Total | 4.01 | % | 5,240 | 51,805 | 305,787 | 12,819 | 983,276 | 1,639,833 | 2,998,760 | |||||||||||||
| Balloon payments | – | 41,165 | 297,080 | 5,728 | 980,029 | 1,632,791 | 2,956,793 | |||||||||||||||
| Principal amortization | 5,240 | 10,640 | 8,707 | 7,091 | 3,247 | 7,042 | 41,967 | |||||||||||||||
| Total consolidated debt | 5,240 | 51,805 | 305,787 | 12,819 | 983,276 | 1,639,833 | 2,998,760 | |||||||||||||||
| Fixed rate/hedged variable rate debt | 5,120 | 51,565 | 229,547 | 12,819 | 983,276 | 1,360,833 | 2,643,160 | |||||||||||||||
| Unhedged variable rate debt | 120 | 240 | 76,240 | – | – | 279,000 | 355,600 | |||||||||||||||
| Total consolidated debt | 5,240 | 51,805 | 305,787 | 12,819 | 983,276 | 1,639,833 | 2,998,760 |
All values are in US Dollars.
| (1) | Represents the contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate hedge agreements. The weighted average interest rate excludes bank fees and amortization of loan fees. |
|---|---|
| (2) | Assumes we exercise our sole option to extend the stated maturity date of April 30, 2016, by six months, twice, to April 30, 2017. |
| (3) | Assumes we exercise our sole option to extend the stated maturity date of June 30, 2015, by one year, to June 30, 2016. |
| (4) | Assumes we exercise our sole option to extend the stated maturity date of January 31, 2016, by one year, to January 31, 2017. |
| (5) | Includes $550 million of our 4.60% unsecured senior notes payable due in April 2022, and $250,000 of our 8.00% unsecured senior convertible notes payable with a maturity date of April 15, 2014. |
In June 2012, we closed a secured construction loan with aggregate commitments of $55 million. The construction loan matures in June 2017, assuming we exercise our sole option to extend the stated maturity date of June 2015 by one year, twice. The construction loan will be used to fund the majority of the cost to complete the development of a 100% pre-leased 170,618 rentable square feet life science laboratory building at 259 East Grand Avenue in the San Francisco Bay market. The construction loan will bear interest at the London Interbank Offered Rate (“LIBOR”) or the base rate specified in the construction loan agreement, defined as the higher of either the prime rate being offered by our lender or the federal funds rate in effect on the day of borrowing (“Base Rate”), plus in either case a specified margin of 1.50% for LIBOR borrowings or 0.25% for Base Rate borrowings. As of June 30, 2012, $55 million of commitments were available.
5. Secured and unsecured senior debt (continued)
4.60% Unsecured senior notes payable
In February 2012, we completed a public $550 million offering of our unsecured senior notes payable at a stated interest rate of 4.60%. The unsecured senior notes payable were priced at 99.915% of the principal amount with a yield to maturity of 4.61% and are due April 1, 2022. The unsecured senior notes payable are unsecured obligations of the Company and are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P., a wholly owned subsidiary of the Company. The unsecured senior notes payable rank equally in right of payment with all other senior unsecured indebtedness. However, the unsecured senior notes payable are effectively subordinated to existing and future mortgages and other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future preferred equity and liabilities, whether secured or unsecured, of the Company’s subsidiaries, other than Alexandria Real Estate Equities, L.P. We used the net proceeds of this offering to prepay the outstanding principal balance of $250 million on our unsecured senior bank term loan (“2012 Unsecured Senior Bank Term Loan”) and to reduce the outstanding borrowings on our unsecured senior line of credit.
The requirements of the key financial covenants under our unsecured senior notes payable as of June 30, 2012, are as follows:
| Covenant Ratios (1) | Requirement | ||
|---|---|---|---|
| Total Debt to Total Assets | Less than or equal to 60% | ||
| Consolidated EBITDA to Interest Expense | Greater than or equal to 1.5x | ||
| Unencumbered Total Asset Value to Unsecured Debt | Greater than or equal to 150% | ||
| Secured Debt to Total Assets | Less than or equal to 40% | ||
| (1) | For a definition of the ratios used in the table above, refer to the Indenture dated February 29, 2012, which governs the unsecured senior notes payable, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 29, 2012. | ||
| --- | --- |
In addition, the terms of the Indenture, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s other subsidiaries to (1) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (2) incur certain secured or unsecured indebtedness.
5. Secured and unsecured senior debt (continued)
Unsecured senior line of credit and unsecured senior bank term loans
In April 2012, we amended our $1.5 billion unsecured senior line of credit, with Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. as joint lead arrangers, and certain lenders, to extend the maturity date of our unsecured senior line of credit, provide an accordion option for up to an additional $500 million, and reduce the interest rate for outstanding borrowings. The maturity date of the unsecured senior line of credit was extended to April 2017, assuming we exercise our sole right to extend the maturity date twice by an additional six months after each exercise. Borrowings under the unsecured senior line of credit bear interest at LIBOR or the base rate specified in the amended unsecured senior line of credit and unsecured senior bank term loan agreements, plus in either case a specified margin (the “Applicable Margin”). The Applicable Margin for LIBOR borrowings under the unsecured senior line of credit was set at 1.20%, down from 2.40% in effect immediately prior to the modification. In addition to the Applicable Margin, our unsecured senior line of credit is subject to an annual facility fee of 0.25%. In connection with the modification of our unsecured senior line of credit in April 2012, we recognized a loss on early extinguishment of debt of approximately $1.6 million related to the write-off of a portion of unamortized loan fees.
In April 2012, we amended our 2016 unsecured senior bank term loan (“2016 Unsecured Senior Bank Term Loan”) and 2017 unsecured senior bank term loan (“2017 Unsecured Senior Bank Term Loan”), conforming the financial covenants contained in our unsecured senior bank term loan agreements to those contained in our amended $1.5 billion unsecured senior line of credit.
In February 2012, we recognized a loss on early extinguishment of debt of approximately $0.6 million related to the write-off of unamortized loan fees as a result of the early repayment of $250 million of our 2012 Unsecured Senior Bank Term Loan. In June 2011, we recognized a loss on early extinguishment of debt of approximately $1.2 million related to the write-off of unamortized loan fees as a result of the early repayment of $500 million of our 2012 Unsecured Senior Bank Term Loan.
The requirements of the key financial covenants under our unsecured senior line of credit and unsecured senior bank term loans as of June 30, 2012, are as follows:
| Covenant Ratios (1) | Requirement | ||
|---|---|---|---|
| Leverage Ratio | Less than or equal to 60.0% | ||
| Fixed Charge Coverage Ratio | Greater than or equal to 1.50x | ||
| Secured Debt Ratio | Less than or equal to 40.0% | ||
| Unsecured Leverage Ratio | Less than or equal to 60.0% | ||
| Unsecured Interest Coverage Ratio | Greater than or equal to 1.75x | ||
| (1) | For a definition of the ratios used in the table above, refer to the amended unsecured senior line of credit and unsecured senior bank term loan agreements, dated as of April 30, 2012, which are filed as Exhibits 10.2, 10.3, and 10.4 to this Quarterly Report on Form 10-Q. | ||
| --- | --- |
In addition, the terms of the unsecured senior line of credit and unsecured senior bank term loan agreements, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s subsidiaries to (1) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (2) incur certain secured or unsecured indebtedness.
5. Secured and unsecured senior debt (continued)
Unsecured senior convertible notes
The following tables summarize the balances, significant terms, and components of interest cost recognized (excluding amortization of loan fees and before the impact of capitalized interest) on our unsecured senior convertible notes (dollars in thousands):
| 8.00% Unsecured Senior Convertible Notes | 3.70% Unsecured Senior Convertible Notes | |||||||
|---|---|---|---|---|---|---|---|---|
| June 30, | December 31, | June 30, | December 31, | |||||
| 2012 | 2011 | 2012 | 2011 | |||||
| Principal amount | 250 | 250 | – | 84,801 | ||||
| Unamortized discount | (12 | ) | (15 | ) | – | (77 | ) | |
| Net carrying amount of liability component | 238 | 235 | – | 84,724 | ||||
| Carrying amount of equity component | 27 | 27 | – | 8,080 | ||||
| Number of shares on which the aggregate consideration to be delivered on conversion is determined | 6,087 | 6,087 | – | N/A | (1) | |||
| Issuance date | April 2009 | N/A | ||||||
| Stated interest rate | 8.00% | N/A | ||||||
| Effective interest rate at June 30, 2012 | 11.00% | N/A | ||||||
| Conversion rate per 1,000 principal value of unsecured senior convertible notes, as adjusted | 24.3480 | N/A |
All values are in US Dollars.
| 8.00% Unsecured Senior Convertible Notes | 3.70% Unsecured Senior Convertible Notes | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Three Months Ended | ||||||||
| June 30, | June 30, | ||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| Contractual interest | 5 | 4 | 3 | 1,905 | |||||
| Amortization of discount on liability component | 2 | 2 | 1 | 1,115 | |||||
| Total interest cost | 7 | 6 | 4 | 3,020 |
All values are in US Dollars.
| Six Months Ended | Six Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | ||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| Contractual interest | 10 | 9 | 142 | 3,947 | |||||
| Amortization of discount on liability component | 3 | 3 | 78 | 2,532 | |||||
| Total interest cost | 13 | 12 | 220 | 6,479 |
All values are in US Dollars.
(1) Our 3.70% unsecured senior convertible notes (“3.70% Unsecured Senior Convertible Notes”) require that upon conversion, the entire principal amount is to be settled in cash, and any excess value above the principal amount, if applicable, is to be settled in shares of our common stock. Based on the December 31, 2011, closing price of our common stock of $68.97, and the conversion price of our 3.70% Unsecured Senior Convertible Notes of $117.36 as of December 31, 2011, the if-converted value of the notes did not exceed the principal amount as of December 31, 2011, and accordingly, no shares of our common stock would have been issued if the notes had been settled on December 31, 2011.
5. Secured and unsecured senior debt (continued)
3.70% unsecured senior convertible notes
During the six months ended June 30, 2011, we recognized an aggregate loss on early extinguishment of debt of approximately $2.5 million related to the repurchase, in privately negotiated transactions, of approximately $96.1 million of certain of our 3.70% Unsecured Senior Convertible Notes.
During January 2012, we repurchased approximately $83.8 million in principal amount of our 3.70% Unsecured Senior Convertible Notes at par, pursuant to options exercised by holders thereof under the indenture governing the notes. During April 2012, we repurchased the remaining outstanding $1.0 million in principal amount of the notes. We did not recognize a gain or loss as a result of either repurchase during the six months ended June 30, 2012.
The following table outlines our interest expense for the three and six months ended June 30, 2012 and 2011 (in thousands):
| Three Months Ended | Six Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | ||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| Gross interest | 33,747 | 31,617 | 65,240 | 62,652 | |||||
| Capitalized interest | (15,825 | ) | (15,046 | ) | (31,091 | ) | (28,239 | ) | |
| Interest expense (1) | 17,922 | 16,571 | 34,149 | 34,413 |
All values are in US Dollars.
(1) Includes interest expense related to and classified in income from discontinued operations in the accompanying condensed consolidated statements of income.
6. Interest rate swap agreements
During the three and six months ended June 30, 2012 and 2011, our interest rate swap agreements were used primarily to hedge the variable cash flows associated with certain of our existing LIBOR-based variable rate debt, including our unsecured senior line of credit and unsecured senior bank term loans. The ineffective portion of the change in fair value of our interest rate swap agreements is required to be recognized directly in earnings. During the three and six months ended June 30, 2012 and 2011, our interest rate swap agreements were 100% effective; because of this, no hedge ineffectiveness was recognized in earnings. The effective portion of changes in the fair value of our interest rate swap agreements that are designated and that qualify as cash flow hedges is classified in accumulated other comprehensive loss.
The following table reflects the effective portion of the unrealized loss recognized in other comprehensive loss for our interest rate swaps related to the change in fair value for the three and six months ended June 30, 2012 and 2011 (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Unrealized loss recognized in other comprehensive loss related to the effective portion of changes in the fair value of our interest rate swap agreements | 3,091 | 5,555 | 7,164 | 5,255 |
All values are in US Dollars.
Losses are subsequently reclassified into earnings in the period during which the hedged forecasted transactions affect earnings. During the next 12 months, we expect to reclassify approximately $17.7 million from accumulated other comprehensive loss to interest expense as an increase to interest expense. The following table indicates the classification in the condensed consolidated statements of income and the effective portion of the loss reclassified from accumulated other comprehensive income into earnings for our cash flow hedge contracts for the three and six months ended June 30, 2012 and 2011 (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Loss reclassified from accumulated other comprehensive income to earnings as an increase to interest expense (effective portion) | 5,895 | 5,302 | 11,670 | 10,741 |
All values are in US Dollars.
6. Interest rate swap agreements (continued)
As of June 30, 2012, and December 31, 2011, our interest rate swap agreements were classified in accounts payable, accrued expenses, and tenant security deposits based upon their respective fair values, aggregating a liability balance of approximately $28.5 million and $33.0 million, respectively, which included accrued interest and adjustments for non-performance risk, with the offsetting adjustment reflected as unrealized loss in accumulated other comprehensive loss in total equity. Under our interest rate swap agreements we have no collateral posting requirements. We had the following outstanding interest rate swap agreements that were designated as cash flow hedges of interest rate risk as of June 30, 2012 (dollars in thousands):
| Notional Amount in Effect as of | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Transaction Date | Effective Date | Termination Date | Interest Pay Rate (1) | Fair Value as of June 30, 2012 | June 30, 2012 | December 31, 2013 | December 31, 2014 | |||||||||
| December 2006 | December 29, 2006 | March 31, 2014 | 4.990 | % | (4,098 | ) | 50,000 | 50,000 | – | |||||||
| October 2007 | October 31, 2007 | September 30, 2012 | 4.546 | (543 | ) | 50,000 | – | – | ||||||||
| October 2007 | October 31, 2007 | September 30, 2013 | 4.642 | (2,738 | ) | 50,000 | – | – | ||||||||
| October 2007 | July 1, 2008 | March 31, 2013 | 4.622 | (817 | ) | 25,000 | – | – | ||||||||
| October 2007 | July 1, 2008 | March 31, 2013 | 4.625 | (818 | ) | 25,000 | – | – | ||||||||
| December 2006 | November 30, 2009 | March 31, 2014 | 5.015 | (6,180 | ) | 75,000 | 75,000 | – | ||||||||
| December 2006 | November 30, 2009 | March 31, 2014 | 5.023 | (6,191 | ) | 75,000 | 75,000 | – | ||||||||
| December 2006 | December 31, 2010 | October 31, 2012 | 5.015 | (1,639 | ) | 100,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (275 | ) | 250,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (275 | ) | 250,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (137 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (137 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.495 | (147 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.508 | (155 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.640 | (672 | ) | – | 250,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.640 | (672 | ) | – | 250,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.644 | (341 | ) | – | 125,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.644 | (341 | ) | – | 125,000 | – | ||||||||
| December 2011 | December 31, 2013 | December 31, 2014 | 0.977 | (1,150 | ) | – | – | 250,000 | ||||||||
| December 2011 | December 31, 2013 | December 31, 2014 | 0.976 | (1,148 | ) | – | – | 250,000 | ||||||||
| Total | (28,474 | ) | 1,450,000 | 950,000 | 500,000 |
All values are in US Dollars.
| (1) | In addition to the interest pay rate, borrowings outstanding under our unsecured senior line of credit and unsecured senior bank term loans include an applicable margin currently ranging from 1.20% to 1.65%. |
|---|
7. Fair value of financial instruments
We are required to disclose fair value information about all financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. We measure and disclose the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels as follows: (1) quoted prices in active markets for identical assets or liabilities, (2) “significant other observable inputs,” and (3) “significant unobservable inputs.” “Significant other observable inputs” can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. “Significant unobservable inputs” are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the three or six months ended June 30, 2012.
The following tables set forth the assets and liabilities that we measure at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2012, and December 31, 2011 (in thousands):
| June 30, 2012 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Description | Total | Quoted Prices in Active Markets for Identical Assets | “Significant Other Observable Inputs” | “Significant Unobservable Inputs” | |||||
| Assets: | |||||||||
| Marketable securities | 7,320 | 7,320 | – | – | |||||
| Liabilities: | |||||||||
| Interest rate swap agreements | 28,474 | – | 28,474 | – |
All values are in US Dollars.
| December 31, 2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Description | Total | Quoted Prices in Active Markets for Identical Assets | “Significant Other Observable Inputs” | “Significant Unobservable Inputs” | |||||
| Assets: | |||||||||
| Marketable securities | 6,235 | 6,235 | – | – | |||||
| Liabilities: | |||||||||
| Interest rate swap agreements | 32,980 | – | 32,980 | – |
All values are in US Dollars.
The carrying amounts of cash and cash equivalents, restricted cash, tenant receivables, other assets, accounts payable, accrued expenses, and tenant security deposits approximate fair value. Our marketable securities and our interest rate swap agreements, respectively, have been recorded at fair value. The fair values of our secured notes payable, unsecured senior notes payable, unsecured senior line of credit, unsecured senior bank term loans, and unsecured senior convertible notes were estimated using widely accepted valuation techniques, including discounted cash flow analyses of “significant other observable inputs” such as available market information on discount and borrowing rates with similar terms and maturities. Because the valuations of our financial instruments are based on these types of estimates, the actual fair value of our financial instruments may differ materially if our estimates do not prove to be accurate. Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.
7. Fair value of financial instruments (continued)
As of June 30, 2012, and December 31, 2011, the book and fair values of our marketable securities, interest rate swap agreements, secured notes payable, unsecured senior notes payable, unsecured senior line of credit, and unsecured senior bank term loans were as follows (in thousands):
| June 30, 2012 | December 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Book Value | Fair Value | Book Value | Fair Value | ||||||
| Marketable securities | 7,320 | 7,320 | 6,235 | 6,235 | |||||
| Interest rate swap agreements | (28,474 | ) | (28,474 | ) | (32,980 | ) | (32,980 | ) | |
| Secured notes payable | (719,977 | ) | (819,831 | ) | (724,305 | ) | (810,128 | ) | |
| Unsecured senior notes payable | (549,783 | ) | (567,453 | ) | (84,959 | ) | (85,221 | ) | |
| Unsecured senior line of credit | (379,000 | ) | (393,149 | ) | (370,000 | ) | (378,783 | ) | |
| Unsecured senior bank term loans | (1,350,000 | ) | (1,359,990 | ) | (1,600,000 | ) | (1,603,917 | ) |
All values are in US Dollars.
8. Earnings per share
We use income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders as the “control number” in determining whether potential common shares, including potential common shares issuable upon conversion of our 8.00% unsecured senior convertible notes (“8.00% Unsecured Senior Convertible Notes”), are dilutive or antidilutive to earnings per share. Pursuant to the presentation and disclosure literature on gains or losses on sales or disposals by REITs and earnings per share required by the SEC and the FASB, gains or losses on sales or disposals by a REIT that do not qualify as discontinued operations are classified below income from discontinued operations in the condensed consolidated statements of income and included in the numerator for the computation of earnings per share for income from continuing operations.
The sale of a land parcel related to our investment in an unconsolidated real estate entity during the six months ended June 30, 2012, did not meet the criteria for discontinued operations because the land parcel did not have significant operations prior to disposition. Accordingly, for the six months ended June 30, 2012, we classified the $1.9 million gain on sale of land parcel below income from discontinued operations, net, in the accompanying condensed consolidated statements of income, and included the gain in income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders in the “control number,” or numerator for computation of earnings per share.
We account for unvested restricted stock awards that contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of earnings per share using the two-class method. Under the two-class method, we allocate net income after preferred stock dividends, preferred stock redemption charge, and amounts attributable to noncontrolling interests to common stockholders and unvested restricted stock awards based on their respective participation rights to dividends declared (or accumulated) and undistributed earnings. Diluted earnings per share is computed using the weighted average shares of common stock outstanding determined for the basic earnings per share computation plus the effect of any dilutive securities, including the dilutive effect of stock options using the treasury stock method.
8. Earnings per share (continued)
The table below is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and six months ended June 30, 2012 and 2011 (dollars in thousands, except per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Income from continuing operations | 25,435 | 33,974 | 56,211 | 66,287 | |||||
| Gain on sale of land parcel | – | – | 1,864 | – | |||||
| Net income attributable to noncontrolling interests | (851 | ) | (938 | ) | (1,562 | ) | (1,867 | ) | |
| Dividends on preferred stock | (6,903 | ) | (7,089 | ) | (14,386 | ) | (14,178 | ) | |
| Preferred stock redemption charge | – | – | (5,978 | ) | – | ||||
| Net income attributable to unvested restricted stock awards | (271 | ) | (298 | ) | (506 | ) | (540 | ) | |
| Income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted | 17,410 | 25,649 | 35,643 | 49,702 | |||||
| Income from discontinued operations, net | 206 | 337 | 341 | 649 | |||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted | 17,616 | 25,986 | 35,984 | 50,351 | |||||
| Weighted average shares of common stock outstanding – basic | 61,663,367 | 58,500,055 | 61,585,587 | 56,734,012 | |||||
| Dilutive effect of stock options | 173 | 13,067 | 667 | 16,261 | |||||
| Weighted average shares of common stock outstanding – diluted | 61,663,540 | 58,513,122 | 61,586,254 | 56,750,273 | |||||
| Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted: | |||||||||
| Continuing operations | 0.29 | 0.43 | 0.57 | 0.88 | |||||
| Discontinued operations, net | – | 0.01 | 0.01 | 0.01 | |||||
| Earnings per share – basic and diluted | 0.29 | 0.44 | 0.58 | 0.89 |
All values are in US Dollars.
For purposes of calculating diluted earnings per share, we did not assume conversion of our 8.00% Unsecured Senior Convertible Notes for the three and six months ended June 30, 2012 and 2011, since the impact was antidilutive to earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders from continuing operations during those periods.
For purposes of calculating diluted earnings per share, we did not assume conversion of our series D convertible preferred stock (“Series D Convertible Preferred Stock”) for the three and six months ended June 30, 2012 and 2011, since the impact was antidilutive to earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders from continuing operations during those periods.
Our calculation of weighted average diluted shares for the three and six months ending June 30, 2011, would include additional shares related to our 3.70% Unsecured Senior Convertible Notes if the average market price of our common stock had been higher than the conversion price ($117.36 as of June 30, 2011). For the three and six months ended June 30, 2011, the weighted average shares of common stock related to our 3.70% Unsecured Senior Convertible Notes have been excluded from diluted weighted average shares of common stock because the average market price of our common stock was lower than the conversion price and the impact of conversion would have been antidilutive to earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders from continuing operations during the period. In April 2012, we repurchased the remaining outstanding $1.0 million in principal amount of the notes.
9. Net income attributable to Alexandria Real Estate Equities, Inc.
The following table shows income from continuing and discontinued operations attributable to Alexandria Real Estate Equities, Inc. for the three and six months ended June 30, 2012 and 2011 (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Income from continuing operations | 25,435 | 33,974 | 56,211 | 66,287 | |||||
| Gain on sale of land parcel | – | – | 1,864 | – | |||||
| Less: net income attributable to noncontrolling interests | (851 | ) | (938 | ) | (1,562 | ) | (1,867 | ) | |
| Income from continuing operations attributable to Alexandria Real Estate Equities, Inc. | 24,584 | 33,036 | 56,513 | 64,420 | |||||
| Income from discontinued operations attributable to Alexandria Real Estate Equities, Inc., net | 206 | 337 | 341 | 649 | |||||
| Less: net income from discontinued operations attributable to noncontrolling interests | – | – | – | – | |||||
| Net income attributable to Alexandria Real Estate Equities, Inc. | 24,790 | 33,373 | 56,854 | 65,069 |
All values are in US Dollars.
10. Stockholders’ equity
Establishment of “at the market” common stock offering program
In June 2012, we established an “at the market” common stock offering program under which we may sell, from time to time, up to an aggregate of $250 million of our common stock through our sales agents, BNY Mellon Capital Markets, LLC and Credit Suisse Securities (USA) LLC, during a three-year period. In June 2012, we sold an aggregate of 573,686 shares of common stock for gross proceeds of approximately $40.5 million at an average stock price of $70.64 and net proceeds of approximately $39.9 million. As of June 30, 2012, approximately $209.5 million of our common stock remained available for issuance under the “at the market” common stock offering program.
6.45% series E preferred stock offering
In March 2012, we completed a public offering of 5,200,000 shares of our 6.45% series E cumulative redeemable preferred stock (“Series E Preferred Stock”). The shares were issued at a price of $25.00 per share, resulting in net proceeds of approximately $124.9 million (after deducting underwriters’ discounts and other offering costs). The proceeds were initially used to reduce the outstanding borrowings under our unsecured senior line of credit. We then borrowed funds under our unsecured senior line of credit to redeem our 8.375% series C cumulative redeemable preferred stock in April 2012 (“Series C Preferred Stock”). The dividends on our Series E Preferred Stock are cumulative and accrue from the date of original issuance. We pay dividends quarterly in arrears at an annual rate of 6.45%, or $1.6125 per share. Our Series E Preferred Stock has no stated maturity date, is not subject to any sinking fund or mandatory redemption provisions, and is not redeemable before March 15, 2017, except to preserve our status as a REIT. On and after March 15, 2017, we may, at our option, redeem the Series E Preferred Stock, in whole or in part, at any time for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends on the Series E Preferred Stock up to, but excluding, the redemption date. In addition, upon the occurrence of a change of control, we may, at our option, redeem the Series E Preferred Stock, in whole or in part, within 120 days after the first date on which such change of control occurred, by paying $25.00 per share, plus any accrued and unpaid dividends up to, but excluding, the date of redemption. Investors in our Series E Preferred Stock generally have no voting rights.
8.375% series C preferred stock redemption
In April 2012, we redeemed all 5,185,500 outstanding shares of our Series C Preferred Stock at a price equal to $25.00 per share, and paid $0.5234375 per share, representing accumulated and unpaid dividends to the redemption date on such shares. We recognized a charge of approximately $6.0 million to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders during the six months ended June 30, 2012, related to the write-off of original issuance costs of the Series C Preferred Stock. This amount represents the excess of the fair value of the consideration transferred to the holders over the carrying amount of the preferred stock.
10. Stockholders’ equity (continued)
Dividends
In June 2012, we declared a cash dividend on our common stock aggregating $32.0 million, or $0.51 per share, for the three months ended June 2012. In June 2012, we also declared cash dividends on our Series D Convertible Preferred Stock aggregating $4.4 million, or $0.4375 per share, for the period from April 15, 2012, through July 14, 2012. Additionally, we declared cash dividends on our Series E Preferred Stock aggregating approximately $2.8 million, or $0.5375 per share, for the period from March 15, 2012, through July 14, 2012.
Accumulated other comprehensive loss
Accumulated other comprehensive loss attributable to Alexandria Real Estate Equities, Inc. consists of the following (in thousands):
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Unrealized gain on marketable securities | 3,715 | 3,834 | |||
| Unrealized loss on interest rate swap agreements | (28,474 | ) | (32,980 | ) | |
| Unrealized loss on foreign currency translation | (12,611 | ) | (5,365 | ) | |
| Total | (37,370 | ) | (34,511 | ) |
All values are in US Dollars.
11. Noncontrolling interests
Noncontrolling interests represent the third-party interests in certain entities in which we have a controlling interest. These entities own 10 properties and two development parcels as of June 30, 2012, and are included in our condensed consolidated financial statements. Noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in accordance with the respective operating agreements.
Certain of our noncontrolling interests have the right to require us to redeem their ownership interests in the respective entities. We classify these ownership interests in the entities as redeemable noncontrolling interests outside of total equity in the accompanying condensed consolidated balance sheets. Redeemable noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in accordance with the respective operating agreements. If the carrying amount of a redeemable noncontrolling interest is less than the maximum redemption value at the balance sheet date, such amount is adjusted to the maximum redemption value. Subsequent declines in the redemption value are recognized only to the extent that previous increases have been recognized. As of June 30, 2012, and December 31, 2011, our redeemable noncontrolling interest balances were approximately $15.8 million and $16.0 million, respectively. Our remaining noncontrolling interests, aggregating approximately $44.2 million and $42.6 million as of June 30, 2012, and December 31, 2011, respectively, do not have rights to require us to purchase their ownership interests and are classified in total equity in the accompanying condensed consolidated balance sheets.
12. Discontinued operations
The following is a summary of net assets of discontinued operations, and income from discontinued operations, net (in thousands):
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Properties “held for sale,” net | 18,851 | 20,851 | |||
| Other assets | 695 | 847 | |||
| Total assets | 19,546 | 21,698 | |||
| Total liabilities | (139 | ) | (469 | ) | |
| Net assets of discontinued operations | 19,407 | 21,229 |
All values are in US Dollars.
| Three Months Ended | Six Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | ||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| Total revenues | 318 | 657 | 602 | 1,276 | |||||
| Operating expenses | 75 | 126 | 185 | 237 | |||||
| Total revenues less operating expenses | 243 | 531 | 417 | 1,039 | |||||
| Interest expense | – | 4 | – | 36 | |||||
| Depreciation expense | 39 | 190 | 78 | 354 | |||||
| Income from discontinued operations before gain on sales of real estate | 204 | 337 | 339 | 649 | |||||
| Gain on sale of real estate | 2 | – | 2 | – | |||||
| Income from discontinued operations, net | 206 | 337 | 341 | 649 |
All values are in US Dollars.
Income from discontinued operations, net, for the three and six months ended June 30, 2012, includes the results of the operations of three operating properties that were classified as “held for sale” as of June 30, 2012, and the results of operations of one property sold during the three months ended June 30, 2012. Income from discontinued operations, net, for the three and six months ended June 30, 2011, includes the results of operations of three properties that were classified as “held for sale” as of June 30, 2012, one property sold during the three months ended June 30, 2012, and one property sold during the three months ended September 30, 2011. During the three and six months ended June 30, 2012, we sold 5110 Campus Drive, located in Pennsylvania, at a price of approximately $1.8 million, which resulted in a gain of approximately $2,000.
13. Condensed consolidating financial information
Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act, as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP”), an indirectly wholly owned subsidiary of the Issuer. The Company’s other subsidiaries, including, but not limited to, the subsidiaries that own substantially all of its real estate (collectively, the “Combined Non-Guarantor Subsidiaries”) will not provide a guarantee of such securities, including the subsidiaries that are partially or wholly owned by the LP. The following condensed consolidating financial information presents the condensed consolidating balance sheets as of June 30, 2012, and December 31, 2011, and the condensed consolidating statements of income, comprehensive income, and cash flows for three and six months ended June 30, 2012 and 2011, for the Issuer, the guarantor subsidiary (the LP), the Combined Non-Guarantor Subsidiaries, consolidating adjustments, and consolidated amounts. Each entity in the condensed consolidating financial information follows the same accounting policies described in our condensed consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interest in subsidiaries that are eliminated upon consolidation.
Condensed Consolidating Balance Sheet
as of June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||||
| Investments in real estate, net | 45,096 | – | 6,163,258 | – | 6,208,354 | ||||||
| Cash and cash equivalents | 30,261 | – | 50,676 | – | 80,937 | ||||||
| Restricted cash | 35 | – | 41,862 | – | 41,897 | ||||||
| Tenant receivables | 15 | – | 6,128 | – | 6,143 | ||||||
| Deferred rent | 1,839 | – | 153,456 | – | 155,295 | ||||||
| Deferred leasing and financing costs, net | 34,672 | – | 116,683 | – | 151,355 | ||||||
| Investments | – | 12,820 | 91,634 | – | 104,454 | ||||||
| Investments in and advances to affiliates | 5,658,418 | 5,205,633 | 106,925 | (10,970,976 | ) | – | |||||
| Intercompany note receivable | 2,250 | – | – | (2,250 | ) | – | |||||
| Other assets | 21,409 | – | 71,895 | – | 93,304 | ||||||
| Total assets | 5,793,995 | 5,218,453 | 6,802,517 | (10,973,226 | ) | 6,841,739 | |||||
| Liabilities, Noncontrolling Interests, and Equity | |||||||||||
| Secured notes payable | – | – | 719,977 | – | 719,977 | ||||||
| Unsecured senior notes payable | 549,783 | – | – | – | 549,783 | ||||||
| Unsecured senior line of credit | 379,000 | – | – | – | 379,000 | ||||||
| Unsecured senior bank term loans | 1,350,000 | – | – | – | 1,350,000 | ||||||
| Accounts payable, accrued expenses, and tenant security deposits | 80,624 | – | 267,413 | – | 348,037 | ||||||
| Dividends payable | 38,067 | – | 290 | – | 38,357 | ||||||
| Intercompany note payable | – | – | 2,250 | (2,250 | ) | – | |||||
| Total liabilities | 2,397,474 | – | 989,930 | (2,250 | ) | 3,385,154 | |||||
| Redeemable noncontrolling interests | – | – | 15,817 | – | 15,817 | ||||||
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 3,396,521 | 5,218,453 | 5,752,523 | (10,970,976 | ) | 3,396,521 | |||||
| Noncontrolling interests | – | – | 44,247 | – | 44,247 | ||||||
| Total equity | 3,396,521 | 5,218,453 | 5,796,770 | (10,970,976 | ) | 3,440,768 | |||||
| Total liabilities, noncontrolling interests, and equity | 5,793,995 | 5,218,453 | 6,802,517 | (10,973,226 | ) | 6,841,739 |
All values are in US Dollars.
Condensed Consolidating Balance Sheet
as of December 31, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||||
| Investments in real estate, net | 46,795 | – | 5,961,645 | – | 6,008,440 | ||||||
| Cash and cash equivalents | 10,608 | – | 67,931 | – | 78,539 | ||||||
| Restricted cash | 40 | – | 23,292 | – | 23,332 | ||||||
| Tenant receivables | 12 | – | 7,468 | – | 7,480 | ||||||
| Deferred rent | 1,615 | – | 140,482 | – | 142,097 | ||||||
| Deferred leasing and financing costs, net | 25,364 | – | 110,186 | – | 135,550 | ||||||
| Investments | – | 13,385 | 82,392 | – | 95,777 | ||||||
| Investments in and advances to affiliates | 5,443,778 | 5,020,525 | 105,284 | (10,569,587 | ) | – | |||||
| Intercompany note receivable | 2,195 | – | – | (2,195 | ) | – | |||||
| Other assets | 18,643 | – | 64,271 | – | 82,914 | ||||||
| Total assets | 5,549,050 | 5,033,910 | 6,562,951 | (10,571,782 | ) | 6,574,129 | |||||
| Liabilities, Noncontrolling Interests, and Equity | |||||||||||
| Secured notes payable | – | – | 724,305 | – | 724,305 | ||||||
| Unsecured senior notes payable | 84,959 | – | – | – | 84,959 | ||||||
| Unsecured senior line of credit | 370,000 | – | – | – | 370,000 | ||||||
| Unsecured senior bank term loans | 1,600,000 | – | – | – | 1,600,000 | ||||||
| Accounts payable, accrued expenses, and tenant security deposits | 83,488 | – | 241,905 | – | 325,393 | ||||||
| Dividends payable | 36,302 | – | 277 | – | 36,579 | ||||||
| Intercompany note payable | – | – | 2,195 | (2,195 | ) | – | |||||
| Total liabilities | 2,174,749 | – | 968,682 | (2,195 | ) | 3,141,236 | |||||
| Redeemable noncontrolling interests | – | – | 16,034 | – | 16,034 | ||||||
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 3,374,301 | 5,033,910 | 5,535,677 | (10,569,587 | ) | 3,374,301 | |||||
| Noncontrolling interests | – | – | 42,558 | – | 42,558 | ||||||
| Total equity | 3,374,301 | 5,033,910 | 5,578,235 | (10,569,587 | ) | 3,416,859 | |||||
| Total liabilities, noncontrolling interests, and equity | 5,549,050 | 5,033,910 | 6,562,951 | (10,571,782 | ) | 6,574,129 |
All values are in US Dollars.
Condensed Consolidating Statement of Income
for the Three Months Ended June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||
| Rental | 1,753 | – | 108,930 | – | 110,683 | ||||||
| Tenant recoveries | 663 | – | 33,378 | – | 34,041 | ||||||
| Other income | 1,110 | 255 | 11,164 | (3,148 | ) | 9,381 | |||||
| Total revenues | 3,526 | 255 | 153,472 | (3,148 | ) | 154,105 | |||||
| Expenses: | |||||||||||
| Rental operations | 2,100 | – | 42,406 | – | 44,506 | ||||||
| General and administrative | 11,173 | 1 | 4,298 | (3,148 | ) | 12,324 | |||||
| Interest | 12,106 | – | 5,816 | – | 17,922 | ||||||
| Depreciation and amortization | 1,393 | – | 50,923 | – | 52,316 | ||||||
| Total expenses | 26,772 | 1 | 103,443 | (3,148 | ) | 127,068 | |||||
| (Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt | (23,246 | ) | 254 | 50,029 | – | 27,037 | |||||
| Equity in earnings of affiliates | 49,638 | 44,424 | 885 | (94,947 | ) | – | |||||
| Loss on early extinguishment of debt | (1,602 | ) | – | – | – | (1,602 | ) | ||||
| Income from continuing operations | 24,790 | 44,678 | 50,914 | (94,947 | ) | 25,435 | |||||
| Income from discontinued operations, net | – | – | 206 | – | 206 | ||||||
| Net income | 24,790 | 44,678 | 51,120 | (94,947 | ) | 25,641 | |||||
| Net income attributable to noncontrolling interests | – | – | 851 | – | 851 | ||||||
| Dividends on preferred stock | 6,903 | – | – | – | 6,903 | ||||||
| Net income attributable to unvested restricted stock awards | 271 | – | – | – | 271 | ||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 17,616 | 44,678 | 50,269 | (94,947 | ) | 17,616 |
All values are in US Dollars.
Condensed Consolidating Statement of Income
for the Six Months Ended June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||
| Rental | 3,474 | – | 214,793 | – | 218,267 | ||||||
| Tenant recoveries | 1,421 | – | 67,142 | – | 68,563 | ||||||
| Other income | 3,107 | 840 | 14,586 | (6,523 | ) | 12,010 | |||||
| Total revenues | 8,002 | 840 | 296,521 | (6,523 | ) | 298,840 | |||||
| Expenses: | |||||||||||
| Rental operations | 4,696 | – | 83,192 | – | 87,888 | ||||||
| General and administrative | 20,671 | 1 | 8,536 | (6,523 | ) | 22,685 | |||||
| Interest | 22,675 | – | 11,474 | – | 34,149 | ||||||
| Depreciation and amortization | 2,785 | – | 92,897 | – | 95,682 | ||||||
| Total expenses | 50,827 | 1 | 196,099 | (6,523 | ) | 240,404 | |||||
| (Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt | (42,825 | ) | 839 | 100,422 | – | 58,436 | |||||
| Equity in earnings of affiliates | 101,904 | 93,779 | 1,871 | (197,554 | ) | – | |||||
| Loss on early extinguishment of debt | (2,225 | ) | – | – | – | (2,225 | ) | ||||
| Income from continuing operations | 56,854 | 94,618 | 102,293 | (197,554 | ) | 56,211 | |||||
| Income from discontinued operations, net | – | – | 341 | – | 341 | ||||||
| Gain on sale of land parcel | – | – | 1,864 | – | 1,864 | ||||||
| Net income | 56,854 | 94,618 | 104,498 | (197,554 | ) | 58,416 | |||||
| Net income attributable to noncontrolling interests | – | – | 1,562 | – | 1,562 | ||||||
| Dividends on preferred stock | 14,386 | – | – | – | 14,386 | ||||||
| Preferred stock redemption charge | 5,978 | – | – | – | 5,978 | ||||||
| Net income attributable to unvested restricted stock awards | 506 | – | – | – | 506 | ||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 35,984 | 94,618 | 102,936 | (197,554 | ) | 35,984 |
All values are in US Dollars.
Condensed Consolidating Statement of Income
for the Three Months Ended June 30, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||
| Rental | 1,308 | – | 107,940 | – | 109,248 | ||||||
| Tenant recoveries | 784 | – | 32,363 | – | 33,147 | ||||||
| Other income (loss) | 2,274 | (123 | ) | 2,044 | (3,269 | ) | 926 | ||||
| Total revenues | 4,366 | (123 | ) | 142,347 | (3,269 | ) | 143,321 | ||||
| Expenses: | |||||||||||
| Rental operations | 3,201 | – | 37,394 | – | 40,595 | ||||||
| General and administrative | 8,840 | – | 5,193 | (3,269 | ) | 10,764 | |||||
| Interest | 11,252 | – | 5,315 | – | 16,567 | ||||||
| Depreciation and amortization | 1,116 | – | 39,057 | – | 40,173 | ||||||
| Total expenses | 24,409 | – | 86,959 | (3,269 | ) | 108,099 | |||||
| (Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt | (20,043 | ) | (123 | ) | 55,388 | – | 35,222 | ||||
| Equity in earnings of affiliates | 54,664 | 51,823 | 1,023 | (107,510 | ) | – | |||||
| Loss on early extinguishment of debt | (1,248 | ) | – | – | – | (1,248 | ) | ||||
| Income from continuing operations | 33,373 | 51,700 | 56,411 | (107,510 | ) | 33,974 | |||||
| Income from discontinued operations, net | – | – | 337 | – | 337 | ||||||
| Net income | 33,373 | 51,700 | 56,748 | (107,510 | ) | 34,311 | |||||
| Net income attributable to noncontrolling interests | – | – | 938 | – | 938 | ||||||
| Dividends on preferred stock | 7,089 | – | – | – | 7,089 | ||||||
| Net income attributable to unvested restricted stock awards | 298 | – | – | – | 298 | ||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 25,986 | 51,700 | 55,810 | (107,510 | ) | 25,986 |
All values are in US Dollars.
Condensed Consolidating Statement of Income
for the Six Months Ended June 30, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||
| Rental | 3,032 | – | 212,268 | – | 215,300 | ||||||
| Tenant recoveries | 1,545 | – | 64,463 | – | 66,008 | ||||||
| Other income (loss) | 4,495 | (392 | ) | 4,054 | (6,454 | ) | 1,703 | ||||
| Total revenues | 9,072 | (392 | ) | 280,785 | (6,454 | ) | 283,011 | ||||
| Expenses: | |||||||||||
| Rental operations | 5,296 | – | 76,334 | – | 81,630 | ||||||
| General and administrative | 17,555 | – | 9,157 | (6,454 | ) | 20,258 | |||||
| Interest | 22,810 | – | 11,567 | – | 34,377 | ||||||
| Depreciation and amortization | 2,326 | – | 74,390 | – | 76,716 | ||||||
| Total expenses | 47,987 | – | 171,448 | (6,454 | ) | 212,981 | |||||
| (Loss) income from continuing operations before equity in earnings of affiliates and loss on early extinguishment of debt | (38,915 | ) | (392 | ) | 109,337 | – | 70,030 | ||||
| Equity in earnings of affiliates | 107,727 | 102,392 | 2,112 | (212,231 | ) | – | |||||
| Loss on early extinguishment of debt | (3,743 | ) | – | – | – | (3,743 | ) | ||||
| Income from continuing operations | 65,069 | 102,000 | 111,449 | (212,231 | ) | 66,287 | |||||
| Income from discontinued operations, net | – | – | 649 | – | 649 | ||||||
| Net income | 65,069 | 102,000 | 112,098 | (212,231 | ) | 66,936 | |||||
| Net income attributable to noncontrolling interests | – | – | 1,867 | – | 1,867 | ||||||
| Dividends on preferred stock | 14,178 | – | – | – | 14,178 | ||||||
| Net income attributable to unvested restricted stock awards | 540 | – | – | – | 540 | ||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 50,351 | 102,000 | 110,231 | (212,231 | ) | 50,351 |
All values are in US Dollars.
Condensed Consolidating Statement of Comprehensive Income
for the Three Months Ended June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income | 24,790 | 44,678 | 51,120 | (94,947 | ) | 25,641 | |||||
| Other comprehensive income: | |||||||||||
| Unrealized gains (losses) on marketable securities: | |||||||||||
| Unrealized holding gains (losses) arising during the period | – | 74 | (181 | ) | – | (107 | ) | ||||
| Reclassification adjustment for losses included in net income | – | 75 | 163 | – | 238 | ||||||
| Unrealized gains (losses) on marketable securities, net | – | 149 | (18 | ) | – | 131 | |||||
| Unrealized gains on interest rate swaps: | |||||||||||
| Unrealized interest rate swap losses arising during the period | (3,091 | ) | – | – | – | (3,091 | ) | ||||
| Reclassification adjustment for amortization of interest expense included in net income | 5,895 | – | – | – | 5,895 | ||||||
| Unrealized gains on interest rate swaps, net | 2,804 | – | – | – | 2,804 | ||||||
| Foreign currency translation losses | – | – | (17,192 | ) | – | (17,192 | ) | ||||
| Total other comprehensive income (loss) | 2,804 | 149 | (17,210 | ) | – | (14,257 | ) | ||||
| Comprehensive income | 27,594 | 44,827 | 33,910 | (94,947 | ) | 11,384 | |||||
| Less: comprehensive income attributable to noncontrolling interests | – | – | (875 | ) | – | (875 | ) | ||||
| Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 27,594 | 44,827 | 33,035 | (94,947 | ) | 10,509 |
All values are in US Dollars.
Condensed Consolidating Statement of Comprehensive Income
for the Six Months Ended June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income | 56,854 | 94,618 | 104,498 | (197,554 | ) | 58,416 | |||||
| Other comprehensive income: | |||||||||||
| Unrealized gains (losses) on marketable securities: | |||||||||||
| Unrealized holding gains arising during the period | – | 106 | 461 | – | 567 | ||||||
| Reclassification adjustment for losses (gains) included in net income | – | 64 | (750 | ) | – | (686 | ) | ||||
| Unrealized gains (losses) on marketable securities, net | – | 170 | (289 | ) | – | (119 | ) | ||||
| Unrealized gains on interest rate swaps: | |||||||||||
| Unrealized interest rate swap losses arising during the period | (7,164 | ) | – | – | – | (7,164 | ) | ||||
| Reclassification adjustment for amortization of interest expense included in net income | 11,670 | – | – | – | 11,670 | ||||||
| Unrealized gains on interest rate swaps, net | 4,506 | – | – | – | 4,506 | ||||||
| Foreign currency translation losses | – | – | (7,233 | ) | – | (7,233 | ) | ||||
| Total other comprehensive income (loss) | 4,506 | 170 | (7,522 | ) | – | (2,846 | ) | ||||
| Comprehensive income | 61,360 | 94,788 | 96,976 | (197,554 | ) | 55,570 | |||||
| Less: comprehensive income attributable to noncontrolling interests | – | – | (1,574 | ) | – | (1,574 | ) | ||||
| Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 61,360 | 94,788 | 95,402 | (197,554 | ) | 53,996 |
All values are in US Dollars.
Condensed Consolidating Statement of Comprehensive Income
for the Three Months Ended June 30, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income | 33,373 | 51,700 | 56,748 | (107,510 | ) | 34,311 | |||||
| Other comprehensive income: | |||||||||||
| Unrealized losses on marketable securities: | |||||||||||
| Unrealized holding losses arising during the period | – | (501 | ) | – | – | (501 | ) | ||||
| Reclassification adjustments for gains included in net income | – | – | – | – | – | ||||||
| Unrealized losses on marketable securities, net | – | (501 | ) | – | – | (501 | ) | ||||
| Unrealized gains on interest rate swaps: | |||||||||||
| Unrealized interest rate swap losses arising during the period | (5,555 | ) | – | – | – | (5,555 | ) | ||||
| Reclassification adjustment for amortization of interest expense included in net income | 5,302 | – | – | – | 5,302 | ||||||
| Unrealized losses on interest rate swaps, net | (253 | ) | – | – | – | (253 | ) | ||||
| Foreign currency translation gains | – | – | 1,676 | – | 1,676 | ||||||
| Total other comprehensive (loss) income | (253 | ) | (501 | ) | 1,676 | – | 922 | ||||
| Comprehensive income | 33,120 | 51,199 | 58,424 | (107,510 | ) | 35,233 | |||||
| Less: comprehensive income attributable to noncontrolling interests | – | – | (939 | ) | – | (939 | ) | ||||
| Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 33,120 | 51,199 | 57,485 | (107,510 | ) | 34,294 |
All values are in US Dollars.
Condensed Consolidating Statement of Comprehensive Income
for the Six Months Ended June 30, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income | 65,069 | 102,000 | 112,098 | (212,231 | ) | 66,936 | |||||
| Other comprehensive income: | |||||||||||
| Unrealized gains on marketable securities: | |||||||||||
| Unrealized holding gains arising during the period | – | 12 | – | – | 12 | ||||||
| Reclassification adjustments for gains included in net income | – | – | – | – | – | ||||||
| Unrealized gains on marketable securities, net | – | 12 | – | – | 12 | ||||||
| Unrealized gains on interest rate swaps: | |||||||||||
| Unrealized interest rate swap losses arising during the period | (5,255 | ) | – | – | – | (5,255 | ) | ||||
| Reclassification adjustment for amortization of interest expense included in net income | 10,741 | – | – | – | 10,741 | ||||||
| Unrealized gains on interest rate swaps, net | 5,486 | – | – | – | 5,486 | ||||||
| Foreign currency translation gains | – | – | 6,559 | – | 6,559 | ||||||
| Total other comprehensive income | 5,486 | 12 | 6,559 | – | 12,057 | ||||||
| Comprehensive income | 70,555 | 102,012 | 118,657 | (212,231 | ) | 78,993 | |||||
| Less: comprehensive income attributable to noncontrolling interests | – | – | (1,861 | ) | – | (1,861 | ) | ||||
| Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 70,555 | 102,012 | 116,796 | (212,231 | ) | 77,132 |
All values are in US Dollars.
Condensed Consolidating Statement of Cash Flows
for the Six Months Ended June 30, 2012*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Activities | |||||||||||
| Net income | 56,854 | 94,618 | 104,498 | (197,554 | ) | 58,416 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 2,785 | – | 92,975 | – | 95,760 | ||||||
| Loss on early extinguishment of debt | 2,225 | – | – | – | 2,225 | ||||||
| Gain on sale of land parcel | – | – | (1,864 | ) | – | (1,864 | ) | ||||
| Gain on sale of real estate | – | – | (2 | ) | – | (2 | ) | ||||
| Amortization of loan fees and costs | 3,628 | – | 1,229 | – | 4,857 | ||||||
| Amortization of debt premiums/discounts | 92 | – | 197 | – | 289 | ||||||
| Amortization of acquired above and below market leases | – | – | (1,578 | ) | – | (1,578 | ) | ||||
| Deferred rent | 18 | – | (14,009 | ) | – | (13,991 | ) | ||||
| Stock compensation expense | 6,567 | – | – | – | 6,567 | ||||||
| Equity in income related to investments | – | 26 | – | – | 26 | ||||||
| Equity in income related to subsidiaries | (101,904 | ) | (93,779 | ) | (1,871 | ) | 197,554 | – | |||
| Gain on sales of investments | – | (1,048 | ) | (10,078 | ) | – | (11,126 | ) | |||
| Loss on sales of investments | – | 183 | 906 | – | 1,089 | ||||||
| Changes in operating assets and liabilities: | |||||||||||
| Restricted cash | 5 | – | (615 | ) | – | (610 | ) | ||||
| Tenant receivables | (3 | ) | – | 1,369 | – | 1,366 | |||||
| Deferred leasing costs | 4,839 | – | (18,630 | ) | – | (13,791 | ) | ||||
| Other assets | 960 | – | (10,291 | ) | – | (9,331 | ) | ||||
| Intercompany receivables and payables | (55 | ) | – | 55 | – | – | |||||
| Accounts payable, accrued expenses, and tenant security deposits | 2,738 | – | 21,580 | – | 24,318 | ||||||
| Net cash provided by operating activities | (21,251 | ) | – | 163,871 | – | 142,620 | |||||
| Investing Activities | |||||||||||
| Proceeds from sale of property | – | – | 1,905 | – | 1,905 | ||||||
| Additions to properties | (661 | ) | – | (257,912 | ) | – | (258,573 | ) | |||
| Purchase of properties | – | – | (42,171 | ) | – | (42,171 | ) | ||||
| Change in restricted cash related to construction projects | – | – | (11,532 | ) | – | (11,532 | ) | ||||
| Distributions from unconsolidated real estate entity | – | – | 22,250 | – | 22,250 | ||||||
| Contributions to unconsolidated real estate entity | – | – | (4,918 | ) | – | (4,918 | ) | ||||
| Investments in subsidiaries | (120,101 | ) | (98,863 | ) | 230 | 218,734 | – | ||||
| Additions to investments | – | (308 | ) | (16,036 | ) | – | (16,344 | ) | |||
| Proceeds from investments | – | 1,882 | 15,677 | – | 17,559 | ||||||
| Net cash used in investing activities | (120,762 | ) | (97,289 | ) | (292,507 | ) | 218,734 | (291,824 | ) | ||
| Financing Activities | |||||||||||
| Principal reductions of secured notes payable | – | – | (4,525 | ) | – | (4,525 | ) | ||||
| Proceeds from issuance of unsecured senior notes payable | 544,649 | – | – | – | 544,649 | ||||||
| Repurchase of unsecured senior convertible notes | (84,801 | ) | – | – | – | (84,801 | ) | ||||
| Principal borrowings from unsecured senior line of credit and unsecured senior bank term loan | 529,147 | – | – | – | 529,147 | ||||||
| Repayments of borrowings from unsecured senior line of credit | (520,147 | ) | – | – | – | (520,147 | ) | ||||
| Repayment of unsecured senior bank term loan | (250,000 | ) | – | – | – | (250,000 | ) | ||||
| Redemption of Series C Preferred Stock | (129,638 | ) | – | – | – | (129,638 | ) | ||||
| Proceeds from issuance of Series E Preferred Stock | 124,868 | – | – | – | 124,868 | ||||||
| Proceeds from issuance of common stock | 37,385 | – | – | – | 37,385 | ||||||
| Transfer to/from parent company | – | 97,289 | 121,445 | (218,734 | ) | ||||||
| Change in restricted cash related to financings | – | – | (7,714 | ) | – | (7,714 | ) | ||||
| Deferred financing costs paid | (14,983 | ) | – | (756 | ) | – | (15,739 | ) | |||
| Proceeds from exercise of stock options | 155 | – | – | – | 155 | ||||||
| Dividends paid on common stock | (60,791 | ) | – | – | – | (60,791 | ) | ||||
| Dividends paid on preferred stock | (14,178 | ) | – | – | – | (14,178 | ) | ||||
| Distributions to redeemable noncontrolling interests | – | – | (630 | ) | – | (630 | ) | ||||
| Contributions by noncontrolling interests | – | – | 1,125 | – | 1,125 | ||||||
| Distributions to noncontrolling interests | – | – | (598 | ) | – | (598 | ) | ||||
| Net cash provided by financing activities | 161,666 | 97,289 | 108,347 | (218,734 | ) | 148,568 | |||||
| Effect of exchange rate changes on cash and cash equivalents | – | – | 3,034 | – | 3,034 | ||||||
| Net increase in cash and cash equivalents | 19,653 | – | (17,255 | ) | – | 2,398 | |||||
| Cash and cash equivalents at beginning of period | 10,608 | – | 67,931 | – | 78,539 | ||||||
| Cash and cash equivalents at end of period | 30,261 | – | 50,676 | – | 80,937 | ||||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Cash paid during the period for interest, net of interest capitalized | 12,873 | – | 10,281 | – | 23,154 |
All values are in US Dollars.
Condensed Consolidating Statement of Cash Flows
for the Six Months Ended June 30, 2011*(In thousands)*
(Unaudited)
| Alexandria Real Estate Equities, Inc. (Issuer) | Alexandria Real Estate Equities, L.P. (Guarantor Subsidiary) | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Activities | |||||||||||
| Net income | 65,069 | 102,000 | 112,098 | (212,231 | ) | 66,936 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 2,326 | – | 74,744 | – | 77,070 | ||||||
| Loss on early extinguishment of debt | 3,743 | – | – | – | 3,743 | ||||||
| Gain on sale of land parcel | – | – | – | – | – | ||||||
| Amortization of loan fees and costs | 3,515 | – | 1,090 | – | 4,605 | ||||||
| Amortization of debt premiums/discounts | 2,385 | – | 119 | – | 2,504 | ||||||
| Amortization of acquired above and below market leases | – | – | (7,580 | ) | – | (7,580 | ) | ||||
| Deferred rent | (195 | ) | – | (9,397 | ) | – | (9,592 | ) | |||
| Stock compensation expense | 5,105 | – | – | – | 5,105 | ||||||
| Equity in loss related to investments | – | – | – | – | – | ||||||
| Equity in income related to subsidiaries | (107,727 | ) | (102,392 | ) | (2,112 | ) | 212,231 | – | |||
| Gain on sales of investments | – | (208 | ) | (2,371 | ) | – | (2,579 | ) | |||
| Loss on sales of investments | – | 591 | 1,177 | – | 1,768 | ||||||
| Changes in operating assets and liabilities: | |||||||||||
| Restricted cash | (15 | ) | – | 125 | – | 110 | |||||
| Tenant receivables | (4 | ) | – | 1,009 | – | 1,005 | |||||
| Deferred leasing costs | (669 | ) | – | (39,755 | ) | – | (40,424 | ) | |||
| Other assets | 357 | – | 8,182 | – | 8,539 | ||||||
| Intercompany receivables and payables | (2,382 | ) | 2,382 | ||||||||
| Accounts payable, accrued expenses, and tenant security deposits | (16,047 | ) | – | 15,065 | – | (982 | ) | ||||
| Net cash (used in) provided by operating activities | (44,539 | ) | (9 | ) | 154,776 | – | 110,228 | ||||
| Investing Activities | |||||||||||
| Additions to properties | (947 | ) | – | (160,815 | ) | – | (161,762 | ) | |||
| Purchase of properties | – | – | (307,839 | ) | – | (307,839 | ) | ||||
| Change in restricted cash related to construction projects | – | – | (4 | ) | – | (4 | ) | ||||
| Distributions from unconsolidated real estate entity | – | – | – | – | – | ||||||
| Contributions to unconsolidated real estate entity | – | – | (2,038 | ) | – | (2,038 | ) | ||||
| Investments in subsidiaries | (340,801 | ) | (331,340 | ) | (4,823 | ) | 676,964 | – | |||
| Additions to investments | – | (14 | ) | (12,707 | ) | – | (12,721 | ) | |||
| Proceeds from investments | – | 934 | 7,647 | – | 8,581 | ||||||
| Net cash used in investing activities | (341,748 | ) | (330,420 | ) | (480,579 | ) | 676,964 | (475,783 | ) | ||
| Financing Activities | |||||||||||
| Principal reductions of secured notes payable | – | – | (16,297 | ) | – | (16,297 | ) | ||||
| Proceeds from issuance of unsecured senior notes payable | – | – | – | – | – | ||||||
| Repurchase of unsecured senior convertible notes | (98,590 | ) | – | – | – | (98,590 | ) | ||||
| Principal borrowings from unsecured senior line of credit | 1,708,317 | – | – | – | 1,708,317 | ||||||
| Repayments of borrowings from unsecured senior line of credit | (1,631,317 | ) | – | – | – | (1,631,317 | ) | ||||
| Repayment of unsecured senior term loan | – | – | – | – | – | ||||||
| Proceeds from issuance of Series E Preferred Stock | – | – | – | – | – | ||||||
| Proceeds from issuance of common stock | 451,538 | – | – | – | 451,538 | ||||||
| Change in restricted cash related to financings | – | – | 4,824 | – | 4,824 | ||||||
| Transfers due to/from parent company | – | 329,827 | 347,137 | (676,964 | ) | – | |||||
| Deferred financing costs paid | (17,988 | ) | – | (138 | ) | – | (18,126 | ) | |||
| Proceeds from exercise of stock options | 1,165 | – | – | – | 1,165 | ||||||
| Dividends paid on common stock | (49,896 | ) | – | – | – | (49,896 | ) | ||||
| Dividends paid on preferred stock | (14,178 | ) | – | – | – | (14,178 | ) | ||||
| Distributions to redeemable noncontrolling interests | – | – | (622 | ) | – | (622 | ) | ||||
| Contributions by noncontrolling interests | – | – | – | – | – | ||||||
| Distributions to noncontrolling interests | – | – | (1,468 | ) | – | (1,468 | ) | ||||
| Net cash provided by financing activities | 349,051 | 329,827 | 333,436 | (676,964 | ) | 335,350 | |||||
| Effect of exchange rate changes on cash and cash equivalents | – | – | (102 | ) | – | (102 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (37,236 | ) | (602 | ) | 7,531 | – | (30,307 | ) | |||
| Cash and cash equivalents at beginning of period | 48,623 | 602 | 42,007 | – | 91,232 | ||||||
| Cash and cash equivalents at end of period | 11,387 | – | 49,538 | – | 60,925 | ||||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Cash paid during the period for interest, net of interest capitalized | 16,109 | – | 9,883 | – | 25,992 |
All values are in US Dollars.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain information and statements included in this quarterly report on Form 10-Q, including, without limitation, statements containing the words “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of these words or similar words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking statements, including, but not limited to, the following:
· Negative worldwide economic, financial, and banking conditions, and the recent slowdown of the United States economy;
· Worldwide economic recession, lack of confidence, and/or high structural unemployment;
· Potential defaults on national debt by certain countries;
· Potential and further downgrades of the credit ratings of the federal, state, and foreign governments, or their perceived creditworthiness;
· Concerns regarding the European debt crisis and market perception concerning the instability of the euro;
· Failure of the United States government to agree on a debt ceiling or deficit reduction plan;
· Potential and further downgrades of the credit ratings of major financial institutions, or their perceived creditworthiness;
· Financial, banking, and credit market conditions;
· The seizure or illiquidity of credit markets;
· Failure to meet market expectations for our financial performance;
· Our inability to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities;
· Our inability to comply with financial covenants in our debt agreements;
· Inflation or deflation;
· Prolonged period of stagnant growth;
· Increased interest rates and operating costs;
· Adverse economic or real estate developments in our markets;
· Our failure to successfully complete and lease our existing space held for redevelopment and new properties acquired for that purpose and any properties undergoing development;
· Significant decreases in our active development, active redevelopment, or preconstruction activities, resulting in significant increases in our interest, operating, and payroll expenses;
· Our failure to successfully operate or lease acquired properties;
· The financial condition of our insurance carriers;
· General and local economic conditions;
· Government changes to the healthcare system and its negative impact on our tenants;
· Adverse developments concerning the life science industry and/or our life science client tenants;
· The nature and extent of future competition;
· Lower rental rates, and/or higher vacancy rates;
· Failure to renew or replace expiring leases;
· Defaults on or non-renewal of leases by tenants;
· Availability of and our ability to attract and retain qualified personnel;
· Our failure to comply with laws or changes in law;
· Compliance with environmental laws;
· Our failure to maintain our status as a real estate investment trust (“REIT”);
· Changes in laws, regulations, and financial accounting standards;
· Certain ownership interests outside the United States that may subject us to different or greater risks than those associated with our domestic operations; and
· Fluctuations in foreign currency exchange rates.
This list of risks and uncertainties is not exhaustive. Additional information regarding risk factors that may affect us is included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended December 31, 2011. Readers of this quarterly report on Form 10-Q should also read our Securities and Exchange Commission (“SEC”) and other publicly filed documents for further discussion regarding such factors.
As used in this quarterly report on Form 10-Q, references to the “Company,” “we,” “our,” and “us” refer to Alexandria Real Estate Equities, Inc. and its subsidiaries. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes appearing elsewhere in this quarterly report on Form 10-Q. References to “GAAP” used herein refer to United States generally accepted accounting principles.
Overview
We are a Maryland corporation formed in October 1994 that has elected to be taxed as a REIT for federal income tax purposes. We are the largest owner, preeminent REIT, and leading life science real estate company focused principally on science-driven cluster development through the ownership, operation, management, selective acquisition, development, and redevelopment of properties containing life science laboratory space. We are the leading provider of high-quality environmentally sustainable real estate, technical infrastructure, and services to the broad and diverse life science industry. Client tenants include leading multinational pharmaceutical companies, academic and medical institutions, public and private biotechnology entities, U.S. government research agencies, medical device companies, clean technology companies, venture capital firms, and life science product and service companies. Our primary business objective is to maximize stockholder value by providing our stockholders with the greatest possible total return based on a multifaceted platform of internal and external growth. Our operating platform is based on the principle of “clustering,” with assets and operations located adjacent to life science entities, driving growth and technological advances within each cluster.
As of June 30, 2012, we had 182 properties aggregating approximately 16.9 million rentable square feet, composed of approximately 14.4 million rentable square feet of operating properties, approximately 1.6 million rentable square feet undergoing active development, and approximately 0.9 million rentable square feet undergoing active redevelopment. Our operating properties were approximately 92.9% leased as of June 30, 2012. Our primary sources of revenues are rental income and tenant recoveries from leases of our properties. The comparability of financial data from period to period is affected by the timing of our property acquisition, development, and redevelopment activities.
2012 highlights
Significant balance sheet management milestones
· In June 2012, we closed a secured construction loan with aggregate commitments of $55 million for a 100% pre-leased development project in the San Francisco Bay market;
· In June 2012, we established an “at the market” common stock offering program under which we may sell up to $250 million of our common stock, and raised $39.9 million in net proceeds from sales under this program;
· In April 2012, we amended our $1.5 billion unsecured senior line of credit to reduce the interest rate and extended the maturity date to April 2017, assuming we exercise our sole right to extend the maturity date twice;
· In April 2012, we redeemed all $129.6 million of our outstanding 8.375% series C cumulative redeemable preferred stock (“Series C Preferred Stock”);
· In March 2012, we completed a 6.45% series E cumulative redeemable preferred stock (“Series E Preferred Stock”) offering with net proceeds of $124.9 million;
· In February 2012, we completed our 4.60% unsecured senior notes payable (“4.60% Unsecured Senior Notes”) offering with net proceeds of $544.6 million; net proceeds from the offering were used to repay certain outstanding variable rate bank debt;
· In January and April 2012, we retired all $84.8 million of our 3.70% unsecured senior convertible notes (“3.70% Unsecured Senior Convertible Notes”);
· In February 2012, we repaid all $250 million of our 2012 unsecured senior bank term loan (“2012 Unsecured Senior Bank Term Loan”);
· In March 2012, we sold an interest in a land parcel to our joint venture partner for $31.4 million; and
· Assets under contract for sale and completed asset sales aggregated $55.4 million, or 49%, of our $112 million sales target for 2012; additional assets are under negotiation for sale.
Core operating metrics
· Total revenues for the three months ended June 30, 2012, were $154.1 million, compared to total revenues for the three months ended June 30, 2011, of $143.3 million; total revenues for the six months ended June 30, 2012, were $298.8 million, compared to total revenues for the six months ended June 30, 2011, of $283.0 million;
· Net operating income (“NOI”) for the three months ended June 30, 2012, was $109.6 million, compared to NOI for the three months ended June 30, 2011, of $102.7 million; NOI for the six months ended June 30, 2012, was $211.0 million, compared to NOI for the six months ended June 30, 2011, of $201.4 million;
· Results for the three months ended June 30, 2012, included $5.8 million, or $0.09 per diluted share, related to a realized gain on an equity investment primarily related to one non-tenant life science entity and a loss on early extinguishment of debt of approximately $1.6 million, or $0.03 per diluted share, related to the write-off of a portion of unamortized loan fees in connection with refinancing our $1.5 billion unsecured senior line of credit;
· Operating margins were at 71% for the three months ended June 30, 2012;
· Cash and GAAP same property revenues less operating expenses increased 1.6% and decreased 0.2%, respectively, for the three months ended June 30, 2012;
· Cash and GAAP same property revenues less operating expenses increased 1.9% and decreased 0.1%, respectively, for the six months ended June 30, 2012;
· 48% of our annualized base rent was from investment-grade tenants;
· Continued solid life science space demand in key cluster submarkets:
· During the three months ended June 30, 2012, we executed 44 leases for 959,000 rentable square feet, including 169,000 rentable square feet of development and redevelopment space. Rental rates decreased 0.8% and increased 5.8% on a cash and GAAP basis, respectively, on renewed/re-leased space; excluding one lease for 71,000 rentable square feet related to one tenant in the Gaithersburg submarket in Suburban Washington, D.C., rental rates for renewed/re-leased space were, on average 1.1% and 6.7% higher than rental rates for expiring leases on a cash and GAAP basis, respectively;
· Alexandria experienced the fourth-highest quarter of leasing activity in the company’s history, continuing solid life science demand in Alexandria’s key cluster submarkets;
· Key life science space leasing:
· Massachusetts Institute of Technology renewed 87,000 rentable square feet in the Greater Boston market;
· United States Government National Institutes of Health leased 75,000 rentable square feet of redevelopment space in the Suburban Washington, D.C. market;
· Three tenants leased 75,000 rentable square feet, including one renewal for 24,000 rentable square feet, at 400/450 East Jamie Court in the San Francisco Bay market; property is 78% leased;
· Infectious Disease Research Institute leased 55,000 rentable square feet in the Seattle market;
· United States Government Department of Veterans Affairs leased 51,000 rentable square feet in the San Francisco Bay market;
· 1366 Technologies, Inc. leased 41,000 rentable square feet in the Greater Boston market;
· Epizyme, Inc. leased 32,000 rentable square feet of redevelopment space in the Greater Boston market;
· Life Technologies Corporation renewed 29,000 rentable square feet in the Greater Boston market;
· During the six months ended June 30, 2012, we executed 105 leases for 1,871,000 rentable square feet, including 563,000 rentable square feet of development and redevelopment space. Rental rates decreased 1.4% and increased 5.2% on a cash and GAAP basis, respectively, on renewed/re-leased space; excluding one lease for 71,000 rentable square feet related to one tenant in the Gaithersburg submarket in Suburban Washington, D.C., rental rates for renewed/re-leased space were flat for expiring leases on a cash basis and on average 5.7% higher than rental rates on a GAAP basis; and
· The occupancy percentage for North America operating properties was approximately 93.9% and the occupancy percentage for North America operating and redevelopment properties was approximately 88.4%; the occupancy percentage for operating properties was approximately 92.9%, including Asia properties and the occupancy percentage for operating and redevelopment properties was approximately 86.9%, including Asia properties.
Value-added opportunities and external growth
· In June 2012, we completed the redevelopment of a 100% leased, 98,320 rentable square feet project located in the San Diego market;
· In April 2012, we completed the development of a 100% leased, 26,426 rentable square feet project located in the Canada market;
· In April 2012, we commenced the development of a 37% pre-leased, 414,000 rentable square feet unconsolidated joint venture project located in the Greater Boston market; and
· In January 2012, we commenced the development of a 100% pre-leased, 170,618 rentable square feet project located in the San Francisco Bay market.
Significant balance sheet management milestones
| Milestones | Transaction Date | Amount (1) | ||
|---|---|---|---|---|
| Closed of secured construction loan with aggregate commitment of 55 million (2) | June 2012 | 55,000 | ||
| Issuance of common stock under “at the market” common stock offering program (3) | June 2012 | 39,856 | ||
| Amendment of 1.5 billion unsecured senior line of credit (4) | April 2012 | 1,500,000 | ||
| Redemption of 8.375% Series C Preferred Stock | April 2012 | (129,638 | ) | |
| Issuance of 6.45% Series E Preferred Stock | March 2012 | 124,868 | ||
| Sale of interest in land parcel to joint venture partner | March 2012 | 31,360 | ||
| Repayment of 2012 Unsecured Senior Bank Term Loan | February 2012 | (250,000 | ) | |
| Debut 4.60% Unsecured Senior Notes offering | February 2012 | 544,649 | ||
| Repurchase of 3.70% Unsecured Senior Convertible Notes | January/April 2012 | (84,801 | ) |
All values are in US Dollars.
| (1) | Net of discounts and offering costs, as applicable. |
|---|---|
| (2) | As of June 30, 2012, we had not drawn on the loan. |
| (3) | We may sell, from time to time, up to $250 million of our common stock under our “at the market” common stock offering program. |
| (4) | Outstanding balance of unsecured senior line of credit as of June 30, 2012, was approximately $379.0 million. |
Investment-grade ratings and key credit metrics
In July 2011, we received investment-grade ratings from two major rating agencies. Receipt of our investment-grade ratings was a significant milestone for the Company that we believe will provide long-term value to our stockholders. Key strengths of our balance sheet and business that highlight our investment-grade credit profile include, among others, balance sheet liquidity, diverse and creditworthy tenant base, well-located properties proximate to leading research institutions, favorable lease terms, stable occupancy and cash flows, and demonstrated life science and real estate expertise. This significant milestone broadens our access to another key source of debt capital and allows us to continue to pursue our long-term capital, investment, and operating strategies. The issuance of investment-grade unsecured senior notes payable has allowed us to begin the transition from bank debt financing to unsecured senior notes payable, from variable rate debt to fixed rate debt, and from short-term debt to long-term debt. While this transition of bank debt is in process, we will utilize interest rate swap agreements to reduce our interest rate risk. We expect to keep our unhedged variable rate debt at less than 20% of our total debt.
| Three Months Ended June 30, | |||
|---|---|---|---|
| Key Credit Metrics (1) | 2012 | 2011 | |
| Net debt to adjusted EBITDA | 7.1x | 6.5x | |
| Net debt to gross assets (2) | 38% | 36% | |
| Fixed charge coverage ratio | 2.6x | 2.7x | |
| Interest coverage ratio | 3.2x | 3.4x | |
| Unencumbered net operating income as a percentage of total net operating income | 74% | 63% | |
| Liquidity – unsecured senior line of credit availability and unrestricted cash (2) | 1.2 billion | 1.0 billion | |
| Non-income-producing assets as a percentage of gross real estate (2) | 25% | 27% | |
| Unhedged variable rate debt as a percentage of total debt (2) | 12% | 44% |
All values are in US Dollars.
| (1) | These metrics reflect certain non-GAAP financial measures. See “Non-GAAP Measures” for more information, including definitions and reconciliations to the most directly comparable GAAP measures. |
|---|---|
| (2) | At the end of the period. |
Leasing
For the three months ended June 30, 2012, we executed a total of 44 leases for approximately 959,000 rentable square feet at 33 different properties (excluding month-to-month leases). Of this total, approximately 534,000 rentable square feet related to new or renewal leases of previously leased space (renewed/re-leased space), and approximately 425,000 rentable square feet related to developed, redeveloped, or previously vacant space. Of the 425,000 rentable square feet, approximately 169,000 rentable square feet related to our development or redevelopment programs, and the remaining approximately 256,000 rentable square feet related to previously vacant space. Rental rates for this renewed/re-leased space were, on average approximately 0.8% lower on a cash basis and approximately 5.8% higher on a GAAP basis than rental rates for the respective expiring leases. Excluding one lease for 71,000 rentable square feet related to one tenant in the Gaithersburg submarket in Suburban Washington, D.C., rental rates for renewed/re-leased space were, on average 1.1% and 6.7% higher on a cash and GAAP basis, for the three months ended June 30, 2012. Additionally, we granted tenant concessions, including free rent averaging approximately 1.5 months, with respect to the 959,000 rentable square feet leased during the three months ended June 30, 2012. Approximately 75% of the number of leases executed during the three months ended June 30, 2012, did not include concessions for free rent.
For the six months ended June 30, 2012, we executed a total of 105 leases for approximately 1,871,000 rentable square feet at 64 different properties (excluding month-to-month leases). Of this total, approximately 809,000 rentable square feet related to new or renewal leases of previously leased space (renewed/re-leased space), and approximately 1,062,000 rentable square feet related to developed, redeveloped, or previously vacant space. Of the 1,062,000 rentable square feet, approximately 563,000 rentable square feet related to our development or redevelopment programs, and the remaining approximately 499,000 rentable square feet related to previously vacant space. Rental rates for this renewed/re-leased space were, on average approximately 1.4% lower on a cash basis and approximately 5.2% higher on a GAAP basis than rental rates for the respective expiring leases. Excluding one lease for 71,000 rentable square feet related to one tenant in the Gaithersburg submarket in Suburban Washington, D.C., rental rates for renewed/re-leased space were flat on a cash basis and on average 5.7% higher on a GAAP basis, for the six months ended June 30, 2012. Additionally, we granted tenant concessions, including free rent averaging approximately 1.6 months, with respect to the 1,871,000 rentable square feet leased during the six months ended June 30, 2012. Approximately 71% of the number of leases executed during the six months ended June 30, 2012, did not include concessions for free rent.
As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Additionally, approximately 96% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed or indexed based on a consumer price index or another index, and approximately 92% of our leases (on a rentable square footage basis) provided for the recapture of certain capital expenditures.
Projected results
Based on our current view of existing market conditions and certain current assumptions, we expect our earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted and FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted for the year ended December 31, 2012, will be as set forth in the table below. All projected FFO measures set forth below are non-GAAP measures. The table below provides a reconciliation of such FFO measures to earnings per share, the most directly comparable GAAP measure.
| Guidance | Year Ended December 31, 2012 | |
|---|---|---|
| Earnings per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 1.36 - 1.46 | |
| Depreciation and amortization | 2.93 - 2.99 | |
| Gain on sales of property | (0.03) | |
| FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 4.32 - 4.36 | |
| Write-off of unamortized loan fees upon early retirement of the 2012 Unsecured Senior Bank Term Loan | 0.01 | |
| Write-off of unamortized loan fees upon modification of unsecured senior line of credit | 0.03 | |
| Preferred stock redemption charge | 0.10 | |
| Realized gain on equity investment primarily related to one non-tenant life science entity | (0.09) | |
| FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted | 4.37 - 4.41 |
All values are in US Dollars.
| Key net operating income projection assumptions | ||
|---|---|---|
| Same property net operating income growth – cash basis | 3% to 5% | |
| Same property net operating income growth – GAAP basis | 0% to 2% | |
| Rental rate steps on lease renewals and re-leasing of space – cash basis | Slightly negative/positive | |
| Rental rate steps on lease renewals and re-leasing of space – GAAP basis | Up to 5% | |
| Straight-line rents | 6.5 million/qtr | |
| Amortization of above and below market leases | 0.8 million/qtr | |
| Realized gain on equity investment primarily related to one non-tenant life science entity | 5.8 million |
All values are in US Dollars.
| Key expense and other projection assumptions | ||
|---|---|---|
| General and administrative expenses in comparison to prior year | Up 12% to 14% | |
| Capitalization of interest | 56 to 62 million | |
| Interest expense, net | 72 to 78 million |
All values are in US Dollars.
Net operating income, net income, and FFO for the three months ended December 31, 2012
As of June 30, 2012, we had approximately $290.3 million and $275.1 million of construction in progress related to our six North American development and 10 North American redevelopment projects, respectively. The completion of these projects, along with recently delivered projects, certain future projects, and contributions from same properties, are expected to contribute significant increases in rental income, net operating income, and cash flows. Net operating income is projected to increase quarter to quarter, from $103.8 million for the three months ended June 30, 2012 (before the realized gain of $5.8 million on an equity investment primarily related to one non-tenant life science entity) to a range from $110.5 million to $112.5 million for the three months ended December 31, 2012. Operating performance assumptions related to the completion of our North America development and redevelopment projects, including the timing of initial occupancy, stabilization dates, and stabilization yields, are included on pages 48 and 50. Certain key assumptions regarding our projections, including the impact of various development and redevelopment projects, are included in the tables below.
The completion of our development and redevelopment projects will result in increased interest expense and other direct project costs, because these project costs will no longer qualify for capitalization and these costs will be expensed as incurred. Our projections for general and administrative expenses, capitalization of interest, and interest expense, net, are included in the tables below. Our projections of net operating income are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking Statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011. To the extent our full year earnings guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance. Further, we believe net operating income is a key performance indicator and is useful to investors as a performance measure because, when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations.
| Three Months Ended December 31, 2012 (in millions, except per share amounts) | ||
|---|---|---|
| Net operating income | 110.5 – 112.5 | |
| General and administrative | 11.0 – 12.0 | |
| Interest | 19.5 – 22.5 | |
| Depreciation and amortization | 42.6 – 47.7 | |
| Preferred stock dividends | 6.5 | |
| Other | 1.0 – 1.4 | |
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | 26.9 – 30.9 | |
| FFO | 71.1 – 73.0 | |
| FFO per share – diluted | 1.15 – 1.17 |
All values are in US Dollars.
Value-added projects
A key component of our business model is our value-added development and redevelopment programs. These programs are focused on providing high-quality, generic, and reusable life science laboratory space to meet the real estate requirements of a wide range of clients in the life science industry. Upon completion, each value-added project is expected to generate significant revenues and cash flows. Our development and redevelopment projects are generally in locations that are highly desirable to life science entities, which we believe results in higher occupancy levels, longer lease terms, and higher rental income and returns.
Development projects generally consist of the ground-up development of generic and reusable life science laboratory facilities. Redevelopment projects generally consist of the permanent change in use of office, warehouse, and shell space into generic life science laboratory space, including the conversion of single-tenancy space to multi-tenancy space, or vice versa. We anticipate execution of new active development projects for aboveground vertical construction of new life science laboratory space generally only with pre-leasing. Preconstruction activities include entitlements, permitting, design, site work, and other activities prior to commencement of vertical construction of aboveground shell and core improvements. Our objective also includes the advancement of preconstruction efforts to reduce the time required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of buildings. Ultimately, these projects will provide high-quality facilities for the life science industry and are expected to generate significant revenue and cash flows for the Company.
Development and redevelopment projects in Asia represent development opportunities focusing on life science laboratory space for our current client tenants and other life science entities. These projects focus on real estate investments with targeted returns on investment greater than returns expected in the United States. We have approximately 491,000 square feet undergoing construction in India. Additionally, we have a two-building development project located in North China aggregating 309,000 rentable square feet undergoing construction. Our development, redevelopment, and preconstruction projects as well as certain real estate in Asia are classified as construction in progress.
Our investments in real estate, net, consisted of the following as of June 30, 2012 (dollars in thousands):
| June 30, 2012 | |||||
|---|---|---|---|---|---|
| Book Value | Square Feet | ||||
| Land (related to rental properties) | 520,593 | ||||
| Buildings and building improvements | 4,600,499 | ||||
| Other improvements | 184,209 | ||||
| Rental properties | 5,305,301 | 14,354,168 | |||
| Less: accumulated depreciation | (822,369 | ) | |||
| Rental properties, net | 4,482,932 | ||||
| Construction in progress (“CIP”)/current value-added projects: | |||||
| Active development in North America | 290,289 | 954,702 | |||
| Active redevelopment in North America | 275,086 | 812,505 | |||
| Generic infrastructure/building improvement projects in North America | 80,877 | – | |||
| Active development and redevelopment in Asia | 97,744 | 800,851 | |||
| 743,996 | 2,568,058 | ||||
| Subtotal | 5,226,928 | 16,922,226 | |||
| Land/future value-added projects: | |||||
| Land held for future development in North America | 324,586 | 5,620,000 | |||
| Land undergoing preconstruction activities (additional CIP) in North America | 569,805 | 2,350,000 | |||
| Land held for future development/land undergoing preconstruction activities (additional CIP) in Asia | 60,161 | 6,700,000 | |||
| 954,552 | 14,670,000 | ||||
| Investment in unconsolidated real estate entity | 26,874 | 414,000 | |||
| Investments in real estate, net | 6,208,354 | 32,006,226 |
All values are in US Dollars.
The following table provides detail on our North America development and redevelopment projects as of June 30, 2012 (dollars in thousands):
| Project RSF | Leased Status RSF | Investment | Stabilized Yield | ||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2012 | To Complete | ||||||||||||||||||||||||||||||||||||
| Market – Submarket/ | In | Leased/<br>Negotiating | Total at | Project<br>Start | Occupancy | Stabilization | |||||||||||||||||||||||||||||||
| Property | Service | CIP | Total | Leased | Negotiating | Marketing | Total | % | In Service | CIP | 2012 | Thereafter | Completion | Cash | GAAP | Date | Date | Date | |||||||||||||||||||
| Greater Boston – Cambridge | |||||||||||||||||||||||||||||||||||||
| 225 Binney Street | – | 303,143 | 303,143 | 303,143 | – | – | 303,143 | 100% | – | 67,125 | 34,043 | 79,105 | 180,273 | 7.5% | 8.1% | 4Q11 | 4Q13 | 4Q13 | |||||||||||||||||||
| San Francisco Bay – Mission Bay | |||||||||||||||||||||||||||||||||||||
| 499 Illinois Street | – | 222,780 | 222,780 | – | – | 222,780 | 222,780 | – | – | 109,309 | 8,544 | 30,247 | 148,100 | 6.7% | 7.4% | 2Q11 | 2Q13 | 2Q14 | |||||||||||||||||||
| San Francisco Bay – South SF | |||||||||||||||||||||||||||||||||||||
| 259 East Grand Avenue | – | 170,618 | 170,618 | 170,618 | – | – | 170,618 | 100% | – | 28,599 | 25,371 | (1) | 26,891 | (1) | 80,861 | 7.8-8.2% | 7.8-8.2% | 1Q12 | 1Q13 | 1Q13 | |||||||||||||||||
| 400/450 East Jamie Court | 77,503 | 85,533 | 163,036 | 127,732 | – | 35,304 | 163,036 | 78% | 48,303 | 48,537 | 10,047 | 1,603 | 108,490 | 4.2% | 4.3% | 4Q06 | 3Q11 | 2Q13 | |||||||||||||||||||
| Other - 400/450 East Jamie Court (2) | 15,380 | (15,380 | ) | ||||||||||||||||||||||||||||||||||
| San Diego – University Town Center | |||||||||||||||||||||||||||||||||||||
| 4755 Nexus Center Drive | – | 45,255 | 45,255 | 45,255 | – | – | 45,255 | 100% | – | 13,812 | 6,916 | 1,613 | 22,341 | 7.0% | 7.7% | 1Q11 | 3Q12 | 3Q12 | |||||||||||||||||||
| 5200 Illumina Way | – | 127,373 | 127,373 | 127,373 | – | – | 127,373 | 100% | – | 38,287 | 9,866 | 1,147 | 49,300 | 7.0% | 10.8% | 4Q10 | 4Q12 | 4Q12 | |||||||||||||||||||
| Development projects in North America | 77,503 | 954,702 | 1,032,205 | 774,121 | – | 258,084 | 1,032,205 | 75% | 63,683 | 290,289 | 94,787 | 140,606 | 589,365 | ||||||||||||||||||||||||
| Greater Boston – Cambridge | |||||||||||||||||||||||||||||||||||||
| 400 Technology Square | – | 212,123 | 212,123 | 108,129 | 50,242 | 53,752 | 212,123 | 75% | – | 92,962 | 28,432 | 18,156 | 139,550 | 8.1% | 9.1% | 4Q11 | 4Q12 | 4Q13 | |||||||||||||||||||
| San Diego – University Town Center | |||||||||||||||||||||||||||||||||||||
| 10300 Campus Point Drive | 89,576 | 189,562 | 279,138 | 261,412 | – | 17,726 | 279,138 | 94% | 39,208 | 29,492 | 52,625 | 10,275 | 131,600 | 7.6% | 7.7% | 4Q10 | 4Q11 | 3Q12 | |||||||||||||||||||
| Seattle – Lake Union | |||||||||||||||||||||||||||||||||||||
| 1551 Eastlake Avenue | 65,342 | 52,141 | 117,483 | 65,342 | 8,000 | 44,141 | 117,483 | 62% | 34,776 | 20,400 | 8,806 | 28 | 64,010 | 6.7% | 6.7% | 4Q11 | 4Q11 | 4Q13 | |||||||||||||||||||
| Suburban and other redevelopment projects | 31,624 | 358,679 | 390,303 | 146,956 | 120,827 | 122,520 | 390,303 | 69% | 18,316 | 155,639 | 41,044 | 23,091 | 238,090 | ||||||||||||||||||||||||
| Other – suburban and other redevelopment projects (2) | 23,407 | (23,407 | ) | ||||||||||||||||||||||||||||||||||
| Redevelopment projects in North America | 186,542 | 812,505 | 999,047 | 581,839 | 179,069 | 238,139 | 999,047 | 76% | 115,707 | 275,086 | 130,907 | 51,550 | 573,250 | ||||||||||||||||||||||||
| Total development and redevelopment projects in North America | 264,045 | 1,767,207 | 2,031,252 | 1,355,960 | 179,069 | 496,223 | 2,031,252 | 76% | 179,390 | 565,375 | 225,694 | 192,156 | 1,162,615 |
All values are in US Dollars.
(1) Funding for this project will be primarily provided by the $55 million secured construction loan we closed in June 2012.
(2) As of the period end, some portion of the real estate basis associated with the rentable square feet under redevelopment or development was classified as in service because activities necessary to prepare the asset for its intended use were no longer in process. In the near future, we anticipate recommencing activities necessary to prepare the asset for its intended use upon execution of leasing and final decisions related to design of each space.
The following table summarizes the components of the square footage of our future value-added projects in North America as of June 30, 2012:
| Markets | Land Undergoing<br>Preconstruction<br>Activities<br>(additional CIP) | Land Held for<br>Future<br>Development | Total Land (1) | Future<br>Redevelopment (2) | |||||
|---|---|---|---|---|---|---|---|---|---|
| Greater Boston | 1,582,000 | 225,000 | 1,807,000 | 119,000 | |||||
| San Francisco Bay – Mission Bay | – | 290,000 | 290,000 | – | |||||
| San Francisco Bay – South San Francisco | – | 1,024,000 | 1,024,000 | 40,000 | |||||
| San Diego | 255,000 | 522,000 | 777,000 | 264,000 | |||||
| Greater NYC | 407,000 | – | 407,000 | – | |||||
| Suburban Washington, D.C. | – | 1,274,000 | 1,274,000 | 416,000 | |||||
| Seattle | 106,000 | 1,018,000 | 1,124,000 | 81,000 | |||||
| Other markets | – | 1,125,000 | 1,125,000 | 217,000 | |||||
| Canada | – | 142,000 | 142,000 | – | |||||
| Total future value-added projects in North America | 2,350,000 | 5,620,000 | 7,970,000 | 1,137,000 |
(1) In addition to assets included in our gross investment in real estate, we hold options/rights for parcels supporting the future ground-up development of approximately 385,000 rentable square feet in Alexandria Center™ for Life Science — New York City related to an option under our ground lease.
(2) Our asset base also includes non-laboratory space (office, warehouse, and industrial space) identified for future conversion into life science laboratory space through redevelopment. These spaces are classified in investments in real estate, net, in the condensed consolidated balance sheets.
As of June 30, 2012, our rental properties, net, in Asia, were comprised of five operating properties aggregating approximately 523,000 square feet, with occupancy of 67.4%. Annualized base rent of our operating properties in Asia was approximately $3.6 million as of June 30, 2012. Our primary sources of revenues are rental income and tenant recoveries from leases of our properties. The comparability of financial data from period to period is affected by the timing of our property acquisition, development, and redevelopment activities.
Our investments in real estate, net, in Asia, consisted of the following as of June 30, 2012 (dollars in thousands):
| June 30, 2012 | |||||
|---|---|---|---|---|---|
| Book Value | Square Feet | ||||
| Rental properties, net | 42,498 | 522,950 | |||
| Construction in progress (“CIP”)/current value-added projects: | |||||
| Active development | 85,250 | 682,466 | |||
| Active redevelopment | 12,494 | 118,385 | |||
| 97,744 | 800,851 | ||||
| Land held for future development/land undergoing preconstruction activities (additional CIP) | 60,161 | 6,700,000 | |||
| Total investments in real estate, net in Asia | 200,403 | 8,023,801 |
All values are in US Dollars.
The following table provides detail on our Asia development and redevelopment projects as of June 30, 2012 (dollars in thousands):
| Project RSF | Leased Status RSF | Investment | ||||||||||||||||||||||||||
| In | Leased/ | June 30, 2012 | To Complete | Total at | ||||||||||||||||||||||||
| Description | Service | CIP | Total | Leased | Negotiating | Marketing | Total | Negotiating % | In Service | CIP | 2012 | Thereafter | Completion | |||||||||||||||
| China development project | – | 309,476 | 309,476 | – | – | 309,476 | 309,476 | –% | – | 55,490 | 3,332 | 23,478 | 82,300 | |||||||||||||||
| India development projects | 79,770 | 372,990 | 452,760 | 82,920 | 53,465 | 316,375 | 452,760 | 30% | 9,476 | 29,760 | 15,486 | 12,870 | 67,592 | |||||||||||||||
| India redevelopment projects | 23,798 | 118,385 | 142,183 | 23,798 | 44,660 | 73,725 | 142,183 | 48% | 2,608 | 12,494 | 4,510 | 3,097 | 22,709 | |||||||||||||||
| Total active development and redevelopment in Asia | 103,568 | 800,851 | 904,419 | 12,084 | 97,744 | 23,328 | 39,445 | 172,601 |
All values are in US Dollars.
Tenants
Our life science properties are leased to a diverse group of tenants, with no tenant accounting for more than 7.0% of our annualized base rent. The following table sets forth information regarding leases with our 20 largest client tenants based upon annualized base rent as of June 30, 2012 (dollars in thousands):
| Remaining Lease | Approximate<br>Aggregate | Percentage<br>of<br>Aggregate | Percentage<br>of<br>Aggregate | Investment-Grade Entities (3) | |||||||||||||||||||||||||
| Number | Term in Years | Rentable | Total | Annualized | Annualized | Fitch | Moody’s | S&P | Education/ | ||||||||||||||||||||
| Tenant | of Leases | (1) | (2) | Square Feet | Square Feet | Base Rent | Base Rent | Rating | Rating | Rating | Research | ||||||||||||||||||
| 1 | Novartis AG | 10 | 4.3 | 4.5 | 564,876 | 3.3 | % | 29,634 | 7.0 | % | AA | Aa2 | AA- | – | |||||||||||||||
| 2 | Eli Lilly and Company | 5 | 9.1 | 10.7 | 262,182 | 1.5 | 15,048 | 3.5 | A | A2 | AA- | – | |||||||||||||||||
| 3 | FibroGen, Inc. | 1 | 11.4 | 11.4 | 234,249 | 1.4 | 14,197 | 3.4 | – | – | – | – | |||||||||||||||||
| 4 | Roche Holding Ltd | 3 | 5.7 | 5.8 | 348,918 | 2.1 | 13,867 | 3.3 | AA- | A1 | AA- | – | |||||||||||||||||
| 5 | Illumina, Inc. | 1 | 19.3 | 19.3 | 346,581 | 2.0 | 13,474 | 3.2 | – | – | – | – | |||||||||||||||||
| 6 | United States Government | 8 | 4.5 | 5.5 | 324,476 | 1.9 | 12,711 | 3.0 | AAA | Aaa | AA+ | – | |||||||||||||||||
| 7 | GlaxoSmithKline plc | 5 | 7.4 | 7.1 | 208,813 | 1.2 | 10,237 | 2.4 | A+ | A1 | A+ | – | |||||||||||||||||
| 8 | Bristol-Myers Squibb Company | 3 | 6.4 | 6.5 | 250,454 | 1.5 | 10,087 | 2.4 | A+ | A2 | A+ | – | |||||||||||||||||
| 9 | Massachusetts Institute of Technology | 3 | 4.9 | 5.2 | 178,952 | 1.1 | 8,230 | 1.9 | – | Aaa | AAA | ü | |||||||||||||||||
| 10 | The Regents of the University of California | 3 | 9.1 | 9.2 | 182,242 | 1.1 | 7,435 | 1.8 | AA+ | Aa1 | AA | ü | |||||||||||||||||
| 11 | NYU-Neuroscience Translational Research Institute | 2 | 13.5 | 12.7 | 78,597 | 0.5 | 6,993 | 1.6 | – | Aa3 | AA- | ü | |||||||||||||||||
| 12 | Alnylam Pharmaceuticals, Inc. (4) | 1 | 4.3 | 4.3 | 129,424 | 0.8 | 6,147 | 1.5 | – | – | – | – | |||||||||||||||||
| 13 | Gilead Sciences, Inc. | 1 | 8.0 | 8.0 | 109,969 | 0.6 | 5,824 | 1.4 | – | Baa1 | A- | – | |||||||||||||||||
| 14 | Amylin Pharmaceuticals, Inc.(5) | 3 | 3.9 | 4.0 | 168,308 | 1.0 | 5,753 | 1.4 | – | – | – | – | |||||||||||||||||
| 15 | Pfizer Inc. | 2 | 6.9 | 6.7 | 116,518 | 0.7 | 5,502 | 1.3 | A+ | A1 | AA | – | |||||||||||||||||
| 16 | The Scripps Research Institute | 2 | 4.4 | 4.4 | 99,377 | 0.6 | 5,197 | 1.2 | AA- | Aa3 | – | ü | |||||||||||||||||
| 17 | Quest Diagnostics Incorporated | 2 | 4.1 | 4.0 | 280,113 | 1.7 | 5,170 | 1.2 | BBB+ | Baa2 | BBB+ | – | |||||||||||||||||
| 18 | Theravance, Inc. (6) | 2 | 7.9 | 7.9 | 130,342 | 0.8 | 4,895 | 1.2 | – | – | – | – | |||||||||||||||||
| 19 | UMass Memorial Health Care, Inc. | 6 | 3.7 | 3.0 | 189,722 | 1.1 | 4,748 | 1.1 | AA | Aa2 | – | ü | |||||||||||||||||
| 20 | Infinity Pharmaceuticals, Inc. | 2 | 2.6 | 2.6 | 68,020 | 0.4 | 4,423 | 1.0 | – | – | – | – | |||||||||||||||||
| Total/Weighted Average: | 65 | 7.2 | 7.6 | 4,272,133 | 25.3 | % | 189,572 | 44.8 | % |
All values are in US Dollars.
(1) Represents remaining lease term in years based on percentage of leased square feet.
(2) Represents remaining lease term in years based on percentage of annualized base rent in effect as of June 30, 2012.
(3) Ratings obtained from Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s.
(4) As of March 31, 2012, Novartis AG owned approximately 11% of the outstanding stock of Alnylam Pharmaceuticals, Inc.
(5) On June 29, 2012, Bristol-Meyers Squibb Company, an A+/A2 rated company, entered into a definitive merger agreement to acquire Amylin Pharmaceuticals, Inc., subject to completion of the cash tender offer.
(6) As of May 16, 2012, GlaxoSmithKline plc owned approximately 27% of the outstanding stock of Theravance, Inc.
The chart below shows tenant business type by annualized base rent as of June 30, 2012:
Location of properties
The locations of our properties are diversified among a number of life science cluster markets. The following table sets forth, as of June 30, 2012, the total rentable square feet and annualized base rent of our properties in each of our existing markets (dollars in thousands):
| Rentable Square Feet | Number of | ||||||||||||||||||
| Markets | Operating | Development | Redevelopment | Total | % Total | Properties | Annualized Base Rent (1) | ||||||||||||
| Greater Boston | 3,089,794 | 303,143 | 329,438 | 3,722,375 | 22 | % | 38 | 114,000 | 27 | % | |||||||||
| San Francisco Bay | 2,230,201 | 478,931 | 53,980 | 2,763,112 | 16 | 25 | 86,420 | 20 | |||||||||||
| San Diego | 2,361,461 | 172,628 | 275,763 | 2,809,852 | 17 | 36 | 73,938 | 17 | |||||||||||
| Greater NYC | 705,693 | – | – | 705,693 | 4 | 8 | 33,332 | 8 | |||||||||||
| Suburban Washington, D.C. | 2,334,752 | – | 101,183 | 2,435,935 | 14 | 31 | 48,984 | 12 | |||||||||||
| Seattle | 897,859 | – | 52,141 | 950,000 | 6 | 11 | 33,508 | 8 | |||||||||||
| Research Triangle Park | 941,639 | – | – | 941,639 | 6 | 14 | 19,350 | 5 | |||||||||||
| Canada | 1,096,077 | – | – | 1,096,077 | 6 | 5 | 9,082 | 2 | |||||||||||
| Non-cluster markets | 61,002 | – | – | 61,002 | – | 2 | 599 | – | |||||||||||
| North America | 13,718,478 | 954,702 | 812,505 | 15,485,685 | 91 | 170 | 419,213 | 99 | |||||||||||
| Asia | 522,950 | 682,466 | 118,385 | 1,323,801 | 8 | 9 | 3,639 | 1 | |||||||||||
| Continuing operations | 14,241,428 | 1,637,168 | 930,890 | 16,809,486 | 99 | 179 | 422,852 | 100 | % | ||||||||||
| Discontinued operations | 112,740 | – | – | 112,740 | 1 | 3 | |||||||||||||
| Total | 14,354,168 | 1,637,168 | 930,890 | 16,922,226 | 100 | % | 182 |
All values are in US Dollars.
(1) Annualized base rent means the annualized fixed base rental amount in effect as of June 30, 2012 (using rental revenue computed on a straight-line basis in accordance with GAAP). Represents annualized base rent related to our operating rentable square feet.
Our average occupancy rate for operating properties as of December 31 of each year from 1998 to 2011, and June 30, 2012, was approximately 95.1%. Our average occupancy rate for operating and redevelopment properties as of December 31 of each year from 1998 to 2011, and June 30, 2012, was approximately 89.0%.
Summary of Lease Expirations
The following table summarizes information with respect to the lease expirations at our properties as of June 30, 2012:
| Year of Lease Expiration | Number of Leases Expiring | RSF of Expiring Leases | Percentage of<br>Aggregate Total RSF | Annualized Base Rent of Expiring Leases (per RSF) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2012 | 42 | (1) | 674,800 | (1) | 4.7 | % | 24.77 | |||||
| 2013 | 98 | 1,222,394 | 8.5 | 28.94 | ||||||||
| 2014 | 85 | 1,324,531 | 9.2 | 28.89 | ||||||||
| 2015 | 65 | 1,265,708 | 8.8 | 32.04 | ||||||||
| 2016 | 55 | 1,527,844 | 10.6 | 30.63 | ||||||||
| 2017 | 52 | 1,465,685 | 10.2 | 30.22 | ||||||||
| 2018 | 19 | 1,140,789 | 7.9 | 39.40 | ||||||||
| 2019 | 14 | 529,455 | 3.7 | 35.40 | ||||||||
| 2020 | 15 | 731,680 | 5.1 | 40.32 | ||||||||
| 2021 | 19 | 646,993 | 4.5 | 38.29 | ||||||||
| Thereafter | 30 | 1,949,227 | 13.5 | 38.98 |
All values are in US Dollars.
| Annualized | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2012 RSF of Expiring Leases | Base Rent of | |||||||||||||
| Negotiating/ | Targeted for | Remaining | Expiring Leases | Market Rent | ||||||||||
| Markets | Leased | Anticipating | Redevelopment | Expiring Leases | Total | (per RSF) | per RSF (2) | |||||||
| Greater Boston | 2,266 | 17,753 | – | 68,843 | 88,862 | 28.40 | 30.00 - 55.00 | |||||||
| San Francisco Bay | 13,980 | 1,379 | 32,074 | 33,333 | 80,766 | 47.72 | 24.00 - 47.00 | |||||||
| San Diego | 18,012 | 6,320 | 243,550 | (3) | 18,596 | 286,478 | 21.86 | 24.00 - 36.00 | ||||||
| Greater NYC | – | – | – | – | – | – | N/A | |||||||
| Suburban Washington, D.C. | 53,464 | – | – | 10,882 | 64,346 | 20.98 | 14.00 - 26.00 | |||||||
| Seattle | 16,666 | – | 66,776 | 36,663 | 120,105 | 18.47 | 20.00 - 48.00 | |||||||
| Research Triangle Park | 12,220 | 4,575 | – | – | 16,795 | 19.35 | 10.00 - 30.00 | |||||||
| Canada | – | – | – | – | – | – | N/A | |||||||
| Non-cluster markets | – | – | – | – | – | – | N/A | |||||||
| Asia | – | 7,491 | – | 9,957 | 17,448 | 10.23 | 8.00 - 15.00 | |||||||
| Total | 116,608 | 37,518 | 342,400 | 178,274 | 674,800 | (1) | 24.77 | |||||||
| Percentage of expiring leases | 17% | 6% | 51% | 26% | 100% |
All values are in US Dollars.
| Annualized | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 RSF of Expiring Leases | Base Rent of | |||||||||||||
| Negotiating/ | Targeted for | Remaining | Expiring Leases | Market Rent | ||||||||||
| Markets | Leased | Anticipating | Redevelopment | Expiring Leases | Total | (per RSF) | per RSF (2) | |||||||
| Greater Boston | – | 136,744 | – | 201,072 | 337,816 | 35.57 | 30.00 - 55.00 | |||||||
| San Francisco Bay | 24,039 | 64,696 | – | 220,878 | 309,613 | 26.24 | 24.00 - 47.00 | |||||||
| San Diego | 9,849 | 14,030 | – | 128,876 | 152,755 | 21.41 | 24.00 - 36.00 | |||||||
| Greater NYC | – | – | – | – | – | – | N/A | |||||||
| Suburban Washington, D.C. | – | 67,951 | – | 190,615 | 258,566 | 29.86 | 14.00 - 26.00 | |||||||
| Seattle | – | – | – | 61,005 | 61,005 | 39.14 | 20.00 - 48.00 | |||||||
| Research Triangle Park | – | 15,949 | – | 53,384 | 69,333 | 18.66 | 10.00 - 30.00 | |||||||
| Canada | – | – | – | – | – | – | N/A | |||||||
| Non-cluster markets | – | 10,330 | – | 13,647 | 23,977 | 17.68 | 14.00 - 22.00 | |||||||
| Asia | – | 2,314 | – | 7,015 | 9,329 | 15.58 | 8.00 - 15.00 | |||||||
| Total | 33,888 | 312,014 | – | 876,492 | 1,222,394 | 28.94 | ||||||||
| Percentage of expiring leases | 3% | 26% | –% | 71% | 100% |
All values are in US Dollars.
| (1) | Excludes nine month-to-month leases for approximately 18,000 rentable square feet. |
|---|---|
| (2) | Based upon rental rates achieved in recently executed leases. |
| (3) | Includes 3013/3033 Science Park Road, which consists of two life science laboratory buildings acquired in April 2012, aggregating 176,500 rentable square feet. The property was 100% leased on a short-term basis through July 2012, and thereafter, we expect to redevelop approximately 105,000 rentable square feet. The remaining square footage will be classified as future developable square feet. |
Results of operations
The following table presents information regarding our asset base and value-added projects as of June 30, 2012 and 2011:
| June 30, | |||||
|---|---|---|---|---|---|
| Rentable square feet | 2012 | 2011 | |||
| Rentable square feet of operating properties | 14,354,168 | 12,682,054 | |||
| Rentable square feet of total properties | 16,922,226 | 14,154,451 | |||
| Number of properties | 182 | 171 | |||
| Occupancy – operating | 92.9% | 93.8% | |||
| Occupancy – operating and redevelopment | 86.9% | 88.3% | |||
| Annualized base rent per leased rentable square foot | 33.83 | 34.06 |
All values are in US Dollars.
As a result of changes within our total property portfolio, the financial data presented in the table on the following page shows significant changes in revenue and expenses from period to period. In order to supplement an evaluation of our results of operations over a given period, we analyze the operating performance for all properties that were fully operating for the entire periods presented (herein referred to as “Same Properties”) separate from properties acquired subsequent to the first period presented, properties undergoing active development and active redevelopment, and corporate entities (legal entities performing general and administrative functions), which are excluded from same property results (herein referred to as “Non-Same Properties”). Additionally, rental revenues from lease termination fees, if any, are excluded from the results of the Same Properties. For the three months ended June 30, 2012 and 2011, our Same Properties consisted of 139 operating properties aggregating approximately 10.5 million rentable square feet with occupancy of 93.6% and 93.0% for each period, respectively. For the six months ended June 30, 2012 and 2011, our Same Properties consisted of 139 operating properties aggregating approximately 10.5 million rentable square feet with occupancy of 93.7% and 93.5% for each period, respectively.
Net operating income is a non-GAAP financial measure equal to income from continuing operations, the most directly comparable GAAP financial measure, plus loss on early extinguishment of debt, depreciation and amortization, interest expense, and general and administrative expense. We believe net operating income provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe net operating income is a useful measure for evaluating the operating performance of our real estate assets. Net operating income on a cash basis is net operating income on a GAAP basis, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. We believe that net operating income on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent adjustments to rental revenue.
Further, we believe net operating income is useful to investors as a performance measure because, when compared across periods, net operating income reflects the impact on operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from income from continuing operations. Net operating income excludes certain components from income from continuing operations in order to provide results that are more closely related to the results of operations of our properties. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Net operating income presented by us may not be comparable to net operating income reported by other equity REITs that define net operating income differently. We believe that in order to facilitate a clear understanding of our operating results, net operating income should be examined in conjunction with income from continuing operations as presented in our condensed consolidated statements of income. Net operating income should not be considered as an alternative to income from continuing operations as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions.
Comparison of the three months ended June 30, 2012, to the three months ended June 30, 2011
The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same Properties for the three months ended June 30, 2012, compared to the three months ended June 30, 2011, and a reconciliation of net operating income to income from continuing operations, the most directly comparable financial measure (dollars in thousands):
| Three Months Ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | % Change | ||||||
| Revenues: | |||||||||
| Rental – Same Properties | 84,623 | 83,831 | 792 | 1 | % | ||||
| Rental – Non-Same Properties | 26,060 | 25,417 | 643 | 3 | |||||
| Total rental | 110,683 | 109,248 | 1,435 | 1 | |||||
| Tenant recoveries – Same Properties | 27,753 | 27,261 | 492 | 2 | |||||
| Tenant recoveries – Non-Same Properties | 6,288 | 5,716 | 402 | 7 | |||||
| Total tenant recoveries | 34,041 | 33,147 | 894 | 3 | |||||
| Other income – Same Properties | 12 | 58 | (46 | ) | (79 | ) | |||
| Other income – Non-Same Properties | 9,369 | 868 | 8,501 | 979 | |||||
| Total other income | 9,381 | 926 | 8,455 | 913 | |||||
| Total revenues – Same Properties | 112,388 | 111,150 | 1,238 | 1 | |||||
| Total revenues – Non-Same Properties | 41,717 | 32,171 | 9,546 | 30 | |||||
| Total revenues | 154,105 | 143,321 | 10,784 | 8 | |||||
| Expenses: | |||||||||
| Rental operations – Same Properties | 33,122 | 31,707 | 1,415 | 4 | |||||
| Rental operations – Non-Same Properties | 11,384 | 8,888 | 2,496 | 28 | |||||
| Total rental operations | 44,506 | 40,595 | 3,911 | 10 | |||||
| Net operating income: | |||||||||
| Net operating income – Same Properties | 79,266 | 79,443 | (177 | ) | – | ||||
| Net operating income – Non-Same Properties | 30,333 | 23,283 | 7,050 | 30 | |||||
| Total net operating income | 109,599 | 102,726 | 6,873 | 7 | |||||
| Other expenses: | |||||||||
| General and administrative | 12,324 | 10,764 | 1,560 | 14 | |||||
| Interest | 17,922 | 16,567 | 1,355 | 8 | |||||
| Depreciation and amortization | 52,316 | 40,173 | 12,143 | 30 | |||||
| Loss on early extinguishment of debt | 1,602 | 1,248 | 354 | 28 | |||||
| 84,164 | 68,752 | 15,412 | 22 | ||||||
| Income from continuing operations | 25,435 | 33,974 | (8,539 | ) | (25 | )% |
All values are in US Dollars.
Rental revenues
Total rental revenues for the three months ended June 30, 2012, increased by $1.5 million, or 1%, to $110.7 million, compared to $109.2 million for the three months ended June 30, 2011. The increase was due to rental revenues from our Non-Same Properties, including seven development and redevelopment projects that were completed and delivered after April 1, 2011, and five operating properties that were acquired subsequent to April 1, 2011.
Tenant recoveries
Tenant recoveries for the three months ended June 30, 2012, compared to the three months ended June 30, 2011, increased $0.9 million, or 3%, to $34.0 million, compared to an increase of $3.9 million, or 10%, of rental operating expenses. Non-Same Properties tenant recoveries increased by $0.4 million while Non-Same Properties rental operating expenses increased by $2.5 million, primarily due to some vacancies related to development and redevelopment properties delivered into operating properties since April 1, 2011, and an increase in certain non-recoverable expenses. As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent.
Other income
Other income for the three months ended June 30, 2012 and 2011, of $9.4 million and $0.9 million, respectively, represents construction management fees, interest, and investment income. The increase of approximately $8.5 million is primarily due to an increase in investment income, including a realized gain of $5.8 million on an equity investment primarily related to one non-tenant life science entity, plus an overall increase in construction management fees, other fee income, and interest income for the three months ended June 30, 2012, compared to the three months ended June 30, 2011.
Rental operating expenses
Total rental operating expenses for the three months ended June 30, 2012, increased by $3.9 million, or 10%, to $44.5 million, compared to $40.6 million for the three months ended June 30, 2011. Approximately $2.5 million of the increase was due to an increase in rental operating expenses from our Non-Same Properties, primarily related to seven development and redevelopment projects that were completed and delivered after April 1, 2011, and five operating properties that were acquired subsequent to April 1, 2011. The remaining $1.4 million increase was due to increases in rental operating expenses from our Same Properties. The increase in rental operating expenses at our Same Properties was primarily attributable to an increase of approximately $0.9 million due to HVAC and generator repair and maintenance expense and an increase in payroll expense of approximately $0.2 million for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011.
General and administrative expenses
General and administrative expenses for the three months ended June 30, 2012, increased by $1.5 million, or 14%, to $12.3 million, compared to $10.8 million for the three months ended June 30, 2011. The increase was primarily due to costs associated with the Amended and Restated Employment Agreement with our Chief Executive Officer, to provide the Company with a performance based compensation program. Additionally, the increase in general and administrative expenses was related to an increase in the number of employees related to the growth in both the depth and breadth of our operations in multiple markets. Since April 1, 2011, our number of employees has increased by approximately 21%. As a percentage of total revenues, general and administrative expenses were 8.0% and 7.5% for the three months ended June 30, 2012 and 2011.
Interest expense
Interest expense for the three months ended June 30, 2012, increased by $1.3 million, or 8%, to $17.9 million, compared to $16.6 million for the three months ended June 30, 2011, detailed as follows (in thousands):
| Three Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| Component | 2012 | 2011 | Change | ||||
| Secured notes payable | 10,133 | 11,741 | (1,608 | ) | |||
| Unsecured senior convertible notes | 11 | 3,026 | (3,015 | ) | |||
| Unsecured senior notes payable | 6,334 | – | 6,334 | ||||
| Unsecured senior line of credit and unsecured senior bank term loan | 9,093 | 9,171 | (78 | ) | |||
| Interest rate swaps | 5,895 | 5,302 | 593 | ||||
| Amortization of loan fees and other interest | 2,281 | 2,373 | (92 | ) | |||
| Capitalized interest | (15,825 | ) | (15,046 | ) | (779 | ) | |
| Total change in interest expense | 17,922 | 16,567 | 1,355 |
All values are in US Dollars.
Interest expense related to our secured notes payable decreased primarily due to the repayments of seven secured notes payable approximating $55.7 million since April 1, 2011. Interest expense related to our unsecured senior convertible notes also decreased due to the repurchases of our 3.70% Unsecured Senior Convertible Notes aggregating $202.3 million since April 1, 2011. These decreases were primarily offset by interest related to our recently issued unsecured senior notes payable, as well as an increase in outstanding balances of our unsecured senior bank term loans since April 1, 2011. We have entered into certain interest rate swap agreements to hedge a portion of our exposure primarily related to variable interest rates associated with our unsecured senior line of credit and unsecured senior bank term loans (see “Liquidity and Capital Resources – Contractual Obligations – Interest Rate Swap Agreements”).
Depreciation and amortization
Depreciation and amortization for the three months ended June 30, 2012, increased by $12.1 million, or 30%, to $52.3 million, compared to $40.2 million for the three months ended June 30, 2011. The increase resulted primarily from increased depreciation related to building improvements and other assets, including seven development and redevelopment projects that were completed and delivered after April 1, 2011, and five operating properties that were acquired subsequent to April 1, 2011. Depreciation also increased as a result of depreciation adjustments necessary to reduce the carrying amount of buildings and improvements to zero in connection with planned redevelopments.
Loss on early extinguishment of debt
During the three months ended June 30, 2012, we recognized a loss on early extinguishment of debt of approximately $1.6 million related to the write-off of unamortized loan fees upon modification of our unsecured senior line of credit. During the three months ended June 30, 2011, we recognized an aggregate loss on early extinguishment of debt of approximately $1.2 million related to the write-off of unamortized loan fees upon the early repayment of $500 million of our 2012 Unsecured Senior Term Loan.
Income from discontinued operations, net
Income from discontinued operations, net, of $0.2 million for the three months ended June 30, 2012, includes the results of the operations of three operating properties that were classified as “held for sale” as of June 30, 2012, and the results of operations of one property sold during the three months ended June 30, 2012. Income from discontinued operations, net, of $0.3 million for the three months ended June 30, 2011, includes the results of operations of three properties that were classified as “held for sale” as of June 30, 2012, the results of operations of one property sold during the three months ended June 30, 2012, and the results of operations of one property sold during the three months ended September 30, 2011.
Comparison of the six months ended June 30, 2012, to the six months ended June 30, 2011
The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same Properties for the six months ended June 30, 2012, compared to the six months ended June 30, 2011, and a reconciliation of net operating income to income from continuing operations, the most directly comparable financial measure (dollars in thousands):
| Six Months Ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | % Change | ||||||
| Revenues: | |||||||||
| Rental – Same Properties | 170,032 | 168,383 | 1,649 | 1 | % | ||||
| Rental – Non-Same Properties | 48,235 | 46,917 | 1,318 | 3 | |||||
| Total rental | 218,267 | 215,300 | 2,967 | 1 | |||||
| Tenant recoveries – Same Properties | 56,001 | 55,793 | 208 | – | |||||
| Tenant recoveries – Non-Same Properties | 12,562 | 10,215 | 2,347 | 23 | |||||
| Total tenant recoveries | 68,563 | 66,008 | 2,555 | 4 | |||||
| Other income – Same Properties | 58 | 50 | 8 | 16 | |||||
| Other income – Non-Same Properties | 11,952 | 1,653 | 10,299 | 623 | |||||
| Total other income | 12,010 | 1,703 | 10,307 | 605 | |||||
| Total revenues – Same Properties | 226,091 | 224,226 | 1,865 | 1 | |||||
| Total revenues – Non-Same Properties | 72,749 | 58,785 | 13,964 | 24 | |||||
| Total revenues | 298,840 | 283,011 | 15,829 | 6 | |||||
| Expenses: | |||||||||
| Rental operations – Same Properties | 66,298 | 64,205 | 2,093 | 3 | |||||
| Rental operations – Non-Same Properties | 21,590 | 17,425 | 4,165 | 24 | |||||
| Total rental operations | 87,888 | 81,630 | 6,258 | 8 | |||||
| Net operating income: | |||||||||
| Net operating income – Same Properties | 159,793 | 160,021 | (228 | ) | – | ||||
| Net operating income – Non-Same Properties | 51,159 | 41,360 | 9,799 | 24 | |||||
| Total net operating income | 210,952 | 201,381 | 9,571 | 5 | |||||
| Other expenses: | |||||||||
| General and administrative | 22,685 | 20,258 | 2,427 | 12 | |||||
| Interest | 34,149 | 34,377 | (228 | ) | (1 | ) | |||
| Depreciation and amortization | 95,682 | 76,716 | 18,966 | 25 | |||||
| Loss on early extinguishment of debt | 2,225 | 3,743 | (1,518 | ) | (41 | ) | |||
| 154,741 | 135,094 | 19,647 | 15 | ||||||
| Income from continuing operations | 56,211 | 66,287 | (10,076 | ) | (15 | )% |
All values are in US Dollars.
Rental revenues
Total rental revenues for the six months ended June 30, 2012, increased by $3.0 million, or 1%, to $218.3 million, compared to $215.3 million for the six months ended June 30, 2011. The increase was due to rental revenues from our Non-Same Properties, including seven development and redevelopment projects that were completed and delivered after January 1, 2011, and five operating properties that were acquired subsequent to January 1, 2011.
Tenant recoveries
Total tenant recoveries for the six months ended June 30, 2012, increased by $2.6 million, or 4%, to $68.6 million, compared to $66.0 million for the six months ended June 30, 2011. Same Properties tenant recoveries increased by $0.2 million while Same Properties rental operating expenses increased by $2.1 million primarily due to some vacancies and an increase in certain non-recoverable operating expenses from our Same Properties. The increase of approximately $2.3 million from our Non-Same Properties tenant recoveries was primarily due to seven development and redevelopment projects that were completed and delivered after January 1, 2011, and five operating properties that were acquired subsequent to January 1, 2011. As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent.
Other income
Other income for the six months ended June 30, 2012 and 2011, of $12.0 million and $1.7 million, respectively, represents construction management fees, interest, and investment income. The increase of approximately $10.3 million is primarily due to an increase in investment income, including a realized gain of $5.8 million on an equity investment primarily related to one non-tenant life science entity, plus an overall increase in construction management fees, other fee income, and interest income, for the six months ended June 30, 2012, compared to the six months ended June 30, 2011.
Rental operating expenses
Total rental operating expenses for the six months ended June 30, 2012, increased by $6.3 million, or 8%, to $87.9 million, compared to $81.6 million for the six months ended June 30, 2011. Approximately $4.2 million of the increase was due to an increase in rental operating expenses from our Non-Same Properties, primarily related to seven development and redevelopment projects that were completed and delivered after January 1, 2011, and five operating properties that were acquired subsequent to January 1, 2011. The remaining $2.1 million increase was due to increases in rental operating expenses from our Same Properties. The increase in rental operating expenses at our Same Properties was primarily attributable to an increase of approximately $1.2 million due to HVAC and generator repair and maintenance expense and an increase in property taxes of approximately $0.3 million for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011.
General and administrative expenses
General and administrative expenses for the six months ended June 30, 2012, increased by $2.4 million, or 12%, to $22.7 million, compared to $20.3 million for the six months ended June 30, 2011. The increase was primarily due to costs associated with the Amended and Restated Employment Agreement with our Chief Executive Officer, to provide the Company with a performance based compensation program. Additionally, the increase in general and administrative expenses was related to an increase in the number of employees related to the growth in both the depth and breadth of our operations in multiple markets. Since January 1, 2011, our number of employees has increased by approximately 23%. As a percentage of total revenues, general and administrative expenses were 7.6% and 7.2%, respectively, for the six months ended June 30, 2012 and 2011.
Interest expense
Interest expense for the six months ended June 30, 2012, decreased by $0.3 million, or 1%, to $34.1 million, compared to $34.4 million for the six months ended June 30, 2011, detailed as follows (in thousands):
| Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| Component | 2012 | 2011 | Change | ||||
| Secured notes payable | 20,243 | 23,621 | (3,378 | ) | |||
| Unsecured senior convertible notes | 233 | 6,491 | (6,258 | ) | |||
| Unsecured senior notes payable | 8,516 | – | 8,516 | ||||
| Unsecured senior line of credit and unsecured senior bank term loan | 19,607 | 17,050 | 2,557 | ||||
| Interest rate swap | 11,670 | 10,741 | 929 | ||||
| Amortization of loan fees and other interest | 4,971 | 4,713 | 258 | ||||
| Capitalized interest | (31,091 | ) | (28,239 | ) | (2,852 | ) | |
| Total change in interest expense | 34,149 | 34,377 | (228 | ) |
All values are in US Dollars.
Interest expense related to our secured notes payable decreased primarily due to the repayments of seven secured notes payable approximating $55.7 million since January 1, 2011. Interest expense related to our unsecured senior convertible notes decreased due to the repurchases of all of our 3.70% Unsecured Senior Convertible Notes, aggregating $295.1 million since January 1, 2011. These decreases were primarily offset by interest related to our recently issued unsecured senior notes payable, as well as an increase in outstanding balances of our unsecured senior bank term loans since January 1, 2011. We have entered into certain interest rate swap agreements to hedge a portion of our exposure primarily related to variable interest rates associated with our unsecured senior line of credit and unsecured senior bank term loans (see “Liquidity and Capital Resources – Contractual Obligations — Interest Rate Swap Agreements”).
Depreciation and amortization
Depreciation and amortization for the six months ended June 30, 2012, increased by $19.0 million, or 25%, to $95.7 million, compared to $76.7 million for the six months ended June 30, 2011. The increase resulted primarily from increased depreciation related to building improvements and other assets, including seven development and redevelopment projects that were completed and delivered after January 1, 2011, and five operating properties that were acquired subsequent to January 1, 2011. Depreciation also increased as a result of depreciation adjustments necessary to reduce the carrying amount of buildings and improvements to zero in connection with planned redevelopments.
Loss on early extinguishment of debt
During the six months ended June 30, 2012, we recognized a loss on early extinguishment of debt of approximately $2.2 million, composed of $1.6 million related to the write-off of unamortized loan fees upon modification of our unsecured senior line of credit, and $0.6 million related to the write-off of unamortized loan fees resulting from the early repayment of $250 million of our 2012 Unsecured Senior Bank Term Loan. During the six months ended June 30, 2011, we recognized losses on early extinguishment of debt of approximately $3.7 million, composed of an aggregate loss of $2.5 million related to the repurchases, in privately negotiated transactions, of approximately $96.1 million principal amount of our 3.70% Unsecured Convertible Notes for an aggregate cash price of approximately $98.6 million, and a $1.2 million loss related to the write-off of unamortized loan fees upon the early repayment of $500 million of our 2012 Unsecured Term Loan.
Income from discontinued operations, net
Income from discontinued operations, net, of $0.3 million for the six months ended June 30, 2012, includes the results of the operations of three operating properties that were classified as “held for sale” as of June 30, 2012, and the results of operations of one property sold during the six months ended June 30, 2012. Income from discontinued operations, net, of $0.6 million for the six months ended June 30, 2011, includes the results of operations of three properties that were classified as “held for sale” as of June 30, 2012, the results of operations of one property sold during the six months ended June 30, 2012, and the results of operations of one property sold during the three months ended September 30, 2011.
Liquidity and capital resources
Overview
We expect to meet certain long-term liquidity requirements, such as for property acquisitions, development, redevelopment, other construction projects, capital improvements, tenant improvements, leasing costs, non-incremental revenue generating expenditures, and scheduled debt maturities, through net cash provided by operating activities, periodic asset sales, and long-term secured and unsecured indebtedness, including borrowings under our unsecured senior line of credit, unsecured senior bank term loans, and the issuance of additional debt and/or equity securities.
We expect to continue meeting our short-term liquidity and capital requirements, as further detailed in this section, generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT.
Over the next several years, our balance sheet, capital structure, and liquidity objectives are as follows:
· Reduce leverage as a percentage of total gross assets and improve our ratio of debt to earnings before interest, taxes, depreciation, and amortization;
· Maintain diverse sources of capital, including sources from net cash flows from operating activities, unsecured debt, secured debt, selective asset sales, joint ventures, preferred stock, and common stock;
· Manage the amount of debt maturing in a single year;
· Refinance outstanding medium-term variable rate bank debt with longer-term fixed rate debt;
· Mitigate unhedged variable rate debt exposure by transitioning our balance sheet debt from short-term and medium-term variable rate bank debt to long-term unsecured fixed rate debt and utilizing interest rate swap agreements in the interim period during this transition of debt;
· Maintain adequate liquidity from net cash provided by operating activities, cash and cash equivalents, and available borrowing capacity under our unsecured senior line of credit;
· Maintain available borrowing capacity under our unsecured senior line of credit in excess of 50% of the total commitments of $1.5 billion, except temporarily as necessary;
· Fund preferred stock and common stock dividends from net cash provided by operating activities;
· Retain positive cash flows from operating activities after payment of dividends for reinvestment in acquisitions and/or development and redevelopment projects; and
· Reduce our non-income-producing assets as a percentage of our gross investment in real estate.
Cash flows
We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table summarizes changes in the Company’s cash flows for the six months ended June 30, 2012 and 2011 (in thousands):
| Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | |||||
| Net cash provided by operating activities | 142,620 | 110,228 | 32,392 | ||||
| Net cash used in investing activities | (291,824 | ) | (475,783 | ) | 183,959 | ||
| Net cash provided by financing activities | 148,568 | 335,350 | (186,782 | ) |
All values are in US Dollars.
Operating activities
Cash flows provided by operating activities consisted of the following amounts (in thousands):
| Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | |||||
| Net cash provided by operating activities | 142,620 | 110,228 | 32,392 | ||||
| Changes in assets and liabilities | (1,952 | ) | 31,752 | (33,704 | ) | ||
| Net cash provided by operating activities before changes in assets and liabilities | 140,668 | 141,980 | (1,312 | ) |
All values are in US Dollars.
Net cash provided by operating activities for the six months ended June 30, 2012, increased by $32.4 million, or 29%, to $142.6 million, compared to $110.2 million for the six months ended June 30, 2011. The increase resulted primarily from changes in assets and liabilities for the six months ended June 30, 2012, compared to the same period in 2011. Excluding the increase in operating cash flow from changes in operating assets and liabilities, cash flow from operations decreased by $1.3 million, to $140.7 million, compared to $142.0 million for the six months ended June 30, 2011, primarily due to the timing of acquisitions and dispositions and the start of and completion of development and redevelopment properties since January 1, 2011. We believe our cash flows from operating activities provide a stable source of cash to fund operating expenses. As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Our average occupancy rate for operating properties as of June 30, 2012, and December 31 of each year from 1998 to 2011 was approximately 95.1%. Our average occupancy rate for operating and redevelopment properties as of June 30, 2012, and December 31 of each year from 1998 to 2011 was approximately 89.0%.
Investing activities
Net cash used in investing activities for the six months ended June 30, 2012, was $291.8 million, compared to $475.8 million for the six months ended June 30, 2011. This change consisted of the following amounts (in thousands):
| Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | |||||
| Proceeds from sale of property | 1,905 | – | 1,905 | ||||
| Additions to properties | (258,573 | ) | (161,762 | ) | (96,811 | ) | |
| Purchase of properties | (42,171 | ) | (307,839 | ) | 265,668 | ||
| Other | 7,015 | (6,182 | ) | 13,197 | |||
| Net cash used in investing activities | (291,824 | ) | (475,783 | ) | 183,959 |
All values are in US Dollars.
The change in net cash used in investing activities for the six months ended June 30, 2012, is primarily due to a lower investment amount in property acquisitions in the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, offset by increased capital expenditures related to our development and redevelopment projects during the six months ended June 30, 2012.
Real estate asset sales
| Date | Rentable | Gain | Disposition | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Real Estate Asset Sales | of Sale | Location | Square Feet | on Sale | Amount | ||||||
| 5110 Campus Drive | May 2012 | Pennsylvania | 21,000 | 2 | 1,800 | (1) | |||||
| Land parcel | March 2012 | Greater Boston | (2) | 1,864 | 31,360 | ||||||
| Assets held for sale at contract price | 22,200 | (3) | |||||||||
| Projected additional dispositions | 56,640 | (4) | |||||||||
| Total projected 2012 dispositions | 112,000 |
All values are in US Dollars.
(1) Represents a sale in May 2012 to a tenant that occupied 28% of the property on the date of sale.
(2) In March 2012, we sold one-half of our 55% interest in a land parcel supporting a 414,000 rentable square feet project for $31 million (including closing costs), or approximately $275 per rentable square foot. See discussion at Note 3, Investments in Real Estate.
(3) Amount represents aggregate contract sales prices for three assets held for sale. Includes one property sold in July 2012 to a tenant occupying 100% of the property, at a price of approximately $8.0 million, or approximately $222 per square foot, resulting in a gain of approximately $1.4 million. The remaining two properties aggregating 196,029 future developable square feet are targeted for sale at an aggregate price of approximately $14.2 million, or approximately $72 per developable square foot. As of June 30, 2012, net book values of the three properties totaled approximately $19.4 million, compared to the contract price of the $22.2 million.
(4) Represents estimate of proceeds from future dispositions and have not met the criteria for classification as discontinued operations.
In May 2012, we completed the sale of 5110 Campus Drive, a 21,000 rentable square feet property located in Pennsylvania, to a tenant that occupied a portion of the property. We received proceeds of approximately $1.8 million, representing a sale price of approximately $86 per rentable square foot.
Acquisitions
In April 2012, we acquired 3013/3033 Science Park Road, which consists of two life science laboratory buildings aggregating 176,500 rentable square feet, for approximately $13.7 million. The property was 100% leased on a short-term basis through July 2012, and thereafter, we expect to redevelop approximately 105,000 rentable square feet. The remaining square footage will be classified as future developable square feet. We expect to provide an estimate of our Stabilized Yields in the future upon commencement of development/redevelopment activity. Stabilized yield on cost is calculated as the quotient of net operating income and our investment in the property at stabilization (“Stabilized Yield”).
Development and redevelopment
During the three and six months ended June 30, 2012, we executed leases aggregating 169,000 and 563,000 rentable square feet, respectively, related to our development and redevelopment projects.
In June 2012, we completed the redevelopment of 3530/3550 John Hopkins Court, a combined 98,320 rentable square feet multi-tenant campus located in the San Diego market, which is 100% leased to (1) Genomics Institute of the Novartis Research Foundation, a non-profit research institute, and (2) a leading industrial biotechnology company. Stabilized Yield on a cash and GAAP basis for this project was approximately 8.9% and 9.1%, respectively.
In April 2012, we completed the development of a 26,426 rentable square feet building located in the Canada market, which is 100% leased to GlaxoSmithKline plc. The Stabilized Yield on a cash and GAAP basis for this project was approximately 7.7% and 8.3%, respectively.
In April 2012, we commenced ground-up development of 360 Longwood Avenue, our 414,000 rentable square feet unconsolidated joint venture development project located in the Longwood Medical Area of the Greater Boston Market, which is 37% pre-leased to the Dana-Farber Cancer Institute, Inc. We expect to achieve an unlevered Stabilized Yield on a cash and GAAP basis in a range from 8.1% to 8.5% and 8.7% to 9.1%, respectively. Funding for this project is primarily provided by capital from our joint venture partner and a $213.2 million non-recourse secured construction loan. Additionally, our share of the future funding is expected to be less than the $22.3 million distribution we received in March 2012, upon admittance of the new partner and refinancing of the project.
In January 2012, we commenced a ground-up development of a 170,618 rentable square feet single tenant building at 259 East Grand Avenue in the San Francisco Bay market which is 100% pre-leased to Onyx Pharmaceuticals Inc. We expect to achieve a Stabilized Yield on both a cash and GAAP basis for this property in a range from 7.8% to 8.2%. Funding for this project will be primarily provided by the $55 million secured construction loan we closed in June 2012.
Capital expenditures and tenant improvements
See discussion in “Uses of Capital — Summary of Capital Expenditures”
Financing activities
Net cash flows provided by financing activities for the six months ended June 30, 2012, decreased by $186.8 million, to $148.6 million, compared to $335.4 million for the six months ended June 30, 2011. This decrease consisted of the following amounts (in thousands):
| Six months ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | |||||
| Principal reductions of secured notes payable | (4,525 | ) | (16,297 | ) | 11,772 | ||
| Proceeds from issuance of unsecured senior notes payable | 544,649 | – | 544,649 | ||||
| Repurchases of unsecured senior convertible notes | (84,801 | ) | (98,590 | ) | 13,789 | ||
| Principal borrowings from unsecured senior line of credit, net of repayments | 9,000 | 77,000 | (68,000 | ) | |||
| Repayment of unsecured senior term loan | (250,000 | ) | – | (250,000 | ) | ||
| Redemption of Series C Preferred Stock | (129,638 | ) | – | (129,638 | ) | ||
| Proceeds from issuance of Series E Preferred Stock | 124,868 | – | 124,868 | ||||
| Proceeds from issuance of common stock | 37,385 | 451,538 | (414,153 | ) | |||
| Dividend payments | (74,969 | ) | (64,074 | ) | (10,895 | ) | |
| Other | (23,401 | ) | (14,227 | ) | (9,174 | ) | |
| Net cash provided by financing activities | 148,568 | 335,350 | (186,782 | ) |
All values are in US Dollars.
Closed secured construction loan for development project in San Francisco Bay market
In June 2012, we closed a secured construction loan with aggregate commitments of $55 million. The construction loan matures in June 2017, assuming we exercise our sole option to extend the stated maturity date of June 2015 by one year, twice. The construction loan will be used to fund the majority of the cost to complete the development of a 100% pre-leased 170,618 rentable square feet life science laboratory building at 259 East Grand Avenue in the San Francisco Bay market. The construction loan will bear interest at the London Interbank Offered Rate (“LIBOR”) or the base rate specified in the construction loan agreement, defined as the higher of either the prime rate being offered by our lender or the federal funds rate in effect on the day of borrowing (“Base Rate”), plus in either case a specified margin of 1.50% for LIBOR borrowings or 0.25% for Base Rate borrowings. As of June 30, 2012, $55 million of commitments were available.
4.60% debut unsecured senior notes payable offering
In February 2012, we completed the issuance of our 4.60% Unsecured Senior Notes due in February 2022. Net proceeds of approximately $544.6 million were used to repay certain outstanding variable rate bank debt, including the entire $250 million of our 2012 Unsecured Senior Bank Term Loan, and approximately $294.6 million of outstanding borrowings under our unsecured senior line of credit. In connection with the retirement of our 2012 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt of approximately $0.6 million related to the write-off of unamortized loan fees.
The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior notes payable as of June 30, 2012, are as follows:
| Covenant Ratios (1) | Requirement | Actual (2) | ||
|---|---|---|---|---|
| Total Debt to Total Assets | Less than or equal to 60% | 39% | ||
| Consolidated EBITDA to interest expense | Greater than or equal to 1.5x | 6.1x | ||
| Unencumbered Total Asset Value to Unsecured Debt | Greater than or equal to 150% | 260% | ||
| Secured Debt to Total Assets | Less than or equal to 40% | 9% |
(1) For a definition of the ratios used in the table above, refer to the Indenture dated February 29, 2012, which governs the unsecured senior notes payable, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 29, 2012.
(2) Actual covenants are calculated pursuant to the specific terms of the Indenture.
In addition, the terms of the Indenture, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s subsidiaries to (1) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (2) incur certain secured or unsecured indebtedness.
Debt repayments/amendments
The following table outlines certain debt repayments and amendments for the six months ended June 30, 2012 (in thousands):
| Six Months Ended June 30, 2012 | ||||
|---|---|---|---|---|
| Loss on Early | ||||
| Debt | Extinguishment | |||
| Repayments | of Debt | |||
| Repurchase of 3.70% Unsecured Senior Convertible Notes | 84,801 | – | ||
| Repayment of 2012 Unsecured Senior Bank Term Loan | 250,000 | 623 | ||
| Amendment of 1.5 billion Unsecured Senior Line of Credit | – | 1,602 | ||
| 334,801 | 2,225 |
All values are in US Dollars.
In February 2012, we repaid the entire $250 million outstanding balance on our 2012 Unsecured Senior Bank Term Loan. In connection with the retirement of our 2012 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt of approximately $0.6 million related to the write-off of unamortized loan fees.
In April 2012, we amended our $1.5 billion unsecured senior line of credit with Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. as joint lead arrangers, and certain lenders, to extend the maturity date of our unsecured senior line of credit, provide an accordion option for up to an additional $500 million, and reduce the interest rate for outstanding borrowings. The maturity date of the unsecured senior line of credit was extended to April 2017, assuming we exercise our sole right to extend the stated maturity date twice by an additional six months after each exercise. Borrowings under the unsecured senior line of credit will bear interest at LIBOR or the base rate specified in the amended unsecured senior line of credit agreement, plus in either case a specified margin (the “Applicable Margin”). The Applicable Margin for LIBOR borrowings under the unsecured senior line of credit was set at 1.20%, down from 2.40% in effect immediately prior to the modification. In addition to the Applicable Margin, our unsecured senior line of credit is subject to an annual facility fee of 0.25%. In connection with the modification of our unsecured senior line of credit in April 2012, we recognized a loss on early extinguishment of debt of approximately $1.6 million related to the write-off of a portion of unamortized loan fees.
The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior line of credit as of June 30, 2012, are as follows:
| Covenant Ratios (1) | Requirement | Actual | |||
|---|---|---|---|---|---|
| Leverage Ratio | Less than or equal to 60.0% | 36% | |||
| Fixed Charge Coverage Ratio | Greater than or equal to 1.50x | 2.5x | |||
| Secured Debt Ratio | Less than or equal to 40.0% | 9% | |||
| Unsecured Leverage Ratio | Less than or equal to 60.0% | 40% | |||
| Unsecured Interest Coverage Ratio | Greater than or equal to 1.75x | 8.3x |
(1) For a definition of the ratios used in the table above, refer to the amended unsecured senior line of credit and unsecured senior bank term loan agreements, dated as of April 30, 2012, which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.
6.45% series E preferred stock offering
In March 2012, we completed a public offering of 5,200,000 shares of our Series E Preferred Stock. The shares were issued at a price of $25.00 per share, resulting in net proceeds of approximately $124.9 million (after deducting underwriters’ discounts and other offering costs). The proceeds were initially used to reduce the outstanding borrowings under our unsecured senior line of credit. We then borrowed funds under our unsecured senior line of credit to redeem our Series C Preferred Stock.
8.375% series C preferred stock redemption
In April 2012, we redeemed all 5,185,500 outstanding shares of our Series C Preferred Stock at a price equal to $25.00 per share, and paid $0.5234375 per share representing accumulated and unpaid dividends to the redemption date on such shares. We recognized a charge of approximately $6.0 million to net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders during the six months ended June 30, 2012, related to the write-off of original issuance costs of the Series C Preferred Stock.
Establishment of “at the market” common stock offering program
In June 2012, we established an “at the market” common stock offering program under which we may sell, from time to time, up to an aggregate of $250 million of our common stock through our sales agents, BNY Mellon Capital Markets, LLC and Credit Suisse Securities (USA) LLC, during a three-year period. In June 2012, we sold an aggregate of 573,686 shares of common stock for gross proceeds of approximately $40.5 million at an average stock price of $70.64 and net proceeds of approximately $39.9 million. As of June 30, 2012, approximately $209.5 million of our common stock remained available for issuance under the “at the market” common stock offering program.
Dividends
During the six months ended June 30, 2012 and 2011, we paid the following dividends (in thousands):
| Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2011 | Change | |||||
| Common stock dividends | 60,791 | 49,896 | 10,895 | ||||
| Series C Preferred Stock dividends | 5,428 | 5,428 | – | ||||
| Series D Preferred Stock dividends | 8,750 | 8,750 | – | ||||
| 74,969 | 64,074 | 10,895 |
All values are in US Dollars.
The increase in dividends paid on our common stock is due to an increase in dividends to $0.98 per common share for the six months ended June 30, 2012, from $0.90 per common share for the six months ended June 30, 2011. The increase was also due to an increase in common stock outstanding. Total common stock outstanding as of December 31, 2011, was 61,560,472 shares, compared to 54,966,925 shares as of December 31, 2010. Total common stock outstanding as of June 30, 2012, was 62,249,973 shares, compared to 61,380,268 shares as of June 30, 2011.
Sources and uses of capital
We expect that our principal liquidity needs for the year ended December 31, 2012, will be satisfied by the following multiple sources of capital as shown in the table below. There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations. Our liquidity available under our unsecured senior line of credit and from cash equivalents was approximately $1.2 billion as of June 30, 2012.
| Sources and Uses of Capital for the Year Ended December 31, 2012 (in millions) | Completed | Projected | Total | ||||
|---|---|---|---|---|---|---|---|
| Sources of capital: | |||||||
| Net cash provided by operating activities less dividends | 41 | 40 | 81 | (1) | |||
| Asset and land sales | 41 | 71 | (2) | 112 | |||
| Unsecured senior notes payable | 550 | – | 550 | ||||
| Borrowings on secured construction financing | – | 24 | 24 | ||||
| Series E Preferred Stock issuance | 125 | – | 125 | ||||
| Issuances under “at the market” common stock offering program | 40 | – | (3) | 40 | |||
| Debt, equity, and joint venture capital | (12) | (4) | 248 | (5) | 236 | ||
| Total sources of capital | 785 | 383 | 1,168 | ||||
| Uses of capital: | |||||||
| Development, redevelopment, and construction | 269 | 377 | 646 | (6) | |||
| Acquisitions | 46 | – | 46 | ||||
| Secured debt repayments | 5 | 6 | 11 | (7) | |||
| 2012 Unsecured Senior Bank Term Loan repayment | 250 | – | 250 | ||||
| 3.70% Unsecured Senior Convertible Notes repurchase | 85 | – | 85 | ||||
| Series C Preferred Stock redemption | 130 | – | 130 | ||||
| Total uses of capital | 785 | 383 | 1,168 |
All values are in US Dollars.
| (1) | See tables of “Key Net Operating Income Projection Assumptions” and “Key Expense and Other Projection Assumptions” in the “Projected Results” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7. |
|---|---|
| (2) | Represents an estimate of sources of capital from asset and land sales, including assets “held for sale” at contract price of $22 million as of June 30, 2012. |
| (3) | See “Debt, equity, and joint venture capital.” |
| (4) | Represents additional amounts used to pay down outstanding borrowings on our unsecured line of credit. |
| (5) | Represents an estimate of sources of capital primarily consisting of borrowings under our unsecured senior line of credit and proceeds from our “at the market” common stock offering program. |
| (6) | See “Investment to Complete” columns in the tables related to construction in progress (page 48 and 50) for additional details underlying this estimate. |
| (7) | Based upon contractually scheduled payments or maturity dates. |
The key assumptions behind the sources and uses of capital in the table above are a favorable capital market environment and performance of our core operations in areas such as delivery of current and future development and redevelopment projects, leasing activity, and renewals. Our expected sources and uses of capital are subject to a number of variables and uncertainties, including those discussed under the “Forward-looking statements” section of Part I, the “Risk Factors” section of Item 1A, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section under Item 7, of our annual report on Form 10-K for the year ended December 31, 2011. We expect to update our forecast of sources and uses of capital on a quarterly basis.
Sources of capital
Unsecured senior line of credit
We use our unsecured senior line of credit to fund working capital, construction activities, and, from time to time, acquisition of properties. As of June 30, 2012, we had $1.1 billion available under our $1.5 billion unsecured senior line of credit.
Cash and cash equivalents
As of June 30, 2012, we had approximately $80.9 million of cash and cash equivalents. We expect existing cash and cash equivalents, and cash flows from operations to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as regular quarterly dividends, scheduled debt repayments, and material capital expenditures, for at least the next 12 months, and thereafter for the foreseeable future.
Restricted cash
Restricted cash consisted of the following as of June 30, 2012, and December 31, 2011 (in thousands):
| June 30, 2012 | December 31, 2011 | ||||
|---|---|---|---|---|---|
| Funds held in trust under the terms of certain secured notes payable | 30,214 | 12,724 | |||
| Funds held in escrow related to construction projects | 5,650 | 5,648 | |||
| Other restricted funds | 6,033 | 4,960 | |||
| Total | 41,897 | 23,332 |
All values are in US Dollars.
The funds held in escrow related to construction projects will be used to pay for certain construction costs.
Real estate asset sales
| Date | Rentable | Gain | Disposition | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Real Estate Asset Sales | of Sale | Location | Square Feet | on Sale | Amount | ||||||
| 5110 Campus Drive | May 2012 | Pennsylvania | 21,000 | 2 | 1,800 | (1) | |||||
| Land parcel | March 2012 | Greater Boston | (2) | 1,864 | 31,360 | ||||||
| Assets held for sale at contract price | 22,200 | (3) | |||||||||
| Projected additional dispositions | 56,640 | (4) | |||||||||
| Total projected 2012 dispositions | 112,000 |
All values are in US Dollars.
| (1) | Represents a sale in May 2012 to a tenant that occupied 28% of the property on the date of sale. |
|---|---|
| (2) | In March 2012, we sold one-half of our 55% interest in a land parcel supporting a 414,000 rentable square feet project for $31 million (including closing costs), or approximately $275 per rentable square foot. See discussion at Note 3, Investments in Real Estate. |
| (3) | Amount represents aggregate contract sales prices for three assets held for sale. Includes one property sold in July 2012 to a tenant occupying 100% of the property, at a price of approximately $8.0 million, or approximately $222 per square foot, resulting in a gain of approximately $1.4 million. The remaining two properties aggregating 196,029 future developable square feet are targeted for sale at an aggregate price of approximately $14.2 million, or approximately $72 per developable square foot. As of June 30, 2012, net book values of the three properties totaled approximately $19.4 million, compared to the contract price of the $22.2 million. |
| (4) | Represents estimate of proceeds from future dispositions and have not met the criteria for classification as discontinued operations. |
Secured construction loans
In June 2012, we closed a secured construction loan with aggregate commitments of $55 million. The construction loan matures in June 2017, assuming we exercise our sole option to extend the stated maturity date of June 2015 by one year, twice. The construction loan will be used to fund the majority of the cost to complete the development of a 100% pre-leased 170,618 rentable square feet life science laboratory building at 259 East Grand Avenue in the San Francisco Bay market. The construction loan will bear interest at the LIBOR or Base Rate, plus in either case a specified margin of 1.50% for LIBOR borrowings or 0.25% for Base Rate borrowings. As of June 30, 2012, $55 million of commitments were available.
At the market stock offering program
In June 2012, we established an “at the market” common stock offering program under which we may sell, from time to time, up to an aggregate of $250 million of our common stock through our sales agents, BNY Mellon Capital Markets, LLC and Credit Suisse Securities (USA) LLC, during a three-year period. In June 2012, we sold an aggregate of 573,686 shares of common stock for gross proceeds of approximately $40.5 million at an average stock price of $70.64 and net proceeds of approximately $39.9 million. As of June 30, 2012, approximately $209.5 million of our common stock remained available for issuance under the “at the market” common stock offering program.
Uses of capital
Summary of capital expenditures
The following table summarizes the components of our total capital expenditures for the six months ended June 30, 2012 and 2011, which includes interest, property taxes, insurance, payroll costs, and other indirect project costs (in thousands):
| Six Months Ended June 30, | |||
|---|---|---|---|
| 2012 | |||
| Development projects in North America | 82,362 | ||
| Redevelopment projects in North America | 82,494 | ||
| Preconstruction | 35,546 | ||
| Generic infrastructure/building improvement projects in North America (1) | 50,464 | ||
| Development and redevelopment projects in Asia | 18,157 | ||
| Total construction spending | 269,023 |
All values are in US Dollars.
(1) Includes amounts shown in table on the following page.
The following table summarizes the components of our total projected capital expenditures for the six months ended December 31, 2012, and the period thereafter. Expenditures include indirect project costs, including interest, property taxes, insurance, and payroll costs (in thousands):
| Six Months Ended December 31, 2012 | Thereafter | ||||
|---|---|---|---|---|---|
| Development projects in North America | 94,787 | 140,606 | |||
| Redevelopment projects in North America | 130,907 | 51,550 | |||
| Preconstruction | 42,977 | TBD | (1) | ||
| Generic infrastructure/building improvement projects in North America (1) | 55,136 | TBD | (1) | ||
| Future projected construction projects in North America | 29,829 | TBD | (1) | ||
| Development and redevelopment projects in Asia | 23,328 | 39,445 | |||
| Total construction spending | 376,964 | 231,601 |
All values are in US Dollars.
(1) Estimated spending beyond 2012 related to preconstruction, generic infrastructure improvements, major capital spending, and projected construction projects will be determined at a future date and is contingent upon many factors.
The table below shows the average per square foot property-related non-revenue-enhancing capital expenditures, tenant improvements, and leasing costs (excluding capital expenditures and tenant improvements that are recoverable from tenants, revenue-enhancing, or related to properties that have undergone redevelopment) for the six months ended June 30, 2012 and 2011:
| Six Months Ended June 30, | |||||
|---|---|---|---|---|---|
| Non-incremental revenue enhancing capital expenditures (1): | 2012 | 2011 | |||
| Major capital expenditures | 318,300 | 433,000 | |||
| Other building improvements | 485,232 | 873,000 | |||
| Square feet in asset base | 13,780,952 | 13,240,610 | |||
| Per square foot: | |||||
| Major capital expenditures | 0.02 | 0.03 | |||
| Other building improvements | 0.04 | 0.07 | |||
| Tenant improvements and leasing costs: | |||||
| Re-tenanted space (2) | |||||
| Tenant improvements and leasing costs | 2,002,499 | 1,137,064 | |||
| Re-tenanted square feet | 223,791 | 253,661 | |||
| Per square foot | 8.95 | 4.48 | |||
| Renewal space | |||||
| Tenant improvements and leasing costs | 2,164,465 | 1,260,520 | |||
| Renewal square feet | 585,010 | 515,846 | |||
| Per square foot | 3.70 | 2.44 |
All values are in US Dollars.
| (1) | Major capital expenditures consist of roof replacements and HVAC systems that are typically identified and considered at the time a property is acquired. Other building improvements exclude major capital expenditures. |
|---|---|
| (2) | Excludes space that has undergone redevelopment before re-tenanting. |
We expect our future capital expenditures, tenant improvements, and leasing costs (excluding capital expenditures and tenant improvements that are recoverable from tenants, revenue-enhancing, or related to properties that have undergone redevelopment) on a per square foot basis to be approximately in the amount shown in the preceding table.
Capitalized interest for the six months ended June 30, 2012 and 2011, of approximately $31.1 million and $28.2 million, respectively, is included in investments in real estate, net, as well as the table on the preceding page summarizing total capital expenditures. In addition, we capitalized payroll and other indirect project costs related to development, redevelopment, and construction projects, including projects in India and China, aggregating approximately $5.9 million and $8.0 million for the six months ended June 30, 2012 and 2011, respectively. Such costs are also included in the “Summary of Capital Expenditures” section on the preceding page.
We capitalize interest cost as a cost of the project only during the period for which activities necessary to prepare an asset for its intended use are ongoing, provided that expenditures for the asset have been made and interest cost is incurred. Indirect project costs, including personnel, construction administration, legal fees, and office costs that clearly relate to projects under construction, are capitalized during the period in which activities necessary to prepare the asset for its intended use take place. Additionally, should activities necessary to prepare an asset for its intended use cease, interest, taxes, insurance, and certain other direct project costs related to this asset would be expensed as incurred. When construction activities cease and the asset is ready for its intended use, the asset is transferred out of construction in progress and classified as rental properties, net. Additionally, if vertical aboveground construction is not initiated at completion of preconstruction activities, the land parcel will be classified as land held for future development. Expenditures for repair and maintenance are expensed as incurred. Fluctuations in our development, redevelopment, and construction activities could result in significant changes to total expenses and net income. For example, had we experienced a 10% reduction in development, redevelopment and construction activities, without a corresponding decrease in indirect project costs, including interest and payroll, total expenses would have increased by approximately $3.7 million for the six months ended June 30, 2012.
We also capitalize and defer initial direct costs to originate leases with independent third parties related to evaluating a prospective lessee’s financial condition, negotiating lease terms, preparing the lease agreement, and closing the lease transaction. Costs that we have capitalized and deferred relate to successful leasing transactions, result directly from and are essential to the lease transaction, and would not have been incurred had that leasing transaction not occurred. The initial direct costs capitalized and deferred also include the portion of our employees’ total compensation and payroll-related fringe benefits directly related to time spent performing activities previously described and related to the respective lease that would not have been performed but for that lease. Total initial direct leasing costs capitalized during the six months ended June 30, 2012 and 2011, were approximately $18.7 million and $24.0 million, respectively, of which approximately $4.9 million and $6.5 million, respectively, represented capitalized and deferred payroll costs directly related and essential to our leasing activities during such periods.
Acquisitions
Refer to “Liquidity and Capital Resources – Acquisitions.”
Dividends
We are required to distribute 90% of our REIT taxable income on an annual basis in order to continue to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to preferred and common stockholders from cash flow from operating activities. All such distributions are at the discretion of our Board of Directors. We may be required to use borrowings under our unsecured senior line of credit, if necessary, to meet REIT distribution requirements and maintain our REIT status. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. Our forecasts of taxable income and distributions do not require significant increases in our annual common stock dividends on a per share basis in order to distribute at least 90% of our REIT taxable income for the period January 1, 2012, through December 31, 2012.
Contractual obligations and commitments
Contractual obligations as of June 30, 2012, consisted of the following (in thousands):
| Payments by Period | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | 2012 | 2013-2014 | 2015-2016 | Thereafter | |||||||
| Secured notes payable (1) (2) | 720,600 | 5,463 | 357,884 | 246,151 | 111,102 | ||||||
| Unsecured senior notes payable (1) | 550,250 | – | 250 | – | 550,000 | ||||||
| Unsecured senior line of credit (3) | 379,000 | – | – | – | 379,000 | ||||||
| 2016 Unsecured Senior Bank Term Loan (4) | 750,000 | – | – | 750,000 | – | ||||||
| 2017 Unsecured Senior Bank Term Loan (5) | 600,000 | – | – | – | 600,000 | ||||||
| Estimated interest payments on fixed rate and hedged variable rate debt (6) | 269,024 | 62,713 | 127,318 | 51,841 | 27,152 | ||||||
| Estimated interest payments on variable rate debt (7) | 69,138 | 1,901 | 22,974 | 43,390 | 873 | ||||||
| Ground lease obligations | 668,488 | 7,027 | 20,734 | 19,879 | 620,848 | ||||||
| Other obligations | 6,965 | 631 | 1,645 | 1,809 | 2,880 | ||||||
| Total | 4,013,465 | 77,735 | 530,805 | 1,113,070 | 2,291,855 |
All values are in US Dollars.
(1) Amounts represent principal amounts due and exclude unamortized premiums/discounts reflected on the condensed consolidated balance sheets.
(2) Amounts include noncontrolling interests’ share of scheduled principal maturities of approximately $21.4 million, of which approximately $20.9 million matures in 2014. See “Secured Notes Payable” for additional information.
(3) The maturity date of our unsecured senior line of credit is April 30, 2017, assuming we exercise our sole right to extend the maturity date of April 30, 2016, twice by an additional six months.
(4) Our 2016 unsecured senior bank term loan (“2016 Unsecured Senior Bank Term Loan”) matures June 30, 2016, assuming we exercise our sole right to extend the maturity date of June 30, 2015, by one year.
(5) Our 2017 unsecured senior bank term loan (“2017 Unsecured Senior Bank Term Loan”) matures January 31, 2017, assuming we exercise our sole right to extend the maturity date of January 31, 2016, by one year.
(6) Estimated interest payments on our fixed rate debt and hedged variable rate debt were calculated based upon contractual interest rates, including the impact of interest rate swap agreements, interest payment dates, and scheduled maturity dates.
(7) The interest payments on variable rate debt were calculated based on the interest rates in effect as of June 30, 2012.
Ground lease obligations
Ground lease obligations as of June 30, 2012, included leases for 25 of our properties and four land development parcels. These lease obligations have remaining lease terms from 21 to 98 years, excluding extension options.
Commitments
In addition to the above, as of June 30, 2012, remaining aggregate costs under contract for the construction of properties undergoing development, redevelopment, and generic life science infrastructure improvements under the terms of leases approximated $371.5 million. We expect payments for these obligations to occur over one to three years, subject to capital planning adjustments from time to time. We are also committed to funding approximately $59.6 million for certain investments over the next six years.
A wholly owned subsidiary of the Company previously executed a ground lease, as ground lessee, for the development site in New York City located at and adjacent to 450 East 29th Street. That ground lease requires the construction of a second building approximating 407,000 rentable square feet to commence no later than October 31, 2013. Commencement of construction of the second building includes, among other things, site preparation in order to accommodate a construction crane, erection of a construction crane, renewal of permits, and updating of the construction plans and specifications. The ground lease provides further that substantial completion of the second building occur by October 31, 2015, requiring satisfying conditions that include substantially completed construction in accordance with the plans and the issuance of either temporary or permanent certificates of occupancy for the core and shell. The ground lease also provides that by October 31, 2016, the ground lessee obtain a temporary or permanent certificate of occupancy for the core and shell of both the first building (which has occurred) and the second building. In each case, the target dates above are subject to force majeure, to contractual cure rights, to other legal remedies available to ground lessees generally, and to change for any reason by agreement between both parties under the ground lease. Lastly, if the above dates are not met, the ground lease provides contractual cure rights and the ground lease does not provide for the payment of additional rent, a late fee, or other monetary penalty.
Off-balance sheet arrangements
Our off-balance sheet arrangements consist of our investment in a real estate entity that is a variable interest entity for which we are not the primary beneficiary. We account for the real estate entity under the equity method. The debt held by the unconsolidated real estate entity is secured by the land parcel owned by the entity, and is non-recourse to us. See Notes 2 and 3 to our condensed consolidated financial statements appearing elsewhere in this quarterly report on Form 10-Q.
Interest rate swap agreements
We utilize interest rate swap agreements to hedge a portion of our exposure to variable interest rates primarily associated with our unsecured senior line of credit and unsecured senior bank term loans. These agreements involve an exchange of fixed and variable rate interest payments without the exchange of the underlying principal amount (the “notional amount”). Interest received under all of our interest rate swap agreements is based on the one-month LIBOR rate. The net difference between the interest paid and the interest received is reflected as an adjustment to interest expense.
The following table summarizes our interest rate swap agreements as of June 30, 2012 (dollars in thousands):
| Notional Amount in Effect as of | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Transaction Date | Effective Date | Termination Date | Interest Pay Rate (1) | Fair Value as of June 30, 2012 | June 30, 2012 | December 31, 2013 | December 31, 2014 | |||||||||
| December 2006 | December 29, 2006 | March 31, 2014 | 4.990 | % | (4,098 | ) | 50,000 | 50,000 | – | |||||||
| October 2007 | October 31, 2007 | September 30, 2012 | 4.546 | (543 | ) | 50,000 | – | – | ||||||||
| October 2007 | October 31, 2007 | September 30, 2013 | 4.642 | (2,738 | ) | 50,000 | – | – | ||||||||
| October 2007 | July 1, 2008 | March 31, 2013 | 4.622 | (817 | ) | 25,000 | – | – | ||||||||
| October 2007 | July 1, 2008 | March 31, 2013 | 4.625 | (818 | ) | 25,000 | – | – | ||||||||
| December 2006 | November 30, 2009 | March 31, 2014 | 5.015 | (6,180 | ) | 75,000 | 75,000 | – | ||||||||
| December 2006 | November 30, 2009 | March 31, 2014 | 5.023 | (6,191 | ) | 75,000 | 75,000 | – | ||||||||
| December 2006 | December 31, 2010 | October 31, 2012 | 5.015 | (1,639 | ) | 100,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (275 | ) | 250,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (275 | ) | 250,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (137 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.480 | (137 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.495 | (147 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 30, 2011 | December 31, 2012 | 0.508 | (155 | ) | 125,000 | – | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.640 | (672 | ) | – | 250,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.640 | (672 | ) | – | 250,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.644 | (341 | ) | – | 125,000 | – | ||||||||
| December 2011 | December 31, 2012 | December 31, 2013 | 0.644 | (341 | ) | – | 125,000 | – | ||||||||
| December 2011 | December 31, 2013 | December 31, 2014 | 0.977 | (1,150 | ) | – | – | 250,000 | ||||||||
| December 2011 | December 31, 2013 | December 31, 2014 | 0.976 | (1,148 | ) | – | – | 250,000 | ||||||||
| Total | (28,474 | ) | 1,450,000 | 950,000 | 500,000 |
All values are in US Dollars.
| (1) | In addition to the interest pay rate, borrowings outstanding under our unsecured senior line of credit and unsecured senior bank term loans include an applicable margin currently ranging from 1.20% to 1.65%. |
|---|
We have entered into master derivative agreements with each counterparty. These master derivative agreements (all of which are adapted from the standard International Swaps and Derivatives Association, Inc. form) define certain terms between the Company and each counterparty to address and minimize certain risks associated with our interest rate swap agreements. In order to limit our risk of non-performance by an individual counterparty under our interest rate swap agreements, our interest rate swap agreements are spread among various counterparties. As of June 30, 2012, the largest aggregate notional amount in effect at any single point in time with an individual counterparty was $375 million. If one or more of our counterparties fail to perform under our interest rate swap agreements, we may incur higher costs associated with our variable rate LIBOR-based debt than the interest costs we originally anticipated.
As of June 30, 2012, our interest rate swap agreements were classified in accounts payable, accrued expenses, and tenant security deposits based upon their respective fair values, aggregating a liability balance of approximately $28.5 million, with the offsetting adjustment reflected as unrealized losses in accumulated other comprehensive loss in total equity. Balances in accumulated other comprehensive loss are recognized in the period during which the forecasted hedge transactions affect earnings. We have not posted any collateral related to our interest rate swap agreements. For the six months ended June 30, 2012 and 2011, approximately $11.7 million and $10.7 million, respectively, was reclassified from accumulated other comprehensive income to interest expense as an increase to interest expense. During the next 12 months, we expect to reclassify approximately $17.7 million from accumulated other comprehensive loss to interest expense as an increase to interest expense.
Other resources and liquidity requirements
Under our current shelf registration statement filed with the SEC, we may offer common stock, preferred stock, debt, and other securities. These securities may be issued from time to time at our discretion based on our needs and market conditions, including as necessary to balance our use of incremental debt capital.
We hold interests, together with certain third parties, in companies that we consolidate in our financial statements. These third parties may contribute equity into these entities primarily related to their share of funds for construction and financing-related activities.
Exposure to environmental liabilities
In connection with the acquisition of all of our properties, we have obtained Phase I environmental assessments to ascertain the existence of any environmental liabilities or other issues. The Phase I environmental assessments of our properties have not revealed any environmental liabilities that we believe would have a material adverse effect on our financial condition or results of operations taken as a whole, nor are we aware of any material environmental liabilities that have occurred since the Phase I environmental assessments were completed. In addition, we carry a policy of pollution legal liability insurance covering exposure to certain environmental losses at substantially all of our properties.
Inflation
As of June 30, 2012, approximately 94% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Approximately 96% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed (generally ranging from 3.0% to 3.5%) or indexed based on a consumer price index or another index. Accordingly, we do not believe that our cash flow or earnings from real estate operations are subject to any significant risk from inflation. An increase in inflation, however, could result in an increase in the cost of our variable rate borrowings, including borrowings related to our unsecured senior line of credit and unsecured senior bank term loans.
Non-GAAP measures
Funds from operations (“FFO”) and FFO, as adjusted
GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) established the measurement tool of FFO. Since its introduction, FFO has become a widely used non-GAAP financial measure among equity REITs. We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT. Moreover, we believe that FFO, as adjusted is also helpful because it allows investors to compare our performance to the performance of other real estate companies between periods, and on a consistent basis, without having to account for differences caused by investment decisions, financing decisions, terms of securities, capital structures, and capital market transactions. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper and related implementation guidance (“NAREIT White Paper”). The NAREIT White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains from sales and real estate impairment losses, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute FFO, as adjusted as FFO calculated in accordance with the NAREIT White Paper, plus losses from early extinguishment of debt and preferred stock redemption charges, less realized gain on equity investment primarily related to one non-tenant life science entity, and the amount of such items which are allocable to our unvested restricted stock awards. Our calculations of both FFO and FFO, as adjusted, may differ from those methodologies utilized by other equity REITs for similar performance measurements, and, accordingly, may not be comparable to other equity REITs. Neither FFO nor FFO, as adjusted, should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity, nor are they indicative of the availability of funds for our cash needs, including funds available to make distributions.
Adjusted funds from operations (“AFFO”)
AFFO is a non-GAAP financial measure that we use as a supplemental measure of our performance. We compute AFFO by adding to or deducting from FFO, as adjusted: (1) non-incremental revenue-enhancing capital expenditures, tenant improvements, and leasing commissions (excludes redevelopment expenditures); (2) effects of straight-line rent and straight-line rent on ground leases; (3) capitalized income from development projects; (4) amortization of acquired above and below market leases, loan fees, and debt premiums/discounts; (5) non-cash compensation expense; and (6) allocation of AFFO attributable to unvested restricted stock awards.
We believe that AFFO is a useful supplemental performance measure because it further adjusts to: (1) deduct certain expenditures which, although capitalized and included in depreciation expense, do not enhance the revenue or cash flows of our properties; (2) eliminate the effect of straight-lining our rental income and capitalizing income from development projects in order to reflect the actual amount of contractual rents due in the period presented; and (3) eliminate the effect of non-cash items that are not indicative of our core operations and do not actually reduce the amount of cash generated by our operations. We believe that eliminating the effect of non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside of our control), and the assumptions and the variety of award types that a company can use. We believe that AFFO provides useful information by excluding certain items that are not representative of our core operating results because such items are dependent upon historical costs or subject to judgmental valuation inputs and the timing of our decisions.
AFFO is not intended to represent cash flow for the period, and is only intended to provide an additional measure of performance. We believe that net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders is the most directly comparable GAAP financial measure to AFFO. We believe that AFFO is a widely recognized measure of the operations of equity REITs, and presenting AFFO will enable investors to assess our performance in comparison to other equity REITs. However, other equity REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to AFFO calculated by other equity REITs. AFFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.
The following table presents a reconciliation of net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, the most directly comparable financial measure calculated and presented in accordance with GAAP, to FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted for the periods below (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic | 17,616 | 25,986 | 35,984 | 50,351 | |||||
| Depreciation and amortization | 52,355 | 40,363 | 95,760 | 77,070 | |||||
| Gain on sale of land parcel | – | – | (1,864 | ) | – | ||||
| Gain on sale of real estate | (2 | ) | – | (2 | ) | – | |||
| Amount attributable to noncontrolling interests/unvested stock awards: | |||||||||
| Net income | 1,122 | 1,236 | 2,068 | 2,407 | |||||
| FFO | (1,133 | ) | (1,671 | ) | (2,305 | ) | (3,283 | ) | |
| FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic | 69,958 | 65,914 | 129,641 | 126,545 | |||||
| Assumed conversion of 8.00% Unsecured Senior Convertible Notes | 6 | 7 | 11 | 12 | |||||
| FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 69,964 | 65,921 | 129,652 | 126,557 | |||||
| Realized gain on equity investment primarily related to one non-tenant life science entity | (5,811 | ) | – | (5,811 | ) | – | |||
| Subtotal | 64,153 | 65,921 | 123,841 | 126,557 | |||||
| Loss on early extinguishment of debt | 1,602 | 1,248 | 2,225 | 3,743 | |||||
| Preferred stock redemption charge | – | – | 5,978 | – | |||||
| Allocation to unvested restricted stock awards | 35 | (12 | ) | (20 | ) | (32 | ) | ||
| FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted | 65,790 | 67,157 | 132,024 | 130,268 | |||||
| Non-incremental revenue-enhancing capital expenditures: | |||||||||
| Building improvements | (594 | ) | (698 | ) | (804 | ) | (1,306 | ) | |
| Tenant improvements and leasing commissions | (2,148 | ) | (1,595 | ) | (4,167 | ) | (2,398 | ) | |
| Straight-line rent | (5,195 | ) | (2,885 | ) | (13,991 | ) | (9,592 | ) | |
| Straight-line rent on ground leases | 1,207 | 1,099 | 2,613 | 2,340 | |||||
| Capitalized income from development projects | 72 | 1,078 | 550 | 2,506 | |||||
| Amortization of acquired above and below market leases | (778 | ) | (2,726 | ) | (1,578 | ) | (7,580 | ) | |
| Amortization of loan fees | 2,214 | 2,327 | 4,857 | 4,605 | |||||
| Amortization of debt premiums/discounts | 110 | 1,169 | 289 | 2,504 | |||||
| Stock compensation | 3,274 | 2,749 | 6,567 | 5,105 | |||||
| Allocation to unvested restricted stock awards | 15 | (4 | ) | 48 | 33 | ||||
| AFFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 63,967 | 67,671 | 126,408 | 126,485 | |||||
| Weighted average shares of common stock outstanding attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic | 61,663,367 | 58,500,055 | 61,585,587 | 56,734,012 | |||||
| Effect of assumed conversion and dilutive securities: | |||||||||
| Assumed conversion of 8.00% Unsecured Senior Convertible Notes | 6,087 | 6,047 | 6,087 | 6,047 | |||||
| Dilutive effect of stock options | 173 | 13,067 | 667 | 16,261 | |||||
| Weighted average shares of common stock outstanding attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 61,669,627 | 58,519,169 | 61,592,341 | 56,756,320 |
All values are in US Dollars.
The following table presents a reconciliation of net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, the most directly comparable financial measure calculated and presented in accordance with GAAP, to FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic, FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted for the periods below:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic | 0.29 | 0.44 | 0.58 | 0.89 | |||||
| Depreciation and amortization | 0.84 | 0.70 | 1.56 | 1.36 | |||||
| Gain on sale of land parcel | – | – | (0.03 | ) | – | ||||
| Gain on sale of real estate | – | – | – | – | |||||
| Amount attributable to noncontrolling interests/unvested stock awards: | |||||||||
| Net income | 0.02 | 0.02 | 0.03 | 0.04 | |||||
| FFO | (0.02 | ) | (0.03 | ) | (0.04 | ) | (0.06 | ) | |
| FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic | 1.13 | 1.13 | 2.11 | 2.23 | |||||
| Assumed conversion of 8.00% Unsecured Senior Convertible Notes | – | – | – | – | |||||
| FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 1.13 | 1.13 | 2.11 | 2.23 | |||||
| Realized gain on equity investment primarily related to one non-tenant life science entity | (0.09 | ) | – | (0.09 | ) | – | |||
| Subtotal | 1.04 | 1.13 | 2.02 | 2.23 | |||||
| Loss on early extinguishment of debt | 0.03 | 0.02 | 0.03 | 0.07 | |||||
| Preferred stock redemption charge | – | – | 0.10 | – | |||||
| Allocation to unvested restricted stock awards | – | – | – | – | |||||
| FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted | 1.07 | 1.15 | 2.14 | 2.30 | |||||
| Non-incremental revenue-enhancing capital expenditures: | |||||||||
| Building improvements | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) | |
| Tenant improvements and leasing commissions | (0.03 | ) | (0.03 | ) | (0.07 | ) | (0.04 | ) | |
| Straight-line rent | (0.08 | ) | (0.05 | ) | (0.23 | ) | (0.17 | ) | |
| Straight-line rent on ground leases | 0.02 | 0.02 | 0.04 | 0.04 | |||||
| Capitalized income from development projects | – | 0.02 | 0.01 | 0.04 | |||||
| Amortization of acquired above and below market leases | (0.01 | ) | (0.05 | ) | (0.03 | ) | (0.13 | ) | |
| Amortization of loan fees | 0.03 | 0.04 | 0.09 | 0.08 | |||||
| Amortization of debt premiums/discounts | – | 0.02 | – | 0.04 | |||||
| Stock compensation | 0.05 | 0.05 | 0.11 | 0.09 | |||||
| Allocation to unvested restricted stock awards | – | – | – | – | |||||
| AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted | 1.04 | 1.16 | 2.05 | 2.23 |
All values are in US Dollars.
Adjusted EBITDA and adjusted EBITDA margins
EBITDA represents earnings before interest, taxes, depreciation, and amortization (“EBITDA”), a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance. We use adjusted EBITDA (“Adjusted EBITDA”) to assess the performance of our core operations, for financial and operational decision-making, and as a supplemental or additional means to evaluate period-to-period comparisons on a consistent basis. Adjusted EBITDA also serves as a proxy for a component of a financial covenant under certain of our debt obligations. Adjusted EBITDA is calculated as EBITDA excluding net stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of land parcels, gains or losses on sales of real estate, and impairments. We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from our operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, net stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of land parcels, gains or losses on sales of real estate, and impairments. By excluding interest expense, EBITDA and Adjusted EBITDA allow investors to measure our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries. We believe that excluding non-cash charges related to stock-based compensation facilitates a comparison of our operations across periods and among other equity REITs without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside of our control), and the assumptions and the variety of award types that a company can use. We believe that adjusting for the effects of gains or losses on early extinguishment of debt, gains or losses on sales of land parcels, gains or losses on sales of real estate, and impairments, provides useful information by excluding certain items that are not representative of our core operating results. These items are not related to core operations, dependent upon historical costs, and subject to judgmental valuation inputs and the timing of our decisions. EBITDA and Adjusted EBITDA have limitations as measures of our performance. EBITDA and Adjusted EBITDA do not reflect our historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA and Adjusted EBITDA are relevant and widely used measures of performance, they do not represent net income or cash flow from operations as defined by GAAP, and they should not be considered as alternatives to those indicators in evaluating performance or liquidity. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.
The following table reconciles net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to EBITDA and Adjusted EBITDA (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Net income | 25,641 | 34,311 | 58,416 | 66,936 | |||||
| Interest expense – continuing operations | 17,922 | 16,567 | 34,149 | 34,377 | |||||
| Interest expense – discontinued operations | – | 4 | – | 36 | |||||
| Depreciation and amortization – continuing operations | 52,316 | 40,173 | 95,682 | 76,716 | |||||
| Depreciation and amortization – discontinued operations | 39 | 190 | 78 | 354 | |||||
| EBITDA | 95,918 | 91,245 | 188,325 | 178,419 | |||||
| Stock compensation expense | 3,274 | 2,749 | 6,567 | 5,105 | |||||
| Loss on early extinguishment of debt | 1,602 | 1,248 | 2,225 | 3,743 | |||||
| Gain on sale of land parcel | – | – | (1,864 | ) | – | ||||
| Gain on sale of real estate | (2 | ) | – | (2 | ) | – | |||
| Adjusted EBITDA | 100,792 | 95,242 | 195,251 | 187,267 |
All values are in US Dollars.
Fixed charge coverage ratio
The fixed charge coverage ratio is useful to investors as a supplemental measure of the Company’s ability to satisfy fixed financing obligations and dividends on preferred stock. Cash interest is equal to interest expense calculated in accordance with GAAP, plus capitalized interest, less amortization of loan fees, and amortization of debt premiums/discounts. The fixed charge coverage ratio calculation below is not directly comparable to the computation of “Consolidated Ratio of Earnings to Fixed Charges and Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends” included in Exhibit 12.1 to our quarterly report on Form 10-Q, as of June 30, 2012.
The following table presents a reconciliation of interest expense, the most directly comparable GAAP financial measure to cash interest and fixed charges for the three and six months ended June 30, 2012 and 2011 (dollars in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Adjusted EBITDA | 100,792 | 95,242 | 195,251 | 187,267 | |||||
| Interest expense – continuing operations | 17,922 | 16,567 | 34,149 | 34,377 | |||||
| Interest expense – discontinued operations | – | 4 | – | 36 | |||||
| Add: capitalized interest | 15,825 | 15,046 | 31,091 | 28,239 | |||||
| Less: amortization of loan fees | (2,214 | ) | (2,327 | ) | (4,857 | ) | (4,605 | ) | |
| Less: amortization of debt premium/discounts | (110 | ) | (1,169 | ) | (289 | ) | (2,504 | ) | |
| Cash interest | 31,423 | 28,121 | 60,094 | 55,543 | |||||
| Dividends on preferred stock | 6,903 | 7,089 | 14,386 | 14,178 | |||||
| Fixed charges | 38,326 | 35,210 | 74,480 | 69,721 | |||||
| Fixed charge coverage ratio | 2.6x | 2.7x | 2.6x | 2.7x |
All values are in US Dollars.
Interest coverage ratio
The interest coverage ratio is the ratio of Adjusted EBITDA to cash interest. This ratio is useful to investors as an indicator of our ability to service our cash interest obligations.
The following table summarizes the calculation of the interest coverage ratio for the three and six months ended June 30, 2012 and 2011 (dollars in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Adjusted EBITDA | 100,792 | 95,242 | 195,251 | 187,267 | |||||
| Interest expense – continuing operations | 17,922 | 16,567 | 34,149 | 34,377 | |||||
| Interest expense – discontinued operations | – | 4 | – | 36 | |||||
| Add: capitalized interest | 15,825 | 15,046 | 31,091 | 28,239 | |||||
| Less: amortization of loan fees | (2,214 | ) | (2,327 | ) | (4,857 | ) | (4,605 | ) | |
| Less: amortization of debt premium/discounts | (110 | ) | (1,169 | ) | (289 | ) | (2,504 | ) | |
| Cash interest | 31,423 | 28,121 | 60,094 | 55,543 | |||||
| Interest coverage ratio | 3.2x | 3.4x | 3.2x | 3.4x |
All values are in US Dollars.
Net debt to adjusted EBITDA
Net debt to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure in evaluating our leverage. Net debt is equal to the sum of total debt less cash, cash equivalents, and restricted cash. See “Adjusted EBITDA” for further information on the calculation of Adjusted EBITDA.
The following table summarizes the calculation of net debt to Adjusted EBITDA as of June 30, 2012, and December 31, 2011 (dollars in thousands):
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Adjusted EBITDA (quarter annualized) | 403,168 | 377,964 | |||
| Secured notes payable | 719,977 | 724,305 | |||
| Unsecured senior notes payable | 549,545 | – | |||
| Unsecured senior line of credit | 379,000 | 370,000 | |||
| Unsecured senior bank term loans | 1,350,000 | 1,600,000 | |||
| Unsecured senior convertible notes | 238 | 84,959 | |||
| Less: cash and cash equivalents | (80,937 | ) | (78,539 | ) | |
| Less: restricted cash | (41,897 | ) | (23,332 | ) | |
| Net debt | 2,875,926 | 2,677,393 | |||
| Net debt to Adjusted EBITDA | 7.1x | 7.1x |
All values are in US Dollars.
Net debt to gross assets (excluding cash and restricted cash)
Net debt to gross assets (excluding cash and restricted cash) is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure in evaluating our leverage. Net debt is calculated as described in “Net debt to adjusted EBITDA.” Gross assets (excluding cash and restricted cash) are equal to total assets plus accumulated depreciation less cash, cash equivalents, and restricted cash.
The following table summarizes the calculation of net debt to gross assets (excluding cash and restricted cash) as of June 30, 2012, and December 31, 2011 (dollars in thousands):
| June 30, | December 31, | ||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Net debt | 2,875,926 | 2,677,393 | |||
| Total assets | 6,841,739 | 6,574,129 | |||
| Add: accumulated depreciation | 822,369 | 742,535 | |||
| Less: cash and cash equivalents | (80,937 | ) | (78,539 | ) | |
| Less: restricted cash | (41,897 | ) | (23,332 | ) | |
| Gross assets (excluding cash and restricted cash) | 7,541,274 | 7,214,793 | |||
| Net debt to gross assets (excluding cash and restricted cash) | 38% | 37% |
All values are in US Dollars.
Net operating income
See discussion of net operating income and reconciliation of net operating income to income from continuing operations in “Results of Operations.”
Same property net operating income
See discussion of Same Properties and reconciliation of net operating income to income from continuing operations in “Results of Operations.”
Unencumbered net operating income as a percentage of total net operating income
Unencumbered net operating income as a percentage of total net operating income is a non-GAAP financial measure that we believe is useful to investors as a performance measure of our results of operations related to our unencumbered real estate assets, as it reflects only those income and expense items that are incurred at the unencumbered property level. We use unencumbered net operating income as a percentage of total net operating income in order to assess its compliance with its financial covenants under our debt obligations because the measure serves as a proxy for a financial measure under certain of our debt obligations. Unencumbered net operating income represents net operating income derived from assets that are not subject to any mortgage, deed of trust, lien, or other security interest. See the reconciliation of net operating income to income from continuing operations in “Results of Operations.”
The following table summarizes unencumbered net operating income as a percentage of total net operating income for the three and six months ended June 30, 2012 and 2011 (dollars in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | ||||||
| Unencumbered net operating income | 80,931 | 64,643 | 153,225 | 128,759 | |||||
| Encumbered net operating income | 28,668 | 38,083 | 57,727 | 72,622 | |||||
| Total net operating income | 109,599 | 102,726 | 210,952 | 201,381 | |||||
| Unencumbered net operating income as a percentage of total net operating income | 74% | 63% | 73% | 64% |
All values are in US Dollars.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk
The primary market risk to which we believe we are exposed is interest rate risk, which may result from many factors, including government monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control.
In order to modify and manage the interest rate characteristics of our outstanding debt and to limit the effects of interest rate risks on our operations, we may utilize a variety of financial instruments, including interest rate swap agreements, caps, floors, and other interest rate exchange contracts. The use of these types of instruments to hedge a portion of our exposure to changes in interest rates carries additional risks, such as counterparty credit risk and the legal enforceability of hedging contracts.
Our future earnings and fair values relating to financial instruments are primarily dependent upon prevalent market rates of interest, such as LIBOR. However, our interest rate swap agreements are intended to reduce the effects of interest rate changes. The following table illustrates the effect of a 1% increase/decrease of interest rates, assuming a LIBOR floor of 0%, on our variable rate debt, including our unsecured senior line of credit and unsecured term loans, after considering the effect of our interest rate swap agreements, secured debt, unsecured senior notes payable, and unsecured senior convertible notes (in thousands):
| As of June 30, 2012 | As of December 31, 2011 | ||||
|---|---|---|---|---|---|
| Impact to future earnings due to variable rate debt: | |||||
| Rate increase of 1% | (4,972 | ) | (3,357 | ) | |
| Rate decrease of 1% | 8,769 | 1,414 | |||
| Effect on fair value of secured debt: | |||||
| Rate increase of 1% | (45,857 | ) | ($77,554 | ) | |
| Rate decrease of 1% | 31,924 | 35,182 |
All values are in US Dollars.
These amounts are determined by considering the impact of the hypothetical interest rates on our borrowing cost and our interest rate swap agreements in effect on June 30, 2012. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change. However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
Equity price risk
We have exposure to equity price market risk because of our equity investments in certain publicly traded companies and privately held entities. We classify investments in publicly traded companies as “available for sale” and, consequently, record them on our condensed consolidated balance sheets at fair value, with unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. Investments in privately held entities are generally accounted for under the cost method because we do not influence any of the operating or financial policies of the entities in which we invest. For all investments, we recognize other-than-temporary declines in value against earnings in the same period during which the decline in value was deemed to have occurred. There is no assurance that future declines in value will not have a material adverse impact on our future results of operations. The following table illustrates the effect that a 10% change in the fair value of our equity investments would have on earnings (in thousands):
| As of June 30, 2012 | As of December 31, 2011 | ||||
|---|---|---|---|---|---|
| Equity price risk: | |||||
| Increase in fair value of 10% | 10,445 | 9,600 | |||
| Decrease in fair value of 10% | (10,445 | ) | (9,600 | ) |
All values are in US Dollars.
Foreign currency exchange rate risk
We have exposure to foreign currency exchange rate risk related to our subsidiaries operating in Canada and Asia. The functional currencies of our foreign subsidiaries are the respective local currencies. Gains or losses resulting from the translation of our foreign subsidiaries’ balance sheets and statements of income are included in accumulated other comprehensive income as a separate component of total equity. Gains or losses will be reflected in our statements of income when there is a sale or partial sale of our investment in these operations or upon a complete or substantially complete liquidation of the investment. The following table illustrates the effect that a 10% increase or decrease in foreign currency rates relative to the United States dollar would have on our earnings, based on our current operating assets outside the United States (in thousands):
| As of June 30, 2012 | As of December 31, 2011 | ||||
|---|---|---|---|---|---|
| Foreign currency exchange rate risk: | |||||
| Increase in foreign currency exchange rate of 10% | 19 | 199 | |||
| Decrease in foreign currency exchange rate of 10% | (19 | ) | (199 | ) |
All values are in US Dollars.
This sensitivity analysis assumes a parallel shift of all foreign currency exchange rates with respect to the United States dollar; however, foreign currency exchange rates do not typically move in such a manner and actual results may differ materially.
Item 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
As of June 30, 2012, we performed an evaluation, under the supervision of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and procedures have been designed to ensure that information required for disclosure is recorded, processed, summarized, and reported within the requisite time periods. Based on our evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2012.
Changes in internal control over financial reporting
There has not been any change in our internal control over financial reporting during the three months ended June 30, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
In addition to the information set forth in this quarterly report on Form 10-Q, one should carefully review and consider the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2011. Those risk factors could materially affect our business, financial condition, and results of operations. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition, and results of operations.
3.1* Articles of Amendment and Restatement of the Company, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 14, 1997.
3.2* Certificate of Correction of the Company, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 14, 1997.
3.3* Bylaws of the Company (as amended December 15, 2011), filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on December 19, 2011.
3.4* Articles Supplementary, dated June 9, 1999, relating to the 9.50% Series A Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 13, 1999.
3.5* Articles Supplementary, dated February 10, 2000, relating to the election to be subject to Subtitle 8 of Title 3 of the Maryland General Corporation Law, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 10, 2000.
3.6* Articles Supplementary, dated February 10, 2000, relating to the Series A Junior Participating Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 10, 2000.
3.7* Articles Supplementary, dated January 18, 2002, relating to the 9.10% Series B Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on January 18, 2002.
3.8* Articles Supplementary, dated June 22, 2004, relating to the 8.375% Series C Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on June 28, 2004.
3.9* Articles Supplementary, dated March 25, 2008, relating to the 7.00% Series D Cumulative Convertible Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 25, 2008.
3.10* Articles Supplementary, dated March 12, 2012, relating to the 6.45% Series E Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 14, 2012.
4.1* Specimen certificate representing shares of common stock, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on May 5, 2011.
4.2* Specimen certificate representing shares of 7.00% Series D Cumulative Convertible Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 25, 2008.
4.3* Indenture, dated as of April 27, 2009, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and Wilmington Trust Company, as Trustee, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 10, 2009.
4.4* Indenture, dated as of February 29, 2012, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 29, 2012.
4.5* Supplemental Indenture No. 1, dated as of February 29, 2012, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 29, 2012.
4.6* Form of 4.60% Senior Note due 2022 (included in Exhibit 4.5 above).
4.7* Specimen certificate representing shares of 6.45% Series E Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on March 12, 2012.
10.1* Amended and Restated Executive Employment Agreement, effective as of April 26, 2012, by and between the Company and Joel S. Marcus, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on May 4, 2012.
10.2 Third Amended and Restated Credit Agreement, dated as of April 30, 2012, among the Company, as Borrower, Alexandria Real Estate Equities, L.P., as Guarantor, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Book Runners, JPMorgan Chase Bank, N.A. and Citibank, N.A., as Co-Syndication Agents, Barclays Bank PLC, Compass Bank, Credit Agricole Corporate and Investment Bank, Goldman Sachs Bank USA, Royal Bank of Canada, Royal Bank of Scotland PLC, and the Bank of Nova Scotia, as Co-Documentation Agents.
10.3 First Amendment to Amended and Restated Term Loan Agreement, dated as of April 30, 2012, among the Company and Alexandria Real Estate Equities, L.P., as the Credit Parties, Citibank, N.A., as Administrative Agent, RBC Capital Markets and the Royal Bank of Scotland PLC, as Co-Syndication Agents, the Bank of Nova Scotia and Compass Bank, as Co-Documentation Agents, Citigroup Global Markets Inc., RBC Capital Markets, and RBS Securities Inc., as Joint Lead Arrangers and Joint Book Running Managers.
10.4 First Amendment to Term Loan Agreement, dated as of April 30, 2012, among the Company and Alexandria Real Estate Equities, L.P., as the Credit Parties, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and Citigroup Global Markets Inc., as Co-Syndication Agents, Royal Bank of Canada and the Bank of Nova Scotia, as Co-Documentation Agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Lead Book Runners.
11.1 Statement of Computation of Per Share Earnings (included in Note 8 to the Condensed Consolidated Financial Statements).
12.1 Computation of Consolidated Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends.
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.0 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 The following materials from the Company’s quarterly report on Form 10-Q for the three and six months ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011 (unaudited), (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2012 and 2011 (unaudited), (iii) Condensed Consolidated Statements of Comprehensive Income for the six months ended June 30, 2012 and 2011 (unaudited), (iv) Condensed Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests for the six months ended June 30, 2012 (unaudited), (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).
(*) Incorporated by reference.
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, thereunto duly authorized, on August 8, 2012.
| ALEXANDRIA REAL ESTATE EQUITIES, INC. | |
|---|---|
| /s/ Joel S. Marcus | |
| Joel S. Marcus | |
| Chairman/Chief Executive Officer | |
| (Principal Executive Officer) | |
| /s/ Dean A. Shigenaga | |
| Dean A. Shigenaga | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
Exhibit 10.2
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 30, 2012
among
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
as the Borrower
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
as a Guarantor
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer,
and
The Other Lenders Party Hereto,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES LLC
and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Bookrunners
JPMORGAN CHASE BANK, N.A.
and
CITIBANK, N.A.,
as Co-Syndication Agents,
BARCLAYS BANK PLC
COMPASS BANK
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
GOLDMAN SACHS BANK USA
ROYAL BANK OF CANADA
ROYAL BANK OF SCOTLAND PLC
THE BANK OF NOVA SCOTIA
as Co-Documentation Agents
Table of Contents
| Page | ||
|---|---|---|
| ARTICLE I DEFINITIONS AND ACCOUNTING TERMS | 1 | |
| 1.01 | Defined Terms | 1 |
| 1.02 | Other Interpretive Provisions | 33 |
| 1.03 | Accounting Terms/Financial Covenants | 33 |
| 1.04 | Exchange Rates; Currency Equivalents | 34 |
| 1.05 | Additional Alternative Currencies | 34 |
| 1.06 | Change of Currency | 35 |
| 1.07 | Times of Day | 35 |
| 1.08 | Letter of Credit Amounts | 36 |
| ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS | 36 | |
| 2.01 | Committed Loans | 36 |
| 2.02 | Borrowings, Conversions and Continuations of Committed Loans | 36 |
| 2.03 | Letters of Credit | 41 |
| 2.04 | Swing Line Loans | 49 |
| 2.04A | Bid Loans | 52 |
| 2.05 | Prepayments | 54 |
| 2.06 | Termination or Reduction of Aggregate Revolving Commitments | 56 |
| 2.07 | Repayment of Loans | 56 |
| 2.08 | Interest | 57 |
| 2.09 | Fees | 57 |
| 2.10 | Computation of Interest and Fees | 58 |
| 2.11 | Evidence of Debt | 58 |
| 2.12 | Payments Generally; Administrative Agent’s Clawback | 59 |
| 2.13 | Sharing of Payments by Lenders | 61 |
| 2.14 | Extension of Revolving Commitment Termination Date | 61 |
| 2.15 | Increase in Commitments | 62 |
| 2.16 | Cash Collateral | 63 |
| 2.17 | Defaulting Lenders | 64 |
| ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY | 67 | |
| 3.01 | Taxes | 67 |
| 3.02 | Illegality | 70 |
| 3.03 | Inability to Determine Rates | 70 |
| 3.04 | Increased Costs; Reserves on Eurocurrency Rate Loans | 71 |
| 3.05 | Compensation for Losses | 73 |
| 3.06 | Mitigation Obligations; Replacement of Lenders | 73 |
| 3.07 | Survival | 74 |
| ARTICLE IV CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND FURTHER CREDIT EXTENSIONS | 74 | |
| 4.01 | Conditions of Effectiveness of this Agreement | 74 |
| 4.02 | Conditions to all Credit Extensions | 76 |
| ARTICLE V REPRESENTATIONS AND WARRANTIES | 76 | |
| 5.01 | Existence, Qualification and Power; Compliance with Laws | 76 |
| 5.02 | Authorization; No Contravention | 77 |
| 5.03 | Governmental Authorization; Other Consents | 77 |
Table of Contents
| Page | ||
|---|---|---|
| 5.04 | Binding Effect | 77 |
| 5.05 | Financial Statements; No Material Adverse Effect | 77 |
| 5.06 | Litigation | 78 |
| 5.07 | No Default | 78 |
| 5.08 | Ownership of Property; Liens | 78 |
| 5.09 | Environmental Compliance | 78 |
| 5.10 | Insurance | 78 |
| 5.11 | Taxes | 78 |
| 5.12 | ERISA Compliance | 78 |
| 5.13 | Margin Regulations; Investment Company Act; REIT Status | 79 |
| 5.14 | Disclosure | 79 |
| 5.15 | Compliance with Laws | 80 |
| 5.16 | Intellectual Property; Licenses, Etc. | 80 |
| 5.17 | [Reserved] | 80 |
| 5.18 | Property | 80 |
| 5.19 | [Reserved] | 80 |
| 5.20 | Solvency | 80 |
| ARTICLE VI AFFIRMATIVE COVENANTS | 80 | |
| 6.01 | Financial Statements | 80 |
| 6.02 | Certificates; Other Information | 81 |
| 6.03 | Payment of Obligations | 83 |
| 6.04 | Preservation of Existence, Etc. | 83 |
| 6.05 | Maintenance of Properties | 83 |
| 6.06 | Maintenance of Insurance | 83 |
| 6.07 | Compliance with Laws | 83 |
| 6.08 | Books and Records | 83 |
| 6.09 | Inspection Rights | 84 |
| 6.10 | Use of Proceeds | 84 |
| ARTICLE VII NEGATIVE COVENANTS | 84 | |
| 7.01 | Liens | 84 |
| 7.02 | Investments | 86 |
| 7.03 | Fundamental Changes | 87 |
| 7.04 | Restricted Payments | 87 |
| 7.05 | Change in Nature of Business | 88 |
| 7.06 | Transactions with Affiliates | 88 |
| 7.07 | Burdensome Agreements | 88 |
| 7.08 | [Reserved] | 88 |
| 7.09 | Financial Covenants | 88 |
| ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES | 89 | |
| 8.01 | Events of Default | 89 |
| 8.02 | Remedies Upon Event of Default | 91 |
| 8.03 | Application of Funds | 91 |
| ARTICLE IX ADMINISTRATIVE AGENT | 92 | |
| 9.01 | Appointment and Authority | 92 |
| 9.02 | Rights as a Lender | 92 |
| 9.03 | Exculpatory Provisions | 92 |
Table of Contents
| Page | ||
|---|---|---|
| 9.04 | Reliance by Administrative Agent | 93 |
| 9.05 | Delegation of Duties | 94 |
| 9.06 | Successor Administrative Agent | 94 |
| 9.07 | Non-Reliance on Administrative Agent and Other Lenders | 95 |
| 9.08 | No Other Duties, Etc. | 95 |
| 9.09 | Administrative Agent May File Proofs of Claim | 95 |
| 9.10 | Collateral and Borrower Matters | 96 |
| 9.11 | No Obligations of Credit Parties | 96 |
| ARTICLE X MISCELLANEOUS | 96 | |
| 10.01 | Amendments, Etc. | 96 |
| 10.02 | Notices; Effectiveness; Electronic Communication | 98 |
| 10.03 | No Waiver; Cumulative Remedies | 99 |
| 10.04 | Expenses; Indemnity; Damage Waiver | 100 |
| 10.05 | Payments Set Aside | 101 |
| 10.06 | Successors and Assigns | 102 |
| 10.07 | Treatment of Certain Information; Confidentiality | 107 |
| 10.08 | Right of Setoff | 109 |
| 10.09 | Interest Rate Limitation | 110 |
| 10.10 | Counterparts; Integration; Effectiveness | 110 |
| 10.11 | Survival of Representations and Warranties | 110 |
| 10.12 | Severability | 111 |
| 10.13 | Replacement of Lenders | 111 |
| 10.14 | Governing Law; Jurisdiction; Etc. | 111 |
| 10.15 | Waiver of Jury Trial | 112 |
| 10.16 | USA PATRIOT Act Notice | 113 |
| 10.17 | [Reserved] | 113 |
| 10.18 | ENTIRE AGREEMENT | 113 |
| 10.19 | [Reserved] | 113 |
| 10.20 | Release of a Guarantor | 113 |
| 10.21 | No Advisory or Fiduciary Responsibility | 113 |
| 10.22 | Judgment Currency | 114 |
| 10.23 | Alternative Currency Fronting Lenders; Fronting Commitments | 114 |
| ARTICLE XI GUARANTY | 115 | |
| 11.01 | The Guaranty | 115 |
| 11.02 | Obligations Unconditional | 115 |
| 11.03 | Reinstatement | 116 |
| 11.04 | Certain Additional Waivers | 116 |
| 11.05 | Remedies | 116 |
| 11.06 | Rights of Contribution | 116 |
| 11.07 | Guarantee of Payment; Continuing Guarantee | 117 |
| 11.08 | Additional Guarantors | 117 |
SCHEDULES
| 1.01(a) | Mandatory Cost Formulae |
|---|---|
| 1.01(b) | Tech Square |
| 2.01 | Revolving Commitments and Applicable Percentages |
| 2.02 | Foreign Currency Lenders |
| 10.02 | Administrative Agent’s Office; Certain Addresses for Notices |
EXHIBITS
| Form of | |
|---|---|
| A | Committed Loan Notice |
| B | Swing Line Loan Notice |
| C | Revolving Note |
| D | Compliance Certificate |
| E | Assignment and Assumption |
| F | Joinder Agreement |
| G | Lender Joinder Agreement |
| H-1 | Bid Request |
| H-2 | Competitive Bid |
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of April 30, 2012, among Alexandria Real Estate Equities, Inc., a Maryland corporation (“Borrower”); Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”); the other guarantors (if any) that from time to time become party hereto pursuant to Section 11.08 (collectively, together with Operating Partnership, the “Guarantors”); each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”); and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
RECITALS
WHEREAS the Borrower and the Operating Partnership entered into the Existing Credit Agreement (as defined herein);
WHEREAS, the Borrower and the Operating Partnership have requested that the Lenders provide a revolving credit facility in the initial principal amount of $1.5 billion pursuant to the terms and conditions set forth herein; and
WHEREAS, the Lenders are willing to provide such revolving credit facility on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth herein and other good and valuable consideration, the receipt and sufficiency which is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
“Absolute Rate” means a fixed rate of interest expressed in multiples of 1/100th of one basis point.
“Absolute Rate Loan” means a Bid Loan that bears interest at a rate determined with reference to an Absolute Rate.
“Acquisition” means, with respect to any Person, the acquisition by such Person, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, or any other property of, another Person or (b) at least a majority of the voting Equity Interests of another Person, in each case whether or not involving a merger or consolidation with such other Person.
“Act” has the meaning set forth in Section 10.16.
“Adjusted EBITDA” means, for any period of determination and without duplication, an amount equal to (a) EBITDA of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, minus (b) the Capital Improvement Reserve for the Real Property of the Borrower and its Subsidiaries, minus (c) (without duplication to the extent already deducted in the
calculation of EBITDA) any Minority Interest’s share of the EBITDA of the Borrower and its Subsidiaries for such period.
“Adjusted Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to Interest Expense less any financing fees to the extent amortized and any amortization thereof (including fees payable under a Swap Contract), prepayment penalties, cost or expense associated with the early extinguishment of Indebtedness or deferred financing costs.
“Adjusted NOI” means, for any period and with respect to a Revenue-Producing Property, an amount equal to (a) NOI of that Revenue-Producing Property, minus (b) the Capital Improvement Reserve for such Revenue-Producing Property, minus (c) any Minority Interest’s share of the NOI of that Revenue-Producing Property; provided that for purposes of calculating Adjusted NOI, any Revenue-Producing Property that has a negative Adjusted NOI for the period shall be deemed to have an Adjusted NOI of zero.
“Adjusted Tangible Assets” means, as of any date of determination, without duplication, an amount equal to (a) Total Assets of the Borrower and its Subsidiaries as of that date, minus (b) Intangible Assets of the Borrower and its Subsidiaries as of that date, plus (c) any Minority Interest’s share of Intangible Assets minus (d) any Minority Interest’s share of Total Assets as of that date.
“Adjusted Total Indebtedness” means, as of any date of determination, without duplication, an amount equal to (a) the aggregate Total Indebtedness of the Borrower and its Subsidiaries as of such date of determination, minus (b) Excluded Indebtedness; provided, in no event shall such Excluded Indebtedness exceed an amount equal to (i) cash and Cash Equivalents of the Borrower and its Subsidiaries that are not subject to pledge, lien or control agreement (excluding statutory liens or rights of set-off in favor of any depositary bank or institution where such cash or Cash Equivalents are maintained) minus (ii) $35,000,000 (it being agreed that Excluded Indebtedness shall in no event be deemed a negative number).
“Adjusted Unencumbered Asset Value” means, as of any date of determination, (a) the Unencumbered Asset Value minus (b) any value attributable to Qualified Land and Qualified Development Assets in excess of 35% of the Unencumbered Asset Value minus (c) any value attributable to Qualified Revenue-Producing Properties, Qualified Land, Qualified Development Assets and Qualified Joint Ventures that are located outside the United States or Canada in excess of 30% of the Unencumbered Asset Value.
“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Aggregate Revolving Commitments” means all Revolving Commitments of the Revolving Lenders. As of the Closing Date, the Aggregate Revolving Commitments are equal to $1,500,000,000.
“Agreement” means this Third Amended and Restated Credit Agreement, as it may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time.
“Alternative Currency” means each of Euro, Sterling, Yen, Canadian Dollars, Australian Dollars and each other currency (other than Dollars) that is approved in accordance with Section 1.05.
“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.
“Alternative Currency Fronting Lender” means Bank of America or any other Revolving Lender designated by the Borrower and the Administrative Agent (such designation shall be consented to by such Revolving Lender) in its capacity as an Alternative Currency Funding Lender for Revolving Loans denominated in an Alternative Currency in which any Alternative Currency Participating Lender purchases Alternative Currency Risk Participations and in which Bank of America (or such other appointed Revolving Lender) advances to the Borrower the amount of all such Alternative Currency Participating Lenders’ respective Applicable Percentages of such Revolving Loans in accordance with Sections 2.02(b) and 2.02(f).
“Alternative Currency Funding Applicable Percentage” means, with respect to any Revolving Loan denominated in an Alternative Currency, (a) for each Alternative Currency Funding Lender other than the Alternative Currency Fronting Lender, its Applicable Percentage, and (b) for the Alternative Currency Fronting Lender, the sum of (i) the Applicable Percentage of the Alternative Currency Fronting Lender and (ii) the sum of the respective Applicable Percentages of the Alternative Currency Participating Lenders.
“Alternative Currency Funding Lender” means, with respect to each Revolving Loan denominated in an Alternative Currency, each Revolving Lender other than an Alternative Currency Participating Lender with respect to such Alternative Currency.
“Alternative Currency Loan Credit Exposure” means, with respect to any Revolving Loan denominated in an Alternative Currency, (a) for each Alternative Currency Funding Lender other than the Alternative Currency Fronting Lender, the aggregate outstanding principal amount of its Alternative Currency Funding Applicable Percentage thereof advanced by such Alternative Currency Funding Lender, (b) for the Alternative Currency Fronting Lender, the aggregate outstanding principal amount of its Alternative Currency Funding Applicable Percentage thereof advanced thereby, net of all Alternative Currency Risk Participations purchased or funded, as applicable, therein, and (c) for each Alternative Currency Participating Lender, the aggregate outstanding principal amount of all Alternative Currency Risk Participations purchased or funded, as applicable, by such Alternative Currency Participating Lender in such Revolving Loan.
“Alternative Currency Participant’s Share” means, for any Alternative Currency Participating Lender in respect of a Revolving Loan denominated in an Alternative Currency, a fraction (expressed as a percentage), the numerator of which is such Alternative Currency Participating Lender’s Applicable Percentage and the denominator of which is the sum of (i) the Applicable Percentage of the Alternative
Currency Fronting Lender in respect of such Revolving Loan and (ii) the sum of the respective Applicable Percentages of all of the Alternative Currency Participating Lenders in respect of such Revolving Loan.
“Alternative Currency Participating Lender” means, with respect to each Revolving Loan denominated in an Alternative Currency, any Revolving Lender that has given notice to the Administrative Agent and the Borrower that it is unable to fund in the applicable Alternative Currency, unless and until such Revolving Lender delivers to the Administrative Agent and the Borrower a written notice pursuant to Section 2.02(f)(ix) requesting that such Revolving Lender’s designation be changed to an Alternative Currency Funding Lender with respect to such Alternative Currency.
“Alternative Currency Participation Payment Date” has the meaning specified in Section 2.02(f)(iii).
“Alternative Currency Risk Participation” means, with respect to each Revolving Loan denominated in an Alternative Currency advanced by the Alternative Currency Fronting Lender, the risk participation purchased by each of the Alternative Currency Participating Lenders in such Revolving Loan in an amount determined in accordance with such Alternative Currency Participating Lender’s Applicable Percentage of such Revolving Loan, as provided in Section 2.02(f).
“Alternative Currency Sublimit” means an amount equal to 25% of the Aggregate Revolving Commitments. The Alternative Currency Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Commitments represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.17. If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Revolving Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption or Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means the following percentages per annum:
| Pricing<br>Level | Debt Rating | Eurocurrency<br>Rate + | Base<br>Rate + | Facility<br>Fee | ||||||||
| 1 | > A / A2 | 0.95% | 0.00% | 0.15% | ||||||||
| 2 | A- / A3 | 1.00% | 0.00% | 0.15% | ||||||||
| 3 | BBB+ / Baal | 1.05% | 0.05% | 0.20% | ||||||||
| 4 | BBB / Baa2 | 1.20% | 0.20% | 0.25% | ||||||||
| 5 | BBB- / Baa3 | 1.475% | 0.475% | 0.325% | ||||||||
| 6 | < BBB- / Baa3 or Unrated | 1.85% | 0.85% | 0.45% |
Each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the day immediately preceding the effective date of the next such change.
“Applicable Time” means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, and communicated in writing to the Borrower to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.
“Appraised Value” means, as of any date of determination, without duplication, with respect to any Real Property, the appraised value (if any) thereof based on its unimproved as-is basis determined pursuant to an appraisal prepared by an M.A.I. certified appraisal and otherwise reasonably satisfactory to Administrative Agent (it being understood and agreed that in no event shall the Borrower (or any applicable Subsidiary) be required to deliver updated appraisals more frequently than once during any 24-month period).
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Citigroup Global Markets Inc., in their capacity as joint lead arrangers and joint bookrunners.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.
“Attributable Indebtedness” means, on any date, in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2011, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.
“Australian Dollars” means the lawful currency of Australia.
“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Revolving Commitment Termination Date, (b) the date of termination of the Revolving Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Revolving Lender to make Revolving Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
“Bank of America” means Bank of America, N.A. and its successors.
“Base Qualifications” means, for any Real Property, the following criteria:
(a) to the best of Borrower’s knowledge and belief, such Real Property is in good repair and condition, subject to ordinary wear and tear, and does not have any title, survey, environmental or other defects that would give rise to a materially adverse effect as to the value,
use of or ability to sell or refinance such Real Property (it being understood and agreed that construction and redevelopment in the ordinary course do not constitute a material adverse effect on the value, use of or ability to sell or refinance such Real Property);
(b) such Real Property is Unencumbered;
(c) such Real Property is either (i) owned in fee simple absolute (or, in the case of Qualified Development Assets and Qualified Revenue-Producing Properties, through ownership of a condominium unit) or (ii) occupied by means of a leasehold interest or similar arrangement providing the right to occupy Real Property pursuant to a Mortgageable Ground Lease;
(d) such Real Property is owned or leased by (i) the Borrower, (ii) a Guarantor or (iii) a Subsidiary of the Borrower (other than an Obligor Subsidiary); and
(e) such Real Property is located in the United States, Canada, Scotland, the United Kingdom, Germany, Austria, France, Switzerland, the Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Ireland or Japan.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurocurrency Rate plus 1.00%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
“Base Rate Loan” means a Committed Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in Dollars.
“Bid Borrowing” means a borrowing consisting of simultaneous Bid Loans of the same Type from each of the Lenders whose offer to make one or more Bid Loans as part of such borrowing has been accepted under the auction bidding procedures described in Section 2.04A.
“Bid Loan” has the meaning specified in Section 2.04A(a).
“Bid Loan Lender” means, in respect of any Bid Loan, the Lender making such Bid Loan to the Borrower.
“Bid Loan Sublimit” means an amount equal to the lesser of (i) (a) the Aggregate Revolving Commitments minus (b) the aggregate Outstanding Amount of the Revolving Loans, minus (c) the Outstanding Amount of all L/C Obligations, minus (d) the Outstanding Amount of all Swing Line Loans and (ii) 50% of the Aggregate Revolving Commitments. The Bid Loan Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
“Bid Request” means a written request for one or more Bid Loans substantially in the form of Exhibit H-1.
“Borrower” has the meaning set forth in the introductory paragraph hereof.
“Borrower Materials” has the meaning set forth in Section 6.02.
“Borrowing” means a Committed Borrowing, a Bid Borrowing or a Swing Line Borrowing, as the context may require.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office with respect to Obligations denominated in Dollars is located and:
(a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;
(b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day;
(c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and
(d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.
“Canadian Dollars” and “C$” mean the lawful currency of Canada.
“Capital Improvement Reserve” means, with respect to any Real Property now or hereafter owned by the Borrower or its Subsidiaries, an amount equal to twenty cents ($.20) multiplied by the Net Rentable Area of the Real Property.
“Capital Lease Obligations” means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease.
“Capitalization Rate” means 7.25%.
“Cash” means money, currency or a credit balance in any demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the L/C Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the
L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means:
(a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof and backed by the full faith and credit of the United States having maturities of not more than one year from the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits, eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers’ acceptances, having in each case a term of not more than one year, issued by Administrative Agent or any Lender, or by any U.S. commercial bank (or any branch or agency of a non-U.S. bank licensed to conduct business in the U.S.) having combined capital and surplus of not less than $100,000,000 whose short-term securities are rated (at the time of acquisition thereof) at least A-1 by S&P and P-1 by Moody’s;
(c) demand deposits on deposit in accounts maintained at commercial banks having membership in the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder;
(d) commercial paper of an issuer rated (at the time of acquisition thereof) at least A-2 by S&P or P-2 by Moody’s and in either case having a term of not more than one year; and
(e) money market mutual or similar funds that invest primarily in assets satisfying the requirements of clauses (a) through (d) of this definition.
“Cash Interest Expense” means Adjusted Interest Expense of a Person that is paid or currently payable in Cash.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption, or taking effect of any law, rule, regulation, guideline, decision, directive or treaty, (b) any change in any law, rule, regulation, directive, guideline, decision, or treaty or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline, law, rule, treaty or directive (whether or not having the force of law) by any Governmental Authority; provided that for purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, guidelines, and directives in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have gone into effect and been adopted after the date of this Agreement.
“Change of Control” means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d 3(a)(l) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 40% or more of the outstanding voting Common Stock or (b) during any period of 12 consecutive months, individuals who at the beginning of such period constituted the board of directors of the Borrower (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office.
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment” means any Revolving Commitment.
“Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.
“Committed Loan” means a Revolving Loan.
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Committed Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
“Common Stock” means the common stock of the Borrower.
“Competitive Bid” means a written offer by a Lender to make one or more Bid Loans, substantially in the form of Exhibit H-2, duly completed and signed by a Lender.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Confidential Information” means (a) all of the terms, covenants, conditions or agreements set forth in any letters of intent or in this Agreement or any amendments hereto and any related agreements of whatever nature, (b) the information and reports provided in compliance with the terms of this Agreement, (c) any and all information provided, disclosed or otherwise made available to the Administrative Agent and the Lenders including, without limitation, any and all plans, maps, studies (including market studies), reports or other data, operating expense information, as-built plans, specifications, site plans, drawings, notes, analyses, compilations, or other documents or materials relating to the properties or their condition or use, whether prepared by the Borrower or others, which use, or reflect, or that are based on, derived from, or are in any way related to the foregoing, and (d) any and all other information of the Borrower or any of its Subsidiaries that the Administrative Agent or any Lender may have access to including, without limitation, ideas, samples, media, techniques, sketches, specifications, designs, plans, forecasts, financial information, technical information, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, financial models and databases, software programs, software source documents, manuals, documents, properties, names of tenants or potential tenants, vendors, suppliers, distributors and consultants, and formulae related to the current, future, and proposed products and services of the Borrower or any of its Subsidiaries or tenants or potential tenants (including, without limitation, information concerning research, experimental work, development, design details and specifications, engineering, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, clients, business and contractual relationships, business forecasts, and sales and marketing plans). Confidential Information may be disclosed or accessible to the Administrative Agent and the Lenders as embodied within tangible material (such as documents, drawings, pictures, graphics, software, hardware, graphs, charts, or disks), orally, or visually.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Credit Party” means the Borrower or any Guarantor and “Credit Parties” means collectively, the Borrower and the Guarantors.
“Debt Rating” means, as of any date of determination, the rating as determined by either Rating Agency of the Borrower’s long-term non-credit enhanced senior unsecured debt; provided that (a) if the Debt Ratings issued by the Rating Agencies differ, the higher of such Debt Rating shall apply, (b) if the Borrower only has one Debt Rating, such Debt Rating shall apply and (c) if the Borrower does not have a Debt Rating, Pricing Level 6 shall apply.
“Debt Service” means, for any period with respect to a Person’s Indebtedness, the sum of all Interest Charges and regularly scheduled principal payments due and payable during such period, excluding any balloon payments due upon maturity of the Indebtedness, refinancing of the Indebtedness or repayments thereof in connection with asset sales; provided that Debt Service shall not include any Minority Interest’s share of any of the foregoing. Debt Service shall include the portion of rent payable by a Person during such period under Capital Lease Obligations that should be treated as principal in accordance with GAAP but shall exclude Interest Charges related to committed construction loans.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate and any Mandatory Cost) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate for Eurocurrency Rate Committed Loans plus 2% per annum.
“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such
Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuer, the Swing Line Lender and each other Lender promptly following such determination.
“Development Investments” means, as of any date of determination, direct or indirect investments in Real Property which, as of such date, is the subject of ground-up development to be used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities); provided, that, such Real Property or any portion thereof will only constitute a Development Investment from the date construction has commenced thereon until the date on which the Real Property and applicable improvements receive a final certificate of occupancy or equivalent certification allowing legal occupancy for its intended purpose.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and dispositions due to casualty or condemnation) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Dollar” and “$”mean lawful money of the United States.
“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“EBITDA” means, with respect to any Person (or any asset of a Person) for any fiscal period and without double counting, the sum of (a) the Net Income of such Person (or attributable to assets of the
Person) for that period, plus (b) the following to the extent deducted in calculating Net Income of such Person (i) any non-recurring loss, plus (ii) Interest Expense for that period, plus (iii) the aggregate amount of federal and state taxes on or measured by income of such Person for that period (whether or not payable during that period), plus (iv) depreciation, amortization and all other non-cash expenses (including non-cash officer compensation and any write-down of goodwill pursuant to GAAP) of such Person for that period, in each case as determined in accordance with GAAP, plus (v) transaction costs and expenses in connection with any merger or acquisition (whether or not consummated) not permitted to be capitalized pursuant to GAAP, plus (vi) severance and restructuring charges plus (vii) charges related to the early extinguishment of Indebtedness minus (c) any non-operating, non-recurring gain to the extent included in calculating Net Income of such Person (or attributable to assets of such Person).
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.
“EMU” means the economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.
“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.
“Environmental Laws” means any and all applicable Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions governing pollution and the protection of the environment or the release of any Hazardous Materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement by the Borrower or any of its Subsidiaries pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interest” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, and other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Equity Offering” means the issuance and sale by the Borrower or the Operating Partnership of any equity securities.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA or the treatment of a Multiemployer Plan amendment as a termination under Section 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA to the extent that such determination could reasonably be expected to give rise to a Material Adverse Effect; or (h) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“Euro” and “EUR” mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.
“Eurocurrency Bid Margin” means the margin above or below the Eurocurrency Rate to be added to or subtracted from the Eurocurrency Rate, which margin shall be expressed in multiples of 1/100th of one basis point.
“Eurocurrency Margin Bid Loan” means a Bid Loan that bears interest at a rate based upon the Eurocurrency Rate.
“Eurocurrency Rate” means:
(a) means, for any Interest Period with respect to a Eurocurrency Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurocurrency Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; and
(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurocurrency market at their request at the date and time of determination.
“Eurocurrency Rate Committed Loan” means a Committed Loan that bears interest at a rate based on clause (a) of the definition of “Eurocurrency Rate.”
“Eurocurrency Rate Loan” means a Eurocurrency Rate Committed Loan or a Eurocurrency Margin Bid Loan.
“Event of Default” has the meaning set forth in Section 8.01.
“Exchange Proceeds” means the net issuance proceeds from Equity Offerings, which the Borrower has designated or otherwise stated that it intends to use to make Restricted Payments on account of then existing Preferred Equity.
“Excluded Indebtedness” means, as of any date of determination, the aggregate principal amount of any Indebtedness of the Borrower and its Subsidiaries included in the definition of Total Indebtedness, as of such date of determination, either (a) which by its terms matures within twenty-four (24) months after such date of determination or (b) as to which the Borrower or any Subsidiary has the right to convert or any holder of such Indebtedness has the right to put or convert such Indebtedness within twenty-four (24) months after such date of determination.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (or any Person whose net income is measured with reference to it) (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located, or in which it is doing business, or in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) other than with respect to an assignee pursuant to a request by the Borrower under Section 10.13, any United States Federal withholding tax that is imposed on amounts payable to such Person at the time such Person becomes a party hereto (or designates a new Lending Office) or is attributable to such Person’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Person (or its assignor, if any) was entitled, at the time of its appointment or designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a) and (d) any United States Federal withholding tax imposed by reason of a Lender’s failure to comply with the requirements of Sections 1471 through 1474 of the Code or any applicable Treasury regulations promulgated thereunder, or any official interpretations thereof.
“Existing Credit Agreement” means that certain Second Amended and Restated Credit Agreement, dated as of October 31, 2006, as amended, among the Credit Parties, the lenders party thereto,
Bank of America, N.A. as administrative agent, swing line lender and letter of credit issuer and the other parties thereto.
“Existing Revolving Commitment Termination Date” has the meaning set forth in Section 2.14(a).
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
“Fee Letters” means (a) that certain letter agreement, dated as of March 19, 2012, between the Borrower and the Administrative Agent and (b) that certain letter agreement, dated as of March 19, 2012, among the Borrower, MLPF&S, Bank of America, N.A., J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A. and Citigroup Global Markets, Inc.
“Fixed Charge Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) Adjusted EBITDA for the period consisting of that fiscal quarter and the three immediately preceding fiscal quarters by (b) an amount equal to (i) Debt Service of the Borrower and its Subsidiaries for such period, plus (ii) all Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during such period.
“Fixed Eurocurrency Rate” means, on any date of determination, for any Swing Line Loan, the sum of: (a) the rate per annum equal to the BBA LIBOR (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) for a 30 day interest period at approximately 4:00 p.m. (London time) on the date of borrowing; plus (b) the Applicable Rate. If such rate is not available for any reason, then the “Fixed Eurocurrency Rate”, on such date of determination, shall be (a) the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of a 30 day interest period in same day funds in the approximate amount of the Swing Line Loan by Bank of America and with a term equivalent to a 30 day interest period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) on the day of commencement of such 30 day interest period; plus (b) the Applicable Rate.
“Fixed Eurocurrency Rate Loan” means a Swing Line Loan that bears interest at a rate based on the Fixed Eurocurrency Rate.
“Foreign Lender” means any Lender that is not a United States person as defined in Section 7701(a)(30) of the Code.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Commitment” means, with respect to any Alternative Currency Fronting Lender, the aggregate Dollar Equivalent amount of Alternative Currency Fronting Loans that such Fronting Lender has agreed to make as set forth on Schedule 2.01, as such amount may be adjusted in accordance with Section 10.24.
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funds From Operations” means, with respect to any fiscal period and without double counting, an amount equal to the Net Income (or deficit) of the Borrower and its Subsidiaries for that period computed on a consolidated basis in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures; provided that Funds From Operations shall exclude one-time or non-recurring charges and impairment charges, charges from the early extinguishment of indebtedness and other non-cash charges. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect Funds From Operations on the same basis. Funds From Operations shall be reported in accordance with the NAREIT Policy Bulletin dated April 5, 2002, as amended, restated, supplemented or otherwise modified from time to time.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision or instrumentality thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Granting Lender” has the meaning specified in Section 10.06(h).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance of such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such
Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors” means the Operating Partnership and, if requested by the Borrower, any other Wholly-Owned Domestic Subsidiary of the Borrower who becomes a Guarantor pursuant to Section 11.08.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated under any Environmental Law.
“Honor Date” is defined in Section 2.03(c)(i).
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(e) Capital Lease Obligations; and
(f) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, (i) the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or is otherwise liable for such Indebtedness, except to the extent such Indebtedness is expressly made non-recourse to such Person and (ii) Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitees” has the meaning specified in Section 10.04(b).
“Intangible Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP, that are considered to be intangible assets under GAAP, including customer lists, goodwill, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
“Interest Charges” means, as of the last day of any fiscal period and without double counting, the sum of (a) Cash Interest Expense of a Person, plus (b) all interest currently payable in Cash by a Person which is incurred during that fiscal period and capitalized under GAAP, minus (c) any Minority Interest’s share of Cash Interest Expense.
“Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to (a) all interest, fees, charges and related expenses paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP, plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations, minus (or plus, as applicable) (c) amounts received (or paid) under Swap Contracts plus (d) all other amounts considered to be “interest expense” under GAAP.
“Interest Payment Date” means the fifth (5th) calendar day of each month; provided that if the fifth (5th) calendar day of any month falls on a day other than a Business Day, then the Interest Payment Date shall be the immediately succeeding Business Day or if any such date would be after the Revolving Commitment Termination Date, the Revolving Commitment Termination Date.
“Interest Period” means, (a) as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or, in the case of any Eurocurrency Rate Committed Loan, converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its applicable Committed Loan Notice or Bid Request, as the case may be; and (b) as to each Absolute Rate Loan, a period of not less than 7 days and not more than 180 days as selected by the Borrower in its Bid Request; provided that:
(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurocurrency Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Revolving Commitment Termination Date.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but reduced by any amounts received in respect of such Investment which constitute capital distributions, principal, sale proceeds or otherwise in respect thereof.
“IP Rights” has the meaning specified in Section 5.16.
“IRS” means the United States Internal Revenue Service.
“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).
“Issuer Documents” means, with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of Credit.
“Joinder Agreement” means a joinder agreement substantially in the form attached hereto as Exhibit F.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“L/C Advance” means, with respect to each Revolving Lender, such Revolving Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage. All L/C Advances shall be denominated in Dollars.
“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in Dollars.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes each Revolving Lender, the Swing Line Lender, a Bid Lender, each Alternative Currency Fronting Lender, each Alternative Currency Funding Lender and each Alternative Currency Participating Lender, as applicable.
“Lender Joinder Agreement” means a lender joinder agreement substantially in the form attached hereto as Exhibit G.
“Lender Party” has the meaning set forth in Section 10.07.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“Letter of Credit” means any standby letter of credit issued hereunder. Letters of Credit may be issued in Dollars or in an Alternative Currency.
“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.
“Letter of Credit Expiration Date” means the day that is seven days prior to the Revolving Commitment Termination Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).
“Letter of Credit Fee” has the meaning specified in Section 2.03(h).
“Letter of Credit Sublimit” means an amount equal to $150,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
“Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) Adjusted Total Indebtedness as of such date by (b) (i) Adjusted Tangible Assets as of such date minus (ii) the amount of Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness as of such date.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, deposit arrangement, encumbrance, lien (statutory or other), charge, or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing, other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest).
“Loan” means a Revolving Loan, a Swing Line Loan, a Bid Loan and/or an L/C Borrowing, as the context requires.
“Loan Documents” means this Agreement, each Revolving Note, each Issuer Document, any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.16 of this Agreement, the Fee Letters and any other instrument, document or agreement from time to time delivered by a Credit Party in connection with this Agreement.
“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“MLPF&S” means Merrill Lynch, Pierce Fenner & Smith Incorporated and its successors.
“Managing Agents” means the following: The Bank of New York Mellon, Credit Suisse AG, Cayman Islands Branch, PNC Bank National Association, Sumitomo Mitsui Banking Corporation, Suntrust Bank and Union Bank, N.A.
“Mandatory Cost” means, with respect to any period, the percentage rate per annum determined in accordance with Schedule 1.01(a).
“Material Acquisition” means an Acquisition by the Borrower or any of its Subsidiaries in which the value of the assets acquired in such Acquisition exceeds five per cent (5%) of Total Assets of the Borrower and its Subsidiaries (after giving effect to such Acquisition).
“Material Adverse Effect” means any set of circumstances or events which (a) has had or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document (other than as a result of any action or inaction of the Administrative Agent or any Lender), (b) has been or could reasonably be expected to be material and adverse to the business or condition (financial or otherwise) of the Borrower and its Subsidiaries on a consolidated basis or (c) has materially impaired or could reasonably be expected to materially impair the ability of the Credit Parties to perform the Obligations.
“Material Unsecured Indebtedness” means outstanding third party unsecured borrowed money Indebtedness (including guaranties thereof), in a principal amount equal to or greater than $25,000,000.
“Maximum Rate” has the meaning set forth in Section 10.09.
“Minimum Book Value” means, as of any date of determination, without duplication, the sum of: (a) all consolidated assets of the Borrower and its Subsidiaries as of that date, plus (b) the Borrower’s and its Subsidiaries’ minority interest in unconsolidated assets as of that date, minus (i) Intangible Assets of the Borrower and its Subsidiaries and (ii) Total Liabilities of Borrower and its Subsidiaries as of that date.
“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 100% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.16(a)(i), (a)(ii) or (a)(iii), an amount equal to 100% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.
“Minority Interest” means, with respect to any non-Wholly-Owned Subsidiary, direct or indirect, of the Borrower, any ownership interest of a third party in such Subsidiary.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgageable Ground Lease” means on any date of determination, a lease or similar arrangement providing the right to occupy Real Property (a) which is granted by the fee owner of Real Property, (b) which has a remaining term (calculated only once on the Closing Date or the date the Real
Property subject to such lease becomes a Qualified Asset Pool Property) of not less than twenty-five (25) years, including extension options exercisable solely at the discretion of the Borrower or any applicable Subsidiary, (c) under which no material default has occurred and is continuing and (d) with respect to which a security interest may be granted (i) without the consent of the lessor or (ii) pursuant to the consent of the lessor, which consent has been granted.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Negative Pledge” means a Contractual Obligation that contains a covenant binding on the Borrower and its Subsidiaries that prohibits Liens on any of their Property, other than (a) any such covenant contained in a Contractual Obligation granting or relating to a particular Lien which affects only the property that is the subject of such Lien and (b) any such covenant that does not apply to Liens which may secure the Obligations now or in the future.
“Net Income” means, for any period and for any Person, the net income of the Person for that period, determined in accordance with GAAP; provided that there shall be excluded therefrom the net amount of any real estate gains or losses.
“Net Rentable Area” means with respect to any Real Property, the floor area of any buildings, structures or improvements available for leasing to tenants (excluding storage lockers and parking spaces) determined in accordance with the Borrower’s or its applicable Subsidiary’s rent roll for such Real Property, the manner of such determination shall be consistently applied for all Real Property, unless otherwise approved by the Administrative Agent.
“NOI” means, with respect to any Revenue-Producing Property and with respect to any fiscal period, the sum of (a) the net income of that Revenue-Producing Property for that period, plus (b) Interest Expense of that Revenue-Producing Property for that period, plus (c) the aggregate amount of federal and state taxes on or measured by income of that Revenue-Producing Property for that period (whether or not payable during that period), plus (d) depreciation, amortization and all other non-cash expenses of that Revenue-Producing Property for that period, in each case as determined in accordance with GAAP.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Recourse Debt” means Indebtedness of any Person for which the liability of such Person (except with respect to fraud, Environmental Laws liability, misapplication of funds, bankruptcy, transfer of collateral in violation of the applicable loan documents, failure to obtain consent for subordinate financing in violation of the applicable loan documents and other exceptions customary in like transactions at the time of the incurrence of such Indebtedness) either is contractually limited to collateral securing such Indebtedness or is so limited by operation of Laws.
“Note(s)” means Revolving Notes.
“Obligations” means all advances to, and debts, liabilities, obligations of, any Credit Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Obligor Subsidiary” means any Subsidiary (other than the Operating Partnership) that is not a Guarantor but is obligated with respect to any Material Unsecured Indebtedness.
“Obligor Subsidiary Debt” means third party unsecured borrowed money Indebtedness (including guaranties) of any Obligor Subsidiary.
“Operating Partnership” has the meaning set forth in the introductory paragraph.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document; provided, however, that “Other Taxes” shall not include such amounts to the extent imposed as a result of any transfer by any Lender or the Administrative Agent of any interest in or under any Loan Document.
“Outstanding Amount” means (a) with respect to Committed Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Committed Loans occurring on such date; (b) with respect to Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Swing Line Loans occurring on such date; (c) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts and (d) with respect to Bid Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Bid Loans occurring on such date.
“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market in accordance with banking industry rules or practices in such offshore interbank market.
“Participant” has the meaning set forth in Section 10.06(d).
“Participating Member State” means each state so described in any EMU Legislation.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) including a multiple employer plan but not including a Multiemployer Plan; that is maintained or is contributed to by the Borrower or its Subsidiaries and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Purposes” has the meaning set forth in Section 10.07(a).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(2) of ERISA) established by the Borrower, or with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
“Platform” has the meaning set forth in Section 6.02.
“Preferred Distributions” means for any period, the amount of any and all Restricted Payments due and payable in cash by the Borrower or any of its Subsidiaries during such period to the holders of Preferred Equity but shall not include any Minority Interest’s share of any such Restricted Payments.
“Preferred Equity” means any form of preferred stock (whether perpetual, convertible or otherwise) or other ownership or beneficial interest in the Borrower or any of its Subsidiaries that entitles the holders thereof to preferential payment or distribution priority with respect to dividends, assets or other payments over the holders of any other stock or other ownership or beneficial interest in such Person.
“Property” means all assets of the Borrower and its Subsidiaries, whether real property or personal property.
“Public Lender” has the meaning set forth in Section 6.02.
“Qualified Asset Pool Property” means Qualified Land, Qualified Revenue-Producing Property, Qualified Development Assets and Qualified Joint Venture Property.
“Qualified Development Asset” means a Real Property that:
(a) satisfies the Base Qualifications;
(b) constitutes a Development Investment; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Land.
“Qualified Joint Venture Property” means a Real Property, owned and controlled by a direct or indirect non-wholly-owned subsidiary of the Borrower, that is any of a Qualified Revenue-Producing Property, Qualified Land and/or a Qualified Development Asset. For purposes of this definition “controlled” means exclusive control of any disposition, refinancing and operating activity without the consent of any other party (other than (i) the Borrower or (ii) any of its Subsidiaries, as long as such Subsidiary does not need the consent of any minority equity holder thereof to consent to any disposition, refinancing or operating activity). Notwithstanding the foregoing, the Tech Square Project shall be deemed a Qualified Joint Venture Property so long as it meets the criteria set forth above other than those matters set forth on Schedule 1.01(b).
“Qualified Land” means, as of any date of determination, without duplication, Real Property that:
(a) satisfies the Base Qualifications;
(b) is entitled; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Development Asset.
“Qualified Revenue-Producing Property” means a Revenue-Producing Property that:
(a) satisfies the Base Qualifications;
(b) is occupied or available for occupancy (subject to final tenant improvements); and
(c) does not otherwise constitute a Qualified Development Asset or Qualified Land.
“Rating Agencies” means (a) S&P and (b) Moody’s.
“Real Property” means, as of any date of determination, real property (together with the underlying real property interests and appurtenant real property rights) then owned, leased or occupied by any Credit Party or any of its Subsidiaries.
“Register” has the meaning specified in Section 10.06(c).
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a real estate investment trust under Sections 856 through 860 of the Code, and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Sections 857 et seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of
Credit Application, (c) with respect to a Bid Loan, a Bid Request, and (d) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“Required Lenders” means, as of any date of determination, Revolving Lenders having more than 50% of the Aggregate Revolving Commitments or, if the Aggregate Revolving Commitments have been terminated pursuant to Section 8.02, Revolving Lenders holding in the aggregate more than 50% of the Total Revolving Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in L/C Obligations, Swing Line Loans and Revolving Loans denominated in an Alternative Currency deemed “held” by such Revolving Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Revolving Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Required Revolving Lenders” means, as of any date of determination, Revolving Lenders having more than 50% of the Aggregate Revolving Commitments or, if the Aggregate Revolving Commitments have been terminated pursuant to Section 8.02, Revolving Lenders holding in the aggregate more than 50% of the Total Revolving Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans deemed “held” by such Revolving Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Revolving Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.
“Responsible Officer” means, (a) with respect to delivery of executed copies of this Agreement or any Compliance Certificate, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable) and (b) for all other purposes, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer, secretary, assistant secretary or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable). Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.
“Restricted Payment” means, with respect to any equity interest or any warrant or option to purchase an equity interest issued by the Borrower or any of its Subsidiaries, (a) the retirement, redemption, purchase or other acquisition for Cash or for Property by the Borrower or such Subsidiary of any such security or interest (excluding any Indebtedness which by its terms is convertible into an Equity Interest), (b) the declaration or (without duplication) payment by the Borrower or such Subsidiary of any dividend in Cash or in Property on or with respect to any such security or interest and (c) any other payment in Cash or Property by the Borrower or such Subsidiary constituting a distribution under applicable Laws with respect to such security or interest.
“Revaluation Date” means (a) with respect to any Loan, each of the following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in an Alternative Currency pursuant to Section 2.02, (iii) the date the Alternative Currency Fronting Lender has requested payment from the Alternative Currency Participating Lenders in Dollars, and with respect to all other instances pursuant to Section 2.02(f) the date on which payments in Dollars are made between the Alternative Currency Fronting Lender and Alternative Currency Participating Lenders with respect to such Loan and (iv) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require; and (b) with respect to any Letter of Credit, each of the following: (i) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (ii) each date of an amendment of any such Letter of
Credit having the effect of increasing the amount thereof, (iii) each date of any payment by the L/C Issuer under any Letter of Credit denominated in an Alternative Currency, and (iv) such additional dates as the Administrative Agent or the L/C Issuer shall determine or the Required Lenders shall require.
“Revenue-Producing Property” means an identifiable improved Real Property that is used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities), or for such other revenue-producing purposes as the Required Lenders may approve.
“Revolving Commitment” means, as to each Revolving Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, (c) purchase participations in Swing Line Loans and (d) if such Lender is an Alternative Currency Participating Lender with respect to any Alternative Currency, purchase Alternative Currency Risk Participations in Revolving Loans denominated in such Alternative Currency, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Revolving Lender’s name on Schedule 2.01 or in the Assignment and Assumption or Lender Joinder Agreement pursuant to which such Revolving Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Revolving Commitment Termination Date” means the earlier of (a) the later of (i) April 30, 2016 and (ii) if the Revolving Commitment Termination Date is extended pursuant to Section 2.14, such extended Revolving Commitment Termination Date as determined pursuant to such Section 2.14 and (b) the date the Revolving Commitments are terminated pursuant to Section 2.06 or Article VIII.
“Revolving Lender” means each Lender that has a Revolving Commitment or, following termination of the Revolving Commitments, has Revolving Loans outstanding or a risk participation in L/C Obligations, Swing Line Loans or Revolving Loans denominated in Alternative Currency.
“Revolving Loan” means a Base Rate Loan or a Eurocurrency Rate Loan made to the Borrower by a Revolving Lender in accordance with its Applicable Percentage pursuant to Section 2.01(a), except as otherwise provided herein.
“Revolving Note” means a promissory note made by the Borrower in favor of, and payable to the order of, a Revolving Lender evidencing Revolving Loans made by such Revolving Lender, substantially in the form of Exhibit C. A Revolving Note shall be executed by the Borrower in favor of each Revolving Lender requesting a Revolving Note.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.
“Same Day Funds” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“SEC Report” means all filings on Form 10-K, Form 10-Q or Form 8-K with the SEC made by the Borrower pursuant to the Securities Exchange Act of 1934.
“Secured Debt” means, without duplication, (a) Indebtedness of the Borrower or any of its Subsidiaries that is secured by a Lien and (b) Obligor Subsidiary Debt; provided, that Secured Debt shall not include any of the Obligations.
“Secured Debt Ratio” means, as of the last day of any fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) the Secured Debt of the Borrower and its Subsidiaries as of such date by (b) the Adjusted Tangible Assets, as of such date.
“Solvent” means, as to any Person, that, as of any date of determination, (a) the amount of the present fair saleable value of the assets of such Person will, as of such date, exceed the amount of all liabilities of such Person, contingent or otherwise, as of such date, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its existing or anticipated debts as such debts become absolute and matured, and (c) such Person will not have as of such date, an unreasonably small amount of capital with which to conduct its business.
“SPC” has the meaning set forth in Section 10.06(h).
“Special Notice Currency” means at any time an Alternative Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe, including, without limitation, Yen and Australian Dollars.
“Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the L/C Issuer may obtain such spot rate from another financial institution designated by the Administrative Agent or the L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.
“Sterling” and “£” mean the lawful currency of the United Kingdom.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04.
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.
“Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.04(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.
“Swing Line Sublimit” means an amount equal to $150,000,000. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
“Syndication Agents” means JPMorgan Chase Bank, N.A. and Citibank, N.A. each in its capacity as co-syndication agent.
“TARGET Day” means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tech Square Project” means the seven building campus located in Cambridge, Massachusetts aggregating approximately 1.2 million square feet.
“Total Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP; provided that all Real Property shall be valued based on its Unencumbered Asset Value (it being understood that the Unencumbered Asset Value for any Real Property that is not a Qualified Asset Pool Property shall be calculated as if it was a Qualified Asset Pool Property). In the event that a Person has an ownership or other equity interest in any
other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the assets of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all assets of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“Total Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) Capital Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, Total Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be (i) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the date referenced in clause (i), zero. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Total Liabilities” means all liabilities of a Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (without duplication) all Indebtedness and Guarantees of such Person and its Subsidiaries (determined on a consolidated basis), whether or not so classified; provided, that, Total Liabilities shall not include any Minority Interest’s share of liabilities. In the event that a Person has an ownership or other equity interest in any other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the liabilities of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all liabilities of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and L/C Obligations.
“Total Revolving Outstandings” means the sum of (i) the aggregate Outstanding Amount of all Revolving Loans plus (ii) the aggregate Outstanding Amount of all Swing Line Loans plus (iii) the aggregate Outstanding Amount of all L/C Obligations plus (iv) the aggregate Outstanding Amount of all Bid Loans.
“to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Officer of that Person).
“Trade Date” has the meaning set forth in Section 10.06(b).
“Type” means (a) with respect to a Committed Loan, its character as a Base Rate Loan or a Eurocurrency Rate Loan, and (b) with respect to a Bid Loan, its character as an Absolute Rate Loan or a Eurocurrency Margin Bid Loan.
“Unencumbered” means, with respect to any Revenue-Producing Property, Qualified Land or Qualified Development Assets, that such Revenue-Producing Property, Qualified Land or Qualified Development Assets (a) is not subject to any Lien other than Liens permitted under Section 7.01 (other than Sections 7.01(q)(ii),(r) and (t)), (b) is not subject to any Negative Pledge and (c) is not held by a Person any of whose direct or indirect equity interests are subject to a Lien or Negative Pledge.
“Unencumbered Asset Value” means, as of any date of determination and without double counting any item, the following amounts for the following types of Real Property:
(a) with respect to any Qualified Revenue-Producing Property owned for a full four consecutive fiscal quarter period or longer, an amount equal to (i) the Adjusted NOI of such Real Property for the prior four full consecutive fiscal quarters divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(b) with respect to any Qualified Revenue-Producing Property owned for less than four full consecutive fiscal quarters, an amount equal to (i) the Adjusted NOI of such Real Property for the period which the Borrower or applicable Subsidiary has owned and operated such Real Property, adjusted by the Borrower to an annual Adjusted NOI in a manner reasonably acceptable to the Administrative Agent, divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(c) with respect to Qualified Revenue-Producing Property that is being renovated or with respect to which a partial or total renovation was recently completed, an amount as determined at the sole election of the Administrative Agent based on (i) the annualized Adjusted NOI with respect to such Real Property, annualized based on bona fide, arms length signed tenant leases which are in full force and effect requiring current rental payments, divided by the Capitalization Rate, or (ii) the cost basis of such Real Property determined in accordance with GAAP multiplied by the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Revenue Property.
(d) with respect to any Real Property that constitutes Qualified Land, an amount equal to, at the option of the Borrower, (i) the cost basis as determined in accordance with GAAP or the Appraised Value (if any) of such Qualified Land multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Land.
(e) with respect to any Real Property that constitutes Qualified Development Assets, an amount equal to (i) the cost basis as determined in accordance with GAAP of such Qualified Development Asset multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Development Asset; provided that if all or any portion of a Qualified Development Asset is materially damaged, the value of such Qualified Development Asset shall be the amount assigned to such Qualified Development Asset prior to the damage less the amount (as determined by the Borrower in good faith) by which the casualty insurance proceeds that are owed or received in respect of such casualty event are insufficient to restore such Qualified Development Asset for a period of up to the lesser of (x) 365 days following such casualty event and (y) the date such Qualified Development Asset is restored and fully functional.
“United States” and “U.S.” mean the United States of America.
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
“Unrelated Person” means any Person other than (i) a Subsidiary of Borrower, (ii) an employee stock ownership plan or other employee benefit plan covering the employees of Borrower and its Subsidiaries or (iii) any Person that held Common Stock on the day prior to the effective date of Borrower’s registration statement under the Securities Act of 1933 covering the initial public offering of Common Stock.
“Unsecured Interest Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) the sum of the aggregate Adjusted NOI from the Qualified Asset Pool Properties for that fiscal quarter and the preceding three full fiscal quarters, by (b) the aggregate Interest Charges for such period in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt). The Unsecured Interest Coverage Ratio shall be determined by the Borrower and such determination shall be reasonably satisfactory to the Administrative Agent and shall exclude interest during construction to the extent capitalized.
“Unsecured Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (as expressed as a percentage) of (a) (i) aggregate unsecured Adjusted Total Indebtedness as of such date minus (ii) Obligor Subsidiary Debt as of such date to (b) (i) the Adjusted Unencumbered Asset Value as of such date minus (ii) the amount of unsecured Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in the calculation of aggregate unsecured Adjusted Total Indebtedness pursuant to clause (a)(i) above.
“Wholly-Owned Subsidiary” means a Subsidiary of the Borrower, 100% of the capital stock or other equity interest of which is owned, directly or indirectly, by the Borrower, except for director’s qualifying shares required by applicable Laws.
“Yen” and “¥” mean the lawful currency of Japan.
1.02 Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms/Financial Covenants.
(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, the effects of FASB ASC 825 on financial liabilities shall be disregarded.
(b) Changes in GAAP or Funds From Operations. If at any time any change in GAAP or the calculation of Funds From Operations would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP or Funds From Operations (subject to the approval of the Required
Lenders, the Administrative Agent and the Borrower); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP or Funds From Operations, as applicable, prior to such change therein and (ii) upon written request, the Borrower shall provide to the Administrative Agent (for distribution to the Lenders) financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or Funds From Operations.
(c) Calculation of Financial Covenants. For purposes of calculation of the applicable financial covenants, the Borrower and its Subsidiaries shall be given credit for properties held by an “exchange accommodation titleholder” pursuant to an exchange that qualifies as a reverse exchange under Section 1031 of the Code (including in the event any such property is subject to a mortgage in favor of, or for the benefit of, the Borrower or any of its Subsidiaries).
1.04 Exchange Rates; Currency Equivalents.
(a) The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent and/or Alternative Currency Equivalents amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.
(b) Wherever in this Agreement in connection with a Committed Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Committed Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuer, as the case may be.
1.05 Additional Alternative Currencies.
(a) The Borrower may from time to time request that Eurocurrency Rate Loans be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency”; provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars and for which Reuters (or any successor thereto) reports a Eurocurrency Rate for such currency for the applicable Interest Periods. In the case of any such request with respect to the making of Eurocurrency Rate Loans, such request shall be subject to the approval of the Administrative Agent, the applicable Lenders and the Alternative Currency Fronting Lender and, in the case of any such request with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Administrative Agent and the L/C Issuer.
(b) Any such request shall be made to the Administrative Agent not later than 11:00 a.m., 20 Business Days prior to the date of the desired Credit Extension (or such other time
or date as may be agreed by the Administrative Agent and, in the case of any such request pertaining to Letters of Credit, the L/C Issuer, in its or their sole discretion). In the case of any such request pertaining to Eurocurrency Rate Loans, the Administrative Agent shall promptly notify each Lender thereof; and in the case of any such request pertaining to Letters of Credit, the Administrative Agent shall promptly notify the L/C Issuer thereof. Each applicable Lender (in the case of any such request pertaining to Eurocurrency Rate Loans) or the L/C Issuer (in the case of a request pertaining to Letters of Credit) shall notify the Administrative Agent, not later than 11:00 a.m., ten Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Eurocurrency Rate Loans or the issuance of Letters of Credit, as the case may be, in such requested currency.
(c) Any failure by a Lender or the L/C Issuer, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Lender or the L/C Issuer, as the case may be, to permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued in such requested currency. If the Administrative Agent and all the applicable Lenders consent to making Eurocurrency Rate Loans in such requested currency, the Administrative Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Committed Borrowings of Eurocurrency Rate Loans; and if the Administrative Agent and the L/C Issuer consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.05, the Administrative Agent shall promptly so notify the Borrower.
1.06 Change of Currency.
(a) Each obligation of the Borrower to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Committed Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Committed Borrowing, at the end of the then current Interest Period.
(b) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent, in consultation with the Borrower, may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.
(c) Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent, in consultation with the Borrower, may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.
1.07 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).
1.08 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans. Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrower in Dollars or in one or more Alternative Currencies from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Revolving Lender’s Revolving Commitment; provided, however, that after giving effect to any Committed Borrowing, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (ii) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender less, with respect only to the Alternative Currency Fronting Lender, the aggregate Alternative Currency Risk Participations in all Loans denominated in Alternative Currencies, plus, with respect only to the Alternative Currency Participating Lenders, the Outstanding Amount of such Lender’s Alternative Currency Risk Participations in Loans denominated in Alternative Currencies and advanced by the Alternative Currency Fronting Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, (iii) the aggregate Outstanding Amount of all Revolving Loans denominated in Alternative Currencies shall not exceed the Alternative Currency Sublimit and (iv) after giving effect to any Revolving Loans denominated in Alternative Currencies and advanced by the Alternative Currency Fronting Lender, the aggregate principal Dollar Equivalent amount of all such Revolving Loans funded by such Alternative Currency Fronting Lender shall not exceed the Fronting Commitment of such Alternative Currency Fronting Lender. Within the limits of each Revolving Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. On the Closing Date, all Revolving Loans shall be Base Rate Loans unless the Borrower shall have delivered at least three Business Days prior to the Closing Date, a funding indemnity letter in form and substance reasonably satisfactory to the Administrative Agent. Thereafter, Revolving Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein
2.02 Borrowings, Conversions and Continuations of Committed Loans .
(a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than (i) 11:00 a.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurocurrency Rate Loans denominated in Dollars, (ii) 11:00 a.m. three Business Days (or five Business Days in the case of a Special Notice Currency) prior to the requested date of any Borrowing or continuation of Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) 10:00 a.m. on the requested date of any Borrowing of Base Rate Committed Loans or of any conversion of Eurocurrency Rate Loans denominated in Dollars to Base Rate Committed
Loans; provided, however, that if the Borrower wishes to request Eurocurrency Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, (x) the applicable notice must be received by the Administrative Agent not later than (i) 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion to or continuation of Eurocurrency Rate Loans denominated in Dollars, or (ii) 11:00 a.m. five Business Days (or six Business days in the case of a Special Notice Currency) prior to the requested date of such Borrowing, conversion or continuation of Eurocurrency Rate Loans denominated in Alternative Currencies, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them and (y) not later than (i) 11:00 a.m. three Business Days before the requested date of such Borrowing, conversion or continuation of Eurocurrency Rate Loans denominated in Dollars, or (ii) 11:00 a.m. four Business Days (or five Business days in the case of a Special Notice Currency) prior to the requested date of such Borrowing, conversion or continuation of Eurocurrency Rate Loans denominated in Alternative Currencies, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto and (vi) the currency of the Committed Loans to be borrowed. If the Borrower fails to specify a currency in a Committed Loan Notice requesting a Borrowing, then the Committed Loans so requested shall be made in Dollars. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans; provided, however, that in the case of a failure to timely request a continuation of Committed Loans denominated in an Alternative Currency, such Loans shall be continued as Eurocurrency Rate Loans in their original currency with an Interest Period of one month. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fail to specify an Interest Period, they will be deemed to have specified an Interest Period of one month. No Committed Loan may be converted into or continued as a Committed Loan denominated in a different currency, but instead must be prepaid in the original currency of such Committed Loan and reborrowed in the other currency.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Applicable Percentage of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation of Committed Loans denominated in a
currency other than Dollars, in each case as described in the preceding subsection. In the case of a Committed Borrowing, each Alternative Currency Funding Lender and each Alternative Currency Fronting Lender, if applicable, shall make the amount of its Committed Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not later than 2:00 p.m., in the case of any Committed Loan denominated in Dollars, and not later than the Applicable Time specified by the Administrative Agent in the case of any Committed Loan in an Alternative Currency, in each case on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date the Committed Loan Notice with respect to such Borrowing denominated in Dollars is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and, second, shall be made available to the Borrower as provided above. Notwithstanding the foregoing, if there are no available Alternative Currency Fronting Lenders with sufficient Fronting Commitments to fund the entire requested Revolving Loan to the Borrower, then the Borrower may decrease the amount of the requested Committed Loan within one (1) Business Day after notice by the Administrative Agent of such limitation. If the Borrower does not reduce its request for a Committed Loan to an amount equal to or less than the available Fronting Commitment, then the requested Committed Loan shall be deemed to be reduced to the available Fronting Commitments.
(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans (whether in Dollars or any Alternative Currency) without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than 20 Interest Periods in effect with respect to Committed Loans.
(f) (i) Subject to all the terms and conditions set forth in this Agreement, including the provisions of Section 2.01, and without limitation of the provisions of Section 2.02, with respect to any Revolving Loans denominated in an Alternative Currency with respect to which one or more Revolving Lenders has given notice to the Administrative Agent and the Borrower that it is an Alternative Currency Participating Lender, (A) each Revolving Lender agrees from time to time on any Business Day during the Availability Period to fund its
Applicable Percentage of Revolving Loans denominated in an Alternative Currency with respect to which it is an Alternative Currency Funding Lender; and (B) each Revolving Lender severally agrees to acquire an Alternative Currency Risk Participation in Revolving Loans denominated in an Alternative Currency with respect to which it is an Alternative Currency Participating Lender.
(ii) Each Revolving Loan denominated in an Alternative Currency shall be funded upon the request of the Borrower in accordance with Section 2.02(b). Immediately upon the funding by the Alternative Currency Fronting Lender of its Alternative Currency Funding Applicable Percentage of any Revolving Loan denominated in an Alternative Currency with respect to which one or more Revolving Lenders is an Alternative Currency Participating Lender, each Alternative Currency Participating Lender shall be deemed to have absolutely, irrevocably and unconditionally purchased from such Alternative Currency Fronting Lender an Alternative Currency Risk Participation in such Loan in an amount such that, after such purchase, each Revolving Lender (including the Alternative Currency Funding Lenders, the Alternative Currency Fronting Lender and the Alternative Currency Participating Lenders) will have an Alternative Currency Loan Credit Exposure with respect to such Revolving Loan equal in amount to its Applicable Percentage of such Revolving Loan.
(iii) Upon the occurrence and during the continuance of an Event of Default or upon a reduction of the Fronting Commitment of an Alternative Currency Fronting Lender, such Alternative Currency Fronting Lender may, by written notice to the Administrative Agent delivered not later than 11:00 a.m., on the third Business Day preceding the proposed date of funding and payment by Alternative Currency Participating Lenders of their Alternative Currency Risk Participations purchased in such Revolving Loans as shall be specified in such notice (the “Alternative Currency Participation Payment Date”), request each Alternative Currency Participating Lender to fund its Alternative Currency Risk Participation in the applicable Alternative Currency purchased with respect to such Revolving Loans to the Administrative Agent on the Alternative Currency Participation Payment Date. Any notice given by the Alternative Currency Fronting Lender or the Administrative Agent pursuant to this subsection may be given by telephone if immediately confirmed in writing; provided that the absence of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(iv) On the applicable Alternative Currency Participation Payment Date, each Alternative Currency Participating Lender in the Revolving Loans specified for funding pursuant to this Section 2.02(f) shall deliver the amount of such Alternative Currency Participating Lender’s Alternative Currency Risk Participation with respect to such specific Revolving Loans in the applicable Alternative Currency and in Same Day Funds to the Administrative Agent; provided, however, that no Alternative Currency Participating Lender shall be (i) responsible for any default by any other Alternative Currency Participating Lender in such other Alternative Currency Participating Lender’s obligation to pay such amount and/or (ii) required to fund an amount under this Section 2.02(f) that would exceed the amount of such Revolving Lender’s Revolving Commitment. Upon receipt of any such amounts from the Alternative Currency Participating Lenders, the Administrative Agent shall distribute such amounts in Same Day Funds to the Alternative Currency Fronting Lender.
(v) In the event that any Alternative Currency Participating Lender fails to make available to the Administrative Agent the amount of its Alternative Currency Risk
Participation as provided herein, the Administrative Agent shall be entitled to recover such amount on behalf of the Alternative Currency Fronting Lender on demand from such Alternative Currency Participating Lender together with interest at the Overnight Rate for three (3) Business Days and thereafter at a rate per annum equal to the Default Rate. A certificate of the Administrative Agent submitted to any Alternative Currency Participating Lender with respect to amounts owing hereunder shall be conclusive in the absence of demonstrable error.
(vi) In the event that the Alternative Currency Fronting Lender receives a payment in respect of any Revolving Loan, whether directly from the Borrower or otherwise, in which Alternative Currency Participating Lenders have fully funded their purchase of Alternative Currency Risk Participations, the Alternative Currency Fronting Lender shall promptly distribute to the Administrative Agent, for its distribution to each such Alternative Currency Participating Lender, such Alternative Currency Participating Lender’s Alternative Currency Participant’s Share of such payment in Same Day Funds. If any payment received by the Alternative Currency Fronting Lender with respect to any Revolving Loan in an Alternative Currency made by it shall be required to be returned by the Alternative Currency Fronting Lender after such time as the Alternative Currency Fronting Lender has distributed such payment to the Administrative Agent pursuant to the immediately preceding sentence, each Alternative Currency Participating Lender that has received a portion of such payment shall pay to the Alternative Currency Fronting Lender an amount equal to its Alternative Currency Participant’s Share of the amount to be returned; provided, however, that no Alternative Currency Participating Lender shall be responsible for any default by any other Alternative Currency Participating Lender in that other Alternative Currency Participating Lender’s obligation to pay such amount.
(vii) Anything contained herein to the contrary notwithstanding, each Alternative Currency Participating Lender’s obligation to acquire and pay for its purchase of Alternative Currency Risk Participations as set forth herein shall be absolute, irrevocable and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Alternative Currency Participating Lender may have against the Alternative Currency Fronting Lender, the Administrative Agent, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or Event of Default; (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries; (iv) any breach of this Agreement or any other Loan Document by a Credit Party or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.
(viii) In no event shall (i) the Alternative Currency Risk Participation of any Alternative Currency Participating Lender in any Revolving Loans denominated in an Alternative Currency pursuant to this Section 2.02(f) be construed as a loan or other extension of credit by such Alternative Currency Participating Lender to the Borrower, any Revolving Lender or the Administrative Agent or (ii) this Agreement be construed to require any Revolving Lender that is an Alternative Currency Participating Lender with respect to a specific Alternative Currency to make any Revolving Loans in such Alternative Currency under this Agreement or under the other Loan Documents, subject to the obligation of each Alternative Currency Participating Lender to give notice to the Administrative Agent and the Borrower at any time such Revolving Lender acquires the ability to make Revolving Loans in such Alternative Currency.
(ix) The Administrative Agent shall change a Revolving Lender’s designation from Alternative Currency Participating Lender to Alternative Currency Funding Lender with respect to an Alternative Currency for which such Lender previously has been designated an Alternative Currency Participating Lender, upon receipt of a written notice to the Administrative Agent and the Borrower from such Alternative Currency Participating Lender requesting that its designation be so changed. Each Alternative Currency Participating Lender agrees to give such notice to the Administrative Agent and the Borrower promptly upon its acquiring the ability to make Revolving Loans in such Alternative Currency. Schedule 2.02 hereto lists each Alternative Currency Participating Lender as of the Closing Date in respect of each Alternative Currency.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or in one or more Alternative Currencies for the account of the Borrower or its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with Section 2.03(b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or their Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender (less, with respect only to the Alternative Currency Fronting Lender, the aggregate Alternative Currency Risk Participations in all Revolving Loans denominated in Alternative Currencies), plus, with respect only to the Alternative Currency Participating Lenders, such Lender’s Alternative Currency Risk Participations in Revolving Loans denominated in Alternative Currencies advanced by the Alternative Currency Fronting Lender for such Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and, accordingly, the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) Subject to Section 2.03(b)(iv), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount of less than $500,000, in the case of a standby Letter of Credit;
(D) such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency;
(E) the L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;
(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(G) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof; or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least five Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Revolving Lender, the Administrative Agent or the Borrower, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof; the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with
the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof; the L/C Issuer will also deliver to the Borrower and the Administrative Agent and to any requesting Lender a true and complete copy of such Letter of Credit or amendment.
(iv) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than sixty (60) days (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.
(v) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. In the case of a Letter of Credit denominated in an Alternative Currency, the Borrower shall reimburse the L/C Issuer in such Alternative Currency, unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the Borrower shall have notified the L/C Issuer promptly following receipt of the notice of drawing that the Borrower will reimburse the L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a drawing under a Letter
of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor Date”) or 9:00 a.m. on the following Business Day if the notification is later than 11:00 a.m. on the Honor Date, the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer, in Dollars, at the Administrative Agent’s Office for Dollar-denominated payments in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, which date will not be earlier than the Business Day after the Honor Date, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.03.
(iv) Until each Revolving Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.
(v) Each Revolving Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Revolving Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Lender such Revolving Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Lender its Applicable Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in Dollars and in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof
on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;
(v) any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to the Borrower or any Subsidiary or in the relevant currency markets generally; or
(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Revolving Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to
obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Lenders or the Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued the rules of the ISP shall apply to each Letter of Credit.
(h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Revolving Lender in accordance with its Applicable Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate for Eurocurrency Rate Committed Loans, stated as a percentage per annum times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. Letter of Credit Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate for Eurocurrency Rate Committed Loans during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate for Eurocurrency Rate Loans separately for each period during such quarter that such Applicable Rate for Eurocurrency Rate Committed Loans was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Revolving Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, a fronting fee with respect to each Letter of Credit, at the rate equal to 0.125% per annum, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears, and due and payable on the first Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the Dollar Equivalent of the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. In addition, the Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(j) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.
2.04 Swing Line Loans .
(a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Revolving Lenders set forth in this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) in Dollars to the Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Revolving Loans and L/C Obligations of the Revolving Lender acting as Swing Line Lender, may exceed the amount of such Revolving Lender’s Revolving Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed the Revolving Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender (less, with respect only to the Alternative Currency Fronting Lender, the aggregate Alternative Currency Risk Participations in all Revolving Loans denominated in Alternative Currencies), plus, with respect only to the Alternative Currency Participating Lenders, such Lender’s Alternative Currency Risk Participations in Revolving Loans denominated in Alternative Currencies advanced by the Alternative Currency Fronting Lender for such Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof; the Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan or a Fixed Eurocurrency
Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Lender’s Applicable Percentage times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of the Required Revolving Lenders) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 2:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender in Same Day Funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on their behalf), that each Revolving Lender make a Base Rate Loan in an amount equal to such Revolving Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Revolving Commitments and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent’s Office for Dollar-denominated payments not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.
(iii) If any Revolving Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Lender’s Committed Loan included in the relevant Committed Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Revolving Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Revolving Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Lender its Applicable Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each Revolving Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
2.04A Bid Loans.
(a) General. Each Revolving Lender agrees that the Borrower may from time to time request the Revolving Lenders to submit offers to make loans (each such loan, a “Bid Loan”) to the Borrower prior to the Revolving Commitment Termination Date pursuant to this Section 2.04A; provided, however, that after giving effect to any Bid Borrowing, (A) the Total Revolver Outstandings shall not exceed the Aggregate Revolving Commitments, and (B) the aggregate Outstanding Amount of all Bid Loans shall not exceed the Bid Loan Sublimit. There shall not be more than ten different Interest Periods in effect with respect to Bid Loans at any time.
(b) Requesting Competitive Bids. The Borrower may request the submission of Competitive Bids by delivering a Bid Request to the Administrative Agent not later than 12:00 Noon (i) one Business Day prior to the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurocurrency Margin Bid Loans. Each Bid Request shall specify (i) the requested date of the Bid Borrowing (which shall be a Business Day), (ii) the aggregate principal amount of Bid Loans requested (which must be $10,000,000 or a whole multiple of $1,000,000 in excess thereof), (iii) the Type of Bid Loans requested, and (iv) the duration of the Interest Period with respect thereto, and shall be signed by a Responsible Officer of the Borrower. No Bid Request shall contain a request for (i) more than one Type of Bid Loan or (ii) Bid Loans having more than three different Interest Periods. Unless the Administrative Agent otherwise agrees in its sole discretion, the Borrower may not submit a Bid Request if it has submitted another Bid Request within the prior five Business Days.
(c) Submitting Competitive Bids.
(i) The Administrative Agent shall promptly notify each Lender of each Bid Request received by it from the Borrower and the contents of such Bid Request.
(ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid containing an offer to make one or more Bid Loans in response to such Bid Request. Such Competitive Bid must be delivered to the Administrative Agent not later than 10:30 a.m. (A) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and (B) three Business Days prior to the requested date of any Bid Borrowing that
is to consist of Eurocurrency Margin Bid Loans; provided, however, that any Competitive Bid submitted by Bank of America in its capacity as a Lender in response to any Bid Request must be submitted to the Administrative Agent not later than 10:15 a.m. on the date on which Competitive Bids are required to be delivered by the other Lenders in response to such Bid Request. Each Competitive Bid shall specify (A) the proposed date of the Bid Borrowing; (B) the principal amount of each Bid Loan for which such Competitive Bid is being made, which principal amount (x) may be equal to, greater than or less than the Commitment of the bidding Lender, (y) must be $2,000,000 or a whole multiple of $1,000,000 in excess thereof, and (z) may not exceed the principal amount of Bid Loans for which Competitive Bids were requested; (C) if the proposed Bid Borrowing is to consist of Absolute Rate Bid Loans, the Absolute Rate offered for each such Bid Loan and the Interest Period applicable thereto; (D) if the proposed Bid Borrowing is to consist of Eurocurrency Margin Bid Loans, the Eurocurrency Bid Margin with respect to each such Eurocurrency Margin Bid Loan and the Interest Period applicable thereto; and (E) the identity of the bidding Lender.
(iii) Any Competitive Bid shall be disregarded if it (A) is received after the applicable time specified in clause (ii) above, (B) is not substantially in the form of a Competitive Bid as specified herein, (C) contains qualifying, conditional or similar language, (D) proposes terms other than or in addition to those set forth in the applicable Bid Request, or (E) is otherwise not responsive to such Bid Request. Any Lender may correct a Competitive Bid containing an error by submitting a corrected Competitive Bid (identified as such) not later than the applicable time required for submission of Competitive Bids. Any such submission of a corrected Competitive Bid shall constitute a revocation of the Competitive Bid that contained the manifest error. The Administrative Agent may, but shall not be required to, notify any Lender of any manifest error it detects in such Lender’s Competitive Bid.
(iv) Subject only to the provisions of Sections 3.02, 3.03 and 4.02 and clause (iii) above, each Competitive Bid shall be irrevocable.
(d) Notice to Borrower of Competitive Bids. Not later than 11:00 a.m. (i) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurocurrency Margin Bid Loans, the Administrative Agent shall notify the Borrower of the identity of each Lender that has submitted a Competitive Bid that complies with Section 2.04A(c) and of the terms of the offers contained in each such Competitive Bid.
(e) Acceptance of Competitive Bids. Not later than 11:30 a.m. (i) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurocurrency Margin Bid Loans, the Borrower shall notify the Administrative Agent of its acceptance or rejection of the offers notified to them pursuant to Section 2.04A(d). The Borrower shall be under no obligation to accept any Competitive Bid and may choose to reject all Competitive Bids. In the case of acceptance, such notice shall specify the aggregate principal amount of Competitive Bids for each Interest Period that is accepted. The Borrower may accept any Competitive Bid in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may not exceed the applicable amount set forth in the related Bid Request;
(ii) the principal amount of each Bid Loan must be $2,000,000 or a whole multiple of $1,000,000 in excess thereof;
(iii) the acceptance of offers may be made only on the basis of ascending Absolute Rates or Eurocurrency Bid Margins within each Interest Period; and
(iv) the Borrower may not accept any offer that is described in Section 2.04A(c)(iii) or that otherwise fails to comply with the requirements hereof.
(f) Procedure for Identical Bids. If two or more Lenders have submitted Competitive Bids at the same Absolute Rate or Eurocurrency Bid Margin, as the case may be, for the same Interest Period, and the result of accepting all of such Competitive Bids in whole (together with any other Competitive Bids at lower Absolute Rates or Eurocurrency Bid Margins, as the case may be, accepted for such Interest Period in conformity with the requirements of Section 2.04A(e)(iii)) would be to cause the aggregate outstanding principal amount of the applicable Bid Borrowing to exceed the amount specified therefor in the related Bid Request, then, unless otherwise agreed by the Borrower, the Administrative Agent and such Lenders, such Competitive Bids shall be accepted as nearly as possible in proportion to the amount offered by each such Lender in respect of such Interest Period, with such accepted amounts being rounded to the nearest whole multiple of $1,000,000.
(g) Notice to Lenders of Acceptance or Rejection of Bids. The Administrative Agent shall promptly notify each Lender having submitted a Competitive Bid whether or not its offer has been accepted and, if its offer has been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof that is not accepted by the Borrower by the applicable time specified in Section 2.04A shall be deemed rejected.
(h) Notice of Eurocurrency Rate. If any Bid Borrowing is to consist of Eurocurrency Margin Loans, the Administrative Agent shall determine the Eurocurrency Rate for the relevant Interest Period, and promptly after making such determination, shall notify the Borrower and the Lenders that will be participating in such Bid Borrowing of such Eurocurrency Rate.
(i) Funding of Bid Loans. Each Lender that has received notice pursuant to Section 2.04A(g) that all or a portion of its Competitive Bid has been accepted by the Borrower shall make the amount of its Bid Loan(s) available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 11:00 a.m. on the date of the requested Bid Borrowing. Upon satisfaction of the applicable conditions set forth in Section 4.02, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent.
(j) Notice of Range of Bids. After each Competitive Bid auction pursuant to this Section 2.04A, the Administrative Agent shall notify each Lender that submitted a Competitive Bid in such auction of the ranges of bids submitted (without the bidder’s name) and accepted for each Bid Loan and the aggregate amount of each Bid Borrowing.
2.05 Prepayments.
(a) The Borrower may, upon written notice to the Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than
12:00 Noon (A) three Business Days prior to any date of prepayment of Eurocurrency Rate Loans denominated in Dollars, (B) four Business Days (or five, in the case of prepayment of Loans denominated in Special Notice Currencies) prior to any date of prepayment of Eurocurrency Rate Loans denominated in Alternative Currencies and (C) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurocurrency Rate Loans denominated in Dollars shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof; (iii) any prepayment of Eurocurrency Rate Loans denominated in Alternative Currencies shall be in a minimum principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and (iv) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date, the amount of such prepayment, and the Type(s) of Committed Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and the contents thereof and of the amount of such Lender’s Applicable Percentage of such prepayment (including, in the event such prepayment is of a Revolving Loan denominated in an Alternative Currency, each Alternative Currency Funding Lender’s Alternative Currency Funding Applicable Percentage of such payment). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided, however, that a notice of voluntary prepayment pursuant to this clause (a) may state that such notice is conditioned upon an event or other transaction, such as the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of Indebtedness, in which case such notice of prepayment pursuant to this clause (a) may be revoked by the Borrower if such condition is not satisfied (subject to Section 3.05(b) for any notice of a prepayment of Eurocurrency Loans that is revoked). Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05*.* Each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.
(b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 9:00 a.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided, however, that a notice of voluntary prepayment pursuant to this clause (b) may state that such notice is conditioned upon an event or other transaction, such as the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of Indebtedness, in which case such notice of prepayment may be revoked by the Borrower if such condition is not satisfied.
(c) If the Administrative Agent notifies the Borrower at any time that the Total Revolving Outstandings at such time exceed, solely as a result of fluctuations in currency, an amount equal to 105% of the Aggregate Revolving Commitments then in effect, then, within two Business Days after receipt of such notice, the Borrower shall prepay Revolving Loans and/or the Borrower shall Cash Collateralize the L/C Obligations in an aggregate amount sufficient to reduce such Total Revolving Outstandings as of such date of payment to an amount not to exceed 100% of the Aggregate Revolving Commitments then in effect; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of the Revolving Loans the Total Revolving Outstandings exceed the Aggregate Revolving Commitments then in effect. Each such
prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.
(d) Except in connection with the prepayment in full of the Revolving Loans and the simultaneous termination of the Revolving Commitments, no Bid Loan may be prepaid without the prior consent of the applicable Bid Loan Lender.
(e) If the Administrative Agent notifies the Borrower at any time that the Outstanding Amount of all Loans denominated in Alternative Currencies at such time exceeds an amount equal to 105% of the Alternative Currency Sublimit then in effect, then, within three Business Days after receipt of such notice, the Borrower shall prepay Loans in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Alternative Currency Sublimit then in effect.
2.06 Termination or Reduction of Aggregate Revolving Commitments. The Borrower may, upon written notice to the Administrative Agent, terminate the Aggregate Revolving Commitments, or from time to time permanently reduce the Aggregate Revolving Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Aggregate Revolving Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Revolving Commitments, the Letter of Credit Sublimit, the Bid Loan Sublimit, the Alternative Currency Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Revolving Commitments, such Letter of Credit Sublimit, Bid Loan Sublimit, Alternative Currency Sublimit or Swing Line Sublimit, as applicable, shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Revolving Lenders of any such notice of termination or reduction of the Aggregate Revolving Commitments and the contents thereof. Any reduction of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Revolving Lender according to its Applicable Percentage. All fees accrued pursuant to Section 2.09(a) until the effective date of any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such termination. Any notice of termination or reduction pursuant to this Section 2.06 may state that such notice is conditioned upon an event or other transaction, such as the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of Indebtedness, in which case such notice of termination or reduction pursuant to this Section 2.06 may be revoked by the Borrower if such condition is not satisfied (subject to Section 3.05(b) for any notice that is revoked).
2.07 Repayment of Loans .
(a) The Borrower shall repay on the Revolving Commitment Termination Date the aggregate principal amount of Revolving Loans outstanding on such date, together with all interest and accrued fees related thereto.
(b) The Borrower shall repay to the Swing Line Lender each Swing Line Loan on the earlier to occur of (i) the date three Business Days after such Swing Loan is made and (ii) the Revolving Commitment Termination Date.
(c) The Borrower shall repay each Bid Loan on the last day of the Interest Period in respect thereof.
2.08 Interest .
(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Committed Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate or the Fixed Eurocurrency Rate; and (iv) each Bid Loan shall bear interest on the outstanding principal amount thereof for the Interest Period therefor at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus (or minus) the Eurocurrency Bid Margin, or at the Absolute Rate for such Interest Period, as the case may be.
(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto (for interest accrued through the last day of the prior month) and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
(d) Interest on any Revolving Loan in an Alternative Currency advanced by the Alternative Currency Fronting Lender shall be for the benefit of the Alternative Currency Fronting Lender, and not any Alternative Currency Participating Lender, until the applicable Alternative Currency Participating Lender has funded its participation therein to the Alternative Currency Fronting Lender.
2.09 Fees. In addition to certain fees described in subsections (h) and (i) of Section 2.03:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent, for the account of each Revolving Lender (other than a Defaulting Lender, subject to Section 2.17(a)(iii)) in accordance with its Applicable Percentage, a facility fee, in Dollars, equal to the Applicable Rate times the actual daily amount of the Aggregate Revolving Commitments (or, if the Aggregate Revolving Commitments have terminated, on the Total Revolving Outstandings), regardless of usage. The facility fee shall accrue at all times during the Availability Period (and thereafter so long as any Revolving Loans, Swing Line Loans or L/C Obligations remain outstanding), including at any time during which one or more of the conditions in Section 4.02 is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Revolving Commitment Termination Date (and, if applicable, thereafter on demand). The facility fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.
(b) Other Fees. The Borrower shall pay to the Arrangers and the Administrative Agent, for their own respective accounts fees, in Dollars, in the amounts and at the times specified in the Fee Letters. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2.10 Computation of Interest and Fees. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurocurrency Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or, in the case of interest in respect of Committed Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
2.11 Evidence of Debt .
(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) the applicable Note(s), which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
2.12 Payments Generally; Administrative Agent’s Clawback.
(a) General. All payments to be made by a Credit Party shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all payments by a Credit Party hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 11:00 a.m. on the date specified herein. Except as otherwise expressly provided herein, all payments by the Borrower hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in such Alternative Currency and in Same Day Funds not later than the Applicable Time specified by the Administrative Agent on the dates specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States. If, for any reason, the Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, the Borrower shall make such payment in Dollars in the Dollar Equivalent of the Alternative Currency payment amount. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein, including without limitation the Alternative Currency Fronting Lender’s Alternative Currency Funding Applicable Percentage of any payment made with respect to any Revolving Loan as to which any Alternative Currency Participating Lender has not funded its Alternative Currency Risk Participation) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent (i) after 11:00 a.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by the Administrative Agent in the case of payments in an Alternative Currency, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders: Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Committed Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Committed Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Committed Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case
of a payment to be made by such Lender, the Overnight Rate, plus any reasonable administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to such Committed Borrowing. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Committed Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Committed Loan included in such Committed Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment and without relieving the Borrower’s obligation to make such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in Same Day Funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Committed Loans (including Revolving Loans denominated in Alternative Currencies in the event they are Alternative Currency Funding Lenders), to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) and to fund Alternative Currency Risk Participations (if they are Alternative Currency Participating Lenders) are several and not joint. The failure of any Lender to make any Committed Loan (including Revolving Loans denominated in an Alternative Currency in the event it is an Alternative Currency Funding Lender), to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Committed Loan (including Revolving Loans denominated in an Alternative Currency in the event it is an Alternative Currency Funding Lender), to purchase its participation or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Committed Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Committed Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and other amounts owing them, provided that:
(a) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(b) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of a Credit Party pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.16, or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Committed Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation.
2.14 Extension of Revolving Commitment Termination Date.
(a) Requests for Extension of Revolving Commitment Termination Date. The Borrower may, up to two times during the term of this Agreement, by notice to the Administrative Agent (who shall promptly notify the Revolving Lenders) not earlier than 90 days prior to, and not later than 30 days prior to, the Revolving Commitment Termination Date then in effect hereunder (the “Existing Revolving Commitment Termination Date”), cause each Revolving Lender to extend such Revolving Lender’s Existing Revolving Commitment Termination Date for an additional six (6) months from the Existing Revolving Commitment Termination Date and each Revolving Lender shall extend such Revolving Lender’s Revolving Commitment Termination Date for an additional six (6) months from the Existing Revolving Commitment Termination Date in accordance with this Section 2.14(a) subject to clause (b) below.
(b) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the extension of the Revolving Commitment Termination Date pursuant to this Section shall not be effective with respect to the Revolving Lenders unless:
(i) no Default or Event of Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;
(ii) the representations and warranties contained in this Agreement are true and correct in all material respects, on and as of the date of such extension and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, only as of such specific date), and except that the representations and warranties contained in subsections (a) and (d) of Section 5.05 shall be deemed to refer to the most recent statements and projections furnished pursuant to Sections 6.01(a) and 6.02(b), respectively; and
(iii) in the case of each extension of the Revolving Commitment Termination Date, the Borrower pays the Administrative Agent (for distribution to the Revolving Lenders), based on their Applicable Percentages, on or prior to the Existing Revolving Termination Date, an extension fee in an amount equal to the product of (i) 0.075%, multiplied by (ii) the Aggregate Revolving Commitments in effect at the time of the extension.
(c) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.
2.15 Increase in Commitments.
(a) Aggregate Revolving Commitments. The Borrower shall have the right from time to time, after the Closing Date and prior to the Revolving Commitment Termination Date, and subject to the terms and conditions set forth below, to increase the amount of the Aggregate Revolving Commitments; provided that (i) no Default or Event of Default shall exist at the time of the request of the proposed increase in the Aggregate Revolving Commitments or after giving effect thereto; (ii) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects, on and as of the date of the increase in the Aggregate Revolving Commitments, except to the extent that such representations and warranties specifically refer to an earlier date, in which case, they are true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.15(a), the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01, (iii) such increase must be in a minimum amount of $25,000,000 and in integral multiples of $1,000,000 above such amount, (iv) the Aggregate Revolving Commitments shall not be increased by an amount after the Closing Date, in the aggregate, that is greater than $500,000,000 less the aggregate principal amount of any term tranches added after the Closing Date pursuant to clause (b) below, (v) no individual Lender’s Revolving Commitment may be increased without such Lender’s written consent (which may be given or withheld at such Lender’s sole discretion), (vi) Schedule 2.01 shall be amended to reflect the revised amount of the Aggregate Revolving Commitments and revised Revolving Commitments of the Lenders and (vii) if any Revolving Loans are outstanding at the time of an increase in the Aggregate Revolving Commitments, the Borrower will prepay (provided that any such prepayment shall be subject to Section 3.05) one or more existing Revolving Loans (or in the case of the addition of any new Lender as set forth in the paragraph below, prepay and
reborrow the outstanding Revolving Loans) in an amount necessary such that after giving effect to the increase in the Aggregate Revolving Commitments, each Lender will hold its Applicable Percentage (based on its Revolving Commitment of the revised Aggregate Revolving Commitments) of outstanding Revolving Loans.
Any such increase in the Aggregate Revolving Commitments shall apply, at the option of the Borrower, to (x) the Revolving Commitment of one or more existing Lenders; provided that any Lender whose Revolving Commitment is being increased must consent in writing thereto and/or (y) the creation of a new Revolving Commitment to one or more institutions that is not an existing Lender; provided that any such institution (A) must conform to the definition of Eligible Assignee and (B) must become a Revolving Lender under this Agreement by execution and delivery of a Lender Joinder Agreement or other documentation reasonably acceptable to the Borrower and the Administrative Agent.
(b) New Term Tranches. The Borrower shall have the right from time to time, after the Closing Date and prior to the Revolving Commitment Termination Date, and subject to the conditions set forth below, to request a tranche or tranches of term loans; provided that (i) no Default or Event of Default shall exist at the time of such new term tranche or after giving effect thereto, (ii) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects, on and as of the date of the funding of the new term tranche, except to the extent that such representations and warranties specifically refer to an earlier date, in which case, they are true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.15(b), the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01, (iii) no Lender shall be required to participate in any such term tranche without its written consent, (iv) the aggregate principal amount of such term tranches after the Closing Date shall not exceed $500,000,000 less any increases in the Aggregate Revolving Commitments after the Closing Date pursuant to clause (a) above, (v) the Borrower and the Lenders providing such term tranche shall enter into an amendment to this Agreement as is necessary to evidence such term tranche and all issues related thereto, including but not limited to, pricing and maturity of such term tranche, and all Lenders not providing such term tranche hereby consent to such limited scope amendment without future consent rights and (vi) Schedule 2.01 shall be amended to reflect the addition of any term tranche and the commitments related thereto.
Any term tranche may be provided by one or more existing Lenders (at the sole discretion of any such existing Lender) or by one or more institutions that is not an existing Lender; provided that any such institution (A) must conform to the definition of Eligible Assignee and (B) must become a Lender under this Agreement by execution of a Lender Joinder Agreement or other documentation reasonably acceptable to the Borrower and the Administrative Agent.
(c) Conflicting Provisions. This Section 2.15 shall supersede any provisions in Sections 2.13 or 10.01 to the contrary.
2.16 Cash Collateral.
(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing that is not repaid when due, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide
Cash Collateral pursuant to Section 8.02(c), or (iv) there shall exist a Defaulting Lender, the Borrower shall within one Business Day following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral provided by each Defaulting Lender).
(b) Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.16(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in a blocked, non-interest bearing deposit account at Bank of America. The Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.
(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.16 or Sections 2.03, 2.05, 2.17 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
(d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the determination by the Administrative Agent and the L/C Issuer that there exists excess Cash Collateral; provided, however, that (x) Cash Collateral furnished by or on behalf of the Borrower shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.16 may be otherwise applied in accordance with Section 8.03) and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.
2.17 Defaulting Lenders.
(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuer’s unfunded Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.16; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as reasonably determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.16; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.17(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees.
(A) Each Defaulting Lender shall only be entitled to receive any fee payable under Section 2.09(a), for any period during which that Lender is a Defaulting Lender, to the extent applicable to the sum of (1) the outstanding principal amount of the Committed
Loans funded by it and (2) its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16 (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16.
(C) With respect to any Letter of Credit Fee or any facility fee payable under Section 2.09(a) not required to be paid to any Defaulting Lender pursuant to (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in unfunded L/C Obligations and in Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause any Non-Defaulting Lender’s Applicable Percentage of the Total Outstandings to exceed such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(v) Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender’s Fronting Exposure and (y) second, Cash Collateralize the L/C Issuer’s Fronting Exposure in accordance with the procedures set forth in Section 2.16.
(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, Swing Line Lender and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Committed Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Payments Free of Taxes; Obligation to Withhold.
(i) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws require the deduction or withholding of any Tax from any such payment by the Administrative Agent or the Borrower, then the Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.
(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Borrower or the Administrative Agent, as applicable, shall withhold or make such deductions as are determined by the Borrower or the Administrative Agent, as applicable, to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Borrower or the Administrative Agent, as applicable, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Lender or the L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification for Taxes.
(i) The Borrower shall and does hereby indemnify the Administrative Agent, each Lender and the L/C Issuer, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) paid by the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, setting forth in reasonable detail the basis for such amounts, shall be conclusive absent manifest error. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(ii) Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) the Administrative Agent and the Borrower, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrower, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or the Borrower in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due the Administrative Agent under this clause (ii).
(d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any of the Administrative Agent, the L/C Issuer or a Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Administrative Agent, the L/C Issuer or any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not the Administrative Agent, the L/C Issuer or such Lender is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing the Administrative Agent, the L/C Issuer or any Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Person becomes a party to this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Person is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of IRS Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Credit Party within the meaning of Section 881 (c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of IRS Form W-8BEN,
(iv) in the case of a Foreign Lender that is not the beneficial owner of payments made under any Loan Documents, duly completed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-9 and/or other certification documents from each beneficial owner, as applicable,
(v) in the case of the Administrative Agent, the Lender or the L/C Issuer that is a “United States person” within the meaning of Section 7701(a)(30) of the Code, duly completed copies of IRS W-9, establishing a complete exemption from backup withholding taxes; and/or
(vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax (or indicating whether such withholding tax is applicable) duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be. If the Administrative Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses and net of any loss or gain realized in the conversion of such funds from or to another currency of the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person or to file for or otherwise pursue on behalf of any Credit Party any refund of any Taxes.
3.02 Illegality. If any Lender determines in good faith that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurocurrency Loans (whether denominated in Dollars or an Alternative Currency), or to determine or charge interest rates based upon the Eurocurrency Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or any Alternative Currency in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurocurrency Rate Loans in the affected currency or currencies or, in the case of Eurocurrency Rate Loans in Dollars, to convert Base Rate Committed Loans to Eurocurrency Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable and such Loans are denominated in Dollars, convert all Eurocurrency Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurocurrency Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurocurrency Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurocurrency Rate component thereof until the Administrative is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurocurrency Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Any Lender that is or becomes an Alternative Currency Participating Lender with respect to any Alternative Currency pursuant to this Section 3.02 or otherwise as provided in this Agreement shall promptly notify the Administrative Agent and the Borrower in the event that the impediment resulting in its being or becoming an Alternative Currency Participating Lender is alleviated in a manner such that it can become an Alternative Currency Funding Lender with respect to such Alternative Currency.
3.03 Inability to Determine Rates. If the Required Lenders determine in good faith that for any reason in connection with any request for a Eurocurrency Rate Loan or a conversion thereto or continuation thereof that (a) deposits (whether in Dollars or an Alternative Currency) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of such Eurocurrency Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan (whether denominated in Dollars or an Alternative Currency), or (c) the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurocurrency Rate Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurocurrency Rate Loans in the affected currency or currencies shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans in the affected currency or currencies or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein.
3.04 Increased Costs; Reserves on Eurocurrency Rate Loans.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except (A) any reserve requirement contemplated by Section 3.04(e) and (B) the requirements of the Bank of England and the Financial Services Authority or the European Central Bank reflected in the Mandatory Cost, other than as set forth below) or the L/C Issuer; or
(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurocurrency Rate Loan made by it, or change the basis of taxation of payments to such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes and the imposition of, or any change in the rate of, any Excluded Tax); or
(iii) result in the failure of the Mandatory Cost, as calculated hereunder, to represent the cost to any Lender of complying with the requirements of the Bank of England and/or the Financial Services Authority or the European Central Bank in relation to its making, funding or maintaining Eurocurrency Rate Loans; or
(iv) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans made by such Lender or any Letter of Credit or participation therein (other than with respect to Taxes, which shall be governed solely by Section 3.01);
and the result of any of the foregoing shall be to increase the cost to such Lender, which such Lender deems material in its reasonable discretion, of making or maintaining any Loan the interest on which is determined by reference to the Eurocurrency Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), by an amount deemed by such Lender to be material in its reasonable discretion, then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth in reasonable detail the basis for and the calculation of the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the provisions of this Section for any increased costs incurred or reductions suffered more than three months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e) Reserves on Eurocurrency Rate Loans. The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurocurrency Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which in each case, shall be due and payable on each date on which interest is payable on such Loan; provided, the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice. Any Lender which gives notice under this Section 3.04(e) shall promptly withdraw such notice (by written notice of withdrawal given to the Administrative
Agent and the Borrower) in the event such Lender is no longer required to maintain such reserves or the circumstances giving rise to such notice shall otherwise cease to exist.
Notwithstanding anything contained in this Section 3.04, the Borrower shall not be obligated to pay any greater amounts than such Lender(s) or the L/C Issuer is (are) generally charging other borrowers or account parties on loans or letters of credit (as the case may be) similarly situated to the Borrower that are parties to similar credit agreements.
3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan on a day other than the last day of the Interest Period for such Eurocurrency Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert to any Eurocurrency Rate Loan on the date or in the amount notified by the Borrower;
(c) any failure by the Borrower to make payment of any Loan or drawing under any Letter of Credit (or interest due thereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or
(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13; or
(e) any change in the applicable Spot Rate between the date of funding of an Alternative Currency Risk Participation pursuant to Section 2.02(f)(iii) and the date of repayment by the Borrower pursuant to Section 2.02(f)(vi);
including any loss or expense (including, without limitation, any foreign exchange losses) arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract (but excluding any loss of anticipated profits). The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate used in determining the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the offshore interbank eurodollar market for such currency for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), setting forth in reasonable detail the basis and calculation for such amounts, shall be conclusive absent manifest error.
3.06 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if material amounts are paid to such Lender under Section 3.05, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.
3.07 Survival . All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Revolving Commitments and repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT
AND FURTHER CREDIT EXTENSIONS
4.01 Conditions of Effectiveness of this Agreement. The effectiveness of this Agreement and the obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies or other electronic imaging transmission (e.g., “pdf” via email) (followed promptly by originals to the extent requested by the Administrative Agent) and unless otherwise specified, each properly executed by a Responsible Officer of the signing Credit Party (to the extent applicable), each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders.
(i) executed counterparts of this Agreement;
(ii) a Revolving Note executed by the Borrower in favor of each Revolving Lender requesting a Revolving Note;
(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized as of the date hereof to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Credit Party is a party;
(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Credit Party is duly organized or formed (including, without limitation, articles or certificates of incorporation or other charter
documents and bylaws or other governance documents of each Credit Party), and that each Credit Party is validly existing and in good standing in its jurisdiction of organization and the tax identification number for each Credit Party;
(v) favorable opinions of counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, as to the matters concerning the Credit Parties and the Loan Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by each Credit Party and the validity against each Credit Party of the Loan Documents to which it is a party (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii)), and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii));
(vii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect and (C) the Debt Rating as of the Closing Date;
(viii) a letter from the agent under the Existing Credit Agreement evidencing that all amounts outstanding under the Existing Credit Agreement have been, or concurrently with the Closing Date, are being repaid in full and that the Existing Credit Agreement is terminated (except as to any provision thereof that, pursuant to the terms of the Existing Credit Agreement, survives such termination); and
(ix) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.
(b) Any fees required to be paid by the Borrower to the Administrative Agent, the Arrangers or the Lenders on or before the Closing Date in connection with this Agreement shall have been, or concurrently with the Closing Date are being, paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurocurrency Rate Loans) is subject to the following conditions precedent:
(a) The representations and warranties of each Credit Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of such Credit Extension in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01.
(b) No Default or Event of Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.
(d) In the case of a Credit Extension to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Lenders (in the case of any Loans to be denominated in an Alternative Currency) or the L/C Issuer (in the case of any Letter of Credit to be denominated in an Alternative Currency) would make it impracticable for such Credit Extension to be denominated in the relevant Alternative Currency.
Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurocurrency Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to the Administrative Agent and the Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each Credit Party, and each of its Subsidiaries, (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization except to the extent permitted by Sections 7.03 or 10.20, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (a) (solely as to Subsidiaries that are
not Credit Parties), (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and performance by each Credit Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law, except, in each case referred to in clause (b) or (c), as contemplated hereunder or to the extent such conflict, breach, contravention or violation, or creation of any such Lien or required payment could not reasonably be expected to have a Material Adverse Effect.
5.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party of this Agreement or any other Loan Document other than those that have already been duly made or obtained and remain in full force and effect or those which, if not made or obtained, could not reasonably be expected to have a Material Adverse Effect.
5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Credit Party party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of each Credit Party party thereto, enforceable against each such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.
(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries delivered pursuant to Section 6.01(b) for the most recent fiscal quarter end, and the related consolidated statements of income or operations and cash flows for the fiscal quarter ended on that date fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject to the absence of footnotes and to normal year end audit adjustments.
(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated financial projections of the Borrower previously delivered to the Administrative Agent for the 2012, 2013 and 2014 fiscal years were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Credit Parties, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against any Credit Party or any of their Subsidiaries or against any of their properties or revenues that (a) affect or pertain to this Agreement or any other Loan Document or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
5.07 No Default. Neither any Credit Party nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
5.08 Ownership of Property; Liens. Each of the Credit Parties and their Subsidiaries has good record and marketable title in fee simple (subject to the rights of other parties as owners of condominium units) to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Credit Parties and their Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5.09 Environmental Compliance. The Credit Parties and their Subsidiaries are not in violation of any Environmental Laws and not subject to liabilities or claims thereunder that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 Insurance. The properties of each Credit Party and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Credit Parties, in such amounts and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Credit Party or the applicable Subsidiary operates.
5.11 Taxes. The Credit Parties and their Subsidiaries have filed all Federal, state and other tax returns and reports required to be filed and have paid all Federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP (to the extent required by GAAP) or (b) where failure to comply with the foregoing could not reasonably be expected to have a Material Adverse Effect. There is no proposed tax assessment against a Credit Party or any of their Subsidiaries that would, if made, have a Material Adverse Effect.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that the form of such Pension Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the best knowledge of the Credit Parties, nothing has occurred that would prevent or cause the loss of such tax-qualified status.
(b) There are no pending or, to the best knowledge of the Credit Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred, and neither any Credit Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Credit Party and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher except where the failure to attain such funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect, and neither any Credit Party nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date except where such drop in funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect; and (iv) neither any Credit Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA.
5.13 Margin Regulations; Investment Company Act; REIT Status.
(a) Neither the making of any Loan or the issuance of any Letter of Credit hereunder nor the use of proceeds thereof will violate the provisions of Regulation T, U or X of the FRB.
(b) None of the Credit Parties is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
(c) The Borrower currently has REIT Status.
5.14 Disclosure. Each Credit Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished by or on behalf of any Credit Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, taken as a whole and as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Credit Parties represent only that such information was prepared in good faith based upon assumptions believed by the Credit Parties to be reasonable at the time made (it being understood
that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5.15 Compliance with Laws. Each Credit Party, and each of its Subsidiaries, are in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.16 Intellectual Property; Licenses, Etc. Each Credit Party and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person except to the extent that failure to so own or possess such IP Rights or any such conflict, could not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
5.17 [Reserved].
5.18 Property. All of the Credit Parties’ and their respective Subsidiaries’ Properties are in good repair and condition, subject to ordinary wear and tear, other than with respect to deferred maintenance existing as of the date of acquisition of such Property and except for such defects relating to properties which would not have a Material Adverse Effect
5.19 [Reserved].
5.20 Solvency. As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all of the Loans made or to be made hereunder and Letters of Credit issued or to be issued hereunder (including but not limited to, the date any such Loan is made or Letter of Credit is issued), the Borrower and its Subsidiaries (on a consolidated basis) are Solvent.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (unless a replacement letter of credit or cash collateral reasonably satisfactory to the L/C Issuer has been provided to the L/C Issuer), the Credit Parties shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:
6.01 Financial Statements. Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender):
(a) As soon as practicable, and in any event within 90 days after the end of each fiscal year, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year and the consolidated statements of operations, stockholders’ equity and cash flows, in each case of the Borrower and its Subsidiaries for such fiscal year, all in reasonable detail. Such financial statements shall be prepared in accordance with GAAP, consistently applied, audited and shall be accompanied by a report of Ernst & Young LLP or other independent public accountants of recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any “going concern” or like qualifications or exception or any qualification or exception as to the scope of the audit; and
(b) As soon as practicable, and in any event within 60 days after the end of each fiscal quarter (other than the fourth fiscal quarter in any fiscal year), the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter and the consolidated statements of operations and cash flows for such fiscal quarter, and the portion of the fiscal year ended with such fiscal quarter, all in reasonable detail. Such financial statements shall be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP (other than footnote disclosures), consistently applied, as at such date and for such periods, subject only to normal year-end accruals and audit adjustments.
6.02 Certificates; Other Information. Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender), in form and detail reasonably satisfactory to the Administrative Agent:
(a) Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer;
(b) No later than 90 days after the commencement of each fiscal year, an annual forecast for the then-current fiscal year in reasonable detail;
(c) Promptly after request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any of its Subsidiaries, or any audit of any of them;
(d) Promptly after the same are available, and in any event within five (5) Business Days after filing with the SEC, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all publicly available annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Administrative Agent pursuant to Section 6.01 or other provisions of this Section 6.02;
(e) Promptly upon a Responsible Officer becoming aware of the occurrence of any (i) Reportable Event or (ii) non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) involving any Pension Plan or any trust created thereunder that could reasonably be expected to give rise to a material liability, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto, and, when known, any action taken by the IRS with respect thereto;
(f) Promptly upon a Responsible Officer becoming aware of the existence of any condition or event which constitutes a Default or Event of Default, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto;
(g) Promptly upon a Responsible Officer becoming aware that any Person has commenced a legal proceeding with respect to a claim against the Credit Parties or their respective Subsidiaries that could reasonably be expected to have a Material Adverse Effect, written notice describing the pertinent facts relating thereto and what action Borrower or its Subsidiaries are taking or propose to take with respect thereto;
(h) Promptly upon a Responsible Officer becoming aware of a change in the Debt Rating or any announcement that any such rating is “under review” or that such rating has been placed on a watch list or that any similar action has been taken by a Rating Agency, written notice of such change, announcement or action;
(i) Promptly upon a Responsible Officer becoming aware, notice of any material change in accounting policies by the Borrower or any other Credit Party; and
(j) Such other data and information with respect to the Borrower or any Subsidiary as from time to time may be reasonably requested by the Administrative Agent.
Documents required to be delivered pursuant to this Agreement (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Credit Parties post such documents, or provide a link thereto on the Credit Parties’ website on the Internet at the website address listed on Schedule 10.02 or (ii) on which such documents are posted on the Credit Parties’ behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent), including the SEC’s EDGAR website; provided that the Credit Parties shall deliver paper copies of such documents to the Administrative Agent for any Lender that requests in writing to the Borrower and the Administrative Agent that the Credit Parties deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Credit Parties with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Credit Parties hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Credit Parties hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Credit Parties or their securities) (each, a “Public Lender”). The Credit Parties hereby agree that (w) all Borrower Materials (other than SEC Reports) that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC,” the Credit Parties shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower Materials as either publicly available information or not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws; (y) all SEC Reports and all Borrower Materials marked “PUBLIC” are permitted to
be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials (other than SEC Reports) that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” The Credit Parties shall be in compliance with all requirements to deliver information under this Agreement if they have made such information available to the Administrative Agent and, to the extent required, Lenders other than Public Lenders, and the failure of Public Lenders to receive information made available to other Lenders shall not result in any breach of this Agreement.
6.03 Payment of Obligations. Pay and discharge as the same shall become due and payable, all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless (a) the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Credit Parties or such Subsidiary prior to the imposition of such Lien or (b) the failure to do so could not reasonably be expected to have a Material Adverse Effect.
6.04 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect the legal existence and good standing of the Credit Parties under the Laws of the jurisdiction of their organization except in a transaction permitted by Sections 7.03 or 10.20; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation or non-renewal of which could reasonably be expected to have a Material Adverse Effect.
6.05 Maintenance of Properties. (a) Maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted and subject to exceptions for extraordinary or reasonably unforeseeable events in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof in a reasonably timely manner except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.
6.06 Maintenance of Insurance. Maintain liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is customarily carried by companies engaged in similar businesses and owning similar assets in the general areas in which the Credit Parties or such Subsidiaries, as applicable, operate.
6.07 Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
6.08 Books and Records. (a) Maintain proper books of record and account, in which entries true and correct in all material respects are made in conformity with GAAP consistently applied; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Credit Parties and their Subsidiaries, as the case may be.
6.09 Inspection Rights. Permit the Lenders, through the Administrative Agent or any representative designated by the Administrative Agent, at the Credit Parties’ expense, to visit and inspect any of the properties of the Credit Parties or any of their respective Subsidiaries (subject to the rights of any tenants), to examine the books of account of the Credit Parties and their respective Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss the affairs, finances and accounts of the Credit Parties and their respective Subsidiaries with, and to be advised as to the same by, their Responsible Officers, all at such reasonable times (typically during normal business hours) and intervals as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request upon not less than four (4) Business Days’ notice; provided, however, that inspections made at the Credit Parties’ expense shall be limited to once per year, unless an Event of Default shall have occurred and be continuing. The Lenders shall use good faith efforts to coordinate such visits and inspections so as to minimize the interference with and disruption to the Credit Parties’ or such Subsidiaries’ normal business operations. Notwithstanding anything to the contrary in this Section 6.09, no Credit Party nor any of their Subsidiaries will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any document, information or other matter that (i) in respect of which disclosure to the Administrative Agent (or its designated representative) or any Lender is then prohibited by law or any agreement binding on any Credit Party or any of its Subsidiaries or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product.
6.10 Use of Proceeds. Use the proceeds of any Credit Extensions for (a) the repayment of obligations under the Existing Credit Agreement and all expenses related thereto and (b) general corporate purposes (including permitted Investments and Acquisitions).
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, or any Letter of Credit (unless a replacement letter of credit or cash collateral reasonably satisfactory to the L/C Issuer has been provided to the L/C Issuer) shall remain outstanding, each Credit Party shall not, nor shall it permit any Subsidiary to, directly or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
(a) inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside, to the extent required by GAAP (or deposits made pursuant to applicable Law), and which are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside, to the extent required by GAAP, and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(c) defects and irregularities in title to any Property which would not reasonably be expected to result in a Material Adverse Effect;
(d) easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property in the ordinary course;
(e) easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center, business or office park or similar project affecting Property in the ordinary conduct of the business of the applicable Person;
(f) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, any right, power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property in the ordinary conduct of the business of the applicable Person;
(i) statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business (but not in connection with the incurrence of any Indebtedness) with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto, to the extent required by GAAP, and, by reason of nonpayment, no Property is subject to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of Property which may not give rise to any Lien against such Property in the ordinary conduct of the business of the applicable Person;
(k) rights of tenants as tenants only under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business;
(n) deposits to secure the performance of bids, contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(o) Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien;
(p) Liens consisting of deposits of Property to secure statutory obligations of any Credit Party or any Subsidiary;
(q) (i) Liens created by or resulting from any litigation or legal proceeding in the ordinary course of business which is currently being contested in good faith by appropriate proceedings; provided that, adequate reserves have been set aside and no material Property is subject to a material impending risk of loss or forfeiture and (ii) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h) or securing appeal or other surety bonds related to such judgments;
(r) other nonconsensual Liens incurred in the ordinary course of business but not in connection with the incurrence of any Indebtedness, which do not individually involve amounts in excess of $10,000,000 or in the aggregate involve amounts in excess of $20,000,000;
(s) any Liens securing the Obligations; and
(t) Liens securing Secured Debt (other than Obligor Subsidiary Debt) not prohibited by this Agreement.
7.02 Investments. Make any Investments, except:
(a) Investments held by any Credit Party or any of its Subsidiaries in the form of Cash, Cash Equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of any Credit Party or any of its Subsidiaries for travel, entertainment, relocation and similar ordinary business purposes;
(c) Investments of a Credit Party in any Subsidiary or any other Credit Party, Investments of any Subsidiary in a Credit Party or in another Subsidiary and Investments in any Person that, as a result of or in connection with such Investment, becomes or will become a Subsidiary of a Credit Party;
(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors;
(e) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of improved real estate property used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes (and appurtenant amenities);
(f) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of (i) Development Investments (the amount of such Investment shall be an amount equal to the aggregate costs incurred in connection therewith), (ii) undeveloped land without improvements, or (iii) any other Real Property, other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities); provided, that, as of the most recently ended
fiscal quarter, the aggregate book value of such Investments may not exceed 35% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(f) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value;
(g) other Investments, other than Investments in Real Property not otherwise permitted by Section 7.02; provided that as of the most recently ended fiscal quarter, the aggregate book value of such Investments pursuant to this Section 7.02(g) shall not exceed 15% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(g) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value; and
(h) Guarantees by any Credit Party or any Subsidiary in respect of Indebtedness not prohibited hereunder.
7.03 Fundamental Changes. Merge, dissolve, liquidate or consolidate with or into another Person, except that, so long as no Default or Event of Default exists or would result therefrom and subject to the proviso below, (a) a Credit Party may merge or consolidate with or into one or more other Credit Parties; (b) any Subsidiary (other than the Operating Partnership) may merge or consolidate with or into a Credit Party or another Subsidiary or may dissolve or liquidate, or (c) any other merger, dissolution, liquidation or consolidation that does not result in a Change of Control shall be permitted; provided that (i) if the Borrower or Operating Partnership is a party to any merger or consolidation permitted under this Section 7.03 it shall be the surviving entity and (ii) in no event shall the Borrower and Operating Partnership be permitted to merge or consolidate with each other.
7.04 Restricted Payments. With respect to any Credit Party or any Subsidiary thereof, make any Restricted Payment except (a) so long as no Event of Default shall have occurred and be continuing under Section 8.01(a) or would result therefrom, such Restricted Payment shall be permitted (i) in an amount not to exceed (excluding Restricted Payments made pursuant to the last sentence of this Section 7.04) the greater of (A) the amount which, when added to the amount of all other Restricted Payments paid by the Borrower in the same fiscal quarter and the preceding three fiscal quarters, would not exceed 95% of Funds From Operations of the Borrower and its Subsidiaries for the four consecutive fiscal quarters ending prior to the fiscal quarter in which such Restricted Payment is paid and (B) the minimum amount of Restricted Payments required (I) under the Code to maintain and preserve Borrower’s REIT Status or (II) to avoid the payment of federal or state income or excise tax, (ii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, to the extent it relates to the retirement of Preferred Equity in an amount not to exceed any Exchange Proceeds so used notwithstanding the limitations set forth in clause (i), and (iii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, with the proceeds of sales of property notwithstanding the limitation set forth in clause (i); provided however, that if an Event of Default under Section 8.01(a) has occurred and is continuing, the Credit Parties and their Subsidiaries may only make the Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status. Notwithstanding the foregoing, any Subsidiary of the Borrower may (A) make Restricted Payments payable to the Borrower or any other Credit Party (directly or indirectly through Subsidiaries) and (B) declare and make Restricted Payments to its equity holders generally so long as the Borrower or such Subsidiary that owns the equity interest or interests in the Subsidiary making such Restricted Payments receives at least its proportionate share thereof (based upon
its relative equity interests in the Subsidiary making such Restricted Payment); provided that in the case of clause (B) above, if an Event of Default under Section 8.01(a) has occurred and is continuing, such Subsidiaries may only make Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status.
7.05 Change in Nature of Business. Make any material change in the principal nature of the business of the Credit Parties and their Subsidiaries, such business being the acquisition, ownership, management, development and renovation of real property and buildings for use as office, office/laboratory, research, health sciences, technology or manufacturing/warehouse properties and related real property (and appurtenant amenities).
7.06 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Credit Parties or their respective Subsidiaries other than (a) salary, bonus, employee stock option, relocation assistance and other compensation arrangements with directors or officers in the ordinary course of business, (b) transactions that are fully disclosed to the board of directors of the Borrower and expressly authorized by a resolution of the board of directors of the Borrower which is approved by a majority of the directors not having an interest in the transaction, (c) transactions permitted by this Agreement, (d) transactions between or among Credit Parties and Subsidiaries and (e) transactions on overall terms at least as favorable to Credit Parties or their Subsidiaries as would be the case in an arm’s length transaction between unrelated parties.
7.07 Burdensome Agreements. Enter into any agreement, instrument or transaction which prohibits any Credit Party’s ability to pledge to Administrative Agent any Qualified Asset Pool Property. The Credit Parties, and their respective Subsidiaries, shall take such actions as are necessary to preserve the right and ability of the Credit Parties, and their respective Subsidiaries, to pledge to Administrative Agent for the benefit of Lenders the Qualified Asset Pool Properties without any such pledge after the date hereof causing or permitting the acceleration (after the giving of notice or the passage of time, or otherwise) of any other Indebtedness of the Credit Parties or any of their respective Subsidiaries.
7.08 [Reserved]
7.09 Financial Covenants.
(a) Permit the Fixed Charge Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.50:1.00.
(b) (i) Subject to clause (ii) below, permit the Secured Debt Ratio, as of the last day of any fiscal quarter, to exceed 40.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Secured Debt Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 45.0%.
(c) (i) Subject to clause (ii) below, permit the Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
(d) Permit Minimum Book Value, as of the last day of any fiscal quarter, to be less than the sum of (i) $2,000,000,000, plus (ii) 50% of the net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds).
(e) Permit the Unsecured Interest Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.75 to 1.00.
(f) (i) Subject to clause (ii) below, permit the Unsecured Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Unsecured Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an “Event of Default”:
(a) Non-Payment. Any Credit Party fails to pay (i) when and as required to be paid herein, and in the currency required hereunder, any amount of principal of any Loan or any L/C Obligation, or (ii) within five Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Credit Party fails to perform or observe any term, covenant or agreement contained in Article VII; or
(c) Other Defaults. Any Credit Party or Subsidiary fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 Business Days following written notice by Administrative Agent or, if such Default is not reasonably susceptible of cure within such period, within such longer period as is reasonably necessary to effect a cure so long as such Credit Party or such Subsidiary continues to diligently pursue cure of such Default but not in any event in excess of 60 Business Days; or
(d) Representations and Warranties. Any representation or warranty by a Credit Party or any of its Subsidiaries made in any Loan Document, or in any certificate or other writing delivered by a Credit Party or any of its Subsidiaries pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of the Lenders; or
(e) Cross-Default. Any Credit Party or any of its Subsidiaries (i) fails to pay the principal, or any principal installment, of any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more required on its part to be paid when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event of default to occur, in connection with any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more, if as a result of such failure or sufferance any holder or holders thereof (or an agent or trustee on its or their behalf) has the right (after giving effect to any notice or grace periods applicable thereto) to declare such Indebtedness due before the date on which it otherwise would become due or the right (after giving effect to any notice or grace periods applicable thereto) to require a Credit Party or any such Subsidiary to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness (provided, that for the purpose of this clause (e), the principal amount of Indebtedness consisting of a Swap Contract shall be the amount which is then payable by the counterparty to close out the Swap Contract); or
(f) Insolvency Proceedings, Etc. Any Credit Party or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Credit Party or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Credit Party or any Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding $50,000,000 (to the extent not covered by independent third party insurance as to which the insurer does not dispute coverage), and (i) enforcement proceedings are commenced by any creditor upon such judgment or order or (ii) such judgment or order shall continue unsatisfied and in effect for a period of 30 consecutive days without being vacated, discharged, satisfied or stayed or bonded pending appeal; or
(i) ERISA. An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Credit Parties or their Subsidiaries under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter, or (ii) the Credit Parties or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or relating to the satisfaction in full of all the Obligations (or cash collateralization in a manner reasonably satisfactory to the L/C Issuer with respect to outstanding Letters of Credit), ceases to be in full force and effect; or any Credit Party contests in any manner
the validity or enforceability of any provision of any Loan Document; or any Credit Party denies that it has any liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document (except as specifically contemplated hereunder or thereunder); or
(k) Change of Control. There occurs any Change of Control.
8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, (i) Required Revolving Lenders with respect to Sections 8.02(a) and (c) below and (ii) the Required Lenders with respect to Sections 8.02 (b) and (d) below take any or all of the following actions:
(a) declare the commitment of each Revolving Lender to make Revolving Loans, the Swing Line Lender to make Swing Line Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Credit Parties;
(c) require that the Credit Parties Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any one or more of the Credit Parties under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to or for the account of such Credit Party shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the
L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and Obligations to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been paid in full, to the Credit Parties or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and, except as set forth in Section 9.06, neither the Borrower nor any other Credit Party shall have rights as a third party beneficiary of any of such provisions.
9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with a Credit Party or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders. The foregoing provisions of this Section 9.02 shall likewise apply to the Person serving as an Alternative Currency Fronting Lender.
9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Credit Parties or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders or Required Revolving Lenders, as the case may be (or such other number, percentage or class of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
9.06 Successor Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. The Required Lenders may remove the Administrative Agent from its capacity as Administrative Agent in the event of the Administrative Agent’s willful misconduct or gross negligence. Upon receipt of any such notice of resignation or the removal of the Administrative Agent as Administrative Agent hereunder, the Required Lenders shall have the right (with the consent of the Borrower provided there does not exist an Event of Default at such time), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders (with the consent of the Borrower provided there does not exist an Event of Default at such time) and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or the Required Lenders remove the Administrative Agent hereunder, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer, Swing Line Lender and Alternative Currency Fronting Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, Swing Line Lender and Alternative Currency Fronting Lender, (b) the retiring L/C Issuer, Swing Line Lender and Alternative Currency Fronting Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, (c) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit and (d) the successor Alternative Currency Fronting Lender shall make arrangements with the resigning Alternative Currency Fronting Lender for the funding of all outstanding Alternative Currency Risk Participations.
9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender, the Swing Line Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender, the Swing Line Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Co-Syndication Agents, the Co-Documentation Agents or Arrangers listed on the cover page hereof or the Managing Agents or any additional titled agents which may be added thereto from time to time shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.
9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, indemnification, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, indemnification, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
9.10 Collateral and Borrower Matters. The Lenders, the Swing Line Lender and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion and the Administrative Agent hereby agrees:
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Revolving Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (unless cash collateralized or supported by a letter of credit of manner satisfactory to the L/C Issuer), (ii) that is sold or to be sold as part of or in connection with any sale not prohibited hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; and
(b) to release a Guarantor (other than the Operating Partnership) from liability for the Obligations in accordance with Section 10.20.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property.
9.11 No Obligations of Credit Parties. Nothing contained in this Article IX shall be deemed to impose upon the Credit Parties any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and the Credit Parties shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Administrative Agent or the Lenders under this Agreement. Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by the Credit Parties to the Administrative Agent for the account of the Lenders, the Credit Parties ‘ obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Credit Parties therefrom, shall be effective unless in writing signed by the Required Lenders (or the Administrative Agent with the written concurrence of the Required Lenders) and the Credit Parties, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender (subject to Sections 2.14 and 2.15);
(c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal or payment of interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby (subject to Section 2.14);
(d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or Letter of Credit Fees (subject to clause (i) of the second proviso to this Section 10.01) at the Default Rate;
(e) change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender (subject to Section 2.17);
(f) change any provision of this Section or any percentage specified in the definition of “Required Lenders” or “Required Revolving Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (subject to Section 2.17); or
(g) release (i) the Borrower or (ii) the Operating Partnership, as a Credit Party hereunder, without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) a Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (v) so long as the Revolving Commitments remain outstanding, no amendment, waiver or consent which has the effect of enabling the Borrower to satisfy any condition to a Committed Borrowing contained in Section 4.02 hereof, which, but for such amendment, waiver or consent would not be satisfied, shall be effective to require the Revolving Lenders to make any additional Revolving Loan unless and until the Required Revolving Lenders shall consent thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender (subject to Section 2.14 and 2.15) and (y) any waiver, amendment or modification requiring the
consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.
10.02 Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to a Credit Party, the Administrative Agent, the L/C Issuer, the Swing Line Lender or and the Alternative Currency Fronting Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02 and
(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been received upon the sender’s receipt of an acknowledgement from the intended recipient (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or a Credit Party may, in its discretion, agree to accept notices and other communications to such Person(s) hereunder by electronic communications pursuant to procedures approved by such Person(s), provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Credit Parties, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Credit Party’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Credit Party, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Credit Parties, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Credit Parties even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof as understood by the recipient, varied from any confirmation thereof. The Credit Parties shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Credit Parties except to the extent resulting from the gross negligence or willful misconduct of Administrative Agent, the L/C Issuer, any Lender or any Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
10.04 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Credit Parties shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent (limited to one counsel, and, if applicable, one local counsel in each material jurisdiction)), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out of pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out of pocket expenses incurred by the Administrative Agent, any Lender, the Alternative Currency Fronting Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Credit Parties. The Credit Parties shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Credit Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Credit Parties or any of their Subsidiaries, or any Environmental Liability related in any way to the Credit Parties or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Credit Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Credit Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) Reimbursement by Lenders. To the extent that the Credit Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, and without limiting the obligation of the Credit Parties to do so, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, any claim against any Indemnitee and any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. Except as otherwise expressly set forth herein with respect to the waiver by the Indemnitees of claims for special, indirect, consequential or punitive damages (as opposed to direct or actual damages), such waiver by the Indemnitees shall not affect the indemnification obligations of the Credit Parties under this Section 10.04. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent resulting from the gross negligence or willful misconduct of any Indemnitee.
(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor (accompanied by reasonable back-up documentation).
(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the Swing Line Lender, the Alternative Currency Fronting Lender and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations.
10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Credit Parties is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
10.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of the Credit Parties may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment, or grant of a security interest, subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement
(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations, in Swing Line Loans and in Alternative Currency Risk Participations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee
Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of the Swing Line Lender’s rights and obligations in respect of Swing Line Loans;
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender;
(C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding);
(D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Swing Line Loans (whether or not then outstanding); and
(E) the consent of an Alternative Currency Fronting Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Loans made in an Alternative Currency (whether or not then outstanding).
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made (A) to a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries or (B) in the case of any assignment of Commitments or Loans by any Revolving Lender, to any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note, as applicable, to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of, and interest owing on, the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive (absent manifest error), and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection
by each of the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, but with, subject to the proviso to the fourth sentence of the immediately succeeding paragraph, prior written notice to, the Borrower and the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations, Swing Line Loans and/or Alternative Currency Risk Participations) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Credit Parties, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Credit Parties agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (subject to the requirements and limitations therein, including the requirements under Section 3.01(e)). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign, or grant a security interest in, all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment, or grant of a security interest, to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment, or grant of a security interest, shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee or grantee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York Uniform Electronic Transactions Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Revolving Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Committed Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Committed Loan, the Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Credit Parties under this Agreement (including its obligations under Section 3.01 or 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Borrower and the Administrative Agent and with the payment of a processing fee of $3,500, assign all or any portion of its right to receive payment with respect to any Committed Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Committed Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(i) Resignation as L/C Issuer, Swing Line Lender or Alternative Currency Fronting Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Commitment and Loans pursuant to subsection
(b) above, Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender and/or (iii) upon 30 days’ notice to the Borrower, resign as Alternative Currency Fronting Lender. In the event of any such resignation as L/C Issuer, Swing Line Lender or Alternative Currency Fronting Lender, the Borrower shall be entitled to appoint from among the Lenders (with the applicable Lender’s consent) a successor L/C Issuer, Swing Line Lender or Alternative Currency Fronting Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer, Swing Line Lender or Alternative Currency Fronting Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Revolving Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). If the Alternative Currency Fronting Lender resigns as Alternative Currency Fronting Lender, it shall retain all the rights and obligations of the Alternative Currency Fronting Lender hereunder with respect to all Alternative Currency Risk Participations outstanding as of the effective date of its resignation as the Alternative Currency Fronting Lender and all obligations of the Borrower or any other Lender with respect thereto (including the right to require Alternative Currency Participating Lenders to fund any Alternative Currency Risk Participations therein in the manner provided in Section 2.02(f)). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender and/or Alternative Currency Fronting Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, Swing Line Lender or Alternative Currency Fronting Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.
10.07 Treatment of Certain Information; Confidentiality.
(a) Confidentiality. Each Lender and the Administrative Agent (each, a “Lender Party”) hereby agrees for itself for Swing Line Lender and for L/C Issuer only that, except as specifically set forth herein, (i) such Lender Party shall not participate in or generate any press release or other release of information to the general public relating to the closing of the Loan without the prior written consent of the Borrower, (ii) such Lender Party shall hold the Confidential Information in accordance with such Lender Party’s customary procedures to prevent the misuse or disclosure of confidential information of this nature and in accordance with safe and sound banking practices, (iii) such Lender Party shall use the Confidential Information solely for the purposes of underwriting the Loan or acquiring an interest therein, carrying out such Lender Party’s rights or obligations under this Agreement, in connection with the syndication of the Loan, the enforcement of the Loan Documents, or other internal examination, supervision or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, or as otherwise permitted by the terms of this Section 10.07 (collectively, “Permitted Purposes”), and (iv) not disclose the Confidential Information to any party, except as expressly authorized in this Agreement or with prior written consent of the Borrower. Each Lender Party shall promptly notify the Borrower in the event that it becomes aware of any loss or unauthorized disclosure of any Confidential Information.
Each Lender Party shall not have any obligations under this Agreement with respect to a specific portion of the Confidential Information if such Lender Party can demonstrate that such Confidential Information (i) was publicly available at the time it was disclosed to such Lender Party, (ii) became publicly available subsequent to the time it was disclosed to such Lender Party, (iii) was in or comes into a Lender Party’s possession from a source not known to such Lender Party (after reasonable inquiry) to be in breach of an obligation of confidentiality owed to the Borrower in making such disclosure to such Lender Party, (iv) was in or comes into Lender Party’s possession free of any obligation of confidence owed to the Borrower at the time it was disclosed to them, or (v) was developed by the employees or agents of the Lender Party without the use of the Confidential Information.
(b) Disclosures. Any Lender Party or its legal counsel may disclose the Confidential Information (i) to the Borrower, other Lenders, the Administrative Agent or any of their respective legal counsel, (ii) to its auditors in connection with bank audits or regulatory officials having jurisdiction over such Lender Party, (iii) to its legal counsel who need to know the Confidential Information for the purposes of representing or advising the Lender Parties, (iv) with prior written notice to the Chief Executive Officer of the Borrower, to its consultants, agents and advisors retained in good faith by such Lender Party with a need to know such information in connection with a Permitted Purpose, (v) as required by Law or legal process (subject to the terms below), or in connection with any legal proceeding in connection with the Loan Documents, or to the extent necessary or desirable to establish, enforce or assert any claims or defenses in connection with any legal proceeding by or against such Lender Party, (vi) to another potential Lender or participant in connection with a disposition or proposed disposition to that Person of all or part of that Lender Party’s interests hereunder or a participation interest in its Notes, and (vii) to its directors, officers, employees and affiliates that control, are controlled by, or are under common control with such Lender Party or its parent or otherwise within the corporate umbrella of such Lender Party who need to know the confidential information for purposes of underwriting the Loan or becoming a party to this Agreement, the syndication of the Loan, the administration, interpretation, performance or exercise of rights under the Loan Documents, the enforcement of the Loan Documents, or other internal supervision, examination or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, provided that any Person to whom any of the Confidential Information is disclosed is informed by such Lender Party of the strictly confidential nature of the Confidential Information, and such Persons described in clauses (b)(iv) and (vi) shall agree in writing to be bound by confidentiality restrictions at least as restrictive as those contained herein. Notwithstanding the foregoing, a Lender Party may disclose Confidential Information to the extent such Lender Party is requested or required by any Law or any order of any court, governmental, regulatory or self-regulatory body or other legal process to make any disclosure of or about any of the Confidential Information. In such event (except with respect to banking regulators or auditors), such Lender Party shall, if permitted by law, promptly notify the Borrower in writing so that the Borrower may seek an appropriate protective order or waive compliance with the provisions of this Agreement (provided that if a protective order or the receipt of a waiver hereunder has not been obtained, or if prior notice is not possible, and a Lender Party is, in the opinion of its counsel, compelled to disclose Confidential Information, such Lender Party may disclose that portion of the Confidential Information which its counsel advises it that such Lender Party is compelled to disclose, and provided further that in any event, such Lender Party will not oppose action by the Borrower to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information.) Each Lender Party shall be liable (but only to the extent it is finally determined to have breached the provisions of this Section 10.07(b)) for any actions by such Lender Party (but not any other Person) which are not in accordance with the provisions of this Section 10.07(b).
(c) No Rights in Confidential Information. The Administrative Agent and each Lender recognizes and agrees that nothing contained in this Section 10.07 shall be construed as granting any property rights, by license or otherwise, to any Confidential Information (other than the Agreement or any amendments thereto or any related agreements), or to any invention or any patent, copyright, trademark, or other intellectual property right that has issued or that may issue, based on such Confidential Information (other than the Agreement or any amendments thereto or any related agreements). No Lender Party shall make, have made, use or sell for any purpose any product or other item using, incorporating or derived from any such Confidential Information; provided that the foregoing shall not limit or restrict in any way the creation, use or sale of banking or related services by any Lender Party.
(d) Survival. All Confidential Information provided by or on behalf of the Borrower during the term of this Agreement or any predecessor agreements shall remain confidential indefinitely and shall continue to receive that level of confidential treatment customarily provided by commercial banks dealing with confidential information of their borrower customers, subject, however, to the specific exceptions to confidential treatment provided herein. For a period of one year after the Termination Date, the affected Lender Party shall continue to make reasonable inquiry of any third party providing Confidential Information as to whether such third party is subject to an obligation of confidentiality owed to the Borrower or its Subsidiaries and if such Lender Party obtains knowledge that such third party is violating a confidentiality agreement with the Borrower, such Lender Party shall treat the Confidential Information received from such third party as strictly confidential in accordance with the provisions of this Section 10.07. For purposes of this Section 10.07(d), the Termination Date shall mean the earlier of the termination of this Agreement or, with respect to a specific Lender Party, the date such Person no longer holds an interest in any Loan.
(e) Injunctive Relief. Each Lender Party hereby agrees that breach of this Section 10.07 will cause the Borrower irreparable damage for which recovery of damages would be inadequate, and that the Borrower shall therefore be entitled to obtain timely injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.
(f) No Fiduciary Duty. Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Administrative Agent or the Lenders to a Credit Party.
(g) Separate Action. Each Credit Party covenants and agrees not to, and hereby expressly waives any right to, raise as a defense, affirmative defense, set off, recoupment or otherwise against any Lender Party any claim arising from or relating to an alleged breach of this Section 10.07 in any action, claim or proceeding relating to a breach of the Loan Documents by the Credit Parties or other action to enforce or recover the Obligations, and covenant and agree that any claim against a Lender Party arising from or relating to an alleged breach of this Section 10.07 by a Lender Party shall only be asserted as an affirmative claim in a separate action against the applicable Lender Party.
10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of a Credit Party against any and all of the obligations of the Credit Parties now or hereafter existing under this Agreement or any other Loan Document to such Lender or the
L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Credit Parties may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff hereunder, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Credit Parties and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Credit Parties. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging transmission (e.g. pdf by email) shall be effective as delivery of a manually executed counterpart of this Agreement.
10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
10.13 Replacement of Lenders. If (a) any Lender requests compensation under Section 3.04, (b) any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender is a Defaulting Lender, (d) any Lender refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to Section 10.01, (i) requires the consent of 100% of the Lenders and the consent of the Required Lenders has been obtained or (ii) requires the consent of each Lender directly affected thereby, or (e) any other circumstance exists hereunder that gives the Credit Parties the right to replace a Lender as a party hereto, then the Credit Parties may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06 except as provided in this Section 10.13), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(A) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);
(B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, funded Alternative Currency Risk Participations and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Sections 3.04, 3.05 and 10.04) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(C) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and
(D) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Credit Parties to require such assignment and delegation cease to apply.
10.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, following a request by the Administrative Agent or any Lender, promptly provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.”
10.17 [Reserved].
10.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
10.19 [Reserved].
10.20 Release of a Guarantor.
(a) Notwithstanding anything to the contrary contained in this Agreement, the Borrower may (i) sell, assign, transfer or dispose of its interest in a Guarantor (other than the Operating Partnership) that is a Subsidiary of the Borrower or (ii) request that any Guarantor (other than the Operating Partnership) be released from its obligations under the Loan Documents; provided, that, on or before (A) the closing of such sale, assignment, transfer or disposition or (B) the effectiveness of such requested release, the Borrower shall have delivered to the Administrative Agent a certification, together with such other evidence as the Administrative Agent may require, that the Credit Parties will be in compliance with all terms of this Agreement after giving effect to such sale, assignment, transfer, disposition or release. The Administrative Agent shall promptly notify the Lenders of any such sale, assignment, transfer, disposition or release permitted hereunder.
(b) Upon a sale, assignment, transfer, disposition or request for release in accordance with clause (a) above, the Administrative Agent shall, at the expense of the Borrower, take such action as is reasonably appropriate to effect such release.
10.21 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, the Credit Parties acknowledge and agree, and acknowledge their Subsidiaries’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Credit Parties and their respective Subsidiaries, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Credit Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of the Administrative Agent, each Arranger and each Lender, is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary, for the Credit Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) none of the Administrative Agent, the Arrangers or any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Credit Parties with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, the Arrangers or any Lender has advised or is currently advising the Credit Parties or any of their respective Affiliates on other matters) and none of the Administrative Agent, the Arrangers or any Lender has any obligation to the Credit Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their respective Affiliates, and none of the Administrative Agent, the Arrangers or any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each of the Credit Parties hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arrangers and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty arising out of the transactions contemplated hereby.
10.22 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Credit Party in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due the Administrative Agent or any Lender from any Credit Party in the Agreement Currency, such Credit Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent or any Lender in such currency, the Administrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to such Credit Party (or to any other Person who may be entitled thereto under applicable law).
10.23 Alternative Currency Fronting Lenders; Fronting Commitments. At any time after the Closing Date, the Borrower may make a request to the Administrative Agent that any existing Revolving Lender act as an additional Alternative Currency Fronting Lender. Upon the Administrative Agent’s approval that such Revolving Lender may act as an Alternative Currency Fronting Lender, the Administrative Agent shall promptly notify such Revolving Lender of such request. Upon the agreement by the applicable Revolving Lender to act as an Alternative Currency Fronting Lender, such Revolving Lender shall become an Alternative Currency Fronting Lender hereunder with a Fronting Commitment in an amount agreed to by the Borrower, the Administrative Agent, and such Alternative Currency Fronting
Lender, and the Administrative Agent shall promptly notify the Borrower of such additional Alternative Currency Fronting Lender and such Alternative Currency Fronting Lender’s Fronting Commitment. In addition, any Alternative Currency Fronting Lender may from time to time increase or decrease its Fronting Commitment pursuant to a written agreement executed by the Borrower, the Administrative Agent, and such Alternative Currency Fronting Lender.
ARTICLE XI
GUARANTY
11.01 The Guaranty. Each of the Guarantors hereby jointly and severally, absolutely and unconditionally guarantees to each Lender, the L/C Issuer and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws.
11.02 Obligations Unconditional. The obligations of the Guarantors under Section 11.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable Laws, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than payment in full of the Obligations), it being the intent of this Section 11.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article XI until such time as the Obligations (other than contingent indemnity obligations) have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the Loan Documents or other documents relating to the Obligations shall be done or omitted;
(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or other documents relating to the Obligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives, to the extent permitted by Law, diligence, presentment, demand of payment, protest and all notices whatsoever, acceptance hereof, and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations, or against any other Person under any other guarantee of, or security for, any of the Obligations.
11.03 Reinstatement. The obligations of the Guarantors under this Article XI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent, each Lender and each other holder of the Obligations on demand for all reasonable costs and expenses (including, without limitation, the fees, charges and disbursements of counsel) incurred by the Administrative Agent, such Lender or such other holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
11.04 Certain Additional Waivers. Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 11.02 and through the exercise of rights of contribution pursuant to Section 11.06.
11.05 Remedies. The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent, the Lenders and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 8.02) for purposes of Section 11.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 11.01.
11.06 Rights of Contribution. The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable Laws. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Loan Documents and no Guarantor
shall exercise such rights of contribution until all Obligations have been paid in full and the Commitments have terminated.
11.07 Guarantee of Payment; Continuing Guarantee. The guarantee in this Article XI is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
11.08 Additional Guarantors. The Borrower may at any time and from time to time, upon written request to the Administrative Agent, cause a Domestic Subsidiary that is a Wholly-Owned Subsidiary to become a Guarantor under this Agreement by (a) executing a Joinder Agreement and (b) delivering such other documentation as the Administrative Agent may reasonably request in connection therewith, including, without limitation, certified resolutions and other organizational and customary authorizing documents of such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
| BORROWER: | ALEXANDRIA REAL ESTATE EQUITIES, INC., | ||
|---|---|---|---|
| a Maryland corporation | |||
| By: | /s/ Dean A. Shigenaga | ||
| Name: Dean A. Shigenaga | |||
| Title: Chief Financial Officer | |||
| GUARANTOR: | ALEXANDRIA REAL ESTATE EQUITIES, L.P., | ||
| a Delaware limited partnership | |||
| By: | ARE-QRS Corp., a Maryland corporation, general partner | ||
| By: | /s/ Dean A. Shigenaga | ||
| Name: Dean A. Shigenaga | |||
| Title: Chief Financial Officer |
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
ALEXANDRIA REAL ESTATE EQUITIES, INC.
| ADMINISTRATIVE AGENT: | BANK OF AMERICA, N.A. | ||
|---|---|---|---|
| By: | /s/ Henry Pennell | ||
| Name: Henry Pennell | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| LENDERS: | BANK OF AMERICA, N.A. | ||
|---|---|---|---|
| By: | /s/ James P. Johnson | ||
| Name: James P. Johnson | |||
| Title: Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CITIBANK, N.A. | |||
|---|---|---|---|
| By: | /s/ John C. Rowland | ||
| Name: John C. Rowland | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| JPMORGAN CHASE BANK, N.A. | |||
|---|---|---|---|
| By: | /s/ Brendan M. Poe | ||
| Name: Brendan M. Poe | |||
| Title: Executive Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| THE BANK OF NOVA SCOTIA | |||
|---|---|---|---|
| By: | /s/ Christopher Usas | ||
| Name: Christopher Usas | |||
| Title: Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| COMPASS BANK | |||
|---|---|---|---|
| By: | /s/ Brian Tuerff | ||
| Name: Brian Tuerff | |||
| Title: Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK | |||
|---|---|---|---|
| By: | /s/ David Christiansen | ||
| Name: David Christiansen | |||
| Title: Director | |||
| By: | /s/ Michael Madnick | ||
| Name: Michael Madnick | |||
| Title: Managing Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| GOLDMAN SACHS BANK USA | |||
|---|---|---|---|
| By: | /s/ Mark Walton | ||
| Name: Mark Walton | |||
| Title: Authorized Signatory |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| ROYAL BANK OF CANADA | |||
|---|---|---|---|
| By: | /s/ Joshua Freedman | ||
| Name: Joshua Freedman | |||
| Title: Authorized Signatory |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| THE ROYAL BANK OF SCOTLAND PLC | |||
|---|---|---|---|
| By: | RBS Securities Inc., as agent | ||
| By: | /s/ Bruce Ferguson | ||
| Name: Bruce Ferguson | |||
| Title: Managing Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| BARCLAYS BANK PLC | |||
|---|---|---|---|
| By: | /s/ Diane Rolfe | ||
| Name: Diane Rolfe | |||
| Title: Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| PNC BANK NATIONAL ASSOCIATION | |||
|---|---|---|---|
| By: | /s/ Tyler Lowry | ||
| Name: Tyler Lowry | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| SUMITOMO MITSUI BANKING CORPORATION | |||
|---|---|---|---|
| By: | /s/ Keith J. Connolly | ||
| Name: Keith J. Connolly | |||
| Title: Managing Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| SUNTRUST BANK | |||
|---|---|---|---|
| By: | /s/ Gregory T. Horstman | ||
| Name: Gregory T. Horstman | |||
| Title: Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| THE BANK OF NEW YORK MELLON | |||
|---|---|---|---|
| By: | /s/ Kenneth R. McDonnell | ||
| Name: Kenneth R. McDonnell | |||
| Title: Managing Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| UNION BANK, NA | |||
|---|---|---|---|
| By: | /s/ Katherine Davidson | ||
| Name: Katherine Davidson | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH | |||
|---|---|---|---|
| By: | /s/ Mikhail Faybusovich | ||
| Name: Mikhail Faybusovich | |||
| Title: Director | |||
| By: | /s/ Vipul Dhadda | ||
| Name: Vipul Dhadda | |||
| Title: Associate |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| BRANCH BANKING AND TRUST COMPANY | |||
|---|---|---|---|
| By: | /s/ Ahaz A. Armstrong | ||
| Name: Ahaz A. Armstrong | |||
| Title: Assistant Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| REGIONS BANK | |||
|---|---|---|---|
| By: | /s/ Michael R. Mellott | ||
| Name: Michael R. Mellott | |||
| Title: Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| THE HUNTINGTON NATIONAL BANK | |||
|---|---|---|---|
| By: | /s/ Bryan McFarland | ||
| Name: Bryan McFarland | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| MIZUHO CORPORATE BANK, LTD. | |||
|---|---|---|---|
| By: | /s/ Noel Purcell | ||
| Name: Noel Purcell | |||
| Title: Authorized Signatory |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| TD BANK, N.A. | |||
|---|---|---|---|
| By: | /s/ Brian S. Welch | ||
| Name: Brian S. Welch | |||
| Title: Sr. Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| HSBC BANK USA, NATIONAL ASSOCIATION | |||
|---|---|---|---|
| By: | /s/ Andrew W. Hietala | ||
| Name: Andrew W. Hietala | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CAPITAL ONE, N.A. | |||
|---|---|---|---|
| By: | /s/ Frederick H. Denecke | ||
| Name: Frederick H. Denecke | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| FIFTH THIRD BANK | |||
|---|---|---|---|
| By: | /s/ Matt Rodgers | ||
| Name: Matt Rodgers | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| BANK OF THE WEST, | |||
|---|---|---|---|
| a California banking corporation | |||
| By: | /s/ Irina Galieva | ||
| Name: Irina Galieva | |||
| Title: Vice President/Documentation Manager | |||
| By: | /s/ Ben Arroyo | ||
| Name: Ben Arroyo | |||
| Title: Vice President/Syndications Officer, Senior |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CITY NATIONAL BANK | |||
|---|---|---|---|
| By: | /s/ Robert Besser | ||
| Name: Robert Besser | |||
| Title: Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| COMERICA BANK | |||
|---|---|---|---|
| By: | /s/ Michael T. Shea | ||
| Name: Michael T. Shea | |||
| Title: Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| LAND BANK OF TAIWAN, LOS ANGELES BRANCH | |||
|---|---|---|---|
| By: | /s/ Juifu Chien | ||
| Name: Juifu Chien | |||
| Title: Vice President & General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. NEW YORK BRANCH | |||
|---|---|---|---|
| By: | /s/ Priscilla Hsing | ||
| Name: Priscilla Hsing | |||
| Title: VP & DGM |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| THE NORTHERN TRUST COMPANY | |||
|---|---|---|---|
| By: | /s/ Blake Lunt | ||
| Name: Blake Lunt | |||
| Title: Second Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CHANG HWA COMMERCIAL BANK LTD., | |||
|---|---|---|---|
| LOS ANGELES BRANCH | |||
| By: | /s/ Chu-I Hung | ||
| Name: Chu-I Hung | |||
| Title: Vice President and General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| HUA NAN COMMERCIAL BANK, LTD., | |||
|---|---|---|---|
| LOS ANGELES BRANCH | |||
| By: | /s/ Oliver C.H. Hsu | ||
| Name: Oliver C.H. Hsu | |||
| Title: VP & General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| E.SUN COMMERCIAL BANK, LTD., LOS ANGELES BRANCH | |||
|---|---|---|---|
| By: | /s/ Edward Chen | ||
| Name: Edward Chen | |||
| Title: VP & General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
| CATHAY UNITED BANK, LTD. | |||
|---|---|---|---|
| By: | /s/ Alexander Wu | ||
| Name: Alexander Wu | |||
| Title: SVP & General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
APRIL 2012
SCHEDULES
| 1.01(a) | Mandatory Cost Formulae | ||
|---|---|---|---|
| 1.01(b) | Tech Square | ||
| 2.01 | Revolving Commitments and Applicable Percentages | ||
| 2.02 | Foreign Currency Lenders | ||
| 10.02 | Administrative Agent’s Office; Certain Addresses for Notices |
SCHEDULE 1.01(a)
MANDATORY COST FORMULAE
- The Mandatory Cost (to the extent applicable) is an addition to the interest rate to compensate Lenders for the cost of compliance with:
(a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions); or
(b) the requirements of the European Central Bank.
On the first day of each Interest Period (or as soon as possible thereafter) the Administrative Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Administrative Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum. The Administrative Agent will, at the request of the Borrower or any Lender, deliver to the Borrower or such Lender as the case may be, a statement setting forth the calculation of any Mandatory Cost.
The Additional Cost Rate for any Lender lending from a Lending Office in a Participating Member State will be the percentage notified by that Lender to the Administrative Agent. This percentage will be certified by such Lender in its notice to the Administrative Agent to be its reasonable determination of the cost (expressed as a percentage of such Lender’s participation in all Loans made from such Lending Office) of complying with the minimum reserve requirements of the European Central Bank in respect of Loans made from that Lending Office.
The Additional Cost Rate for any Lender lending from a Lending Office in the United Kingdom will be calculated by the Administrative Agent as follows:
(a) in relation to any Loan in Sterling:
| AB+C(B-D)+E x 0.01 | per cent per annum |
|---|---|
| 100 - (A+C) |
(b) in relation to any Loan in any currency other than Sterling:
| E x 0.01 | per cent per annum |
|---|---|
| 300 |
Where:
“A” is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.
“B” is the percentage rate of interest (excluding the Applicable Rate, the Mandatory Cost and any interest charged on overdue amounts pursuant to the first sentence of Section 2.08(b) and, in the case of interest (other than on overdue amounts) charged at the Default Rate, without counting any increase in interest rate effected by the charging of the Default Rate) payable for the relevant Interest Period of such Loan.
“C” is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.
“D” is the percentage rate per annum payable by the Bank of England to the Administrative Agent on interest bearing Special Deposits.
“E” is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Administrative Agent as being the average of the most recent rates of charge supplied by the Lenders to the Administrative Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.
- For the purposes of this Schedule:
(a) “Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
(b) “Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;
(c) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); and
(d) “Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5% will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.
If requested by the Administrative Agent or the Borrower, each Lender with a Lending Office in the United Kingdom or a Participating Member State shall, as soon as practicable after publication by the Financial Services Authority, supply to the Administrative Agent and the Borrower, the rate of charge payable by such Lender to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by such Lender as being the average of the Fee Tariffs applicable to such Lender for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of such Lender.
Each Lender shall supply any information required by the Administrative Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:
(a) the jurisdiction of the Lending Office out of which it is making available its participation in the relevant Loan; and
(b) any other information that the Administrative Agent may reasonably require for such purpose.
Each Lender shall promptly notify the Administrative Agent in writing of any change to the information provided by it pursuant to this paragraph.
- The percentages of each Lender for the purpose of A and C above and the rates of charge of each Lender for the purpose of E above shall be determined by the Administrative Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Administrative Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its Lending Office.
The Administrative Agent shall have no liability to any Person if such determination results in an Additional Cost Rate which over- or under-compensates any Lender and shall be entitled to assume that the information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.
The Administrative Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3, 7 and 8 above.
Any determination by the Administrative Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties hereto.
The Administrative Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties hereto.
SCHEDULE 1.01(b)
TECH SQUARE
The existence of the consent rights of the Massachusetts Institute of Technology with respect to (a) leases over 150,000 square feet, (b) alteration of the Real Property affecting more than 150,000 square feet and having an expense of $20,000,000 or more in any single project, (c) leverage exceeding 80% of loan to value with respect to such Real Property, (d) transactions with any affiliate of the Parent, (e) acquisition of assets other than such Real Property and related items of property and (f) changing the purpose of the company.
SCHEDULE 2.01
REVOLVING COMMITMENTS AND APPLICABLE PERCENTAGES
| Revolving Lender | Revolving Commitment | Applicable Percentage of | ||||
|---|---|---|---|---|---|---|
| Revolving Commitment | ||||||
| Bank of America, N.A. | $84,000,000 | 5.600000001% | ||||
| --- | --- | --- | ||||
| Citibank, N.A. | $84,000,000 | 5.600000001% | ||||
| JPMorgan Chase Bank, N.A. | $84,000,000 | 5.600000001% | ||||
| The Bank of Nova Scotia | $65,000,000 | 4.333333333% | ||||
| Compass Bank | $65,000,000 | 4.333333333% | ||||
| Credit Agricole Corporate and Investment Bank | $65,000,000 | 4.333333333% | ||||
| Goldman Sachs Bank USA | $65,000,000 | 4.333333333% | ||||
| Royal Bank of Canada | $65,000,000 | 4.333333333% | ||||
| The Royal Bank of Scotland plc | $65,000,000 | 4.333333333% | ||||
| Barclays Bank PLC | $65,000,000 | 4.333333333% | ||||
| PNC Bank National Association | $50,000,000 | 3.333333333% | ||||
| Sumitomo Mitsui Banking Corporation | $50,000,000 | 3.333333333% | ||||
| SunTrust Bank | $50,000,000 | 3.333333333% | ||||
| The Bank of New York Mellon | $50,000,000 | 3.333333333% | ||||
| Union Bank, NA | $50,000,000 | 3.333333333% | ||||
| Credit Suisse AG, Cayman Islands Branch | $50,000,000 | 3.333333333% | ||||
| Branch Banking and Trust Company | $45,000,000 | 3.000000000% | ||||
| Regions Bank | $45,000,000 | 3.000000000% | ||||
| The Huntington National Bank | $40,000,000 | 2.666666667% | ||||
| Mizuho Corporate Bank, Ltd. | $40,000,000 | 2.666666667% | ||||
| TD Bank, N.A. | $40,000,000 | 2.666666667% | ||||
| HSBC Bank USA, National Association | $40,000,000 | 2.666666667% | ||||
| Capitol One, N.A. | $30,000,000 | 2.000000000% | ||||
| Fifth Third Bank | $30,000,000 | 2.000000000% | ||||
| Bank of the West | $30,000,000 | 2.000000000% | ||||
| City National Bank | $25,000,000 | 1.666666667% | ||||
| Comerica Bank | $25,000,000 | 1.666666667% | ||||
| Land Bank of Taiwan, Los Angeles Branch | $20,000,000 | 1.333333333% | ||||
| Mega International Commercial Bank Co., Ltd., New York Branch | $20,000,000 | 1.333333333% | ||||
| The Northern Trust Company | $20,000,000 | 1.333333333% | ||||
| Chang Hwa Commercial Bank Ltd., Los Angeles Branch | $15,000,000 | 1.000000000% | ||||
| Hua Nan Commercial Bank, Ltd., Los Angeles Branch | $10,000,000 | 0.666666667% | ||||
| E.Sun Commercial Bank, Ltd., Los Angeles Branch | $10,000,000 | 0.666666667% | ||||
| Cathay United Bank, Ltd. | $ 8,000,000 | 0.533333333% | ||||
| TOTALS | $ 1,500,000,000 | 100.000000000% |
SCHEDULE 2.02
FOREIGN CURRENCY LENDERS
| Currency Option | ||
|---|---|---|
| Multi-Currency | USD-Only | |
| Bank of America, N.A. | X | |
| Citibank, N.A. | X | |
| JPMorgan Chase Bank, N.A. | X | |
| The Bank of Nova Scotia | X | |
| Compass Bank | X | |
| Credit Agricole Corporate and Investment Bank | X | |
| Goldman Sachs Bank USA | X | |
| Royal Bank of Canada | X | |
| The Royal Bank of Scotland plc | X | |
| Barclays Bank PLC | X | |
| PNC Bank National Association | X | |
| Sumitomo Mitsui Banking Corporation | X | |
| SunTrust Bank | X | |
| The Bank of New York Mellon | X | |
| Union Bank, NA | X | |
| Credit Suisse AG, Cayman Islands Branch | X | |
| Branch Banking and Trust Company | X | |
| Regions Bank | X | |
| The Huntington National Bank | X | |
| Mizuho Corporate Bank, Ltd. | X | |
| TD Bank, N.A. | X | |
| HSBC Bank USA, National Association | X | |
| Capital One, N.A. | X | |
| Fifth Third Bank | X | |
| Bank of the West | X | |
| City National Bank | X | |
| Comerica Bank | X | |
| Land Bank of Taiwan, Los Angeles Branch | X | |
| Mega International Commercial Bank Co., Ltd., New York Branch | X | |
| The Northern Trust Company | X | |
| Chang Hwa Commercial Bank Ltd., Los Angeles Branch | X | |
| Hua Nan Commercial Bank, Ltd., Los Angeles Branch | X | |
| E.Sun Commercial Bank, Ltd., Los Angeles Branch | X | |
| Cathay United Bank, Ltd. | X |
SCHEDULE 10.02
ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES
CREDIT PARTIES :
385 E. Colorado Blvd., Suite 299
Pasadena, CA 91101
Attention: Dean Shigenaga, Chief Financial Officer
Telephone: (626) 578-0777
Telecopier: (626) 578-0770
Electronic Mail: [email protected]
Website Address: www.are.com
ADMINISTRATIVE AGENT :
Administrative Agent’s Office (for payments and Requests for Credit Extensions):
Bank of America, N.A.
901 Main Street, 14th Floor
Mail Code: TX1-492-14-12
Dallas, TX 75202
ATTN: Ramon O. Presas III
TEL: (214) 209-9262
FAX: (214) 209-8364
Email: [email protected]
Other Notices as Administrative Agent :
Bank of America, N.A.
Agency Management
901 Main Street, 14th Floor
Mail Code: TX1-492-14-11
Dallas, TX 75202
ATTN: Henry Pennell
TEL: (214) 209-1226
FAX: (214) 290-9448
Email: [email protected]
with a copy to:
Bank of America, N.A.
Portfolio Management
Mail Code: CA5-704-06-37
315 Montgomery Street, 6th Floor
San Francisco, CA 94104
ATTN: James P. Johnson
TEL: (415) 913-4699
FAX: (415) 913-2356
Email: [email protected]
L/C ISSUER :
Bank of America, N.A.
Trade Operations
Mail Code: CA9-705-07-05
1000 W. Temple Street, 7th Floor
Los Angeles, CA 90012
ATTN: Stella Rosales
TEL: (213) 417-9484
FAX: (213) 457-8841
Email: [email protected]
SWING LINE LENDER :
Bank of America, N.A.
901 Main Street, 14th Floor
Mail Code: TX1-492-14-12
Dallas, TX 75202
ATTN: Ramon O. Presas III
TEL: (214) 209-9262
FAX: (214) 209-8364
Email: [email protected]
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C Revolving Note
D Compliance Certificate
E Assignment and Assumption
F Joinder Agreement
G Lender Joinder Agreement
H-1 Bid Request
H-2 Competitive Bid
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: ____________ _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The Borrower hereby requests (select one):
o A Borrowing of Committed Loans o A conversion or continuation of
Committed Loans
On _________________________________ (a Business Day).
In the principal amount of $_____________.
Type of Committed Loan requested to be borrowed or to which existing Committed Loans are to be continued or converted:
o Base Rate Loan
o Eurocurrency Rate Loans: with an Interest Period of ____ month(s)1.
- Currency: ____________.
[continues on next page]
1 One, two, three or six months.
[In accordance with the requirements of Section 4.02 of the Agreement, the Borrower hereby reaffirms the representations and warranties set forth in the Agreement and in the other Loan Documents as provided in clause (a) of such Section and confirms that no Default or Event of Default exists or will result from the Committed Borrowing requested herein or the application of the proceeds thereof.
The Committed Borrowing requested herein complies with the provisos to the first sentence of Section 2.01 of the Agreement.]2
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
2 Include only in the case of a notice of Committed Borrowing (and not for any conversion or continuation).
EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date: ____________, _____
To: Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The Borrower hereby requests a Swing Line Loan:
On ________________________________ (a Business Day).
In the principal amount of $_____________.
Comprised of:
o Base Rate Loan
o Fixed Eurocurrency Rate Loan
In accordance with the requirements of Section 4.02 of the Agreement, the Borrower hereby reaffirms the representations and warranties set forth in the Agreement and in the other Loan Documents as provided in clause (a) of such Section and confirms that no Default or Event of Default exists or will result from the Swing Line Borrowing requested herein or the application of the proceeds thereof.
The Swing Line Borrowing requested herein complies with the provisos to the first sentence of Section 2.04(a) of the Agreement.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
EXHIBIT C
FORM OF REVOLVING NOTE
________________
FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to _______________________ (or its registered assigns) (the “Revolving Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Revolving Loan from time to time made by the Revolving Lender to the Borrower under that certain Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (collectively, together with the Operating Partnership, the “Guarantors”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. Except as otherwise provided in Section 2.04(f) of the Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to the Administrative Agent for the account of the Revolving Lender in the applicable currency in Same Day Funds at the Administrative Agent’s Office for such currency. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand in accordance with the terms of the Agreement, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Revolving Note is one of the Revolving Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Revolving Note shall become, or may be declared to be, immediately due and payable, all as provided in the Agreement. Revolving Loans made by the Revolving Lender shall be evidenced by one or more loan accounts or records maintained by the Revolving Lender in the ordinary course of business. The Revolving Lender may also attach schedules to this Revolving Note and endorse thereon the date, amount, currency and maturity of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Revolving Note.
[signature page follows]
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
LOANS AND PAYMENTS WITH RESPECT THERETO
| Date | Type of<br>Loan<br>Made | Currency | Amount of<br>Loan Made | End of<br>Interest<br>Period | Amount of<br>Principal or<br>Interest<br>Paid This<br>Date | Outstanding<br>Principal<br>Balance This<br>Date | Notation<br>Made By | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
_______________________
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the ______________________________ of Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Credit Parties, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
- Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of [_______] (the “Statement Date”), together with the report and opinion of an independent certified public accountant required by such section.
[Use following paragraphs for fiscal quarter-end financial statements]
Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of [_______] (the “Statement Date”). Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the Statement Date.
As of the date hereof, the Debt Rating (if any) is ________.
A review of the activities of the Credit Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Credit Parties performed and observed all of their respective Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, no Default or Event of Default exists.]
--or—
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
[signature page follows]
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of _______________, _____________.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
For the Quarter/Year ended (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
| I. | Section 7.09(a) — Fixed Charge Coverage Ratio. | |||
|---|---|---|---|---|
| A. | Adjusted EBITDA for the four quarter period ended on Statement Date: | $__________ | ||
| B. | Debt Service of the Borrower and its Subsidiaries for the four quarter period ended on Statement Date: | $_________ | ||
| C. | Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during the four quarter period ended on Statement Date: | $_________ | ||
| D. | Line I.B. + Line I.C.: | $__________ | ||
| E. | Fixed Charge Coverage Ratio (Line I.A. ÷ Line I.D.): | ____ : 1.00 | ||
| F. | Compliance Ratio: | >1.50:1.00 | ||
| G. | Covenant Compliance: | Yes __ No __ | ||
| II. | Section 7.09(b) — Secured Debt Ratio. | |||
| A. | Secured Debt of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $_________ | ||
| C. | Secured Debt to Adjusted Tangible Assets (Line II.A. ÷ Line II.B.): | _________% | ||
| D. | Compliance Ratio: | <40.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition3: | <45.0% | |||
| E. | Covenant Compliance: | Yes __ No __ | ||
| III. | Section 7.09(c) — Leverage Ratio. | |||
| A. | Adjusted Total Indebtedness at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| *** | ||||
| 3 See Section 7.09(b)(ii) of the Credit Agreement. |
| C. | Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness at Statement Date: | $__________ | |
|---|---|---|---|
| D. | Line III.B. - Line III.C.: | $_________ | |
| E. | Line III.A. ÷ Line III.D.: | ________% | |
| F. | Compliance Ratio: | <60.0% | |
| For the four quarters ending subsequent to the consummation of a Material Acquisition4: | <65.0% | ||
| G. | Covenant Compliance: | Yes __ No __ | |
| IV. | Section 7.09(d) — Minimum Book Value. | ||
| A. | Minimum Book Value at Statement Date: | $__________ | |
| B. | 50% of net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds): | $__________ | |
| C. | 2,000,000,000 + Line IV.B.: | $__________ | |
| D. | Compliance Ratio: Line IV.A. > Line IV.C.: | ||
| E. | Covenant Compliance: | Yes __ No __ | |
| V. | Section 7.09(e) — Unsecured Interest Coverage Ratio. | ||
| A. | aggregate Adjusted NOI from the Qualified Asset Pool Properties for the four fiscal quarter period ending on the Statement Date: | $__________ | |
| B. | aggregate Interest Charges for the four quarter period ended on the Statement Date in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt): | $__________ | |
| C. | Line V.A. ÷ Line V.B.: | ______:1.00 | |
| D. | Compliance Ratio: | >1.75:1.00 | |
| E. | Covenant Compliance: | Yes __ No __ | |
| VI. | Section 7.09(f) — Unsecured Leverage Ratio. | ||
| A. | aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |
| *** | |||
| 4 See Section 7.09(c)(ii) of the Credit Agreement. |
All values are in US Dollars.
| B. | Obligor Subsidiary Debt: | $__________ | ||
|---|---|---|---|---|
| C. | Adjusted Unencumbered Asset Value at Statement Date: | $__________ | ||
| D. | amount of Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in connection with the determination of aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| E. | Line VI.A. - Line VI.B. | $__________ | ||
| F. | Line VI.C. — Line VI.D. | $__________ | ||
| G. | Unsecured Leverage Ratio (Line VI.E. ÷ Line VI.F.): | __________% | ||
| H. | Compliance Ratio: | <60.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition5: | <65.0% | |||
| I. | Covenant Compliance: | Yes __ No __ | ||
| VII. | Section 7.04 — Restricted Payments. | |||
| A. | Restricted Payments by Borrower for the four quarter period ended on the Statement Date: | $__________ | ||
| B. | Funds From Operations of Borrower and its Subsidiaries for the four quarter period ending on the Statement Date: | $__________ | ||
| C. | (Line VII.A. ÷ Line VII.B.): | _________% | ||
| D. | Compliance Percentage: | <95% | ||
| E. | Covenant Compliance: | Yes __ No __ | ||
| o Compliance based on Line VII.D. percentage | ||||
| o Compliance based on REIT Status or to avoid payment of federal or state income or excise tax | ||||
| VIII. | Section 7.02(f) and (g) - Investments. | |||
| A. | Development Investments at the Statement Date: | $__________ | ||
| B. | Undeveloped land without improvements at the Statement Date: | $__________ | ||
| C. | Real Property (other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, | |||
| *** | ||||
| 5 See Section 7.09(f)(ii) of the Credit Agreement. |
| health sciences or technology purposes (and appurtenant amenities) at the Statement Date: | $__________ | |||
|---|---|---|---|---|
| D. | Sum of Line VIII.A. + Line VIII.B. + Line VIII.C.: | $__________ | ||
| E. | Adjusted Tangible Assets at the Statement Date: | $__________ | ||
| F. | Line VIII.D. ÷ Line VIII.E.: | _________% | ||
| G. | Compliance Percentage: | <35% | ||
| H. | Covenant Compliance: | Yes __ No __ | ||
| I. | Other non-Real Property Investments at the Statement Date (not otherwise permitted under Section 7.02): | $__________ | ||
| J. | Line VIII.I. ÷ Line VIII.E.: | _________% | ||
| K. | Compliance Percentage: | <15% | ||
| L. | Covenant Compliance: | Yes __ No __ |
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]6 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]7 Assignee identified in item 2 below ([the][each, an] “Assignee”). **[It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]**8 **hereunder are several and not joint.]**9 Capitalized terms used but not defined herein shall have the meanings given to them in the Third Amended and Restated Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto in the amounts and equal to the percentage interest**[s]** identified below of the outstanding rights and obligations under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as
6 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
7 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
8 Select as appropriate.
9 Include bracketed language if there are either multiple Assignors or multiple Assignees.
expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
Assignor**[s]**:
Assignee**[s]**: [and is an Affiliate/Approved Fund of [identify Lender]]
Borrower: Alexandria Real Estate Equities, Inc., a Maryland corporation
Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement
5. Credit Agreement: Third Amended and Restated Credit Agreement, dated as of April [30], 2012, among Alexandria Real Estate Equities, Inc., as Borrower, Alexandria Real Estate Equities, L.P., as a Guarantor, the other Guarantors (if any) party thereto, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent, L/C Issuer, and Swing Line Lender.
- Assigned Interest**[s]**:
| Facility Assigned | Aggregate Amount of Commitment/Loans for all Lenders* | Amount of Commitment/Loans Assigned* | Percentage Assigned<br>of<br>Commitment/Loans | CUSIP Number | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| % | |||||||||||
| % | |||||||||||
| % | |||||||||||
All values are in US Dollars.
[7. Trade Date: ]
Effective Date: , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
| ASSIGNOR**[S]** | |||||
|---|---|---|---|---|---|
| [NAME OF ASSIGNOR] | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| ASSIGNEE**[S]** | |||||
| [NAME OF ASSIGNEE] | |||||
| By: | |||||
| Name: | |||||
| Title: |
| Consented to, if applicable, and Accepted: | |||||
|---|---|---|---|---|---|
| BANK OF AMERICA, N.A., | |||||
| as Administrative Agent | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| BANK OF AMERICA, N.A., | |||||
| as L/C Issuer and Swing Line Lender | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| Consented to, if applicable: | |||||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||||
| a Maryland corporation | |||||
| By: | |||||
| Name: | |||||
| Title: |
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
- Representations and Warranties.
1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.06(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements referred to in Section 5.05 thereof or delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
- Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of
interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.
- General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT F
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of [date], is by and between _______________, a _______________ [corporation], a Domestic Subsidiary that is a Wholly-Owned Subsidiary (the “Subsidiary”), the Borrower (as hereinafter defined) and the Administrative Agent (as hereinafter defined) pursuant to that Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, supplemented, extended or otherwise modified in writing from time to time, the “Credit Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (collectively, with Operating Partnership, the “Guarantors” and each individually, a “Guarantor”), each lender from time to time party thereto (individually, a “Lender” and collectively, the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms not otherwise defined herein are defined in the Credit Agreement.
The Borrower has requested, pursuant to Section 11.08 of the Credit Agreement, that the Subsidiary become a Guarantor. Accordingly, the Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders:
The Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Subsidiary will be deemed to be a party to the Credit Agreement and a “Guarantor” for all purposes of the Credit Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent, as provided in Article XI of the Credit Agreement, the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof.
The Subsidiary acknowledges and confirms that it has received a copy of the Credit Agreement and the Schedules and Exhibits thereto.
The Borrower, on behalf of the Credit Parties, confirms that all of the Obligations under the Credit Agreement are, and upon the Subsidiary becoming a Guarantor shall continue to be, in full force and effect.
The Borrower and the Subsidiary agree that at any time and from time to time, upon the written request of the Administrative Agent, each of the Borrower and the Subsidiary will execute and deliver such further documents and do such further acts and things as the Administrative Agent may reasonably request in order to effectuate the purposes of this Agreement.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the Subsidiary and the Borrower has caused this Joinder Agreement to be duly executed by its authorized officers, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
| [______________________________________] | ||||||
|---|---|---|---|---|---|---|
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| BANK OF AMERICA, N.A., | ||||||
| as Administrative Agent for itself and the other Lenders | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Consented to: | ||||||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | ||||||
| a Maryland corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: |
EXHIBIT G
FORM OF LENDER JOINDER AGREEMENT
This LENDER JOINDER AGREEMENT (this “Agreement”), dated as of ___________ __, _____ is entered into by and between ____________________________________ (the “Additional Lender”) and the Administrative Agent (as hereinafter defined) pursuant to that certain Third Amended and Restated Credit Agreement, dated as of April [30], 2012 (as amended, restated, amended and restated, supplemented, extended or otherwise modified in writing from time to time, the “Credit Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (collectively, with Operating Partnership, the “Guarantors”), each lender from time to time party thereto (the “Existing Lenders” and together with the Additional Lender, individually, a “Lender” and collectively, the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms not otherwise defined herein are defined in the Credit Agreement.
The Additional Lender desires to become a Lender pursuant to the terms of the Credit Agreement.
Accordingly, the Additional Lender hereby agrees as follows with the Administrative Agent:
The Additional Lender hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Additional Lender will be deemed to be a party to the Credit Agreement and a “Lender” for all purposes of the Credit Agreement and the other Loan Documents, and shall have all of the rights and obligations of a Lender thereunder as fully as if it has executed the Credit Agreement and the other Loan Documents. The Additional Lender hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement and in the Loan Documents which are binding upon the Lenders, including, without limitation all of the authorizations of the Lenders set forth in Article IX of the Credit Agreement, as supplemented from time to time in accordance with the terms thereof.
The Administrative Agent confirms that all of the obligations of the Existing Lenders under the Credit Agreement are, and upon the Additional Lender becoming a Lender shall continue to be, in full force and effect. The Administrative Agent further confirms that immediately upon execution of this Agreement by the parties hereto, that the Additional Lender shall become a Lender under the Credit Agreement.
The Additional Lender agrees (i) that, concurrently herewith, it will execute and deliver to the Administrative Agent the Bank of America Agent Questionnaire attached hereto as Schedule 1, and (ii) that, at any time and from time to time, upon the written request of the Administrative Agent, it will execute and deliver such further documents and do such further acts and things as the Administrative Agent may reasonably request in order to effect the purposes of this Agreement.
The Additional Lender’s new interest shall be:
| Credit Facility | Aggregate Amount of<br>Commitment/Loans for<br>all Lenders | Amount of<br>Commitment/Loans for<br>Additional Lender | Additional Lenders’<br>Percentage of Aggregate<br>Amount of<br>Commitment/Loans |
|---|---|---|---|
| $ | $ | % |
The Additional Lender (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the date hereof, it shall be bound by the provisions of the Credit Agreement and, to the extent of its Applicable Percentage of the Commitments, shall have the rights and obligations of a Lender thereunder, (iii) it has received a copy of the Credit Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement on the basis of which it has made such analysis and decision, and (iv) attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement (including Section 3.01 thereof), duly completed and executed by the Additional Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Administrative Agent and the Additional Lender have caused this Agreement to be duly executed by their authorized officers, and Borrower has caused the same to be accepted by its authorized officer, as of the day and year first above written.
| [______________________________________] | ||||||
|---|---|---|---|---|---|---|
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| BANK OF AMERICA, N.A., | ||||||
| as Administrative Agent for itself and the other Existing Lenders | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| [BANK OF AMERICA, N.A., | ||||||
| as L/C Issuer and Swing Line Lender | ||||||
| By: | ||||||
| Name: | ||||||
| Title:] | ||||||
| Consented to: | ||||||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | ||||||
| a Maryland corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: |
SCHEDULE 1
BANK OF AMERICA AGENT QUESTIONNAIRE
EXHIBIT H-1
FORM OF BID REQUEST
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Third Amended and Restated Credit Agreement dated as of April [30], 2012 (as amended from time to time, the “Credit Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, each lender from time to time party thereto (individually, a “Lender” and collectively, the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.
The Revolving Lenders are invited to make Bid Loans:
On ____________________________________ (a Business Day).
In an aggregate amount not exceeding $________________ (with any sublimits set forth below).
Comprised of (select one):
| o Bid Loans based on an Absolute Rate | o Bid Loans based on Eurocurrency Rate | |
|---|---|---|
| Bid Loan<br><br>No. | Interest Period<br>requested | Maximum principal<br><br>amount requested |
| --- | --- | --- |
| 1 | _______days/mos | $____________ |
| 2 | _______days/mos | $____________ |
| 3 | _______days/mos | $____________ |
The Bid Borrowing requested herein complies with the requirements of the proviso to the first sentence of Section 2.04A(a) of the Credit Agreement.
The Borrower authorizes the Administrative Agent to deliver this Bid Request to the Lenders. Responses by the Lenders must be in substantially the form of Exhibit H-2 to the Credit Agreement and must be received by the Administrative Agent by the time specified in Section 2.04A(c) of the Credit Agreement for submitting Competitive Bids.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||||
|---|---|---|---|---|---|
| a Maryland corporation | |||||
| By: | |||||
| Name: | |||||
| Title: |
EXHIBIT H-2
FORM OF COMPETITIVE BID
_____________, ____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Third Amended and Restated Credit Agreement dated as of April [30], 2012 (as amended from time to time, the “Credit Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, each lender from time to time party thereto (individually, a “Lender” and collectively, the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.
In response to the Bid Request dated ________________, ____, the undersigned offers to make the following Bid Loan(s):
Borrowing date: ________________ (a Business Day).
In an aggregate amount not exceeding $____________(with any sublimits set forth below).
Comprised of:
| Bid Loan No. | Interest Period<br><br>offered | Bid Maximum | Absolute Rate Bid<br>or Eurocurrency<br>Margin Bid* |
|---|---|---|---|
| 1 | _______days/mos | $________________ | (- +) ________% |
| 2 | _______days/mos | $________________ | (- +) ________% |
| 3 | _______days/mos | $________________ | (- +) ________% |
Contact Person: ____________ Telephone:________________
| [LENDER] | ||||
|---|---|---|---|---|
| By: | ||||
| Name: | ||||
| Title: |
******************************************************************************
THIS SECTION IS TO BE COMPLETED BY THE BORROWER IF IT WISHES TO ACCEPT ANY OFFERS CONTAINED IN THIS COMPETITIVE BID:
* Expressed in multiples of 1/100th of a basis point.
The offers made above are hereby accepted in the amounts set forth below:
| Bid Loan No. | Principal Amount Accepted |
|---|---|
| $ | |
| $ | |
| $ |
ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation
| By: | ||||
|---|---|---|---|---|
| Name: | ||||
| Title: | ||||
| Date: |
Exhibit 10.3
Execution Version
FIRST AMENDMENT
TO
AMENDED AND RESTATED TERM LOAN AGREEMENT
Dated as of April 30, 2012
among
ALEXANDRIA REAL ESTATE EQUITIES, INC. and
ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
as the Credit Parties,
CITIBANK, N.A.,
as Administrative Agent,
and
The Lenders Party Hereto
with
RBC CAPITAL MARKETS1
and
THE ROYAL BANK OF SCOTLAND PLC,
as Co-Syndication Agents,
THE BANK OF NOVA SCOTIA
and
COMPASS BANK,
as Co-Documentation Agents,
and
CITIGROUP GLOBAL MARKETS INC.,
RBC CAPITAL MARKETS,
and
RBS SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Running Managers
1 RBC Capital Markets is a marketing name for the investment banking activities of Royal Bank of Canada and its affiliates.
FIRST AMENDMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT, dated as of April 30, 2012 (this “Amendment”), is entered into among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Parent”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (the “Operating Partnership”); collectively, the Parent and the Operating Partnership may be referred to herein as the “Credit Parties”), certain lenders party to the Existing Term Loan Agreement described below (the “Lenders”) and Citibank, N.A., as administrative agent (the “Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Existing Term Loan Agreement described below.
W I T N E S S E T H:
WHEREAS, the Credit Parties, certain Subsidiaries of the Operating Partnership party thereto from time to time (collectively, the “Subsidiary Borrowers”), the Lenders party thereto and the Administrative Agent have entered into that certain Amended and Restated Term Loan Agreement (as otherwise amended or modified, the “Existing Term Loan Agreement”), dated as of June 30, 2011 (such date, the “Original Effective Date”);
WHEREAS, pursuant to that certain release dated as of February 29, 2012 each of the Subsidiary Borrowers (as defined in the Existing Term Loan Agreement) was released from its obligations under the Existing Term Loan Agreement and the other Loan Documents (as defined in the Existing Term Loan Agreement) in accordance with Section 10.23 of the Existing Term Loan Agreement.
WHEREAS, the Credit Parties have, concurrent with the effectiveness of this Amendment entered into a $1.5 billion revolving credit facility (the “New Revolver”), which New Revolver is evidenced by (i) that certain Third Amended and Restated Credit Agreement dated as of April 30, 2012 (the “New Revolving Credit Agreement”), by and among the Parent, the Operating Partnership, each lender from time to time party thereto, and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and (ii) the other Loan Documents (as such term is defined in the New Revolving Credit Agreement) relating thereto;
WHEREAS, the Credit Parties have requested that the Required Lenders agree to amend certain provisions of the Existing Term Loan Agreement to conform such provisions to corresponding provisions under the New Revolver and the New Revolving Credit Agreement, all as more particularly set forth herein; and
WHEREAS, subject to the terms and conditions herein, the Required Lenders have agreed to amend the Existing Term Loan Agreement, as more fully set forth below;
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1 . AMENDMENTS TO EXISTING TERM LOAN AGREEMENT
(a) Effective on the Amendment Effective Date (as defined below), the Existing Term Loan Agreement is hereby amended to read in the form attached hereto as Exhibit A (as so amended, the “Amended Term Loan Agreement”).
(b) Without limiting the foregoing, effective on the Amendment Effective Date, Schedule 5.18 annexed to the Existing Term Loan Agreement is hereby deleted in its entirety.
(c) Without limiting the foregoing, effective on the Amendment Effective Date, the form of Compliance Certificate attached as Exhibit D to the Existing Term Loan Agreement is hereby amended to read in the form attached hereto as Exhibit B.
2 . EFFECTIVENESS
This Amendment shall become effective on the day (the “Amendment Effective Date”) on which each of the following conditions precedent has been satisfied:
(a) Amendment. Receipt by the Administrative Agent of executed counterparts of this Amendment, duly executed by each Credit Party, the Administrative Agent and the Required Lenders.
(b) Resolutions, Etc. Receipt by the Administrative Agent of (i) such resolutions or other action, incumbency certificates of Responsible Officers of each Credit Party, as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and (ii) certified copies of the Organization Documents of each Credit Party.
(c) Good Standing. Receipt by the Administrative Agent of evidence that each Credit Party is validly existing and in good standing in its jurisdiction of organization.
(d) Officer’s Certificate. Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Borrower stating that (i) no Default or Event of Default exists as of the Amendment Effective Date, either before or immediately after giving effect to this Amendment and (ii) the representations and warranties contained in Article V of the Existing Term Loan Agreement and the other Loan Documents are true and correct in all material respects, on and as of the Amendment Effective Date, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case, they are true and correct in all material respects as of such earlier date, and (B) that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Existing Term Loan Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Existing Term Loan Agreement.
(e) Fees and Expenses. Receipt by the Administrative Agent of reimbursement of all fees, costs and expenses of the Administrative Agent and the lead arrangers incurred in connection with this Amendment and the transactions contemplated by this Amendment on the Amendment Effective Date, to the extent invoiced prior to the Amendment Effective Date.
(f) Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions of legal counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, dated as of the Amendment Effective Date.
3 . MISCELLANEOUS
(a) Ratification of Loan Documents.
(i) The term “Agreement” as used in each of the Loan Documents shall, as of and following the Amendment Effective Date, mean the Existing Term Loan Agreement as amended and modified by this Amendment to read in the form of the Amended Term Loan Agreement attached as Exhibit A.
(ii) Each Credit Party acknowledges and consents to the modifications set forth herein (and as reflected in the form of the Amended Term Loan Agreement attached as Exhibit A) and agrees that this Amendment does not impair, reduce or limit any of its respective obligations under the Loan Documents and that, after the date hereof, this Amendment shall constitute a Loan Document.
(iii) The Existing Term Loan Agreement and each other Loan Document, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
(iv) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein or as provided in the exhibits hereto, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, or constitute a waiver of any provision of any of the Loan Documents.
(v) This Amendment shall not extinguish the obligations for the payment of money outstanding under the Existing Term Loan Agreement or the Amended Term Loan Agreement. Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Existing Term Loan Agreement, which shall remain in full force and effect, except to any extent modified hereby or as provided in the exhibits hereto. Nothing implied in this Amendment or in any other document contemplated hereby shall be construed as a release or other discharge of any of the Credit Parties from the Loan Documents.
(b) Authority/Enforceability. The Credit Parties represent and warrant to the Administrative Agent as follows:
(i) They have taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered by the Credit Parties and constitute the Credit Parties’ legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(iii) The execution and delivery of this Amendment does not (A) violate, contravene or conflict with any provision of their Organization Documents or (B) materially violate, contravene or conflict with any Law applicable to them.
(c) Counterparts/Telecopy. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of executed counterparts of this Amendment by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an original shall be delivered if requested by the Administrative Agent.
(d) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(e) Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(f) Loan Documents Executed Prior to the Amendment Effective Date. The parties hereto acknowledge and agree that each of the Loan Documents (including without limitation each of the Notes) executed as of the Original Effective Date, or at any time prior to the Amendment Effective Date, by the Operating Partnership in its capacity as a “Borrower” (as such term is defined in the Existing Term Loan Agreement) shall be deemed to have been executed by the Operating Partnership as of such date in its capacity as a “Guarantor” (as such term is defined in the Amended Term Loan Agreement), and that no such Loan Document shall be required to be executed or re-executed by the Operating Partnership in connection with this Amendment.
(g) Compliance with Financial Covenants for Fiscal Quarter Ended March 31, 2012. Notwithstanding any provision in the Existing Term Loan Agreement to the contrary, the parties hereto acknowledge and agree that the Compliance Certificate to be delivered by the Borrower pursuant to Section 6.02(a) of the Existing Term Loan Agreement for the fiscal quarter ended March 31, 2012 shall be in the form attached hereto as Exhibit B and shall prepared in accordance with, and shall demonstrate compliance with the financial and other applicable covenants set forth in, the Amended Term Loan Agreement, as if the Amended Term Loan Agreement were in effect as of such fiscal quarter end date.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Amended and Restated Term Loan Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||||||
|---|---|---|---|---|---|---|---|
| a Maryland corporation | |||||||
| By: | /s/ Dean A. Shigenaga | ||||||
| Name: | Dean A. Shigenaga | ||||||
| Title: | Chief Financial Officer | ||||||
| ALEXANDRIA REAL ESTATE EQUITIES, L.P., a<br>Delaware limited partnership | |||||||
| By: ARE-QRS Corp., a Maryland corporation, | |||||||
| general partner | |||||||
| By: | /s/ Dean A. Shigenaga | ||||||
| Name: | Dean A. Shigenaga | ||||||
| Title: | Chief Financial Officer |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
ADMINISTRATIVE AGENT:
| CITIBANK, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ John C. Rowland | |||
| Name: | John C. Rowland | |||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| THE BANK OF NEW YORK MELLON | ||||
|---|---|---|---|---|
| By: | /s/ Kenneth R. McDonnell | |||
| Name: | Kenneth R. McDonnell | |||
| Title: | Managing Director |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| The Bank of Nova Scotia | ||||
|---|---|---|---|---|
| By: | /s/ Christopher Usas | |||
| Name: | Christopher Usas | |||
| Title: | Director |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. | ||||
|---|---|---|---|---|
| By: | /s/ Charles Stewart | |||
| Name: | Charles Stewart | |||
| Title: | Director |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDER:
| BANK OF THE WEST, | ||||
|---|---|---|---|---|
| a California banking corporation | ||||
| By: | /s/ Irina Galieva | |||
| Name: | Irina Galieva | |||
| Title: | Vice President/Documentation Manager | |||
| --- | --- | --- | --- | --- |
| By: | /s/ Ben Arroyo | |||
| Name: | Ben Arroyo | |||
| Title: | Vice President/Syndications Officer, Senior |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| CAPITAL ONE, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ Frederick H. Denecke | |||
| Name: | Frederick H. Denecke | |||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| CATHAY UNITED BANK, LTD. | ||||
|---|---|---|---|---|
| By: | /s/ Alex Wu | |||
| Name: | Alex Wu | |||
| Title: | SVP & General Manager |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| CITIBANK, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ John Rowland | |||
| Name: | John Rowland | |||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| COMPASS BANK | ||||
|---|---|---|---|---|
| By: | /s/ Brian Tuerff | |||
| Name: | Brian Tuerff | |||
| Title: | Senior Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| MANUFACTURERS BANK, | ||||
|---|---|---|---|---|
| By: | /s/ Diana A. Wilson | |||
| Name: | Diana A. Wilson | |||
| Title: | Sr. Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| MIDFIRST BANK, a federally chartered savings association | |||||
|---|---|---|---|---|---|
| By: | /s/ Darrin Rigler | ||||
| Name: | Darrin Rigler | ||||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| PNC Bank, NA | |||||
|---|---|---|---|---|---|
| By: | /s/ Tyler Lowry | ||||
| Name: | Tyler Lowry | ||||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| REGIONS BANK | |||||
|---|---|---|---|---|---|
| By: | /s/ Michael R. Mellott | ||||
| Name: | Michael R. Mellott | ||||
| Title: | Director |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| Royal Bank of Canada | |||||
|---|---|---|---|---|---|
| By: | /s/ Dan LePage | ||||
| Name: | Dan LePage | ||||
| Title: | Authorized Signatory |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| THE ROYAL BANK OF SCOTLAND FINANCE (IRELAND),<br>as Lender | |||||
|---|---|---|---|---|---|
| By: | /s/ Len O’Connell | ||||
| Name: | Len O’Connell | ||||
| Title: | Director | ||||
| By: | /s/ Mulris O’Dwyer | ||||
| --- | --- | --- | --- | --- | |
| Name: | Mulris O’Dwyer | ||||
| Title: | Director |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| The Royal Bank of Scotland plc | |||||
|---|---|---|---|---|---|
| By: RBS Securities Inc., as Agent | |||||
| By: | /s/ Brett Thompson | ||||
| Name: | Brett Thompson | ||||
| Title: | Senior Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| SOVEREIGN BANK | ||||
|---|---|---|---|---|
| By: | /s/ Frederick H. Murphy, Jr. | |||
| Name: | Frederick H. Murphy, Jr. | |||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| Sumitomo Mitsui Banking Corporation | ||||
|---|---|---|---|---|
| By: | /s/ William G. Karl | |||
| Name: | William G. Karl | |||
| Title: | General Manager |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| SUNTRUST BANK | ||||
|---|---|---|---|---|
| By: | /s/ Gregory T. Horstram | |||
| Name: | Gregory T. Horstram | |||
| Title: | Senior Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
LENDERS:
| UNION BANK, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ Katherine Davidson | |||
| Name: | Katherine Davidson | |||
| Title: | Vice President |
Alexandria Real Estate Equities – Signature Page to First Amendment to Amended and Restated Term Loan Agreement
EXHIBIT A
Amended Term Loan Agreement
(attached)
CONFORMED TO FIRST AMENDMENT
TO THE AMENDED AND RESTATED
TERM LOAN AGREEMENT
AMENDED AND RESTATED TERM LOAN AGREEMENT
Dated as of June 30, 2011
among
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
as the Borrower,
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
as a Guarantor,
CITIBANK, N.A.,
as Administrative Agent,
and
The Lenders Party Hereto
with
RBC CAPITAL MARKETS2
and
THE ROYAL BANK OF SCOTLAND PLC,
as Co-Syndication Agents,
THE BANK OF NOVA SCOTIA
and
COMPASS BANK,
as Co-Documentation Agents,
and
CITIGROUP GLOBAL MARKETS INC.,
RBC CAPITAL MARKETS, and RBS SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Running Managers
2 RBC Capital Markets is a marketing name for the investment banking activities of Royal Bank of Canada and its affiliates.
TABLE OF CONTENTS
| Page | ||
|---|---|---|
| ARTICLE I DEFINITIONS AND ACCOUNTING TERMS | 1 | |
| 1.01 | Defined Terms | 1 |
| 1.02 | Other Interpretive Provisions | 26 |
| 1.03 | Accounting Terms/Financial Covenants | 26 |
| 1.04 | Times of Day | 27 |
| ARTICLE II THE COMMITMENTS AND BORROWINGS | 27 | |
| 2.01 | Term Loans | 27 |
| 2.02 | Borrowings, Conversions and Continuations of Loans | 28 |
| 2.03 | [Reserved] | 29 |
| 2.04 | [Reserved] | 29 |
| 2.05 | Prepayments | 29 |
| 2.06 | [Reserved] | 29 |
| 2.07 | Repayment of Loans | 29 |
| 2.08 | Interest | 30 |
| 2.09 | Fees | 30 |
| 2.10 | Computation of Interest and Fees | 30 |
| 2.11 | Evidence of Debt | 31 |
| 2.12 | Payments Generally; Administrative Agent’s Clawback | 31 |
| 2.13 | Sharing of Payments by Lenders | 32 |
| 2.14 | Extension of Maturity Date | 33 |
| ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY | 34 | |
| 3.01 | Taxes | 34 |
| 3.02 | Illegality | 36 |
| 3.03 | Inability to Determine Rates | 37 |
| 3.04 | Increased Costs; Reserves on Eurodollar Rate Loans | 37 |
| 3.05 | Compensation for Losses | 39 |
| 3.06 | Mitigation Obligations; Replacement of Lenders | 39 |
| ARTICLE IV CONDITIONS PRECEDENT TO THIS AGREEMENT AND THE BORROWING | 40 | |
| 4.01 | Conditions of Effectiveness of this Agreement | 40 |
| 4.02 | Additional Conditions to Borrowing | 41 |
| ARTICLE V REPRESENTATIONS AND WARRANTIES | 42 | |
| 5.01 | Existence, Qualification and Power; Compliance with Laws | 42 |
| 5.02 | Authorization; No Contravention | 42 |
| 5.03 | Governmental Authorization; Other Consents | 42 |
| 5.04 | Binding Effect | 43 |
| 5.05 | Financial Statements; No Material Adverse Effect | 43 |
| 5.06 | Litigation | 43 |
| 5.07 | No Default | 43 |
| 5.08 | Ownership of Property; Liens | 44 |
|---|---|---|
| 5.09 | Environmental Compliance | 44 |
| 5.10 | Insurance | 44 |
| 5.11 | Taxes | 44 |
| 5.12 | ERISA Compliance | 44 |
| 5.13 | Margin Regulations; Investment Company Act; REIT Status | 45 |
| 5.14 | Disclosure | 45 |
| 5.15 | Compliance with Laws | 45 |
| 5.16 | Intellectual Property; Licenses, Etc. | 46 |
| 5.17 | Property | 46 |
| 5.18 | Solvency | 46 |
| ARTICLE VI AFFIRMATIVE COVENANTS | 46 | |
| 6.01 | Financial Statements | 46 |
| 6.02 | Certificates; Other Information | 47 |
| 6.03 | Payment of Obligations | 49 |
| 6.04 | Preservation of Existence, Etc. | 49 |
| 6.05 | Maintenance of Properties | 49 |
| 6.06 | Maintenance of Insurance | 49 |
| 6.07 | Compliance with Laws | 49 |
| 6.08 | Books and Records | 49 |
| 6.09 | Inspection Rights | 50 |
| 6.10 | Use of Proceeds | 50 |
| ARTICLE VII NEGATIVE COVENANTS | 50 | |
| 7.01 | Liens | 50 |
| 7.02 | Investments | 52 |
| 7.03 | Fundamental Changes | 53 |
| 7.04 | Restricted Payments | 53 |
| 7.05 | Change in Nature of Business | 54 |
| 7.06 | Transactions with Affiliates | 54 |
| 7.07 | Burdensome Agreements | 54 |
| 7.08 | [Reserved] | 54 |
| 7.09 | Financial Covenants | 54 |
| ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES | 55 | |
| 8.01 | Events of Default | 55 |
| 8.02 | Remedies Upon Event of Default | 57 |
| 8.03 | Application of Funds | 57 |
| ARTICLE IX ADMINISTRATIVE AGENT | 58 | |
| 9.01 | Appointment and Authority | 58 |
| 9.02 | Rights as a Lender | 58 |
| 9.03 | Exculpatory Provisions | 58 |
| 9.04 | Reliance by Administrative Agent | 59 |
| 9.05 | Delegation of Duties | 59 |
| 9.06 | Successor Administrative Agent | 60 |
| 9.07 | Non-Reliance on Administrative Agent and Other Lenders | 60 |
|---|---|---|
| 9.08 | No Other Duties, Etc. | 61 |
| 9.09 | Administrative Agent May File Proofs of Claim | 61 |
| 9.10 | Collateral and Borrower Matters | 61 |
| 9.11 | No Obligations of Credit Parties | 62 |
| ARTICLE X MISCELLANEOUS | 62 | |
| 10.01 | Amendments, Etc. | 62 |
| 10.02 | Notices; Effectiveness; Electronic Communication | 63 |
| 10.03 | No Waiver; Cumulative Remedies | 65 |
| 10.04 | Expenses; Indemnity; Damage Waiver | 65 |
| 10.05 | Payments Set Aside | 66 |
| 10.06 | Successors and Assigns | 67 |
| 10.07 | Treatment of Certain Information; Confidentiality | 70 |
| 10.08 | Right of Setoff | 72 |
| 10.09 | Interest Rate Limitation | 72 |
| 10.10 | Counterparts; Integration; Effectiveness | 72 |
| 10.11 | Survival of Representations and Warranties | 73 |
| 10.12 | Severability | 73 |
| 10.13 | Replacement of Lenders | 73 |
| 10.14 | Governing Law; Jurisdiction; Etc. | 74 |
| 10.15 | Waiver of Jury Trial | 75 |
| 10.16 | USA PATRIOT Act Notice | 75 |
| 10.17 | [Reserved] | 75 |
| 10.18 | ENTIRE AGREEMENT | 75 |
| 10.19 | [Reserved] | 75 |
| 10.20 | Release of a Guarantor | 75 |
| 10.21 | No Advisory or Fiduciary Responsibility | 76 |
| ARTICLE XI GUARANTY | 77 | |
| 11.01 | The Guaranty | 77 |
| 11.02 | Obligations Unconditional | 77 |
| 11.03 | Reinstatement | 78 |
| 11.04 | Certain Additional Waivers | 78 |
| 11.05 | Remedies | 78 |
| 11.06 | Rights of Contribution | 79 |
| 11.07 | Guarantee of Payment; Continuing Guarantee | 79 |
| 11.08 | Additional Guarantors | 79 |
| SCHEDULES | ||
|---|---|---|
| 1.01 | Tech Square | |
| 2.01 | Commitments and Applicable Percentages | |
| 10.02 | Administrative Agent’s Office; Certain Addresses for Notices | |
| EXHIBITS | ||
| Form of | ||
| A | Loan Notice | |
| B | Reserved | |
| C | Note | |
| D | Compliance Certificate | |
| E | Assignment and Assumption | |
| F | Joinder Agreement |
AMENDED AND RESTATED TERM LOAN AGREEMENT
This AMENDED AND RESTATED TERM LOAN AGREEMENT is entered into as of June 30, 2011, among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors, if any, that from time to time become party to this Agreement pursuant to Section 11.08 (collectively, together with Operating Partnership, the “Guarantors”); each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”); and Citibank, N.A., as Administrative Agent, with reference to the following Recitals:
RECITALS
WHEREAS, pursuant to that certain Term Loan Agreement dated as of February 16, 2011 by and among the Borrowers (as defined therein), the Lenders (as defined therein) party thereto, and Citibank, N.A., as administrative agent for such Lenders (as amended prior to the date hereof, the “Existing Loan Agreement”), such Lenders made a $250,000,000 loan to the Borrowers (as defined in the Existing Loan Agreement);
WHEREAS, the Borrowers (as defined in the to the Existing Loan Agreement), the other parties to the Existing Loan Agreement and the New Lenders (as defined herein) desire to amend and restate the Existing Loan Agreement to, among other things, increase the loan amount to $750,000,000 and otherwise modify the terms and conditions thereof; and
WHEREAS, the Lenders are willing to increase the loan amount and otherwise modify the terms and conditions of the Existing Loan Agreement subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Loan Agreement to read in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1 .01 Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below:
“Acquisition” means, with respect to any Person, the acquisition by such Person, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, or any other property of, another Person or (b) at least a majority of the voting Equity Interests of another Person, in each case whether or not involving a merger or consolidation with such other Person.
“Act” has the meaning set forth in Section 10.16.
“Adjusted EBITDA” means, for any period of determination and without duplication, an amount equal to (a) EBITDA of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, minus (b) the Capital Improvement Reserve for the Real Property of the Borrower and its Subsidiaries, minus (c) (without duplication to the extent already deducted in the calculation of EBITDA) any Minority Interest’s share of the EBITDA of the Borrower and its Subsidiaries for such period.
“Adjusted Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to Interest Expense less any financing fees to the extent amortized and any amortization thereof (including fees payable under a Swap Contract), prepayment penalties, cost or expense associated with the early extinguishment of Indebtedness or deferred financing costs.
“Adjusted NOI” means, for any period and with respect to a Revenue-Producing Property, an amount equal to (a) NOI of that Revenue-Producing Property, minus (b) the Capital Improvement Reserve for such Revenue-Producing Property, minus (c) any Minority Interest’s share of the NOI of that Revenue-Producing Property; provided that for purposes of calculating Adjusted NOI, any Revenue-Producing Property that has a negative Adjusted NOI for the period shall be deemed to have an Adjusted NOI of zero.
“Adjusted Tangible Assets” means, as of any date of determination, without duplication, an amount equal to (a) Total Assets of Borrower and its Subsidiaries as of that date, minus (b) Intangible Assets of Borrower and its Subsidiaries as of that date, plus (c) any Minority Interest’s share of Intangible Assets minus (d) any Minority Interest’s share of Total Assets as of that date.
“Adjusted Total Indebtedness” means, as of any date of determination, without duplication, an amount equal to (a) the aggregate Total Indebtedness of the Borrower and its Subsidiaries as of such date of determination, minus (b) Excluded Indebtedness; provided, in no event shall such Excluded Indebtedness exceed an amount equal to (i) cash and Cash Equivalents of the Borrower and its Subsidiaries that are not subject to pledge, lien or control agreement (excluding statutory liens or rights of set-off in favor of any depositary bank or institution where such cash or Cash Equivalents are maintained) minus (ii) $35,000,000 (it being agreed that Excluded Indebtedness shall in no event be deemed a negative number).
“Adjusted Unencumbered Asset Value” means, as of any date of determination, (a) the Unencumbered Asset Value minus (b) any value attributable to Qualified Land and Qualified Development Assets in excess of 35% of the Unencumbered Asset Value minus (c) any value attributable to Qualified Revenue-Producing Properties, Qualified Land, Qualified Development Assets and Qualified Joint Ventures that are located outside the United States or Canada in excess of 30% of the Unencumbered Asset Value.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“Administrative Agent” means Citibank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Aggregate Commitments” means the Commitments of all the Lenders.
“Agreement” means this Amended and Restated Term Loan Agreement, as it may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time.
“Applicable Percentage” means, with respect to any Lender at any time, the following percentages (carried out to the ninth decimal place), as of the date of determination:
(a) with respect to a Lender’s right to receive payments of interest, fees, and principal with respect to Loans made by such Lender, the percentage obtained by dividing (i) the aggregate outstanding principal amount of such Lender’s Loans by (ii) the Loan Amount; and
(b) the Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, or in the records of the Administrative Agent, as applicable.
“Applicable Rate” means:
(a) the following percentages per annum, but subject to clause (b) below:
| Pricing<br>Level | Leverage Ratio | Eurodollar<br>Rate | Base Rate |
|---|---|---|---|
| 1 | < 35% | 1.65% | 0.65% |
| 2 | ³ 35% and <40% | 1.75% | 0.75% |
| 3 | ³ 40% and <50% | 1.95% | 0.95% |
| 4 | ³ 50% | 2.35% | 1.35% |
For any applicable period, the Applicable Rate shall be the rate set forth opposite the Leverage Ratio in effect from time to time.
On the Closing Date, the Applicable Rate shall be set at Pricing Level 2 above. Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date the Compliance Certificate is delivered pursuant to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered timely in accordance with such Section (at any time this clause (a) applies to the determination of the Applicable Rate), then the Applicable Rate for Pricing Level 4 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to be delivered, until the Business Day such Compliance Certificate is delivered.
(b) In the event that the Borrower achieves an Investment Grade Rating, the Borrower may, upon written notice to the Administrative Agent, elect to convert to the ratings-based pricing grid set forth below (such election, a “Ratings Grid Election”). Any Ratings Grid Election shall be irrevocable.
| Pricing<br>Level | Debt Rating<br><br>of Borrower | Eurodollar<br>Rate | Base Rate |
|---|---|---|---|
| 1 | ³ A / A2 | 1.25% | 0.25% |
| 2 | A- / A3 | 1.35% | 0.35% |
| 3 | BBB+ / Baal | 1.45% | 0.45% |
| 4 | BBB / Baa2 | 1.65% | 0.65% |
| 5 | BBB- / Baa3 | 2.00% | 1.00% |
On the Closing Date, the Applicable Rate applicable under this clause (b) shall be determined based upon the Debt Rating effective at the time of the Borrower’s election to convert to a ratings-based pricing grid. Thereafter, each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the day immediately preceding the effective date of the next such change. If the Borrower has made the Ratings Grid Election as provided above but the Borrower thereafter fails to maintain an Investment Grade Rating by at least one of S&P or Moody’s, then the Applicable Rate shall be determined pursuant to clause (a) above during the period commencing on the date the Borrower no longer has an Investment Grade Rating by at least one of S&P or Moody’s and ending on the date the Borrower makes another Ratings Grid Election.
“Appraised Value” means, as of any date of determination, without duplication, with respect to any Real Property, the appraised value (if any) thereof based on its unimproved as-is basis determined pursuant to an appraisal prepared by an M.A.I. certified appraisal and otherwise reasonably satisfactory to Administrative Agent (it being understood and agreed that in no event shall the Borrower (or any applicable Subsidiary) be required to deliver updated appraisals more frequently than once during any 24-month period).
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means CGMI, RBC and RBSSI in their capacity as joint lead arrangers and joint book running managers.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.
“Attributable Indebtedness” means, on any date, in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2010, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.
“Base Qualifications” means, for any Real Property, the following criteria:
(a) to the best of Borrower’s knowledge and belief, such Real Property is in good repair and condition, subject to ordinary wear and tear, and does not have any title, survey, environmental or other defects that would give rise to a materially adverse effect as to the value, use of or ability to sell or refinance such Real Property (it being understood and agreed that construction and redevelopment in the ordinary course do not constitute a material adverse effect on the value, use of or ability to sell or refinance such Real Property);
(b) such Real Property is Unencumbered;
(c) such Real Property is either (i) owned in fee simple absolute (or, in the case of Qualified Development Assets and Qualified Revenue-Producing Properties, through ownership of a condominium unit) or (ii) occupied by means of a leasehold interest or similar arrangement providing the right to occupy Real Property pursuant to a Mortgageable Ground Lease;
(d) such Real Property is owned or leased by (i) the Borrower, (ii) a Guarantor or (iii) a Subsidiary of the Borrower (other than an Obligor Subsidiary); and
(e) such Real Property is located in the United States, Canada, Scotland, the United Kingdom, Germany, Austria, France, Switzerland, the Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Ireland or Japan.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank as its “base rate,” and (c) the Eurodollar Rate plus 1.00%. The “base rate” is a rate set by Citibank based upon various factors including Citibank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Citibank shall take effect at the opening of business on the day specified in the public announcement of such change.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrower Materials” has the meaning set forth in Section 6.02.
“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by the Lenders pursuant to Section 2.01.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any interest rate settings as to a Eurodollar Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.
“Capital Improvement Reserve” means, with respect to any Real Property now or hereafter owned by the Borrower or its Subsidiaries, an amount equal to twenty cents ($.20) multiplied by the Net Rentable Area of the Real Property.
“Capital Lease Obligations” means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease.
“Capitalization Rate” means 7.25%.
“Cash” means money, currency or a credit balance in any demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.
“Cash Equivalents” means:
(a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof and backed by the full faith and credit of the United States having maturities of not more than one year from the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits, eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers’ acceptances, having in each case a term of not more than one year, issued by Administrative Agent or any Lender, or by any U.S. commercial bank (or any branch or agency of a non-U.S. bank licensed to conduct business in the U.S.) having combined capital and surplus of not less than $100,000,000 whose short-term securities are rated (at the time of acquisition thereof) at least A-1 by S&P and P-1 by Moody’s;
(c) demand deposits on deposit in accounts maintained at commercial banks having membership in the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder;
(d) commercial paper of an issuer rated (at the time of acquisition thereof) at least A-2 by S&P or P-2 by Moody’s and in either case having a term of not more than one year; and
(e) money market mutual or similar funds that invest primarily in assets satisfying the requirements of clauses (a) through (d) of this definition.
“Cash Interest Expense” means Adjusted Interest Expense of a Person that is paid or currently payable in Cash.
“CGMI” means Citigroup Global Markets Inc. and its successors.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption, or taking effect of any law, rule, regulation, guideline, decision, directive or treaty, (b) any change in any law, rule, regulation, directive, guideline, decision, or treaty or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline, law, rule, treaty or directive (whether or not having the force of law) by any Governmental Authority; provided that for purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, guidelines, and directives in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have gone into effect and been adopted after the date of this Agreement.
“Change of Control” means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d 3(a)(l) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 40% or more of the outstanding voting Common Stock, or (b) during any period of 12 consecutive months, individuals who at the beginning of such period constituted the board of directors of the Borrower (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office.
“Citibank” means Citibank, N.A. and its successors.
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment” means, as to each Lender, its obligation to make a Loan to the Borrower pursuant Section 2.01, in an aggregate principal amount on the Closing Date not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 hereto or the amount set forth in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Common Stock” means the common stock of the Borrower.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Confidential Information” means (a) all of the terms, covenants, conditions or agreements set forth in any letters of intent or in this Agreement or any amendments hereto and any related agreements of whatever nature, (b) the information and reports provided in compliance with the terms of this Agreement, (c) any and all information provided, disclosed or otherwise made available to the Administrative Agent and the Lenders including, without limitation, any and all plans, maps, studies (including market studies), reports or other data, operating expense information, as-built plans, specifications, site plans, drawings, notes, analyses, compilations, or other documents or materials relating to the properties or their condition or use, whether prepared by the Borrower or others, which use, or reflect, or that are based on, derived from, or are in any way related to the foregoing, and (d) any and all other information of the Borrower or any of its Subsidiaries that the Administrative Agent or any Lender may have access to including, without limitation, ideas, samples, media, techniques, sketches, specifications, designs, plans, forecasts, financial information, technical information, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, financial models and databases, software programs, software source documents, manuals, documents, properties, names of tenants or potential tenants, vendors, suppliers, distributors and consultants, and formulae related to the current, future, and proposed products and services of the Borrower or any of its Subsidiaries or tenants or potential tenants (including, without limitation, information concerning research, experimental work, development, design details and specifications, engineering, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, clients, business and contractual relationships, business forecasts, and sales and marketing plans). Confidential Information may be disclosed or accessible to the Administrative Agent and the Lenders as embodied within tangible
material (such as documents, drawings, pictures, graphics, software, hardware, graphs, charts, or disks), orally, or visually.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Party” means the Borrower or any Guarantor and “Credit Parties” means, collectively, the Borrower and the Guarantors.
“Debt Rating” means, as of any date of determination, the higher of the credit ratings then assigned to Borrower’s long-term senior unsecured debt by either of the Rating Agencies. For purposes of the foregoing, a credit rating of BBB- from S&P is equivalent to a credit rating of Baa3 from Moody’s and vice versa. A credit rating of BBB from S&P is equivalent to a credit rating of Baa2 from Moody’s and vice versa. It is the intention of the parties that if Borrower shall only obtain a Debt Rating from one of the Rating Agencies without seeking a credit rating from the other of the Rating Agencies, the Borrower shall be entitled to the benefit of the Pricing Level for such credit rating. If Borrower obtains a Debt Rating from both of the Rating Agencies, the higher of the two ratings shall control, provided that the lower rating is only one level below that of the higher rating. If, however, the lower rating is more than one level below that of the higher Debt Rating, the Pricing Level that is one level higher than the lower Debt Rating shall apply. If the Borrower has only one Investment Grade Rating, then that Debt Rating shall apply. If Borrower obtains a Debt Rating from both of the Rating Agencies and thereafter loses such rating from one of the Rating Agencies, the Borrower shall be deemed to not have a Debt Rating from such Rating Agency. At any time, if either of the Rating Agencies shall no longer perform the functions of a securities rating agency, then the Credit Parties and the Administrative Agent shall promptly negotiate in good faith to agree upon a substitute rating agency or agencies (and to correlate the system of ratings of each substitute rating agency with that of the rating agency being replaced), and pending such amendment, the Debt Rating of the other of the Rating Agencies, if one has been provided, shall continue to apply.
“Debt Service” means, for any period with respect to a Person’s Indebtedness, the sum of all Interest Charges and regularly scheduled principal payments due and payable during such period, excluding any balloon payments due upon maturity of the Indebtedness, refinancing of the Indebtedness or repayments thereof in connection with asset sales; provided that Debt Service shall not include any Minority Interest’s share of any of the foregoing. Debt Service shall include the portion of rent payable by a Person during such period under Capital Lease Obligations that should be treated as principal in accordance with GAAP but shall exclude Interest Charges related to committed construction loans.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.
“Development Investments” means, as of any date of determination, direct or indirect investments in Real Property which, as of such date, is the subject of ground-up development to be used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities); provided, that, such Real Property or any portion thereof will only constitute a Development Investment from the date construction has commenced thereon until the date on which the Real Property and applicable improvements receive a final certificate of occupancy or equivalent certification allowing legal occupancy for its intended purpose.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and dispositions due to casualty or condemnation) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Documentation Agents” means The Bank of Nova Scotia and Compass Bank, each in its capacity as co-documentation agent.
“Dollar” and “$”mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“EBITDA” means, with respect to any Person (or any asset of a Person) for any fiscal period and without double counting, the sum of (a) the Net Income of such Person (or attributable to assets of the Person) for that period, plus (b) the following to the extent deducted in calculating Net Income of such Person (i) any non-recurring loss, plus (ii) Interest Expense for that period, plus (iii) the aggregate amount of federal and state taxes on or measured by income of such Person for that period (whether or not payable during that period), plus (iv) depreciation, amortization and all other non-cash expenses (including non-cash officer compensation and any write-down of goodwill pursuant to GAAP) of such Person for that period, in each case as determined in accordance with GAAP, plus (v) transaction costs and expenses in connection with any merger or acquisition (whether or not consummated) not permitted to be capitalized pursuant to GAAP, plus (vi) severance and restructuring charges plus (vii) charges related to the early extinguishment of Indebtedness minus (c) any non-operating, non-recurring gain to the extent included in calculating Net Income of such Person (or attributable to assets of such Person).
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (on behalf of the Credit Parties) (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.
“Environmental Laws” means any and all applicable Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions governing pollution and the protection of the environment or the release of any Hazardous Materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement by the Borrower or any of its Subsidiaries pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interest” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, and other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Equity Offering” means the issuance and sale by the Borrower or the Operating Partnership of any equity securities.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA or the treatment of a Multiemployer Plan amendment as a termination under Section 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA to the extent that such determination could reasonably be expected to give rise to a Material Adverse Effect; or (h) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“Eurodollar Rate” means:
(a) means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Citibank and with a term equivalent to such Interest Period would be offered by Citibank’s London Branch (or other Citibank branch or Affiliate) to major banks in the London interbank market for Dollars at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; and
(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Citibank’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”
“Event of Default” has the meaning set forth in Section 8.01.
“Exchange Proceeds” means the net issuance proceeds from Equity Offerings, which the Borrower has designated or otherwise stated that it intends to use to make Restricted Payments on account of then existing Preferred Equity.
“Excluded Indebtedness” means, as of any date of determination, the aggregate principal amount of any Indebtedness of the Borrower and its Subsidiaries included in the definition of Total Indebtedness, as of such date of determination, either (a) which by its terms matures within twenty-four (24) months after such date of determination or (b) as to which the Borrower or any Subsidiary has the right to convert or any holder of such Indebtedness has the right to put or convert such Indebtedness within twenty-four (24) months after such date of determination.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (or any Person whose net income is measured with reference to it) (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located, or in which it is doing business, or in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) other than with respect to an assignee pursuant to a request by the Borrower under Section 10.13, any United States Federal withholding tax that is imposed on amounts payable to such Person at the time such Person becomes a party hereto (or designates a new Lending Office) or is attributable to such Person’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Person (or its assignor, if any) was entitled, at the time of its appointment or designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a) and (d) any United States Federal
withholding tax imposed by reason of a Lender’s failure to comply with the requirements of Sections 1471 through 1474 of the Code or any applicable Treasury regulations promulgated thereunder, or any official interpretations thereof.
“Existing Loan Agreement” has the meaning specified in the Recitals to this Agreement.
“Existing Maturity Date” has the meaning set forth in Section 2.14(a).
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank on such day on such transactions as determined by the Administrative Agent.
“Fee Letter” means any letter agreement dated as of the Closing Date executed and delivered by the Borrower and/or the Operating Partnership and to which any of the Arrangers and/or the Administrative Agent are party, as the same may be amended from time to time.
“Fixed Charge Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) Adjusted EBITDA for the period consisting of that fiscal quarter and the three immediately preceding fiscal quarters by (b) an amount equal to (i) Debt Service of the Borrower and its Subsidiaries for such period, plus (ii) all Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during such period.
“Foreign Lender” means any Lender that is not a United States person as defined in Section 7701(a)(30) of the Code.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funds From Operations” means, with respect to any fiscal period and without double counting, an amount equal to the Net Income (or deficit) of the Borrower and its Subsidiaries for that period computed on a consolidated basis in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures; provided that Funds From Operations shall exclude one time or non-recurring charges and impairment charges, charges from the early extinguishment of indebtedness and other non-cash charges. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect Funds From Operations on the same basis. Funds From Operations shall be reported in accordance with the NAREIT Policy Bulletin dated April 5, 2002, as amended, restated, supplemented or otherwise modified from time to time.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision or instrumentality thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Group Credit Agreement” has the meaning set forth in the definition of Group Credit Loan Documents.
Group Credit Loan Documents” means that certain Second Amended and Restated Credit Agreement, dated as of October 31, 2006 (the “Group Credit Agreement”), among the Operating Partnership, the Parent and each other borrower thereunder, as borrowers, the lenders party thereto from time to time, Bank of America, N.A., as administrative agent, and the arrangers and other agents party thereto, as amended by that certain First Amendment to Second Amended and Restated Credit Agreement dated as of December 1, 2006, that certain Second Amendment to Second Amended and Restated Credit Agreement dated as of May 2, 2007, and that certain Third Amendment to Second Amended and Restated Credit Agreement dated as of January 28, 2011 and each other Loan Document (as defined in the Group Credit Agreement as so amended and as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time) relating thereto, each as amended, amended and restated, supplemented or otherwise modified from time to time.
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance of such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors” means the Operating Partnership and, if requested by the Borrower, any other Wholly-Owned Domestic Subsidiary of the Borrower who becomes a Guarantor pursuant to Section 11.08.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated under any Environmental Law.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with
GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) Capital Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, (i) the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or is otherwise liable for such Indebtedness, except to the extent such Indebtedness is expressly made non-recourse to such Person and (ii) Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitees” has the meaning specified in Section 10.04(b).
“Intangible Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP, that are considered to be intangible assets under GAAP, including customer lists, goodwill, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
“Interest Charges” means, as of the last day of any fiscal period and without double counting, the sum of (a) Cash Interest Expense of a Person, plus (b) all interest currently payable in Cash by a Person which is incurred during that fiscal period and capitalized under GAAP, minus (c) any Minority Interest’s share of Cash Interest Expense.
“Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to (a) all interest, fees, charges and related expenses paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP, plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations, minus (or plus, as applicable) (c) amounts received (or paid) under Swap Contracts plus (d) all other amounts considered to be “interest expense” under GAAP.
“Interest Payment Date” means the fifth (5th) calendar day of each month; provided that if the fifth (5th) calendar day of any month falls on a day other than a Business Day, then the Interest Payment Date shall be the immediately succeeding Business Day or, if any such date would be after the Maturity Date, the Maturity Date.
“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or, in the case of any Eurodollar Rate Loan, converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in the applicable Loan Notice, as the case may be; provided that:
(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but reduced by any amounts received in respect of such Investment which constitute capital distributions, principal, sale proceeds or otherwise in respect thereof.
“Investment Grade Rating” means a Debt Rating of BBB- or better from S&P or a Debt Rating of Baa3 or better from Moody’s.
“IP Rights” has the meaning specified in Section 5.16.
“IRS” means the United States Internal Revenue Service.
“Joinder Agreement” means a joinder agreement substantially in the form attached hereto as Exhibit F.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lender” has the meaning specified in the introductory paragraph.
“Lender Party” has the meaning set forth in Section 10.07.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) Adjusted Total Indebtedness as of such date by (b) (i) the Adjusted Tangible Assets as of such date minus (ii) the amount of Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness as of such date.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, deposit arrangement, encumbrance, lien (statutory or other), charge, or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing, other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest).
“Loan” means a term loan of any Type made to the Borrower by the Lenders pursuant to Section 2.01.
“Loan Amount” means, at any time, the aggregate principal amount of the Loans then outstanding, which on the Closing Date is equal to $750,000,000.
“Loan Documents” means this Agreement, each Note, the Fee Letter and any other instrument, document or agreement from time to time delivered by a Credit Party in connection with this Agreement.
“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
“Material Acquisition” means an Acquisition by the Borrower or any of its Subsidiaries in which the value of the assets acquired in such Acquisition exceeds five percent (5%) of Total Assets of the Borrower and its Subsidiaries (after giving effect to such Acquisition).
“Material Adverse Effect” means any set of circumstances or events which (a) has had or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document (other than as a result of any action or inaction of the Administrative Agent or any Lender), (b) has been or could reasonably be expected to be material and adverse to the business or
condition (financial or otherwise) of the Borrower and its Subsidiaries on a consolidated basis or (c) has materially impaired or could reasonably be expected to materially impair the ability of the Credit Parties to perform the Obligations.
“Material Unsecured Indebtedness” means outstanding third party unsecured borrowed money Indebtedness (including guaranties thereof), in a principal amount equal to or greater than $25,000,000.
“Maturity Date” means the later of (a) June 30, 2015, and (b) if the Existing Maturity Date is extended pursuant to Section 2.14, such extended Maturity Date as determined pursuant to such Section 2.14.
“Maximum Rate” has the meaning set forth in Section 10.09.
“Minimum Book Value” means, as of any date of determination, without duplication, the sum of: (a) all consolidated assets of the Borrower and its Subsidiaries as of that date, plus (b) the Borrower and its Subsidiaries’ minority interest in unconsolidated assets as of that date, minus (i) Intangible Assets of the Borrower and its Subsidiaries and (ii) Total Liabilities of the Borrower and its Subsidiaries as of that date.
“Minority Interest” means, with respect to any non-Wholly-Owned Subsidiary, direct or indirect, of the Borrower, any ownership interest of a third party in such Subsidiary.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgageable Ground Lease” means on any date of determination, a lease or similar arrangement providing the right to occupy Real Property (a) which is granted by the fee owner of Real Property, (b) which has a remaining term (calculated only once on the Closing Date or the date the Real Property subject to such lease becomes a Qualified Asset Pool Property) of not less than twenty-five (25) years, including extension options exercisable solely at the discretion of the Borrower or any applicable Subsidiary, (c) under which no material default has occurred and is continuing and (d) with respect to which a security interest may be granted (i) without the consent of the lessor or (ii) pursuant to the consent of the lessor, which consent has been granted.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Negative Pledge” means a Contractual Obligation that contains a covenant binding on the Borrower and its Subsidiaries that prohibits Liens on any of their Property, other than (a) any such covenant contained in a Contractual Obligation granting or relating to a particular Lien which affects only the property that is the subject of such Lien and (b) any such covenant that does not apply to Liens which may secure the Obligations now or in the future.
“Net Income” means, for any period and for any Person, the net income of the Person for that period, determined in accordance with GAAP; provided that there shall be excluded therefrom the net amount of any real estate gains or losses.
“Net Rentable Area” means with respect to any Real Property, the floor area of any buildings, structures or improvements available for leasing to tenants (excluding storage lockers and parking spaces) determined in accordance with the Borrower’s or its applicable Subsidiary’s rent roll for such Real
Property, the manner of such determination shall be consistently applied for all Real Property, unless otherwise approved by the Administrative Agent.
“New Lenders” means all of the “Lenders” party to, and as defined in, this Agreement, which were not Lenders under the Existing Loan Agreement immediately prior to the Closing Date.
“NOI” means, with respect to any Revenue-Producing Property and with respect to any fiscal period, the sum of (a) the net income of that Revenue-Producing Property for that period, plus (b) Interest Expense of that Revenue-Producing Property for that period, plus (c) the aggregate amount of federal and state taxes on or measured by income of that Revenue-Producing Property for that period (whether or not payable during that period), plus (d) depreciation, amortization and all other non-cash expenses of that Revenue-Producing Property for that period, in each case as determined in accordance with GAAP.
“Non-Recourse Debt” means Indebtedness of any Person for which the liability of such Person (except with respect to fraud, Environmental Laws liability, misapplication of funds, bankruptcy, transfer of collateral in violation of the applicable loan documents, failure to obtain consent for subordinate financing in violation of the applicable loan documents and other exceptions customary in like transactions at the time of the incurrence of such Indebtedness) either is contractually limited to collateral securing such Indebtedness or is so limited by operation of Laws.
“Note” means a promissory note made by the Borrower in favor of, and payable to the order of, a Lender evidencing that portion of the Loan made by such Lender substantially in the form of Exhibit C. A Note shall be executed by the Borrower in favor of each Lender requesting such Note.
“Obligations” means all advances to, and debts, liabilities, obligations of, any Credit Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Obligor Subsidiary” means any Subsidiary (other than the Operating Partnership) that is not a Guarantor but is obligated with respect to any Material Unsecured Indebtedness.
“Obligor Subsidiary Debt” means third party unsecured borrowed money Indebtedness (including guaranties) of any Obligor Subsidiary.
“Operating Partnership” has the meaning set forth in the introductory paragraph.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other
Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document; provided, however, that “Other Taxes” shall not include such amounts to the extent imposed as a result of any transfer by any Lender or the Administrative Agent of any interest in or under any Loan Document.
“Overnight Rate” means, for any day, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
“Participant” has the meaning set forth in Section 10.06(d).
“Participant Register” has the meaning set forth in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) including a multiple employer plan but not including a Multiemployer Plan; that is maintained or is contributed to by the Borrower or its Subsidiaries and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Purposes” has the meaning set forth in Section 10.07(a).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(2) of ERISA) established by the Borrower, or with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
“Platform” has the meaning set forth in Section 6.02.
“Preferred Distributions” means for any period, the amount of any and all Restricted Payments due and payable in cash by the Borrower or any of its Subsidiaries during such period to the holders of Preferred Equity but shall not include any Minority Interest’s share of any such Restricted Payments.
“Preferred Equity” means any form of preferred stock (whether perpetual, convertible or otherwise) or other ownership or beneficial interest in the Borrower or any of its Subsidiaries that entitles the holders thereof to preferential payment or distribution priority with respect to dividends, assets or other payments over the holders of any other stock or other ownership or beneficial interest in such Person.
“Property” means all assets of the Borrower and its Subsidiaries, whether real property or personal property.
“Public Lender” has the meaning set forth in Section 6.02.
“Qualified Asset Pool Property” means Qualified Land, Qualified Revenue-Producing Property, Qualified Development Assets and Qualified Joint Venture Property.
“Qualified Development Asset” means a Real Property that:
(a) satisfies the Base Qualifications;
(b) constitutes a Development Investment; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Land.
“Qualified Joint Venture Property” means a Real Property, owned and controlled by a direct or indirect non-wholly-owned subsidiary of the Borrower, that is any of a Qualified Revenue-Producing Property, Qualified Land and/or a Qualified Development Asset. For purposes of this definition “controlled” means exclusive control of any disposition, refinancing and operating activity without the consent of any other party (other than (i) the Borrower or (ii) any of its Subsidiaries, as long as such Subsidiary does not need the consent of any minority equity holder thereof to consent to any disposition, refinancing or operating activity). Notwithstanding the foregoing, the Tech Square Project shall be deemed a Qualified Joint Venture Property so long as it meets the criteria set forth above other than those matters set forth on Schedule 1.01.
“Qualified Land” means, as of any date of determination, without duplication, Real Property that:
(a) satisfies the Base Qualifications;
(b) is entitled; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Development Asset.
“Qualified Revenue-Producing Property” means a Revenue-Producing Property that:
(a) satisfies the Base Qualifications;
(b) is occupied or available for occupancy (subject to final tenant improvements); and
(c) does not otherwise constitute a Qualified Development Asset or Qualified Land.
“Rating Agencies” means (a) S&P and (b) Moody’s.
“Ratings Grid Election” shall have the meaning specified in the definition of “Applicable Rate”.
“Real Property” means, as of any date of determination, real property (together with the underlying real property interests and appurtenant real property rights) then owned, leased or occupied by any Credit Party or any of its Subsidiaries.
“RBC” means Royal Bank of Canada and its affiliates.
“RBS” means The Royal Bank of Scotland plc and its successors.
“RBSSI” means RBS Securities Inc. and its successors.
“Register” has the meaning specified in Section 10.06(c).
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a real estate investment trust under Sections 856 through 860 of the Code, and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Sections 857 et seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“Required Lenders” means, as of any date of determination, Lenders holding in the aggregate more than 50% of the Loan Amount.
“Responsible Officer” means, (a) with respect to delivery of executed copies of this Agreement or any Compliance Certificate, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable) and (b) for all other purposes, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer, secretary, assistant secretary or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable). Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.
“Restricted Payment” means, with respect to any equity interest or any warrant or option to purchase an equity interest issued by the Borrower or any of its Subsidiaries, (a) the retirement, redemption, purchase or other acquisition for Cash or for Property by the Borrower or such Subsidiary of any such security or interest (excluding any Indebtedness which by its terms is convertible into an Equity Interest), (b) the declaration or (without duplication) payment by the Borrower or such Subsidiary of any dividend in Cash or in Property on or with respect to any such security or interest and (c) any other payment in Cash or Property by the Borrower or such Subsidiary constituting a distribution under applicable Laws with respect to such security or interest.
“Revenue-Producing Property” means an identifiable improved Real Property that is used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities), or for such other revenue-producing purposes as the Required Lenders may approve.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.
“Same Day Funds” means immediately available funds.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“SEC Report” means all filings on Form 10-K, Form 10-Q or Form 8-K with the SEC made by the Borrower pursuant to the Securities Exchange Act of 1934.
“Secured Debt” means, without duplication, (a) Indebtedness of the Borrower or any of its Subsidiaries that is secured by a Lien and (b) Obligor Subsidiary Debt; provided, that Secured Debt shall not include any of the Obligations.
“Secured Debt Ratio” means, as of the last day of any fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) the Secured Debt of the Borrower and its Subsidiaries as of such date by (b) the Adjusted Tangible Assets, as of such date.
“Solvent” means, as to any Person, that, as of any date of determination, (a) the amount of the present fair saleable value of the assets of such Person will, as of such date, exceed the amount of all liabilities of such Person, contingent or otherwise, as of such date, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its existing or anticipated debts as such debts become absolute and matured, and (c) such Person will not have as of such date, an unreasonably small amount of capital with which to conduct its business.
“SPC” has the meaning set forth in Section 10.06(h).
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap
Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Syndication Agents” means RBC and RBS, each in its capacity as co-syndication agent.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tech Square Project” means the seven building campus located in Cambridge, Massachusetts aggregating approximately 1.2 million square feet.
“Total Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP; provided that all Real Property shall be valued based on its Unencumbered Asset Value (it being understood that the Unencumbered Asset Value for any Real Property that is not a Qualified Asset Pool Property shall be calculated as if it was a Qualified Asset Pool Property). In the event that a Person has an ownership or other equity interest in any other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the assets of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all assets of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“Total Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) Capital Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, Total Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be (i) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the
date referenced in clause (i), zero. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Total Liabilities” means all liabilities of a Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (without duplication) all Indebtedness and Guarantees of such Person and its Subsidiaries (determined on a consolidated basis), whether or not so classified; provided, that, Total Liabilities shall not include any Minority Interest’s share of liabilities. In the event that a Person has an ownership or other equity interest in any other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the liabilities of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all liabilities of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Officer of that Person).
“Trade Date” has the meaning set forth in Section 10.06(b).
“Type” means with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.
“Unencumbered” means, with respect to any Revenue-Producing Property, Qualified Land or Qualified Development Assets, that such Revenue-Producing Property, Qualified Land or Qualified Development Assets (a) is not subject to any Lien other than Liens permitted under Section 7.01 (other than Sections 7.01(q)(ii), (r) and (t)), (b) is not subject to any Negative Pledge and (c) is not held by a Person any of whose direct or indirect equity interests are subject to a Lien or Negative Pledge.
“Unencumbered Asset Value” means, as of any date of determination and without double counting any item, the following amounts for the following types of Real Property:
(a) with respect to any Qualified Revenue-Producing Property owned for a full four consecutive fiscal quarter period or longer, an amount equal to (i) the Adjusted NOI of such Real Property for the prior four full consecutive fiscal quarters divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(b) with respect to any Qualified Revenue-Producing Property owned for less than four full consecutive fiscal quarters, an amount equal to (i) the Adjusted NOI of such Real Property for the period which the Borrower or applicable Subsidiary has owned and operated such Real Property, adjusted by the Borrower to an annual Adjusted NOI in a manner reasonably acceptable to the Administrative Agent, divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business
interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(c) with respect to Qualified Revenue-Producing Property that is being renovated or with respect to which a partial or total renovation was recently completed, an amount as determined at the sole election of the Administrative Agent based on (i) the annualized Adjusted NOI with respect to such Real Property, annualized based on bona fide, arms length signed tenant leases which are in full force and effect requiring current rental payments, divided by the Capitalization Rate, or (ii) the cost basis of such Real Property determined in accordance with GAAP multiplied by the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Revenue Property.
(d) with respect to any Real Property that constitutes Qualified Land, an amount equal to, at the option of the Borrower, (i) the cost basis as determined in accordance with GAAP or the Appraised Value (if any) of such Qualified Land multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Land.
(e) with respect to any Real Property that constitutes Qualified Development Assets, an amount equal to (i) the cost basis as determined in accordance with GAAP of such Qualified Development Asset multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Development Asset; provided that if all or any portion of a Qualified Development Asset is materially damaged, the value of such Qualified Development Asset shall be the amount assigned to such Qualified Development Asset prior to the damage less the amount (as determined by the Borrower in good faith) by which the casualty insurance proceeds that are owed or received in respect of such casualty event are insufficient to restore such Qualified Development Asset for a period of up to the lesser of (x) 365 days following such casualty event and (y) the date such Qualified Development Asset is restored and fully functional.
“United States” and “U.S.” mean the United States of America.
“Unrelated Person” means any Person other than (i) a Subsidiary of Borrower, (ii) an employee stock ownership plan or other employee benefit plan covering the employees of Borrower and its Subsidiaries or (iii) any Person that held Common Stock on the day prior to the effective date of Borrower’s registration statement under the Securities Act of 1933 covering the initial public offering of Common Stock.
“Unsecured Interest Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) the sum of the aggregate Adjusted NOI from the Qualified Asset Pool Properties for that fiscal quarter and the preceding three full fiscal quarters, by (b) the aggregate Interest Charges for such period in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt). The Unsecured Interest Coverage Ratio shall be determined by the Borrower and such determination shall be reasonably satisfactory to the Administrative Agent and shall exclude interest during construction to the extent capitalized.
“Unsecured Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (as expressed as a percentage) of (a) (i) aggregate unsecured Adjusted Total Indebtedness as of such date minus (ii) Obligor Subsidiary Debt as of such date to (b) (i) the Adjusted Unencumbered Asset Value as of such date minus (ii) the amount of unsecured Excluded Indebtedness (other than Obligor Subsidiary
Debt) deducted in the calculation of aggregate unsecured Adjusted Total Indebtedness pursuant to clause (a)(i) above.
“Wholly-Owned Subsidiary” means a Subsidiary of the Borrower, 100% of the capital stock or other equity interest of which is owned, directly or indirectly, by the Borrower, except for director’s qualifying shares required by applicable Laws.
1 .02 Other Interpretive Provisions .
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof; (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
1 .03 Accounting Terms/Financial Covenants.
(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant
(including the computation of any financial covenant) contained herein, the effects of FASB ASC 825 on financial liabilities shall be disregarded.
(b) Changes in GAAP or Funds From Operations. If at any time any change in GAAP or the calculation of Funds From Operations would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP or Funds From Operations (subject to the approval of the Required Lenders, the Administrative Agent and the Borrower); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP or Funds From Operations, as applicable, prior to such change therein and (ii) upon written request, the Borrower shall provide to the Administrative Agent (for distribution to the Lenders) financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or Funds From Operations.
(c) Calculation of Financial Covenants. For purposes of calculation of the applicable financial covenants, the Borrower and its Subsidiaries shall be given credit for properties held by an “exchange accommodation titleholder” pursuant to an exchange that qualifies as a reverse exchange under Section 1031 of the Code (including in the event any such property is subject to a mortgage in favor of, or for the benefit of, the Borrower or any of its Subsidiaries).
1 .04 Times of Day .
Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).
ARTICLE II
THE COMMITMENTS AND BORROWINGS
2 .01 Term Loans.
Subject to the terms and conditions set forth herein, each Lender severally agrees to fund the portion of the Loan Amount represented by its Commitment to the Borrower on the Closing Date in an aggregate amount not to exceed such Lender’s Commitment or the Loan Amount; provided, however, that the $250,000,000 advanced pursuant to the Existing Loan Agreement shall be deemed to be advanced under this Agreement and reallocated among the Lenders by the Administrative Agent as set forth in Schedule 2.01 on the date hereof, without executing any Assignment and Assumption or any other documentation. The Loans shall be in Dollars and, except as set forth in the preceding sentence, drawn in a single Borrowing on the Closing Date. The Lenders shall have no commitments hereunder to fund any additional Loans after the Borrowing on the Closing Date. To the extent all or any portion of the Loans are repaid or prepaid, they may not be reborrowed. All Loans advanced on the Closing Date shall be Base Rate Loans unless the Borrower shall have delivered at least three Business Days prior to the Closing Date, a funding indemnity letter in form and substance reasonably satisfactory to the Administrative Agent. Thereafter, Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
2 .02 Borrowings, Conversions and Continuations of Loans .
(a) The Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than (i) 12:00 Noon three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans, and (ii) 12:00 Noon on the Business Day prior to the requested date of any Borrowing of Base Rate Loans and 12:00 Noon on the Business Day prior to the requested date of any conversion of Eurodollar Rate Loans to Base Rate Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, (x) the applicable notice must be received by the Administrative Agent not later than 12:00 Noon four Business Days prior to the requested date of such Borrowing, conversion to or continuation of Eurodollar Rate Loans, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them and (y) not later than 12:00 Noon, three Business Days before the requested date of such Borrowing, conversion or continuation of Eurodollar Rate Loans, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fail to specify an Interest Period, they will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans as described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office not later than 2:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.01, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Citibank with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Citibank’s base rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than 20 Interest Periods in effect with respect to Loans.
2 .03 [Reserved].
2 .04 [Reserved] .
2 .05 Prepayments .
The Borrower may, upon written notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 12:00 Noon (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the Business Day prior to the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date, the amount of such prepayment, and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and the contents thereof and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided, however, that a notice of voluntary prepayment pursuant to this clause (a) may state that such notice is conditioned upon an event or other transaction, such as the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of Indebtedness, in which case such notice of prepayment pursuant to this clause (a) may be revoked by the Borrower if such condition is not satisfied (subject to Section 3.05(b) for any notice of a prepayment of Eurodollar Rate Loans that is revoked). Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05*.* Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.
2 .06 [Reserved].
2 .07 Repayment of Loans .
The Borrower shall repay on the Maturity Date the aggregate principal amount of the Loans outstanding on such date, together with all interest and accrued fees related thereto.
2 .08 Interest .
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto (for interest accrued through the last day of the prior month) and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
2 .09 Fees.
(a) The Borrower shall pay to the Administrative Agent for its own account and for the account of the Lenders fees, in Dollars, in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
(b) The Borrower shall pay to the Administrative Agent and the Lenders such fees, in Dollars, as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2 .10 Computation of Interest and Fees.
All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
2 .11 Evidence of Debt .
The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) the applicable Note(s), which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.
2 .12 Payments Generally; Administrative Agent’s Clawback.
(a) General. All payments to be made by a Credit Party shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by a Credit Party hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 11:00 a.m. on the date specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 11:00 a.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders: Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of the Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any reasonable administrative, processing or
similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to such Borrowing. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower: Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment and without relieving the Borrower’s obligation to make such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in Same Day Funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2 .13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(a) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(b) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of a Credit Party pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation.
2 .14 Extension of Maturity Date .
(a) Requests for Extension of Maturity Date. The Borrower may on a one-time basis, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 90 days prior to, and not later than 30 days prior to, the Maturity Date then in effect hereunder (the “Existing Maturity Date”), cause each Lender to extend such Lender’s Existing Maturity Date to June 30, 2016 and each Lender shall extend such Lender’s Maturity Date to June 30, 2016 in accordance with this Section 2.14(a) and subject to clause (b) below.
(b) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the extension of the Maturity Date pursuant to this Section shall not be effective unless:
(i) no Default or Event of Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;
(ii) the representations and warranties contained in this Agreement are true and correct in all material respects, on and as of the date of such extension and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, only as of such specific date), and except that the representations and warranties contained in subsections (a) and (d) of Section 5.05 shall be deemed to refer to the most recent statements and projections furnished pursuant to Sections 6.01(a) and 6.02(b), respectively; and
(iii) the Borrower pays the Administrative Agent, for distribution to the Lenders, based on their Applicable Percentages, an extension fee on or prior to the Existing Maturity Date in an amount equal to the product of (i) 0.25%, multiplied by (ii) the Loan Amount at the time of the extension.
(c) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3 .01 Taxes .
(a) Payments Free of Taxes; Obligation to Withhold.
(i) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws require the deduction or withholding of any Tax from any such payment by the Administrative Agent or the Borrower, then the Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.
(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Borrower or the Administrative Agent, as applicable, shall withhold or make such deductions as are determined by the Borrower or the Administrative Agent, as applicable, to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Borrower or the Administrative Agent, as applicable, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Lender receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification for Taxes. (i) The Borrower shall and does hereby indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) paid by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, setting forth in reasonable detail the basis for such amounts, shall be conclusive absent manifest error. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(ii) Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) the Administrative Agent and the Borrower, as applicable, against any Taxes attributable to
such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrower, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or the Borrower in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).
(d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any of the Administrative Agent or a Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Administrative Agent or any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not the Administrative Agent or such Lender is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing the Administrative Agent or any Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Person becomes a party to this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Person is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of IRS Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Credit Party within the meaning of Section 881 (c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of IRS Form W-8BEN,
(iv) in the case of a Foreign Lender that is not the beneficial owner of payments made under any Loan Documents, duly completed copies of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN, IRS Form W-9 and/or other certification documents from each beneficial owner, as applicable,
(v) in the case of the Administrative Agent or any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code, duly completed copies of IRS W-9, establishing a complete exemption from backup withholding taxes, and/or
(vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax (or indicating whether such withholding tax is applicable) duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses and net of any loss or gain realized in the conversion of such funds from or to another currency of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person or to file for or otherwise pursue on behalf of any Credit Party any refund of any Taxes.
3 .02 Illegality .
If any Lender determines in good faith that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be
determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3 .03 Inability to Determine Rates .
If the Required Lenders determine in good faith that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion thereto or continuation thereof that (a) deposits are not being offered to banks in the applicable offshore interbank market for Dollars for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.
3 .04 Increased Costs; Reserves on Eurodollar Rate Loans .
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)); or
(ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any participation in any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes and the imposition of, or any change in the rate of, any Excluded Tax); or
(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or participation therein (other than with respect to Taxes, which shall be governed solely by Section 3.01);
and the result of any of the foregoing shall be to increase the cost to such Lender , which such Lender deems material in its reasonable discretion, of making or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such
Lender, as the case may be, such additional amount or amounts as will compensate such Lender, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), by an amount deemed by such Lender to be material in its reasonable discretion, then from time to time the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting forth in reasonable detail the basis for and the calculation of the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the provisions of this Section for any increased costs incurred or reductions suffered more than three months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which in each case, shall be due and payable on each date on which interest is payable on such Loan; provided, the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice. Any Lender which gives notice under this Section 3.04(e) shall promptly withdraw such notice (by written notice of withdrawal given to the Administrative Agent and the Borrower) in the event such Lender is no longer required to maintain such reserves or the circumstances giving rise to such notice shall otherwise cease to exist.
Notwithstanding anything contained in this Section 3.04, the Borrower shall not be obligated to pay any greater amounts than such Lender(s) is (are) generally charging other borrowers on loans similarly situated to the Borrower that are parties to similar credit agreements.
3 .05 Compensation for Losses .
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Eurodollar Rate Loan on a day other than the last day of the Interest Period for such Eurodollar Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert to any Eurodollar Rate Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;
including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract (but excluding any loss of anticipated profits). The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the offshore interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), setting forth in reasonable detail the basis and calculation for such amounts, shall be conclusive absent manifest error.
3 .06 Mitigation Obligations; Replacement of Lenders .
(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if material amounts are paid to such Lender under Section 3.05, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.
3 .07 Survival .
All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO
THIS AGREEMENT AND THE BORROWING
4 .01 Conditions of Effectiveness of this Agreement .
The effectiveness of this Agreement and the obligation of each Lender to make its Loan on the Closing Date hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies or other electronic imaging transmission (e.g. “pdf” via e-mail) (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Credit Party (to the extent applicable), each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement;
(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;
(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized as of the date hereof to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Credit Party is a party;
(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Credit Party is duly organized or formed (including, without limitation, articles or certificates of incorporation or other charter documents and bylaws or other governance documents of each Credit Party), and that each Credit Party is validly existing and in good standing in its jurisdiction of organization and the tax identification number for each Credit Party;
(v) favorable opinions of each counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, as to the matters concerning the Credit Parties and the Loan Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of the Credit Parties either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by each Credit Party and the validity against such Credit Party of the Loan Documents to which it is a party (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii)), and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii));
(vii) a certificate signed by a Responsible Officer of the Credit Parties certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;
(viii) a payment instructions for cash proceeds of the Loan Amount received by the Borrower on the Closing Date to be applied to prepayment of a $500,000,000 portion of the term loan facility created pursuant to the Group Credit Loan Documents; and
(ix) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or the Required Lenders reasonably may require.
(b) Any fees required to be paid by the Borrower to the Administrative Agent or to the Lenders on or before the Closing Date shall have been, or concurrently with the Closing Date are being, paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable and documented fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
4 .02 Additional Conditions to Borrowing .
The obligation of each Lender to make its Loan on the Closing Date is subject to the following conditions precedent:
(a) The representations and warranties of each Credit Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the Closing Date in all material respects, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.
(b) No Default or Event of Default shall exist, or would result from the proposed Borrowing on the Closing Date or from the application of the proceeds thereof.
(c) The Administrative Agent shall have received a Loan Notice in accordance with the requirements hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to the Administrative Agent and the Lenders that:
5 .01 Existence, Qualification and Power; Compliance with Laws .
Each Credit Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization except to the extent permitted by Sections 7.03 or 10.20, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (a) (solely as to Subsidiaries that are not Credit Parties), (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
5 .02 Authorization; No Contravention .
The execution, delivery and performance by each Credit Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law, except, in each case referred to in clause (b) or (c), as contemplated hereunder or to the extent such conflict, breach, contravention or violation, or creation of any such Lien or required payment could not reasonably be expected to have a Material Adverse Effect.
5 .03 Governmental Authorization; Other Consents .
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party of this Agreement or any other Loan Document other than those that have already been made or obtained and remain in full force and effect or those which, if not made or obtained, could not reasonably be expected to have a Material Adverse Effect.
5 .04 Binding Effect .
This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Credit Party party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of each Credit Party party thereto, enforceable against each such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5 .05 Financial Statements; No Material Adverse Effect .
(a) The Audited Financial Statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.
(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries delivered pursuant to Section 6.01(b) for the most recent fiscal quarter end, and the related consolidated statements of income or operations and cash flows for the fiscal quarter ended on that date fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject to the absence of footnotes and to normal year end audit adjustments.
(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated financial projections of the Borrower previously delivered to the Administrative Agent for the 2011, 2012 and 2013 fiscal years were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5 .06 Litigation .
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Credit Parties, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against any Credit Party or any of their Subsidiaries or against any of their properties or revenues that (a) affect or pertain to this Agreement or any other Loan Document or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
5 .07 No Default .
Neither any Credit Party nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
5 .08 Ownership of Property; Liens .
Each of the Credit Parties and their Subsidiaries has good record and marketable title in fee simple (subject to the rights of other parties as owners of condominium units) to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Credit Parties and their Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5 .09 Environmental Compliance .
The Credit Parties and their Subsidiaries are not in violation of any Environmental Laws and not subject to liabilities or claims thereunder that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
5 .10 Insurance .
The properties of each Credit Party and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Credit Parties, in such amounts and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Credit Party or the applicable Subsidiary operates.
5 .11 Taxes .
The Credit Parties and their Subsidiaries have filed all Federal, state and other tax returns and reports required to be filed and have paid all Federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP (to the extent required by GAAP) or (b) where failure to comply with the foregoing could not reasonably be expected to have a Material Adverse Effect. There is no proposed tax assessment against a Credit Party or any of their Subsidiaries that would, if made, have a Material Adverse Effect.
5 .12 ERISA Compliance .
(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Pension Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the best knowledge of the Credit Parties, nothing has occurred that would prevent or cause the loss of such tax-qualified status.
(b) There are no pending or, to the best knowledge of the Credit Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred, and neither any Credit Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Credit Party and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher except where the failure to attain such funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect, and neither any Credit Party nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date except where such drop in funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect; and (iv) neither any Credit Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA.
5 .13 Margin Regulations; Investment Company Act; REIT Status .
(a) Neither the making of any Loan hereunder nor the use of proceeds thereof will violate the provisions of Regulations T, U or X of the FRB..
(b) None of the Credit Parties is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
(c) The Borrower currently has REIT Status.
5 .14 Disclosure .
Each Credit Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished by or on behalf of any Credit Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, taken as a whole and as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Credit Parties represent only that such information was prepared in good faith based upon assumptions believed by the Credit Parties to be reasonable at the time made (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5 .15 Compliance with Laws .
Each Credit Party and each of its Subsidiaries are in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5 .16 Intellectual Property; Licenses, Etc.
Each Credit Party and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person except to the extent that failure to so own or possess such IP Rights or any such conflict, could not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
5 .17 Property .
All of the Credit Parties’ and their respective Subsidiaries’ Properties are in good repair and condition, subject to ordinary wear and tear, other than with respect to deferred maintenance existing as of the date of acquisition of such Property and except for such defects relating to properties which would not have a Material Adverse Effect.
5 .18 Solvency .
As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all of the Loans made hereunder, the Borrower and its Subsidiaries (on a consolidated basis) are Solvent..
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, the Credit Parties shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Subsidiary to:
6 .01 Financial Statements .
Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender):
(a) As soon as practicable, and in any event within 90 days after the end of each fiscal year, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the consolidated statements of operations, stockholders’ equity and cash flows, in each case of the Borrower and its Subsidiaries for such fiscal year, all in reasonable detail. Such financial statements shall be prepared in accordance with GAAP, consistently applied, audited and shall be accompanied by a report of Ernst & Young LLP or other independent public accountants of recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any “going concern” or like qualifications or exception or any qualification or exception as to the scope of the audit; and
(b) As soon as practicable, and in any event within 60 days after the end of each fiscal quarter (other than the fourth fiscal quarter in any fiscal year), the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter and the consolidated statements of operations and cash flows for such fiscal quarter, and the portion of the fiscal year ended with such fiscal quarter, all in reasonable detail. Such financial statements shall be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP (other than footnote disclosures), consistently applied, as at such date and for such periods, subject only to normal year-end accruals and audit adjustments.
6 .02 Certificates; Other Information .
Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender), in form and detail reasonably satisfactory to the Administrative Agent:
(a) Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer;
(b) No later than 90 days after the commencement of each fiscal year, an annual forecast for the then-current fiscal year in reasonable detail;
(c) Promptly after request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any of its Subsidiaries, or any audit of any of them;
(d) Promptly after the same are available, and in any event within five (5) Business Days after filing with the SEC, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all publicly available annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Administrative Agent pursuant to Section 6.01 or other provisions of this Section 6.02;
(e) Promptly upon a Responsible Officer becoming aware of the occurrence of any (i) Reportable Event or (ii) non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) involving any Pension Plan or any trust created thereunder that could reasonably be expected to give rise to a material liability, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto, and, when known, any action taken by the IRS with respect thereto;
(f) Promptly upon a Responsible Officer becoming aware of the existence of any condition or event which constitutes a Default or Event of Default, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto;
(g) Promptly upon a Responsible Officer becoming aware that any Person has commenced a legal proceeding with respect to a claim against the Credit Parties or their respective Subsidiaries that could reasonably be expected to have a Material Adverse Effect, written notice describing the pertinent facts relating thereto and what action Borrower or its Subsidiaries are taking or propose to take with respect thereto;
(h) Promptly upon a Responsible Officer becoming aware of a change in the Debt Rating (including a change in the Debt Rating resulting from the initial issuance of a Debt Rating based on Borrower’s long-term senior unsecured debt) or any announcement that any such rating is “under review” or that such rating has been placed on a watch list or that any similar action has been taken by a Rating Agency, written notice of such change, announcement or action;
(i) Promptly upon a Responsible Officer becoming aware, notice of any material change in accounting policies by the Borrower or any other Credit Party; and
(j) Such other data and information with respect to the Borrower or any Subsidiary as from time to time may be reasonably requested by the Administrative Agent.
Documents required to be delivered pursuant to this Agreement (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Credit Parties post such documents, or provide a link thereto on the Credit Parties’ website on the Internet at the website address listed on Schedule 10.02 or (ii) on which such documents are posted on the Credit Parties’ behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent), including the SEC’s EDGAR website; provided that the Credit Parties shall deliver paper copies of such documents to the Administrative Agent for any Lender that requests in writing to the Borrower and the Administrative Agent that the Credit Parties deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Credit Parties with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Credit Parties hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders materials and/or information provided by or on behalf of the Credit Parties hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Credit Parties or their securities) (each, a “Public Lender”). The Credit Parties hereby agree that (w) all Borrower Materials (other than SEC Reports) that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC,” the Credit Parties shall be deemed to have authorized the Administrative Agent, the Arrangers and the Lenders to treat such Borrower Materials as either publicly available information or not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws; (y) all SEC Reports and all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials (other than SEC Reports) that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” The Credit Parties shall be in compliance with all requirements to deliver information under this Agreement if they have made such information available to the Administrative Agent and, to the extent required, Lenders other than Public Lenders, and the failure of Public Lenders to receive information made available to other Lenders shall not result in any breach of this Agreement.
6 .03 Payment of Obligations .
Pay and discharge as the same shall become due and payable, all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless (a) the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Credit Parties or such Subsidiary prior to the imposition of such Lien or (b) the failure to do so could not reasonably be expected to have a Material Adverse Effect.
6 .04 Preservation of Existence, Etc .
(a) Preserve, renew and maintain in full force and effect the legal existence and good standing of the Credit Parties under the Laws of the jurisdiction of their organization except in a transaction permitted by Sections 7.03 or 10.20; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation or non-renewal of which could reasonably be expected to have a Material Adverse Effect.
6 .05 Maintenance of Properties .
(a) Maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted and subject to exceptions for extraordinary or reasonably unforeseeable events in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof in a reasonably timely manner except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.
6 .06 Maintenance of Insurance .
Maintain liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is customarily carried by companies engaged in similar businesses and owning similar assets in the general areas in which the Credit Parties or such Subsidiaries, as applicable, operate.
6 .07 Compliance with Laws .
Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
6 .08 Books and Records .
(a) Maintain proper books of record and account, in which entries true and correct in all material respects are made in conformity with GAAP consistently applied; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Credit Parties and their Subsidiaries, as the case may be.
6 .09 Inspection Rights .
Permit the Lenders, through the Administrative Agent or any representative designated by the Administrative Agent, at the Credit Parties’ expense, to visit and inspect any of the properties of the Credit Parties or any of their respective Subsidiaries (subject to the rights of any tenants), to examine the books of account of the Credit Parties and their respective Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss the affairs, finances and accounts of the Credit Parties and their respective Subsidiaries with, and to be advised as to the same by, their Responsible Officers, all at such reasonable times (typically during normal business hours) and intervals as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request upon not less than four (4) Business Days’ notice; provided, however, that inspections made at the Credit Parties’ expense shall be limited to once per year, unless an Event of Default shall have occurred and be continuing. The Lenders shall use good faith efforts to coordinate such visits and inspections so as to minimize the interference with and disruption to the Credit Parties’ or such Subsidiaries’ normal business operations. Notwithstanding anything to the contrary in this Section 6.09, no Credit Party nor any of their Subsidiaries will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any document, information or other matter that (i) in respect of which disclosure to the Administrative Agent (or its designated representative) or any Lender is then prohibited by law or any agreement binding on any Credit Party or any of its Subsidiaries or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product.
6 .10 Use of Proceeds .
Use the proceeds of the Loans for working capital and general corporate purposes (including repayments of Indebtedness) not in contravention of any Laws or any Loan Documents.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, each Credit Party shall not, nor shall it permit any Subsidiary to, directly or indirectly:
7 .01 Liens .
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
(a) inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside, to the extent required by GAAP (or deposits made pursuant to applicable Law) and which are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside, to the extent required by GAAP, and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations
secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(c) defects and irregularities in title to any Property which would not reasonably be expected to result in a Material Adverse Effect;
(d) easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property in the ordinary course;
(e) easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center, business or office park or similar project affecting Property in the ordinary conduct of the business of the applicable Person;
(f) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, any right, power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property in the ordinary conduct of the business of the applicable Person;
(i) statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business (but not in connection with the incurrence of any Indebtedness) with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto, to the extent required by GAAP, and, by reason of nonpayment, no Property is subject to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of Property which may not give rise to any Lien against such Property in the ordinary conduct of the business of the applicable Person;
(k) rights of tenants as tenants only under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business;
(n) deposits to secure the performance of bids, contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(o) Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien;
(p) Liens consisting of deposits of Property to secure statutory obligations of any Credit Party or any Subsidiary;
(q) (i) Liens created by or resulting from any litigation or legal proceeding in the ordinary course of business which is currently being contested in good faith by appropriate proceedings, provided that, adequate reserves have been set aside and no material Property is subject to a material impending risk of loss or forfeiture and (ii) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h) or securing appeal or other surety bonds related to such judgments;
(r) other nonconsensual Liens incurred in the ordinary course of business but not in connection with the incurrence of any Indebtedness, which do not individually involve amounts in excess of $10,000,000 or in the aggregate involve amounts in excess of $20,000,000;
(s) any Liens securing the Obligations; and
(t) Liens securing Secured Debt (other than Obligor Subsidiary Debt) not prohibited by this Agreement.
7 .02 Investments.
Make any Investments, except:
(a) Investments held by any Credit Party or any of its Subsidiaries in the form of Cash, Cash Equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of any Credit Party or any of its Subsidiaries for travel, entertainment, relocation and similar ordinary business purposes;
(c) Investments of a Credit Party in any Subsidiary or any other Credit Party, Investments of any Subsidiary in a Credit Party or in another Subsidiary and Investments in any Person that, as a result of or in connection with such Investment, becomes or will become a Subsidiary of a Credit Party;
(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors;
(e) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of improved real estate property used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes (and appurtenant amenities);
(f) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of (i) Development Investments (the amount of such Investment shall be an amount equal to the aggregate costs incurred in connection therewith), (ii) undeveloped land without improvements, or (iii) any other Real Property, other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities); provided, that, as of the most recently ended fiscal quarter, the aggregate book value of such Investments may not exceed 35% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(f) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value;
(g) other Investments, other than Investments in Real Property not otherwise permitted by Section 7.02; provided that as of the most recently ended fiscal quarter, the aggregate book value of such Investments pursuant to this Section 7.02(g) shall not exceed 15% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(g) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value; and
(h) Guarantees by any Credit Party or any Subsidiary in respect of Indebtedness not prohibited hereunder.
7 .03 Fundamental Changes .
Merge, dissolve, liquidate or consolidate with or into another Person, except that, so long as no Default or Event of Default exists or would result therefrom and subject to the proviso below, (a) a Credit Party may merge or consolidate with or into one or more other Credit Parties, (b) any Subsidiary (other than the Operating Partnership) may merge or consolidate with or into a Credit Party or another Subsidiary or may dissolve or liquidate, or (c) any other merger, dissolution, liquidation or consolidation that does not result in a Change of Control shall be permitted; provided, that (i) if the Borrower or Operating Partnership is a party to any merger or consolidation permitted under this Section 7.03, it shall be the surviving entity, and (ii) in no event shall the Borrower and Operating Partnership be permitted to merge or consolidate with each other.
7 .04 Restricted Payments .
With respect to any Credit Party or any Subsidiary thereof, make any Restricted Payment except (a) so long as no Event of Default shall have occurred and be continuing under Section 8.01(a) or would result therefrom, such Restricted Payment shall be permitted (i) in an amount not to exceed (excluding Restricted Payments made pursuant to the last sentence of this Section 7.04) the greater of (A) the amount which, when added to the amount of all other Restricted Payments paid by the Borrower in the same fiscal quarter and the preceding three fiscal quarters, would not exceed 95% of Funds From Operations of the Borrower and its Subsidiaries for the four consecutive fiscal quarters ending prior to the fiscal quarter in which such Restricted Payment is paid and (B) the minimum amount of Restricted Payments required (I) under the Code to maintain and preserve Borrower’s REIT Status or (II) to avoid the payment of federal or state income or excise tax, (ii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, to the extent it relates to the retirement of Preferred Equity in an
amount not to exceed any Exchange Proceeds so used notwithstanding the limitations set forth in clause (i), and (iii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, with the proceeds of sales of property notwithstanding the limitation set forth in clause (i); provided however, that if an Event of Default under Section 8.01(a) has occurred and is continuing, the Credit Parties and their Subsidiaries may only make the Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status. Notwithstanding the foregoing, any Subsidiary of the Borrower may (A) make Restricted Payments payable to the Borrower or any other Credit Party (directly or indirectly through Subsidiaries) and (B) declare and make Restricted Payments to its equity holders generally so long as the Borrower or such Subsidiary that owns the equity interest or interests in the Subsidiary making such Restricted Payments receives at least its proportionate share thereof (based upon its relative equity interests in the Subsidiary making such Restricted Payment); provided that in the case of clause (B) above, if an Event of Default under Section 8.01(a) has occurred and is continuing, such Subsidiaries may only make Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status.
7 .05 Change in Nature of Business .
Make any material change in the principal nature of the business of the Credit Parties and their Subsidiaries, such business being the acquisition, ownership, management, development and renovation of real property and buildings for use as office, office/laboratory, research, health sciences, technology or manufacturing/warehouse properties and related real property (and appurtenant amenities).
7 .06 Transactions with Affiliates .
Enter into any transaction of any kind with any Affiliate of the Credit Parties or their respective Subsidiaries other than (a) salary, bonus, employee stock option, relocation assistance and other compensation arrangements with directors or officers in the ordinary course of business, (b) transactions that are fully disclosed to the board of directors of the Borrower and expressly authorized by a resolution of the board of directors of the Borrower which is approved by a majority of the directors not having an interest in the transaction, (c) transactions permitted by this Agreement, (d) transactions between or among Credit Parties and Subsidiaries and (e) transactions on overall terms at least as favorable to Credit Parties or their Subsidiaries as would be the case in an arm’s length transaction between unrelated parties.
7 .07 Burdensome Agreements .
Enter into any agreement, instrument or transaction which prohibits any Credit Party’s ability to pledge to Administrative Agent any Qualified Asset Pool Property. The Credit Parties, and their respective Subsidiaries, shall take such actions as are necessary to preserve the right and ability of the Credit Parties, and their respective Subsidiaries, to pledge to Administrative Agent for the benefit of Lenders the Qualified Asset Pool Properties without any such pledge after the date hereof causing or permitting the acceleration (after the giving of notice or the passage of time, or otherwise) of any other Indebtedness of the Credit Parties or any of their respective Subsidiaries.
7 .08 [Reserved] .
7 .09 Financial Covenants .
(a) Permit the Fixed Charge Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.50:1.00.
(b) (i) Subject to clause (ii) below, permit the Secured Debt Ratio, as of the last day of any fiscal quarter, to exceed 40.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Secured Debt Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 45.0%.
(c) (i) Subject to clause (ii) below, permit the Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
(d) Permit Minimum Book Value, as of the last day of any fiscal quarter, to be less than the sum of (i) $2,000,000,000, plus (ii) 50% of the net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds).
(e) Permit the Unsecured Interest Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.75 to 1.00.
(f) (i) Subject to clause (ii) below, permit the Unsecured Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Unsecured Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8 .01 Events of Default .
Any of the following shall constitute an “Event of Default”:
(a) Non-Payment. Any Credit Party fails to pay (i) when and as required to be paid herein any amount of principal of any Loan, or (ii) within five Business Days after the same becomes due, any interest on any Loan, or any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Credit Party fails to perform or observe any term, covenant or agreement contained in Article VII; or
(c) Other Defaults. Any Credit Party or Subsidiary fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 Business
Days following written notice by Administrative Agent or, if such Default is not reasonably susceptible of cure within such period, within such longer period as is reasonably necessary to effect a cure so long as such Credit Party or such Subsidiary continues to diligently pursue cure of such Default but not in any event in excess of 60 Business Days; or
(d) Representations and Warranties. Any representation or warranty by a Credit Party or any of its Subsidiaries made in any Loan Document, or in any certificate or other writing delivered by a Credit Party or any of its Subsidiaries pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of the Lenders; or
(e) Cross-Default. Any Credit Party or any of its Subsidiaries (i) fails to pay the principal, or any principal installment, of any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more required on its part to be paid when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be performed or observed, or suffers any event of default to occur, in connection with any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more, if as a result of such failure or sufferance any holder or holders thereof (or an agent or trustee on its or their behalf) has the right (after giving effect to any notice or grace periods applicable thereto) to declare such Indebtedness due before the date on which it otherwise would become due or the right (after giving effect to any notice or grace periods applicable thereto) to require a Credit Party or any such Subsidiary to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness (provided, that for the purpose of this clause (e), the principal amount of Indebtedness consisting of a Swap Contract shall be the amount which is then payable by the counterparty to close out the Swap Contract); or
(f) Insolvency Proceedings, Etc. Any Credit Party or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Credit Party or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Credit Party or any Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding $50,000,000 (to the extent not covered by independent third party insurance as to which the insurer does not dispute coverage), and (i) enforcement proceedings are commenced by any creditor upon such judgment or order, or (ii) such judgment or order shall continue unsatisfied and in effect for a period of 30 consecutive days without being vacated, discharged, satisfied or stayed or bonded pending appeal; or
(i) ERISA. An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Credit Parties or their Subsidiaries under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter, or (ii) the Credit Parties or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or relating to the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Credit Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Credit Party denies that it has any liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document (except as specifically contemplated hereunder or thereunder); or
(k) Change of Control. There occurs any Change of Control.
8 .02 Remedies Upon Event of Default .
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Credit Parties; and
(b) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any one or more of the Credit Parties under the Bankruptcy Code of the United States, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, without further act of the Administrative Agent or any Lender.
8 .03 Application of Funds .
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and
disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender) and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been paid in full, to the Credit Parties or as otherwise required by Law.
ARTICLE IX
ADMINISTRATIVE AGENT
9 .01 Appointment and Authority .
Each of the Lenders hereby irrevocably appoints Citibank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and except as set forth in Section 9.06, neither the Borrower nor any other Credit Party shall have rights as a third party beneficiary of any of such provisions.
9 .02 Rights as a Lender .
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Credit Parties or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
9 .03 Exculpatory Provisions .
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by
the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Credit Parties or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number, percentage or class of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the Borrower or a Lender.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
9 .04 Reliance by Administrative Agent .
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
9 .05 Delegation of Duties .
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
9 .06 Successor Administrative Agent .
The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. The Required Lenders may remove the Administrative Agent from its capacity as Administrative Agent in the event of the Administrative Agent’s willful misconduct or gross negligence. Upon receipt of any such notice of resignation or the removal of the Administrative Agent as Administrative Agent hereunder, the Required Lenders shall have the right (with the consent of the Borrower provided there does not exist an Event of Default at such time), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders (with the consent of the Borrower provided there does not exist an Event of Default at such time) and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or the Required Lenders remove the Administrative Agent hereunder, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
9 .07 Non-Reliance on Administrative Agent and Other Lenders .
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
9 .08 No Other Duties, Etc .
Anything herein to the contrary notwithstanding, none of the Syndication Agents, the Documentation Agents or Arrangers listed on the cover page hereof or any additional titled agents which may be added thereto from time to time shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.
9 .09 Administrative Agent May File Proofs of Claim .
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, indemnification, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, indemnification, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
9 .10 Collateral and Borrower Matters .
The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion and the Administrative Agent hereby agrees:
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as part of or in connection
with any sale not prohibited hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; and
(b) to release a Guarantor (other than the Operating Partnership) from liability for the Obligations in accordance with Section 10.20.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property.
9 .11 No Obligations of Credit Parties .
Nothing contained in this Article IX shall be deemed to impose upon the Credit Parties any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and the Credit Parties shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Administrative Agent or the Lenders under this Agreement. Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by the Credit Parties to the Administrative Agent for the account of the Lenders, the Credit Parties’ obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.
ARTICLE X
MISCELLANEOUS
10 .01 Amendments, Etc .
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Credit Parties therefrom, shall be effective unless in writing signed by the Required Lenders (or the Administrative Agent with the written concurrence of the Required Lenders) and the Credit Parties, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender without the written consent of such Lender (subject to Section 2.14);
(c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal or payment of interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby (subject to Section 2.14);
(d) reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to clause (ii) of the second proviso to this Section 10.01) any fees or other amounts
payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein);
(e) change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;
(f) change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or
(g) release (i) the Borrower or (ii) the Operating Partnership, as a Credit Party hereunder, without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (ii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.
10 .02 Notices; Effectiveness; Electronic Communication .
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to a Credit Party or the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02 and
(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been received upon the sender’s receipt of an acknowledgement from the intended recipient (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or a Credit Party may, in its discretion, agree to accept notices and other communications to such Person(s) hereunder by electronic communications pursuant to procedures approved by such Person(s), provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Credit Parties, any Lender, or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Credit Party’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Credit Party, any Lender, or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Credit Parties and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Credit Parties even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof as understood by the recipient, varied from any confirmation thereof. The Credit Parties shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Credit Parties except to the extent resulting from the gross
negligence or willful misconduct of Administrative Agent, any Lender or any Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
10 .03 No Waiver; Cumulative Remedies .
No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
10 .04 Expenses; Indemnity; Damage Waiver .
(a) Costs and Expenses. The Credit Parties shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent (limited to one counsel, and, if applicable, one local counsel in each material jurisdiction)), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out of pocket expenses incurred by the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) Indemnification by the Credit Parties. The Credit Parties shall indemnify the Administrative Agent (and any sub-agent thereof) and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Credit Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Credit Parties or any of their Subsidiaries, or any Environmental Liability related in any way to the Credit Parties or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Credit Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Credit Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) Reimbursement by Lenders. To the extent that the Credit Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, and without limiting the obligation of the Credit Parties to do so, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, any claim against any Indemnitee and any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. Except as otherwise expressly set forth herein with respect to the waiver by the Indemnitees of claims for special, indirect, consequential or punitive damages (as opposed to direct or actual damages), such waiver by the Indemnitees shall not affect the indemnification obligations of the Credit Parties under this Section 10.04. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent resulting from the gross negligence or willful misconduct of any Indemnitee.
(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor (accompanied by reasonable back-up documentation).
(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the passage of the Maturity Date and the repayment, satisfaction or discharge of all the other Obligations.
10 .05 Payments Set Aside .
To the extent that any payment by or on behalf of the Credit Parties is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred,
and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
10 .06 Successors and Assigns .
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of the Credit Parties may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement
(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans; provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned;
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made to a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note, as applicable, to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of, and interest owing on, the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive (absent manifest error), and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by each of the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, but with, subject to the proviso to the fourth sentence of the immediately succeeding paragraph prior written notice to, the Borrower and the Administrative Agent, sell participations to any Person (other than a natural person, a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Credit Parties, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Credit Parties agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (subject to the requirements and limitations therein, including the requirements under Section 3.01(e)). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign, or grant a security interest in, all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment, or grant of a security interest, to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment, or grant of a security
interest, shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee or grantee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York Uniform Electronic Transactions Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
10 .07 Treatment of Certain Information; Confidentiality .
(a) Confidentiality. Each Lender and the Administrative Agent (each, a “Lender Party”) hereby agrees for itself only that, except as specifically set forth herein, (i) such Lender Party shall not participate in or generate any press release or other release of information to the general public relating to the closing of the Loan without the prior written consent of the Borrower, (ii) such Lender Party shall hold the Confidential Information in accordance with such Lender Party’s customary procedures to prevent the misuse or disclosure of confidential information of this nature and in accordance with safe and sound banking practices, (iii) such Lender Party shall use the Confidential Information solely for the purposes of underwriting the Loan or acquiring an interest therein, carrying out such Lender Party’s rights or obligations under this Agreement, in connection with the syndication of the Loan, the enforcement of the Loan Documents, or other internal examination, supervision or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, or as otherwise permitted by the terms of this Section 10.07 (collectively, “Permitted Purposes”), and (iv) not disclose the Confidential Information to any party, except as expressly authorized in this Agreement or with prior written consent of the Borrower. Each Lender Party shall promptly notify the Borrower in the event that it becomes aware of any loss or unauthorized disclosure of any Confidential Information.
Each Lender Party shall not have any obligations under this Agreement with respect to a specific portion of the Confidential Information if such Lender Party can demonstrate that such Confidential Information (i) was publicly available at the time it was disclosed to such Lender Party, (ii) became publicly available subsequent to the time it was disclosed to such Lender Party, (iii) was in or comes into a Lender Party’s possession from a source not known to such Lender Party (after reasonable inquiry) to be in breach of an obligation of confidentiality owed to the Borrower in making such disclosure to such Lender Party, (iv) was in or comes into Lender Party’s possession free of any obligation of confidence owed to the Borrower at the time it was disclosed to them, or (v) was developed by the employees or agents of the Lender Party without the use of the Confidential Information.
(b) Disclosures. Any Lender Party or its legal counsel may disclose the Confidential Information (i) to the Borrower, other Lenders, the Administrative Agent or any of their respective legal counsel, (ii) to its auditors in connection with bank audits or regulatory officials having jurisdiction over such Lender Party, (iii) to its legal counsel who need to know the Confidential Information for the purposes of representing or advising the Lender Parties, (iv) with prior written notice to the Chief Executive Officer of the Borrower, to its consultants, agents and advisors retained in good faith by such Lender Party with a need to know such information in connection with a Permitted Purpose, (v) as required by Law or legal process (subject to the terms below), or in connection with any legal proceeding in connection with the Loan Documents, or to the extent necessary or desirable to establish, enforce or assert any claims or defenses in connection with any legal proceeding by or against any such Lender Party, (vi) to another potential Lender or participant in connection with a disposition or proposed disposition to that Person of all or part of that Lender Party’s interests hereunder or a participation interest
in its Notes, and (vii) to its directors, officers, employees and affiliates that control, are controlled by, or are under common control with such Lender Party or its parent or otherwise within the corporate umbrella of such Lender Party who need to know the confidential information for purposes of underwriting the Loan or becoming a party to this Agreement, the syndication of the Loan, the administration, interpretation, performance or exercise of rights under the Loan Documents, the enforcement of the Loan Documents, or other internal supervision, examination or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, provided that any Person to whom any of the Confidential Information is disclosed is informed by such Lender Party of the strictly confidential nature of the Confidential Information, and such Persons described in clauses (b)(iv) and (vi) shall agree in writing to be bound by confidentiality restrictions at least as restrictive as those contained herein. Notwithstanding the foregoing, a Lender Party may disclose Confidential Information to the extent such Lender Party is requested or required by any Law or any order of any court, governmental, regulatory or self-regulatory body or other legal process to make any disclosure of or about any of the Confidential Information. In such event (except with respect to banking regulators or auditors), such Lender Party shall, if permitted by law, promptly notify the Borrower in writing so that the Borrower may seek an appropriate protective order or waive compliance with the provisions of this Agreement (provided that if a protective order or the receipt of a waiver hereunder has not been obtained, or if prior notice is not possible, and a Lender Party is, in the opinion of its counsel, compelled to disclose Confidential Information, such Lender Party may disclose that portion of the Confidential Information which its counsel advises it that such Lender Party is compelled to disclose, and provided further that in any event, such Lender Party will not oppose action by the Borrower to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information.) Each Lender Party shall be liable (but only to the extent it is finally determined to have breached the provisions of this Section 10.07(b)) for any actions by such Lender Party (but not any other Person) which are not in accordance with the provisions of this Section 10.07(b).
(c) No Rights in Confidential Information. The Administrative Agent and each Lender recognizes and agrees that nothing contained in this Section 10.07 shall be construed as granting any property rights, by license or otherwise, to any Confidential Information (other than the Agreement or any amendments thereto or any related agreements), or to any invention or any patent, copyright, trademark, or other intellectual property right that has issued or that may issue, based on such Confidential Information (other than the Agreement or any amendments thereto or any related agreements). No Lender Party shall make, have made, use or sell for any purpose any product or other item using, incorporating or derived from any such Confidential Information; provided that the foregoing shall not limit or restrict in any way the creation, use or sale of banking or related services by any Lender Party.
(d) Survival. All Confidential Information provided by or on behalf of the Borrower during the term of this Agreement or any predecessor agreements shall remain confidential indefinitely and shall continue to receive that level of confidential treatment customarily provided by commercial banks dealing with confidential information of their borrower customers, subject, however, to the specific exceptions to confidential treatment provided herein. For a period of one year after the Termination Date, the affected Lender Party shall continue to make reasonable inquiry of any third party providing Confidential Information as to whether such third party is subject to an obligation of confidentiality owed to the Borrower or its Subsidiaries and if such Lender Party obtains knowledge that such third party is violating a confidentiality agreement with the Borrower, such Lender Party shall treat the Confidential Information received from such third party as strictly confidential in accordance with the provisions of this Section 10.07. For purposes of this Section 10.07(d), the Termination Date shall mean the earlier of the termination of this Agreement or, with respect to a specific Lender Party, the date such Person no longer holds an interest in the Loan.
(e) Injunctive Relief. Each Lender Party hereby agrees that breach of this Section 10.07 will cause the Borrower irreparable damage for which recovery of damages would be inadequate, and that the Borrower shall therefore be entitled to obtain timely injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.
(f) No Fiduciary Duty. Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Administrative Agent or the Lenders to a Credit Party.
(g) Separate Action. Each Credit Party covenants and agrees not to, and hereby expressly waives any right to, raise as a defense, affirmative defense, set off, recoupment or otherwise against any Lender Party any claim arising from or relating to an alleged breach of this Section 10.07 in any action, claim or proceeding relating to a breach of the Loan Documents by the Credit Parties or other action to enforce or recover the Obligations, and covenant and agree that any claim against a Lender Party arising from or relating to an alleged breach of this Section 10.07 by a Lender Party shall only be asserted as an affirmative claim in a separate action against the applicable Lender Party.
10 .08 Right of Setoff .
If an Event of Default shall have occurred and be continuing, each Lender and each of its respective Affiliates is hereby authorized at any time and from time to time to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of a Credit Party against any and all of the obligations of the Credit Parties now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Credit Parties may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and each of its respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or each of its respective Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
10 .09 Interest Rate Limitation .
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
10 .10 Counterparts; Integration; Effectiveness .
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging transmission (e.g. “pdf” via e-mail) shall be effective as delivery of a manually executed counterpart of this Agreement.
10 .11 Survival of Representations and Warranties .
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.
10 .12 Severability .
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
10 .13 Replacement of Lenders .
If (a) any Lender requests compensation under Section 3.04, (b) any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to Section 10.01, (i) requires the consent of 100% of the Lenders and the consent of the Required Lenders has been obtained or (ii) requires the consent of each Lender directly affected thereby, or (d) any other circumstance exists hereunder that gives the Credit Parties the right to replace a Lender as a party hereto, then the Credit Parties may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06 except as provided in this Section 10.13), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Sections 3.04, 3.05 and 10.04)
from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Credit Parties to require such assignment and delegation cease to apply.
10 .14 Governing Law; Jurisdiction; Etc .
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
10 .15 Waiver of Jury Trial .
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10 .16 USA PATRIOT Act Notice .
Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, following a request by the Administrative Agent or any Lender, promptly provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.”
10 .17 [Reserved] .
10 .18 ENTIRE AGREEMENT .
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
10 .19 [Reserved] .
10 .20 Release of a Guarantor .
(a) Notwithstanding anything to the contrary contained in this Agreement, the Borrower may (i) sell, assign, transfer or dispose of its interest in a Guarantor (other than the Operating Partnership) that is a Subsidiary of the Borrower or (ii) request that any Guarantor (other than the Operating Partnership) be released from its obligations under the Loan Documents; provided, that, on or before (A) the closing of such sale, assignment, transfer or disposition or (B) the effectiveness of such requested release, the
Borrower shall have delivered to the Administrative Agent a certification, together with such other evidence as the Administrative Agent may require, that the Credit Parties will be in compliance with all terms of this Agreement after giving effect to such sale, assignment, transfer, disposition or release. The Administrative Agent shall promptly notify the Lenders of any such sale, assignment, transfer, disposition or release permitted hereunder.
(b) Upon a sale, assignment, transfer, disposition or request for release in accordance with clause (a) above, the Administrative Agent shall, at the expense of the Borrower, take such action as is reasonably appropriate to effect such release.
10 .21 No Advisory or Fiduciary Responsibility .
In connection with all aspects of each transaction contemplated hereby, the Credit Parties acknowledge and agree, and acknowledge their Subsidiaries’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Credit Parties and their respective Subsidiaries, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Credit Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of the Administrative Agent, the Arrangers and each Lender, each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Credit Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent, the Arrangers nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Credit Parties with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, the Arrangers or any Lender has advised or is currently advising the Credit Parties or any of their respective Affiliates on other matters) and neither the Administrative Agent, the Arrangers nor any Lender has any obligation to the Credit Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their respective Affiliates, and neither the Administrative Agent, the Arrangers nor any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each of the Credit Parties hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arrangers and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty arising out of the transactions contemplated hereby.
ARTICLE XI
GUARANTY
11 .01 The Guaranty .
Each of the Guarantors hereby jointly and severally, absolutely and unconditionally, guarantees to each Lender and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws.
11 .02 Obligations Unconditional .
The obligations of the Guarantors under Section 11.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable Laws, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than payment in full of the Obligations), it being the intent of this Section 11.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article XI until such time as the Obligations (other than contingent indemnity obligations) have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above.
(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the Loan Documents or other documents relating to the Obligations shall be done or omitted;
(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or other documents relating to the Obligations shall be waived or any other guarantee
of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives, to the extent permitted by Law, diligence, presentment, demand of payment, protest and all notices whatsoever, acceptance hereof, and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations, or against any other Person under any other guarantee of, or security for, any of the Obligations.
11 .03 Reinstatement .
The obligations of the Guarantors under this Article XI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent, each Lender and each other holder of the Obligations on demand for all reasonable costs and expenses (including, without limitation, the fees, charges and disbursements of counsel) incurred by the Administrative Agent, such Lender or such other holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
11 .04 Certain Additional Waivers .
Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 11.02 and through the exercise of rights of contribution pursuant to Section 11.06.
11 .05 Remedies .
The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent, the Lenders and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 8.02) for purposes of Section 11.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 11.01.
11 .06 Rights of Contribution .
The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable Laws. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until all Obligations have been paid in full and the Commitments have terminated.
11 .07 Guarantee of Payment; Continuing Guarantee .
The guarantee in this Article XI is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
11 .08 Additional Guarantors .
The Borrower may at any time and from time to time, upon written request to the Administrative Agent, cause a Domestic Subsidiary that is a Wholly-Owned Subsidiary to become a Guarantor under this Agreement by (a) executing a Joinder Agreement and (b) delivering such other documentation as the Administrative Agent may reasonably request in connection therewith, including, without limitation, certified resolutions and other organizational and customary authorizing documents of such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent.
[Remainder of Page Intentionally Left Blank]
SCHEDULE 1.01
The existence of the consent rights of the Massachusetts Institute of Technology with respect to (a) leases over 150,000 square feet, (b) alteration of the Real Property affecting more than 150,000 square feet and having an expense of $20,000,000 or more in any single project, (c) leverage exceeding 80% of loan to value with respect to such Real Property, (d) transactions with any affiliate of the Parent, (e) acquisition of assets other than such Real Property and related items of property and (f) changing the purpose of the company.
SCHEDULE 2.01
Commitments and Applicable Percentages
[On file with Administrative Agent]
SCHEDULE 10.02
Administrative Agent’s Office; Certain Addresses for Notices
To the Administrative Agent:
Citibank, N.A.
1615 Brett Road, OPS III
New Castle, Delaware 19720
Attn: Helen S. Pugh
Telephone: (302) 894-6114
Facsimile: (212) 994-0961
Email: [email protected]
Email address for notices: [email protected]
To Borrower/Credit Parties:
Alexandria Real Estate Equities, Inc.
385 E. Colorado Boulevard, Suite 299
Pasadena, California 91101
Attn: Dean A. Shigenaga, Chief Financial Officer
Telephone: (626) 578-0777
Facsimile: (626) 578-0770
Email: [email protected]
Website Address: www.are.com
EXHIBIT A
FORM OF LOAN NOTICE
Date: ___________ _____
To: Citibank, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Term Loan Agreement, dated as of June 30, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent.
The undersigned hereby requests (select one):
o A Borrowing of Loans o A conversion or continuation of Loans
On (a Business Day).
In the principal amount of $ .
Type of Loan requested to be borrowed or to which existing Loans are to be continued or converted:
o Base Rate Loan
o Eurodollar Rate Loans: with an Interest Period of month(s)3.
[After giving effect to the Borrowing requested herein, the aggregate outstanding principal amount of all Loans shall not exceed the Aggregate Commitments.]4
3 One, two, three or six months
4 Include only in the case of a notice of Borrowing (and not for any conversion or continuation).
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
|---|---|---|---|
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
EXHIBIT B
[RESERVED]
EXHIBIT C
FORM OF NOTE
| New York, New York | $________________ |
|---|
___________________
FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to (or its registered assigns) (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of Dollars ($ ) made by the Lender to the Borrower under that certain Amended and Restated Term Loan Agreement, dated as of June 30, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent.
The Borrower promises to pay interest on the unpaid principal amount of the Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand in accordance with the terms of the Agreement, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Agreement.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
To: Citibank N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Term Loan Agreement, dated as of June 30, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders, and Citibank N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the of Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Credit Parties, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
- Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of [ ] (the “Statement Date”), together with the report and opinion of an independent certified public accountant required by such section.
[Use following paragraphs for fiscal quarter-end financial statements]
Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of [ ] (the “Statement Date”). Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the Statement Date.
As of the date hereof, the Borrower’s Debt Rating (if any) is .
A review of the activities of the Credit Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Credit Parties performed and observed all of their respective Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, no Default or Event of Default exists.]
--or--
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
[signature page follows]
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of , .
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
|---|---|---|---|
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
For the Quarter/Year ended (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
| I. | Section 7.09(a) — Fixed Charge Coverage Ratio. | |||
|---|---|---|---|---|
| A. | Adjusted EBITDA for the four quarter period ended on Statement Date: | $__________ | ||
| B. | Debt Service of the Borrower and its Subsidiaries for the four quarter period ended on Statement Date: | $__________ | ||
| C. | Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during the four quarter period ended on Statement Date: | $__________ | ||
| D. | Line I.B. + Line I.C.: | $__________ | ||
| E. | Fixed Charge Coverage Ratio (Line I.A. ÷ Line I.D.): | ____ : 1.00 | ||
| F. | Compliance Ratio: | >1.50:1.00 | ||
| G. | Covenant Compliance: | Yes __ No __ | ||
| II. | Section 7.09(b) — Secured Debt Ratio. | |||
| A. | Secured Debt of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| C. | Secured Debt to Adjusted Tangible Assets (Line II.A. ÷ Line II.B.): | _________% | ||
| D. | Compliance Ratio: | <40.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition5: | <45.0% | |||
| E. | Covenant Compliance: | Yes __ No __ | ||
| III. | Section 7.09(c) — Leverage Ratio. | |||
| A. | Adjusted Total Indebtedness at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| C. | Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness at Statement Date: | $__________ |
5 See Section 7.09(b)(ii) of the Credit Agreement.
| D. | Line III.B. - Line III.C.: | $_________ | |
|---|---|---|---|
| E. | Line III.A. ÷ Line III.D.: | ________% | |
| F. | Compliance Ratio: | <60.0% | |
| For the four quarters ending subsequent to the consummation of a Material Acquisition6: | <65.0% | ||
| G. | Covenant Compliance: | Yes __ No __ | |
| IV. | Section 7.09(d) — Minimum Book Value. | ||
| A. | Minimum Book Value at Statement Date: | $__________ | |
| B. | 50% of net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds): | $__________ | |
| C. | 2,000,000,000 + Line IV.B.: | $__________ | |
| D. | Compliance Ratio: Line IV.A. > Line IV.C.: | ||
| E. | Covenant Compliance: | Yes __ No __ | |
| V. | Section 7.09(e) — Unsecured Interest Coverage Ratio. | ||
| A. | aggregate Adjusted NOI from the Qualified Asset Pool Properties for the four fiscal quarter period ending on the Statement Date: | $__________ | |
| B. | aggregate Interest Charges for the four quarter period ended on the Statement Date in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt): | $__________ | |
| C. | Line V.A. ÷ Line V.B.: | ______:1.00 | |
| D. | Compliance Ratio: | >1.75:1.00 | |
| E. | Covenant Compliance: | Yes __ No __ | |
| VI. | Section 7.09(f) — Unsecured Leverage Ratio. | ||
| A. | aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |
| B. | Obligor Subsidiary Debt: | $__________ | |
| C. | Adjusted Unencumbered Asset Value at Statement Date: | $__________ | |
| D. | amount of Excluded Indebtedness (other than Obligor Subsidiary Debt) |
All values are in US Dollars.
6 See Section 7.09(c)(ii) of the Credit Agreement.
| deducted in connection with the determination of aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |||
|---|---|---|---|---|
| E. | Line VI.A. - Line VI.B. | $__________ | ||
| F. | Line VI.C. – Line VI.D. | $__________ | ||
| G. | Unsecured Leverage Ratio (Line VI.E. ÷ Line VI.F.): | __________% | ||
| H. | Compliance Ratio: | <60.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition7: | <65.0% | |||
| I. | Covenant Compliance: | Yes __ No __ | ||
| VII. | Section 7.04 — Restricted Payments. | |||
| A. | Restricted Payments by Borrower for the four quarter period ended on the Statement Date: | $__________ | ||
| B. | Funds From Operations of Borrower and its Subsidiaries for the four quarter period ending on the Statement Date: | $__________ | ||
| C. | (Line VII.A. ÷ Line VII.B.): | _________% | ||
| D. | Compliance Percentage: | <95% | ||
| E. | Covenant Compliance: | Yes __ No __ | ||
| o Compliance based on Line VII.D. percentage | ||||
| o Compliance based on REIT Status or to avoid payment of federal or state income or excise tax | ||||
| VIII. | Section 7.02(f) and (g) - Investments. | |||
| A. | Development Investments at the Statement Date: | $__________ | ||
| B. | Undeveloped land without improvements at the Statement Date: | $__________ | ||
| C. | Real Property (other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities) at the Statement Date: | $__________ | ||
| D. | Sum of Line VIII.A. + Line VIII.B. + Line VIII.C.: | $__________ | ||
| E. | Adjusted Tangible Assets at the Statement Date: | $__________ | ||
| F. | Line VIII.D. ÷ Line VIII.E.: | _________% |
7 See Section 7.09(f)(ii) of the Credit Agreement.
| G. | Compliance Percentage: | <35% | ||
|---|---|---|---|---|
| H. | Covenant Compliance: | Yes __ No __ | ||
| I. | Other non-Real Property Investments at the Statement Date (not otherwise permitted under Section 7.02): | $__________ | ||
| J. | Line VIII.I. ÷ Line VIII.E.: | _________% | ||
| K. | Compliance Percentage: | <15% | ||
| L. | Covenant Compliance: | Yes __ No __ |
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]8 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]9 Assignee identified in item 2 below ([the][each, an] “Assignee”). **[It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]**10 **hereunder are several and not joint.]**11 Capitalized terms used but not defined herein shall have the meanings given to them in the Amended and Restated Term Loan Agreement identified below (the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the term loan facility established by the Loan Agreement and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
| 1. | Assignor: | ||
|---|---|---|---|
| 2. | Assignee: | [and is an Affiliate/Approved Fund of [identify Lender]] | |
| 3. | Borrower: Alexandria Real Estate Equities, Inc. | ||
| 4. | Administrative Agent: Citibank, N.A., as the administrative agent under the Loan Agreement. |
8 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
9 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
10 Select as appropriate.
11 Include bracketed language if there are either multiple Assignors or multiple Assignees.
| 5. | Loan Agreement: Amended and Restated Term Loan Agreement, dated as of June 30, 2011, among Alexandria Real Estate Equities, Inc., as the Borrower, Alexandria Real Estate Equities, L.P., as a Guarantor, the other Guarantors (if any) party thereto, the Lenders from time to time party thereto and Citibank, N.A., as Administrative Agent. | |||
|---|---|---|---|---|
| 6. | Assigned Interest: | |||
| Facility Assigned | Aggregate Amount of<br>Commitment/Loans<br>for all Lenders* | Amount of<br>Commitment/Loans<br>Assigned* | Percentage Assigned<br>of<br>Commitment/Loans | CUSIP Number |
| --- | --- | --- | --- | --- |
| Term Loan | $______________ | $______________ | ______________% | |
| $______________ | $______________ | ______________% | ||
| $______________ | $______________ | ______________% | ||
| [7. | Trade Date: ] | |||
| --- | --- |
Effective Date: , 20_ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
| ASSIGNOR | |||
|---|---|---|---|
| [NAME OF ASSIGNOR] | |||
| By: | |||
| Name: | |||
| Title: | |||
| ASSIGNEE | |||
| [NAME OF ASSIGNEE] | |||
| By: | |||
| Name: | |||
| Title: |
Consented to, if applicable, and Accepted:
CITIBANK, N.A.,
as Administrative Agent
| By: | ||
|---|---|---|
| Name: | ||
| Title: |
Consented to, if applicable:
ALEXANDRIA REAL ESTATE EQUITIES, INC., a
Maryland corporation
| By: | ||
|---|---|---|
| Name: | ||
| Title: |
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
- Representations and Warranties.
1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06 of the Loan Agreement (subject to such consents, if any, as may be required under Section 10.06 of the Loan Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Loan Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.
General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT F
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of [date], is by and between , a [corporation] a Domestic Subsidiary that is a Wholly Owned Subsidiary (the “Subsidiary”), the Borrower (as hereinafter defined) and the Administrative Agent (as hereinafter defined) pursuant to that certain Amended and Restated Term Loan Agreement, dated as of June 30, 2011 (as amended, restated, amended and restated, supplemented, extended or otherwise modified in writing from time to time, the “Loan Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (together with the Operating Partnership, collectively the “Guarantors” and individually a “Guarantor”), each lender from time to time party thereto (individually, a “Lender” and collectively, the “Lenders”) and Citibank, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms not otherwise defined herein are defined in the Loan Agreement.
The Borrower has, pursuant to Section 11.08 of the Loan Agreement, requested that the Subsidiary become a Guarantor. Accordingly, the Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders:
The Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Subsidiary will be deemed to be a party to the Loan Agreement and a “Guarantor” for all purposes of the Loan Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Loan Agreement. The Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Loan Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent, as provided in Article XI of the Loan Agreement, the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof.
The Subsidiary acknowledges and confirms that it has received a copy of the Loan Agreement and the Schedules and Exhibits thereto.
The Borrower, on behalf of the Credit Parties, confirms that all of the Obligations under the Loan Agreement are, and upon the Subsidiary becoming a Guarantor shall continue to be, in full force and effect.
The Borrower and the Subsidiary agree that at any time and from time to time, upon the written request of the Administrative Agent, each of the Borrower and the Subsidiary will execute and deliver such further documents and do such further acts and things as the Administrative Agent may reasonably request in order to effectuate the purposes of this Agreement.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the Subsidiary and the Borrower has caused this Joinder Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
| [ ] | |||
|---|---|---|---|
| By: | |||
| Name: | |||
| Title: | |||
| CITIBANK, N.A., | |||
| as Administrative Agent for itself and the other Lenders | |||
| By: | |||
| Name: | |||
| Title: |
Consented to:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
| By: | ||
|---|---|---|
| Name: | ||
| Title: |
EXHIBIT B
Revised Form of Compliance Certificate
(attached)
FORM OF COMPLIANCE CERTIFICATE
To: Citibank N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Term Loan Agreement, dated as of June 30, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders, and Citibank N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the of Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Credit Parties, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
- Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of [ ] (the “Statement Date”), together with the report and opinion of an independent certified public accountant required by such section.
[Use following paragraphs for fiscal quarter-end financial statements]
Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of [ ] (the “Statement Date”). Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the Statement Date.
As of the date hereof, the Borrower’s Debt Rating (if any) is .
A review of the activities of the Credit Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Credit Parties performed and observed all of their respective Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, no Default or Event of Default exists.]
--or--
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
[signature page follows]
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of , .
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
|---|---|---|---|
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
For the Quarter/Year ended (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
| I. | Section 7.09(a) — Fixed Charge Coverage Ratio. | |||
|---|---|---|---|---|
| A. | Adjusted EBITDA for the four quarter period ended on Statement Date: | $__________ | ||
| B. | Debt Service of the Borrower and its Subsidiaries for the four quarter period ended on Statement Date: | $__________ | ||
| C. | Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during the four quarter period ended on Statement Date: | $__________ | ||
| D. | Line I.B. + Line I.C.: | $__________ | ||
| E. | Fixed Charge Coverage Ratio (Line I.A. ÷ Line I.D.): | ____ : 1.00 | ||
| F. | Compliance Ratio: | >1.50:1.00 | ||
| G. | Covenant Compliance: | Yes __ No __ | ||
| II. | Section 7.09(b) — Secured Debt Ratio. | |||
| A. | Secured Debt of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| C. | Secured Debt to Adjusted Tangible Assets (Line II.A. ÷ Line II.B.): | _________% | ||
| D. | Compliance Ratio: | <40.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition12: | <45.0% | |||
| E. | Covenant Compliance: | Yes __ No __ | ||
| III. | Section 7.09(c) — Leverage Ratio. | |||
| A. | Adjusted Total Indebtedness at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| C. | Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness at Statement Date: | $__________ |
12 See Section 7.09(b)(ii) of the Credit Agreement.
| D. | Line III.B. - Line III.C.: | $_________ | |
|---|---|---|---|
| E. | Line III.A. ÷ Line III.D.: | ________% | |
| F. | Compliance Ratio: | <60.0% | |
| For the four quarters ending subsequent to the consummation of a Material Acquisition13: | <65.0% | ||
| G. | Covenant Compliance: | Yes __ No __ | |
| IV. | Section 7.09(d) — Minimum Book Value. | ||
| A. | Minimum Book Value at Statement Date: | $__________ | |
| B. | 50% of net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds): | $__________ | |
| C. | 2,000,000,000 + Line IV.B.: | $__________ | |
| D. | Compliance Ratio: Line IV.A. > Line IV.C.: | ||
| E. | Covenant Compliance: | Yes __ No __ | |
| V. | Section 7.09(e) — Unsecured Interest Coverage Ratio. | ||
| A. | aggregate Adjusted NOI from the Qualified Asset Pool Properties for the four fiscal quarter period ending on the Statement Date: | $__________ | |
| B. | aggregate Interest Charges for the four quarter period ended on the Statement Date in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt): | $__________ | |
| C. | Line V.A. ÷ Line V.B.: | ______:1.00 | |
| D. | Compliance Ratio: | >1.75:1.00 | |
| E. | Covenant Compliance: | Yes __ No __ | |
| VI. | Section 7.09(f) — Unsecured Leverage Ratio. | ||
| A. | aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |
| B. | Obligor Subsidiary Debt: | $__________ | |
| C. | Adjusted Unencumbered Asset Value at Statement Date: | $__________ | |
| D. | amount of Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in connection with the determination of aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at |
All values are in US Dollars.
13 See Section 7.09(c)(ii) of the Credit Agreement.
| Statement Date: | $__________ | |||
|---|---|---|---|---|
| E. | Line VI.A. - Line VI.B. | $__________ | ||
| F. | Line VI.C. – Line VI.D. | $__________ | ||
| G. | Unsecured Leverage Ratio (Line VI.E. ÷ Line VI.F.): | __________% | ||
| H. | Compliance Ratio: | <60.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition14: | <65.0% | |||
| I. | Covenant Compliance: | Yes __ No __ | ||
| VII. | Section 7.04 — Restricted Payments. | |||
| A. | Restricted Payments by Borrower for the four quarter period ended on the Statement Date: | $__________ | ||
| B. | Funds From Operations of Borrower and its Subsidiaries for the four quarter period ending on the Statement Date: | $__________ | ||
| C. | (Line VII.A. ÷ Line VII.B.): | _________% | ||
| D. | Compliance Percentage: | <95% | ||
| E. | Covenant Compliance: | Yes __ No __ | ||
| o Compliance based on Line VII.D. percentage | ||||
| o Compliance based on REIT Status or to avoid payment of federal or state income or excise tax | ||||
| VIII. | Section 7.02(f) and (g) - Investments. | |||
| A. | Development Investments at the Statement Date: | $__________ | ||
| B. | Undeveloped land without improvements at the Statement Date: | $__________ | ||
| C. | Real Property (other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities) at the Statement Date: | $__________ | ||
| D. | Sum of Line VIII.A. + Line VIII.B. + Line VIII.C.: | $__________ | ||
| E. | Adjusted Tangible Assets at the Statement Date: | $__________ | ||
| F. | Line VIII.D. ÷ Line VIII.E.: | _________% | ||
| G. | Compliance Percentage: | <35% | ||
| H. | Covenant Compliance: | Yes __ No __ |
14 See Section 7.09(f)(ii) of the Credit Agreement.
| I. | Other non-Real Property Investments at the Statement Date (not otherwise permitted under Section 7.02): | $__________ | ||
|---|---|---|---|---|
| J. | Line VIII.I. ÷ Line VIII.E.: | _________% | ||
| K. | Compliance Percentage: | <15% | ||
| L. | Covenant Compliance: | Yes __ No __ |
Exhibit 10.4
FIRST AMENDMENT
TO
TERM LOAN AGREEMENT
Dated as of April 30, 2012
among
ALEXANDRIA REAL ESTATE EQUITIES, INC. and
ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
as the Credit Parties
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
The Lenders Party Hereto
with
JPMORGAN CHASE BANK, N.A.
and
CITIGROUP GLOBAL MARKETS INC.,
as Co-Syndication Agents,
ROYAL BANK OF CANADA
and
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agents,
and
J.P. MORGAN SECURITIES LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Lead Book Runners
FIRST AMENDMENT TO TERM LOAN AGREEMENT
THIS FIRST AMENDMENT TO TERM LOAN AGREEMENT, dated as of April 30, 2012 (this “Amendment”), is entered into among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Parent”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (the “Operating Partnership” or a “Guarantor”); collectively, the Parent and the Operating Partnership may be referred to herein as the “Credit Parties”), certain lenders party to the Existing Term Loan Agreement described below (the “Lenders”) and Bank of America, N.A., as administrative agent (the “Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Existing Term Loan Agreement described below.
W I T N E S S E T H:
WHEREAS, the Credit Parties, certain Subsidiaries of the Operating Partnership party thereto from time to time (collectively, the “Subsidiary Borrowers”), the Lenders party thereto and the Administrative Agent have entered into that certain Term Loan Agreement (as otherwise amended or modified, the “Existing Term Loan Agreement”), dated as of December 6, 2011 (such date, the “Original Effective Date”);
WHEREAS, pursuant to that certain letter dated as of February 29, 2012 from the Administrative Agent to the Parent, each of the Subsidiary Borrowers (as defined in the Existing Term Loan Agreement) was released from its obligations under the Existing Term Loan Agreement and the other Loan Documents (as defined in the Existing Term Loan Agreement) in accordance with Section 10.23 of the Existing Term Loan Agreement;
WHEREAS, the Credit Parties have, concurrent with the effectiveness of this Amendment entered into a $1.5 billion revolving credit facility (the “New Revolver”), which New Revolver is evidenced by (i) that certain Third Amended and Restated Credit Agreement dated as of April 30, 2012 (the “New Revolving Credit Agreement”), by and among the Parent, the Operating Partnership, each lender from time to time party thereto, and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and (ii) the other Loan Documents (as such term is defined in the New Revolving Credit Agreement) relating thereto;
WHEREAS, the Credit Parties have requested that the Required Lenders agree to amend certain provisions of the Existing Term Loan Agreement to conform such provisions to corresponding provisions under the New Revolver and the New Revolving Credit Agreement, all as more particularly set forth herein; and
WHEREAS, subject to the terms and conditions herein, the Required Lenders have agreed to amend the Existing Term Loan Agreement, as more fully set forth below.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1 . AMENDMENTS TO EXISTING TERM LOAN AGREEMENT
(a) Effective on the Amendment Effective Date (as defined below), the Existing Term Loan Agreement is hereby amended to read in the form attached hereto as Exhibit A (as so amended, the “Amended Term Loan Agreement”).
(b) Without limiting the foregoing, effective on the Amendment Effective Date, Schedule 5.17 annexed to the Existing Term Loan Agreement is hereby deleted in its entirety.
(c) Without limiting the foregoing, effective on the Amendment Effective Date, the form of Compliance Certificate attached as Exhibit D to the Existing Term Loan Agreement is hereby amended to read in the form attached hereto as Exhibit B.
2 . EFFECTIVENESS
This Amendment shall become effective on the day (the “Amendment Effective Date”) on which each of the following conditions precedent has been satisfied:
(a) Amendment. Receipt by the Administrative Agent of executed counterparts of this Amendment, duly executed by each Credit Party, the Administrative Agent and the Required Lenders.
(b) Resolutions, Etc. Receipt by the Administrative Agent of (i) such resolutions or other action, incumbency certificates of Responsible Officers of each Credit Party, as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and (ii) certified copies of the Organization Documents of each Credit Party.
(c) Good Standing. Receipt by the Administrative Agent of evidence that each Credit Party is validly existing and in good standing in its jurisdiction of organization.
(d) Officer’s Certificate. Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Borrower stating that (i) no Default or Event of Default exists as of the Amendment Effective Date, either before or immediately after giving effect to this Amendment and (ii) the representations and warranties contained in Article V of the Existing Term Loan Agreement and the other Loan Documents are true and correct in all material respects, on and as of the Amendment Effective Date, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case, they are true and correct in all material respects as of such earlier date, and (B) that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Existing Term Loan Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Existing Term Loan Agreement.
(e) Fees and Expenses. Receipt by the Administrative Agent of reimbursement of any expenses of the Administrative Agent and the lead arrangers incurred in connection with this Amendment required to be reimbursed by the Credit Parties on the Amendment Effective Date, to the extent invoiced prior to the Amendment Effective Date.
(f) Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions of legal counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, dated as of the Amendment Effective Date.
3 . MISCELLANEOUS
(a) Ratification of Loan Documents.
(i) The term “Agreement” as used in each of the Loan Documents shall, as of and following the Amendment Effective Date, mean the Existing Term Loan Agreement as amended and modified by this Amendment to read in the form of the Amended Term Loan Agreement attached as Exhibit A.
(ii) Each Credit Party acknowledges and consents to the modifications set forth herein (and as reflected in the form of the Amended Term Loan Agreement attached as Exhibit A) and agrees that this Amendment does not impair, reduce or limit any of its respective obligations under the Loan Documents and that, after the date hereof, this Amendment shall constitute a Loan Document.
(iii) The Existing Term Loan Agreement and each other Loan Document, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
(iv) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein or as provided in the exhibits hereto, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
(v) This Amendment shall not extinguish the obligations for the payment of money outstanding under the Existing Term Loan Agreement or the Amended Term Loan Agreement. Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Existing Term Loan Agreement, which shall remain in full force and effect, except to any extent modified hereby or as provided in the exhibits hereto. Nothing implied in this Amendment or in any other document contemplated hereby shall be construed as a release or other discharge of any of the Credit Parties from the Loan Documents.
(b) Authority/Enforceability. The Credit Parties represent and warrant to the Administrative Agent as follows:
(i) They have taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered by the Credit Parties and constitute the Credit Parties’ legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(iii) The execution and delivery of this Amendment does not (A) violate, contravene or conflict with any provision of their Organization Documents or (B) materially violate, contravene or conflict with any Law applicable to them.
(c) Counterparts/Telecopy. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of executed counterparts of this Amendment by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an original shall be delivered if requested by the Administrative Agent.
(d) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(e) Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(f) Loan Documents Executed Prior to the Amendment Effective Date. The parties hereto acknowledge and agree that each of the Loan Documents (including without limitation each of the Notes) executed as of the Original Effective Date, or at any time prior to the Amendment Effective Date, by the Operating Partnership in its capacity as a “Borrower” (as such term is defined in the Existing Term Loan Agreement) shall be deemed to have been executed by the Operating Partnership as of such date in its capacity as a “Guarantor” (as such term is defined in the Amended Term Loan Agreement), and that no such Loan Document shall be required to be executed or re-executed by the Operating Partnership in connection with this Amendment.
(g) Compliance with Financial Covenants for Fiscal Quarter Ended March 31, 2012. Notwithstanding any provision in the Existing Term Loan Agreement to the contrary, the parties hereto acknowledge and agree that the Compliance Certificate to be delivered by the Borrower pursuant to Section 6.02(a) of the Agreement for the fiscal quarter ended March 31, 2012 shall be in the form attached hereto as Exhibit B and shall prepared in accordance with, and shall demonstrate compliance with the financial and other applicable covenants set forth in, the Amended Term Loan Agreement, as if such Amended Term Loan Agreement was in effect as of such fiscal quarter end date.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Term Loan Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||||||
|---|---|---|---|---|---|---|---|
| a Maryland corporation | |||||||
| By: | /s/ Dean A. Shigenaga | ||||||
| Name: | Dean A. Shigenaga | ||||||
| Title: | Chief Financial Officer | ||||||
| ALEXANDRIA REAL ESTATE EQUITIES, L.P., a<br>Delaware limited partnership | |||||||
| By: | ARE-QRS Corp., a Maryland corporation, | ||||||
| general partner | |||||||
| By: | /s/ Dean A. Shigenaga | ||||||
| Name: | Dean A. Shigenaga | ||||||
| Title: | Chief Financial Officer |
FIRST AMENDMENT TO TERM LOAN AGREEMENT
ALEXANDRIA REAL ESTATE EQUITIES, INC.
| ADMINISTRATIVE AGENT: | ||||
|---|---|---|---|---|
| BANK OF AMERICA, N.A. | ||||
| By: | /s/ Henry Pennell | |||
| Name: | Henry Pennell | |||
| Title: | Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| LENDERS: | ||||
|---|---|---|---|---|
| BANK OF AMERICA, N.A. | ||||
| By: | /s/ James P. Johnson | |||
| Name: | James P. Johnson | |||
| Title: | Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| JPMORGAN CHASE BANK, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ Brendan M. Poe | |||
| Name: | Brendan M. Poe | |||
| Title: | Executive Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| CITIBANK, N.A. | ||||
|---|---|---|---|---|
| By: | /s/ John Rowland | |||
| Name: | John Rowland | |||
| Title: | Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| ROYAL BANK OF CANADA | ||||
|---|---|---|---|---|
| By: | /s/ G. David Cole | |||
| Name: | G. David Cole | |||
| Title: | Authorized Signatory |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| REGIONS BANK | ||||
|---|---|---|---|---|
| By: | /s/ Michael R. Mellott | |||
| Name: | Michael R. Mellott | |||
| Title: | Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| PNC BANK NATIONAL ASSOCIATION | ||||
|---|---|---|---|---|
| By: | /s/ Tyler Lowry | |||
| Name: | Tyler Lowry | |||
| Title: | Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| THE BANK OF NOVA SCOTIA | ||||
|---|---|---|---|---|
| By: | /s/ Christopher Usas | |||
| Name: | Christopher Usas | |||
| Title: | Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH | ||||
|---|---|---|---|---|
| By: | /s/ Mikhail Faybusovich | |||
| Name: | Mikhail Faybusovich | |||
| Title: | Director | |||
| By: | /s/ Viupl Dhadda | |||
| Name: | Vipul Dhadda | |||
| Title: | Associate |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| BARCLAYS BANK PLC | ||||
|---|---|---|---|---|
| By: | /s/ Noam Azachi | |||
| Name: | Noam Azachi | |||
| Title: | Assistant Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| GOLDMAN SACHS BANK USA | ||||
|---|---|---|---|---|
| By: | /s/ Michelle Latzoni | |||
| Name: | Michelle Latzoni | |||
| Title: | Authorized Signatory |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| BRANCH BANKING AND TRUST COMPANY | ||||
|---|---|---|---|---|
| By: | /s/ Ahaz A. Armstrong | |||
| Name: | Ahaz A. Armstrong | |||
| Title: | Assistant Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. | ||||
|---|---|---|---|---|
| By: | /s/ Charles Stewart | |||
| Name: | Charles Stewart | |||
| Title: | Director |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| CHANG HWA COMMERCIAL BANK LTD.,<br><br>LOS ANGELES BRANCH | ||||
|---|---|---|---|---|
| By: | /s/ Chu-I Hung | |||
| Name: | Chu-I Hung | |||
| Title: | VP & General Manager |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
| CITY NATIONAL BANK | ||||
|---|---|---|---|---|
| By: | /s/ Robert Besser | |||
| Name: | Robert Besser | |||
| Title: | Senior Vice President |
ALEXANDRIA REAL ESTATE EQUITIES, INC.
FIRST AMENDMENT TO TERM LOAN AGREEMENT
APRIL 2012
EXHIBIT A
Amended Term Loan Agreement
(attached)
EXHIBIT A TO FIRST AMENDMENT
TO TERM LOAN AGREEMENT
TERM LOAN AGREEMENT
Dated as of December 6, 2011
among
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
as the Borrower,
ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
as a Guarantor,
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
The Lenders Party Hereto
with
JPMORGAN CHASE BANK, N.A.
and
CITIGROUP GLOBAL MARKETS INC.,
as Co-Syndication Agents,
ROYAL BANK OF CANADA
and
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agents,
and
J.P. MORGAN SECURITIES LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Lead Book Runners
TABLE OF CONTENTS
| Page | |||
|---|---|---|---|
| ARTICLE I DEFINITIONS AND ACCOUNTING TERMS | 1 | ||
| 1.01 | Defined Terms | 1 | |
| 1.02 | Other Interpretive Provisions | 25 | |
| 1.03 | Accounting Terms/Financial Covenants | 25 | |
| 1.04 | Times of Day | 26 | |
| ARTICLE II THE COMMITMENTS AND BORROWINGS | 26 | ||
| 2.01 | Term Loans | 26 | |
| 2.02 | Borrowings, Conversions and Continuations of Loans | 26 | |
| 2.03 | [Reserved] | 28 | |
| 2.04 | [Reserved] | 28 | |
| 2.05 | Prepayments | 28 | |
| 2.06 | [Reserved] | 28 | |
| 2.07 | Repayment of Loans | 28 | |
| 2.08 | Interest | 28 | |
| 2.09 | Fees | 29 | |
| 2.10 | Computation of Interest and Fees | 29 | |
| 2.11 | Evidence of Debt | 29 | |
| 2.12 | Payments Generally; Administrative Agent’s Clawback | 30 | |
| 2.13 | Sharing of Payments by Lenders | 31 | |
| 2.14 | Extension of Maturity Date | 32 | |
| 2.15 | Increase in Commitments | 32 | |
| 2.16 | Defaulting Lenders | 33 | |
| ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY | 34 | ||
| 3.01 | Taxes | 34 | |
| 3.02 | Illegality | 36 | |
| 3.03 | Inability to Determine Rates | 37 | |
| 3.04 | Increased Costs; Reserves on Eurodollar Rate Loans | 37 | |
| 3.05 | Compensation for Losses | 39 | |
| 3.06 | Mitigation Obligations; Replacement of Lenders | 39 | |
| 3.07 | Survival | 40 | |
| ARTICLE IV CONDITIONS PRECEDENT TO THIS AGREEMENT AND THE BORROWING | 40 | ||
| 4.01 | Conditions of Effectiveness of this Agreement | 40 | |
| 4.02 | Additional Conditions to Borrowing | 42 | |
| ARTICLE V REPRESENTATIONS AND WARRANTIES | 42 | ||
| 5.01 | Existence, Qualification and Power; Compliance with Laws | 42 | |
| 5.02 | Authorization; No Contravention | 42 | |
| 5.03 | Governmental Authorization; Other Consents | 43 | |
| 5.04 | Binding Effect | 43 | |
| 5.05 | Financial Statements; No Material Adverse Effect | 43 | |
| 5.06 | Litigation | 43 | |
| 5.07 | No Default | 44 | |
| 5.08 | Ownership of Property; Liens | 44 | |
| 5.09 | Environmental Compliance | 44 |
| 5.10 | Insurance | 44 | |
|---|---|---|---|
| 5.11 | Taxes | 44 | |
| 5.12 | ERISA Compliance | 44 | |
| 5.13 | Margin Regulations; Investment Company Act; REIT Status | 45 | |
| 5.14 | Disclosure | 45 | |
| 5.15 | Compliance with Laws | 46 | |
| 5.16 | Intellectual Property; Licenses, Etc. | 46 | |
| 5.17 | [Reserved] | 46 | |
| 5.19 | [Reserved] | 46 | |
| 5.20 | Solvency | 46 | |
| ARTICLE VI AFFIRMATIVE COVENANTS | 46 | ||
| 6.01 | Financial Statements | 47 | |
| 6.02 | Certificates; Other Information | 47 | |
| 6.03 | Payment of Obligations | 49 | |
| 6.04 | Preservation of Existence, Etc. | 49 | |
| 6.05 | Maintenance of Properties | 49 | |
| 6.06 | Maintenance of Insurance | 49 | |
| 6.07 | Compliance with Laws | 50 | |
| 6.08 | Books and Records | 50 | |
| 6.09 | Inspection Rights | 50 | |
| 6.10 | Use of Proceeds | 50 | |
| ARTICLE VII NEGATIVE COVENANTS | 50 | ||
| 7.01 | Liens | 51 | |
| 7.02 | Investments | 52 | |
| 7.03 | Fundamental Changes | 53 | |
| 7.04 | Restricted Payments | 54 | |
| 7.05 | Change in Nature of Business | 54 | |
| 7.06 | Transactions with Affiliates | 54 | |
| 7.07 | Burdensome Agreements | 55 | |
| 7.08 | [Reserved] | 55 | |
| 7.09 | Financial Covenants | 55 | |
| ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES | 56 | ||
| 8.01 | Events of Default | 56 | |
| 8.02 | Remedies Upon Event of Default | 57 | |
| 8.03 | Application of Funds | 58 | |
| ARTICLE IX ADMINISTRATIVE AGENT | 58 | ||
| 9.01 | Appointment and Authority | 58 | |
| 9.02 | Rights as a Lender | 59 | |
| 9.03 | Exculpatory Provisions | 59 | |
| 9.04 | Reliance by Administrative Agent | 60 | |
| 9.05 | Delegation of Duties | 60 | |
| 9.06 | Successor Administrative Agent | 60 | |
| 9.07 | Non-Reliance on Administrative Agent and Other Lenders | 61 | |
| 9.08 | No Other Duties, Etc. | 61 | |
| 9.09 | Administrative Agent May File Proofs of Claim | 61 | |
| 9.10 | Collateral and Borrower Matters | 62 |
| 9.11 | No Obligations of Credit Parties | 62 | ||
|---|---|---|---|---|
| ARTICLE X MISCELLANEOUS | 63 | |||
| 10.01 | Amendments, Etc. | 63 | ||
| 10.02 | Notices; Effectiveness; Electronic Communication | 64 | ||
| 10.03 | No Waiver; Cumulative Remedies | 65 | ||
| 10.04 | Expenses; Indemnity; Damage Waiver | 66 | ||
| 10.05 | Payments Set Aside | 67 | ||
| 10.06 | Successors and Assigns | 67 | ||
| 10.07 | Treatment of Certain Information; Confidentiality | 71 | ||
| 10.08 | Right of Setoff | 73 | ||
| 10.09 | Interest Rate Limitation | 73 | ||
| 10.10 | Counterparts; Integration; Effectiveness | 74 | ||
| 10.11 | Survival of Representations and Warranties | 74 | ||
| 10.12 | Severability | 74 | ||
| 10.13 | Replacement of Lenders | 74 | ||
| 10.14 | Governing Law; Jurisdiction; Etc. | 75 | ||
| 10.15 | Waiver of Jury Trial | 76 | ||
| 10.16 | USA PATRIOT Act Notice | 76 | ||
| 10.17 | [Reserved] | 77 | ||
| 10.18 | ENTIRE AGREEMENT | 77 | ||
| 10.19 | [Reserved] | 77 | ||
| 10.20 | Release of a Guarantor | 77 | ||
| 10.21 | No Advisory or Fiduciary Responsibility | 77 | ||
| ARTICLE XI GUARANTY | 78 | |||
| 11.01 | The Guaranty | 78 | ||
| 11.02 | Obligations Unconditional | 78 | ||
| 11.03 | Reinstatement | 79 | ||
| 11.04 | Certain Additional Waivers | 79 | ||
| 11.05 | Remedies | 80 | ||
| 11.06 | Rights of Contribution | 80 | ||
| 11.07 | Guarantee of Payment; Continuing Guarantee | 80 | ||
| 11.08 | Additional Guarantors | 80 |
SCHEDULES
| 1.01 | Tech Square |
|---|---|
| 2.01 | Commitments and Applicable Percentages |
| 10.02 | Administrative Agent’s Office; Certain Addresses for Notices |
EXHIBITS
| Form of | |
|---|---|
| A | Loan Notice |
| B | Reserved |
| C | Note |
| D | Compliance Certificate |
| E | Assignment and Assumption |
| F | Joinder Agreement |
| G | Lender Joinder Agreement |
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT is entered into as of December 6, 2011, among Alexandria Real Estate Equities, Inc., a Maryland corporation (“Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) that from time to time become party hereto pursuant to Section 11.08 (collectively, together with Operating Partnership, the “Guarantors”); each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”); and Bank of America, N.A., as Administrative Agent, with reference to the following Recitals:
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide a term loan credit facility in an initial amount of $600,000,000 for the purposes described herein; and
WHEREAS, the Lenders are willing to do so on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
“Acquisition” means, with respect to any Person, the acquisition by such Person, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, or any other property of, another Person or (b) at least a majority of the voting Equity Interests of another Person, in each case whether or not involving a merger or consolidation with such other Person.
“Act” has the meaning set forth in Section 10.16.
“Adjusted EBITDA” means, for any period of determination and without duplication, an amount equal to (a) EBITDA of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, minus (b) the Capital Improvement Reserve for the Real Property of the Borrower and its Subsidiaries, minus (c) (without duplication to the extent already deducted in the calculation of EBITDA) any Minority Interest’s share of the EBITDA of Borrower and its Subsidiaries for such period.
“Adjusted Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to Interest Expense less any financing fees to the extent amortized and any amortization thereof (including fees payable under a Swap Contract), prepayment penalties, cost or expense associated with the early extinguishment of Indebtedness or deferred financing costs.
“Adjusted NOI” means, for any period and with respect to a Revenue-Producing Property, an amount equal to (a) NOI of that Revenue-Producing Property, minus (b) the Capital Improvement Reserve for such Revenue-Producing Property, minus (c) any Minority Interest’s share of the NOI of that
Revenue-Producing Property; provided that for purposes of calculating Adjusted NOI, any Revenue-Producing Property that has a negative Adjusted NOI for the period shall be deemed to have an Adjusted NOI of zero.
“Adjusted Tangible Assets” means, as of any date of determination, without duplication, an amount equal to (a) Total Assets of Borrower and its Subsidiaries as of that date, minus (b) Intangible Assets of Borrower and its Subsidiaries as of that date, plus (c) any Minority Interest’s share of Intangible Assets minus (d) any Minority Interest’s share of Total Assets as of that date.
“Adjusted Total Indebtedness” means, as of any date of determination, without duplication, an amount equal to (a) the aggregate Total Indebtedness of the Borrower and its Subsidiaries as of such date of determination, minus (b) Excluded Indebtedness; provided, in no event shall such Excluded Indebtedness exceed an amount equal to (i) cash and Cash Equivalents of the Borrower and its Subsidiaries that are not subject to pledge, lien or control agreement (excluding statutory liens or rights of set-off in favor of any depositary bank or institution where such cash or Cash Equivalents are maintained) minus (ii) $35,000,000 (it being agreed that Excluded Indebtedness shall in no event be deemed a negative number).
“Adjusted Unencumbered Asset Value” means, as of any date of determination, (a) the Unencumbered Asset Value minus (b) any value attributable to Qualified Land and Qualified Development Assets in excess of 35% of the Unencumbered Asset Value minus (c) any value attributable to Qualified Revenue-Producing Properties, Qualified Land, Qualified Development Assets and Qualified Joint Ventures that are located outside the United States or Canada in excess of 30% of the Unencumbered Asset Value.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Aggregate Commitments” means the Commitments of all the Lenders.
“Agreement” means this Term Loan Agreement, as it may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time.
“Applicable Percentage” means, with respect to any Lender at any time, the following percentages (carried out to the ninth decimal place), as of the date of determination:
(a) with respect to a Lender’s right to receive payments of interest, fees, and principal with respect to Loans made by such Lender, the percentage obtained by dividing (i) the aggregate outstanding principal amount of such Lender’s Loans by (ii) the Loan Amount; and
(b) the Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption or Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, or in the records of the Administrative Agent, as applicable.
“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating as set forth below:
| Pricing Level | Debt Rating | Applicable Rate for<br>Eurodollar Rate Loans | Applicable Rate for Base<br>Rate Loans |
|---|---|---|---|
| 1 | > A / A2 | 1.05% | 0.05% |
| 2 | A- / A3 | 1.15% | 0.15% |
| 3 | BBB+ / Baal | 1.25% | 0.25% |
| 4 | BBB / Baa2 | 1.50% | 0.50% |
| 5 | BBB- / Baa3 | 1.85% | 0.85% |
| 6 | Unrated or <BBB- / Baa3 | 2.30% | 1.30% |
Initially, the Applicable Rate shall be determined based upon the Debt Rating specified in the certificate delivered pursuant to Section 4.01(a)(vii). Thereafter, each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating (including as a result of the initial public announcement of credit ratings with respect to Borrower’s long-term unsecured debt by at least one of the Rating Agencies) shall be effective during the period commencing on the date of the public announcement thereof and ending on the day immediately preceding the effective date of the next such change.
“Appraised Value” means, as of any date of determination, without duplication, with respect to any Real Property, the appraised value (if any) thereof based on its unimproved as-is basis determined pursuant to an appraisal prepared by an M.A.I. certified appraisal and otherwise reasonably satisfactory to Administrative Agent (it being understood and agreed that in no event shall the Borrower (or any applicable Subsidiary) be required to deliver updated appraisals more frequently than once during any 24-month period).
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. (or one of its Affiliates), in their capacities as joint lead arrangers and joint lead bookrunners.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.
“Attributable Indebtedness” means, on any date, in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2010, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.
“Bank of America” means Bank of America, N.A. and its successors.
“Base Qualifications” means, for any Real Property, the following criteria:
(a) to the best of Borrower’s knowledge and belief, such Real Property is in good repair and condition, subject to ordinary wear and tear, and does not have any title, survey, environmental or other defects that would give rise to a materially adverse effect as to the value, use of or ability to sell or refinance such Real Property (it being understood and agreed that construction and redevelopment in the ordinary course do not constitute a material adverse effect on the value, use of or ability to sell or refinance such Real Property);
(b) such Real Property is Unencumbered;
(c) such Real Property is either (i) owned in fee simple absolute (or, in the case of Qualified Development Assets and Qualified Revenue-Producing Properties, through ownership of a condominium unit) or (ii) occupied by means of a leasehold interest or similar arrangement providing the right to occupy Real Property pursuant to a Mortgageable Ground Lease;
(d) such Real Property is owned or leased by (i) the Borrower, (ii) a Guarantor or (iii) a Subsidiary of the Borrower (other than an Obligor Subsidiary); and
(e) such Real Property is located in the United States, Canada, Scotland, the United Kingdom, Germany, Austria, France, Switzerland, the Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Ireland or Japan.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrower Materials” has the meaning set forth in Section 6.02.
“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by the Lenders pursuant to Section 2.01 or pursuant to the terms of Section 2.15.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any interest rate settings as to a Eurodollar Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.
“Capital Improvement Reserve” means, with respect to any Real Property now or hereafter owned by the Borrower or its Subsidiaries, an amount equal to twenty cents ($.20) multiplied by the Net Rentable Area of the Real Property.
“Capital Lease Obligations” means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease.
“Capitalization Rate” means 7.25%.
“Cash” means money, currency or a credit balance in any demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.
“Cash Equivalents” means:
(a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof and backed by the full faith and credit of the United States having maturities of not more than one year from the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits, eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers’ acceptances, having in each case a term of not more than one year, issued by Administrative Agent or any Lender, or by any U.S. commercial bank (or any branch or agency of a non-U.S. bank licensed to conduct business in the U.S.) having combined capital and surplus of not less than $100,000,000 whose short-term securities are rated (at the time of acquisition thereof) at least A-1 by S&P and P-1 by Moody’s;
(c) demand deposits on deposit in accounts maintained at commercial banks having membership in the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder;
(d) commercial paper of an issuer rated (at the time of acquisition thereof) at least A-2 by S&P or P-2 by Moody’s and in either case having a term of not more than one year; and
(e) money market mutual or similar funds that invest primarily in assets satisfying the requirements of clauses (a) through (d) of this definition.
“Cash Interest Expense” means Adjusted Interest Expense of a Person that is paid or currently payable in Cash.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption, or taking effect of any law, rule, regulation, guideline, decision, directive or treaty, (b) any change in any law, rule, regulation, directive, guideline, decision, or treaty or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline, law, rule, treaty or directive (whether or not having the force of law) by any Governmental Authority; provided that for purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, guidelines, and directives in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have gone into effect and been adopted after the date of this Agreement.
“Change of Control” means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d 3(a)(l) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 40% or more of the outstanding voting Common Stock, or (b) during any period of 12 consecutive months, individuals who at the beginning of such period constituted the board of directors of the Borrower (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office.
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment” means, as to each Lender, its obligation to make a Loan to the Borrower pursuant Section 2.01 (or any commitment to provide any additional Loans pursuant to Section 2.15), in an aggregate principal amount on the Closing Date not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 hereto or the amount set forth in the Assignment and Assumption or the Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable.
“Common Stock” means the common stock of the Borrower.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Confidential Information” means (a) all of the terms, covenants, conditions or agreements set forth in any letters of intent or in this Agreement or any amendments hereto and any related agreements of whatever nature, (b) the information and reports provided in compliance with the terms of this Agreement, (c) any and all information provided, disclosed or otherwise made available to the Administrative Agent and the Lenders including, without limitation, any and all plans, maps, studies (including market studies), reports or other data, operating expense information, as-built plans, specifications, site plans, drawings, notes, analyses, compilations, or other documents or materials relating to the properties or their condition or use, whether prepared by the Borrower or others, which use, or reflect, or that are based on, derived from, or are in any way related to the foregoing, and (d) any and all other information of the Borrower or any of its Subsidiaries that the Administrative Agent or any Lender may have access to including, without limitation, ideas, samples, media, techniques, sketches, specifications, designs, plans, forecasts, financial information, technical information, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, financial models and databases, software programs, software source documents, manuals, documents, properties, names of tenants or potential tenants, vendors, suppliers, distributors and consultants, and formulae related to the current, future, and proposed products and services of the Borrower or any of its Subsidiaries or tenants or potential tenants (including, without limitation, information concerning
research, experimental work, development, design details and specifications, engineering, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, clients, business and contractual relationships, business forecasts, and sales and marketing plans). Confidential Information may be disclosed or accessible to the Administrative Agent and the Lenders as embodied within tangible material (such as documents, drawings, pictures, graphics, software, hardware, graphs, charts, or disks), orally, or visually.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Party” means the Borrower or any Guarantor and “Credit Parties” means, collectively, the Borrower and the Guarantors.
“Debt Rating” means, as of any date of determination, the higher of the credit ratings then assigned to Borrower’s long-term senior unsecured debt by either of the Rating Agencies. For purposes of the foregoing, a credit rating of BBB- from S&P is equivalent to a credit rating of Baa3 from Moody’s and vice versa. A credit rating of BBB from S&P is equivalent to a credit rating of Baa2 from Moody’s and vice versa. It is the intention of the parties that if Borrower shall only obtain a Debt Rating from one of the Rating Agencies without seeking a credit rating from the other of the Rating Agencies, the Borrower shall be entitled to the benefit of the Pricing Level for such credit rating. If Borrower obtains a Debt Rating from both of the Rating Agencies, the higher of the two ratings shall control, provided that the lower rating is only one level below that of the higher rating. If, however, the lower rating is more than one level below that of the higher Debt Rating, the Pricing Level that is one level higher than the lower Debt Rating shall apply. If the Borrower has only one Investment Grade Rating, then that Debt Rating shall apply. If Borrower obtains a Debt Rating from both of the Rating Agencies and thereafter loses such rating from one of the Rating Agencies, the Borrower shall be deemed to not have a Debt Rating from such Rating Agency. At any time, if either of the Rating Agencies shall no longer perform the functions of a securities rating agency, then the Credit Parties and the Administrative Agent shall promptly negotiate in good faith to agree upon a substitute rating agency or agencies (and to correlate the system of ratings of each substitute rating agency with that of the rating agency being replaced), and pending such amendment, the Debt Rating of the other of the Rating Agencies, if one has been provided, shall continue to apply. Notwithstanding the foregoing, until such time as credit ratings are assigned to Borrower’s long-term unsecured debt by at least one of the Rating Agencies, “Debt Rating” shall mean the higher of Borrower’s long-term corporate issuer rating assigned by either of the Rating Agencies.
“Debt Service” means, for any period with respect to a Person’s Indebtedness, the sum of all Interest Charges and regularly scheduled principal payments due and payable during such period, excluding any balloon payments due upon maturity of the Indebtedness, refinancing of the Indebtedness or repayments thereof in connection with asset sales; provided that Debt Service shall not include any Minority Interest’s share of any of the foregoing. Debt Service shall include the portion of rent payable by a Person during such period under Capital Lease Obligations that should be treated as principal in accordance with GAAP but shall exclude Interest Charges related to committed construction loans.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.
“Defaulting Lender” means, subject to Section 2.16(b), any Lender that, as reasonably determined by the Administrative Agent (with notice to the Borrower of such determination), has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.
“Development Investments” means, as of any date of determination, direct or indirect investments in Real Property which, as of such date, is the subject of ground-up development to be used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities); provided, that, such Real Property or any portion thereof will only constitute a Development Investment from the date construction has commenced thereon until the date on which the Real Property and applicable improvements receive a final certificate of occupancy or equivalent certification allowing legal occupancy for its intended purpose.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and dispositions due to casualty or condemnation) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Documentation Agents” means Royal Bank of Canada and The Bank of Nova Scotia, each in its capacity as co-documentation agent.
“Dollar” and “$”mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“EBITDA” means, with respect to any Person (or any asset of a Person) for any fiscal period and without double counting, the sum of (a) the Net Income of such Person (or attributable to assets of the Person) for that period, plus (b) the following to the extent deducted in calculating Net Income of such Person (i) any non-recurring loss, plus (ii) Interest Expense for that period, plus (iii) the aggregate amount of federal and state taxes on or measured by income of such Person for that period (whether or not payable during that period), plus (iv) depreciation, amortization and all other non-cash expenses (including non-cash officer compensation and any write-down of goodwill pursuant to GAAP) of such Person for that period, in each case as determined in accordance with GAAP, plus (v) transaction costs and expenses in connection with any merger or acquisition (whether or not consummated) not permitted
to be capitalized pursuant to GAAP, plus (vi) severance and restructuring charges plus (vii) charges related to the early extinguishment of Indebtedness minus (c) any non-operating, non-recurring gain to the extent included in calculating Net Income of such Person (or attributable to assets of such Person).
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (on behalf of the Credit Parties) (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.
“Environmental Laws” means any and all applicable Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions governing pollution and the protection of the environment or the release of any Hazardous Materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement by the Borrower or any of its Subsidiaries pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interest” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, and other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Equity Offering” means the issuance and sale by the Borrower or the Operating Partnership of any equity securities.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA or the treatment of a Multiemployer Plan amendment as a termination under Section 4041A of ERISA; (e) the
institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA to the extent that such determination could reasonably be expected to give rise to a Material Adverse Effect; or (h) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“Eurodollar Rate” means:
(a) means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London interbank market for Dollars at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; and
(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”
“Event of Default” has the meaning set forth in Section 8.01.
“Exchange Proceeds” means the net issuance proceeds from Equity Offerings, which the Borrower has designated or otherwise stated that it intends to use to make Restricted Payments on account of then existing Preferred Equity.
“Excluded Indebtedness” means, as of any date of determination, the aggregate principal amount of any Indebtedness of the Borrower and its Subsidiaries included in the definition of Total Indebtedness, as of such date of determination, either (a) which by its terms matures within twenty-four (24) months after such date of determination or (b) as to which the Borrower or any Subsidiary has the right to convert or any holder of such Indebtedness has the right to put or convert such Indebtedness within twenty-four (24) months after such date of determination.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (or any Person whose net income is measured with reference to it) (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located, or in which it is doing business, or in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) other than with respect to an assignee pursuant to a request by the Borrower under Section 10.13, any United States Federal withholding tax that is imposed on amounts payable to such Person at the time such Person becomes a party hereto (or designates a new Lending Office) or is attributable to such Person’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Person (or its assignor, if any) was entitled, at the time of its appointment or designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a) and (d) any United States Federal withholding tax imposed by reason of a Lender’s failure to comply with the requirements of Sections 1471 through 1474 of the Code or any applicable Treasury regulations promulgated thereunder, or any official interpretations thereof.
“Existing Maturity Date” has the meaning set forth in Section 2.14(a).
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
“Fee Letter” means each letter agreement dated on or about November 9, 2011 executed and delivered by the Borrower and to which any of the Arrangers and/or the Administrative Agent are party, as the same may be amended from time to time.
“Fixed Charge Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) Adjusted EBITDA for the period consisting of that fiscal quarter and the three immediately preceding fiscal quarters by (b) an amount equal to (i) Debt Service of the Borrower and its Subsidiaries for such period, plus (ii) all Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during such period.
“Foreign Lender” means any Lender that is not a United States person as defined in Section 7701(a)(30) of the Code.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funds From Operations” means, with respect to any fiscal period and without double counting, an amount equal to the Net Income (or deficit) of the Borrower and its Subsidiaries for that period computed on a consolidated basis in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures; provided that Funds From Operations shall exclude one-time or non-recurring charges and impairment charges, charges from the early extinguishment of indebtedness and other non-cash charges. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect Funds From Operations on the same basis. Funds From Operations shall be reported in accordance with the NAREIT Policy Bulletin dated April 5, 2002, as amended, restated, supplemented or otherwise modified from time to time.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision or instrumentality thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance of such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors” means the Operating Partnership and, if requested by the Borrower, any other Wholly-Owned Domestic Subsidiary of the Borrower who becomes a Guarantor pursuant to Section 11.08.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated under any Environmental Law.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) Capital Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, (i) the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or is otherwise liable for such Indebtedness, except to the extent such Indebtedness is expressly made non-recourse to such Person and (ii) Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitees” has the meaning specified in Section 10.04(b).
“Intangible Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP, that are considered to be intangible assets under GAAP, including customer lists, goodwill, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
“Interest Charges” means, as of the last day of any fiscal period and without double counting, the sum of (a) Cash Interest Expense of a Person, plus (b) all interest currently payable in Cash by a Person which is incurred during that fiscal period and capitalized under GAAP, minus (c) any Minority Interest’s share of Cash Interest Expense.
“Interest Expense” means, with respect to any Person as of the last day of any fiscal period and without duplication, an amount equal to (a) all interest, fees, charges and related expenses paid or payable
(without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP, plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations, minus (or plus, as applicable) (c) amounts received (or paid) under Swap Contracts plus (d) all other amounts considered to be “interest expense” under GAAP.
“Interest Payment Date” means the fifth (5th) calendar day of each month; provided that if the fifth (5th) calendar day of any month falls on a day other than a Business Day, then the Interest Payment Date shall be the immediately succeeding Business Day or, if any such date would be after the Maturity Date, the Maturity Date.
“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or, in the case of any Eurodollar Rate Loan, converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in the applicable Loan Notice, as the case may be; provided that:
(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but reduced by any amounts received in respect of such Investment which constitute capital distributions, principal, sale proceeds or otherwise in respect thereof.
“Investment Grade Rating” means a Debt Rating of BBB- or better from S&P or a Debt Rating of Baa3 or better from Moody’s.
“IP Rights” has the meaning specified in Section 5.16.
“IRS” means the United States Internal Revenue Service.
“Joinder Agreement” means a joinder agreement substantially in the form attached hereto as Exhibit F.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lender” has the meaning specified in the introductory paragraph.
“Lender Joinder Agreement” means a lender joinder agreement substantially in the form attached hereto as Exhibit G.
“Lender Party” has the meaning set forth in Section 10.07.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) Adjusted Total Indebtedness as of such date by (b) (i) the Adjusted Tangible Assets as of such date minus (ii) the amount of Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness as of such date.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, deposit arrangement, encumbrance, lien (statutory or other), charge, or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing, other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest).
“Loan” means a term loan of any Type made to the Borrower by the Lenders pursuant to Section 2.01 or Section 2.15.
“Loan Amount” means, at any time, the aggregate principal amount of the Loans then outstanding, which on the Closing Date is equal to $600,000,000.
“Loan Documents” means this Agreement, each Note, each Fee Letter and any other instrument, document or agreement from time to time delivered by a Credit Party in connection with this Agreement.
“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
“Material Acquisition” means an Acquisition by the Borrower or any of its Subsidiaries in which the value of the assets acquired in such Acquisition exceeds five per cent (5%) of Total Assets of the Borrower and its Subsidiaries (after giving effect to such Acquisition).
“Material Adverse Effect” means any set of circumstances or events which (a) has had or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document (other than as a result of any action or inaction of the Administrative Agent or any Lender), (b) has been or could reasonably be expected to be material and adverse to the business or
condition (financial or otherwise) of the Borrower and its Subsidiaries on a consolidated basis or (c) has materially impaired or could reasonably be expected to materially impair the ability of the Credit Parties to perform the Obligations.
“Material Unsecured Indebtedness” means outstanding third party unsecured borrowed money Indebtedness (including guaranties thereof), in a principal amount equal to or greater than $25,000,000.
“Maturity Date” means the later of (a) January 31, 2016, and (b) if the Existing Maturity Date is extended pursuant to Section 2.14, such extended Maturity Date as determined pursuant to such Section 2.14.
“Maximum Rate” has the meaning set forth in Section 10.09.
“Minimum Book Value” means, as of any date of determination, without duplication, the sum of: (a) all consolidated assets of the Borrower and its Subsidiaries as of that date, plus (b) the Borrower’s and its Subsidiaries’ minority interest in unconsolidated assets as of that date, minus (i) Intangible Assets of the Borrower and its Subsidiaries and (ii) Total Liabilities of Borrower and its Subsidiaries as of that date.
“Minority Interest” means, with respect to any non-Wholly-Owned Subsidiary, direct or indirect, of the Borrower, any ownership interest of a third party in such Subsidiary.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgageable Ground Lease” means on any date of determination, a lease or similar arrangement providing the right to occupy Real Property (a) which is granted by the fee owner of Real Property, (b) which has a remaining term (calculated only once on the Closing Date or the date the Real Property subject to such lease becomes a Qualified Asset Pool Property) of not less than twenty-five (25) years, including extension options exercisable solely at the discretion of the Borrower or any applicable Subsidiary, (c) under which no material default has occurred and is continuing and (d) with respect to which a security interest may be granted (i) without the consent of the lessor or (ii) pursuant to the consent of the lessor, which consent has been granted.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Negative Pledge” means a Contractual Obligation that contains a covenant binding on the Borrower and its Subsidiaries that prohibits Liens on any of their Property, other than (a) any such covenant contained in a Contractual Obligation granting or relating to a particular Lien which affects only the property that is the subject of such Lien and (b) any such covenant that does not apply to Liens which may secure the Obligations now or in the future.
“Net Income” means, for any period and for any Person, the net income of the Person for that period, determined in accordance with GAAP; provided that there shall be excluded therefrom the net amount of any real estate gains or losses.
“Net Rentable Area” means with respect to any Real Property, the floor area of any buildings, structures or improvements available for leasing to tenants (excluding storage lockers and parking spaces) determined in accordance with the Borrower’s or its applicable Subsidiary’s rent roll for such Real
Property, the manner of such determination shall be consistently applied for all Real Property, unless otherwise approved by the Administrative Agent.
“NOI” means, with respect to any Revenue-Producing Property and with respect to any fiscal period, the sum of (a) the net income of that Revenue-Producing Property for that period, plus (b) Interest Expense of that Revenue-Producing Property for that period, plus (c) the aggregate amount of federal and state taxes on or measured by income of that Revenue-Producing Property for that period (whether or not payable during that period), plus (d) depreciation, amortization and all other non-cash expenses of that Revenue-Producing Property for that period, in each case as determined in accordance with GAAP.
“Non-Recourse Debt” means Indebtedness of any Person for which the liability of such Person (except with respect to fraud, Environmental Laws liability, misapplication of funds, bankruptcy, transfer of collateral in violation of the applicable loan documents, failure to obtain consent for subordinate financing in violation of the applicable loan documents and other exceptions customary in like transactions at the time of the incurrence of such Indebtedness) either is contractually limited to collateral securing such Indebtedness or is so limited by operation of Laws.
“Note” means a promissory note made by the Borrower in favor of, and payable to the order of, a Lender evidencing that portion of the Loan made by such Lender substantially in the form of Exhibit C. A Note shall be executed by the Borrower in favor of each Lender requesting such Note.
“Obligations” means all advances to, and debts, liabilities, obligations of, any Credit Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Obligor Subsidiary” means any Subsidiary (other than the Operating Partnership) that is not a Guarantor but is obligated with respect to any Material Unsecured Indebtedness.
“Obligor Subsidiary Debt” means third party unsecured borrowed money Indebtedness (including guaranties) of any Obligor Subsidiary.
“Operating Partnership” has the meaning set forth in the introductory paragraph.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document; provided, however, that “Other Taxes” shall not include such
amounts to the extent imposed as a result of any transfer by any Lender or the Administrative Agent of any interest in or under any Loan Document.
“Overnight Rate” means, for any day, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
“Participant” has the meaning set forth in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) including a multiple employer plan but not including a Multiemployer Plan; that is maintained or is contributed to by the Borrower or its Subsidiaries and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Purposes” has the meaning set forth in Section 10.07(a).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(2) of ERISA) established by the Borrower, or with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
“Platform” has the meaning set forth in Section 6.02.
“Preferred Distributions” means for any period, the amount of any and all Restricted Payments due and payable in cash by the Borrower or any of its Subsidiaries during such period to the holders of Preferred Equity but shall not include any Minority Interest’s share of any such Restricted Payments.
“Preferred Equity” means any form of preferred stock (whether perpetual, convertible or otherwise) or other ownership or beneficial interest in the Borrower or any of its Subsidiaries that entitles the holders thereof to preferential payment or distribution priority with respect to dividends, assets or other payments over the holders of any other stock or other ownership or beneficial interest in such Person.
“Property” means all assets of the Borrower and its Subsidiaries, whether real property or personal property.
“Public Lender” has the meaning set forth in Section 6.02.
“Qualified Asset Pool Property” means Qualified Land, Qualified Revenue-Producing Property, Qualified Development Assets and Qualified Joint Venture Property.
“Qualified Development Asset” means a Real Property that:
(a) satisfies the Base Qualifications;
(b) constitutes a Development Investment; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Land.
“Qualified Joint Venture Property” means a Real Property, owned and controlled by a direct or indirect non-wholly-owned subsidiary of the Borrower, that is any of a Qualified Revenue-Producing Property, Qualified Land and/or a Qualified Development Asset. For purposes of this definition “controlled” means exclusive control of any disposition, refinancing and operating activity without the consent of any other party (other than (i) the Borrower or (ii) any of its Subsidiaries, as long as such Subsidiary does not need the consent of any minority equity holder thereof to consent to any disposition, refinancing or operating activity). Notwithstanding the foregoing, the Tech Square Project shall be deemed a Qualified Joint Venture Property so long as it meets the criteria set forth above other than those matters set forth on Schedule 1.01.
“Qualified Land” means, as of any date of determination, without duplication, Real Property that:
(a) satisfies the Base Qualifications;
(b) is entitled; and
(c) does not otherwise constitute a Qualified Revenue-Producing Property or Qualified Development Asset.
“Qualified Revenue-Producing Property” means a Revenue-Producing Property that:
(a) satisfies the Base Qualifications;
(b) is occupied or available for occupancy (subject to final tenant improvements); and
(c) does not otherwise constitute a Qualified Development Asset or Qualified Land.
“Rating Agencies” means (a) S&P and (b) Moody’s.
“Real Property” means, as of any date of determination, real property (together with the underlying real property interests and appurtenant real property rights) then owned, leased or occupied by any Credit Party or any of its Subsidiaries.
“Register” has the meaning specified in Section 10.06(c).
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a real estate investment trust under Sections 856 through 860 of the Code, and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Sections 857 et seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“Required Lenders” means, as of any date of determination, Lenders holding in the aggregate more than 50% of the Loan Amount. The outstanding Loans held, or deemed held, by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Responsible Officer” means, (a) with respect to delivery of executed copies of this Agreement or any Compliance Certificate, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable) and (b) for all other purposes, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer, secretary, assistant secretary or any executive vice president of the applicable Credit Party (or the partner or member or manager, as applicable). Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.
“Restricted Payment” means, with respect to any equity interest or any warrant or option to purchase an equity interest issued by the Borrower or any of its Subsidiaries, (a) the retirement, redemption, purchase or other acquisition for Cash or for Property by the Borrower or such Subsidiary of any such security or interest (excluding any Indebtedness which by its terms is convertible into an Equity Interest), (b) the declaration or (without duplication) payment by the Borrower or such Subsidiary of any dividend in Cash or in Property on or with respect to any such security or interest and (c) any other payment in Cash or Property by the Borrower or such Subsidiary constituting a distribution under applicable Laws with respect to such security or interest.
“Revenue-Producing Property” means an identifiable improved Real Property that is used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes and related real property (and appurtenant amenities), or for such other revenue-producing purposes as the Required Lenders may approve.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.
“Same Day Funds” means immediately available funds.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“SEC Report” means all filings on Form 10-K, Form 10-Q or Form 8-K with the SEC made by the Borrower pursuant to the Securities Exchange Act of 1934.
“Secured Debt” means, without duplication, (a) Indebtedness of the Borrower or any of its Subsidiaries that is secured by a Lien and (b) Obligor Subsidiary Debt; provided, that Secured Debt shall not include any of the Obligations.
“Secured Debt Ratio” means, as of the last day of any fiscal quarter, the ratio (expressed as a percentage) obtained by dividing (a) the Secured Debt of the Borrower and its Subsidiaries as of such date by (b) the Adjusted Tangible Assets, as of such date.
“Solvent” means, as to any Person, that, as of any date of determination, (a) the amount of the present fair saleable value of the assets of such Person will, as of such date, exceed the amount of all liabilities of such Person, contingent or otherwise, as of such date, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its existing or anticipated debts as such debts become absolute and matured, and (c) such Person will not have as of such date, an unreasonably small amount of capital with which to conduct its business.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Syndication Agents” means JPMorgan Chase Bank, N.A. and Citibank, N.A., each in its capacity as co-syndication agent.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tech Square Project” means the seven building campus located in Cambridge, Massachusetts aggregating approximately 1.2 million square feet.
“Total Assets” means the value of all assets of a Person and its Subsidiaries (without duplication), determined on a consolidated basis in accordance with GAAP; provided that all Real Property shall be valued based on its Unencumbered Asset Value (it being understood that the Unencumbered Asset Value for any Real Property that is not a Qualified Asset Pool Property shall be calculated as if it was a Qualified Asset Pool Property). In the event that a Person has an ownership or other equity interest in any other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the assets of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all assets of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“Total Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) Capital Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, Total Indebtedness shall not include any Minority Interest’s share of any of the foregoing. The amount of any net obligation under any Swap Contract on any date shall be deemed to be (i) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the date referenced in clause (i), zero. The amount of any Capital Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Total Liabilities” means all liabilities of a Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, and (without duplication) all Indebtedness and Guarantees of such Person and its Subsidiaries (determined on a consolidated basis), whether or not so classified; provided, that, Total Liabilities shall not include any Minority Interest’s share of liabilities. In the event that a Person has an ownership or other equity interest in any other Person, which investment is not consolidated in accordance with GAAP (that is, such interest is a “minority interest”), then the liabilities of a Person and its Subsidiaries shall include such Person’s or its Subsidiaries’ allocable share of all
liabilities of such Person in which a minority interest is owned based on such Person’s respective ownership interest in such other Person.
“to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Officer of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Officer of that Person).
“Trade Date” has the meaning set forth in Section 10.06(b).
“Type” means with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.
“Unencumbered” means, with respect to any Revenue-Producing Property, Qualified Land or Qualified Development Assets, that such Revenue-Producing Property, Qualified Land or Qualified Development Assets (a) is not subject to any Lien other than Liens permitted under Section 7.01 (other than Sections 7.01(q)(ii), (r) and (t)), (b) is not subject to any Negative Pledge and (c) is not held by a Person any of whose direct or indirect equity interests are subject to a Lien or Negative Pledge.
“Unencumbered Asset Value” means, as of any date of determination and without double counting any item, the following amounts for the following types of Real Property:
(a) with respect to any Qualified Revenue-Producing Property owned for a full four consecutive fiscal quarter period or longer, an amount equal to (i) the Adjusted NOI of such Real Property for the prior four full consecutive fiscal quarters divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(b) with respect to any Qualified Revenue-Producing Property owned for less than four full consecutive fiscal quarters, an amount equal to (i) the Adjusted NOI of such Real Property for the period which the Borrower or applicable Subsidiary has owned and operated such Real Property, adjusted by the Borrower to an annual Adjusted NOI in a manner reasonably acceptable to the Administrative Agent, divided by (ii) the Capitalization Rate; provided that in the event any such Real Property sustains any material damage, the value of any business interruption insurance proceeds owed to or received by the Borrower during such period with respect to such Qualified Revenue-Producing Property shall be included in the Adjusted NOI of such Real Property for the periods from the date of such material damage until such time as such Qualified Revenue-Producing Property becomes fully operational.
(c) with respect to Qualified Revenue-Producing Property that is being renovated or with respect to which a partial or total renovation was recently completed, an amount as determined at the sole election of the Administrative Agent based on (i) the annualized Adjusted NOI with respect to such Real Property, annualized based on bona fide, arms length signed tenant leases which are in full force and effect requiring current rental payments, divided by the
Capitalization Rate, or (ii) the cost basis of such Real Property determined in accordance with GAAP multiplied by the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Revenue Property.
(d) with respect to any Real Property that constitutes Qualified Land, an amount equal to, at the option of the Borrower, (i) the cost basis as determined in accordance with GAAP or the Appraised Value (if any) of such Qualified Land multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Land.
(e) with respect to any Real Property that constitutes Qualified Development Assets, an amount equal to (i) the cost basis as determined in accordance with GAAP of such Qualified Development Asset multiplied by (ii) the Borrower’s or its Subsidiaries’ percentage ownership interest in such Qualified Development Asset; provided that if all or any portion of a Qualified Development Asset is materially damaged, the value of such Qualified Development Asset shall be the amount assigned to such Qualified Development Asset prior to the damage less the amount (as determined by the Borrower in good faith) by which the casualty insurance proceeds that are owed or received in respect of such casualty event are insufficient to restore such Qualified Development Asset for a period of up to the lesser of (x) 365 days following such casualty event and (y) the date such Qualified Development Asset is restored and fully functional.
“United States” and “U.S.” mean the United States of America.
“Unrelated Person” means any Person other than (i) a Subsidiary of Borrower, (ii) an employee stock ownership plan or other employee benefit plan covering the employees of Borrower and its Subsidiaries or (iii) any Person that held Common Stock on the day prior to the effective date of Borrower’s registration statement under the Securities Act of 1933 covering the initial public offering of Common Stock.
“Unsecured Interest Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio obtained by dividing (a) the sum of the aggregate Adjusted NOI from the Qualified Asset Pool Properties for that fiscal quarter and the preceding three full fiscal quarters, by (b) the aggregate Interest Charges for such period in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt). The Unsecured Interest Coverage Ratio shall be determined by the Borrower and such determination shall be reasonably satisfactory to the Administrative Agent and shall exclude interest during construction to the extent capitalized.
“Unsecured Leverage Ratio” means, as of the last day of each fiscal quarter, the ratio (as expressed as a percentage) of (a) (i) aggregate unsecured Adjusted Total Indebtedness as of such date minus (ii) Obligor Subsidiary Debt as of such date to (b) (i) the Adjusted Unencumbered Asset Value as of such date minus (ii) the amount of unsecured Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in the calculation of aggregate unsecured Adjusted Total Indebtedness pursuant to clause (a)(i) above.
“Wholly-Owned Subsidiary” means a Subsidiary of the Borrower, 100% of the capital stock or other equity interest of which is owned, directly or indirectly, by the Borrower, except for director’s qualifying shares required by applicable Laws.
1 .02 Other Interpretive Provisions .
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof; (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
1 .03 Accounting Terms/Financial Covenants .
(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, the effects of FASB ASC 825 on financial liabilities shall be disregarded.
(b) Changes in GAAP or Funds From Operations. If at any time any change in GAAP or the calculation of Funds From Operations would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in GAAP or Funds From Operations (subject to the approval of the Required Lenders, the Administrative Agent and the Borrower); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP or Funds From Operations, as applicable, prior to such change therein and (ii) upon written request, the Borrower shall provide to the Administrative Agent (for distribution to the Lenders) financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or Funds From Operations.
(c) Calculation of Financial Covenants. For purposes of calculation of the applicable financial covenants, the Borrower and its Subsidiaries shall be given credit for properties held by an “exchange accommodation titleholder” pursuant to an exchange that qualifies as a reverse exchange under Section 1031 of the Code (including in the event any such property is subject to a mortgage in favor of, or for the benefit of, the Borrower or any of its Subsidiaries)
1 .04 Times of Day .
Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).
ARTICLE II
THE COMMITMENTS AND BORROWINGS
2 .01 Term Loans .
Subject to the terms and conditions set forth herein, each Lender severally agrees to fund the portion of the Loan Amount represented by its Commitment to the Borrower on the Closing Date in an aggregate amount not to exceed such Lender’s Commitment or the Loan Amount. The initial Loans shall be in Dollars and drawn in a single Borrowing on the Closing Date. The Lenders shall have no commitments hereunder to fund any additional Loans after the Borrowing on the Closing Date unless agreed to pursuant to Section 2.15. To the extent all or any portion of the Loans are repaid or prepaid, they may not be reborrowed. All Loans advanced on the Closing Date shall be Base Rate Loans unless the Borrower shall have delivered at least three Business Days prior to the Closing Date, a funding indemnity letter in form and substance reasonably satisfactory to the Administrative Agent. Thereafter, Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
2.02 Borrowings, Conversions and Continuations of Loans**.**
(a) The Borrowing on the Closing Date, any Borrowing pursuant to the terms of Section 2.15, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than (i) 12:00 Noon three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans, and (ii) 12:00 Noon on the Business Day prior to the requested date of any Borrowing of Base Rate Loans, and (iii) 12:00 Noon on the Business Day prior to the requested date of any conversion of Eurodollar Rate Loans to Base Rate Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, (x) the applicable notice must be received by the Administrative Agent not later than 12:00 Noon four Business Days prior to the requested date of such Borrowing, conversion to or continuation of Eurodollar Rate Loans, whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them and (y) not later than 12:00 Noon, three Business Days before the requested date of such Borrowing, conversion or continuation of Eurodollar Rate Loans, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fail to specify an Interest Period, they will be deemed to have specified an Interest Period of one month.
(b) (i) Following receipt of a Loan Notice in connection with the continuation or conversion of any Loans, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans as described in the preceding subsection.
(ii) In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office not later than 2:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.01, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (A) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (B) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than ten (10) Interest Periods in effect with respect to Loans.
2.03 [Reserved].
2 .04 [Reserved] .
2 .05 Prepayments .
The Borrower may, upon written notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 12:00 Noon (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the Business Day prior to the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date, the amount of such prepayment, and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and the contents thereof and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided, however, that a notice of voluntary prepayment pursuant to this clause (a) may state that such notice is conditioned upon an event or other transaction, such as the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of Indebtedness, in which case such notice of prepayment pursuant to this clause (a) may be revoked by the Borrower if such condition is not satisfied (subject to Section 3.05(b) for any notice of a prepayment of Eurodollar Rate Loans that is revoked). Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05*.* Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.
2.06 [Reserved].
2.07 Repayment of Loans**.**
The Borrower shall repay on the Maturity Date the aggregate principal amount of the Loans outstanding on such date, together with all interest and accrued fees related thereto.
2.08 Interest**.**
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto (for interest accrued through the last day of the prior month) and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
2 .09 Fees .
(a) The Borrower shall pay to (i) the Administrative Agent, for its own account and for the account of the Lenders, and (ii) each applicable Arranger, for its own account, fees, in Dollars, in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
(b) The Borrower shall pay to the Administrative Agent and the Lenders such fees, in Dollars, as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2 .10 Computation of Interest and Fees .
All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
2 .11 Evidence of Debt .
The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) the applicable Note(s), which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.
2 .12 Payments Generally; Administrative Agent’s Clawback .
(a) General. All payments to be made by a Credit Party shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by a Credit Party hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 11:00 a.m. on the date specified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 11:00 a.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders: Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any reasonable administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to such Borrowing. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower: Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment and without relieving the Borrower’s obligation to make such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in Same Day Funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(a) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(b) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of a Credit Party pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation.
2 .14 Extension of Maturity Date .
(a) Requests for Extension of Maturity Date. The Borrower may on a one-time basis, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 90 days prior to, and not later than 30 days prior to, the Maturity Date then in effect hereunder (the “Existing Maturity Date”), cause each Lender to extend such Lender’s Existing Maturity Date to January 31, 2017 and each Lender shall extend such Lender’s Maturity Date to January 31, 2017 in accordance with this Section 2.14(a) and subject to clause (b) below.
(b) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the extension of the Maturity Date pursuant to this Section shall not be effective unless:
(i) no Default or Event of Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;
(ii) the representations and warranties contained in this Agreement are true and correct in all material respects, on and as of the date of such extension and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, only as of such specific date), and except that the representations and warranties contained in subsections (a) and (d) of Section 5.05 shall be deemed to refer to the most recent statements and projections furnished pursuant to Sections 6.01(a) and 6.02(b), respectively; and
(iii) the Borrower pays the Administrative Agent, for distribution to the Lenders, based on their Applicable Percentages, an extension fee on or prior to the Existing Maturity Date in an amount equal to the product of (i) 0.15%, multiplied by (ii) the Loan Amount at the time of the extension.
(c) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.
2 .15 Increase in Commitments .
(a) New Term Tranches. The Borrower shall have the right from time to time, after the Closing Date and prior to the Maturity Date, and subject to the conditions set forth below, to request new tranches of term loans; provided that (i) no Default or Event of Default shall exist at the time of such new term tranche or after giving effect thereto, (ii) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects, on and as of the date of the funding of the new term tranche, except to the extent that such representations and warranties specifically refer to an earlier date, in which case, they are true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.15(a), the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01, (iii) no Lender shall be required to participate in any such term tranche without
its written consent, (iv) the aggregate principal amount of such new term loan tranches after the Closing Date shall not exceed $250,000,000, (v) the maturity date for such new term loan tranche shall be the Maturity Date, (vi) the Borrower and the Lenders providing such term tranche shall enter into an amendment to this Agreement as is necessary to evidence such new term tranche and all issues related thereto, including but not limited to, pricing of such new term loan tranche, and all Lenders not providing such new term loan tranche hereby consent to such limited scope amendment without future consent rights, and (vii) Schedule 2.01 shall be amended to reflect the addition of any term loan tranche and the commitments related thereto.
Any new term loan tranche may be provided by one or more existing Lenders (at the sole discretion of any such existing Lender) or by one or more institutions that is not an existing Lender; provided that any such new institution (A) must conform to the definition of Eligible Assignee and (B) must become a Lender under this agreement by execution of a Lender Joinder Agreement substantially in the form of Exhibit G or of counterparts to this agreement in a manner reasonably acceptable to the Administrative Agent.
(b) Conflicting Provisions. This Section 2.15 shall supersede any provisions in Sections 2.13 or 10.01 to the contrary.
2 .16 Defaulting Lenders .
(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08, shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment of any amounts owing to the Lenders, as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; third, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fourth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other
Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3 .01 Taxes .
(a) Payments Free of Taxes; Obligation to Withhold.
(i) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws require the deduction or withholding of any Tax from any such payment by the Administrative Agent or the Borrower, then the Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.
(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Borrower or the Administrative Agent, as applicable, shall withhold or make such deductions as are determined by the Borrower or the Administrative Agent, as applicable, to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Borrower or the Administrative Agent, as applicable, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Lender receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification for Taxes.
(i) The Borrower shall and does hereby indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) paid by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, setting forth in reasonable detail the basis for such amounts, shall be conclusive absent manifest error. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(ii) Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) the Administrative Agent and the Borrower, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrower, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or the Borrower in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).
(d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any of the Administrative Agent or a Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Administrative Agent or any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law and reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not the Administrative Agent or such Lender is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing the Administrative Agent or any Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Person becomes a party to this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Person is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of IRS Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Credit Party within the meaning of Section 881 (c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of IRS Form W-8BEN,
(iv) in the case of a Foreign Lender that is not the beneficial owner of payments made under any Loan Documents, duly completed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-9 and/or other certification documents from each beneficial owner, as applicable,
(v) in the case of the Administrative Agent or any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code, duly completed copies of IRS W-9, establishing a complete exemption from backup withholding taxes, and/or
(vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax (or indicating whether such withholding tax is applicable) duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses and net of any loss or gain realized in the conversion of such funds from or to another currency of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person or to file for or otherwise pursue on behalf of any Credit Party any refund of any Taxes.
3 .02 Illegality .
If any Lender determines in good faith that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3 .03 Inability to Determine Rates .
If the Required Lenders determine in good faith that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion thereto or continuation thereof that (a) deposits are not being offered to banks in the applicable offshore interbank market for Dollars for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.
3 .04 Increased Costs; Reserves on Eurodollar Rate Loans .
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)); or
(ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any participation in any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes and the imposition of, or any change in the rate of, any Excluded Tax); or
(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or participation therein (other than with respect to Taxes, which shall be governed solely by Section 3.01);
and the result of any of the foregoing shall be to increase the cost to such Lender , which such Lender deems material in its reasonable discretion, of making or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), by an amount deemed by such Lender to be material in its reasonable discretion, then from time to time the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting forth in reasonable detail the basis for and the calculation of the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the provisions of this Section for any increased costs incurred or reductions suffered more than three months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such
Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which in each case, shall be due and payable on each date on which interest is payable on such Loan; provided, the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice. Any Lender which gives notice under this Section 3.04(e) shall promptly withdraw such notice (by written notice of withdrawal given to the Administrative Agent and the Borrower) in the event such Lender is no longer required to maintain such reserves or the circumstances giving rise to such notice shall otherwise cease to exist.
Notwithstanding anything contained in this Section 3.04, the Borrower shall not be obligated to pay any greater amounts than such Lender(s) is (are) generally charging other borrowers on loans similarly situated to the Borrower that are parties to similar credit agreements.
3 .05 Compensation for Losses .
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Eurodollar Rate Loan on a day other than the last day of the Interest Period for such Eurodollar Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert to any Eurodollar Rate Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;
including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract (but excluding any loss of anticipated profits). The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the offshore interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), setting forth in reasonable detail the basis and calculation for such amounts, shall be conclusive absent manifest error.
3 .06 Mitigation Obligations; Replacement of Lenders .
(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if material amounts are paid to such Lender under Section 3.05, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.
3 .07 Survival .
All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO
THIS AGREEMENT AND THE BORROWING
4 .01 Conditions of Effectiveness of this Agreement .
The effectiveness of this Agreement and the obligation of each Lender to make its Loan on the Closing Date hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies or other electronic imaging transmission (e.g. “pdf” via e-mail) (followed promptly by originals to the extent requested by the Administrative Agent) and unless otherwise specified, each properly executed by a Responsible Officer of the signing Credit Party (to the extent applicable), each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement;
(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;
(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized as of the date hereof to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Credit Party is a party;
(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Credit Party is duly organized or formed (including, without limitation, articles or certificates of incorporation or other charter documents and bylaws or other governance documents of each Credit Party), and that each Credit Party is validly existing and in good standing in its jurisdiction of organization and the tax identification number for each Credit Party;
(v) favorable opinions of counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, as to the matters concerning the Credit Parties and the Loan Documents as the Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by each Credit Party and the validity against such Credit Party of the Loan Documents to which it is a party (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii)), and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required (other than such consents and approvals delivered pursuant to Section 4.01(a)(iii));
(vii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (C) the Debt Rating as of the Closing Date;
(viii) payment instructions for cash proceeds of the Loan Amount received by the Borrower on the Closing Date; and
(ix) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or the Required Lenders reasonably may require.
(b) Any fees required to be paid by the Borrower to the Administrative Agent or to the Lenders on or before the Closing Date shall have been, or concurrently with the Closing Date are being, paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable and documented fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
4 .02 Additional Conditions to Borrowing .
The obligation of each Lender to make its Loan on the Closing Date or pursuant to Section 2.15 is subject to the following conditions precedent:
(a) The representations and warranties of each Credit Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of Borrowing in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.
(b) No Default or Event of Default shall exist, or would result from the proposed Borrowing or from the application of the proceeds thereof.
(c) The Administrative Agent shall have received a Loan Notice in accordance with the requirements hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to the Administrative Agent and the Lenders that:
5 .01 Existence, Qualification and Power; Compliance with Laws .
Each Credit Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization except to the extent permitted by Sections 7.03 or 10.20, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (a) (solely as to Subsidiaries that are not Credit Parties), (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
5 .02 Authorization; No Contravention .
The execution, delivery and performance by each Credit Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law, except, in each case referred to in clause (b) or (c), as contemplated hereunder or to the extent such conflict, breach, contravention or violation, or creation of any such Lien or required payment could not reasonably be expected to have a Material Adverse Effect.
5 .03 Governmental Authorization; Other Consents .
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party of this Agreement or any other Loan Document other than those that have already been made or obtained and remain in full force and effect or those which, if not made or obtained, could not reasonably be expected to have a Material Adverse Effect.
5 .04 Binding Effect .
This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Credit Party party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of each Credit Party party thereto, enforceable against each such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5 .05 Financial Statements; No Material Adverse Effect .
(a) The Audited Financial Statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.
(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries delivered pursuant to Section 6.01(b) for the most recent fiscal quarter end, and the related consolidated statements of income or operations and cash flows for the fiscal quarter ended on that date fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject to the absence of footnotes and to normal year end audit adjustments.
(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated financial projections of the Borrower previously delivered to the Administrative Agent for the 2011, 2012 and 2013 fiscal years were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5 .06 Litigation .
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Credit Parties, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against any Credit Party or any of their Subsidiaries or against any of their properties or revenues that (a)
affect or pertain to this Agreement or any other Loan Document or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
5 .07 No Default .
Neither any Credit Party nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
5 .08 Ownership of Property; Liens .
Each of the Credit Parties and their Subsidiaries has good record and marketable title in fee simple (subject to the rights of other parties as owners of condominium units) to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Credit Parties and their Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5 .09 Environmental Compliance .
The Credit Parties and their Subsidiaries are not in violation of any Environmental Laws and not subject to liabilities or claims thereunder that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
5 .10 Insurance .
The properties of each Credit Party and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Credit Parties, in such amounts and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Credit Party or the applicable Subsidiary operates.
5 .11 Taxes .
The Credit Parties and their Subsidiaries have filed all Federal, state and other tax returns and reports required to be filed and have paid all Federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP (to the extent required by GAAP) or (b) where failure to comply with the foregoing could not reasonably be expected to have a Material Adverse Effect. There is no proposed tax assessment against a Credit Party or any of their Subsidiaries that would, if made, have a Material Adverse Effect.
5 .12 ERISA Compliance .
(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Pension Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal
Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the best knowledge of the Credit Parties, nothing has occurred that would prevent or cause the loss of such tax-qualified status.
(b) There are no pending or, to the best knowledge of the Credit Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred, and neither any Credit Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Credit Party and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher except where the failure to attain such funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect, and neither any Credit Party nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date except where such drop in funding target attainment percentage could not reasonably be expected to give rise to a Material Adverse Effect; and (iv) neither any Credit Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA.
5 .13 Margin Regulations; Investment Company Act; REIT Status .
(a) Neither the making of any Loan hereunder nor the use of proceeds thereof will violate the provisions of Regulations T, U or X of the FRB.
(b) None of the Credit Parties is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
(c) The Borrower currently has REIT Status.
5 .14 Disclosure .
Each Credit Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished by or on behalf of any Credit Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, taken as a whole and as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Credit Parties represent only that such information was prepared in good faith based upon assumptions believed by the Credit Parties to be reasonable at the time made (it being understood that such financial projections
are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and its Subsidiaries and that no assurance is given by the Borrower that such projections will be realized).
5 .15 Compliance with Laws .
Each Credit Party and each of its Subsidiaries are in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5 .16 Intellectual Property; Licenses, Etc.
Each Credit Party and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person except to the extent that failure to so own or possess such IP Rights or any such conflict, could not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
5 .17 [Reserved].
5.18 Property .
All of the Credit Parties’ and their respective Subsidiaries’ Properties are in good repair and condition, subject to ordinary wear and tear, other than with respect to deferred maintenance existing as of the date of acquisition of such Property and except for such defects relating to properties which would not have a Material Adverse Effect.
5 .19 [ Reserved ].
5 .20 Solvency .
As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all of the Loans made hereunder, the Borrower and its Subsidiaries (on a consolidated basis) are Solvent.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, the Credit Parties shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Subsidiary to:
6 .01 Financial Statements .
Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender):
(a) As soon as practicable, and in any event within 90 days after the end of each fiscal year, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the consolidated statements of operations, stockholders’ equity and cash flows, in each case of the Borrower and its Subsidiaries for such fiscal year, all in reasonable detail. Such financial statements shall be prepared in accordance with GAAP, consistently applied, audited and shall be accompanied by a report of Ernst & Young LLP or other independent public accountants of recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any “going concern” or like qualifications or exception or any qualification or exception as to the scope of the audit; and
(b) As soon as practicable, and in any event within 60 days after the end of each fiscal quarter (other than the fourth fiscal quarter in any fiscal year), the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter and the consolidated statements of operations and cash flows for such fiscal quarter, and the portion of the fiscal year ended with such fiscal quarter, all in reasonable detail. Such financial statements shall be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP (other than footnote disclosures), consistently applied, as at such date and for such periods, subject only to normal year-end accruals and audit adjustments.
6 .02 Certificates; Other Information .
Deliver to the Administrative Agent (and the Administrative Agent shall deliver to each Lender), in form and detail reasonably satisfactory to the Administrative Agent:
(a) Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer;
(b) No later than 90 days after the commencement of each fiscal year, an annual forecast for the then-current fiscal year in reasonable detail;
(c) Promptly after request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any of its Subsidiaries, or any audit of any of them;
(d) Promptly after the same are available, and in any event within five (5) Business Days after filing with the SEC, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all publicly available annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Administrative Agent pursuant to Section 6.01 or other provisions of this Section 6.02;
(e) Promptly upon a Responsible Officer becoming aware of the occurrence of any (i) Reportable Event or (ii) non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) involving any Pension Plan or any trust created thereunder that could reasonably be expected to give rise to a material liability, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto, and, when known, any action taken by the IRS with respect thereto;
(f) Promptly upon a Responsible Officer becoming aware of the existence of any condition or event which constitutes a Default or Event of Default, written notice thereof and specifying what action the Borrower is taking or proposes to take with respect thereto;
(g) Promptly upon a Responsible Officer becoming aware that any Person has commenced a legal proceeding with respect to a claim against the Credit Parties or their respective Subsidiaries that could reasonably be expected to have a Material Adverse Effect, written notice describing the pertinent facts relating thereto and what action Borrower or its Subsidiaries are taking or propose to take with respect thereto;
(h) Promptly upon a Responsible Officer becoming aware of a change in the Debt Rating (including a change in the Debt Rating resulting from the initial issuance of a Debt Rating based on Borrower’s long-term senior unsecured debt) or any announcement that any such rating is “under review” or that such rating has been placed on a watch list or that any similar action has been taken by a Rating Agency, written notice of such change, announcement or action;
(i) Promptly upon a Responsible Officer becoming aware, notice of any material change in accounting policies by the Borrower or any other Credit Party; and
(j) Such other data and information with respect to the Borrower or any Subsidiary as from time to time may be reasonably requested by the Administrative Agent.
Documents required to be delivered pursuant to this Agreement (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Credit Parties post such documents, or provide a link thereto on the Credit Parties’ website on the Internet at the website address listed on Schedule 10.02 or (ii) on which such documents are posted on the Credit Parties’ behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent), including the SEC’s EDGAR website; provided that the Credit Parties shall deliver paper copies of such documents to the Administrative Agent for any Lender that requests in writing to the Borrower and the Administrative Agent that the Credit Parties deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Credit Parties with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Credit Parties hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders materials and/or information provided by or on behalf of the Credit Parties hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Credit Parties or their securities) (each, a “Public Lender”). The Credit Parties hereby agree that (w) all
Borrower Materials (other than SEC Reports) that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC,” the Credit Parties shall be deemed to have authorized the Administrative Agent, the Arrangers and the Lenders to treat such Borrower Materials as either publicly available information or not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws; (y) all SEC Reports and all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials (other than SEC Reports) that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” The Credit Parties shall be in compliance with all requirements to deliver information under this Agreement if they have made such information available to the Administrative Agent and, to the extent required, Lenders other than Public Lenders, and the failure of Public Lenders to receive information made available to other Lenders shall not result in any breach of this Agreement.
6 .03 Payment of Obligations .
Pay and discharge as the same shall become due and payable, all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless (a) the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Credit Parties or such Subsidiary prior to the imposition of such Lien or (b) the failure to do so could not reasonably be expected to have a Material Adverse Effect.
6 .04 Preservation of Existence, Etc .
(a) Preserve, renew and maintain in full force and effect the legal existence and good standing of the Credit Parties under the Laws of the jurisdiction of their organization except in a transaction permitted by Sections 7.03 or 10.20; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation or non-renewal of which could reasonably be expected to have a Material Adverse Effect.
6 .05 Maintenance of Properties .
(a) Maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted and subject to exceptions for extraordinary or reasonably unforeseeable events in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof in a reasonably timely manner except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.
6 .06 Maintenance of Insurance .
Maintain liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is customarily carried by companies engaged in similar businesses and owning similar assets in the general areas in which the Credit Parties or such Subsidiaries, as applicable, operate.
6 .07 Compliance with Laws .
Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
6 .08 Books and Records .
(a) Maintain proper books of record and account, in which entries true and correct in all material respects are made in conformity with GAAP consistently applied; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Credit Parties and their Subsidiaries, as the case may be.
6 .09 Inspection Rights .
Permit the Lenders, through the Administrative Agent or any representative designated by the Administrative Agent, at the Credit Parties’ expense, to visit and inspect any of the properties of the Credit Parties or any of their respective Subsidiaries (subject to the rights of any tenants), to examine the books of account of the Credit Parties and their respective Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss the affairs, finances and accounts of the Credit Parties and their respective Subsidiaries with, and to be advised as to the same by, their Responsible Officers, all at such reasonable times (typically during normal business hours) and intervals as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request upon not less than four (4) Business Days’ notice; provided, however, that inspections made at the Credit Parties’ expense shall be limited to once per year, unless an Event of Default shall have occurred and be continuing. The Lenders shall use good faith efforts to coordinate such visits and inspections so as to minimize the interference with and disruption to the Credit Parties’ or such Subsidiaries’ normal business operations. Notwithstanding anything to the contrary in this Section 6.09, no Credit Party nor any of their Subsidiaries will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any document, information or other matter that (i) in respect of which disclosure to the Administrative Agent (or its designated representative) or any Lender is then prohibited by law or any agreement binding on any Credit Party or any of its Subsidiaries or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product.
6 .10 Use of Proceeds .
Use the proceeds of the Loans for working capital and general corporate purposes (including repayments of Indebtedness) not in contravention of any Laws or any Loan Documents.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder (other than contingent indemnity obligations) shall remain unpaid or unsatisfied, each Credit Party shall not, nor shall it permit any Subsidiary to, directly or indirectly:
7 .01 Liens .
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
(a) inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside, to the extent required by GAAP (or deposits made pursuant to applicable Law) and which are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside, to the extent required by GAAP, and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material impending risk of loss or forfeiture;
(c) defects and irregularities in title to any Property which would not reasonably be expected to result in a Material Adverse Effect;
(d) easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property in the ordinary course;
(e) easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center, business or office park or similar project affecting Property in the ordinary conduct of the business of the applicable Person;
(f) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, any right, power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property in the ordinary conduct of the business of the applicable Person;
(i) statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business (but not in connection with the incurrence of any Indebtedness) with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto, to the extent required by GAAP, and, by reason of nonpayment, no Property is subject to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of Property which may not give rise to any Lien against such Property in the ordinary conduct of the business of the applicable Person;
(k) rights of tenants as tenants only under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business;
(n) deposits to secure the performance of bids, contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(o) Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien;
(p) Liens consisting of deposits of Property to secure statutory obligations of any Credit Party or any Subsidiary;
(q) (i) Liens created by or resulting from any litigation or legal proceeding in the ordinary course of business which is currently being contested in good faith by appropriate proceedings, provided that, adequate reserves have been set aside and no material Property is subject to a material impending risk of loss or forfeiture and (ii) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h) or securing appeal or other surety bonds related to such judgments;
(r) other nonconsensual Liens incurred in the ordinary course of business but not in connection with the incurrence of any Indebtedness, which do not individually involve amounts in excess of $10,000,000 or in the aggregate involve amounts in excess of $20,000,000;
(s) any Liens securing the Obligations; and
(t) Liens securing Secured Debt (other than Obligor Subsidiary Debt) not prohibited by this Agreement.
7 .02 Investments.
Make any Investments, except:
(a) Investments held by any Credit Party or any of its Subsidiaries in the form of Cash, Cash Equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of any Credit Party or any of its Subsidiaries for travel, entertainment, relocation and similar ordinary business purposes;
(c) Investments of a Credit Party in any Subsidiary or any other Credit Party, Investments of any Subsidiary in a Credit Party or in another Subsidiary and Investments in any Person that, as a result of or in connection with such Investment, becomes or will become a Subsidiary of a Credit Party;
(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors;
(e) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of improved real estate property used principally for office, laboratory, research, health sciences, technology, manufacturing or warehouse purposes (and appurtenant amenities);
(f) Investments in Real Property of the Credit Parties and their Subsidiaries consisting of (i) Development Investments (the amount of such Investment shall be an amount equal to the aggregate costs incurred in connection therewith), (ii) undeveloped land without improvements, or (iii) any other Real Property, other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities); provided, that, as of the most recently ended fiscal quarter, the aggregate book value of such Investments may not exceed 35% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(f) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value;
(g) other Investments, other than Investments in Real Property not otherwise permitted by Section 7.02; provided that as of the most recently ended fiscal quarter, the aggregate book value of such Investments pursuant to this Section 7.02(g) shall not exceed 15% of the Adjusted Tangible Assets. To determine such book value of Investments described in this Section 7.02(g) which are not owned 100%, directly or indirectly, by the Borrower or any of its Subsidiaries, the book value of such Investment shall be adjusted by multiplying the same by the Borrower’s or such Subsidiaries’ interest therein during the fiscal quarter of the Borrower ending as of the date of determination of such book value; and
(h) Guarantees by any Credit Party or any Subsidiary in respect of Indebtedness not prohibited hereunder.
7 .03 Fundamental Changes .
Merge, dissolve, liquidate or consolidate with or into another Person, except that, so long as no Default or Event of Default exists or would result therefrom and subject to the proviso below, (a) a Credit Party may merge or consolidate with or into one or more other Credit Parties, (b) any Subsidiary (other than the Operating Partnership) may merge or consolidate with or into a Credit Party or another Subsidiary or may dissolve or liquidate, or (c) any other merger, dissolution, liquidation or consolidation that does not result in a Change of Control shall be permitted; provided, that (i) if the Borrower or
Operating Partnership is a party to any merger or consolidation permitted under this Section 7.03, it shall be the surviving entity, and (ii) in no event shall the Borrower and Operating Partnership be permitted to merge or consolidate with each other.
7 .04 Restricted Payments .
With respect to any Credit Party or any Subsidiary thereof, make any Restricted Payment except (a) so long as no Event of Default shall have occurred and be continuing under Section 8.01(a) or would result therefrom, such Restricted Payment shall be permitted (i) in an amount not to exceed (excluding Restricted Payments made pursuant to the last sentence of this Section 7.04) the greater of (A) the amount which, when added to the amount of all other Restricted Payments paid by the Borrower in the same fiscal quarter and the preceding three fiscal quarters, would not exceed 95% of Funds From Operations of the Borrower and its Subsidiaries for the four consecutive fiscal quarters ending prior to the fiscal quarter in which such Restricted Payment is paid and (B) the minimum amount of Restricted Payments required (I) under the Code to maintain and preserve Borrower’s REIT Status or (II) to avoid the payment of federal or state income or excise tax, (ii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, to the extent it relates to the retirement of Preferred Equity in an amount not to exceed any Exchange Proceeds so used notwithstanding the limitations set forth in clause (i), and (iii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, with the proceeds of sales of property notwithstanding the limitation set forth in clause (i); provided however, that if an Event of Default under Section 8.01(a) has occurred and is continuing, the Credit Parties and their Subsidiaries may only make the Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status. Notwithstanding the foregoing, any Subsidiary of the Borrower may (A) make Restricted Payments payable to the Borrower or any other Credit Party (directly or indirectly through Subsidiaries) and (B) declare and make Restricted Payments to its equity holders generally so long as the Borrower or such Subsidiary that owns the equity interest or interests in the Subsidiary making such Restricted Payments receives at least its proportionate share thereof (based upon its relative equity interests in the Subsidiary making such Restricted Payment); provided that in the case of clause (B) above, if an Event of Default under Section 8.01(a) has occurred and is continuing, such Subsidiaries may only make Restricted Payments in the minimum amount necessary to comply with Section 857(a) of the Code and maintain the Borrower’s REIT Status.
7 .05 Change in Nature of Business .
Make any material change in the principal nature of the business of the Credit Parties and their Subsidiaries, such business being the acquisition, ownership, management, development and renovation of real property and buildings for use as office, office/laboratory, research, health sciences, technology or manufacturing/warehouse properties and related real property (and appurtenant amenities).
7 .06 Transactions with Affiliates .
Enter into any transaction of any kind with any Affiliate of the Credit Parties or their respective Subsidiaries other than (a) salary, bonus, employee stock option, relocation assistance and other compensation arrangements with directors or officers in the ordinary course of business, (b) transactions that are fully disclosed to the board of directors of the Borrower and expressly authorized by a resolution of the board of directors of the Borrower which is approved by a majority of the directors not having an interest in the transaction, (c) transactions permitted by this Agreement, (d) transactions between or among Credit Parties and Subsidiaries and (e) transactions on overall terms at least as favorable to Credit Parties or their Subsidiaries as would be the case in an arm’s length transaction between unrelated parties.
7 .07 Burdensome Agreements .
Enter into any agreement, instrument or transaction which prohibits any Credit Party’s ability to pledge to Administrative Agent any Qualified Asset Pool Property. The Credit Parties, and their respective Subsidiaries, shall take such actions as are necessary to preserve the right and ability of the Credit Parties, and their respective Subsidiaries, to pledge to Administrative Agent for the benefit of Lenders the Qualified Asset Pool Properties without any such pledge after the date hereof causing or permitting the acceleration (after the giving of notice or the passage of time, or otherwise) of any other Indebtedness of the Credit Parties or any of their respective Subsidiaries.
7 .08 [Reserved] .
7 .09 Financial Covenants .
(a) Permit the Fixed Charge Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.50:1.00.
(b) (i) Subject to clause (ii) below, permit the Secured Debt Ratio, as of the last day of any fiscal quarter, to exceed 40.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Secured Debt Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 45.0%.
(c) (i) Subject to clause (ii) below, permit the Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
(d) Permit Minimum Book Value, as of the last day of any fiscal quarter, to be less than the sum of (i) $2,000,000,000, plus (ii) 50% of the net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds).
(e) Permit the Unsecured Interest Coverage Ratio, as of the last day of any fiscal quarter, to be less than 1.75 to 1.00.
(f) (i) Subject to clause (ii) below, permit the Unsecured Leverage Ratio, as of the last day of any fiscal quarter, to exceed 60.0%; or
(ii) subsequent to the consummation of a Material Acquisition, permit the Unsecured Leverage Ratio, as of the last day of the fiscal quarter in which such Material Acquisition occurs and as of the last day of each of the three consecutive fiscal quarters following such Material Acquisition, to exceed 65.0%.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8 .01 Events of Default .
Any of the following shall constitute an “Event of Default”:
(a) Non-Payment. Any Credit Party fails to pay (i) when and as required to be paid herein any amount of principal of any Loan, or (ii) within five Business Days after the same becomes due, any interest on any Loan, or any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Credit Party fails to perform or observe any term, covenant or agreement contained in Article VII; or
(c) Other Defaults. Any Credit Party or Subsidiary fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 Business Days following written notice by Administrative Agent or, if such Default is not reasonably susceptible of cure within such period, within such longer period as is reasonably necessary to effect a cure so long as such Credit Party or such Subsidiary continues to diligently pursue cure of such Default but not in any event in excess of 60 Business Days; or
(d) Representations and Warranties. Any representation or warranty by a Credit Party or any of its Subsidiaries made in any Loan Document, or in any certificate or other writing delivered by a Credit Party or any of its Subsidiaries pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of the Lenders; or
(e) Cross-Default. Any Credit Party or any of its Subsidiaries (i) fails to pay the principal, or any principal installment, of any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more required on its part to be paid when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be performed or observed, or suffers any event of default to occur, in connection with any Indebtedness (other than Non-Recourse Debt) of $50,000,000 or more, if as a result of such failure or sufferance any holder or holders thereof (or an agent or trustee on its or their behalf) has the right (after giving effect to any notice or grace periods applicable thereto) to declare such Indebtedness due before the date on which it otherwise would become due or the right (after giving effect to any notice or grace periods applicable thereto) to require a Credit Party or any such Subsidiary to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness (provided, that for the purpose of this clause (e), the principal amount of Indebtedness consisting of a Swap Contract shall be the amount which is then payable by the counterparty to close out the Swap Contract); or
(f) Insolvency Proceedings, Etc. Any Credit Party or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Credit Party or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Credit Party or any Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding $50,000,000 (to the extent not covered by independent third party insurance as to which the insurer does not dispute coverage), and (i) enforcement proceedings are commenced by any creditor upon such judgment or order, or (ii) such judgment or order shall continue unsatisfied and in effect for a period of 30 consecutive days without being vacated, discharged, satisfied or stayed or bonded pending appeal; or
(i) ERISA. An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Credit Parties or their Subsidiaries under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter, or (ii) the Credit Parties or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of 5% of the combined total assets of such Credit Parties or Subsidiaries as of the most recent fiscal quarter; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or relating to the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Credit Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Credit Party denies that it has any liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document (except as specifically contemplated hereunder or thereunder); or
(k) Change of Control. There occurs any Change of Control.
8 .02 Remedies Upon Event of Default .
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Credit Parties; and
(b) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any one or more of the Credit Parties under the Bankruptcy Code of the United States, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, without further act of the Administrative Agent or any Lender.
8 .03 Application of Funds .
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender) and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been paid in full, to the Credit Parties or as otherwise required by Law.
ARTICLE IX
ADMINISTRATIVE AGENT
9 .01 Appointment and Authority .
Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and, except as set forth in Section 9.06, neither the Borrower nor any other Credit Party shall have rights as a third party beneficiary of any of such provisions.
9 .02 Rights as a Lender .
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Credit Parties or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
9 .03 Exculpatory Provisions .
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Credit Parties or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number, percentage or class of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the Borrower or a Lender.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
9 .04 Reliance by Administrative Agent .
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
9 .05 Delegation of Duties .
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
9 .06 Successor Administrative Agent .
The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. The Required Lenders may remove the Administrative Agent from its capacity as Administrative Agent in the event of the Administrative Agent’s willful misconduct or gross negligence. Upon receipt of any such notice of resignation or the removal of the Administrative Agent as Administrative Agent hereunder, the Required Lenders shall have the right (with the consent of the Borrower provided there does not exist an Event of Default at such time), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders (with the consent of the Borrower provided there does not exist an Event of Default at such time) and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or the Required Lenders remove the Administrative Agent hereunder, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
9 .07 Non-Reliance on Administrative Agent and Other Lenders .
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
9 .08 No Other Duties, Etc .
Anything herein to the contrary notwithstanding, none of the Syndication Agents, the Documentation Agents or Arrangers listed on the cover page hereof or any additional titled agents which may be added thereto from time to time shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.
9 .09 Administrative Agent May File Proofs of Claim .
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, indemnification, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, indemnification, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
9 .10 Collateral and Borrower Matters .
The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion and the Administrative Agent hereby agrees:
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as part of or in connection with any sale not prohibited hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; and
(b) to release a Guarantor (other than the Operating Partnership) from liability for the Obligations in accordance with Section 10.20.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property.
9 .11 No Obligations of Credit Parties .
Nothing contained in this Article IX shall be deemed to impose upon the Credit Parties any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and the Credit Parties shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Administrative Agent or the Lenders under this Agreement. Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by the Credit Parties to the Administrative Agent for the account of the Lenders, the Credit Parties’ obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.
ARTICLE X
MISCELLANEOUS
10 .01 Amendments, Etc .
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Credit Parties therefrom, shall be effective unless in writing signed by the Required Lenders (or the Administrative Agent with the written concurrence of the Required Lenders) and the Credit Parties, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender without the written consent of such Lender (subject to Sections 2.14 and 2.15);
(c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal or payment of interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby (subject to Section 2.14);
(d) reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to clause (ii) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein);
(e) change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender (subject to Section 2.15);
(f) change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (subject to Section 2.15); or
(g) release (i) the Borrower or (ii) the Operating Partnership, as a Credit Party hereunder, without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (ii) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or
consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.
10 .02 Notices; Effectiveness; Electronic Communication .
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to a Credit Party or the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02 and
(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been received upon the sender’s receipt of an acknowledgement from the intended recipient (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or a Credit Party may, in its discretion, agree to accept notices and other communications to such Person(s) hereunder by electronic communications pursuant to procedures approved by such Person(s), provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Credit Parties, any Lender, or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Credit Party’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Credit Party, any Lender, or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Credit Parties and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Credit Parties even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof as understood by the recipient, varied from any confirmation thereof. The Credit Parties shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Credit Parties except to the extent resulting from the gross negligence or willful misconduct of Administrative Agent, any Lender or any Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
10 .03 No Waiver; Cumulative Remedies .
No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
10 .04 Expenses; Indemnity; Damage Waiver .
(a) Costs and Expenses. The Credit Parties shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent (limited to one counsel, and, if applicable, one local counsel in each material jurisdiction)), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out of pocket expenses incurred by the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) Indemnification by the Credit Parties. The Credit Parties shall indemnify the Administrative Agent (and any sub-agent thereof) and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Credit Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Credit Parties or any of their Subsidiaries, or any Environmental Liability related in any way to the Credit Parties or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Credit Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) Reimbursement by Lenders. To the extent that the Credit Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, and without limiting the obligation of the Credit Parties to do so, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, any claim against any Indemnitee and any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. Except as otherwise expressly set forth herein with respect to the waiver by the Indemnitees of claims for special, indirect, consequential or punitive damages (as opposed to direct or actual damages), such waiver by the Indemnitees shall not affect the indemnification obligations of the Credit Parties under this Section 10.04. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent resulting from the gross negligence or willful misconduct of any Indemnitee.
(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor (accompanied by reasonable back-up documentation).
(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the passage of the Maturity Date and the repayment, satisfaction or discharge of all the other Obligations.
10 .05 Payments Set Aside .
To the extent that any payment by or on behalf of the Credit Parties is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
10 .06 Successors and Assigns .
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of the Credit Parties may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and
no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement
(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans; provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned;
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that
is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made to (A) a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries, or (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note, as applicable, to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of, and interest owing on, the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive (absent manifest error), and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by each of the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, but with, subject to the proviso to the fourth sentence of the immediately succeeding paragraph, prior written notice to, the Borrower and the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or a Credit Party or any of the Credit Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Credit Parties, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Credit Parties agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (subject to the requirements and limitations therein, including the requirements under Section 3.01(e)). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign, or grant a security interest in, all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment, or grant of a security interest, to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment, or grant of a security interest, shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee or grantee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York Uniform Electronic Transactions Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
10 .07 Treatment of Certain Information; Confidentiality .
(a) Confidentiality. Each Lender and the Administrative Agent (each, a “Lender Party”) hereby agrees for itself only that, except as specifically set forth herein, (i) such Lender Party shall not participate in or generate any press release or other release of information to the general public relating to the closing of the Loan without the prior written consent of the Borrower, (ii) such Lender Party shall hold the Confidential Information in accordance with such Lender Party’s customary procedures to prevent the misuse or disclosure of confidential information of this nature and in accordance with safe and sound banking practices, (iii) such Lender Party shall use the Confidential Information solely for the purposes of underwriting the Loan or acquiring an interest therein, carrying out such Lender Party’s rights or obligations under this Agreement, in connection with the syndication of the Loan, the enforcement of the Loan Documents, or other internal examination, supervision or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, or as otherwise permitted by the terms of this Section 10.07 (collectively, “Permitted Purposes”), and (iv) not disclose the Confidential Information to any party, except as expressly authorized in this Agreement or with prior written consent of the Borrower. Each Lender Party shall promptly notify the Borrower in the event that it becomes aware of any loss or unauthorized disclosure of any Confidential Information.
Each Lender Party shall not have any obligations under this Agreement with respect to a specific portion of the Confidential Information if such Lender Party can demonstrate that such Confidential Information (i) was publicly available at the time it was disclosed to such Lender Party, (ii) became publicly available subsequent to the time it was disclosed to such Lender Party, (iii) was in or comes into a Lender Party’s possession from a source not known to such Lender Party (after reasonable inquiry) to be in breach of an obligation of confidentiality owed to the Borrower in making such disclosure to such Lender Party, (iv) was in or comes into Lender Party’s possession free of any obligation of confidence owed to the Borrower at the time it was disclosed to them, or (v) was developed by the employees or agents of the Lender Party without the use of the Confidential Information.
(b) Disclosures. Any Lender Party or its legal counsel may disclose the Confidential Information (i) to the Borrower, other Lenders, the Administrative Agent or any of their respective legal counsel, (ii) to its auditors in connection with bank audits or regulatory officials having jurisdiction over such Lender Party, (iii) to its legal counsel who need to know the Confidential Information for the purposes of representing or advising the Lender Parties, (iv) with prior written notice to the Chief Executive Officer of the Borrower, to its consultants, agents and advisors retained in good faith by such Lender Party with a need to know such information in connection with a Permitted Purpose, (v) as required by Law or legal process (subject to the terms below), or in connection with any legal proceeding
in connection with the Loan Documents, or to the extent necessary or desirable to establish, enforce or assert any claims or defenses in connection with any legal proceeding by or against any such Lender Party, (vi) to another potential Lender or participant in connection with a disposition or proposed disposition to that Person of all or part of that Lender Party’s interests hereunder or a participation interest in its Notes, and (vii) to its directors, officers, employees and affiliates that control, are controlled by, or are under common control with such Lender Party or its parent or otherwise within the corporate umbrella of such Lender Party who need to know the confidential information for purposes of underwriting the Loan or becoming a party to this Agreement, the syndication of the Loan, the administration, interpretation, performance or exercise of rights under the Loan Documents, the enforcement of the Loan Documents, or other internal supervision, examination or oversight of the transactions contemplated hereby as reasonably determined by such Lender Party, provided that any Person to whom any of the Confidential Information is disclosed is informed by such Lender Party of the strictly confidential nature of the Confidential Information, and such Persons described in clauses (b)(iv) and (vi) shall agree in writing to be bound by confidentiality restrictions at least as restrictive as those contained herein. Notwithstanding the foregoing, a Lender Party may disclose Confidential Information to the extent such Lender Party is requested or required by any Law or any order of any court, governmental, regulatory or self-regulatory body or other legal process to make any disclosure of or about any of the Confidential Information. In such event (except with respect to banking regulators or auditors), such Lender Party shall, if permitted by law, promptly notify the Borrower in writing so that the Borrower may seek an appropriate protective order or waive compliance with the provisions of this Agreement (provided that if a protective order or the receipt of a waiver hereunder has not been obtained, or if prior notice is not possible, and a Lender Party is, in the opinion of its counsel, compelled to disclose Confidential Information, such Lender Party may disclose that portion of the Confidential Information which its counsel advises it that such Lender Party is compelled to disclose, and provided further that in any event, such Lender Party will not oppose action by the Borrower to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information.) Each Lender Party shall be liable (but only to the extent it is finally determined to have breached the provisions of this Section 10.07(b)) for any actions by such Lender Party (but not any other Person) which are not in accordance with the provisions of this Section 10.07(b).
(c) No Rights in Confidential Information. The Administrative Agent and each Lender recognizes and agrees that nothing contained in this Section 10.07 shall be construed as granting any property rights, by license or otherwise, to any Confidential Information (other than the Agreement or any amendments thereto or any related agreements), or to any invention or any patent, copyright, trademark, or other intellectual property right that has issued or that may issue, based on such Confidential Information (other than the Agreement or any amendments thereto or any related agreements). No Lender Party shall make, have made, use or sell for any purpose any product or other item using, incorporating or derived from any such Confidential Information; provided that the foregoing shall not limit or restrict in any way the creation, use or sale of banking or related services by any Lender Party.
(d) Survival. All Confidential Information provided by or on behalf of the Borrower during the term of this Agreement or any predecessor agreements shall remain confidential indefinitely and shall continue to receive that level of confidential treatment customarily provided by commercial banks dealing with confidential information of their borrower customers, subject, however, to the specific exceptions to confidential treatment provided herein. For a period of one year after the Termination Date, the affected Lender Party shall continue to make reasonable inquiry of any third party providing Confidential Information as to whether such third party is subject to an obligation of confidentiality owed to the Borrower or its Subsidiaries and if such Lender Party obtains knowledge that such third party is violating a confidentiality agreement with the Borrower, such Lender Party shall treat the Confidential Information received from such third party as strictly confidential in accordance with the provisions of this Section 10.07. For purposes of this Section 10.07(d), the Termination Date shall mean the earlier of the
termination of this Agreement or, with respect to a specific Lender Party, the date such Person no longer holds an interest in any Loan.
(e) Injunctive Relief. Each Lender Party hereby agrees that breach of this Section 10.07 will cause the Borrower irreparable damage for which recovery of damages would be inadequate, and that the Borrower shall therefore be entitled to obtain timely injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.
(f) No Fiduciary Duty. Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Administrative Agent or the Lenders to a Credit Party.
(g) Separate Action. Each Credit Party covenants and agrees not to, and hereby expressly waives any right to, raise as a defense, affirmative defense, set off, recoupment or otherwise against any Lender Party any claim arising from or relating to an alleged breach of this Section 10.07 in any action, claim or proceeding relating to a breach of the Loan Documents by the Credit Parties or other action to enforce or recover the Obligations, and covenant and agree that any claim against a Lender Party arising from or relating to an alleged breach of this Section 10.07 by a Lender Party shall only be asserted as an affirmative claim in a separate action against the applicable Lender Party.
10 .08 Right of Setoff .
If an Event of Default shall have occurred and be continuing, each Lender and each of its respective Affiliates is hereby authorized at any time and from time to time to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of a Credit Party against any and all of the obligations of the Credit Parties now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Credit Parties may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff hereunder, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have. Each Lender agrees to notify the Credit Parties and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
10 .09 Interest Rate Limitation .
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Credit Parties. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
10 .10 Counterparts; Integration; Effectiveness .
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging transmission (e.g. “pdf” via e-mail) shall be effective as delivery of a manually executed counterpart of this Agreement.
10 .11 Survival of Representations and Warranties .
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.
10 .12 Severability .
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.
10 .13 Replacement of Lenders .
If (a) any Lender requests compensation under Section 3.04, (b) any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender is a Defaulting Lender, (d) any Lender refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to Section 10.01, (i) requires the consent of 100% of the Lenders and the consent of the Required Lenders has been obtained or (ii)
requires the consent of each Lender directly affected thereby, or (e) any other circumstance exists hereunder that gives the Credit Parties the right to replace a Lender as a party hereto, then the Credit Parties may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06 except as provided in this Section 10.13), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Sections 3.04, 3.05 and 10.04) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Credit Parties to require such assignment and delegation cease to apply.
10 .14 Governing Law; Jurisdiction; Etc .
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE CREDIT PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
10 .15 Waiver of Jury Trial .
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10 .16 USA PATRIOT Act Notice .
Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, following a request by the Administrative Agent or any Lender, promptly provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.”
10 .17 [Reserved].
10 .18 ENTIRE AGREEMENT .
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
10 .19 [Reserved].
10 .20 Release of a Guarantor .
(a) Notwithstanding anything to the contrary contained in this Agreement, the Borrower may (i) sell, assign, transfer or dispose of its interest in a Guarantor (other than the Operating Partnership) that is a Subsidiary of the Borrower or (ii) request that any Guarantor (other than the Operating Partnership) be released from its obligations under the Loan Documents; provided, that, on or before (A) the closing of such sale, assignment, transfer or disposition or (B) the effectiveness of such requested release, the Borrower shall have delivered to the Administrative Agent a certification, together with such other evidence as the Administrative Agent may require, that the Credit Parties will be in compliance with all terms of this Agreement after giving effect to such sale, assignment, transfer, disposition or release. The Administrative Agent shall promptly notify the Lenders of any such sale, assignment, transfer, disposition or release permitted hereunder.
(b) Upon a sale, assignment, transfer, disposition or request for release in accordance with clause (a) above, the Administrative Agent shall, at the expense of the Borrower, take such action as is reasonably appropriate to effect such release.
10 .21 No Advisory or Fiduciary Responsibility .
In connection with all aspects of each transaction contemplated hereby, the Credit Parties acknowledge and agree, and acknowledge their Subsidiaries’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Credit Parties and their respective Subsidiaries, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Credit Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of the Administrative Agent, each Arranger and each Lender is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Credit Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) none of the Administrative Agent, the Arrangers or any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Credit Parties with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, the Arrangers or any Lender has advised or is currently advising the Credit Parties or any of their respective Affiliates on other matters) and none of the Administrative Agent, the Arrangers or any Lender has any obligation to the Credit Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents;
(iv) the Administrative Agent, the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their respective Affiliates, and none of the Administrative Agent, the Arrangers or any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each of the Credit Parties hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arrangers and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty arising out of the transactions contemplated hereby.
ARTICLE XI
GUARANTY
11 .01 The Guaranty .
Each of the Guarantors hereby jointly and severally, absolutely and unconditionally guarantees to each Lender and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws.
11 .02 Obligations Unconditional .
The obligations of the Guarantors under Section 11.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable Laws, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than payment in full of the Obligations), it being the intent of this Section 11.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article XI until such time as the Obligations (other than contingent indemnity obligations) have been paid in full and the Commitments have expired
or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above.
(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the Loan Documents or other documents relating to the Obligations shall be done or omitted;
(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or other documents relating to the Obligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives, to the extent permitted by Law, diligence, presentment, demand of payment, protest and all notices whatsoever, acceptance hereof, and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations, or against any other Person under any other guarantee of, or security for, any of the Obligations.
11 .03 Reinstatement .
The obligations of the Guarantors under this Article XI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent, each Lender and each other holder of the Obligations on demand for all reasonable costs and expenses (including, without limitation, the fees, charges and disbursements of counsel) incurred by the Administrative Agent, such Lender or such other holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
11 .04 Certain Additional Waivers .
Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 11.02 and through the exercise of rights of contribution pursuant to Section 11.06.
11 .05 Remedies .
The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent, the Lenders and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 8.02) for purposes of Section 11.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 11.01.
11 .06 Rights of Contribution .
The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable Laws. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until all Obligations have been paid in full and the Commitments have terminated.
11 .07 Guarantee of Payment; Continuing Guarantee .
The guarantee in this Article XI is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
11 .08 Additional Guarantors .
The Borrower may at any time and from time to time, upon written request to the Administrative Agent, cause a Domestic Subsidiary that is a Wholly-Owned Subsidiary to become a Guarantor under this Agreement by (a) executing a Joinder Agreement and (b) delivering such other documentation as the Administrative Agent may reasonably request in connection therewith, including, without limitation, certified resolutions and other organizational and customary authorizing documents of such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| BORROWER: | ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||||
|---|---|---|---|---|---|---|
| a Maryland corporation | ||||||
| By: | ||||||
| Name: | Eric S. Johnson | |||||
| Title: | Vice President | |||||
| GUARANTORS: | ALEXANDRIA REAL ESTATE EQUITIES, L.P., a Delaware limited partnership | |||||
| By: ARE-QRS Corp., a Maryland corporation, general partner | ||||||
| By: | ||||||
| Name: | Eric S. Johnson | |||||
| Title: | Vice President |
TERM LOAN AGREEMENT
| ADMINISTRATIVE AGENT: | BANK OF AMERICA, N.A. | ||
|---|---|---|---|
| By: | |||
| Name: | |||
| Title: |
TERM LOAN AGREEMENT
LENDERS:
[List of Lenders/Signature Pages on file with Administrative Agent]
TERM LOAN AGREEMENT
SCHEDULE 1.01
The existence of the consent rights of the Massachusetts Institute of Technology with respect to (a) leases over 150,000 square feet, (b) alteration of the Real Property affecting more than 150,000 square feet and having an expense of $20,000,000 or more in any single project, (c) leverage exceeding 80% of loan to value with respect to such Real Property, (d) transactions with any affiliate of the Borrower, (e) acquisition of assets other than such Real Property and related items of property and (f) changing the purpose of the company.
SCHEDULE 2.01
Commitments and Applicable Percentages
[On file with Administrative Agent]
SCHEDULE 10.02
ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES
CREDIT PARTIES:
385 E. Colorado Blvd., Suite 299
Pasadena, CA 91101
Attention: Dean Shigenaga, Chief Financial Officer
Telephone: (626) 578-0777
Telecopier: (626) 578-0770
Electronic Mail: [email protected]
Website Address: www.are.com
ADMINISTRATIVE AGENT:
Administrative Agent’s Office (for payments and Requests for Credit Extensions):
Bank of America, N.A.
901 Main Street, 14th Floor
TX1-492-14-12
Dallas, TX 75202
Attention: Ramon Presas
Telephone: (214) 209-9262
Telecopier: (214)209-8364
Electronic Mail: [email protected]
Other Notices as Administrative Agent :
Bank of America, N.A.
901 Main Street, 14th Floor
TX1-492-14-11
Dallas, TX 75202
Attention: Henry Pennell
Telephone: (214) 209-1226
Telecopier: (214) 290-9448
Electronic Mail: [email protected]
with a copy to:
Bank of America, N.A.
315 Montgomery Street
San Francisco, CA 94104
Attention: James P. Johnson
Telephone: (415) 913-4699
Telecopier: (415) 913-2356
Electronic Mail: [email protected]
EXHIBIT A
FORM OF LOAN NOTICE
Date: ____________ _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.
The Borrower hereby requests (select one):
| o A Borrowing of Loans | o A conversion or continuation of Loans | |||
|---|---|---|---|---|
| 1. | On _________________________________ (a Business Day). | |||
| --- | --- | --- | ||
| 2. | In the principal amount of $_____________. | |||
| 3. | Type of Loan requested to be borrowed or to which existing Loans are to be continued or converted: | |||
| o | Base Rate Loan | |||
| o | Eurodollar Rate Loans: with an Interest Period of ____ month(s)1. |
1 One, two, three or six months
**[Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, on the date of this Loan Notice and on the date of the related Borrowing, the conditions to lending specified in Section 4.02(a) and Section 4.02(b) of the Agreement have been satisfied.]**2
**[After giving effect to the Borrowing requested herein, the aggregate outstanding principal amount of all Loans shall not exceed the Aggregate Commitments.]**3
[signature page follows]
2 Insert bracketed language only if Borrower is making a request for a Borrowing on the Closing Date or pursuant to Section 2.15 of the Agreement (and not if Borrower is requesting only a conversion of Loans to another Type or a continuation of Eurodollar Rate Loans).
3 Include only in the case of a notice of Borrowing (and not for any conversion or continuation).
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
EXHIBIT B
[RESERVED]
EXHIBIT C
FORM OF NOTE
___________
FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to (or its registered assigns) (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of the Loan made by the Lender to the Borrower under that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among the Borrower, Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.
The Borrower promises to pay interest on the unpaid principal amount of the Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand in accordance with the terms of the Agreement, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Agreement.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[signature page follows]
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | |||
|---|---|---|---|
| a Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
_______________________
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders, and Bank of America, N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the ______________________________ of Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Credit Parties, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
- Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of [_______] (the “Statement Date”), together with the report and opinion of an independent certified public accountant required by such section.
[Use following paragraphs for fiscal quarter-end financial statements]
Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of [_______] (the “Statement Date”). Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the Statement Date.
As of the date hereof, the Debt Rating (if any) is ________.4
A review of the activities of the Credit Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Credit Parties performed and observed all of their respective Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, no Default or Event of Default exists.]
--or--
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
[signature page follows]
4 Specify whether such Debt Rating is based on Borrower’s long-term unsecured debt rating or Borrower’s long-term corporate issuer rating.
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of _____________,_______.
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
|---|---|---|---|
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
For the Quarter/Year ended______________ (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
| I. | Section 7.09(a) — Fixed Charge Coverage Ratio. | |||
|---|---|---|---|---|
| A. | Adjusted EBITDA for the four quarter period ended on Statement Date: | $__________ | ||
| B. | Debt Service of the Borrower and its Subsidiaries for the four quarter period ended on Statement Date: | $_________ | ||
| C. | Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during the four quarter period ended on Statement Date: | $_________ | ||
| D. | Line I.B. + Line I.C.: | $__________ | ||
| E. | Fixed Charge Coverage Ratio (Line I.A. ÷ Line I.D.): | ____ : 1.00 | ||
| F. | Compliance Ratio: | >1.50:1.00 | ||
| G. | Covenant Compliance: | Yes __ No __ | ||
| II. | Section 7.09(b) — Secured Debt Ratio. | |||
| A. | Secured Debt of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $_________ | ||
| C. | Secured Debt to Adjusted Tangible Assets (Line II.A. ÷ Line II.B.): | _________% | ||
| D. | Compliance Ratio: | <40.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition5: | <45.0% | |||
| E. | Covenant Compliance: | Yes __ No __ | ||
| III. | Section 7.09(c) — Leverage Ratio. | |||
| A. | Adjusted Total Indebtedness at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ |
5 See Section 7.09(b)(ii) of the Credit Agreement.
| C. | Excluded Indebtedness deducted in connection with the determination of Adjusted Total Indebtedness at Statement Date: | $__________ | |
|---|---|---|---|
| D. | Line III.B. - Line III.C.: | $_________ | |
| E. | Line III.A. ÷ Line III.D.: | ________% | |
| F. | Compliance Ratio: | <60.0% | |
| For the four quarters ending subsequent to the consummation of a Material Acquisition6: | <65.0% | ||
| G. | Covenant Compliance: | Yes __ No __ | |
| IV. | Section 7.09(d) — Minimum Book Value. | ||
| A. | Minimum Book Value at Statement Date: | $__________ | |
| B. | 50% of net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds): | $__________ | |
| C. | 2,000,000,000 + Line IV.B.: | $__________ | |
| D. | Compliance Ratio: Line IV.A. > Line IV.C.: | ||
| E. | Covenant Compliance: | Yes __ No __ | |
| V. | Section 7.09(e) — Unsecured Interest Coverage Ratio. | ||
| A. | aggregate Adjusted NOI from the Qualified Asset Pool Properties for the four fiscal quarter period ending on the Statement Date: | $__________ | |
| B. | aggregate Interest Charges for the four quarter period ended on the Statement Date in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt): | $__________ | |
| C. | Line V.A. ÷ Line V.B.: | ______:1.00 | |
| D. | Compliance Ratio: | >1.75:1.00 | |
| E. | Covenant Compliance: | Yes __ No __ | |
| VI. | Section 7.09(f) — Unsecured Leverage Ratio. | ||
| A. | aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |
| B. | Obligor Subsidiary Debt: | $__________ |
All values are in US Dollars.
6 See Section 7.09(c)(ii) of the Credit Agreement.
| C. | Adjusted Unencumbered Asset Value at Statement Date: | $__________ | ||
|---|---|---|---|---|
| D. | amount of Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in connection with the determination of aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| E. | Line VI.A. - Line VI.B. | $__________ | ||
| F. | Line VI.C. — Line VI.D. | $__________ | ||
| G. | Unsecured Leverage Ratio (Line VI.E. ÷ Line VI.F.): | __________% | ||
| H. | Compliance Ratio: | <60.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition7: | <65.0% | |||
| I. | Covenant Compliance: | Yes __ No __ | ||
| VII. | Section 7.04 — Restricted Payments. | |||
| A. | Restricted Payments by Borrower for the four quarter period ended on the Statement Date: | $__________ | ||
| B. | Funds From Operations of Borrower and its Subsidiaries for the four quarter period ending on the Statement Date: | $__________ | ||
| C. | (Line VII.A. ÷ Line VII.B.): | _________% | ||
| D. | Compliance Percentage: | <95% | ||
| E. | Covenant Compliance: | Yes __ No __ | ||
| o Compliance based on Line VII.D. percentage | ||||
| o Compliance based on REIT Status or to avoid payment of federal or state income or excise tax | ||||
| VIII. | Section 7.02(f) and (g) - Investments. | |||
| A. | Development Investments at the Statement Date: | $__________ | ||
| B. | Undeveloped land without improvements at the Statement Date: | $__________ | ||
| C. | Real Property (other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities) at the Statement Date: | $__________ |
7 See Section 7.09(f)(ii) of the Credit Agreement.
| D. | Sum of Line VIII.A. + Line VIII.B. + Line VIII.C.: | $__________ | ||
|---|---|---|---|---|
| E. | Adjusted Tangible Assets at the Statement Date: | $__________ | ||
| F. | Line VIII.D. ÷ Line VIII.E.: | _________% | ||
| G. | Compliance Percentage: | <35% | ||
| H. | Covenant Compliance: | Yes __ No __ | ||
| I. | Other non-Real Property Investments at the Statement Date (not otherwise permitted under Section 7.02): | $__________ | ||
| J. | Line VIII.I. ÷ Line VIII.E.: | _________% | ||
| K. | Compliance Percentage: | <15% | ||
| L. | Covenant Compliance: | Yes __ No __ |
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]8 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]9 Assignee identified in item 2 below ([the][each, an] “Assignee”). **[It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]**10 **hereunder are several and not joint.]**11 Capitalized terms used but not defined herein shall have the meanings given to them in the Term Loan Agreement identified below (the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the term loan facility established by the Loan Agreement and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
__________________________
8 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
9 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
10 Select as appropriate.
11 Include bracketed language if there are either multiple Assignors or multiple Assignees.
| 1. | Assignor: | |||
|---|---|---|---|---|
| 2. | Assignee: | [and is an Affiliate/Approved Fund of [identify Lender]] | ||
| 3. | Borrower: Alexandria Real Estate Equities, Inc., a Maryland corporation | |||
| 4. | Administrative Agent: Bank of America, N.A., as the administrative agent under the Loan Agreement. | |||
| 5. | Loan Agreement: Term Loan Agreement, dated as of December 6, 2011 among Alexandria Real Estate Equities, Inc., as the Borrower, Alexandria Real Estate Equities, L.P., as a Guarantor, the other Guarantors (if any) party thereto, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent. | |||
| 6. | Assigned Interest: | |||
| Facility Assigned | Aggregate Amount<br>of<br>Commitment/Loans<br>for all Lenders* | Amount of<br>Commitment/Loans<br>Assigned* | Percentage<br>Assigned of<br>Commitment/Loans | CUSIP Number |
| --- | --- | --- | --- | --- |
| Term Loan | $ | $ | % | |
| [7. | Trade Date: ] | |||
| --- | --- |
Effective Date: _____________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
| ASSIGNOR | |||
|---|---|---|---|
| [NAME OF ASSIGNOR] | |||
| By: | |||
| Name: | |||
| Title: | |||
| ASSIGNEE | |||
| [NAME OF ASSIGNEE] | |||
| By: | |||
| Name: | |||
| Title: |
| Consented to, if applicable, and Accepted: | |||
|---|---|---|---|
| BANK OF AMERICA, N.A., | |||
| as Administrative Agent | |||
| By: | |||
| Name: | |||
| Title: | |||
| Consented to, if applicable: | |||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
- Representations and Warranties.
12.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
12.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06 of the Loan Agreement (subject to such consents, if any, as may be required under Section 10.06 of the Loan Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Loan Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements referred to in Section 5.05 thereof or delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.
General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
EXHIBIT F
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of [date], is by and between _______________, a _______________ [corporation], a Domestic Subsidiary that is a Wholly Owned Subsidiary (the “Subsidiary”), the Borrower (as hereinafter defined) and the Administrative Agent (as hereinafter defined) pursuant to that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, supplemented, extended or otherwise modified in writing from time to time, the “Loan Agreement”), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (together with the Operating Partnership, collectively the “Guarantors” and individually a “Guarantor”), each lender from time to time party thereto (individually, a “Lender” and collectively, the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms not otherwise defined herein are defined in the Loan Agreement.
The Borrower has, pursuant to Section 11.08 of the Loan Agreement, requested that the Subsidiary become a Guarantor. Accordingly, the Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders:
The Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Subsidiary will be deemed to be a party to the Loan Agreement and a “Guarantor” for all purposes of the Loan Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Loan Agreement. The Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Loan Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent, as provided in Article XI of the Loan Agreement, the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof.
The Subsidiary acknowledges and confirms that it has received a copy of the Loan Agreement and the Schedules and Exhibits thereto.
The Borrower, on behalf of the Credit Parties, confirms that all of the Obligations under the Loan Agreement are, and upon the Subsidiary becoming a Guarantor shall continue to be, in full force and effect.
The Borrower and the Subsidiary agree that at any time and from time to time, upon the written request of the Administrative Agent, each of the Borrower and the Subsidiary will execute and deliver such further documents and do such further acts and things as the Administrative Agent may reasonably request in order to effectuate the purposes of this Agreement.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.
- This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the Subsidiary and the Borrower has caused this Joinder Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
| [ | ] | |||||
|---|---|---|---|---|---|---|
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| BANK OF AMERICA, N.A., | ||||||
| as Administrative Agent for itself and the other Lenders | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Consented to: | ||||||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | ||||||
| a Maryland corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: |
EXHIBIT G
FORM OF LENDER JOINDER AGREEMENT
This LENDER JOINDER AGREEMENT (this “Agreement”), dated as of ___________ __, 20__ is entered into by and among Alexandria Real Estate Equities, Inc., a Maryland corporation (“Borrower”), ____________________________________ (the “Additional Lender”) and the Administrative Agent (as hereinafter defined) pursuant to that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, supplemented, extended or otherwise modified in writing from time to time, the “Loan Agreement”), among the Borrower, Alexandria Real Estate Equities, L.P., a Delaware limited partnership (“Operating Partnership”), the other guarantors (if any) party thereto (together with the Operating Partnership, collectively the “Guarantors” and individually a “Guarantor”), each lender from time to time party thereto (the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms not otherwise defined herein are defined in the Loan Agreement.
The Additional Lender desires to become a Lender pursuant to the terms of the Loan Agreement.
Accordingly, the Additional Lender hereby agrees as follows with the Administrative Agent and the Borrower (on behalf of the Credit Parties):
The Additional Lender hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Additional Lender will be deemed to be a party to the Loan Agreement and a “Lender” for all purposes of the Loan Agreement and the other Loan Documents, and shall have all of the rights and obligations of a Lender thereunder as fully as if it has executed the Loan Agreement and the other Loan Documents. The Additional Lender hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Loan Agreement and in the other Loan Documents which are binding upon the Lenders, including, without limitation all of the authorizations of the Lenders set forth in Article IX of the Loan Agreement.
The Administrative Agent confirms that all of the obligations of the other Lenders under the Loan Agreement are, and upon the Additional Lender becoming a Lender shall continue to be, in full force and effect. The Administrative Agent further confirms that immediately upon execution of this Agreement by the parties hereto, that the Additional Lender shall become a Lender under the Loan Agreement.
The Additional Lender agrees (i) that, concurrently herewith, it will execute and deliver to the Administrative Agent the Bank of America Agent Questionnaire attached hereto as Schedule 1, and (ii) that, at any time and from time to time, upon the written request of the Administrative Agent, it will execute and deliver such further documents and do such further acts and things as the Administrative Agent may reasonably request in order to effect the purposes of this Agreement.
The Additional Lender’s new interest shall be:
| Credit Facility | Aggregate Amount of<br>Commitment/Loans for<br>all Lenders | Amount of<br>Commitment/Loans for<br>Additional Lender | Additional Lender’s<br>Percentage of Aggregate<br>Amount of<br>Commitment/Loans |
|---|---|---|---|
| Loans | $ | $ | % |
The Additional Lender (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) from and after the date hereof, it shall be bound by the provisions of the Loan Agreement and, to the extent of its Applicable Percentage, shall have the rights and obligations of a Lender thereunder, (iii) it has received a copy of the Loan Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement on the basis of which it has made such analysis and decision, and (iv) attached hereto is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement (including Section 3.01 thereof), duly completed and executed by the Additional Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Administrative Agent, the Borrower and the Additional Lender have caused this Agreement to be duly executed by their authorized officers, as of the day and year first above written.
| [ | ] | |||
|---|---|---|---|---|
| By: | ||||
| Name: | ||||
| Title: | ||||
| BANK OF AMERICA, N.A., | ||||
| as Administrative Agent for itself and the other Lenders | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| ALEXANDRIA REAL ESTATE EQUITIES, INC., | ||||
| a Maryland corporation | ||||
| By: | ||||
| Name: | ||||
| Title: |
SCHEDULE 1
BANK OF AMERICA AGENT QUESTIONNAIRE
See attached.
Section 13
FAX ALONG WITH COMMITMENT LETTER TO: HENRY PENNELL
FAX #: 214.290.9448
I. Borrower Name: Alexandria Real Estate Equities, Inc.
$ $600 MILLION Type of Credit Facility TERM LOAN
II. Legal Name of Lender of Record for Signature Page:
· Signing Credit Agreement _____ YES _____NO
· Coming in via Assignment _____ YES _____NO
| III. Type of Lender: |
|---|
(Bank, Asset Manager, Broker/Dealer, CLO/CDO, Finance Company, Hedge Fund, Insurance, Mutual Fund, Pension Fund, Other Regulated Investment Fund, Special Purpose Vehicle, Other – please specify)
| IV. Domestic Address: | V. Eurodollar Address: | |
|---|---|---|
VI. Contact Information :
Syndicate level information (which may contain material non-public information about the Borrower and its related parties or their respective securities will be made available to the Credit Contact(s). The Credit Contacts identified must be able to receive such information in accordance with his/her institution’s compliance procedures and applicable laws, including Federal and State securities laws.
| Primary | Secondary | |||||
|---|---|---|---|---|---|---|
| Credit Contact | Operations Contact | Operations Contact | ||||
| Name: | ||||||
| Title: | ||||||
| Address: | ||||||
| Telephone: | ||||||
| Facsimile: | ||||||
| E Mail Address: | ||||||
| IntraLinks E Mail Address: |
Does Secondary Operations Contact need copy of notices? ___YES ___ NO
| Letter of Credit | Draft Documentation | |||||
|---|---|---|---|---|---|---|
| Contact | Contact | Legal Counsel | ||||
| Name: | ||||||
| Title: | ||||||
| Address: | ||||||
| Telephone: | ||||||
| Facsimile: | ||||||
| E Mail Address: |
VII. Lender’s Standby Letter of Credit, Commercial Letter of Credit, and Bankers’ Acceptance Fed Wire Payment Instructions (if applicable):
Pay to:
| (Bank Name) | ||
| (ABA #) | ||
| (Account #) | ||
| (Attention) |
VIII. Lender’s Fed Wire Payment Instructions:
Pay to:
| (Bank Name) | ||
| (ABA #) | (City/State) | |
| (Account #) | (Account Name) | |
| (Attention) |
IX. Organizational Structure and Tax Status
Please refer to the enclosed withholding tax instructions below and then complete this section accordingly:
Lender Taxpayer Identification Number (TIN): ___ ___ - ___ ___ ___ ___ ___ ___
Tax Withholding Form Delivered to Bank of America*:
| W-9 | ||
|---|---|---|
| W-8BEN | ||
| W-8ECI | ||
| W-8EXP | ||
| W-8IMY |
Tax Contact
| Name: | ||
|---|---|---|
| Title: | ||
| Address: | ||
| Telephone: | ||
| Facsimile: | ||
| E Mail Address: |
NON–U.S. LENDER INSTITUTIONS
- Corporations:
If your institution is incorporated outside of the United States for U.S. federal income tax purposes, and is the beneficial owner of the interest and other income it receives, you must complete one of the following three tax forms, as applicable to your institution: a.) Form W-8BEN (Certificate of Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively Connected to a U.S. Trade or Business), or c.) Form W-8EXP (Certificate of Foreign Government or Governmental Agency).
A U.S. taxpayer identification number is required for any institution submitting a Form W-8 ECI. It is also required on Form W-8BEN for certain institutions claiming the benefits of a tax treaty with the U.S. Please refer to the instructions when completing the form applicable to your institution. In addition, please be advised that U.S. tax regulations do not permit the acceptance of faxed forms. An original tax form must be submitted.
- Flow-Through Entities
If your institution is organized outside the U.S., and is classified for U.S. federal income tax purposes as either a Partnership, Trust, Qualified or Non-Qualified Intermediary, or other non-U.S. flow-through entity, an original Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. branches for United States Tax Withholding) must be completed by the intermediary together with a withholding statement. Flow-through entities other than Qualified Intermediaries are required to include tax forms for each of the underlying beneficial owners.
Please refer to the instructions when completing this form. In addition, please be advised that U.S. tax regulations do not permit the acceptance of faxed forms. Original tax form(s) must be submitted.
U.S. LENDER INSTITUTIONS:
If your institution is incorporated or organized within the United States, you must complete and return Form W-9 (Request for Taxpayer Identification Number and Certification). Please be advised that we require an original form W-9.
Pursuant to the language contained in the tax section of the Credit Agreement, the applicable tax form for your institution must be completed and returned on or prior to the date on which your institution becomes a lender under this Credit Agreement. Failure to provide the proper tax form when requested will subject your institution to U.S. tax withholding.
*Additional guidance and instructions as to where to submit this documentation can be found at this link:
X. Bank of America Payment Instructions:
| Pay to: | Bank of America, N.A. |
|---|---|
| ABA # 026009593 | |
| New York, NY | |
| Acct. # 1292000883 | |
| Attn: Corporate Credit Services | |
| Ref: Alexandria Real Estate Equities, Inc. |
EXHIBIT B
Revised Form of Compliance Certificate
(attached)
EXHIBIT B TO FIRST AMENDMENT
TO TERM LOAN AGREEMENT
EXHIBIT D TO AMENDED TERM LOAN AGREEMENT
REVISED FORM OF COMPLIANCE CERTIFICATE
_______________________
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement, dated as of December 6, 2011 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Borrower”), Alexandria Real Estate Equities, L.P., a Delaware limited partnership, as a guarantor, the other guarantors (if any) party thereto, the Lenders, and Bank of America, N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the ______________________________ of Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Credit Parties, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
- Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of [_______] (the “Statement Date”), together with the report and opinion of an independent certified public accountant required by such section.
[Use following paragraphs for fiscal quarter-end financial statements]
Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of [_______] (the “Statement Date”). Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements.
The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the Statement Date.
As of the date hereof, the Debt Rating (if any) is ________.12
A review of the activities of the Credit Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Credit Parties performed and observed all of their respective Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, no Default or Event of Default exists.]
--or--
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
[signature page follows]
___________________________
12 Specify whether such Debt Rating is based on Borrower’s long-term unsecured debt rating or Borrower’s long-term corporate issuer rating.
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of , .
| ALEXANDRIA REAL ESTATE EQUITIES, INC., a | |||
|---|---|---|---|
| Maryland corporation | |||
| By: | |||
| Name: | |||
| Title: |
For the Quarter/Year ended (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
| I. | Section 7.09(a) — Fixed Charge Coverage Ratio. | |||
|---|---|---|---|---|
| A. | Adjusted EBITDA for the four quarter period ended on Statement Date: | $__________ | ||
| B. | Debt Service of the Borrower and its Subsidiaries for the four quarter period ended on Statement Date: | $_________ | ||
| C. | Preferred Distributions (other than redemptions) of the Borrower and its Subsidiaries during the four quarter period ended on Statement Date: | $_________ | ||
| D. | Line I.B. + Line I.C.: | $__________ | ||
| E. | Fixed Charge Coverage Ratio (Line I.A. ÷ Line I.D.): | ____ : 1.00 | ||
| F. | Compliance Ratio: | >1.50:1.00 | ||
| G. | Covenant Compliance: | Yes __ No __ | ||
| II. | Section 7.09(b) — Secured Debt Ratio. | |||
| A. | Secured Debt of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $_________ | ||
| C. | Secured Debt to Adjusted Tangible Assets (Line II.A. ÷ Line II.B.): | _________% | ||
| D. | Compliance Ratio: | <40.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition13: | <45.0% | |||
| E. | Covenant Compliance: | Yes __ No __ | ||
| III. | Section 7.09(c) — Leverage Ratio. | |||
| A. | Adjusted Total Indebtedness at Statement Date: | $__________ | ||
| B. | Adjusted Tangible Assets at Statement Date: | $__________ | ||
| C. | Excluded Indebtedness deducted in connection with the determination of |
_____________________________
13 See Section 7.09(b)(ii) of the Credit Agreement.
| Adjusted Total Indebtedness at Statement Date: | $__________ | ||
|---|---|---|---|
| D. | Line III.B. - Line III.C.: | $_________ | |
| E. | Line III.A. ÷ Line III.D.: | _________% | |
| F. | Compliance Ratio: | <60.0% | |
| For the four quarters ending subsequent to the consummation of a Material Acquisition14: | <65.0% | ||
| G. | Covenant Compliance: | Yes __ No __ | |
| IV. | Section 7.09(d) — Minimum Book Value. | ||
| A. | Minimum Book Value at Statement Date: | $__________ | |
| B. | 50% of net issuance proceeds of all Equity Offerings from and after January 28, 2011 (excluding the amount of Exchange Proceeds): | $__________ | |
| C. | 2,000,000,000 + Line IV.B.: | $__________ | |
| D. | Compliance Ratio: Line IV.A. > Line IV.C.: | ||
| E. | Covenant Compliance: | Yes __ No __ | |
| V. | Section 7.09(e) — Unsecured Interest Coverage Ratio. | ||
| A. | aggregate Adjusted NOI from the Qualified Asset Pool Properties for the four fiscal quarter period ending on the Statement Date: | $__________ | |
| B. | aggregate Interest Charges for the four quarter period ended on the Statement Date in respect of the unsecured Indebtedness of the Borrower and its Subsidiaries (other than Obligor Subsidiary Debt): | $__________ | |
| C. | Line V.A. ÷ Line V.B.: | ______:1.00 | |
| D. | Compliance Ratio: | >1.75:1.00 | |
| E. | Covenant Compliance: | Yes __ No __ | |
| VI. | Section 7.09(f) — Unsecured Leverage Ratio. | ||
| A. | aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | |
| B. | Obligor Subsidiary Debt: | $__________ | |
| C. | Adjusted Unencumbered Asset Value at Statement Date: | $__________ |
All values are in US Dollars.
_________________________
14 See Section 7.09(c)(ii) of the Credit Agreement.
| D. | amount of Excluded Indebtedness (other than Obligor Subsidiary Debt) deducted in connection with the determination of aggregate unsecured Adjusted Total Indebtedness of the Borrower and its Subsidiaries at Statement Date: | $__________ | ||
|---|---|---|---|---|
| E. | Line VI.A. - Line VI.B. | $__________ | ||
| F. | Line VI.C. – Line VI.D. | $__________ | ||
| G. | Unsecured Leverage Ratio (Line VI.E. ÷ Line VI.F.): | __________% | ||
| H. | Compliance Ratio: | <60.0% | ||
| For the four quarters ending subsequent to the consummation of a Material Acquisition15: | <65.0% | |||
| I. | Covenant Compliance: | Yes __ No __ | ||
| VII. | Section 7.04 — Restricted Payments. | |||
| A. | Restricted Payments by Borrower for the four quarter period ended on the Statement Date: | $__________ | ||
| B. | Funds From Operations of Borrower and its Subsidiaries for the four quarter period ending on the Statement Date: | $__________ | ||
| C. | (Line VII.A. ÷ Line VII.B.): | _________% | ||
| D. | Compliance Percentage: | <95% | ||
| E. | Covenant Compliance: | Yes __ No __ | ||
| o Compliance based on Line VII.D. percentage | ||||
| o Compliance based on REIT Status or to avoid payment of federal or state income or excise tax | ||||
| VIII. | Section 7.02(f) and (g) - Investments. | |||
| A. | Development Investments at the Statement Date: | $__________ | ||
| B. | Undeveloped land without improvements at the Statement Date: | $__________ | ||
| C. | Real Property (other than an improved real estate property used principally for office, manufacturing, warehouse, research, laboratory, health sciences or technology purposes (and appurtenant amenities) at the Statement Date: | $__________ | ||
| D. | Sum of Line VIII.A. + Line VIII.B. + Line VIII.C.: | $__________ | ||
| E. | Adjusted Tangible Assets at the Statement Date: | $__________ |
________________________
15 See Section 7.09(f)(ii) of the Credit Agreement.
| F. | Line VIII.D. ÷ Line VIII.E.: | _________% | ||
|---|---|---|---|---|
| G. | Compliance Percentage: | <35% | ||
| H. | Covenant Compliance: | Yes __ No __ | ||
| I. | Other non-Real Property Investments at the Statement Date (not otherwise permitted under Section 7.02): | $__________ | ||
| J. | Line VIII.I. ÷ Line VIII.E.: | _________% | ||
| K. | Compliance Percentage: | <15% | ||
| L. | Covenant Compliance: | Yes __ No __ |
EXHIBIT 12.1
ALEXANDRIA REAL ESTATE EQUITIES, INC.
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
(in thousands, except ratios)
| Six Months | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ended June 30, | Year Ended December 31, (a) | ||||||||||||
| 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||
| Income from continuing operations before noncontrolling interests | 58,075 | (b) | 135,626 | (b) | 137,262 | (b) | 134,355 | 99,683 | 75,777 | ||||
| Add: Interest expense | 34,149 | 63,407 | 69,509 | 82,111 | 85,222 | 93,390 | |||||||
| Subtract: Noncontrolling interests in income of subsidiaries that have not incurred fixed charges | (395 | ) | (1,323 | ) | (1,156 | ) | (1,217 | ) | (1,304 | ) | (1,407 | ) | |
| Earnings available for fixed charges (c) | 91,829 | 197,710 | 205,615 | 215,249 | 183,601 | 167,760 | |||||||
| Fixed charges: | |||||||||||||
| Interest incurred | 64,951 | 120,644 | 132,345 | 148,207 | 151,443 | 142,492 | |||||||
| Total fixed charges | 64,951 | 120,644 | 132,345 | 148,207 | 151,443 | 142,492 | |||||||
| Preferred stock dividends | 14,386 | 28,357 | 28,357 | 28,357 | 24,225 | 12,020 | |||||||
| Preferred stock redemption charge | 5,978 | – | – | – | – | 2,799 | |||||||
| Total combined fixed charges and preferred stock dividends | 85,315 | 149,001 | 160,702 | 176,564 | 175,668 | 157,311 | |||||||
| Consolidated ratio of earnings to fixed charges | 1.41 | (d) | 1.64 | (e) | 1.55 | (f) | 1.45 | 1.21 | (g) | 1.18 | |||
| Consolidated ratio of earnings to combined fixed charges and preferred stock dividends | 1.08 | (d) | 1.33 | (e) | 1.28 | (f) | 1.22 | 1.05 | (g) | 1.07 | (h) |
All values are in US Dollars.
(a) Amounts disclosed for prior periods have been reclassified to conform to the current period presentation related to discontinued operations.
(b) Income from continuing operations before noncontrolling interests for the six months ended June 30, 2012, and the years ended December 31, 2011 and 2010, includes the gain on sales of land parcels of approximately $1.9 million, $46,000, and $59.4 million, respectively. Pursuant to the presentation and disclosure literature on gains/losses on sales or disposals by real estate investment trusts (“REITs”) and earnings per share required by the Securities and Exchange Commission and the Financial Accounting Standards Board, gains or losses on sales or disposals by a REIT that do not qualify as discontinued operations are classified below income from discontinued operations in the statements of income and are included in the numerator for the computation of earnings per share for income from continuing operations. The land parcels we sold during the six months ended June 30, 2012, and the years ended December 31, 2011 and 2010, did not meet the criteria for discontinued operations because the parcels did not have any significant operations prior to disposition. Accordingly, for the six months ended June 30, 2012, and the years ended December 31, 2011 and 2010, we classified the $1.9 million, $46,000, and $59.4 million, respectively, gain on sales of land parcels below income from discontinued operations, net, in the condensed consolidated statements of income, and included the gain in income from continuing operations for the computation of earnings per share.
(c) For purposes of calculating the consolidated ratio of earnings to fixed charges and consolidated ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of income from continuing operations before noncontrolling interests and interest expense less noncontrolling interests in income of subsidiaries that have not incurred fixed charges. Fixed charges consist of interest incurred (including amortization of deferred financing costs and capitalized interest).
(d) Ratios for the six months ended June 30, 2012, include the effect of losses on early extinguishment of debt aggregating $2.2 million and a preferred stock redemption charge of $6.0 million. Excluding the impact of losses on early extinguishment of debt and the preferred stock redemption charge, the consolidated ratio of earnings to fixed charges and consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the six months ended June 30, 2012, were 1.45 and 1.19, respectively.
(e) Ratios for the year ended December 31, 2011, include the effect of loss on early extinguishment of debt aggregating $6.5 million and a non-cash impairment charge of approximately $1.0 million. Excluding the impact of loss on early extinguishment of debt and the non-cash impairment charge, the consolidated ratio of earnings to fixed charges and consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2011, were 1.70 and 1.38, respectively.
(f) Ratios for the year ended December 31, 2010, include the effect of loss on early extinguishment of debt aggregating $45.2 million. Excluding the impact of loss on early extinguishment of debt, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2010, were 1.89 and 1.56, respectively.
(g) Ratios for the year ended December 31, 2008, include the effect of non-cash impairment charges aggregating $13.3 million for other-than-temporary declines in the fair value of certain investments. Excluding the impact of the non-cash impairment charges, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2008, were 1.30 and 1.12, respectively.
(h) Ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2007, include the effect of a preferred stock redemption charge. Excluding the impact of this charge, the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2007, was 1.09.
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joel S. Marcus, certify that:
I have reviewed this quarterly report on Form 10-Q of Alexandria Real Estate Equities, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
- The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 8, 2012
| /s/ Joel S. Marcus | |
|---|---|
| Joel S. Marcus | |
| Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dean A. Shigenaga, certify that:
I have reviewed this quarterly report on Form 10-Q of Alexandria Real Estate Equities, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
- The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 8, 2012
| /s/ Dean A. Shigenaga | |
|---|---|
| Dean A. Shigenaga | |
| Chief Financial Officer |
EXHIBIT 32.0
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350.
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Joel S. Marcus, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alexandria Real Estate Equities, Inc. for the quarter ended June 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Alexandria Real Estate Equities, Inc.
Date: August 8, 2012
| /s/ Joel S. Marcus | |
|---|---|
| Joel S. Marcus | |
| Chief Executive Officer |
I, Dean A. Shigenaga, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alexandria Real Estate Equities, Inc. for the quarter ended June 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Alexandria Real Estate Equities, Inc.
Date: August 8, 2012
| /s/ Dean A. Shigenaga | |
|---|---|
| Dean A. Shigenaga | |
| Chief Financial Officer |