UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐ 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: 001-13779
W. P. Carey Inc.
(Exact name of registrant as specified in its charter)
Maryland
(State of incorporation)
One Manhattan West, 395 9th Avenue, 58th Floor
New York, New York
(Address of principal executive offices)
45-4549771
(I.R.S. Employer Identification No.)
10001
(Zip Code)
Investor Relations (212) 492-8920
(212) 492-1100
(Registrant’s telephone numbers, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.001 Par Value
Trading Symbol(s)
WPC
Name of exchange on which registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Securities registered pursuant to Section 12(g) of the Act: None
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 ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Smaller reporting company
☑
☐
Accelerated filer
Emerging growth company
☐
☐
Non-accelerated filer
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of last business day of the registrant’s most recently completed second fiscal quarter: $15.9 billion.
As of February 3, 2023, there were 210,621,971 shares of Common Stock of registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant incorporates by reference its definitive Proxy Statement with respect to its 2023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within
120 days following the end of its fiscal year, into Part III of this Annual Report on Form 10-K.
INDEX
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
SIGNATURES
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145
W. P. Carey 2022 10-K – 1
Forward-Looking Statements
This Annual Report on Form 10-K (the “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in
Item 7 of Part II of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements
generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to,
statements regarding: the impact of the CPA:18 Merger (as defined herein); our corporate strategy and estimated or future economic performance and
results, including the general economic outlook and our expectations surrounding the continued impact of the novel coronavirus (“COVID-19”) pandemic
on our business, financial condition, liquidity, results of operations, and prospects; underlying assumptions about our portfolio, including tenant rent
collections and bankruptcies, as well as the estimated fair value of our investments and properties; the amount and timing of any future dividends; our
future capital expenditure and leverage levels, debt service obligations, and any plans to fund our future liquidity needs; prospective statements regarding
our access to the capital markets, including related to our credit ratings, ability to sell shares under our “at-the-market” program (“ATM Program”), and
settlement of our Equity Forwards (as defined herein); the outlook for the investment program that we manage, including possible liquidity events for the
program; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust (“REIT”); and the impact of
recently issued accounting pronouncements and other regulatory activity.
These statements are based on the current expectations of our management. It is important to note that our actual results could be materially different from
those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from
these forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to inflation and increased interest rates, the
effects of pandemics and global outbreaks of contagious diseases (such as the ongoing COVID-19 pandemic) and domestic or geopolitical crises, such as
terrorism, military conflict (including the ongoing conflict between Russia and Ukraine and the global response to it), war or the perception that hostilities
may be imminent, political instability or civil unrest, or other conflict, could also have material adverse effects on our business, financial condition,
liquidity, results of operations, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown
risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that
could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report,
as well as in our other filings with the Securities and Exchange Commission (“SEC”), including but not limited to those described in Item 1A. Risk Factors
and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Report. Moreover, because we operate in a
very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential
investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of
this presentation, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to
revise or update any forward-looking statements.
All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part II, Item 8.
Financial Statements and Supplementary Data.
W. P. Carey 2022 10-K – 2
Item 1. Business.
General Development of Business
PART I
W. P. Carey Inc. (“W. P. Carey”), together with our consolidated subsidiaries and predecessors, is an internally-managed diversified REIT and a leading
owner of commercial real estate, net-leased to companies located primarily in the United States and Northern and Western Europe on a long-term basis.
The vast majority of our revenues originate from lease revenue provided by our real estate portfolio, which is comprised primarily of single-tenant
industrial, warehouse, office, retail, and self-storage facilities that are critical to our tenants’ operations. Our portfolio is comprised of 1,449 properties, net-
leased to 392 tenants in 26 countries. As of December 31, 2022, approximately 63% of our contractual minimum annualized base rent (“ABR”) was
generated by properties located in the United States and approximately 34% was generated by properties located in Europe. As of that same date, our
portfolio included 87 operating properties, comprised of 84 self-storage properties, two student housing properties, and one hotel.
On August 1, 2022, one of our former investment programs, Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”), merged with
and into one of our indirect subsidiaries (the “CPA:18 Merger”), which added approximately $2.2 billion of real estate assets to our portfolio (Note 3). This
effectively completed our exit from our investment management business.
Founded in 1973, we became a publicly traded company listed on the New York Stock Exchange (“NYSE”) in 1998 and reorganized as a REIT in 2012.
Our shares of common stock are listed on the NYSE under the ticker symbol “WPC.” Headquartered in New York, we also have offices in Dallas, London,
and Amsterdam.
Narrative Description of Business
Business Objectives and Strategy
Our primary business objective is to invest in a diversified portfolio of high-quality, mission-critical assets subject to long-term net leases with built-in rent
escalators for the purpose of generating stable cash flows, enabling us to grow our dividend and increase long-term stockholder value.
Our investment strategy primarily focuses on owning and actively managing a diverse portfolio of commercial real estate that is net-leased to credit-worthy
companies. We review and evaluate the fundamental value of the underlying real estate. We believe that many companies prefer to lease rather than own
their corporate real estate because it allows them to deploy their capital more effectively into their core competencies. We specialize in sale-leaseback
transactions, where we acquire a company’s critical real estate and then lease it back to them on a long-term, triple-net basis, which requires them to pay
substantially all of the costs associated with operating and maintaining the property (such as real estate taxes, insurance, and facility maintenance).
Compared to other types of real estate investments, sale-leaseback transactions typically produce a more predictable income stream and require minimal
capital expenditures, which in turn generate revenues that provide our stockholders with a stable, growing source of income.
We believe that diversification across property type, tenant, tenant industry, and geographic location, as well as diversification of our lease expirations and
scheduled rent increases, are vital aspects of portfolio risk management and accordingly have constructed a portfolio of real estate that we believe is well-
diversified across each of these categories. We capitalize on our large portfolio and existing tenant relationships through accretive expansions, renovations,
and follow-on deals. We actively manage our real estate portfolio to monitor tenant credit quality and lease renewal risks. We also maintain ample liquidity,
a conservative capital structure, and access to multiple forms of capital.
Our business operates in two segments: Real Estate and Investment Management, as described herein and in Note 1. Our Real Estate segment generates the
vast majority of our earnings through the lease revenues we earn from our real estate investments. We have historically earned asset management fees and
other compensation from the management of non-traded real estate investment programs through our Investment Management segment. Following the
close of the CPA:18 Merger, our advisory agreements with CPA:18 – Global were terminated (Note 3). On April 13, 2020, two of our former investment
programs, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”) (together, the “CWI REITs”),
merged in an all-stock transaction (the “CWI 1 and CWI 2 Merger”). Following the close of the CWI 1 and CWI 2
W. P. Carey 2022 10-K – 3
Merger, our advisory agreements with CWI 1 and CWI 2 were terminated and CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”) (Note 4). As
used herein, “Managed Programs” refers to CPA:18 – Global (through August 1, 2022), the CWI REITs (through April 13, 2020), and Carey European
Student Housing Fund I, L.P. (“CESH”). We continue to act as the advisor to CESH and currently expect to do so through the end of its life cycle (Note 4).
We intend to operate our business in a manner that is consistent with the maintenance of our status as a REIT for federal income tax purposes. In addition,
we expect to manage our investments in order to maintain our exemption from registration as an investment company under the Investment Company Act
of 1940, as amended.
Investment Strategies
When considering potential net-lease investments for our real estate portfolio, we review various aspects of a transaction to determine whether the
investment and lease structure will satisfy our investment criteria. We generally analyze the following main aspects of each transaction:
Tenant/Borrower Evaluation — We evaluate each potential tenant or borrower for creditworthiness, typically considering factors such as management
experience, industry position and fundamentals, operating history, and capital structure. We also rate each asset based on its market, liquidity, and criticality
to the tenant’s operations, as well as other factors that may be unique to a particular investment. We seek opportunities where we believe the tenant may
have a stable or improving credit profile or credit potential that has not been fully recognized by the market. We define creditworthiness as a risk-reward
relationship appropriate to our investment strategies, which may or may not coincide with ratings issued by the credit rating agencies. We have a robust
internal credit rating system and may designate subsidiaries of non-guarantor parent companies with investment grade ratings as “implied investment
grade.”
Properties Critical to Tenant/Borrower Operations — We generally focus on properties and facilities that we believe are critical to the ongoing operations
of the tenant. We believe that these properties generally provide better protection, particularly in the event of a bankruptcy, since a tenant/borrower is less
likely to risk the loss of a critically important lease or property in a bankruptcy proceeding or otherwise.
Diversification — We attempt to diversify our portfolio to avoid undue dependence on any one particular tenant, borrower, collateral type, geographic
location, or industry. By diversifying our portfolio, we seek to reduce the adverse effect of a single underperforming investment or a downturn in any
particular industry or geographic region. While we do not set any fixed diversity metrics in our portfolio, we believe that it is well-diversified.
Lease Terms — Generally, the net-leased properties we invest in are leased on a full-recourse basis to the tenants or their affiliates. In addition, the vast
majority of our leases provide for scheduled rent increases over the term of the lease (see Our Portfolio below). These rent increases are either fixed (i.e.,
mandated on specific dates) or tied to increases in inflation indices (e.g., the Consumer Price Index (“CPI”) or similar indices in the jurisdiction where the
property is located), but may contain caps or other limitations, either on an annual or overall basis. In the case of retail stores and hotels, the lease may
provide for participation in the gross revenues of the tenant above a stated level, which we refer to as percentage rent.
Real Estate Evaluation — We review and evaluate the physical condition of the property and the market in which it is located. We consider a variety of
factors, including current market rents, replacement cost, residual valuation, property operating history, demographic characteristics of the location and
accessibility, competitive properties, and suitability for re-leasing. We obtain third-party environmental and engineering reports and market studies when
required. When considering an investment outside the United States, we will also consider factors particular to a country or region, including geopolitical
risk, in addition to the risks normally associated with real property investments. See Item 1A. Risk Factors.
Transaction Provisions to Enhance and Protect Value — When negotiating leases with potential tenants, we attempt to include provisions that we believe
help to protect the investment from material changes in the tenant’s operating and financial characteristics, which may affect the tenant’s ability to satisfy
its obligations to us or reduce the value of the investment. Such provisions include covenants requiring our consent for certain activities, requiring
indemnification protections and/or security deposits, and requiring the tenant to satisfy specific operating tests. We may also seek to enhance the likelihood
that a tenant will satisfy their lease obligations through a letter of credit or guaranty from the tenant’s parent or other entity. Such credit enhancements, if
obtained, provide us with additional financial security. However, in markets where competition for net-lease transactions is strong, some or all of these
lease provisions may be difficult to obtain.
W. P. Carey 2022 10-K – 4
Competition — We face active competition from many sources, both domestically and internationally, for net-lease investment opportunities in commercial
properties. In general, we believe that our management’s experience in real estate, credit underwriting, and transaction structuring will allow us to compete
effectively for commercial properties. However, competitors may be willing to accept rates of return, lease terms, other transaction terms, or levels of risk
that we find unacceptable.
Asset Management
We believe that proactive asset management is essential to maintaining and enhancing property values. Important aspects of asset management include
entering into new or modified transactions to meet the evolving needs of current tenants, re-leasing properties, credit and real estate risk analysis, building
expansions and redevelopments, repositioning assets, sustainability and efficiency analysis and retrofits, and strategic dispositions. We regularly engage
directly with our tenants and form long-term working relationships with their decision makers in order to provide proactive solutions and to obtain an in-
depth, real-time understanding of tenant credit.
We monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our real estate investments on
an ongoing basis, which typically involves ensuring that each tenant has paid real estate taxes and other expenses relating to the properties it occupies and
is maintaining appropriate insurance coverage. To ensure such compliance at our properties, we often engage the expertise of third parties to complete
property inspections. We also review tenant financial statements and undertake regular physical inspections of the properties to verify their condition and
maintenance. Additionally, we periodically analyze each tenant’s financial condition, the industry in which each tenant operates, and each tenant’s relative
strength in its industry. The in-depth understanding of our tenants’ businesses and direct relationships with their management teams provides strong
visibility into potential issues as well as additional investment opportunities. Our business intelligence platform provides real-time surveillance and early
warning, allowing asset managers to work with tenants to enforce lease provisions, and where appropriate, consider lease modifications.
Financing Strategies
We believe in maintaining ample liquidity, a conservative capital structure, and access to multiple forms of capital. We preserve balance sheet flexibility
and liquidity by maintaining significant capacity on our $1.8 billion unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”), as
well as any amounts available to us under our term loan (“Term Loan”) and delayed draw term loan (“Delayed Draw Term Loan”), which, together with
our Unsecured Revolving Credit Facility, we refer to collectively as our “Senior Unsecured Credit Facility.” We also hold cash on hand to settle our
forward equity arrangements, as needed. We generally use the Unsecured Revolving Credit Facility to fund our immediate capital needs, including new
acquisitions and the repayment of secured mortgage debt as we continue to unencumber assets. We seek to replace short-term financing with more
permanent forms of capital, including, but not limited to, common stock, unsecured debt securities, bank debt, and proceeds from asset sales. When
evaluating which form of capital to pursue, we take into consideration multiple factors, including our corporate leverage levels and targets, and the most
attractive source of capital available to us. We may choose to issue unsecured debt securities and bank debt denominated in foreign currencies in part to
fund international acquisitions, unencumber assets, and mitigate our exposure to fluctuations in exchange rates. We strive to maintain an investment grade
rating, which places limitations on the amount of leverage acceptable in our capital structure. Although we expect to continue to have access to a wide
variety of capital sources and maintain our investment grade rating, there can be no assurance that we will be able to do so in the future.
Our Portfolio
At December 31, 2022, our portfolio had the following characteristics:
• Number of properties — full or partial ownership interests in 1,449 net-leased properties, 84 self-storage properties, two student housing
properties, and one hotel;
Total net-leased square footage — approximately 176 million; and
•
• Occupancy rate — approximately 98.8%.
For more information about our portfolio, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Portfolio Overview.
W. P. Carey 2022 10-K – 5
Tenant/Lease Information
At December 31, 2022, our tenants/leases had the following characteristics:
Investment grade tenants as a percentage of total ABR — 24%;
Implied investment grade tenants as a percentage of total ABR — 7%;
• Number of tenants — 392;
•
•
• Weighted-average lease term — 10.8 years;
•
99.0% of our leases as a percentage of total ABR provide rent adjustments as follows:
CPI and similar — 55.5%
Fixed — 40.0%
◦
◦
◦ Other — 3.5%
Human Capital
Investing in Our Employees
At December 31, 2022, we had 193 employees, 141 of which were located in the United States and 52 of which were located in Europe. We strive to make
W. P. Carey a great place to work by attracting a diverse pool of the best and brightest applicants and making them feel supported as they grow with the
company. We offer various levels of training, including “Respect in the Workplace,” skills training, Diversity, Equity & Inclusion, and executive coaching,
as well as additional training including safety and cybersecurity. By engaging with our employees and investing in their careers through training and
development, we have built a talented workforce capable of executing our business strategies.
Diversity
We believe that our success is dependent upon the diverse backgrounds and perspectives of our employees and directors. W. P. Carey is an equal
opportunity employer and considers qualified applicants regardless of race, color, religion, sexual orientation, gender, gender identity or expression,
national origin, age, disability, military or veteran status, genetic information, or other statuses protected by applicable federal, state, and local law. Our
diversity, equity and inclusion initiative is designed to facilitate conversations around race, sexual orientation and gender identity, national origin, creeds,
and other important topics. These conversations, led by our Diversity, Equity & Inclusion Advisory Committee, provide a forum for us to translate our
positions as a company into action in both our internal and external communities. We are also signatory to the CEO Action Pledge for Diversity &
Inclusion, which reflects our commitment to fostering a more diverse and inclusive workforce.
Employee Wellness and Benefits
The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the evolving
needs of our diverse workforce and their dependents. Our benefits package is evaluated on an annual basis. In addition to robust health and wellness
benefits, we also provide our employees with competitive compensation programs, with a focus on both current compensation and retirement planning for
their future.
Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Environmental, Social, and
Governance (“ESG”) Report, which can be found on our company website. Information on our website, including our ESG Report, is not incorporated by
reference into this Report.
Available Information
We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. Our filings can also be obtained
for free on the SEC’s website at http://www.sec.gov. All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our
current reports on Form 8-K, as well as any amendments to those reports, are available for free on the Investor Relations portion of our website
(http://www.wpcarey.com), as soon as reasonably practicable after they are filed with or furnished to the SEC.
W. P. Carey 2022 10-K – 6
Our quarterly earnings conference call and investor presentations are accessible by the public. We generally announce via press release the dates and
conference call details for upcoming scheduled quarterly earnings announcements and webcast investor presentations, which are also available in the
Investor Relations section of our website approximately ten days prior to the event.
Our Code of Business Conduct and Ethics, which applies to all employees, including our chief executive officer and chief financial officer, is also available
on our website. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four
business days after any such amendments or waivers. We are providing our website address solely for the information of investors and do not intend for it
to be an active link. We do not intend to incorporate the information contained on our website into this Report or other documents filed with or furnished to
the SEC.
Item 1A. Risk Factors.
Our business, results of operations, financial condition, and ability to pay dividends could be materially adversely affected by various risks and
uncertainties, including those enumerated below, which could cause such results to differ materially from those in any forward-looking statements. You
should not consider this list exhaustive. New risk factors emerge periodically and we cannot assure you that the factors described below list all risks that
may become material to us at any later time.
Risks Related to Our Portfolio and Ownership of Real Estate
We face an increasingly competitive marketplace for investments.
The net lease financing market is perceived as a relatively conservative investment vehicle and there has been increasing capital inflows into our sector;
accordingly, we face escalating competition for investments, both domestically and internationally. We compete for investments with many other financial
institutions and investors, including other REITs, private equity firms, pension funds, and finance companies. Our competitors may accept greater risk or
lower returns, allowing them to offer more attractive terms to prospective tenants. Further capital inflows into our sector will place additional pressure on
our ability to execute transactions and the returns that we can generate from investments. In particular, private equity real estate investors have raised
record amounts of capital in recent periods, which is expected to be deployed into acquisitions that are contributing to an increasingly competitive
marketplace. This competitive marketplace for investments could also have a negative impact on our revenue growth.
In addition, expectations of rising interest rates may increase our cost of capital, while capitalization rates (which generally respond to higher interest rates
on a lag) could remain low or continue to decline, thereby placing additional pressure on investment spreads throughout the net lease sector. Finally, the
vast majority of our current investments are in single-tenant commercial properties that are subject to triple-net leases. Many factors, including changes in
tax laws or accounting rules, may make these types of sale-leaseback transactions less attractive to potential sellers and lessees, which could negatively
affect our ability to increase these types of investments.
We are not required to meet any diversification standards; therefore, our investments may become subject to concentration risks.
Subject to our intention to maintain our qualification as a REIT, we are not required to meet any diversification standards. Therefore, our investments may
become concentrated in type or geographic location, which could subject us to significant risks with potentially adverse effects on our investment
objectives.
Inflation and increased interest rates may adversely affect our financial condition and results of operations.
Increases in inflation and interest rates could have an adverse impact on the cost of our existing variable-rate debt, new debt obligations entered into in the
future, and costs incurred by the company through its operations. Our leases typically require tenants to pay all property operating expenses and increases
in those property-level expenses at our leased properties generally do not affect us. However, increased operating expenses at properties not subject to full
triple-net leases could cause us to incur additional operating expenses. Increases in inflation could also impact other costs incurred by the company
including general and administrative costs. While the vast majority of leases contain rent escalators, including inflation-linked rent escalators, these costs
could increase at a rate higher than our rental and other revenue. In addition, as a result of rising interest rates we may experience difficulty arranging third-
party financing, including refinancing maturing debt in part or in full as it comes due, and could pay higher interest costs on future financings. If increases
in costs are not sufficiently offset by the contractual rent
W. P. Carey 2022 10-K – 7
increases or increases in other revenue, we may be required to implement measures to conserve cash or preserve liquidity. Certain financial covenants could
be affected as a result of higher debt service costs, which may place restrictions on our liquidity. If we are unable to find alternative credit arrangements or
other funding in a high interest environment, our business needs may not be adequately met. Tenants and potential tenants of our properties may also be
adversely impacted by inflation and rising interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties.
Such adverse impacts on our tenants may cause increased vacancies and lower future rents.
We may incur substantial impairment charges.
We may incur substantial impairment charges, which could adversely affect our results of operations or limit our ability to dispose of assets at attractive
prices and may reduce the availability of buyer financing. By their nature, the timing or extent of impairment charges are not predictable.
Because we invest in properties located outside the United States, we are exposed to additional risks.
We have invested, and may continue to invest, in properties located outside the United States. At December 31, 2022, our real estate properties located
outside of the United States represented 37% of our ABR. These investments may be affected by factors particular to the local jurisdiction where the
property is located and may expose us to additional risks, including:
•
•
•
•
•
•
•
•
enactment of laws relating to foreign ownership of property (including expropriation of investments), or laws and regulations relating to our
ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States;
legal systems where the ability to enforce contractual rights and remedies may be more limited than under U.S. law;
difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws,
regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning,
environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation);
tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European
Union’s Anti-Tax Avoidance Directives), which may result in additional taxes on our international investments;
changes in operating expenses in particular countries or regions;
increased energy and commodity prices in Europe;
foreign exchange rates; and
geopolitical and military conflict risk and adverse market conditions caused by changes in national or regional economic or political conditions,
including the ongoing conflict between Russia and Ukraine (which may impact relative interest rates and the terms or availability of debt
financing).
The failure of our compliance and internal control systems to properly mitigate such additional risks, or of our operating infrastructure to support such
international investments, could result in operational failures, regulatory fines, or other governmental sanctions. We may engage third-party asset managers
in international jurisdictions to monitor compliance with legal requirements and lending agreements. Failure to comply with applicable requirements may
expose us, our operating subsidiaries, or the entities we manage to additional liabilities. Our operations in the United Kingdom, the European Economic
Area, and other countries are subject to significant compliance, disclosure, and other obligations.
In addition, the lack of publicly available information in certain jurisdictions could impair our ability to analyze transactions and may cause us to forego an
investment opportunity. It may also impair our ability to receive timely and accurate financial information from tenants necessary to meet reporting
obligations to financial institutions or governmental and regulatory agencies. Certain of these risks may be greater in less developed countries. Further, our
expertise to date is primarily in the United States and certain countries in Europe. We have less experience in other international markets and may not be as
familiar with the potential risks to investments in these areas, which could cause us and the entities we manage to incur losses.
We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in
foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro). Our results of foreign operations are adversely
affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and
our expenses).
W. P. Carey 2022 10-K – 8
A significant amount of our leases will expire within the next five years and we may have difficulty re-leasing or selling our properties if tenants do
not renew their leases.
Within the next five years, approximately 26% of our leases, based on our ABR as of December 31, 2022, are due to expire. If these leases are not renewed
or if the properties cannot be re-leased on terms that yield comparable payments, our lease revenues could be substantially adversely affected. In addition,
when attempting to re-lease such properties, we may incur significant costs and the terms of any new or renewed leases will depend on prevailing market
conditions at that time. We may also seek to sell such properties and incur losses due to prevailing market conditions. Some of our properties are designed
for the particular needs of a tenant; thus, we may be required to renovate or make rent concessions in order to lease the property to another tenant. If we
need to sell such properties, we may have difficulty selling it to a third party due to the property’s unique design. Real estate investments are generally less
liquid than many other financial assets, which may limit our ability to quickly adjust our portfolio in response to changes in economic or other conditions.
These and other limitations may adversely affect returns to our stockholders.
Certain of our leases permit tenants to purchase a property at a predetermined price, which could limit our realization of any appreciation or
result in a loss.
Under our existing leases, certain tenants have a right to repurchase the properties they lease from us. The purchase price may be a fixed price or it may be
based on a formula or the market value at the time of exercise. If a tenant exercises its right to purchase the property and the property’s market value has
increased beyond that price, we would not be able to fully realize the appreciation on that property. Additionally, if the price at which the tenant can
purchase the property is less than our carrying value (e.g., where the purchase price is based on an appraised value), we may incur a loss. In addition, we
may also be unable to reinvest proceeds from these dispositions in investments with similar or better investment returns.
Our ability to control the management of our net-leased properties is limited, which limits our ability to manage property deterioration risks and
could impact our ESG ratings and our ability to make ESG disclosures.
The tenants or managers of net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not
adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance expenditures or other
liabilities once the property becomes free of the lease. While our leases generally provide for recourse against the tenant in these instances, a bankrupt or
financially troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant. Although we
endeavor to monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our properties on an
ongoing basis, we may not always be able to ascertain or forestall deterioration in the condition of a property or the financial circumstances of a tenant.
This lack of control over our net-leased properties also makes it difficult for us to collect property-level environmental metrics and to enforce sustainability
initiatives, which may impact our ability to comply with certain ESG disclosure requirements (such as the SEC’s expected new ESG disclosure rules) or
engage effectively with established ESG frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, the Task Force for Climate-
Related Financial Disclosures and the Sustainability Accounting Standards Board. If we are unable to successfully collect the data necessary to comply
with ESG disclosure requirements, we may be subject to increased regulatory risk; and if such data is incomplete or unfavorable, our relationship with our
investor base, our stock price, and our access to capital may be negatively impacted.
The value of our real estate is subject to fluctuation.
We are subject to all of the general risks associated with the ownership of real estate, which include:
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adverse changes in general or local economic conditions, including changes in interest rates or foreign exchange rates;
changes in the supply of, or demand for, similar or competing properties;
competition for tenants and changes in market rental rates;
the ongoing need for capital improvements;
Federal Reserve short term rate decisions;
the mortgage market and real estate market in the United States;
inability to lease or sell properties upon termination of existing leases, or renewal of leases at lower rental rates;
inability to collect rents from tenants due to financial hardship, including bankruptcy;
changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate;
W. P. Carey 2022 10-K – 9
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failure to comply with federal, state, and local legal and regulatory requirements, including the Americans with Disabilities Act and fire or life-
safety requirements;
changes in governmental rules and fiscal policies;
uninsured property liability, property damage, or casualty losses;
increased operating costs, which may not necessarily be offset by increased rents, including insurance premiums, utilities and real estate taxes, due
to inflation and other factors;
exposure to environmental losses and the effects of climate change; and
civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured
losses) and other factors beyond our control.
While the revenues from our leases are not directly dependent upon the value of the real estate owned, significant declines in real estate values could
adversely affect us in many ways, including a decline in the residual values of properties at lease expiration, possible lease abandonment by tenants, and a
decline in the attractiveness of triple-net lease transactions to potential sellers. We also face the risk that lease revenue will be insufficient to cover all
corporate operating expenses and the debt service payments we incur.
Because most of our properties are occupied by a single tenant, our success is materially dependent upon the tenant’s financial stability.
Most of our properties are occupied by a single tenant; therefore, the success of our investments is materially dependent on the financial stability of these
tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for
approximately 18% of total ABR at December 31, 2022. Lease payment defaults by tenants could negatively impact our net income and reduce the
amounts available for distribution to stockholders.
The bankruptcy or insolvency of tenants may cause a reduction in our revenue and an increase in our expenses.
We have had, and may in the future have, tenants file for bankruptcy protection. Bankruptcy or insolvency of a tenant could lead to the loss of lease or
interest and principal payments, an increase in the carrying cost of the property, and litigation. If one or a series of bankruptcies or insolvencies is
significant enough (more likely during a period of economic downturn), it could lead to a reduction in the value of our shares and/or a decrease in our
dividend. Under U.S. bankruptcy law, a tenant that is the subject of bankruptcy proceedings has the option of assuming or rejecting any unexpired lease. If
the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general
unsecured claim and the maximum claim will be capped. In addition, due to the long-term nature of our leases and, in some cases, terms providing for the
repurchase of a property by the tenant, a bankruptcy court could recharacterize a net lease transaction as a secured lending transaction. Insolvency laws
outside the United States may be more or less favorable to reorganization or the protection of a debtor’s rights as in the United States. In circumstances
where the bankruptcy laws of the United States are considered to be more favorable to debtors and/or their reorganization, entities that are not ordinarily
perceived as U.S. entities may seek to take advantage of U.S. bankruptcy laws.
The continued disruption and reduced economic activity caused by COVID-19, rising interest rates, inflation and a potential economic downturn may
severely affect our tenants’ businesses, financial condition and liquidity, leading to an increase in tenant bankruptcy or insolvency. In addition, a portion of
our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations. Certain jurisdictions may also
enact laws or regulations that impact or alter our ability to collect rent under our existing least terms. The ultimate extent to which COVID-19 will continue
to impact the operations of our tenants will depend on future developments, which remain uncertain and cannot be predicted with confidence.
We may be materially adversely affected by laws, regulations or other issues related to climate change.
If we become subject to laws or regulations related to climate change, our business, financial condition and results of operations could be materially
adversely affected. The federal government has enacted certain climate change laws and regulations which may, among other things, regulate “carbon
footprints” and greenhouse gas emissions. In addition, the SEC has recently proposed rule amendments that would require us to prepare a wide range of
new climate-related disclosures, including with respect to our climate-related risks, greenhouse gas emissions, and other climate-related targets, goals and
plans. Such laws and regulations could result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs
and capital expenditures for environmental control facilities and other new equipment. Noncompliance with these laws or regulations may result in
potential cost increases, litigation, fines, penalties, brand or reputational damage, loss of tenants, lower
W. P. Carey 2022 10-K – 10
valuation and higher investor activism activities. We cannot predict how future laws and regulations, or future interpretations of current laws and
regulations related to climate change will affect our business, financial condition and results of operations.
Additionally, the potential physical impacts of climate change on our operations are highly uncertain. These may include changes in rainfall and storm
patterns and intensity, increased strength of hurricanes, water shortages, changing sea levels and changing temperatures. These impacts may have a material
adverse effect on our business, financial condition and results of operations.
Because we are subject to possible liabilities relating to environmental matters, we could incur unexpected costs and our ability to sell or otherwise
dispose of a property may be negatively impacted.
We have invested, and may in the future invest, in real properties historically or currently used for industrial, manufacturing, and other commercial
purposes, and some of our tenants may handle hazardous or toxic substances, generate hazardous wastes, or discharge regulated pollutants to the
environment. Buildings and structures on the properties we purchase may have known or suspected asbestos-containing building materials. We may invest
in properties located in countries that have adopted laws or observe environmental management standards that are less stringent than those generally
followed in the United States, which may pose a greater risk that releases of hazardous or toxic substances have occurred. We therefore may own properties
that have known or potential environmental contamination as a result of historical or ongoing operations, which may expose us to liabilities under
environmental laws. Some of these laws could impose the following on us:
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responsibility and liability for the cost of investigation and removal or remediation (including at appropriate disposal facilities) of hazardous or
toxic substances in, on, or migrating from our property, generally without regard to our knowledge of, or responsibility for, the presence of these
contaminants;
liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of
hazardous or toxic substances in, on, or migrating from our property; and
responsibility for managing asbestos-containing building materials and third-party claims for exposure to those materials.
Costs relating to investigation, remediation, or removal of hazardous or toxic substances, or for third-party claims for damages, may be substantial and
could exceed any amounts estimated and recorded within our consolidated financial statements. The presence of hazardous or toxic substances at any of our
properties, or the failure to properly remediate a contaminated property, could (i) give rise to a lien in favor of the government for costs it may incur to
address the contamination or (ii) otherwise adversely affect our ability to sell or lease the property or to borrow using the property as collateral. In addition,
environmental liabilities, or costs or operating limitations imposed on a tenant by environmental laws, could affect its ability to make rental payments to us.
And although we endeavor to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with
indemnifications against potential environmental liabilities.
Risks Related to Our Liquidity and Capital Resources
Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations.
Our consolidated indebtedness as of December 31, 2022 was approximately $7.9 billion, representing a consolidated debt to gross assets ratio of
approximately 39.8%. This consolidated indebtedness was comprised of (i) $5.9 billion in Senior Unsecured Notes (as defined in Note 11), (ii) $828.9
million outstanding under our Senior Unsecured Credit Facility (as defined in Note 11), and (iii) $1.1 billion in non-recourse mortgage loans on various
properties. Our level of indebtedness could have significant adverse consequences on our business and operations, including the following:
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it may increase our vulnerability to changes in economic conditions (including increases in interest rates) and limit our flexibility in planning for,
or reacting to, changes in our business and/or industry;
• we may be at a disadvantage compared to our competitors with comparatively less indebtedness;
• we may be unable to hedge our debt, or such hedges may fail or expire, leaving us exposed to potentially volatile interest or currency exchange
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any default on our secured indebtedness may lead to foreclosures, creating taxable income that could hinder our ability to meet the REIT
distribution requirements imposed by the Internal Revenue Code; and
• we may be unable to refinance our indebtedness or obtain additional financing as needed or on favorable terms.
W. P. Carey 2022 10-K – 11
Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii)
refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important
business uses. Our future cash flow is subject to many factors beyond our control and we cannot assure you that our business will generate sufficient cash
flow from operations, or that future sources of cash will be available to us on favorable terms, to meet all of our debt service obligations and fund our other
important business uses or liquidity needs. As a result, we may be forced to take other actions to meet those obligations, such as selling properties, raising
equity, or delaying capital expenditures, any of which may not be feasible or could have a material adverse effect on us. In addition, despite our substantial
outstanding indebtedness and the restrictions in the agreements governing our indebtedness, we may incur significantly more indebtedness in the future,
which would exacerbate the risks discussed above.
We are subject to risks related to the anticipated replacement of the London Inter-bank Offered Rate (“LIBOR”).
In July 2017, the Financial Conduct Authority (“FCA”), the authority that regulates LIBOR, announced that it intends to stop compelling banks to submit
rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative
Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD LIBOR in derivatives
and other financial contracts. The ICE Benchmark Administration stated that it will cease to publish all remaining USD LIBOR settings immediately
following their publication on June 30, 2023. We have financial contracts that are indexed to LIBOR. Our Senior Unsecured Credit Facility contained
provisions that contemplate methods to establishing an alternative base rate upon USD LIBOR’s retirement and, in January 2023, we entered into a Third
Amendment to the Fourth Amended and Restated Credit Agreement to transition to SOFR.
In a similar manner, we will manage the transition from LIBOR for all of our remaining debt and derivative instruments using any language that may be
included in their respective agreements and through potential modifications. Risks related to potential changes in LIBOR availability include, but are not
limited to, potential changes to financial products and market practices, borrowing rates, fees, interest obligations, and the value of debt and derivative
instruments. Transitioning to an alternative reference rate may require negotiations with lenders and other counterparties, which could present challenges if
the method of transition is not mutually agreed upon. We have transitioned all non-USD LIBOR base rate exposures phased out at the end of 2021 to their
respective alternative reference rates.
Restrictive covenants in our credit agreement and indentures may limit our ability to expand or fully pursue our business strategies.
The credit agreement for our Senior Unsecured Credit Facility and the indentures governing our Senior Unsecured Notes contain financial and operating
covenants that, among other things, require us to meet specified financial ratios and may limit our ability to take specific actions, even if we believe them to
be in our best interest (e.g., subject to certain exceptions, our ability to consummate a merger, consolidation, or a transfer of all or substantially all of our
consolidated assets to another person is restricted). These covenants may restrict our ability to expand or fully pursue our business strategies. Our ability to
comply with these and other provisions of our debt agreements may be affected by changes in our operating and financial performance, changes in general
business and economic conditions, adverse regulatory developments, or other events beyond our control. The breach of any of these covenants could result
in a default under our indebtedness, which could result in the acceleration of the maturity of such indebtedness and potentially other indebtedness. If any of
our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at
all.
A downgrade in our credit ratings could materially adversely affect our business and financial condition as well as the market price of our Senior
Unsecured Notes.
We plan to manage our operations to maintain investment grade status with a capital structure consistent with our current profile. In September 2022 our
rating was upgraded by Moody’s to Baa1 and in January 2023 our rating was upgraded by S&P Global Ratings to BBB+, but there can be no assurance that
we will be able to maintain our current credit ratings. Our credit ratings could change based upon, among other things, our historical and projected
business, financial condition, liquidity, results of operations, and prospects. These ratings are subject to ongoing evaluation by credit rating agencies and we
cannot provide any assurance that our ratings will not be changed or withdrawn by a rating agency in the future. If any of the credit rating agencies
downgrades or lowers our credit rating, or if any credit rating agency indicates that it has placed our rating on a “watch list” for a possible downgrading or
lowering, or otherwise indicates that its outlook for our rating is negative, it could have a material adverse effect on our costs and availability of capital,
which could in turn have a material adverse effect on us and on our ability to satisfy our debt service obligations (including those under our Senior
Unsecured Credit Facility, our Senior
W. P. Carey 2022 10-K – 12
Unsecured Notes, or other similar debt securities that we issue) and to pay dividends on our common stock. Furthermore, any such action could negatively
impact the market price of our Senior Unsecured Notes.
Some of our properties are encumbered by mortgage debt, which could adversely affect our cash flow.
At December 31, 2022, we had $1.1 billion of property-level mortgage debt on a non-recourse basis, which limits our exposure on any property to the
amount of equity invested in the property. If we are unable to make our mortgage-related debt payments as required, a lender could foreclose on the
property or properties securing its debt. Additionally, lenders for our mortgage loan transactions typically incorporated various covenants and other
provisions (including loan to value ratio, debt service coverage ratio, and material adverse changes in the borrower’s or tenant’s business) that can cause a
technical loan default. Accordingly, if the real estate value declines or the tenant defaults, the lender would have the right to foreclose on its security. If any
of these events were to occur, it could cause us to lose part or all of our investment, which could reduce the value of our portfolio and revenues available
for distribution to our stockholders.
Some of our property-level financing may also require us to make a balloon payment at maturity. Our ability to make such balloon payments may depend
upon our ability to refinance the obligation or sell the underlying property. When a balloon payment is due, however, we may be unable to refinance the
balloon payment on terms as favorable as the original loan, make the payment with existing cash or cash resources, or sell the property at a price sufficient
to cover the payment. Our ability to accomplish these goals will be affected by various factors existing at the relevant time, such as the state of national and
regional economies, local real estate conditions, available mortgage or interest rates, availability of credit, our equity in the mortgaged properties, our
financial condition, the operating history of the mortgaged properties, and tax laws. A refinancing or sale could affect the rate of return to stockholders and
the projected disposition timeline of our assets.
Risks Related to our Corporate Structure and Maryland Law
Our charter and Maryland law contain provisions that may delay or prevent a change of control transaction.
Our charter, subject to certain exceptions, authorizes our board of directors (our “Board”) to take such actions as are necessary and desirable to limit any
person to beneficial or constructive ownership of 9.8%, in either value or number of shares, whichever is more restrictive, of our aggregate outstanding
shares of (i) common and preferred stock (excluding any outstanding shares of our common or preferred stock not treated as outstanding for federal income
tax purposes) or (ii) common stock (excluding any of our outstanding shares of common stock not treated as outstanding for federal income tax purposes).
Our Board, in its sole discretion, may exempt a person from such ownership limits, provided that they obtain such representations, covenants, and
undertakings as appropriate to determine that the exemption would not affect our REIT status. Our Board may also increase or decrease the common stock
ownership limit and/or the aggregate stock ownership limit, so long as the change would not result in five or fewer persons beneficially owning more than
49.9% in value of our outstanding stock. The ownership limits and other stock ownership restrictions contained in our charter may delay or prevent a
transaction or change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Our Board may modify our authorized shares of stock of any class or series and may create and issue a class or series of common stock or
preferred stock without stockholder approval.
Our charter empowers our Board to, without stockholder approval, increase or decrease the aggregate number of shares of our stock or the number of
shares of stock of any class or series that we have authority to issue; classify any unissued shares of common stock or preferred stock; reclassify any
previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock; and issue such shares of stock so
classified or reclassified. Our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock
issued. As a result, we may issue series or classes of common stock or preferred stock with preferences, dividends, powers, and rights (voting or otherwise)
senior to the rights of current holders of our common stock. The issuance of any such classes or series of common stock or preferred stock could also have
the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our stockholders.
W. P. Carey 2022 10-K – 13
Certain provisions of Maryland law could inhibit changes in control.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire
us or impeding a change of control that could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of
our common stock, including:
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“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder”
(defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof,
for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal
rights and supermajority voting requirements on these combinations; and
“control share” provisions that provide that holders of “control shares” of our company (defined as voting shares which, when aggregated with all
other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing
directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding
“control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the
votes entitled to be cast on the matter, excluding all interested shares.
The statute permits various exemptions from its provisions, including business combinations that are exempted by a board of directors prior to the time that
the “interested stockholder” becomes an interested stockholder. Our Board has, by resolution, exempted any business combination between us and any
person who is an existing, or becomes in the future, an “interested stockholder.” Consequently, the five-year prohibition and the supermajority vote
requirements will not apply to business combinations between us and any such person. As a result, such person may be able to enter into business
combinations with us that may not be in the best interest of our stockholders, without compliance with the supermajority vote requirements and the other
provisions of the statute. Additionally, this resolution may be altered, revoked, or repealed in whole or in part at any time and we may opt back into the
business combination provisions of the MGCL. If this resolution is revoked or repealed, the statute may discourage others from trying to acquire control of
us and increase the difficulty of consummating any offer. In the case of the control share provisions of the MGCL, we have elected to opt out of these
provisions of the MGCL pursuant to a provision in our bylaws.
Additionally, Title 3, Subtitle 8 of the MGCL permits our Board, without stockholder approval and regardless of what is currently provided in our charter
or our bylaws, to implement certain governance provisions, some of which we do not currently have. We have opted out of Section 3-803 of the MGCL,
which permits a board of directors to be divided into classes pursuant to Title 3, Subtitle 8 of the MGCL. Any amendment or repeal of this resolution must
be approved in the same manner as an amendment to our charter. The remaining provisions of Title 3, Subtitle 8 of the MGCL may have the effect of
inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring, or preventing a change in control of our company
under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market
price. Our charter, our bylaws, and Maryland law also contain other provisions that may delay, defer, or prevent a transaction or a change of control that
might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Risks Related to REIT Structure
While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue
Service will find that we have qualified as a REIT.
We believe that we are organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code beginning with our
2012 taxable year and that our current and anticipated investments and plan of operation will enable us to meet and continue to meet the requirements for
qualification and taxation as a REIT. Investors should be aware, however, that the Internal Revenue Service or any court could take a position different
from our own. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of
future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year.
W. P. Carey 2022 10-K – 14
Furthermore, our qualification and taxation as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder
ownership, and other requirements on a continuing basis. Our ability to satisfy the quarterly asset tests under applicable Internal Revenue Code provisions
and Treasury Regulations will depend on the fair market values of our assets, some of which are not susceptible to a precise determination. Our compliance
with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on
an ongoing basis. While we believe that we will satisfy these tests, we cannot guarantee that this will be the case on a continuing basis.
If we fail to remain qualified as a REIT, we would be subject to federal income tax at corporate income tax rates and would not be able to deduct
distributions to stockholders when computing our taxable income.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will:
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not be allowed a deduction for distributions to stockholders in computing our taxable income;
be subject to federal and state income tax, including the Inflation Reduction Act of 2022 which was signed into law in the United States on
August 16, 2022 and will be effective in 2023 (which introduced a 15% corporate minimum tax on certain corporations and a 1% excise tax on
certain stock repurchases by certain corporations, among other changes), on our taxable income at regular corporate rate; and
be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to our stockholders, which in turn
could have an adverse impact on the value of our common stock. This adverse impact could last for five or more years because, unless we are entitled to
relief under certain statutory provisions, we will be taxed as a corporation beginning the year in which the failure occurs and for the following four years.
If we fail to qualify for taxation as a REIT, we may need to borrow funds or liquidate some investments to pay the additional tax liability. Were this to
occur, funds available for investment would be reduced. REIT qualification involves the application of highly technical and complex provisions of the
Internal Revenue Code to our operations, as well as various factual determinations concerning matters and circumstances not entirely within our control.
There are limited judicial or administrative interpretations of these provisions. Although we plan to continue to operate in a manner consistent with the
REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified.
If we fail to make required distributions, we may be subject to federal corporate income tax.
We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our Board. To continue to
qualify and be taxed as a REIT, we will generally be required to distribute at least 90% of our REIT taxable income (determined without regard to the
dividends-paid deduction and excluding net capital gain) each year to our stockholders. Generally, we expect to distribute all, or substantially all, of our
REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain the proposed quarterly distributions
that approximate our taxable income and we may fail to qualify for taxation as a REIT. In addition, our cash flows from operations may be insufficient to
fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax
purposes or the effect of nondeductible expenditures (e.g., capital expenditures, payments of compensation for which Section 162(m) of the Internal
Revenue Code denies a deduction, the creation of reserves, or required debt service or amortization payments). To the extent we satisfy the 90%
distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed
taxable income. We will also be subject to a 4.0% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is
less than a minimum amount specified under the Internal Revenue Code. In addition, in order to continue to qualify as a REIT, any C corporation earnings
and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C corporation’s earnings
and profits.
W. P. Carey 2022 10-K – 15
Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation.
Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions. If
the limits set forth in these covenants prevent us from satisfying our REIT distribution requirements, we could fail to qualify for federal income tax
purposes as a REIT. If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing
100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.
Because we are required to satisfy numerous requirements imposed upon REITs, we may be required to borrow funds, sell assets, or raise equity
on terms that are not favorable to us.
In order to meet the REIT distribution requirements and maintain our qualification and taxation as a REIT, we may need to borrow funds, sell assets, or
raise equity, even if the then-prevailing market conditions are not favorable for such transactions. If our cash flows are not sufficient to cover our REIT
distribution requirements, it could adversely impact our ability to raise short- and long-term debt, sell assets, or offer equity securities in order to fund the
distributions required to maintain our qualification and taxation as a REIT. Furthermore, the REIT distribution requirements may increase the financing we
need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must generally correct the failure within 30 days
after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required
to liquidate otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.
Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities
may be limited.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the
nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our common stock. Compliance with these
tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-
qualifying assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by our taxable REIT subsidiaries (“TRSs”),
thereby limiting our opportunities and the flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic and international
markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions. Also,
please see the risk “There can be no assurance that we will be able to maintain cash dividends” below.
Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may
incur tax liabilities.
The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate.
Generally, income from hedging transactions that have been properly identified for tax purposes (which we enter into to manage interest rate risk with
respect to borrowings to acquire or carry real estate assets) and income from certain currency hedging transactions related to our non-U.S. operations, do
not constitute “gross income” for purposes of the REIT gross income tests (such a hedging transaction is referred to as a “qualifying hedge”). In addition, if
we enter into a qualifying hedge, but dispose of the underlying property (or a portion thereof) or the underlying debt (or a portion thereof) is extinguished,
we can enter into a hedge of the original qualifying hedge, and income from the subsequent hedge will also not constitute “gross income” for purposes of
the REIT gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated
as non-qualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging
techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs could be subject to tax on
income or gains resulting from such hedges or expose us to greater interest rate risks than we would otherwise want to bear. In addition, losses in any of our
TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs.
W. P. Carey 2022 10-K – 16
We use TRSs, which may cause us to fail to qualify as a REIT.
To qualify as a REIT for federal income tax purposes, we hold our non-qualifying REIT assets and conduct our non-qualifying REIT income activities in or
through one or more TRSs. The net income of our TRSs is not required to be distributed to us. Income that is not distributed to us by our domestic TRSs
will generally not be subject to the REIT income distribution requirement. However, certain income that is not distributed to us by our foreign TRSs may
be deemed distributed to us by operation of certain provisions of the U.S. Tax Code and generally subject to REIT income distribution requirements. In
addition, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our
TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and
certain other non-qualifying assets to exceed 20% of the fair market value of our assets, we would lose tax efficiency and could potentially fail to qualify as
a REIT.
Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated
through our TRSs may be limited.
Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status. In particular, at least
75% of our gross income for each taxable year as a REIT must be derived from real estate-related sources, which principally includes gross income from
the leasing of our properties. Consequently, no more than 25% of our gross income may consist of dividend income from our TRSs and other non-
qualifying income types. Thus, our ability to receive distributions from our TRSs is limited and may impact our ability to fund distributions to our
stockholders using cash flows from our TRSs. Specifically, if our TRSs become highly profitable, we might be limited in our ability to receive net income
from our TRSs in an amount required to fund distributions to our stockholders commensurate with that profitability.
Transactions with our TRSs could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not
conducted on an arm’s-length basis.
The Internal Revenue Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an
appropriate level of corporate taxation. The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent
REIT that are not conducted on an arm’s-length basis. We will monitor the value of investments in our TRSs in order to ensure compliance with TRS
ownership limitations and will structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax
described above. There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of
the 100% excise tax.
Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
Certain distributions payable by domestic or qualified foreign corporations to individuals, trusts, and estates in the United States are currently eligible for
federal income tax at a maximum rate of 20% plus the 3.8% Medicare tax on net investment income, if applicable. Distributions payable by REITs, in
contrast, are generally not eligible for this reduced rate, unless the distributions are attributable to dividends received by the REIT from other corporations
that would otherwise be eligible for the reduced rate. This more favorable tax rate for regular corporate distributions could cause qualified investors to
perceive investments in REITs to be less attractive than investments in the stock of corporations that pay distributions, which could adversely affect the
value of REIT stocks, including our common stock.
Even if we continue to qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which
will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.
Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets (including
alternative minimum taxes for taxable years ending prior to January 1, 2018); (ii) taxes on any undistributed income and state, local, or foreign income; and
(iii) franchise, property, and transfer taxes. In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize
one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount.
W. P. Carey 2022 10-K – 17
Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the
jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to
stockholders.
We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a
sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such
assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax
basis. The tax on subsequently sold assets will be based on the fair market value and built-in gain of those assets as of the beginning of our holding period.
Gains from the sale of an asset occurring after the specified period will not be subject to this corporate level tax. We expect to have only a de minimis
amount of assets subject to these corporate tax rules and do not expect to dispose of any significant assets subject to these corporate tax rules.
Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such
persons.
Ordinary dividends received by foreign stockholders that are not effectively connected with the conduct of a U.S. trade or business are generally subject to
U.S. withholding tax at a rate of 30%, unless reduced by an applicable income tax treaty. Additional rules with respect to certain capital gain distributions
will apply to foreign stockholders that own more than 10% of our common stock.
The ability of our Board to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders.
Our organizational documents permit our Board to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it
determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for
dividends paid to stockholders in computing our taxable income and we will be subject to federal income tax at regular corporate rate and state and local
taxes, which may have adverse consequences on the total return to our stockholders.
Federal and state income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions
affecting REITs could have a negative effect on us and our stockholders.
Federal and state income tax laws governing REITs or the administrative interpretations of those laws may be amended at any time. Federal, state, and
foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the
Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied
retroactively, could adversely affect us or our stockholders. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws,
regulations, and administrative interpretations applicable to us or our stockholders may be changed. Accordingly, we cannot assure you that any such
change will not significantly affect our ability to qualify for taxation as a REIT or the federal income tax consequences to you or us.
Risks Related to Our Overall Business
We are subject to the volatility of the capital markets, which may impact our ability to deploy capital.
The trading volume and market price of our common stock may fluctuate significantly and be adversely impacted in response to a number of factors.
Therefore, our current or historical trading volume and share prices are not indicative of the number of shares of our common stock that will trade going
forward or how the market will value shares of our common stock in the future. In addition, the capital markets may experience extreme volatility,
disruption and periods of dislocation (e.g., during pandemics or a global financial crisis), which could make it more difficult for us to raise capital. Since
net-lease REITs must be able to deploy capital with agility and consistency, if we cannot access the capital markets upon favorable terms or at all, we may
be required to liquidate one or more investments, including when an investment has not yet realized its maximum return, which could also result in adverse
tax consequences and affect our ability to capitalize on acquisition opportunities and/or meet operational needs. Moreover, market turmoil could lead to
decreased consumer confidence and widespread reduction of business activity, which may materially and adversely impact us, including our ability to
acquire and dispose of properties.
W. P. Carey 2022 10-K – 18
Future issuances of debt and equity securities may negatively affect the market price of our common stock.
We may issue debt or equity securities or incur additional borrowings in the future. Future issuances of debt securities would increase our interest costs and
rank senior to our common stock upon our liquidation, and additional issuances of equity securities would dilute the holdings of our existing common
stockholders (and any preferred stock may rank senior to our common stock for the purposes of making distributions), both of which may negatively affect
the market price of our common stock. However, our future growth will depend, in part, upon our ability to raise additional capital, including through the
issuance of debt and equity securities. Because our decision to issue additional debt or equity securities or incur additional borrowings in the future will
depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature, or success of our future capital
raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities, or our incurrence of additional borrowings,
will negatively affect the market price of our common stock.
There can be no assurance that we will be able to maintain cash dividends.
Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report. More specifically, while we
expect to continue our current dividend practices, we can give no assurance that we will be able to maintain dividend levels in the future for various
reasons, including the following:
•
•
•
there is no assurance that rents from our properties will increase or that future acquisitions will increase our cash available for distribution to
stockholders, and we may not have enough cash to pay such dividends due to changes in our cash requirements, capital plans, cash flow, or
financial position;
our Board, in its sole discretion, determines the amount and timing of any future dividend payments to our stockholders based on a number of
factors, therefore our dividend levels are not guaranteed and may fluctuate; and
the amount of dividends that our subsidiaries may distribute to us may be subject to restrictions imposed by law or regulators, as well as the terms
of any current or future indebtedness that these subsidiaries may incur.
Furthermore, certain agreements relating to our borrowings may, under certain circumstances, prohibit or otherwise restrict our ability to pay dividends to
our common stockholders. Future dividends, if any, are expected to be based upon our earnings, financial condition, cash flows and liquidity, debt service
requirements, capital expenditure requirements for our properties, financing covenants, and applicable law. If we do not have sufficient cash available to
pay dividends, we may need to fund the shortage out of working capital or revenues from future acquisitions, if any, or borrow to provide funds for such
dividends, which would reduce the amount of funds available for investment and increase our future interest costs. Our inability to pay dividends, or to pay
dividends at expected levels, could adversely impact the market price of our common stock.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they
require management to make estimates, judgments, and assumptions about matters that are inherently uncertain.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified
several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make
particularly subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts
would be recorded under different conditions or using different assumptions. Due to the inherent uncertainty of the estimates, judgments, and assumptions
associated with these critical accounting policies, we cannot provide any assurance that we will not make significant subsequent adjustments to our
consolidated financial statements. If our judgments, assumptions, and allocations prove to be incorrect, or if circumstances change, our business, financial
condition, revenues, operating expense, results of operations, liquidity, ability to pay dividends, or stock price may be materially adversely affected.
W. P. Carey 2022 10-K – 19
We may make investments in asset classes or countries outside of our core investment strategy which may be perceived as complicating our
strategy relative to our peers.
We may need to expand beyond our current asset class mix to growth our portfolio. As a result, we intend, to the extent that market conditions warrant, to
seek to grow our businesses by increasing our investments in existing businesses, pursuing new investment strategies (including investment opportunities
in new asset classes), developing new types of investment structures and products, and expanding into new geographic markets and businesses. Introducing
new types of investment structures and products could increase the complexities involved in managing such investments, including to ensure compliance
with regulatory requirements and terms of the investment. Making investments in assets classes or countries outside of our core investment strategy may
also be perceived as complicating our strategy relative to our peers.
Entry into asset classes or countries may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt,
and may lead to increased litigation and regulatory risk and costs.
Failure to hedge effectively against interest rate changes and foreign exchange rate changes may have a material adverse effect on our business,
financial condition and results of operations.
The interest rate and foreign exchange rate hedge instruments we may use to manage some of our exposure to interest rate and foreign exchange rate
volatility involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements. Failure to hedge effectively against
such interest rate and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations.
Our future success depends on the successful recruitment and retention of personnel, including our executives.
Our future success depends in large part on our ability to hire and retain a sufficient number of qualified and diverse personnel. Failure to recruit from a
diverse pool of qualified candidates, particularly in light of recent labor shortages could negatively impact the dynamic growth of our company. In addition,
the nature of our executive officers’ experience and the extent of the relationships they have developed with real estate professionals and financial
institutions are important to the success of our business. We cannot provide any assurances regarding their continued employment with us. The loss of the
services of certain of our executive officers could detrimentally affect our business and prospects, and a sustained labor shortage or increased turnover rates
among our employees, could increase costs and materially adversely affect our business.
The occurrence of cyber incidents, or a deficiency in our cyber security, could negatively impact our business by causing a disruption to our
operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively
impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources, which could
be an intentional attack or an unintentional accident or error. We use information technology and other computer resources to carry out important
operational activities and to maintain our business records. With the advent of remote work environments and technologies, we face heightened
cybersecurity risks as our employees and counterparties increasingly depend on the internet and face greater exposure to malware and phishing attacks.
These heightened cybersecurity risks may increase our vulnerability to cyber-attacks and cause disruptions to our internal control procedures.
In addition, we may store or come into contact with sensitive information and data. If we or our third-party service providers fail to comply with applicable
privacy or data security laws in handling this information, including the General Data Protection Regulation and the California Consumer Privacy Act, we
could face significant legal and financial exposure to claims of governmental agencies and parties whose privacy is compromised, including sizable fines
and penalties.
We have implemented processes, procedures, and controls intended to address ongoing and evolving cyber security risks, but these measures, as well as our
increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident. The
primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants,
and private data exposure. A significant and extended disruption could damage our business or reputation; cause a loss of revenue; have an adverse effect
on tenant relations; cause an unintended or unauthorized public disclosure; or lead to the misappropriation of proprietary, personal identifying and
confidential information; all of which could result in us incurring significant expenses to address and remediate or otherwise resolve these kinds of issues.
There can be no assurance that the insurance we maintain to cover some of these risks will be sufficient to cover the losses from any future breaches of our
systems.
W. P. Carey 2022 10-K – 20
Our business may continue to be adversely affected by the ongoing COVID-19 pandemic.
We are unable to predict the impact of ongoing disruptions caused by additional surges and strains of COVID-19 transmission. The economic downturn and
market volatility caused by the ongoing COVID-19 pandemic has already eroded the financial condition of certain of our tenants and operating properties;
therefore, we cannot predict the impact that COVID-19 will continue to have on our tenants’ ability to pay rent and any information provided regarding
historical rent collections should not serve as an indication of expected future rent collections. We also cannot assure you that conditions in the bank
lending, capital, and other financial markets will not deteriorate as a result of the continued impact of COVID-19, causing our access to capital and other
sources of funding to become constrained, which could adversely affect the terms or even availability of future borrowings, renewals, and refinancings.
Changes in laws and regulatory policies, including any governmental actions related to COVID-19 and the effects of fiscal and monetary policy changes,
could result in business disruptions and subject us to additional market volatility and risks.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our principal corporate offices are located at One Manhattan West, 395 9th Avenue, 58th Floor, New York, NY 10001 and our international offices are
located in London and Amsterdam. We have additional office space domestically in Dallas. We lease all of these offices and believe these leases are
suitable for our operations for the foreseeable future.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview for a discussion of the
properties we hold for rental operations and Part II, Item 8. Financial Statements and Supplementary Data — Schedule III — Real Estate and Accumulated
Depreciation for a detailed listing of such properties.
Item 3. Legal Proceedings.
Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a
material adverse effect on our consolidated financial position or results of operations.
Item 4. Mine Safety Disclosures.
Not applicable.
W. P. Carey 2022 10-K – 21
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is listed on the NYSE under the ticker symbol “WPC.” At February 3, 2023 there were 8,982 registered holders of record of our
common stock. This figure does not reflect the beneficial ownership of shares of our common stock.
Stock Price Performance Graph
The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 2017 to December 31,
2022, as compared with the S&P 500 Index, the FTSE NAREIT Equity REITs Index, and the MSCI US REIT Index, which we have added to the graph
below since it serves as a benchmark index for our compensation decisions. We intend to discontinue presentation of the FTSE NAREIT Equity REITs
Index in future stock price performance graphs, as the MSCI US REIT Index will serve as our industry index. The graph assumes a $100 investment on
December 31, 2017, together with the reinvestment of all dividends.
2017
2018
2019
2020
2021
2022
At December 31,
W. P. Carey Inc.
S&P 500 Index
FTSE NAREIT Equity REITs Index
MSCI US REIT Index
$
100.00 $
100.00
100.00
100.00
101.08 $
95.62
95.38
95.43
130.23 $
125.72
120.17
120.09
122.44 $
148.85
110.56
110.99
150.45 $
191.58
158.36
158.79
151.16
156.88
119.77
119.87
The stock price performance included in this graph is not indicative of future stock price performance.
Dividends
We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any
future dividend payments to our stockholders based on a variety of factors.
W. P. Carey 2022 10-K – 22
Securities Authorized for Issuance Under Equity Compensation Plans
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and
the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our
financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also breaks down the financial results of
our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations.
The following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under
Item 1A. Risk Factors. Please see our Annual Report on Form 10-K for the year ended December 31, 2021 for discussion of our financial condition and
results of operations for the year ended December 31, 2020. Refer to Item 1. Business for a description of our business.
Significant Developments
Board of Directors Change
On December 12, 2022, we announced that Ms. Elisabeth Stheeman, age 58, was appointed to our Board. Please see our Current Report on Form 8-K filed
on December 12, 2022 for additional information.
Financial Highlights
During the year ended December 31, 2022, we completed the following (as further described in the consolidated financial statements):
Real Estate
CPA:18 Merger
On August 1, 2022, we completed the CPA:18 Merger (Note 3).
• We acquired full or partial ownership interests in 42 properties in the CPA:18 Merger (including seven properties in which we already owned a
partial ownership interest), substantially all of which were triple-net leased with a weighted-average lease term of 7.0 years, an occupancy rate of
99.3%, and an estimated ABR totaling $81.0 million. We also acquired 65 self-storage operating properties and two student housing operating
properties totaling 5.1 million square feet. The related property-level debt was comprised of non-recourse mortgage loans with an aggregate
consolidated fair value of approximately $900.2 million with a weighted-average annual interest rate of 5.1% as of August 1, 2022.
• We issued the following to CPA:18 – Global stockholders as part of the merger consideration: (i) 13,786,302 shares of our common stock of
approximately $1.2 billion, (ii) $3.00 per share of cash consideration totaling approximately $423.3 million, and (iii) cash of $0.1 million paid in
lieu of issuing any fractional shares of our common stock.
Lease revenues and operating property revenues from properties acquired in the CPA:18 Merger were $42.7 million and $39.2 million,
respectively, for the year ended December 31, 2022.
•
• We recognized a Gain on change in control of interests of $33.9 million in connection with the CPA:18 Merger during the year ended
December 31, 2022, of which $11.4 million was attributable to our Real Estate segment and $22.5 million was attributable to our Investment
Management segment.
W. P. Carey 2022 10-K – 23
Investments
• We acquired 23 investments totaling $1.2 billion (Note 5, Note 6).
• We completed six construction projects at a cost totaling $148.1 million (Note 5).
• We funded approximately $89.5 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the year ended
December 31, 2022. Through December 31, 2022, we have funded $193.2 million (Note 8).
• We committed to fund six build-to-suit or redevelopment projects totaling $20.3 million. We currently expect to complete the projects in 2023
(Note 5).
Dispositions
• We disposed of 23 properties for total proceeds, net of selling costs, of $234.7 million (Note 16).
•
•
In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (Note 9).
In October 2022, we received $82.6 million in cash proceeds as a result of certain private real estate funds’ acquisition of all outstanding shares of
WLT common stock. As of the date of acquisition, we owned 12,208,243 shares of WLT common stock. Upon completion of this transaction, we
have no remaining interest in WLT (Note 9).
Financing and Capital Markets Transactions
•
In April 2022, we increased the Term Loan to £270.0 million and the Delayed Draw Term Loan to €215.0 million, thereby increasing the total
capacity of our Senior Unsecured Credit Facility to approximately $2.4 billion. We used the approximately $300 million of proceeds from this
increase in the capacity of our Unsecured Term Loans to partially repay amounts outstanding under our Unsecured Revolving Credit Facility
(Note 11).
• On May 2, 2022, we established a $1.0 billion ATM Program, under which we may issue shares directly or defer delivery to a later date through
our ATM Forwards (Note 13).
• We issued 2,740,295 shares of our common stock under our prior ATM Program at a weighted-average price of $80.79 per share, for net proceeds
of $218.1 million (Note 13).
• We settled our remaining Equity Forwards by delivering 3,925,000 shares of common stock for net proceeds of $284.3 million (Note 13).
• As of December 31, 2022, we had approximately $530.0 million of available proceeds under our ATM Forwards (Note 13).
• On September 28, 2022, we completed a private placement of (i) €150 million of 3.41% Senior Notes due 2029, which have a seven-year term and
are scheduled to mature on September 28, 2029, and (ii) €200 million of 3.70% Senior Notes due 2032, which have a ten-year term and are
scheduled to mature on September 28, 2032 (Note 11).
Investment Management
• Upon completion of the CPA:18 Merger (Note 3), we ceased earning advisory fees and other income previously earned when we served as advisor
to CPA:18 – Global. During the year ended December 31, 2022, through the date of the CPA:18 Merger, such fees and other income from CPA:18
– Global totaled $17.9 million. Investment Management fees and other income are expected to be minimal going forward.
Dividends to Stockholders
We declared cash dividends totaling $4.242 per share, comprised of four quarterly dividends per share of $1.057, $1.059, $1.061, and $1.065.
W. P. Carey 2022 10-K – 24
Consolidated Results
(in thousands, except shares)
Revenues from Real Estate
Revenues from Investment Management
Total revenues
Net income from Real Estate attributable to W. P. Carey
Net income from Investment Management attributable to W. P. Carey
Net income attributable to W. P. Carey
Dividends declared
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
Supplemental financial measures
(a)
:
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management
Adjusted funds from operations attributable to W. P. Carey (AFFO)
Diluted weighted-average shares outstanding
__________
Years Ended December 31,
2022
2021
$
1,468,101 $
10,985
1,479,086
591,603
7,536
599,139
859,655
1,003,556
(1,052,531)
57,887
1,042,782
17,816
1,060,598
1,312,126
19,398
1,331,524
384,766
25,222
409,988
781,626
926,479
(1,566,727)
557,048
896,139
25,352
921,491
200,427,124
183,127,098
(a) We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by U.S. generally accepted accounting principles
(“GAAP”) (a “non-GAAP measure”), to be an important measure in the evaluation of our operating performance. See Supplemental Financial
Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.
Revenues
Real Estate revenue increased in 2022 as compared to 2021, primarily due to higher lease revenues (substantially as a result of property acquisition activity
and rent escalations, as well as the net-leased properties we acquired in the CPA:18 Merger on August 1, 2022 (Note 3), partially offset by the impact of the
weakening euro and British pound sterling) and higher operating property revenues (primarily from the operating properties we acquired in the CPA:18
Merger on August 1, 2022 (Note 3)), partially offset by lower other lease-related income (Note 5).
Net Income Attributable to W. P. Carey
Net income attributable to W. P. Carey increased in 2022 as compared to 2021. Net income from Real Estate attributable to W. P. Carey increased primarily
due to a lower loss on extinguishment of debt (Note 11), non-cash unrealized gains recognized on our investment in common shares of WLT (Note 9), and
the impact of real estate acquisitions, partially offset by higher interest expense and the impact of the weakening euro and British pound sterling. In
addition, we recognized non-cash unrealized gains on our investment in shares of Lineage Logistics during both the current and prior year (Note 9). Net
income from Investment Management attributable to W. P. Carey decreased primarily due to an impairment charge recognized on goodwill within our
Investment Management segment (Note 9). In addition, we recognized a gain on change in control of interests during the current year in connection with
the CPA:18 Merger (Note 3).
W. P. Carey 2022 10-K – 25
AFFO
AFFO increased in 2022 as compared to 2021, primarily due to investment activity and rent escalations, higher other lease-related income (on an AFFO
basis), and the accretive impact of the CPA:18 Merger (Note 3), partially offset by the impact of the weakening euro and British pound sterling and higher
interest expense.
Portfolio Overview
Our portfolio is comprised of operationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern
and Western Europe. We invest in high-quality single tenant industrial, warehouse, office, retail, and self-storage (net lease) properties subject to long-term
leases with built-in rent escalators. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic
impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.
Portfolio Summary
Net-leased Properties
ABR (in thousands)
Number of net-leased properties
Number of tenants
Total square footage (in thousands)
Occupancy
Weighted-average lease term (in years)
(a)
Operating Properties
Number of operating properties:
(b)
Number of self-storage operating properties
Number of student housing operating properties
Number of hotel operating properties
Occupancy (self-storage operating properties)
(c)
Number of countries
Total assets (in thousands)
Net investments in real estate (in thousands)
Acquisition volume (in millions)
Construction projects completed (in millions)
Average U.S. dollar/euro exchange rate
Average U.S. dollar/British pound sterling exchange rate
(d)
__________
$
$
As of December 31,
$
2022
1,381,899
1,449
392
175,957
2021
1,247,764
1,304
352
155,674
98.8 %
10.8
87
84
2
1
91.0 %
98.5 %
10.8
20
19
—
1
95.3 %
26
18,102,035
15,488,898
$
24
15,480,630
13,037,369
Years Ended December 31,
2022
2021
$
1,265.5 $
148.1
1.0540
1.2373
1,627.9
88.2
1.1830
1.3755
(a) We acquired 35 net-leased properties (in which we did not already have an ownership interest) in the CPA:18 Merger in August 2022 (Note 3).
(b) We acquired 65 self-storage properties, one student housing property, and one student housing development project in the CPA:18 Merger in August
2022 (Note 3).
(c) We acquired investments in Belgium during the year ended December 31, 2022. We acquired an investment in Mauritius in connection with the
CPA:18 Merger in August 2022 (Note 3).
(d) Amount for the year ended December 31, 2022 excludes properties acquired in the CPA:18 Merger (Note 3). Amounts for the years ended
December 31, 2022 and 2021 include $19.8 million and $217.0 million, respectively, of sale-leasebacks classified as loans receivable (Note 6).
Amounts for the years ended December 31, 2022 and 2021 include $89.5 million and $103.7 million, respectively, of funding for a construction loan
(Note 8).
W. P. Carey 2022 10-K – 26
Net-Leased Portfolio
The tables below represent information about our net-leased portfolio at December 31, 2022 on a pro rata basis and, accordingly, exclude all operating
properties. See Terms and Definitions below for a description of pro rata amounts and ABR.
Top Ten Tenants by ABR
(dollars in thousands)
Tenant/Lease Guarantor
U-Haul Moving Partners Inc. and
Mercury Partners, LP
(a)
State of Andalucía
(a)
(a)
Metro Cash & Carry Italia S.p.A.
Hellweg Die Profi-Baumärkte GmbH
& Co. KG
Extra Space Storage, Inc.
(a)
OBI Group
Marriott Corporation
Nord Anglia Education, Inc.
Advance Auto Parts, Inc.
Eroski Sociedad
Cooperativa
(b)
(a)
Total
__________
Description
Number of
Properties
ABR
ABR Percent
Weighted-Average
Lease Term (Years)
Net lease self-storage properties in the U.S.
Government office properties in Spain
Business-to-business wholesale stores in Italy
and Germany
Do-it-yourself retail properties in Germany
Net lease self-storage properties in the U.S.
Do-it-yourself retail properties in Poland
Net lease hotel properties in the U.S.
K-12 private schools in the U.S.
Distribution facilities in the U.S.
Grocery stores and warehouses in Spain
78 $
70
20
35
27
26
18
3
29
38,751
29,271
27,512
27,250
22,957
22,266
21,350
20,981
19,851
63
369 $
19,705
249,894
2.8 %
2.1 %
2.0 %
2.0 %
1.7 %
1.6 %
1.6 %
1.5 %
1.4 %
1.4 %
18.1 %
1.3
12.0
5.8
14.2
21.3
7.8
1.0
20.7
10.1
13.2
10.1
(a) ABR amounts are subject to fluctuations in foreign currency exchange rates.
(b) ABR for this tenant includes $16.1 million from a lease that expired in January 2023. Upon lease expiration, these properties were converted from net
lease properties to operating properties.
W. P. Carey 2022 10-K – 27
Portfolio Diversification by Geography
(in thousands, except percentages)
Region
United States
(b)
South
Texas
Florida
Georgia
Tennessee
Alabama
(b)
Other
Total South
Midwest
Illinois
Minnesota
Indiana
Michigan
Ohio
Wisconsin
Other
Total Midwest
East
North Carolina
Pennsylvania
New York
Kentucky
South Carolina
Massachusetts
New Jersey
Virginia
(b)
Other
Total East
West
California
Arizona
(b)
Other
Total West
United States Total
International
Germany
Spain
Poland
The Netherlands
United Kingdom
Italy
Denmark
France
Croatia
Canada
Norway
(c)
Other
International Total
Total
ABR
ABR Percent
Square Footage
(a)
Square Footage Percent
$
$
115,176
54,064
28,411
25,545
20,072
14,529
257,797
75,252
34,977
29,312
28,311
28,303
18,126
42,430
256,711
38,333
32,169
19,373
18,638
18,556
18,209
15,735
14,652
25,029
200,694
64,977
30,417
64,897
160,291
875,493
71,304
63,779
63,552
55,666
51,977
26,884
23,526
19,920
19,475
16,337
15,533
78,453
506,406
1,381,899
8.3 %
3.9 %
2.1 %
1.8 %
1.5 %
1.1 %
18.7 %
5.5 %
2.5 %
2.1 %
2.1 %
2.0 %
1.3 %
3.1 %
18.6 %
2.8 %
2.3 %
1.4 %
1.4 %
1.3 %
1.3 %
1.1 %
1.1 %
1.8 %
14.5 %
4.7 %
2.2 %
4.7 %
11.6 %
63.4 %
5.2 %
4.6 %
4.6 %
4.0 %
3.8 %
1.9 %
1.7 %
1.4 %
1.4 %
1.2 %
1.1 %
5.7 %
36.6 %
100.0 %
12,609
4,544
4,721
4,136
3,334
2,237
31,581
10,864
3,686
5,222
4,705
6,181
3,276
6,230
40,164
8,302
3,527
2,257
3,063
4,949
1,387
943
1,854
3,884
30,166
6,417
3,437
6,994
16,848
118,759
7,020
5,187
8,631
7,054
4,766
2,541
3,039
1,679
2,063
2,492
753
11,973
57,198
175,957
7.2 %
2.6 %
2.7 %
2.3 %
1.9 %
1.3 %
18.0 %
6.2 %
2.1 %
3.0 %
2.7 %
3.5 %
1.8 %
3.5 %
22.8 %
4.7 %
2.0 %
1.3 %
1.7 %
2.8 %
0.8 %
0.5 %
1.1 %
2.2 %
17.1 %
3.6 %
2.0 %
4.0 %
9.6 %
67.5 %
4.0 %
3.0 %
4.9 %
4.0 %
2.7 %
1.4 %
1.7 %
1.0 %
1.2 %
1.4 %
0.4 %
6.8 %
32.5 %
100.0 %
W. P. Carey 2022 10-K – 28
Portfolio Diversification by Property Type
(in thousands, except percentages)
Property Type
Industrial
Warehouse
Office
Retail
Self Storage (net lease)
Other
(e)
(d)
Total
__________
ABR
ABR Percent
Square Footage
(a)
$
$
366,777
333,713
239,941
231,839
61,708
147,921
1,381,899
26.5 %
24.1 %
17.4 %
16.8 %
4.5 %
10.7 %
100.0 %
62,521
63,192
16,703
20,290
5,810
7,441
175,957
Square Footage Percent
35.6 %
35.9 %
9.5 %
11.5 %
3.3 %
4.2 %
100.0 %
Includes square footage for any vacant properties.
(a)
(b) Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi. Other properties within Midwest include assets in
Iowa, Missouri, Kansas, Nebraska, South Dakota, and North Dakota. Other properties within East include assets in Maryland, Connecticut, West
Virginia, New Hampshire, and Maine. Other properties within West include assets in Utah, Oregon, Colorado, Washington, Nevada, Hawaii, Idaho,
New Mexico, Wyoming, and Montana.
Includes assets in Lithuania, Mexico, Finland, Belgium, Hungary, Mauritius, Slovakia, Portugal, the Czech Republic, Austria, Sweden, Japan, Latvia,
and Estonia.
(c)
(d) Includes automotive dealerships.
(e)
Includes ABR from tenants with the following property types: hotel (net lease), education facility, laboratory, specialty, fitness facility, research and
development, student housing (net lease), theater, funeral home, restaurant, land, and parking.
W. P. Carey 2022 10-K – 29
Portfolio Diversification by Tenant Industry
(in thousands, except percentages)
(a)
Industry Type
Retail Stores
Consumer Services
Beverage and Food
Automotive
Grocery
Cargo Transportation
Hotel and Leisure
Healthcare and Pharmaceuticals
Capital Equipment
Business Services
Containers, Packaging, and Glass
Durable Consumer Goods
Construction and Building
Sovereign and Public Finance
High Tech Industries
Insurance
Chemicals, Plastics, and Rubber
Non-Durable Consumer Goods
Banking
Metals
Telecommunications
Other
(b)
Total
__________
ABR
ABR Percent
Square Footage
$
$
283,868
110,969
105,906
85,966
79,516
63,473
57,132
55,806
55,593
48,375
46,942
46,761
46,583
42,578
36,027
30,862
29,935
26,374
23,894
18,673
16,839
69,827
1,381,899
20.5 %
8.0 %
7.7 %
6.2 %
5.8 %
4.6 %
4.1 %
4.0 %
4.0 %
3.5 %
3.4 %
3.4 %
3.4 %
3.1 %
2.6 %
2.2 %
2.2 %
1.9 %
1.7 %
1.4 %
1.2 %
5.1 %
100.0 %
36,457
8,067
15,759
13,477
8,363
9,550
3,060
5,557
8,459
4,113
8,266
10,300
9,235
3,560
3,574
2,024
5,254
6,244
1,426
3,259
1,686
8,267
175,957
Square Footage Percent
20.7 %
4.6 %
9.0 %
7.7 %
4.8 %
5.4 %
1.7 %
3.2 %
4.8 %
2.3 %
4.7 %
5.9 %
5.2 %
2.0 %
2.0 %
1.1 %
3.0 %
3.5 %
0.8 %
1.9 %
1.0 %
4.7 %
100.0 %
Includes automotive dealerships.
(a)
(b) Includes ABR from tenants in the following industries: media: broadcasting and subscription, aerospace and defense, wholesale, media: advertising,
printing, and publishing, oil and gas, utilities: electric, environmental industries, consumer transportation, forest products and paper, electricity, and
real estate. Also includes square footage for vacant properties.
W. P. Carey 2022 10-K – 30
Lease Expirations
(dollars and square footage in thousands)
(a)
(c)
(b)
Year of Lease Expiration
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Thereafter (>2036)
Vacant
Total
__________
Number of Leases
Expiring
Number of Tenants
with Leases Expiring
ABR
ABR Percent
Square Footage
36
41
53
46
57
46
57
34
37
41
31
49
14
49
261
—
852
30 $
35
32
36
33
28
29
29
21
22
24
18
14
19
107
—
$
54,228
90,330
61,241
64,074
82,953
69,298
68,802
73,128
70,249
44,204
81,864
83,347
29,388
84,795
423,998
—
1,381,899
3.9 %
6.6 %
4.4 %
4.7 %
6.0 %
5.0 %
5.0 %
5.3 %
5.1 %
3.2 %
5.9 %
6.0 %
2.1 %
6.1 %
30.7 %
— %
100.0 %
5,500
11,230
7,068
9,081
8,906
5,589
8,337
6,165
8,749
6,200
11,377
8,638
4,957
13,524
58,555
2,081
175,957
Square Footage Percent
3.1 %
6.4 %
4.0 %
5.1 %
5.1 %
3.2 %
4.7 %
3.5 %
5.0 %
3.5 %
6.5 %
4.9 %
2.8 %
7.7 %
33.3 %
1.2 %
100.0 %
(a) Assumes tenants do not exercise any renewal options or purchase options.
(b) Includes ABR of $16.1 million from a tenant (Marriott Corporation) with a lease that expired in January 2023. Upon lease expiration, these properties
(c)
were converted from net lease properties to operating properties.
Includes ABR of $38.8 million from a tenant (U-Haul Moving Partners, Inc. and Mercury Partners, LP) that holds an option to repurchase the 78
properties it is leasing in April 2024. There can be no assurance that such repurchase will be completed.
Rent Collections
Through the date of this Report, we received from tenants over 99.3% of contractual base rent that was due during the fourth quarter of 2022 (based on
contractual minimum ABR as of September 30, 2022).
Terms and Definitions
Pro Rata Metrics —The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We
have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. On a full consolidation basis, we report
100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the
primary beneficiary, even if our ownership is less than 100%. Also, for all other jointly owned investments, which we do not control, we report our net
investment and our net income or loss from that investment. On a pro rata basis, we generally present our proportionate share, based on our economic
ownership of these jointly owned investments, of the portfolio metrics of those investments. Multiplying each of our jointly owned investments’ financial
statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the
legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investments.
ABR — ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2022. If
there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties.
W. P. Carey 2022 10-K – 31
Results of Operations
We operate in two reportable segments: Real Estate and Investment Management. We evaluate our results of operations with a primary focus on increasing
and enhancing the value, quality, and number of properties in our Real Estate segment. We focus our efforts on accretive investing and improving portfolio
quality through re-leasing efforts, including negotiation of lease renewals, or selectively selling assets in order to increase value in our real estate portfolio.
Through our Investment Management segment, we expect to continue to earn fees and other income from the management of the CESH portfolio until it
reaches the end of its life cycle. Refer to Note 17 for tables presenting the comparative results of our Real Estate and Investment Management segments.
Real Estate
Revenues
The following table presents revenues within our Real Estate segment (in thousands):
Real Estate Revenues
Lease revenues from:
Existing net-leased properties
Recently acquired net-leased properties
Net-leased properties acquired in the CPA:18 Merger
Net-leased properties sold or held for sale
Total lease revenues (including reimbursable tenant costs)
Income from direct financing leases and loans receivable
Operating property revenues from:
Operating properties acquired in the CPA:18 Merger
Existing operating properties
Total operating property revenues
Other lease-related income
Years Ended December 31,
2022
2021
Change
$
$
1,110,502 $
140,431
36,040
14,644
1,301,617
74,266
39,193
20,037
59,230
32,988
1,468,101 $
1,103,945 $
53,687
—
19,806
1,177,438
67,555
—
13,478
13,478
53,655
1,312,126 $
6,557
86,744
36,040
(5,162)
124,179
6,711
39,193
6,559
45,752
(20,667)
155,975
W. P. Carey 2022 10-K – 32
Lease Revenues
“Existing net-leased properties” are those that we acquired or placed into service prior to January 1, 2021 and that were not sold or held for sale during the
periods presented. For the periods presented, there were 1,108 existing net-leased properties.
For the year ended December 31, 2022 as compared to 2021, lease revenues from existing net-leased properties increased due to the following items (in
millions):
__________
(a) Excludes fixed minimum rent increases, which are reflected as straight-line rent adjustments within lease revenues.
(b) Primarily related to (i) straight-line rent adjustments and (ii) write-offs of above/below-market rent intangibles.
“Recently acquired net-leased properties” are those that we acquired or placed into service subsequent to December 31, 2020 and that were not sold or held
for sale during the periods presented. Since January 1, 2021, we acquired 48 investments (comprised of 192 properties and six land parcels under buildings
that we already own) and placed three properties into service.
“Net-leased properties acquired in the CPA:18 Merger” on August 1, 2022 (Note 3) consisted of 38 net-leased properties, which contributed five months of
lease revenue, depreciation and amortization, and property expenses during the year ended December 31, 2022.
“Net-leased properties sold or held for sale” include (i) 23 net-leased properties disposed of during the year ended December 31, 2022; (ii) three net-leased
properties classified as held for sale at December 31, 2022, one of which was sold in January 2023 (Note 5, Note 18); and (iii) 24 net-leased properties
disposed of during the year ended December 31, 2021. Our dispositions are more fully described in Note 16.
W. P. Carey 2022 10-K – 33
Income from Direct Financing Leases and Loans Receivable
For the year ended December 31, 2022 as compared to 2021, income from direct financing leases and loans receivable decreased due to the following items
(in millions):
Operating Property Revenues and Expenses
“Operating properties acquired in the CPA:18 Merger” on August 1, 2022 (Note 3) consisted of 65 self-storage properties and two student housing
properties, which contributed five months of operating property revenues, depreciation and amortization, and operating property expenses during the year
ended December 31, 2022.
“Existing operating properties” are those that we acquired or placed into service prior to January 1, 2021 and that were not sold or held for sale during the
periods presented. For the periods presented, we recorded operating property revenues from 11 existing operating properties, comprised of ten self-storage
operating properties (which excludes nine self-storage properties accounted for under the equity method) and one hotel operating property. For our hotel
operating property, revenues and expenses increased by $4.9 million and $2.8 million, respectively, for the year ended December 31, 2022 as compared to
2021, reflecting higher occupancy as the hotel’s business recovers from the ongoing COVID-19 pandemic.
Other Lease-Related Income
Other lease-related income is described in Note 5.
Operating Expenses
Depreciation and Amortization
For the year ended December 31, 2022 as compared to 2021, depreciation and amortization expense for net-leased properties and self-storage operating
properties increased primarily due to the impact of net acquisition activity (including properties acquired in the CPA:18 Merger (Note 3)), partially offset
by the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the U.S. dollar between the periods.
W. P. Carey 2022 10-K – 34
General and Administrative
All general and administrative expenses are recognized within our Real Estate segment.
For the year ended December 31, 2022 as compared to 2021, general and administrative expenses increased by $7.1 million, primarily due to higher
compensation expense, increased professional fees resulting from the CPA:18 Merger, and higher travel costs.
Property Expenses, Excluding Reimbursable Tenant Costs
For the year ended December 31, 2022 as compared to 2021, property expenses, excluding reimbursable tenant costs, increased by $2.9 million, primarily
due to due to tenant vacancies during 2021 and 2022 (which resulted in property expenses no longer being reimbursable) and property expenses incurred on
acquisitions since January 1, 2021 (Note 3).
Impairment Charges
Our impairment charges are described in Note 9.
Stock-based Compensation Expense
For a description of our equity plans and awards, please see Note 14. Stock-based compensation expense is fully recognized within our Real Estate
segment.
For the year ended December 31, 2022 as compared to 2021, stock-based compensation expense increased by $8.0 million, primarily due to changes in the
projected payout for performance share units.
Merger and Other Expenses
For the years ended December 31, 2022 and 2021, merger and other expenses are primarily comprised of costs incurred in connection with the CPA:18
Merger (Note 3) and/or reversals of estimated liabilities for German real estate transfer taxes that were previously recorded in connection with mergers in
prior years.
Other Income and (Expenses), and (Provision for) Benefit from Income Taxes
Interest Expense
For the year ended December 31, 2022 as compared to 2021, interest expense increased by $22.3 million, primarily due to (i) $20.1 million of interest
expense incurred from August through December 2022 related to non-recourse mortgage loans assumed in the CPA:18 Merger (Note 3), (ii) higher
outstanding balances and interest rates on our Senior Unsecured Credit Facility, and (iii) five senior unsecured notes issuances totaling $1.7 billion (based
on the exchange rate of the euro on the dates of issuance for our euro-denominated senior unsecured notes) with a weighted-average interest rate of 2.1%
completed since January 1, 2021, partially offset by (i) the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the
U.S. dollar between the periods and (ii) the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $892.9
million of non-recourse mortgage loans with a weighted-average interest rate of 4.8% since January 1, 2021.
The following table presents certain information about our outstanding debt (dollars in thousands):
Average outstanding debt balance
Weighted-average interest rate
Years Ended December 31,
2022
7,392,208
$
2.7 %
2021
6,906,997
2.6 %
$
The weighted-average interest rate for our debt instruments as of December 31, 2022 increased to 3.0% as compared to 2.5% as of December 31, 2021, and
is expected to be further impacted by rising interest rates over the next year.
W. P. Carey 2022 10-K – 35
Other Gains and (Losses)
Other gains and (losses) primarily consists of gains and losses on (i) the mark-to-market fair value of equity securities, (ii) extinguishment of debt, and (iii)
foreign currency exchange rate movements. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation. All of
our foreign currency-denominated unsecured debt instruments were designated as net investment hedges during the years ended December 31, 2022 and
2021. Therefore, no gains and losses on foreign currency exchange rate movements were recognized on the remeasurement of such instruments during
those periods (Note 10).
The following table presents other gains and (losses) within our Real Estate segment (in thousands):
Other Gains and (Losses)
Non-cash unrealized gains related to an increase in the fair value of our investment in common
shares of WLT (Note 9)
Non-cash unrealized gains related to an increase in the fair value of our investment in shares of
Lineage Logistics (Note 9)
Net realized and unrealized losses on foreign currency exchange rate movements
Non-cash unrealized gains related to an increase in the fair value of our investment in preferred
(a)
shares of WLT (Note 9)
Change in allowance for credit losses on finance receivables (Note 6)
Gain on repayment of secured loan receivable
Adjustment to insurance receivable acquired as part of a prior merger
Gain (loss) on extinguishment of debt
Other
(d)
(b)
(c)
Years Ended December 31,
2022
2021
Change
$
49,233 $
— $
49,233
38,582
(26,866)
18,688
14,363
10,613
(9,358)
1,301
593
97,149 $
76,312
(15,608)
—
(266)
—
—
(75,339)
1,225
(13,676) $
(37,730)
(11,258)
18,688
14,629
10,613
(9,358)
76,640
(632)
110,825
$
__________
(a) We make certain foreign currency-denominated intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar
as their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of
accrued interest and amortizing loans, are included in other gains and (losses).
(b) We acquired a secured loan receivable with a fair value of $23.4 million in our merger with a former affiliate, Corporate Property Associates 17 –
Global Incorporated, in October 2018 (“CPA:17 Merger”), for which the outstanding principal of $34.0 million was fully repaid to us in September
2022 (Note 6). Therefore, we recorded a $10.6 million gain on repayment of this secured loan receivable.
(c) This insurance receivable was acquired in the CPA:17 Merger.
(d) Amount for the year ended December 31, 2021 is related to the prepayment of mortgage loans (primarily comprised of prepayment penalties totaling
$45.2 million) and redemption of the €500.0 million of 2.0% Senior Notes due 2023 in March 2021 (primarily comprised of a “make-whole” amount
of $26.2 million related to the redemption) (Note 11).
Gain on Sale of Real Estate, Net
Gain on sale of real estate, net, consists of gain on the sale of properties that were disposed of during the reporting period. Our dispositions are more fully
described in Note 16.
W. P. Carey 2022 10-K – 36
Non-Operating Income
Non-operating income primarily consists of realized gains and losses on derivative instruments, dividends from equity securities, and interest income on
our loans to affiliates and cash deposits.
The following table presents non-operating income within our Real Estate segment (in thousands):
Non-Operating Income
Realized gains on foreign currency collars (Note 10)
Cash dividend from our investment in Lineage Logistics (Note 9)
Interest income related to our loans to affiliates and cash deposits
Cash dividends from our investment in preferred shares of WLT (Note 9)
Earnings (Losses) from Equity Method Investments in Real Estate
Years Ended December 31,
2022
2021
Change
$
$
24,058 $
4,308
1,011
912
30,289 $
2,357 $
6,438
90
4,893
13,778 $
21,701
(2,130)
921
(3,981)
16,511
Our equity method investments in real estate are more fully described in Note 8. The following table presents earnings (losses) from equity method
investments in real estate (in thousands):
Earnings (Losses) from Equity Method Investments in Real Estate
Existing Equity Method Investments:
Earnings from Las Vegas Retail Complex
Earnings from Johnson Self Storage
Earnings from Kesko Senukai
Earnings from Harmon Retail Center
(c)
Losses from WLT
(b)
(a)
Equity Method Investments Consolidated after the CPA:18 Merger (Note 3):
Proportionate share of impairment charge or other-than-temporary impairment charge recognized
on Bank Pekao (Note 8, Note 9)
Earnings from Fortenova Grupa d.d.
Other-than-temporary impairment charge on State Farm Mutual Automobile Insurance Co. (Note 8,
(d)
Note 9)
Other
__________
Years Ended December 31,
2022
2021
Change
$
$
10,077 $
4,334
3,908
1,051
—
19,370
(4,610)
136
—
1,325
(3,149)
16,221 $
3,017 $
2,460
841
1,108
(10,790)
(3,364)
(13,220)
1,542
(6,830)
2,223
(16,285)
(19,649) $
7,060
1,874
3,067
(57)
10,790
22,734
8,610
(1,406)
6,830
(898)
13,136
35,870
Increase is primarily due to higher occupancy and unit rates at these self-storage facilities.
(a)
(b) Increase is primarily due to higher rent collections at these retail properties, where certain rents were previously disputed and subsequently collected.
(c) Loss for 2021 is primarily due to the adverse impact of the COVID-19 pandemic on WLT’s operations. We recorded losses from this investment on a
one quarter lag. This investment was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January
2022 (Note 9).
(d) Amount for 2021 reflects our proportionate share of a gain recognized on the sale of one of the properties in this portfolio.
W. P. Carey 2022 10-K – 37
(Provision for) Benefit from Income Taxes
For the year ended December 31, 2022 as compared to 2021, provision for income taxes within our Real Estate segment decreased by $7.3 million,
primarily due to (i) deferred tax benefits totaling $3.5 million recognized during 2022 related to the release of valuation allowances on certain foreign
properties, (ii) trade taxes of $1.8 million recognized during 2021 as a result of the completion of a tax review on a portfolio of properties in Germany, and
(iii) tax benefits of $0.7 million recognized on certain foreign properties during 2022 as a result of a tax court ruling.
Investment Management
We earn revenue as the advisor to the Managed Programs. For the periods presented, we acted as advisor to the following Managed Programs: CPA:18 –
Global (through August 1, 2022), CWI 1 and CWI 2 (through April 13, 2020), and CESH. Upon completion of the CPA:18 Merger on August 1, 2022
(Note 3), the advisory agreement with CPA:18 – Global was terminated, and we ceased earning revenue from CPA:18 – Global. The CWI 1 and CWI 2
Merger closed on April 13, 2020, and as a result, CWI 2 was renamed Watermark Lodging Trust, Inc., for which we provided certain services pursuant to a
transition services agreement, which was terminated on October 13, 2021 (Note 4).
We no longer raise capital for new or existing funds, but we currently expect to continue managing CESH and earn the various fees described below
through the end of its life cycle (Note 1, Note 4).
Revenues
The following table presents revenues within our Investment Management segment (in thousands):
Investment Management Revenues
Asset management and other revenue
CPA:18 – Global
CESH
Reimbursable costs from affiliates
CPA:18 – Global
CESH
WLT
Asset Management and Other Revenue
Years Ended December 31,
2022
2021
Change
$
$
6,956 $
1,511
8,467
2,040
478
—
2,518
10,985 $
12,528 $
2,835
15,363
2,874
878
283
4,035
19,398 $
(5,572)
(1,324)
(6,896)
(834)
(400)
(283)
(1,517)
(8,413)
During the periods presented, we earned asset management revenue from (i) CPA:18 – Global (prior to the CPA:18 Merger) based on the value of its real
estate-related assets under management and (ii) CESH based on its gross assets under management at fair value. For 2022, we received asset management
fees from (i) CPA:18 – Global in shares of its common stock through February 28, 2022; effective as of March 1, 2022, we receive asset management fees
from CPA:18 – Global in cash in light of the CPA:18 Merger, which closed on August 1, 2022 (Note 3), and (ii) CESH in cash. Asset management
revenues from CESH are expected to decline as assets are sold.
Operating Expenses
Impairment Charges — Investment Management Goodwill
Our impairment charges on Investment Management goodwill are more fully described in Note 9.
W. P. Carey 2022 10-K – 38
Other Income and Expenses, and (Provision for) Benefit from Income Taxes
Earnings from Equity Method Investments in the Managed Programs
The following table presents the details of our earnings from equity method investments in the Managed Programs (Note 8) (in thousands):
Earnings from equity method investments in the Managed Programs:
Distributions of Available Cash from CPA:18 – Global
Earnings from equity method investments in the Managed Programs
(a)
(a) (b)
Earnings from equity method investments in the Managed Programs
__________
Years Ended December 31,
2022
2021
$
$
8,746 $
4,542
13,288 $
7,345
1,475
8,820
(a) As a result of the completion of the CPA:18 Merger on August 1, 2022 (Note 3), we no longer recognize equity income from our investment in shares
of common stock of CPA:18 – Global or receive distributions of Available Cash from CPA:18 – Global.
(b) The increase for the year ended December 31, 2022 as compared to 2021 was primarily due to an increase of $3.1 million from our investment in
shares of CPA:18 – Global.
(Provision for) Benefit from Income Taxes
For the year ended December 31, 2022 we recorded a provision for income taxes of $6.3 million, compared to a benefit from income taxes of $0.2 million
recognized during the year ended December 31, 2021, within our Investment Management segment. During 2022, in connection with the CPA:18 Merger,
we incurred one-time current taxes upon the recognition of taxable income associated with the accelerated vesting of shares previously issued by CPA:18 –
Global to us for asset management services performed.
Liquidity and Capital Resources
Sources and Uses of Cash During the Year
We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund dividends to stockholders. Our cash
flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of our equity and debt offerings; the timing of
purchases and sales of real estate; the timing of the repayment of mortgage loans and receipt of lease revenues; the timing and amount of other lease-related
payments; the timing of settlement of foreign currency transactions; changes in foreign currency exchange rates; and the timing of distributions from equity
method investments. We no longer receive certain fees and distributions from CPA:18 – Global following the completion of the CPA:18 Merger on August
1, 2022 (Note 3). Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term and
long-term liquidity needs. We may also use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from
dispositions of properties, and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Forwards (Note
13), in order to meet these needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described
below.
Operating Activities — Net cash provided by operating activities increased by $77.1 million during 2022 as compared to 2021, primarily due to an increase
in cash flow generated from net investment activity (including properties acquired in the CPA:18 Merger (Note 3)) and scheduled rent increases at existing
properties. These increases were partially offset by higher interest expense and merger expenses recognized during the current year related to the CPA:18
Merger (Note 3).
W. P. Carey 2022 10-K – 39
Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales) and funding for build-to-suit
activities and other capital expenditures on real estate. In connection with the CPA:18 Merger, we paid $423.4 million in cash consideration, and acquired
$331.1 million of cash and restricted cash. We received $147.6 million of proceeds from the redemption of WLT preferred stock and cash exchanged for
WLT common stock (Note 9). In addition, during the year ended December 31, 2022, we used $26.0 million to fund short-term loans to the Managed
Programs, all of which were repaid during that period (Note 4). We also received $7.1 million in distributions from equity method investments.
Financing Activities — Our financing activities are generally comprised of borrowings and repayments under our Unsecured Revolving Credit Facility and
Unsecured Term Loans, issuances of the Senior Unsecured Notes, payments and prepayments of non-recourse mortgage loans, and payments of dividends
to stockholders. In addition to these types of transactions, during the year ended December 31, 2022, we received (i) $284.3 million in net proceeds from
the issuance of common stock under our Equity Forwards (Note 14) and (ii) $218.1 million in net proceeds from the issuance of shares under our prior
ATM Program (Note 14).
Summary of Financing
The table below summarizes our Senior Unsecured Notes, our non-recourse mortgages, and our Senior Unsecured Credit Facility (dollars in thousands):
Carrying Value
Fixed rate:
Senior Unsecured Notes
Non-recourse mortgages
(a)
(a)
Variable rate:
(a)
Unsecured Term Loans
Unsecured Revolving Credit Facility
Non-recourse mortgages
Floating interest rate mortgage loans
Amount subject to interest rate swaps and caps
(a)
:
Percent of Total Debt
Fixed rate
Variable rate
Weighted-Average Interest Rate at End of Year
Fixed rate
Variable rate
Total debt
(b)
____________
December 31,
2022
2021
$
$
5,916,400
824,270
6,740,670
552,539
276,392
213,958
94,189
1,137,078
7,877,748
$
$
5,701,913
235,898
5,937,811
310,583
410,596
53,571
79,055
853,805
6,791,616
86 %
14 %
100 %
2.9 %
3.6 %
3.0 %
87 %
13 %
100 %
2.7 %
1.1 %
2.5 %
(a) Aggregate debt balance includes unamortized discount, net, totaling $35.9 million and $30.9 million as of December 31, 2022 and 2021, respectively,
and unamortized deferred financing costs totaling $26.0 million and $28.8 million as of December 31, 2022 and 2021, respectively.
(b) The impact of our interest rate swaps and caps is reflected in the weighted-average interest rates.
W. P. Carey 2022 10-K – 40
Cash Resources
At December 31, 2022, our cash resources consisted of the following:
•
•
•
•
cash and cash equivalents totaling $168.0 million. Of this amount, $96.6 million, at then-current exchange rates, was held in foreign subsidiaries,
and we could be subject to restrictions or significant costs should we decide to repatriate these amounts;
our Unsecured Revolving Credit Facility, with available capacity of $1.5 billion (net of amounts reserved for standby letters of credit totaling $0.6
million);
available proceeds under our ATM Forwards of approximately $530.0 million; and
unleveraged properties that had an aggregate asset carrying value of approximately $13.1 billion at December 31, 2022, although there can be no
assurance that we would be able to obtain financing for these properties.
We may also access the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings.
Our cash resources can be used for working capital needs and other commitments and may be used for future investments.
Cash Requirements and Liquidity
As of December 31, 2022, we had (i) $168.0 million of cash and cash equivalents, (ii) approximately $1.5 billion of available capacity under our Unsecured
Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $0.6 million), and (iii) available proceeds under our ATM Forwards
of approximately $530.0 million. Our Senior Unsecured Credit Facility includes a $1.8 billion Unsecured Revolving Credit Facility and Unsecured Term
Loans outstanding totaling $552.5 million as of December 31, 2022 (Note 11), and is scheduled to mature on February 20, 2025. As of December 31, 2022,
scheduled debt principal payments total $456.7 million through December 31, 2023 and $1.7 billion through December 31, 2024, and our Senior
Unsecured Notes do not start to mature until April 2024 (Note 11).
During the next 12 months following December 31, 2022 and thereafter, we expect that our significant cash requirements will include:
•
paying dividends to our stockholders; (which we expect to be higher, following the issuance of 13,786,302 shares of our common stock in the
CPA:18 Merger (Note 3));
funding acquisitions of new investments (Note 5);
•
funding future capital commitments and tenant improvement allowances (Note 5);
•
• making scheduled principal and balloon payments on our debt obligations (Note 11);
• making scheduled interest payments on our debt obligations (future interest payments total $927.7 million, with $231.6 million due during the
next 12 months; interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances
outstanding at December 31, 2022); and
other normal recurring operating expenses.
•
We expect to fund these cash requirements through cash generated from operations, cash received from dispositions of properties, the use of our cash
reserves or unused amounts on our Unsecured Revolving Credit Facility (as described above), issuances of common stock through our ATM Program (Note
13), and potential issuances of additional debt or equity securities. We may also choose to prepay certain of our non-recourse mortgage loan obligations,
depending on our capital needs and market conditions at that time.
Our liquidity could be adversely affected by unanticipated costs, greater-than-anticipated operating expenses, and the ongoing impact of the COVID-19
pandemic. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash from
operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, available capacity under our
Unsecured Revolving Credit Facility, mortgage loan proceeds, and the issuance of additional debt or equity securities to meet these needs.
Certain amounts disclosed above are based on the applicable foreign currency exchange rate at December 31, 2022.
W. P. Carey 2022 10-K – 41
Environmental Obligations
In connection with the purchase of many of our properties, we required the sellers to perform environmental reviews. We believe, based on the results of
these reviews, that our properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were
acquired. However, portions of certain properties have been subject to some degree of contamination, principally in connection with leakage from
underground storage tanks, surface spills, or other on-site activities. In most instances where contamination has been identified, tenants are actively
engaged in the remediation process and addressing identified conditions. We believe that the ultimate resolution of any environmental matters should not
have a material adverse effect on our financial condition, liquidity, or results of operations. We record environmental obligations within Accounts payable,
accrued expenses and other liabilities in the consolidated financial statements. See Item 1A. Risk Factors for further discussion of potential environmental
risks.
Critical Accounting Estimates
Our significant accounting policies are described in Note 2. Many of these accounting policies require judgment and the use of estimates and assumptions
when applying these policies in the preparation of our consolidated financial statements. On a quarterly basis, we evaluate these estimates and judgments
based on historical experience as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in
the future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of estimates. Those
accounting policies that require significant estimation and/or judgment are described under Critical Accounting Policies and Estimates in Note 2.
Supplemental Financial Measures
In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons
between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we
use Funds from Operations (“FFO”) and AFFO, which are non-GAAP measures defined by our management. We believe that these measures are useful to
investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar
companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are
provided below.
Funds from Operations and Adjusted Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc.
(“NAREIT”), an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental
measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The
use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to, nor a substitute for, net income or loss
as determined under GAAP.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of
NAREIT, as restated in December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or
losses from sales of property, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in
control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and
jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO.
We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related
intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for
credit losses on loans receivable and direct financing leases, stock-based compensation, non-cash environmental accretion expense, amortization of
discounts and premiums on debt, and amortization of deferred financing costs. Our assessment of our operations is focused on long-term sustainability and
not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core
income and expenses, such as gains or losses from extinguishment of debt, and merger and acquisition expenses. We also exclude realized and unrealized
gains/losses on foreign currency exchange rate movements (other than those realized on the settlement of foreign currency derivatives), which are not
considered fundamental attributes of our business plan
W. P. Carey 2022 10-K – 42
and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP
net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our
portfolio performance over time and makes it more comparable to other REITs that are currently not engaged in acquisitions, mergers, and restructuring,
which are not part of our normal business operations. AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments. We
use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine
executive compensation.
We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to better assess the sustainability of our
operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to
investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate
disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial
measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income
computed under GAAP, or as alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our
cash needs.
Consolidated FFO and AFFO were as follows (in thousands):
Net income attributable to W. P. Carey
Adjustments:
Depreciation and amortization of real property
Gain on sale of real estate, net
Impairment charges — real estate
Gain on change in control of interests
Impairment charges — Investment Management goodwill
Proportionate share of adjustments to earnings from equity method investments
Proportionate share of adjustments for noncontrolling interests
(a) (b)
(c)
(f)
(d) (e)
Total adjustments
FFO (as defined by NAREIT) attributable to W. P. Carey
(h)
(g)
Adjustments:
Other (gains) and losses
Straight-line and other leasing and financing adjustments
Above- and below-market rent intangible lease amortization, net
Stock-based compensation
Merger and other expenses
Amortization of deferred financing costs
Tax benefit — deferred and other
Other amortization and non-cash items
Proportionate share of adjustments to earnings from equity method investments
Proportionate share of adjustments for noncontrolling interests
(f)
(i)
(e)
Total adjustments
AFFO attributable to W. P. Carey
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey
AFFO attributable to W. P. Carey
Years Ended December 31,
2022
2021
$
599,139 $
409,988
500,764
(43,476)
39,119
(33,931)
29,334
15,155
(491)
506,474
1,105,613
(96,038)
(54,431)
41,390
32,841
19,387
17,203
(3,759)
1,931
(2,770)
(769)
(45,015)
1,060,598 $
470,554
(40,425)
24,246
—
—
32,213
(16)
486,572
896,560
12,885
(83,267)
53,585
24,881
(4,546)
13,523
(5,967)
1,709
12,152
(24)
24,931
921,491
1,105,613 $
1,060,598 $
896,560
921,491
W. P. Carey 2022 10-K – 43
$
$
$
FFO and AFFO from Real Estate were as follows (in thousands):
Net income from Real Estate attributable to W. P. Carey
Adjustments:
Depreciation and amortization of real property
Gain on sale of real estate, net
Impairment charges — real estate
Gain on change in control of interests
Proportionate share of adjustments to earnings from equity method investments
Proportionate share of adjustments for noncontrolling interests
(a) (b)
(f)
(d) (e)
Total adjustments
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate
(h)
(g)
Adjustments:
Other (gains) and losses
Straight-line and other leasing and financing adjustments
Above- and below-market rent intangible lease amortization, net
Stock-based compensation
Merger and other expenses
Amortization of deferred financing costs
Tax benefit — deferred and other
Other amortization and non-cash items
Proportionate share of adjustments to earnings from equity method investments
Proportionate share of adjustments for noncontrolling interests
(f)
(i)
(e)
Total adjustments
AFFO attributable to W. P. Carey — Real Estate
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate
AFFO attributable to W. P. Carey — Real Estate
Years Ended December 31,
2022
2021
$
591,603 $
384,766
500,764
(43,476)
39,119
(11,405)
15,155
(491)
499,666
1,091,269
(97,149)
(54,431)
41,390
32,841
19,384
17,203
(8,164)
1,931
(723)
(769)
(48,487)
1,042,782 $
470,554
(40,425)
24,246
—
32,213
(16)
486,572
871,338
13,676
(83,267)
53,585
24,881
(4,597)
13,523
(4,938)
1,709
10,253
(24)
24,801
896,139
1,091,269 $
1,042,782 $
871,338
896,139
W. P. Carey 2022 10-K – 44
$
$
$
FFO and AFFO from Investment Management were as follows (in thousands):
Net income from Investment Management attributable to W. P. Carey
Adjustments:
Impairment charges — Investment Management goodwill
Gain on change in control of interests
(a) (b)
(c)
Total adjustments
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management
Adjustments:
Tax expense (benefit) — deferred and other
Other (gains) and losses
Merger and other expenses
Proportionate share of adjustments to earnings from equity method investments
(g)
(e)
Total adjustments
AFFO attributable to W. P. Carey — Investment Management
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management
AFFO attributable to W. P. Carey — Investment Management
__________
Years Ended December 31,
2022
2021
$
7,536 $
25,222
29,334
(22,526)
6,808
14,344
4,405
1,111
3
(2,047)
3,472
17,816 $
14,344 $
17,816 $
$
$
$
—
—
—
25,222
(1,029)
(791)
51
1,899
130
25,352
25,222
25,352
(a) Amount for the year ended December 31, 2022 represents a gain recognized on the remaining interests in four investments acquired in the CPA:18
Merger, which we had previously accounted for under the equity method (Note 3).
(b) Amount for the year ended December 31, 2022 represents a gain recognized on our previously held interest in shares of CPA:18 – Global common
stock in connection with the CPA:18 Merger (Note 3).
(c) Amount for the year ended December 31, 2022 represents an impairment charge recognized on goodwill within our Investment Management segment,
since future Investment Management cash flows are expected to be minimal (Note 7, Note 9).
(d) Amount for the year ended December 31, 2022 includes our $4.6 million proportionate share of an impairment charge recognized on an equity method
investment in real estate (Note 8). Amount for the year ended December 31, 2021 includes a non-cash other-than-temporary impairment charge of $6.8
million recognized on an equity method investment in real estate (Note 9)
(e) Equity income, including amounts that are not typically recognized for FFO and AFFO, is recognized within Earnings (losses) from equity method
investments on the consolidated statements of income. This represents adjustments to equity income to reflect FFO and AFFO on a pro rata basis.
(f) Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.
(g) Primarily comprised of gains and losses on extinguishment of debt, the mark-to-market fair value of equity securities, and foreign currency exchange
rate movements, as well as non-cash allowance for credit losses on loans receivable and direct financing leases.
(h) Amount for the year ended December 31, 2021 includes an adjustment to exclude $37.8 million of lease termination fees received from a tenant, as
such amount was determined to be non-core income (Note 5).
(i) Amounts for the years ended December 31, 2022 and 2021 are primarily comprised of costs incurred in connection with the CPA:18 Merger (Note 3)
and/or reversals of estimated liabilities for German real estate transfer taxes that were previously recorded in connection with mergers in prior years.
While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of
a company’s operating performance. These non-GAAP measures should be used in conjunction with net income as defined by GAAP. FFO and AFFO, or
similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures.
W. P. Carey 2022 10-K – 45
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market Risk
Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices. The primary market risks
that we are exposed to are interest rate risk and foreign currency exchange risk; however, we do not use derivative instruments to hedge credit/market risks
or for speculative purposes. From time to time, we may enter into foreign currency collars to hedge our foreign currency cash flow exposures.
We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors
(such as the COVID-19 pandemic) can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to
manage this risk, we view our collective tenant roster as a portfolio and we attempt to diversify such portfolio so that we are not overexposed to a particular
industry or geographic region.
Interest Rate Risk
The values of our real estate and related fixed-rate debt obligations, as well as the values of our unsecured debt obligations, are subject to fluctuations based
on changes in interest rates. The value of our real estate is also subject to fluctuations based on local and regional economic conditions (including the
ongoing impact of the COVID-19 pandemic) and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level
mortgage debt when balloon payments are scheduled, if we do not choose to repay the debt when due. Interest rates are highly sensitive to many factors,
including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An
increase in interest rates would likely cause the fair value of our assets to decrease. Increases in interest rates may also have an impact on the credit profile
of certain tenants.
We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt
financing on a fixed-rate basis. However, we are subject to variable-rate interest on our Unsecured Term Loans, Unsecured Revolving Credit Facility, and
certain of our non-recourse mortgage debt. We have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap
agreements with counterparties related to certain of our variable-rate non-recourse mortgage loans. See Note 10 for additional information on our interest
rate swaps and caps.
At December 31, 2022, a significant portion (approximately 86.8%) of our long-term debt either bore interest at fixed rates or was swapped or capped to a
fixed rate. Our debt obligations are more fully described in Note 11 and Liquidity and Capital Resources — Summary of Financing in Item 7 above. The
following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at December 31, 2022 (in thousands):
Fixed-rate debt
Variable-rate debt
(a) (b)
(a)
2023
239,146 $
217,562 $
2024
1,195,330 $
36,138 $
2025
791,654 $
872,622 $
2026
972,135 $
11,290 $
2027
533,760 $
— $
$
$
Thereafter
3,070,039 $
— $
Total
6,802,064 $
1,137,612 $
Fair Value
6,041,968
1,135,000
__________
(a) Amounts are based on the exchange rate at December 31, 2022, as applicable.
(b) Amounts after 2023 are primarily comprised of principal payments for our Senior Unsecured Notes (Note 11).
The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a
fixed rate through the use of interest rate swaps, or that has been subject to interest rate caps, is affected by changes in interest rates. Annual interest
expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 2022 would increase or decrease by $5.9 million for
our euro-denominated debt, by $3.7 million for our British pound sterling-denominated debt, by $0.3 million for U.S. dollar-denominated debt, and by $0.2
million for our Japanese yen-denominated debt for each respective 1% change in annual interest rates.
W. P. Carey 2022 10-K – 46
Foreign Currency Exchange Rate Risk
We own international investments, primarily in Europe, Canada, and Japan, and as a result are subject to risk from the effects of exchange rate movements
in various foreign currencies, primarily the euro, the British pound sterling, the Canadian dollar, the Japanese yen, and certain other currencies which may
affect future costs and cash flows. We have obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also
completed several offerings of euro-denominated senior notes, and have borrowed under our Senior Unsecured Credit Facility in foreign currencies,
including the euro, British pound sterling, and Japanese yen (Note 11). Volatile market conditions arising from the ongoing effects of the COVID-19 global
pandemic, as well as other macroeconomic factors, may result in significant fluctuations in foreign currency exchange rates. To the extent that currency
fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service (comprised of principal and interest, excluding
balloon payments), as translated to U.S. dollars, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes
in foreign currency exchange rates. We estimate that, for a 1% increase or decrease in the exchange rate between the euro, British pound sterling, or
Japanese yen and the U.S. dollar, there would be a corresponding change in the projected estimated cash flow (scheduled future rental revenues, net of
scheduled future debt service payments for the next 12 months) for our consolidated foreign operations at December 31, 2022 of $2.7 million, $0.3 million,
and less than $0.1 million, respectively, excluding the impact of our derivative instruments.
In addition, we may use currency hedging to further reduce the exposure to our equity cash flow. We are generally a net receiver of these currencies (we
receive more cash than we pay out), and therefore our foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S.
dollar, relative to the foreign currency.
We enter into foreign currency collars to hedge certain of our foreign currency cash flow exposures. See Note 10 for additional information on our foreign
currency collars.
Concentration of Credit Risk
Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that
could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk. While we
believe our portfolio is well-diversified, it does contain concentrations in certain areas.
For the year ended December 31, 2022, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of
our consolidated total revenues:
•
•
67% related to domestic operations; and
33% related to international operations.
At December 31, 2022, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in
excess of 10% in certain areas, based on the percentage of our ABR as of that date:
•
•
•
•
63% related to domestic properties;
37% related to international properties;
27% related to industrial facilities, 24% related to warehouse facilities, 17% related to office facilities, and 17% related to retail facilities; and
21% related to the retail stores industry (including automotive dealerships).
W. P. Carey 2022 10-K – 47
Item 8. Financial Statements and Supplementary Data.
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021, and 2020
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020
Consolidated Statements of Equity for the Years Ended December 31, 2022, 2021, and 2020
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020
Notes to Consolidated Financial Statements
Schedule II — Valuation and Qualifying Accounts for the Years Ended December 31, 2022, 2021, and 2020
Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2022
Notes to Schedule III for the Years Ended December 31, 2022, 2021, and 2020
Schedule IV — Mortgage Loans on Real Estate as of December 31, 2022
Page No.
49
52
53
54
55
58
60
114
115
134
135
Financial statement schedules other than those listed above are omitted because the required information is given in the financial statements, including the
notes thereto, or because the conditions requiring their filing do not exist.
W. P. Carey 2022 10-K – 48
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of W. P. Carey Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of W. P. Carey Inc. and its subsidiaries (the “Company”) as of December 31, 2022 and
2021, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period
ended December 31, 2022, including the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the
“consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on
criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of
December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial
Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s
internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective
internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
W. P. Carey 2022 10-K – 49
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was
communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated
financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Purchase Price Allocation for Asset Acquisitions and Business Combinations
As described in Note 2 to the consolidated financial statements, management determines whether a transaction or other event is a business combination,
which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired and liabilities assumed are not a business,
management accounts for the transaction or other event as an asset acquisition. As described in Note 5, the Company completed real estate asset
acquisitions with total capitalized costs of $1.2 billion during the year ended December 31, 2022. As described in Note 3, the Company accounted for the
CPA:18 Merger as a business combination under the acquisition method of accounting for total merger consideration of approximately $1.6 billion during
the year ended December 31, 2022. Land is typically valued utilizing the sales comparison (or market) approach. Buildings are valued, as if vacant, using
the cost and/or income approach. Under the income approach, management uses either the discounted cash flow method or the direct capitalization method.
For the discounted cash flow method, the fair value of real estate is determined (i) by applying a discounted cash flow analysis to the estimated net
operating income for each property in the portfolio during the remaining anticipated lease term and (ii) by the estimated residual value, which is based on a
hypothetical sale of the property upon expiration of a lease factoring in the re-tenanting of such property at estimated market rental rates and applying a
selected capitalization rate. For the direct capitalization method, the fair value of real estate is determined (i) by the stabilized estimated net operating
income for each property in the portfolio and (ii) a selected capitalization rate. For acquired properties with leases classified as operating leases,
management allocated the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. For
acquired properties that do not qualify as sale-leaseback transactions, management records above- and below-market lease intangible assets and liabilities
for acquired properties based on the present value, using a discount rate reflecting the risks associated with the leases acquired. For acquired properties with
tenants in place, management records in-place lease intangible assets based on the estimated value ascribed to the avoidance of costs of leasing the
properties for the remaining primary in-place lease terms.
The principal considerations for our determination that performing procedures relating to the purchase price allocation for asset acquisitions and business
combinations is a critical audit matter are (i) the significant judgment by management to develop the fair value estimates of tangible and intangible assets
and liabilities using the discounted cash flow and direct capitalization methods; (ii) a high degree of auditor judgment, subjectivity, and effort in performing
procedures and evaluating management’s significant assumptions related to the market rental rates, capitalization rates, and discount rates used in the
discounted cash flow method, and capitalization rates used in the direct capitalization method; and (iii) the audit effort involved the use of professionals
with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. These procedures included testing the effectiveness of controls relating to purchase price allocations for asset acquisitions and
business combinations, including controls over management’s valuation of the tangible and intangible assets and liabilities and controls over management’s
review of the assumptions related to market rental rates, capitalization rates, and discount rates. These procedures also included, among others, (i) reading
the executed purchase agreements and leasing documents; (ii) testing management’s process for developing the fair value estimates of tangible and
intangible assets and liabilities, (iii) evaluating the appropriateness of the discounted cash flow and direct capitalization valuation methods, (iv) evaluating
the reasonableness of the significant assumptions related to market rental rates, capitalization rates, and discount rates used in the discounted cash flow
method, and capitalization rates used in the direct capitalization method, and (v) testing the completeness and accuracy of data used in the valuation
methods. Evaluating management’s significant assumptions related to market rental rates, capitalization rates, and discount rates involved evaluating
whether the assumptions used by management were reasonable considering (i) comparable market data and other industry
W. P. Carey 2022 10-K – 50
factors and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and
knowledge were used to assist in evaluating (i) the appropriateness of the Company’s valuation methods and (ii) the reasonableness of the significant
assumptions related to market rental rates, capitalization rates, and discount rates.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 10, 2023
We have served as the Company’s auditor since 1973, which includes periods before the Company became subject to SEC reporting requirements.
W. P. Carey 2022 10-K – 51
W. P. CAREY INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
Assets
Investments in real estate:
Land, buildings and improvements — net lease and other
Land, buildings and improvements — operating properties
Net investments in direct financing leases and loans receivable
In-place lease intangible assets and other
Above-market rent intangible assets
Investments in real estate
Accumulated depreciation and amortization
Assets held for sale, net
Net investments in real estate
Equity method investments
Cash and cash equivalents
Due from affiliates
Other assets, net
Goodwill
Total assets
(a)
Liabilities and Equity
Debt:
Senior unsecured notes, net
Unsecured term loans, net
Unsecured revolving credit facility
Non-recourse mortgages, net
Debt, net
Accounts payable, accrued expenses and other liabilities
Below-market rent and other intangible liabilities, net
Deferred income taxes
Dividends payable
Total liabilities
Commitments and contingencies (Note 12)
(a)
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued
Common stock, $0.001 par value, 450,000,000 shares authorized; 210,620,949 and 190,013,751 shares, respectively,
issued and outstanding
Additional paid-in capital
Distributions in excess of accumulated earnings
Deferred compensation obligation
Accumulated other comprehensive loss
Total stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
__________
(a) See Note 2 for details related to variable interest entities (“VIEs”).
See Notes to Consolidated Financial Statements.
December 31,
2022
2021
13,338,857 $
1,095,892
771,761
2,659,750
833,751
18,700,011
(3,269,057)
57,944
15,488,898
327,502
167,996
919
1,079,308
1,037,412
18,102,035 $
5,916,400 $
552,539
276,392
1,132,417
7,877,748
623,843
184,584
178,959
228,257
9,093,391
11,791,734
83,673
813,577
2,386,000
843,410
15,918,394
(2,889,294)
8,269
13,037,369
356,637
165,427
1,826
1,017,842
901,529
15,480,630
5,701,913
310,583
410,596
368,524
6,791,616
572,846
183,286
145,572
203,859
7,897,179
—
—
211
11,706,836
(2,486,633)
57,012
(283,780)
8,993,646
14,998
9,008,644
18,102,035 $
190
9,977,686
(2,224,231)
49,810
(221,670)
7,581,785
1,666
7,583,451
15,480,630
$
$
$
$
W. P. Carey 2022 10-K – 52
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Revenues
Real Estate:
Lease revenues
Income from direct financing leases and loans receivable
Operating property revenues
Other lease-related income
Investment Management:
Asset management and other revenue
Reimbursable costs from affiliates
Operating Expenses
Depreciation and amortization
General and administrative
Reimbursable tenant costs
Property expenses, excluding reimbursable tenant costs
Impairment charges — real estate
Stock-based compensation expense
Impairment charges — Investment Management goodwill
Operating property expenses
Merger and other expenses
Reimbursable costs from affiliates
Subadvisor fees
Other Income and Expenses
Interest expense
Other gains and (losses)
Gain on sale of real estate, net
Gain on change in control of interests
Non-operating income
Earnings (losses) from equity method investments
Income before income taxes
(Provision for) benefit from income taxes
Net Income
Net loss (income) attributable to noncontrolling interests
Net Income Attributable to W. P. Carey
Basic Earnings Per Share
Diluted Earnings Per Share
Weighted-Average Shares Outstanding
Basic
Diluted
See Notes to Consolidated Financial Statements.
Years Ended December 31,
2022
2021
2020
$
1,301,617 $
74,266
59,230
32,988
1,468,101
1,177,438 $
67,555
13,478
53,655
1,312,126
8,467
2,518
10,985
1,479,086
503,403
88,952
73,622
50,753
39,119
32,841
29,334
27,054
19,387
2,518
—
866,983
15,363
4,035
19,398
1,331,524
475,989
81,888
62,417
47,898
24,246
24,881
—
9,848
(4,546)
4,035
—
726,656
(219,160)
96,038
43,476
33,931
30,309
29,509
14,103
626,206
(27,724)
598,482
657
599,139 $
(196,831)
(12,885)
40,425
—
13,860
(10,829)
(166,260)
438,608
(28,486)
410,122
(134)
409,988 $
3.00 $
2.99 $
2.25 $
2.24 $
$
$
$
1,080,623
74,893
11,399
11,082
1,177,997
22,467
8,855
31,322
1,209,319
442,935
75,950
56,409
44,067
35,830
15,938
—
9,901
247
8,855
1,469
691,601
(210,087)
37,165
109,370
—
9,587
(18,557)
(72,522)
445,196
20,759
465,955
(10,596)
455,359
2.61
2.60
199,633,802
182,486,476
174,504,406
200,427,124
183,127,098
174,839,428
W. P. Carey 2022 10-K – 53
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net Income
Other Comprehensive (Loss) Income
Foreign currency translation adjustments
Unrealized gain (loss) on derivative instruments
(Reclassification of unrealized gain on investments to net income) / Unrealized gain on investments
Comprehensive Income
Amounts Attributable to Noncontrolling Interests
Net loss (income)
Foreign currency translation adjustments
Unrealized gain on derivative instruments
Comprehensive loss (income) attributable to noncontrolling interests
Comprehensive Income Attributable to W. P. Carey
See Notes to Consolidated Financial Statements.
Years Ended December 31,
2022
598,482 $
2021
410,122 $
2020
465,955
$
(63,149)
19,732
(18,688)
(62,105)
536,377
(35,736)
35,305
18,688
18,257
428,379
657
(5)
—
652
537,029 $
(134)
—
(21)
(155)
428,224 $
$
47,746
(31,978)
—
15,768
481,723
(10,596)
—
(7)
(10,603)
471,120
W. P. Carey 2022 10-K – 54
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share and per share amounts)
Common Stock
$0.001 Par Value
Shares
Amount
Additional
Paid-in
Capital
W. P. Carey Stockholders
Distributions
in Excess of
Accumulated
Deferred
Other
Total
Accumulated
Compensation
Comprehensive
W. P. Carey
Noncontrolling
Earnings
Obligation
Loss
Stockholders
Interests
Total
190,013,751 $
190 $ 9,977,686 $ (2,224,231) $
49,810 $ (221,670) $ 7,581,785 $
1,666 $ 7,583,451
13,786,302
3,925,000
2,740,295
152,830
2,771
14
4
3
—
—
1,205,736
284,198
218,098
(6,612)
205
32,841
(6,696)
6,696
1,380
(861,541)
599,139
506
1,205,750
284,202
218,101
(6,612)
205
32,841
—
—
—
—
(859,655)
599,139
(63,154)
19,732
(63,154)
19,732
(18,688)
(18,688)
1,205,750
284,202
218,101
(6,612)
205
32,841
—
14,367
(413)
30
(859,655)
598,482
(63,149)
19,732
(18,688)
14,367
(413)
30
(657)
5
Balance at January 1, 2022
Shares issued to stockholders of CPA:18 – Global in
connection with CPA:18 Merger
Shares issued under Equity Forwards, net
Shares issued under ATM Program, net
Shares issued upon delivery of vested restricted share awards
Shares issued upon purchases under employee share
purchase plan
Amortization of stock-based compensation expense
Deferral of vested shares, net
Acquisition of noncontrolling interests in connection with
the CPA:18 Merger
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Dividends declared ($4.242 per share)
Net income
Other comprehensive loss:
Foreign currency translation adjustments
Unrealized gain on derivative instruments
Reclassification of unrealized gain on investments to net
income
Balance at December 31, 2022
210,620,949 $
211 $ 11,706,836 $ (2,486,633) $
57,012 $ (283,780) $ 8,993,646 $
14,998 $ 9,008,644
(Continued)
W. P. Carey 2022 10-K – 55
Balance at January 1, 2021
Shares issued under Equity Forwards, net
Shares issued under ATM Program, net
Shares issued upon delivery of vested restricted share awards
Shares issued upon purchases under employee share purchase
plan
Amortization of stock-based compensation expense
Deferral of vested shares, net
Distributions to noncontrolling interests
Dividends declared ($4.205 per share)
Net income
Other comprehensive loss:
Foreign currency translation adjustments
Unrealized gain on derivative instruments
Unrealized gain on investments
Balance at December 31, 2021
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Continued)
(in thousands, except share and per share amounts)
Common Stock
$0.001 Par Value
Shares
Amount
Additional
Paid-in
Capital
W. P. Carey Stockholders
Distributions
in Excess of
Deferred
Accumulated
Other
Total
Accumulated
Compensation
Comprehensive
W. P. Carey
Noncontrolling
Earnings
Obligation
Loss
Stockholders
Interests
Total
42,014 $ (239,906) $ 6,876,713 $
175,401,757 $
9,798,209
4,690,073
119,268
175 $ 8,925,365 $ (1,850,935) $
10
5
—
697,034
340,061
(3,822)
4,444
—
305
24,881
(7,044)
906
7,044
752
(783,284)
409,988
697,044
340,066
(3,822)
305
24,881
—
—
(781,626)
409,988
(35,736)
35,284
18,688
(35,736)
35,284
18,688
1,656 $ 6,878,369
697,044
340,066
(3,822)
305
24,881
—
(145)
(781,626)
410,122
(35,736)
35,305
18,688
(145)
134
21
190,013,751 $
190 $ 9,977,686 $ (2,224,231) $
49,810 $ (221,670) $ 7,581,785 $
1,666 $ 7,583,451
(Continued)
W. P. Carey 2022 10-K – 56
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Continued)
(in thousands, except share and per share amounts)
Balance at January 1, 2020
Cumulative-effect adjustment for the adoption of ASU 2016-
13,
Financial Instruments — Credit Losses
Shares issued under Equity Forwards, net
Shares issued upon delivery of vested restricted share awards
Shares issued upon purchases under employee share purchase
plan
Shares issued under ATM Program, net
Amortization of stock-based compensation expense
Deferral of vested shares, net
Distributions to noncontrolling interests
Dividends declared ($4.172 per share)
Redemption of noncontrolling interest (Note 4)
Net income
Other comprehensive income:
Foreign currency translation adjustments
Unrealized loss on derivative instruments
Balance at December 31, 2020
Common Stock
$0.001 Par Value
Shares
Amount
W. P. Carey Stockholders
Distributions
Accumulated
Additional
in Excess of
Deferred
Other
Total
Paid-in
Capital
Accumulated
Compensation
Comprehensive
W. P. Carey
Noncontrolling
Earnings
Obligation
Loss
Stockholders
Interests
Total
172,278,242 $
172 $ 8,717,535 $ (1,557,374) $
37,263 $ (255,667) $ 6,941,929 $
6,244 $ 6,948,173
(14,812)
2,951,791
162,331
6,893
2,500
3
—
—
—
199,478
(5,372)
389
60
15,938
(3,854)
3,854
1,191
(734,108)
897
455,359
(14,812)
199,481
(5,372)
389
60
15,938
—
—
(732,020)
—
455,359
(14,812)
199,481
(5,372)
389
60
15,938
—
(5,326)
(732,020)
(9,865)
465,955
(5,326)
(9,865)
10,596
175,401,757 $
175 $ 8,925,365 $ (1,850,935) $
42,014 $ (239,906) $ 6,876,713 $
1,656 $ 6,878,369
47,746
(31,985)
47,746
(31,985)
47,746
(31,978)
7
See Notes to Consolidated Financial Statements.
W. P. Carey 2022 10-K – 57
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash Flows — Operating Activities
Net income
Adjustments to net income:
Depreciation and amortization, including intangible assets and deferred financing costs
Net realized and unrealized (gains) losses on extinguishment of debt, equity securities, foreign currency exchange rate movements,
and other
Straight-line rent adjustments
Gain on sale of real estate, net
Amortization of rent-related intangibles and deferred rental revenue
Impairment charges — real estate
Gain on change in control of interests
Stock-based compensation expense
Distributions of earnings from equity method investments
(Earnings) losses from equity method investments
Impairment charges — Investment Management goodwill
(Decrease) increase in allowance for credit losses
Deferred income tax benefit
Asset management revenue received in shares of Managed Programs
Net changes in other operating assets and liabilities
Net Cash Provided by Operating Activities
Cash Flows — Investing Activities
Purchases of real estate
Cash paid to stockholders of CPA:18 – Global in the CPA:18 Merger
Cash and restricted cash acquired in connection with the CPA:18 Merger
Proceeds from sales of real estate
Proceeds from redemption of WLT preferred stock and cash exchanged for WLT common stock (Note 9)
Funding for real estate construction, redevelopments, and other capital expenditures on real estate
Capital contributions to equity method investments
Proceeds from repayment of loans receivable
Proceeds from repayment of short-term loans to affiliates
Funding of short-term loans to affiliates
Investments in loans receivable
Other investing activities, net
Return of capital from equity method investments
Purchases of securities
Net Cash Used in Investing Activities
Cash Flows — Financing Activities
Repayments of Unsecured Revolving Credit Facility
Proceeds from Unsecured Revolving Credit Facility
Dividends paid
Proceeds from issuance of Senior Unsecured Notes
Proceeds from shares issued under Equity Forwards, net of selling costs
Proceeds from Unsecured Term Loans
Proceeds from shares issued under ATM Program, net of selling costs
Scheduled payments of mortgage principal
Prepayments of mortgage principal
Other financing activities, net
Payments for withholding taxes upon delivery of equity-based awards
Payment of financing costs
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Redemption of Senior Unsecured Notes
Net Cash Provided by (Used in) Financing Activities
Change in Cash and Cash Equivalents and Restricted Cash During the Year
Effect of exchange rate changes on cash and cash equivalents and restricted cash
Net increase (decrease) in cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash, beginning of year
Cash and cash equivalents and restricted cash, end of year
See Notes to Consolidated Financial Statements.
Years Ended December 31,
2022
2021
2020
$
598,482
$
410,122
$
465,955
519,741
(76,202)
(57,988)
(43,476)
43,249
39,119
(33,931)
32,841
30,236
(29,509)
29,334
(24,976)
(8,071)
(1,024)
(14,269)
1,003,556
(1,145,734)
(423,435)
331,063
234,652
147,625
(104,441)
(93,416)
34,000
26,000
(26,000)
(20,180)
(19,767)
7,102
—
(1,052,531)
(2,168,392)
2,079,420
(835,257)
334,775
284,259
283,139
218,081
(127,230)
(10,381)
8,839
(6,612)
(2,371)
(413)
30
—
57,887
(2,721)
6,191
217,950
490,722
15,505
(50,565)
(40,425)
56,910
24,246
—
24,881
15,471
10,829
—
266
(4,703)
(12,528)
(14,252)
926,479
(1,306,858)
—
—
163,638
—
(113,616)
(107,552)
—
62,048
(41,000)
(217,711)
(19,631)
13,955
—
(1,566,727)
(1,663,869)
2,000,639
(764,281)
1,385,059
697,044
—
339,968
(64,290)
(745,124)
4,606
(3,822)
(11,295)
(145)
—
(617,442)
557,048
(10,629)
(93,829)
311,779
$
224,141
$
217,950
$
456,210
(55,810)
(50,299)
(109,370)
52,736
35,830
—
15,938
9,419
18,557
—
22,259
(49,076)
(16,642)
5,831
801,538
(656,313)
—
—
366,532
—
(207,256)
(4,253)
11,000
51,702
(26,481)
—
1,165
19,483
(95,511)
(539,932)
(1,137,026)
1,019,158
(726,955)
495,495
199,716
298,974
158
(275,746)
(68,501)
8,917
(5,372)
(14,205)
(5,326)
—
—
(210,713)
9,368
60,261
251,518
311,779
W. P. Carey 2022 10-K – 58
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Supplemental Non-Cash Investing and Financing Activities:
2022 — On August 1, 2022, CPA:18 – Global (as defined herein) merged with and into one of our indirect subsidiaries in the CPA:18 Merger (as defined
herein) (Note 3). The following table summarizes estimated fair values of the assets acquired and liabilities assumed in the CPA:18 Merger (in thousands):
Total Consideration
Fair value of W. P. Carey shares of common stock issued
Cash consideration paid
Cash paid for fractional shares
Fair value of our equity interest in CPA:18 – Global prior to the CPA:18 Merger
Fair value of our equity interest in jointly owned investments with CPA:18 – Global prior to the CPA:18 Merger
Assets Acquired at Fair Value
Land, buildings and improvements — net lease and other
Land, buildings and improvements — operating properties
Net investments in direct financing leases and loans receivable
In-place lease and other intangible assets
Above-market rent intangible assets
Assets held for sale
Goodwill
Other assets, net (excluding restricted cash)
Liabilities Assumed at Fair Value
Non-recourse mortgages, net
Accounts payable, accrued expenses and other liabilities
Below-market rent and other intangible liabilities
Deferred income taxes
Amounts attributable to noncontrolling interests
Net assets acquired excluding cash and restricted cash
Cash and cash equivalents and restricted cash acquired
See Notes to Consolidated Financial Statements.
$
$
1,205,750
423,297
138
88,299
28,574
1,746,058
881,613
1,000,447
38,517
224,458
61,090
85,026
172,346
25,229
900,173
90,035
16,836
52,320
14,367
1,414,995
331,063
W. P. Carey 2022 10-K – 59
W. P. CAREY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Business and Organization
W. P. Carey Inc. (“W. P. Carey”) is a real estate investment trust (“REIT”) that, together with our consolidated subsidiaries, invests primarily in
operationally-critical, single-tenant commercial real estate properties located in the United States and Northern and Western Europe on a long-term basis.
We earn revenue principally by leasing the properties we own to companies on a triple-net lease basis, which generally requires each tenant to pay the costs
associated with operating and maintaining the property.
Founded in 1973, our shares of common stock are listed on the New York Stock Exchange under the symbol “WPC.”
We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. As a REIT, we are not
subject to federal income taxes on income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to
the nature of our income and the level of our distributions, as well as other factors. We also own real property in jurisdictions outside the United States
through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. Through our taxable REIT
subsidiaries (“TRSs”), we also earn revenue as the advisor to certain non-traded investment programs. We hold all of our real estate assets attributable to
our Real Estate segment under the REIT structure, while the activities conducted by our Investment Management segment subsidiaries have been organized
under TRSs.
On August 1, 2022, a non-traded REIT that we advised, Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”) merged with and
into one of our indirect subsidiaries (the “CPA:18 Merger”) (Note 3). At December 31, 2022, we were the advisor to Carey European Student Housing
Fund I, L.P. (“CESH”), a limited partnership formed for the purpose of developing, owning, and operating student housing properties in Europe (Note 4).
We refer to CPA:18 – Global (prior to the CPA:18 Merger) and CESH collectively as the “Managed Programs.” We no longer raise capital for new or
existing funds, but currently expect to continue managing CESH through the end of its life cycle (Note 4).
Reportable Segments
Real Estate — Lease revenues from our real estate investments generate the vast majority of our earnings. We invest primarily in commercial properties
located in the United States and Northern and Western Europe, which are leased to companies on a triple-net lease basis. At December 31, 2022, our owned
portfolio was comprised of our full or partial ownership interests in 1,449 properties, totaling approximately 176 million square feet (unaudited),
substantially all of which were net leased to 392 tenants, with a weighted-average lease term of 10.8 years and an occupancy rate of 98.8% (unaudited). In
addition, at December 31, 2022, our portfolio was comprised of full or partial ownership interests in 87 operating properties, including 84 self-storage
properties, two student housing properties, and one hotel, totaling approximately 6.6 million square feet (unaudited).
Investment Management — Through our TRSs, we manage the real estate investment portfolio for CESH, for which we earn asset management revenue.
We may also be entitled to receive certain distributions pursuant to our advisory arrangements with CESH. At December 31, 2022, CESH owned (i) all or a
portion of three net-leased properties, totaling approximately 0.4 million square feet (unaudited), all of which were leased to one tenant, with an occupancy
rate of 100.0% (unaudited), and (ii) one active build-to-suit project.
Note 2. Summary of Significant Accounting Policies
Critical Accounting Policies and Estimates
Accounting for Acquisitions
In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires
that the assets acquired and liabilities assumed constitute a business. If the assets acquired are not a business, we account for the transaction or other event
as an asset acquisition. Under both methods, we recognize the
W. P. Carey 2022 10-K – 60
Notes to Consolidated Financial Statements
identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business
combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with
asset acquisitions. We immediately expense acquisition-related costs and fees associated with business combinations. All transaction costs incurred during
the reporting period were capitalized since our acquisitions were classified as asset acquisitions (excluding the CPA:18 Merger).
Purchase Price Allocation of Tangible Assets — When we acquire properties with leases classified as operating leases, we allocate the purchase price to the
tangible and intangible assets and liabilities acquired based on their estimated fair values. The tangible assets consist of land, buildings, and site
improvements. The intangible assets include the above- and below-market value of leases and the in-place leases, which includes the value of tenant
relationships. Land is typically valued utilizing the sales comparison (or market) approach. Buildings are valued, as if vacant, using the cost and/or income
approach. Under the cost approach, the fair value of real estate is based on estimated costs to construct a vacant building with similar characteristics. Under
the income approach, we use either the discounted cash flow method or the direct capitalization method. For the discounted cash flow method, the fair
value of real estate is determined (i) by applying a discounted cash flow analysis to the estimated net operating income for each property in the portfolio
during the remaining anticipated lease term and (ii) by the estimated residual value, which is based on a hypothetical sale of the property upon expiration of
a lease factoring in the re-tenanting of such property at estimated market rental rates, and applying a selected capitalization rate. For the direct
capitalization method, the fair value of real estate is determined (i) by the stabilized estimated net operating income for each property in the portfolio and
(ii) a selected capitalization rate.
Assumptions used in the model are property-specific where this information is available; however, when certain necessary information is not available, we
use available regional and property-type information. Assumptions and estimates include the following:
a discount rate or internal rate of return;
•
• market rents, growth factors of rents, and market lease term;
•
•
•
•
capitalization rates to be applied to an estimate of market rent at the beginning and/or the end of the market lease term;
the marketing period necessary to put a lease in place;
carrying costs during the marketing period; and
leasing commissions and tenant improvement allowances.
The discount rates and residual capitalization rates used to value the properties are selected based on several factors, including:
•
•
•
•
•
•
the creditworthiness of the lessees;
industry surveys;
property type;
property location and age;
current lease rates relative to market lease rates; and
anticipated lease duration.
In the case where a tenant has a purchase option deemed to be favorable to the tenant, or the tenant has long-term renewal options at rental rates below
estimated market rental rates, we generally include the value of the exercise of such purchase option or long-term renewal options in the determination of
residual value.
The remaining economic life of leased assets is estimated by relying in part upon third-party appraisals of the leased assets and industry standards.
Different estimates of remaining economic life will affect the depreciation expense that is recorded.
Purchase Price Allocation of Intangible Assets and Liabilities — For acquired properties that do not qualify as sale-leaseback transactions, we record
above- and below-market lease intangible assets and liabilities for acquired properties based on the present value (using a discount rate reflecting the risks
associated with the leases acquired including consideration of the credit of the lessee) of the difference between (i) the contractual rents to be paid pursuant
to the leases negotiated or in place at the time of acquisition of the properties and (ii) our estimate of fair market lease rates for the property or equivalent
property, both of which are measured over the estimated lease term, which includes renewal options that have rental rates below estimated market rental
rates. We discount the difference between the estimated market rent and contractual rent to a present value using an interest rate reflecting our current
assessment of the risk associated with the lease acquired, which includes a consideration of the credit of the lessee. When we enter into sale-leaseback
transactions with above- or below-market leases, the intangibles will be accounted for as loan receivables or prepaid rent liabilities, respectively. We
measure the fair value of below-market
W. P. Carey 2022 10-K – 61
Notes to Consolidated Financial Statements
purchase option liabilities we acquire as the excess of the present value of the fair value of the real estate over the present value of the tenant’s exercise
price at the option date. We determine these values using our estimates or by relying in part upon third-party valuations conducted by independent appraisal
firms.
We amortize the above-market lease intangible as a reduction of lease revenue over the remaining contractual lease term. We amortize the below-market
lease intangible as an increase to lease revenue over the initial term and any renewal periods in the respective leases. We include the value of below-market
leases in Below-market rent and other intangible liabilities in the consolidated financial statements.
For acquired properties with tenants in place, we record in-place lease intangible assets based on the estimated value ascribed to the avoidance of costs of
leasing the properties for the remaining primary in-place lease terms. The cost avoidance is derived first by determining the in-place lease term on the
subject lease. Then, based on our review of the market, the cost to be borne by a property owner to replicate a market lease to the remaining in-place term is
estimated. These costs consist of: (i) rent lost during downtime (i.e., assumed periods of vacancy), (ii) estimated expenses that would be incurred by the
property owner during periods of vacancy, (iii) rent concessions (i.e., free rent), (iv) leasing commissions, and (v) tenant improvements allowances given to
tenants. We determine these values using our estimates or by relying in part upon third-party valuations. We amortize the value of in-place lease intangibles
to depreciation and amortization expense over the remaining initial term of each lease. The amortization period for intangibles does not exceed the
remaining depreciable life of the building.
If a lease is terminated, we charge the unamortized portion of above- and below-market lease values to rental income and in-place lease values to
amortization expense. If a lease is amended, we will determine whether the economics of the amended lease continue to support the existence of the above-
or below-market lease intangibles.
Purchase Price Allocation of Debt — When we acquire leveraged properties, the fair value of the related debt instruments is determined using a discounted
cash flow model with rates that take into account the credit of the tenants, where applicable, and interest rate risk. Such resulting premium or discount is
amortized over the remaining term of the obligation. We also consider the value of the underlying collateral, taking into account the quality of the
collateral, the credit quality of the tenant, the time until maturity and the current interest rate.
Purchase Price Allocation of Goodwill — In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the
excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill. We allocate goodwill to
the respective reporting units in which such goodwill arises. Goodwill acquired in certain business combinations was attributed to the Real Estate segment
which comprises one reporting unit. In the event we dispose of a property or an investment that constitutes a business under U.S. generally accepted
accounting principles (“GAAP”) from a reporting unit with goodwill, we allocate a portion of the reporting unit’s goodwill to that business in determining
the gain or loss on the disposal of the business. The amount of goodwill allocated to the business is based on the relative fair value of the business to the
fair value of the reporting unit. As part of purchase accounting for a business, we record any deferred tax assets and/or liabilities resulting from the
difference between the tax basis and GAAP basis of the investment in the taxing jurisdiction. Such deferred tax amount will be included in purchase
accounting and may impact the amount of goodwill recorded depending on the fair value of all of the other assets and liabilities and the amounts paid.
Financing Arrangements — In accordance with Accounting Standards Codification (“ASC”) 310, Receivables and ASC 842, Leases, real estate assets
acquired through a sale-leaseback transaction are accounted for as a financing arrangement if the investment does not meet the criteria for sale-leaseback
accounting. We record such investments within Net investments in direct financing leases and loans receivable on the consolidated balance sheets. Rent
payments from these investments are included within Income from direct financing leases and loans receivable on the consolidated statements of income.
Impairments
Real Estate — We periodically assess whether there are any indicators that the value of our long-lived real estate and related intangible assets may be
impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, vacancies, an upcoming lease
expiration, a tenant with credit difficulty, the termination of a lease by a tenant, or a likely disposition of the property.
W. P. Carey 2022 10-K – 62
Notes to Consolidated Financial Statements
For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to
determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the
estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual
sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values, and holding
periods. We estimate market rents and residual values using market information from outside sources such as third-party market research, external
appraisals, broker quotes, or recent comparable sales.
As our investment objective is to hold properties on a long-term basis, holding periods used in the undiscounted cash flow analysis are generally ten years,
but may be less if our intent is to hold a property for less than ten years. Depending on the assumptions made and estimates used, the future cash flow
projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible
outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If
the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is
considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair
value.
Assets Held for Sale — We generally classify real estate assets that are subject to operating leases as held for sale when we have entered into a contract to
sell the property, all material due diligence requirements have been satisfied, we received a non-refundable deposit, and we believe it is probable that the
disposition will occur within one year. When we classify an asset as held for sale, we compare the asset’s fair value less estimated cost to sell to its carrying
value, and if the fair value less estimated cost to sell is less than the property’s carrying value, we reduce the carrying value to the fair value less estimated
cost to sell. We will continue to review the property for subsequent changes in the fair value, and may recognize an additional impairment charge, if
warranted.
Equity Method Investments — We evaluate our equity method investments on a periodic basis to determine if there are any indicators that the value of our
equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is
determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value, which is
determined by calculating our share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint-
venture agreement. For our equity investments in real estate, we calculate the estimated fair value of the underlying investment’s real estate as described in
Real Estate above. The fair value of the underlying investment’s debt, if any, is calculated based on market interest rates and other market information. The
fair value of the underlying investment’s other financial assets and liabilities (excluding net investment in direct financing leases) have fair values that
generally approximate their carrying values.
Goodwill — We evaluate goodwill for possible impairment at least annually or upon the occurrence of a triggering event. Such a triggering event within
our Investment Management segment depended on the timing and form of liquidity events for the Managed Programs (Note 3, Note 4). To identify any
impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying
value. This assessment is used as a basis to determine whether it is necessary to calculate reporting unit fair values. If necessary, we calculate the estimated
fair value of the Investment Management reporting unit by utilizing a discounted cash flow analysis methodology and available net asset values. We
calculate the estimated fair value of the Real Estate reporting unit by utilizing our market capitalization and the aforementioned fair value of the Investment
Management segment. Impairments, if any, will be the difference between the reporting unit’s fair value and carrying amount, not to exceed the carrying
amount of goodwill.
Credit Losses
We adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses on January 1, 2020, which replaces the “incurred
loss” model with an “expected loss” model, resulting in the earlier recognition of credit losses even if the risk of loss is remote. This standard applies to
financial assets measured at amortized cost and certain other instruments, including net investments in direct financing leases and loans receivable. This
standard does not apply to receivables arising from operating leases, which are within the scope of Topic 842. We adopted ASU 2016-13 using the modified
retrospective method, under which we recorded a cumulative-effect adjustment as a charge to retained earnings of $14.8 million on January 1, 2020, which
is reflected within our consolidated statements of equity.
W. P. Carey 2022 10-K – 63
Notes to Consolidated Financial Statements
The allowance for credit losses, which is recorded as a reduction to Net investments in direct financing leases and loans receivable on our consolidated
balance sheets, is measured on a pool basis by credit ratings (Note 6), using a probability of default method based on the lessees’ respective credit ratings,
the expected value of the underlying collateral upon its repossession, and our historical loss experience related to other direct financing leases. Included in
our model are factors that incorporate forward-looking information. Allowance for credit losses is included in our consolidated statements of income within
Other gains and (losses).
Other Accounting Policies
Basis of Consolidation — Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of
equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant
intercompany accounts and transactions have been eliminated.
When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a VIE and, if so, whether we are the primary
beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the
equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-
making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate
as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is
required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other
related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare
our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether
the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb
losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can
only be satisfied from each VIE’s respective assets.
Upon the closing of the CPA:18 Merger, we acquired five consolidated VIEs and declassified three entities as VIEs.
At December 31, 2022 and 2021, we considered 16 and 14 entities to be VIEs, respectively, of which we consolidated 11 and six, respectively, as we are
considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in our
consolidated balance sheets (in thousands):
Land, buildings and improvements — net lease and other
Land, buildings and improvements — operating properties
Net investments in direct financing leases and loans receivable
In-place lease intangible assets and other
Above-market rent intangible assets
Accumulated depreciation and amortization
Total assets
Non-recourse mortgages, net
Below-market rent and other intangible liabilities, net
Total liabilities
$
$
December 31,
2022
2021
590,390 $
143,390
144,103
72,070
33,634
(176,379)
843,500
132,950 $
18,891
199,633
426,831
—
144,103
42,884
26,720
(154,413)
500,884
1,485
20,568
46,302
W. P. Carey 2022 10-K – 64
Notes to Consolidated Financial Statements
At December 31, 2022 and 2021, our five and eight unconsolidated VIEs included our interests in (i) three and six unconsolidated real estate investments,
respectively, which we account for under the equity method of accounting (we do not consolidate these entities because we are not the primary beneficiary
and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions
that significantly affect the economic performance of these entities), and (ii) two unconsolidated investments in equity securities, which we accounted for
as investments in shares of the entities at fair value. As of December 31, 2022 and 2021, the net carrying amount of our investments in these entities was
$693.4 million and $581.3 million, respectively, and our maximum exposure to loss in these entities was limited to our investments.
Leases
As a Lessee: Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments under the lease. We determine if an arrangement contains a lease at contract inception and determine the classification of the lease at
commencement. Operating and financing lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value
of lease payments over the lease term. We do not include renewal options in the lease term when calculating the lease liability unless we are reasonably
certain we will exercise the option. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in
which the obligation for those payments is incurred. Our variable lease payments consist of increases as a result of the Consumer Price Index (“CPI”) or
other comparable indices, taxes, and maintenance costs. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease.
Below-market ground lease intangible assets and above-market ground lease intangible liabilities are included as a component of ROU assets. See Note 5
for additional disclosures on the presentation of these amounts in our consolidated balance sheets.
The implicit rate within our operating leases is generally not determinable and, as a result, we use our incremental borrowing rate at the lease
commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment. We
determine our incremental borrowing rate for each lease using estimated baseline mortgage rates. These baseline rates are determined based on a review of
current mortgage debt market activity for benchmark securities across domestic and international markets, utilizing a yield curve. The rates are then
adjusted for various factors, including level of collateralization and lease term.
As a Lessor: We combine non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease
revenues), since both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the
predominant component, and the lease component would otherwise be classified as an operating lease. For (i) operating lease arrangements involving real
estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present
these amounts within lease revenues in our consolidated statements of income. We record amounts reimbursed by the lessee in the period in which the
applicable expenses are incurred, if the reimbursements are deemed collectible.
Reclassifications — Certain prior period amounts have been reclassified to conform to the current period presentation.
We currently present Land, buildings and improvements — net lease and other and Land, buildings and improvements — operating properties on separate
line items in the consolidated balance sheets. Previously, land, buildings and improvements attributable to net lease properties and operating properties
were aggregated within Land, buildings and improvements in the consolidated balance sheets (Note 5).
Restricted Cash — Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt
service, capital improvements, and real estate taxes. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported
within the consolidated balance sheets to the consolidated statements of cash flows (in thousands):
Cash and cash equivalents
Restricted cash
(a)
Total cash and cash equivalents and restricted cash
__________
2022
167,996 $
56,145
224,141 $
$
$
December 31,
2021
165,427 $
52,523
217,950 $
2020
248,662
63,117
311,779
W. P. Carey 2022 10-K – 65
Notes to Consolidated Financial Statements
(a) Restricted cash is included within Other assets, net on our consolidated balance sheets.
Real Estate and Operating Real Estate — We carry land, buildings, and improvements at cost less accumulated depreciation. We capitalize costs that
extend the useful life of properties or increase their value, while we expense maintenance and repairs that do not improve or extend the lives of the
respective assets as incurred.
Gain/Loss on Sale — We recognize gains and losses on the sale of properties when the transaction meets the definition of a contract, criteria are met for the
sale of one or more distinct assets, and control of the properties is transferred.
Cash and Cash Equivalents — We consider all short-term, highly liquid investments that are both readily convertible to cash and have a maturity of three
months or less at the time of purchase to be cash equivalents. Items classified as cash equivalents include commercial paper and money market funds. Our
cash and cash equivalents are held in the custody of several financial institutions, and these balances, at times, exceed federally insurable limits. We seek to
mitigate this risk by depositing funds only with major financial institutions.
Internal-Use Software Development Costs and Cloud Computing Arrangements — We expense costs associated with the assessment stage of software
development projects. Upon completion of the preliminary project assessment stage, we capitalize internal and external costs associated with the
application development stage. We expense the personnel-related costs of training and data conversion. We also expense costs associated with the post-
implementation and operation stage, including maintenance and specified upgrades; however, we capitalize internal and external costs associated with
significant upgrades to existing systems that result in additional functionality. Cloud computing arrangement costs follow the internal-use software
accounting guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized internal-use software development
costs are amortized on a straight-line basis over the software’s estimated useful life, which is three to seven years. Capitalized implementation costs related
to a service contract will be amortized over the term of the hosting arrangement beginning when the component of the hosting arrangement is ready for its
intended use. Periodically, we reassess the useful life considering technology, obsolescence, and other factors.
Other Assets and Liabilities — We include prepaid expenses, deferred rental income, tenant receivables, deferred charges, escrow balances held by lenders,
restricted cash balances, marketable securities, derivative assets, other intangible assets, corporate fixed assets, our investment in shares of Lineage
Logistics (a cold storage REIT) (Note 9), our investment in shares of Guggenheim Credit Income Fund (“GCIF”) (Note 9), and office lease ROU assets in
Other assets, net. We include derivative liabilities, amounts held on behalf of tenants, operating lease liabilities, and deferred revenue in Accounts payable,
accrued expenses and other liabilities.
Revenue Recognition, Real Estate Leased to Others — We lease real estate to others primarily on a triple-net leased basis, whereby the tenant is generally
responsible for operating expenses relating to the property, including property taxes, insurance, maintenance, repairs, and improvements.
Substantially all of our leases provide for either scheduled rent increases, periodic rent adjustments based on formulas indexed to changes in the CPI or
similar indices, or percentage rents. CPI-based adjustments are contingent on future events and are therefore not included as minimum rent in straight-line
rent calculations. We recognize rents from percentage rents as reported by the lessees, which is after the level of sales requiring a rental payment to us is
reached. Percentage rents were insignificant for the periods presented.
For our operating leases, we recognize future minimum rental revenue on a straight-line basis over the non-cancelable lease term of the related leases and
charge expenses to operations as incurred (Note 5). We record leases accounted for under the direct financing method as a net investment in direct
financing leases (Note 6). The net investment is equal to the cost of the leased assets. The difference between the cost and the gross investment, which
includes the residual value of the leased asset and the future minimum rents, is unearned income. We defer and amortize unearned income to income over
the lease term so as to produce a constant periodic rate of return on our net investment in the lease.
W. P. Carey 2022 10-K – 66
Notes to Consolidated Financial Statements
Revenue from contracts under ASC 606, Revenue from Contracts with Customers is recognized when, or as, control of promised goods or services is
transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract
inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the
customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services
promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. ASC 606 does not apply to our
lease revenues, which constitute a majority of our revenues, but primarily applies to revenues generated from our hotel operating properties and our
Investment Management segment.
Revenue from contracts for our Real Estate segment primarily represented hotel operating property revenues of $12.0 million, $7.2 million, and $5.9
million for the years ended December 31, 2022, 2021, and 2020, respectively. Such operating property revenues are primarily comprised of revenues from
room rentals and from food and beverage services at our hotel operating properties during those years. We identified a single performance obligation for
each distinct service. Performance obligations are typically satisfied at a point in time, at the time of sale, or at the rendering of the service. Fees are
generally determined to be fixed. Payment is typically due immediately following the delivery of the service. Revenue from contracts under ASC 606 from
our Investment Management segment is discussed in Note 4.
Lease revenue (including straight-line lease revenue) is only recognized when deemed probable of collection. Collectibility is assessed for each tenant
receivable using various criteria including credit ratings (Note 6), guarantees, past collection issues, and the current economic and business environment
affecting the tenant. If collectibility of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the
tenant.
Revenue Recognition, Investment Management Operations — We earn asset management revenue in connection with providing services to the Managed
Programs. We earn asset management revenue from property management, leasing, and advisory services performed. In addition, we earn subordinated
incentive and disposition revenue related to the disposition of properties.
The Managed Programs reimburse us for certain personnel and overhead costs that we incur on their behalf. We record reimbursement income as the
expenses are incurred, subject to limitations imposed by the advisory agreements.
Asset Retirement Obligations — Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result
from the acquisition, construction, development, and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation
is recorded in the period in which it is incurred or at the point of acquisition of an asset with an assumed asset retirement obligation, and the cost of such
liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the
capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in
adjustments to the related capitalized asset and corresponding liability.
In order to determine the fair value of the asset retirement obligations, we make certain estimates and assumptions including, among other things, projected
cash flows, the borrowing interest rate, and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and
assumptions are subjective.
Depreciation — We compute depreciation of building and related improvements using the straight-line method over the estimated remaining useful lives of
the properties (not to exceed 40 years) and furniture, fixtures, and equipment. We compute depreciation of tenant improvements using the straight-line
method over the lesser of the remaining term of the lease or the estimated useful life.
Stock-Based Compensation — We have granted restricted share awards (“RSAs”), restricted share units (“RSUs”), and performance share units (“PSUs”)
to certain employees, independent directors, and nonemployees. Grants were awarded in the name of the recipient subject to certain restrictions of
transferability and a risk of forfeiture. Stock-based compensation expense for all equity-classified stock-based compensation awards is based on the grant
date fair value estimated in accordance with current accounting guidance for share-based payments, which includes awards granted to certain
nonemployees. We recognize these compensation costs for only those shares expected to vest on a straight-line basis over the requisite service or
performance period of the award. We include stock-based compensation within Additional paid-in capital in the consolidated statements of equity and
Stock-based compensation expense in the consolidated statements of income.
W. P. Carey 2022 10-K – 67
Notes to Consolidated Financial Statements
Foreign Currency Translation and Transaction Gains and Losses — We have interests in international real estate investments primarily in Europe, Canada,
and Japan, and the primary functional currencies for those investments are the euro, the British pound sterling, the Canadian dollar, and the Japanese yen.
We perform the translation from these currencies to the U.S. dollar for assets and liabilities using current exchange rates in effect at the balance sheet date
and for revenue and expense accounts using the average exchange rate during the month in which the transaction occurs. We report the gains and losses
resulting from such translation as a component of other comprehensive income in equity. These translation gains and losses are released to net income
(within Gain on sale of real estate, net, in the consolidated statements of income) when we have substantially exited from all investments in the related
currency.
A transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later), realized upon
settlement of a foreign currency transaction generally will be included in net income for the period in which the transaction is settled. Also, foreign
currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and the translation to the reporting currency
of intercompany debt that is short-term or has scheduled principal payments, are included in the determination of net income (within Other gains and
(losses) in the statements of income).
The translation impact of foreign currency transactions of a long-term nature (that is, settlement is not planned or anticipated in the foreseeable future), in
which the entities involved in the transactions are consolidated or accounted for by the equity method in our consolidated financial statements, are not
included in net income but are reported as a component of other comprehensive income in equity.
Derivative Instruments — We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations
under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For derivatives
designated and that qualify as cash flow hedges, the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the
hedged transaction affects earnings. Gains and losses on the cash flow hedges representing hedge components excluded from the assessment of
effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with
our accounting policy election. Such gains and losses are recorded within Other gains and (losses) or Interest expense in our consolidated statements of
income. The earnings recognition of excluded components is presented in the same line item as the hedged transactions. For derivatives designated and that
qualify as a net investment hedge, the change in the fair value and/or the net settlement of the derivative is reported in Other comprehensive (loss) income
as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive (loss) income into earnings (within
Gain on sale of real estate, net, in our consolidated statements of income) when the hedged investment is either sold or substantially liquidated. In
accordance with fair value measurement guidance, counterparty credit risk is measured on a net portfolio position basis.
Segment Allocation Changes — Beginning with the second quarter of 2020, general and administrative expenses attributed to our Investment Management
segment are comprised of the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no
net expense for us). All other general and administrative expenses are attributed to our Real Estate segment. Previously, general and administrative
expenses were allocated based on time incurred by our personnel for the Real Estate and Investment Management segments. In addition, beginning with the
second quarter of 2020, stock-based compensation expense and corporate depreciation and amortization expense are fully recognized within our Real
Estate segment. In light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the Watermark Lodging Trust, Inc.
(“WLT”) management internalization (Note 4), as well as the termination of the advisory agreements with CPA:18 – Global in connection with the CPA:18
Merger (Note 3), we now view essentially all assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental
activities that are expected to wind down as we manage CESH through the end of its life cycle. These changes between the segments had no impact on our
consolidated financial statements.
In addition, our investments in WLT, and income recognized from our investments in WLT, were included within our Real Estate segment following the
CWI 1 and CWI 2 Merger, since we were no longer the advisor to that company. Previously, our investments in CWI 1 and CWI 2, and income recognized
from our investments in CWI 1 and CWI 2, were included within our Investment Management segment (Note 4).
W. P. Carey 2022 10-K – 68
Notes to Consolidated Financial Statements
Income Taxes — We conduct business in various states and municipalities primarily within North America and Europe, and as a result, we or one or more
of our subsidiaries file income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. We derive most of our REIT
income from our real estate operations under our Real Estate segment. Our domestic real estate operations are generally not subject to federal tax, and
accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may
be subject to certain state and local taxes, as applicable. We conduct our Investment Management operations primarily through TRSs. In general, a TRS
may perform additional services for our tenants and generally may engage in any real estate or non-real estate-related business. These operations are
subject to federal, state, local, and foreign taxes, as applicable. Our financial statements are prepared on a consolidated basis including these TRSs and
include a provision for current and deferred taxes on these operations.
Significant judgment is required in determining our tax provision and in evaluating our tax positions. We establish tax reserves based on a benefit
recognition model, which could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances.
Provided that the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50%
likely of being ultimately realized upon settlement. We derecognize the tax position when it is no longer more likely than not of being sustained.
Our earnings and profits, which determine the taxability of distributions to stockholders, differ from net income reported for financial reporting purposes
due primarily to differences in depreciation, including hotel properties, and timing differences of rent recognition and certain expense deductions, for
federal income tax purposes.
We recognize deferred income taxes in certain of our subsidiaries taxable in the United States or in foreign jurisdictions. Deferred income taxes are
generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes as described in Note 15). In
addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. Deferred income taxes are computed under the asset and
liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between tax bases and financial bases of assets and liabilities. We provide a valuation allowance against our deferred income tax
assets when we believe that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in
circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation
allowance is included in deferred income tax expense (benefit).
Earnings Per Share — Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted-average number of
shares of common stock outstanding during the year. Diluted earnings per share reflects potentially dilutive securities (RSAs, RSUs, PSUs, and shares
available for issuance under our Equity Forwards and ATM Forwards) using the treasury stock method, except when the effect would be anti-dilutive.
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could
differ from those estimates.
Note 3. Merger with CPA:18 – Global
CPA:18 Merger
On February 27, 2022, we and certain of our subsidiaries entered into a merger agreement with CPA:18 – Global, pursuant to which CPA:18 – Global
would merge with and into one of our indirect subsidiaries in exchange for shares of our common stock and cash, subject to approval by the stockholders of
CPA:18 – Global. The CPA:18 Merger and related transactions were approved by the stockholders of CPA:18 – Global on July 26, 2022 and completed on
August 1, 2022.
At the effective time of the CPA:18 Merger, each share of CPA:18 – Global common stock issued and outstanding immediately prior to the effective time
of the CPA:18 Merger was canceled and, in exchange for cancellation of such share, the rights attaching to such share were converted automatically into the
right to receive (i) 0.098 shares of our common stock and (ii) $3.00 in cash, which we refer to herein as the Merger Consideration. Each share of CPA:18 –
Global common stock owned by us or any of our subsidiaries immediately prior to the effective time of the CPA:18 Merger was automatically canceled and
retired, and ceased to exist, for no Merger Consideration. In exchange for the 141,099,002 shares of CPA:18 – Global common stock that we and our
subsidiaries did not previously own, we paid total merger consideration of approximately $1.6 billion,
W. P. Carey 2022 10-K – 69
Notes to Consolidated Financial Statements
consisting of (i) the issuance of 13,786,302 shares of our common stock with a fair value of $1.2 billion, based on the closing price of our common stock
on August 1, 2022 of $87.46 per share, (ii) cash consideration of $423.3 million, and (iii) cash of $0.1 million paid in lieu of issuing any fractional shares
of our common stock. Pursuant to the terms of the definitive merger agreement, in connection with the closing of the CPA:18 Merger, we waived certain
back-end fees that we would have otherwise been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our pre-closing
advisory agreement with CPA:18 – Global.
Immediately prior to the closing of the CPA:18 Merger, CPA:18 – Global’s portfolio was comprised of full or partial ownership interests in 42 leased
properties (including seven properties in which we already owned a partial ownership interest), substantially all of which were net leased with a weighted-
average lease term of 7.0 years, an occupancy rate of 99.3% (unaudited), and an estimated contractual minimum annualized base rent (“ABR”) totaling
$81.0 million, as well as 65 self-storage operating properties and two student housing operating properties totaling 5.1 million square feet (unaudited). The
related property-level debt was comprised of non-recourse mortgage loans with an aggregate consolidated fair value of approximately $900.2 million with
a weighted-average annual interest rate of 5.1% as of August 1, 2022. From the closing of the CPA:18 Merger through December 31, 2022, lease revenues,
operating property revenues, and net income from properties acquired were $42.7 million, $39.2 million, and $12.3 million, respectively.
Two of the net lease properties that we acquired in the CPA:18 Merger were classified as Assets held for sale, with an aggregate fair value of $85.0 million
at acquisition (Note 5). From the closing of the CPA:18 Merger through December 31, 2022, lease revenues from these properties totaled $4.9 million. We
sold one of these properties in August 2022 for total proceeds, net of selling costs, of $44.5 million, and recognized a loss on sale of $0.2 million (Note 16).
Purchase Price Allocation
We accounted for the CPA:18 Merger as a business combination under the acquisition method of accounting. After consideration of all applicable factors
pursuant to the business combination accounting rules, we were considered the “accounting acquirer” due to various factors, including the fact that our
stockholders held the largest portion of the voting rights in the combined company upon completion of the CPA:18 Merger. Costs related to the CPA:18
Merger have been expensed as incurred and classified within Merger and other expenses in the consolidated statements of income, totaling $17.2 million
for the year ended December 31, 2022.
The purchase price was allocated to the assets acquired and liabilities assumed, based upon their preliminary fair values at August 1, 2022. The following
tables summarize the preliminary consideration and estimated fair values of the assets acquired and liabilities assumed in the acquisition, based on the
current best estimate of management. We are in the process of finalizing our assessment of the fair value of the assets acquired and liabilities assumed.
Investments in land, buildings and improvements, net investments in direct financing leases, non-recourse mortgages, and noncontrolling interests were
based on preliminary valuation data and estimates.
Total Consideration
Fair value of W. P. Carey shares of common stock issued
Cash consideration paid
Cash paid for fractional shares
Merger Consideration
Fair value of our equity interest in CPA:18 – Global prior to the CPA:18 Merger
Fair value of our equity interest in jointly owned investments with CPA:18 – Global prior to the CPA:18 Merger
Preliminary Purchase Price
Allocation (in thousands)
$
$
1,205,750
423,297
138
1,629,185
88,299
28,574
1,746,058
W. P. Carey 2022 10-K – 70
Assets
Land, buildings and improvements — net lease and other
Land, buildings and improvements — operating properties
Net investments in direct financing leases and loans receivable
In-place lease and other intangible assets
Above-market rent intangible assets
Assets held for sale
Cash and cash equivalents and restricted cash
Other assets, net (excluding restricted cash)
Total assets
Liabilities
Non-recourse mortgages, net
Accounts payable, accrued expenses and other liabilities
Below-market rent and other intangible liabilities
Deferred income taxes
Total liabilities
Total identifiable net assets
Noncontrolling interests
Goodwill
Goodwill
Notes to Consolidated Financial Statements
Preliminary Purchase Price
Allocation (in thousands)
$
$
881,613
1,000,447
38,517
224,458
61,090
85,026
331,063
25,229
2,647,443
900,173
90,035
16,836
52,320
1,059,364
1,588,079
(14,367)
172,346
1,746,058
The $172.3 million of goodwill recorded in the CPA:18 Merger was primarily due to the premium we paid over CPA:18 – Global’s estimated fair value.
Management believes the premium is supported by several factors, including that the CPA:18 Merger (i) concludes our exit from the non-traded REIT
business, (ii) adds a high-quality diversified portfolio of net lease assets that is well-aligned with our existing portfolio, (iii) enhances certain portfolio
metrics, and (iv) adds an attractive portfolio of self-storage operating properties.
The fair value of the 13,786,302 shares of our common stock issued in the CPA:18 Merger as part of the consideration paid for CPA:18 – Global of $1.6
billion was derived from the closing market price of our common stock on the acquisition date. As required by GAAP, the fair value related to the assets
acquired and liabilities assumed, as well as the shares exchanged, has been computed as of the date we gained control, which was the closing date of the
CPA:18 Merger, in a manner consistent with the methodology described above.
Goodwill is not deductible for income tax purposes.
Equity Investments
During the third quarter of 2022, we recognized a gain on change in control of interests of approximately $22.5 million, which was the difference between
the carrying value of approximately $65.8 million and the fair value of approximately $88.3 million of our previously held equity interest in 8,556,732
shares of CPA:18 – Global’s common stock.
The CPA:18 Merger also resulted in our acquisition of the remaining interests in four investments in which we already had a joint interest and accounted
for under the equity method. Upon acquiring the remaining interests in these investments, we owned 100% of these investments and thus accounted for the
acquisitions of these interests utilizing the purchase method of accounting. Due to the change in control of the four jointly owned investments that
occurred, we recorded a gain on change in control of interests of approximately $11.4 million during the third quarter of 2022, which was the difference
between our carrying values and the fair values of our previously held equity interests on August 1, 2022 of approximately $17.2 million and
approximately $28.6 million, respectively. Subsequent to the CPA:18 Merger, we consolidate these wholly owned investments.
W. P. Carey 2022 10-K – 71
Notes to Consolidated Financial Statements
The fair values of our previously held equity interests are based on the estimated fair market values of the underlying real estate and related mortgage debt,
both of which were determined by management relying in part on a third party. Real estate valuation requires significant judgment. We determined the
significant assumptions to be Level 3 with ranges for our previously held equity interests as follows:
• Market rents ranged from $8.65 per square foot to $21.00 per square foot;
• Discount rates applied to the estimated net operating income of each property ranged from approximately 5.75% to 9.75%;
• Discount rates applied to the estimated residual value of each property ranged from approximately 6.50% to 8.50%;
•
•
Residual capitalization rates applied to the properties ranged from approximately 5.75% to 8.00%;
The fair market value of the property level debt was determined based upon available market data for comparable liabilities and by applying
selected discount rates to the stream of future debt payments; and
• Discount rates applied to the property level debt cash flows ranged from approximately 2.28% to 5.50%.
Pro Forma Financial Information (Unaudited)
The following consolidated pro forma financial information has been presented as if the CPA:18 Merger had occurred on January 1, 2021 for the years
ended December 31, 2022 and 2021. The pro forma financial information is not necessarily indicative of what the actual results would have been had the
CPA:18 Merger on that date, nor does it purport to represent the results of operations for future periods.
(in thousands)
Pro forma total revenues
Years Ended December 31,
2022
2021
$
1,590,233 $
1,509,828
Note 4. Agreements and Transactions with Related Parties
Advisory Agreements and Partnership Agreements with the Managed Programs
We currently have advisory arrangements with CESH, pursuant to which we earn fees and are entitled to receive reimbursement for certain fund
management expenses. Upon completion of the CPA:18 Merger on August 1, 2022 (Note 3), our advisory agreements with CPA:18 – Global were
terminated, and we ceased earning revenue from CPA:18 – Global. We no longer raise capital for new or existing funds, but we currently expect to continue
to manage CESH and earn various fees (as described below) through the end of its life cycle.
W. P. Carey 2022 10-K – 72
The following tables present a summary of revenue earned, reimbursable costs, and distributions of Available Cash received/accrued from the Managed
Programs and WLT for the periods indicated, included in the consolidated financial statements (in thousands):
Notes to Consolidated Financial Statements
(a)
Distributions of Available Cash
Asset management revenue
Reimbursable costs from affiliates
Interest income on deferred acquisition fees and loans to affiliates
Structuring and other advisory revenue
(b)
(b)
(b)
(c)
CPA:18 – Global
CWI 1
CWI 2
CESH
WLT (reimbursed transition services)
__________
Years Ended December 31,
2022
2021
2020
8,746 $
8,467
2,518
112
—
19,843 $
7,345 $
15,363
4,035
120
—
26,863 $
Years Ended December 31,
2022
2021
2020
17,854 $
—
—
1,989
—
19,843 $
22,867 $
—
—
3,713
283
26,863 $
7,225
21,973
8,855
369
494
38,916
22,200
5,662
4,668
4,723
1,663
38,916
$
$
$
$
Included within Earnings (losses) from equity method investments in the consolidated statements of income.
(a)
(b) Amounts represent revenues from contracts under ASC 606.
(c)
Included within Non-operating income in the consolidated statements of income.
The following table presents a summary of amounts included in Due from affiliates in the consolidated financial statements (in thousands):
Asset management fees receivable
Accounts receivable
Reimbursable costs
Current acquisition fees receivable
Deferred acquisition fees receivable, including accrued interest
Performance Obligations and Significant Judgments
December 31,
2022
2021
386 $
329
204
—
—
919 $
494
336
974
19
3
1,826
$
$
The fees earned pursuant to our advisory agreements are considered variable consideration. For the agreements that include multiple performance
obligations, including asset management services, revenue is allocated to each performance obligation based on estimates of the price that we would charge
for each promised service if it were sold on a standalone basis.
Judgment is applied in assessing whether there should be a constraint on the amount of fees recognized, such as amounts in excess of certain threshold
limits with respect to the contract price or any potential clawback provisions included in certain of our arrangements. We exclude fees subject to such
constraints to the extent it is probable that a significant reversal of those amounts will occur.
W. P. Carey 2022 10-K – 73
Notes to Consolidated Financial Statements
Asset Management Revenue
Under the advisory agreements with the Managed Programs, we earn asset management revenue for managing their investment portfolios. The following
table presents a summary of our asset management fee arrangements with the Managed Programs:
Managed Program
CPA:18 – Global
Rate
0.5% – 1.5%
CESH
1.0%
Payable
In shares of its Class A common stock and/or
cash, at the option of CPA:18 – Global;
payable 50% in cash and 50% in shares of its
Class A common stock for 2021 through
February 28, 2022; payable in cash from
March 1, 2022 to August 1, 2022 (the date of
the completion of the CPA:18 Merger)
In cash
Description
Rate depended on the type of investment and was based
on the average market or average equity value, as
applicable
Based on gross assets at fair value
The performance obligation for asset management services is satisfied over time as services are rendered. The time-based output method is used to measure
progress over time, as this is representative of the transfer of the services. We are compensated for our services on a monthly or quarterly basis. However,
these services represent a series of distinct daily services under ASC 606, Revenue from Contracts with Customers. Accordingly, we satisfy the
performance obligation and resolve the variability associated with our fees on a daily basis. We apply the practical expedient and, as a result, do not
disclose variable consideration attributable to wholly or partially unsatisfied performance obligations as of the end of the reporting period.
In providing asset management services, we are reimbursed for certain costs. Direct reimbursement of these costs does not represent a separate
performance obligation. Payment for asset management services is typically due on the first business day following the month of the delivery of the
service.
Reimbursable Costs from Affiliates
CESH reimburses us in cash for certain personnel and overhead costs that we incur on its behalf, based on actual expenses incurred.
Distributions of Available Cash
We were entitled to receive distributions of up to 10% of the Available Cash (as defined in CPA:18 – Global’s partnership agreement) from the operating
partnership of CPA:18 – Global, payable quarterly in arrears. After completion of the CPA:18 Merger on August 1, 2022 (Note 3), we no longer receive
distributions of Available Cash from CPA:18 – Global.
Back-End Fees and Interests in the Managed Programs
Under our advisory arrangements with CESH, we may also receive compensation in connection with providing a liquidity event for its investors. Such
back-end fees or interests include or may include interests in disposition proceeds. There can be no assurance as to whether or when any back-end fees or
interests will be realized. Pursuant to the terms of the definitive merger agreement, in connection with the closing of the CPA:18 Merger, we waived certain
back-end fees that we would have been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our advisory agreement and
partnership agreement with CPA:18 – Global (Note 3).
W. P. Carey 2022 10-K – 74
Notes to Consolidated Financial Statements
Other Transactions with Former Affiliates
CWI 1 and CWI 2 Merger
On October 22, 2019, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”), two non-traded
REITs that we advised, announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-
stock transaction, with CWI 2 as the surviving entity (the “CWI 1 and CWI 2 Merger”). The CWI 1 and CWI 2 Merger was approved by the stockholders
of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020. Subsequently, CWI 2 was renamed WLT. In connection with the CWI 1 and CWI 2
Merger, we entered into an internalization agreement and a transition services agreement. Immediately following the closing of the CWI 1 and CWI 2
Merger, (i) the advisory agreements with each of CWI 1 and CWI 2 and each of their respective operating partnerships terminated, (ii) the subadvisory
agreements with the subadvisors for CWI 1 and CWI 2 were terminated, (iii) pursuant to the internalization agreement, two of our representatives were
appointed to the board of directors of WLT (however both representatives resigned from the board of directors of WLT on April 29, 2020), and (iv) we
provided certain transition services at cost to WLT, pursuant to a transition services agreement. On October 13, 2021, all services provided under the
transition services agreement were terminated.
In accordance with the merger agreement, at the effective time of the CWI 1 and CWI 2 Merger, each issued and outstanding share of CWI 1’s common
stock (or fraction thereof), was converted into the right to receive 0.9106 shares (the “exchange ratio”) of CWI 2 Class A common stock. As a result, we
exchanged 6,074,046 shares of CWI 1 common stock for 5,531,025 shares of CWI 2 Class A common stock.
Pursuant to the internalization agreement, the operating partnerships of each of CWI 1 and CWI 2 redeemed the special general partner interests that we
previously held, for which we received 1,300,000 shares of CWI 2 preferred stock with a liquidation preference of $50.00 per share and 2,840,549 shares in
CWI 2 Class A common stock (which was a non-cash investing activity). In connection with this redemption, we recognized a non-cash net gain on sale of
$33.0 million, which was included within Earnings (losses) from equity method investments in the consolidated statements of income for the year ended
December 31, 2020. This net gain on sale was recorded based on:
•
•
•
•
•
a fair value of $46.3 million for the 1,300,000 shares of CWI 2 preferred stock that we received (Note 9);
a fair value of $11.6 million for the 2,840,549 shares in CWI 2 common stock that we received (Note 8);
a gain recognized on the redemption of the noncontrolling interest in the special general partner interests previously held by the respective
subadvisors for CWI 1 and CWI 2 of $9.9 million (which is included within Net income attributable to noncontrolling interests in our consolidated
statements of income and Redemption of noncontrolling interest in our consolidated statements of equity);
an allocation of $34.3 million of goodwill within our Investment Management segment in accordance with ASC 350, Intangibles—goodwill and
other, since the WLT management internalization resulted in a sale of a portion of our Investment Management business (the allocation of
goodwill was based on the relative fair value of the portion of the Investment Management business sold) (Note 7); and
the carrying value of our previously held equity investments in the operating partnerships of CWI 1 and CWI 2 (Note 8), which totaled
$0.5 million on the date of the merger.
In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (based on the liquidation preference
of $50.00 per share, as described above) (Note 9).
Prior to the closing of the CWI 1 and CWI 2 Merger, we owned 3,836,669 shares of CWI 2 Class A common stock. Following the closing of the CWI 1
and CWI 2 Merger, execution of the internalization agreement, and CWI 2 being renamed WLT, we owned 12,208,243 shares of WLT common stock,
which we accounted for as an equity method investment. We recorded our investment in shares of common stock of WLT on a one quarter lag. In January
2022, we reclassified our investment in shares of common stock of WLT from equity method investments to equity securities, since we no longer had
significant influence over WLT, following the redemption of our investment in preferred shares of WLT, as described above (Note 8). As a result, we
accounted for this investment, which was included in Other assets, net in the consolidated financial statements, at fair value. WLT completed its previously
announced sale to private real estate funds in October 2022 and we received $82.6 million in cash proceeds. We recognized non-cash unrealized gains of
$49.2 million on our investment in common shares of WLT during the year ended December 31, 2022, which was recorded within Other gains and (losses)
in the consolidated financial statements. Upon completion of this transaction, we have no remaining interest in WLT.
W. P. Carey 2022 10-K – 75
Notes to Consolidated Financial Statements
Loans to Affiliates
From time to time, our board of directors (our “Board”) has approved the making of secured and unsecured loans or lines of credit from us to certain of the
Managed Programs, at our sole discretion, generally for the purpose of facilitating acquisitions or for working capital purposes. No amounts were
outstanding on our line of credit to CPA:18 – Global as of December 31, 2021. In July 2022, CPA:18 – Global repaid the $16.0 million principal
outstanding balance in full. The loan agreement with CPA:18 – Global was terminated upon completion of the CPA:18 Merger on August 1, 2022. No such
line of credit with CESH existed during the reporting period.
Other
At December 31, 2022, we owned interests in ten jointly owned investments in real estate, with the remaining interests held by third parties. We consolidate
six such investments and account for the remaining four investments under the equity method of accounting (Note 8). In addition, we owned limited
partnership units of CESH at that date. We elected to account for our investment in CESH under the fair value option (Note 8).
Note 5. Land, Buildings and Improvements, and Assets Held for Sale
Land, Buildings and Improvements — Net Lease and Other
Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands):
Land
Buildings and improvements
Real estate under construction
Less: Accumulated depreciation
December 31,
2022
2,400,002 $
10,916,630
22,225
(1,672,091)
11,666,766 $
2021
2,151,327
9,525,858
114,549
(1,448,020)
10,343,714
$
$
As discussed in Note 3, we acquired 39 consolidated properties subject to existing operating leases in the CPA:18 Merger, which increased the carrying
value of our Land, buildings and improvements — net lease and other by $881.6 million during the year ended December 31, 2022.
During 2022, the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreased by 5.8% to $1.0666
from $1.1326. As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements — net lease
and other decreased by $250.5 million from December 31, 2021 to December 31, 2022.
In connection with changes in lease classifications due to terminations or extensions of the underlying leases, we reclassified seven properties with an
aggregate carrying value of $67.0 million from Net investments in direct financing leases and loans receivable to Land, buildings and improvements — net
lease and other during 2022 (Note 6).
Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $299.4
million, $286.4 million, and $258.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.
W. P. Carey 2022 10-K – 76
Acquisitions of Real Estate During 2022
During 2022, we entered into the following investments, which were deemed to be real estate asset acquisitions, and which excludes properties acquired in
the CPA:18 Merger (dollars in thousands):
Notes to Consolidated Financial Statements
Property Location(s)
(a)
Pleasant Prairie, Wisconsin
Various, Spain
Various, Denmark
Laval, Canada
Chattanooga, Tennessee
Various, United States (4 properties), Canada (1 property), and
(a) (b)
(a)
(c)
Mexico (1 property)
Various, United States
(a) (b)
Various, Denmark
Medina, Ohio
Bree, Belgium
Various, Spain
(a)
(a)
Various, United States
(a) (b)
Various, Denmark
Westlake, Ohio
(a)
Hebron and Strongsville, Ohio; and Scarborough, Canada
Clifton Park, New York and West Des Moines, Iowa
Orzinuovi, Italy
West Chester, Pennsylvania
Various, Denmark
Various, United States
Romulus, Michigan
Salisbury, North Carolina
(a) (b)
(d)
Number of
Properties
1
26
8
1
1
6
6
10
1
1
5
18
8
1
3
2
1
1
4
19
1
1
125
Date of Acquisition
1/10/2022
2/3/2022
2/11/2022
2/18/2022
3/4/2022
4/27/2022; 5/9/2022
5/16/2022
6/1/2022; 6/30/2022
6/17/2022
6/30/2022
7/21/2022
7/26/2022
8/1/2022; 9/28/2022
8/3/2022
8/10/2022
8/12/2022
8/26/2022
10/1/2022
11/30/2022
12/21/2022
12/30/2022
12/30/2022
Property Type
Industrial
Funeral Home
Retail
Industrial
Warehouse
Industrial
Industrial;
Warehouse
Retail
Industrial
Warehouse
Retail
Industrial;
Warehouse
Retail
Warehouse
Industrial;
Warehouse
Specialty
Industrial
Outdoor Advertising
Retail
Industrial
Warehouse
Industrial
Total Capitalized Costs
(a)
$
$
20,024
146,364
33,976
21,459
43,198
80,595
110,381
42,635
28,913
96,697
19,894
262,061
29,644
29,517
20,111
23,317
14,033
1,863
15,553
63,006
36,569
16,412
1,156,222
__________
(a) Amount reflects the applicable exchange rate on the date of transaction.
(b) We also entered into a purchase agreement to acquire one additional retail facility leased to this tenant for $3.4 million (based on the exchange rate of
the Danish krone at December 31, 2022), which is expected to be completed in 2023.
(c) We also committed to fund an additional $26.6 million for an expansion at the facility, which is expected to be completed in the third quarter of 2023.
(d) We also committed to fund an additional $13.8 million for an expansion at this facility, which is expected to be completed in the fourth quarter of
2023.
W. P. Carey 2022 10-K – 77
The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
Land
Buildings and improvements
Intangible assets and liabilities:
In-place lease (weighted-average expected life of 20.6 years)
Below-market rent (weighted-average expected life of 10.9 years)
ROU assets:
Prepaid rent
(a)
__________
Notes to Consolidated Financial Statements
Total Capitalized Costs
145,078
$
852,991
152,889
(7,023)
12,287
1,156,222
$
(a) Represents prepaid rent for a land lease. Therefore, there is no future obligation on the land lease asset and no corresponding operating lease liability.
This asset is included in In-place lease intangible assets and other in the consolidated balance sheets.
Acquisitions of Real Estate During 2021 — We entered into 28 investments, which were deemed to be real estate asset acquisitions, at a total cost of $1.3
billion, including land of $191.0 million, buildings of $946.9 million, net lease intangibles of $188.9 million, land lease ROU assets of $6.0 million, above-
market ground lease intangibles, net, of $4.2 million (included within ROU assets), prepaid rent liabilities of $15.4 million, and operating lease liabilities of
$6.0 million.
Acquisitions of Real Estate During 2020 — We entered into 14 investments, which were deemed to be real estate asset acquisitions, at a total cost of $661.4
million, including land of $105.4 million, buildings of $449.4 million, and net lease intangibles of $106.6 million.
Real Estate Under Construction
During 2022, we capitalized real estate under construction totaling $141.2 million (including $78.3 million related to a student housing development
project acquired in the CPA:18 Merger, as discussed below under Land, Buildings and Improvements — Operating Properties). The number of construction
projects in progress with balances included in real estate under construction was eight and six as of December 31, 2022 and 2021, respectively. Aggregate
unfunded commitments totaled approximately $61.1 million and $55.3 million as of December 31, 2022 and 2021, respectively.
During 2022, we completed the following construction projects (dollars in thousands):
Property Location(s)
Primary Transaction
Type
Number of
Properties
Date of Completion
Property Type
Total Capitalized Costs
(a)
Hurricane, Utah
Breda, Netherlands
Bowling Green, Kentucky
(a)
Wageningen, Netherlands
Radomsko, Poland
(a)
(a)
Flemington, New Jersey
__________
Expansion
Expansion
Renovation
Build-to-Suit
Expansion
Build-to-Suit
1
1
1
1
1
1
6
3/8/2022
3/18/2022
4/26/2022
7/7/2022
8/1/2022
10/1/2022
Warehouse
Warehouse
Warehouse
Research and
Development
Industrial
Outdoor
Advertising
$
$
20,517
4,721
72,971
26,054
23,042
832
148,137
(a) Amount reflects the applicable exchange rate on the date of transaction.
During 2021, we completed four construction projects, at a total cost of $88.2 million.
During 2020, we completed five construction projects, at a total cost of $171.2 million.
W. P. Carey 2022 10-K – 78
Notes to Consolidated Financial Statements
In addition to the expansion commitments discussed under Acquisitions of Real Estate During 2022 above, during 2022, we committed to fund six build-to-
suit or redevelopment projects, for an aggregate amount of $20.3 million. We currently expect to complete the projects in 2023.
Capitalized interest incurred during construction was $1.3 million, $2.5 million, and $2.9 million for the years ended December 31, 2022, 2021, and 2020
respectively, which reduces Interest expense in the consolidated statements of income.
Dispositions of Properties
During 2022, we sold 20 properties, which were classified as Land, buildings and improvements — net lease and other. As a result, the carrying value of
our Land, buildings and improvements — net lease and other decreased by $118.1 million from December 31, 2021 to December 31, 2022 (Note 16).
Other Lease-Related Income
2022 — For the year ended December 31, 2022, Other lease-related income on our consolidated statements of income included: (i) lease termination
income totaling $12.4 million received from two tenants; (ii) other lease-related settlements totaling $17.6 million; and (iii) income from a parking garage
attached to one of our net-leased properties totaling $1.6 million.
2021 — For the year ended December 31, 2021, Other lease-related income on our consolidated statements of income included: (i) lease termination
income of $41.0 million received from a tenant; (ii) other lease-related settlements totaling $9.8 million; and (iii) income from a parking garage attached to
one of our net-leased properties totaling $1.9 million.
2020 — For the year ended December 31, 2020, Other lease-related income on our consolidated statements of income included: (i) lease-related
settlements totaling $7.9 million and (ii) income from a parking garage attached to one of our net-leased properties totaling $2.3 million.
Leases
Operating Lease Income
Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands):
Lease income — fixed
Lease income — variable
(a)
Total operating lease income
__________
Years Ended December 31,
2022
2021
2020
$
$
1,160,942 $
140,675
1,301,617 $
1,066,250 $
111,188
1,177,438 $
981,430
99,193
1,080,623
(a)
Includes (i) rent increases based on changes in the CPI and other comparable indices and (ii) reimbursements for property taxes, insurance, and
common area maintenance services.
W. P. Carey 2022 10-K – 79
Scheduled Future Lease Payments to be Received
Scheduled future lease payments to be received (exclusive of expenses paid by tenants, percentage of sales rents, and future CPI-based adjustments) under
non-cancelable operating leases at December 31, 2022 are as follows (in thousands):
Notes to Consolidated Financial Statements
Years Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total
Total
1,285,481
1,233,058
1,179,250
1,127,974
1,064,061
9,481,009
15,370,833
$
$
See Note 6 for scheduled future lease payments to be received under non-cancelable direct financing leases.
Lease Cost
Lease costs for operating leases are included in (i) General and administrative expenses (office leases), (ii) Property expenses, excluding reimbursable
tenant costs (land leases), and (iii) Reimbursable tenant costs (land leases) in the consolidated statements of income. Certain information related to the total
lease cost for operating leases is as follows (in thousands):
Fixed lease cost
Variable lease cost
Total lease cost
Years Ended December 31,
2022
2021
2020
$
$
15,087 $
1,086
16,173 $
16,426 $
1,149
17,575 $
17,616
1,089
18,705
During the years ended December 31, 2022, 2021, and 2020, we received sublease income totaling approximately $4.6 million, $5.1 million, and $5.5
million, respectively, which is included in Lease revenues in the consolidated statements of income.
Other Information
Supplemental balance sheet information related to ROU assets and lease liabilities is as follows (dollars in thousands):
Operating ROU assets — land leases
Finance ROU assets — land leases
Operating ROU assets — office leases
Total operating ROU assets
Location on Consolidated Balance Sheets
In-place lease intangible assets and other
In-place lease intangible assets and other
Other assets, net
Operating lease liabilities
Accounts payable, accrued expenses and
other liabilities
Weighted-average remaining lease term — operating leases
Weighted-average discount rate — operating leases
Number of land lease arrangements — operating leases
Number of land lease arrangements — finance leases
Number of office space arrangements
Lease term range (excluding extension options not reasonably certain of being exercised)
December 31,
2022
2021
$
$
$
123,834
12,598
56,674
193,106
146,302
$
$
$
106,095
—
59,902
165,997
146,437
25.8 years
6.8 %
72
1
4
<1 – 99 years
26.1 years
6.8 %
66
—
4
<1 – 100 years
W. P. Carey 2022 10-K – 80
Notes to Consolidated Financial Statements
Cash paid for operating lease liabilities included in Net cash provided by operating activities totaled $15.8 million, $13.9 million, and $15.5 million for the
years ended December 31, 2022, 2021, and 2020, respectively.
We assumed seven land lease arrangements in the CPA:18 Merger, for which we are the lessee. As a result, we capitalized (i) ROU assets totaling
$24.5 million (comprised of below-market ground lease intangibles totaling $17.9 million and land lease ROU assets totaling $6.6 million), which are
included within In-place lease intangible assets and other on our consolidated balance sheets, and (ii) operating lease liabilities totaling $6.6 million, which
are included within Accounts payable, accrued expenses and other liabilities on our consolidated balance sheets.
During the year ended December 31, 2022, we entered into a land lease agreement for 99 years, which we account for as a finance lease. Upon entering
into the lease, we prepaid the full ground rent of $12.3 million, which is included in Net cash used in investing activities on the consolidated statements of
cash flows. During the year ended December 31, 2022, we recognized $0.1 million of rent expense for this finance lease, which is included in Depreciation
and amortization on our consolidated statements of income.
Undiscounted Cash Flows
A reconciliation of the undiscounted cash flows for operating leases recorded on the consolidated balance sheet within Accounts payable, accrued expenses
and other liabilities as of December 31, 2022 is as follows (in thousands):
Years Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: amount of lease payments representing interest
Present value of future lease payments/lease obligations
Land, Buildings and Improvements — Operating Properties
Total
14,486
13,856
13,851
13,721
13,911
269,848
339,673
(193,371)
146,302
$
$
At December 31, 2022, Land, buildings and improvements — operating properties consisted of our investments in 75 consolidated self-storage properties,
two consolidated student housing properties, and one consolidated hotel. We acquired 65 self-storage properties, one student housing property, and one
student housing development project with an aggregate fair value of $1.0 billion in the CPA:18 Merger (including $78.3 million within real estate under
construction) (Note 3). In September 2022, we partially placed into service the student housing development project for total capitalized costs of
$66.8 million. At December 31, 2021, Land, buildings and improvements — operating properties consisted of our investments in ten consolidated self-
storage properties and one consolidated hotel. Below is a summary of our Land, buildings and improvements — operating properties (in thousands):
Land
Buildings and improvements
Real estate under construction
Less: Accumulated depreciation
December 31,
2022
2021
$
$
122,317 $
955,009
18,566
(28,295)
1,067,597 $
10,452
73,221
—
(16,750)
66,923
Depreciation expense on our buildings and improvements attributable to operating properties was $11.6 million, $2.7 million, and $2.8 million for the years
ended December 31, 2022, 2021, and 2020, respectively.
For the year ended December 31, 2022, Land, buildings and improvements — operating properties revenues totaling $59.2 million were comprised of
$54.4 million in lease revenues and $4.8 million in other income (such as food and beverage
W. P. Carey 2022 10-K – 81
revenue) from 75 consolidated self-storage properties, two student housing properties, and one consolidated hotel. For the year ended December 31, 2021,
Land, buildings and improvements — operating properties revenues totaling $13.5 million were comprised of $11.2 million in lease revenues and $2.3
million in other income from ten consolidated self-storage properties and one consolidated hotel. For the year ended December 31, 2020, Land, buildings
and improvements — operating properties revenues totaling $11.4 million were comprised of $9.5 million in lease revenues and $1.9 million in other
income from ten consolidated self-storage properties and one consolidated hotel. We derive self-storage revenue primarily from rents received from
customers who rent storage space under month-to-month leases for personal or business use. We earn student housing operating revenue primarily from
leases of one year or less with individual students. We derive hotel revenue primarily from room rentals, as well as food, beverage, and other services.
Notes to Consolidated Financial Statements
Assets Held for Sale, Net
Below is a summary of our properties held for sale (in thousands):
Land, buildings and improvements — net lease and other
In-place lease intangible assets and other
Above-market rent intangible assets
Accumulated depreciation and amortization
Assets held for sale, net
December 31,
2022
2021
$
$
47,134 $
10,854
3,210
(3,254)
57,944 $
10,628
—
—
(2,359)
8,269
At December 31, 2022, we had three properties classified as Assets held for sale, net, with an aggregate carrying value of $57.9 million. We sold one of
these properties in January 2023 for gross proceeds of $11.2 million (Note 18). We acquired two properties classified as Assets held for sale, net, with a fair
value of $85.0 million in the CPA:18 Merger (Note 3), one of which was sold in August 2022 (Note 16). At December 31, 2021, we had two properties
classified as Assets held for sale, net, with an aggregate carrying value of $8.3 million. These properties were sold in the first quarter of 2022.
Note 6. Finance Receivables
Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables
portfolio consists of our Net investments in direct financing leases and loans receivable (net of allowance for credit losses). Operating leases are not
included in finance receivables. See Note 2 and Note 5 for information on ROU operating lease assets recognized in our consolidated balance sheets.
Finance Receivables
Net investments in direct financing leases and loans receivable are summarized as follows (in thousands):
Net investments in direct financing leases
Sale-leaseback transactions accounted for as loans receivable
Secured loans receivable
(a)
(a)
(b)
Maturity Date
2023 – 2036
2038 – 2052
2023 – 2024
December 31,
2022
2021
$
$
498,313 $
234,198
39,250
771,761 $
572,205
217,229
24,143
813,577
__________
(a) Amounts are net of allowance for credit losses, as disclosed below under Net Investments in Direct Financing Leases.
(b) These investments are accounted for as loans receivable in accordance with ASC 310, Receivables and ASC 842, Leases. Maturity dates reflect the
current lease maturity dates.
(c) Amounts are net of allowance for credit losses of $2.1 million and $12.6 million as of December 31, 2022 and 2021, respectively.
W. P. Carey 2022 10-K – 82
Net Investments in Direct Financing Leases
Net investments in direct financing leases is summarized as follows (in thousands):
Lease payments receivable
Unguaranteed residual value
Less: unearned income
Less: allowance for credit losses
(a)
__________
Notes to Consolidated Financial Statements
December 31,
2022
2021
332,618 $
470,839
803,457
(296,411)
(8,733)
498,313 $
414,002
545,896
959,898
(370,353)
(17,340)
572,205
$
$
(a) During the years ended December 31, 2022 and 2021, we recorded a net release of allowance for credit losses of $3.9 million and a net allowance for
credit losses of $0.3 million, respectively, on our net investments in direct financing leases due to changes in expected economic conditions and
improved credit quality for certain tenants, which was included within Other gains and (losses) in our consolidated statements of income. In addition,
during the year ended December 31, 2022, we reduced the allowance for credit losses balance by $4.7 million, in connection with the reclassifications
of properties from Net investments in direct financing leases and loans receivable to Real estate, as described below.
2022 — Income from direct financing leases, which is included in Income from direct financing leases and loans receivable in the consolidated financial
statements, was $53.0 million for the year ended December 31, 2022.
As discussed in Note 3, we acquired one consolidated property subject to a direct financing lease in the CPA:18 Merger, which increased the carrying value
of our Net investments in direct financing leases and loans receivable by $10.5 million during the year ended December 31, 2022. During the year ended
December 31, 2022, we reclassified seven properties with a carrying value of $67.0 million from Net investments in direct financing leases and loans
receivable to Real estate in connection with changes in lease classifications due to terminations or extensions of the underlying leases (Note 5). During the
year ended December 31, 2022, the U.S. dollar strengthened against the euro, resulting in a $23.5 million decrease in the carrying value of Net investments
in direct financing leases and loans receivable from December 31, 2021 to December 31, 2022.
2021 — Income from direct financing leases, which is included in Income from direct financing leases and loans receivable in the consolidated financial
statements, was $63.2 million for the year ended December 31, 2021.
2020 — Income from direct financing leases, which was included in Income from direct financing leases and loans receivable in the consolidated financial
statements, was $73.9 million for the year ended December 31, 2020.
Scheduled Future Lease Payments to be Received
Scheduled future lease payments to be received (exclusive of expenses paid by tenants, percentage of sales rents, and future CPI-based adjustments) under
non-cancelable direct financing leases at December 31, 2022 are as follows (in thousands):
Years Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total
See Note 5 for scheduled future lease payments to be received under non-cancelable operating leases.
Total
50,273
48,146
43,897
42,578
41,370
106,354
332,618
$
W. P. Carey 2022 10-K – 83
Notes to Consolidated Financial Statements
Loans Receivable
During the year ended December 31, 2022, we entered into the following sale-leaseback, which was deemed to be a loan receivable in accordance with
ASC 310, Receivables and ASC 842, Leases (dollars in thousands):
Property Location(s)
Various, Belgium
(a)
__________
Number of
Properties
5
5
Date of Acquisition
6/22/2022
Property Type
Retail
Total Investment
$
$
19,795
19,795
(a) Amount reflects the applicable exchange rate on the date of transaction.
During the year ended December 31, 2021, we entered into three sale-leasebacks, which were deemed to be loans receivable, at a total cost of $217.0
million.
As discussed in Note 3, we acquired one secured loan receivable in the CPA:18 Merger for $28.0 million, which pays interest at 10% per annum with a
maturity date of July 2024.
In September 2022, one of our secured loans receivable was repaid to us for $34.0 million. In connection with this repayment, we recorded a release of
allowance for credit losses of $10.5 million since the loan principal was fully repaid. In addition, in the first quarter of 2021, we entered into an agreement
with the borrowers for certain of our secured loans receivable, who agreed to pay us at maturity a total of $3.7 million of unpaid interest due over the
previous year. In connection with the repayment of the secured loan receivable in September 2022, we collected $2.3 million of this interest, which was
included in Income from direct financing leases and loans receivable on the consolidated statements of income for the year ended December 31, 2022. The
remaining $1.4 million of unpaid interest is related to a secured loan receivable that we still own, and has not been recognized in the consolidated financial
statements due to uncertainty of collectibility.
Earnings from our loans receivable are included in Income from direct financing leases and loans receivable in the consolidated financial statements, and
totaled $21.2 million, $4.3 million, and $1.0 million for the years ended December 31, 2022, 2021, and 2020, respectively.
Credit Quality of Finance Receivables
We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. At both December 31,
2022 and 2021, other than uncollected income from our secured loans receivable (as noted above), no material balances of our finance receivables were
past due. Other than the lease terminations and extensions noted under Net Investments in Direct Financing Leases above, there were no material
modifications of finance receivables during the year ended December 31, 2022.
We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality
and five representing the lowest. A credit quality of one through three indicates a range of investment grade to stable. A credit quality of four through five
indicates a range of inclusion on the watch list to risk of default. The credit quality evaluation of our finance receivables is updated quarterly.
A summary of our finance receivables by internal credit quality rating, excluding our allowance for credit losses, is as follows (dollars in thousands):
Number of Tenants / Obligors at December 31,
Carrying Value at December 31,
Internal Credit Quality Indicator
1 – 3
4
5
2022
19
8
—
2021
17
9
—
2022
2021
$
$
664,761 $
117,833
—
782,594 $
703,280
140,230
—
843,510
W. P. Carey 2022 10-K – 84
Notes to Consolidated Financial Statements
Note 7. Goodwill and Other Intangibles
We have recorded lease, internal-use software development, and trade name intangibles that are being amortized over periods ranging from one year to 48
years. In-place lease intangibles, at cost are included in In-place lease intangible assets and other in the consolidated financial statements. Above-market
rent intangibles, at cost are included in Above-market rent intangible assets in the consolidated financial statements. Accumulated amortization of in-place
lease and above-market rent intangibles is included in Accumulated depreciation and amortization in the consolidated financial statements. Internal-use
software development and trade name intangibles are included in Other assets, net in the consolidated financial statements. Below-market rent and below-
market purchase option intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements.
Net lease intangibles recorded in connection with property acquisitions during the year ended December 31, 2022 are described in Note 5. In connection
with the CPA:18 Merger (Note 3), we recorded net lease intangibles comprised as follows (life in years, dollars in thousands):
Weighted-Average Life
Amount
Finite-Lived Intangible Assets
In-place lease
Above-market rent
Finite-Lived Intangible Liabilities
Below-market rent
7.4
11.9
8.5
$
$
$
199,913
61,090
261,003
(16,836)
In connection with certain business combinations, including the CPA:18 Merger (Note 3), we recorded goodwill as a result of consideration exceeding the
fair values of the assets acquired and liabilities assumed (Note 2). The goodwill was attributed to our Real Estate reporting unit as it relates to the real estate
assets we acquired in such business combinations. The following table presents a reconciliation of our goodwill (in thousands):
Real Estate
Investment
Management
Total
Balance at January 1, 2020
Foreign currency translation adjustments
Allocation of goodwill based on portion of Investment Management business sold (Note 4)
Balance at December 31, 2020
Foreign currency translation adjustments
Balance at December 31, 2021
Acquisition of CPA:18 – Global (Note 3)
Foreign currency translation adjustments
Impairment charges (Note 9)
$
871,081 $
10,403
—
881,484
(9,289)
872,195
172,346
(7,129)
—
Balance at December 31, 2022
$
1,037,412 $
63,607 $
—
(34,273)
29,334
—
29,334
—
—
(29,334)
— $
934,688
10,403
(34,273)
910,818
(9,289)
901,529
172,346
(7,129)
(29,334)
1,037,412
Current accounting guidance requires that we test for the recoverability of goodwill at the reporting unit level. The test for recoverability must be conducted
at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. In
connection with the completion of the CPA:18 Merger in August 2022 (Note 3), we performed a test for impairment during the third quarter of 2022 for
goodwill recorded in both segments and recognized an impairment charge of $29.3 million on goodwill within our Investment Management segment (Note
9). We also performed our annual test for impairment in October 2022 for goodwill recorded in our Real Estate segment and found no impairment
indicated.
W. P. Carey 2022 10-K – 85
Notes to Consolidated Financial Statements
Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands):
Finite-Lived Intangible Assets
Internal-use software development costs
Trade name
Lease Intangibles:
In-place lease
Above-market rent
Goodwill
Goodwill
Total intangible assets
Finite-Lived Intangible Liabilities
Below-market rent
Indefinite-Lived Intangible Liabilities
Below-market purchase option
Total intangible liabilities
$
$
$
$
2022
2021
December 31,
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
19,812 $
—
19,812
(19,144) $
—
(19,144)
668 $
—
668
19,553 $
3,975
23,528
(18,682) $
(3,581)
(22,263)
871
394
1,265
2,523,318
833,751
3,357,069
(1,061,235)
(507,436)
(1,568,671)
1,462,083
326,315
1,788,398
2,279,905
843,410
3,123,315
(934,663)
(489,861)
(1,424,524)
1,037,412
4,414,293 $
—
(1,587,815) $
1,037,412
2,826,478 $
901,529
4,048,372 $
—
(1,446,787) $
1,345,242
353,549
1,698,791
901,529
2,601,585
(293,160) $
125,287 $
(167,873) $
(272,483) $
105,908 $
(166,575)
(16,711)
(309,871) $
—
125,287 $
(16,711)
(184,584) $
(16,711)
(289,194) $
—
105,908 $
(16,711)
(183,286)
During 2022, the U.S. dollar strengthened against the euro, resulting in an decrease of $42.3 million in the carrying value of our net intangible assets
from December 31, 2021 to December 31, 2022. Net amortization of intangibles, including the effect of foreign currency translation, was $229.2 million,
$236.6 million, and $226.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. Amortization of below-market rent and above-
market rent intangibles is recorded as an adjustment to Lease revenues and amortization of internal-use software development, trade name, and in-place
lease intangibles is included in Depreciation and amortization.
Based on the intangible assets and liabilities recorded at December 31, 2022, scheduled annual net amortization of intangibles for each of the next five
calendar years and thereafter is as follows (in thousands):
Years Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total
Net Decrease in
Lease Revenues
Increase to Amortization
Total
$
$
34,878 $
30,783
27,047
21,196
17,100
27,438
158,442 $
213,525 $
158,641
144,395
128,578
115,105
702,507
1,462,751 $
248,403
189,424
171,442
149,774
132,205
729,945
1,621,193
W. P. Carey 2022 10-K – 86
Notes to Consolidated Financial Statements
Note 8. Equity Method Investments
We own interests in the Managed Programs and certain unconsolidated real estate investments with third parties. We account for our interests in these
investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus
contributions and other adjustments required by equity method accounting, such as basis differences) or at fair value by electing the equity method fair
value option available under GAAP.
We classify distributions received from equity method investments using the cumulative earnings approach. In general, distributions received are
considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received,
less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is
considered a return of investment and is classified as cash inflows from investing activities.
Managed Programs
We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, we do not exert control over,
but we do have the ability to exercise significant influence over, the Managed Programs. Operating results of the Managed Programs are included in the
Investment Management segment.
The following table sets forth certain information about our investments in the Managed Programs (dollars in thousands):
Fund
CPA:18 – Global
CPA:18 – Global operating partnership
CESH
(b)
(a)
% of Outstanding Shares Owned at
Carrying Amount of Investment at
December 31,
December 31,
2022
2021
2022
2021
100.000 %
100.000 %
2.430 %
5.578 % $
0.034 %
2.430 %
$
— $
—
2,225
2,225 $
60,836
209
3,689
64,734
__________
(a) On August 1, 2022, we acquired all of the remaining interests in CPA:18 – Global and the CPA:18 – Global operating partnership in the CPA:18
Merger (Note 3).
(b) Investment is accounted for at fair value.
CPA:18 – Global — We received distributions from this investment during the years ended December 31, 2022, 2021, and 2020 of $1.6 million, $3.5
million, and $2.6 million, respectively. We received distributions from our investment in the CPA:18 – Global operating partnership during the years ended
December 31, 2022, 2021, and 2020 of $8.7 million, $7.3 million, and $7.2 million, respectively (Note 4).
CESH — We have elected to account for our investment in CESH at fair value by selecting the equity method fair value option available under GAAP. We
record our investment in CESH on a one quarter lag; therefore, the balance of our equity method investment in CESH recorded as of December 31, 2022 is
based on the estimated fair value of our investment as of September 30, 2022. We received distributions from this investment during the years ended
December 31, 2022 and 2021 of $1.2 million and $1.3 million, respectively. We did not receive distributions from this investment during the year ended
December 31, 2020.
At December 31, 2021, the aggregate unamortized basis differences on our equity method investments in the Managed Programs were $23.3 million.
During the third quarter of 2022, we recognized a gain on change in control of interests of approximately $22.5 million, which was the difference between
the carrying value and the fair value of our previously held equity interest in shares of CPA:18 – Global’s common stock (Note 3). Following the close of
the CPA:18 Merger, there are no such unamortized basis differences on our equity method investments in the Managed Programs.
W. P. Carey 2022 10-K – 87
Notes to Consolidated Financial Statements
Interests in Other Unconsolidated Real Estate Investments and WLT
We own equity interests in properties that are generally leased to companies through noncontrolling interests in partnerships and limited liability companies
that we do not control but over which we exercise significant influence. The underlying investments are jointly owned with affiliates or third parties. We
account for these investments under the equity method of accounting. In addition, we owned shares of WLT common stock, which we accounted for under
the equity method of accounting as of December 31, 2021, but was reclassified to equity securities at fair value within Other assets, net on our consolidated
balance sheets in January 2022, as described in Note 9. Operating results of our unconsolidated real estate investments are included in the Real Estate
segment.
The following table sets forth our ownership interests in our equity method investments in real estate, excluding the Managed Programs, and their
respective carrying values (dollars in thousands):
Co-owner
December 31, 2022
2022
2021
Ownership Interest at
Carrying Value at December 31,
Lessee/Fund/Description
Existing Equity Method Investments
Las Vegas Retail Complex
Johnson Self Storage
Kesko Senukai
Harmon Retail Corner
WLT
(b)
(d)
(c)
(a)
Third Party
Third Party
Third Party
Third Party
WLT
Equity Method Investments Consolidated After the CPA:18 Merger
State Farm Mutual Automobile Insurance Co.
Apply Sørco AS
(b) (g)
Bank Pekao
Fortenova Grupa d.d.
CPA:18 – Global
CPA:18 – Global
CPA:18 – Global
CPA:18 – Global
(b)
(f)
(e)
N/A
90%
70%
15%
N/A
100%
N/A
100%
100%
$
$
196,352 $
65,707
38,569
24,649
—
—
—
—
—
325,277 $
104,114
67,573
41,955
24,435
33,392
7,129
5,909
4,460
2,936
291,903
__________
(a) See “Las Vegas Retail Complex” below for discussion of this equity method investment in real estate.
(b) The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
(c) This investment is reported using the hypothetical liquidation at book value model, which may be different than pro rata ownership percentages,
primarily due to the capital structure of the partnership agreement.
(d) At December 31, 2021, we owned 12,208,243 shares of common stock of WLT, which we accounted for as an equity method investment in real estate,
but was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022 (Note 9). WLT
completed its previously announced sale to private real estate funds in October 2022 (Note 9).
(e) We acquired the remaining interests in these investments from CPA:18 – Global in the CPA:18 Merger, subsequent to which we consolidated these
wholly owned investments (Note 3).
(f) The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone. We sold this investment in December
2022, which was consolidated and wholly owned at the time of disposition.
(g) We recognized our $4.6 million proportionate share of an impairment charge recorded on this investment during the year ended December 31, 2022,
which was reflected within Earnings (losses) from equity method investments in our consolidated statements of income. The estimated fair value of the
investment is based on the estimated selling price of the international office facility owned by the investment, and the fair value of the non-recourse
mortgage encumbering the property also approximates the fair value of the property.
We received aggregate distributions of $27.8 million, $18.6 million, and $17.8 million from our other unconsolidated real estate investments for the years
ended December 31, 2022, 2021, and 2020, respectively. At December 31, 2022 and 2021, the aggregate unamortized basis differences on our
unconsolidated real estate investments were $19.1 million and $7.9 million, respectively. During the third quarter of 2022, we recorded a gain on change in
control of interests of approximately $11.4 million, which was the difference between our carrying values and the fair values of our previously held equity
method investments in real estate consolidated after the CPA:18 Merger (Note 3).
W. P. Carey 2022 10-K – 88
Notes to Consolidated Financial Statements
Las Vegas Retail Complex
On June 10, 2021, we entered into an agreement to fund a construction loan of approximately $261.9 million for a retail complex in Las Vegas, Nevada, at
an interest rate of 6.0% and term of 36 months. Through December 31, 2022, we funded $193.2 million, with the remaining amount expected to be funded
in 2023. We hold a purchase option for two net-leased units at the complex upon its completion, as well as an equity purchase option to acquire a 47.5%
equity interest in the partnership that owns the borrower. As of the agreement date, we did not deem the exercise of the purchase options to be reasonably
certain.
In accordance with ASC 810, Consolidation, we determined that this loan will not be consolidated, but due to the characteristics of the arrangement
(including our participation in expected residual profits), the risks and rewards of the agreement are similar to those associated with an investment in real
estate rather than a loan. Therefore, the loan will be treated as an implied investment in real estate (i.e., an equity method investment in real estate) for
accounting purposes in accordance with the acquisition, development and construction arrangement sub-section of ASC 310, Receivables. Equity income
from this investment was $10.1 million and $3.0 million for the years ended December 31, 2022 and 2021, respectively, which was recognized within
Earnings (losses) from equity method investments in our consolidated statements of income.
Note 9. Fair Value Measurements
The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs
used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as
money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1
that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, and foreign currency collars;
and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own
assumptions.
Items Measured at Fair Value on a Recurring Basis
The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we
have also provided the unobservable inputs.
Derivative Assets and Liabilities — Our derivative assets and liabilities, which are included in Other assets, net and Accounts payable, accrued expenses
and other liabilities, respectively, in the consolidated financial statements, are comprised of foreign currency collars, interest rate swaps, interest rate caps,
and stock warrants (Note 10).
The valuation of our derivative instruments (excluding stock warrants) is determined using a discounted cash flow analysis on the expected cash flows of
each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs,
including interest rate curves, spot and forward rates, and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our
own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our
derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as
collateral postings, thresholds, mutual puts, and guarantees. These derivative instruments were classified as Level 2 as these instruments are custom, over-
the-counter contracts with various bank counterparties that are not traded in an active market.
The stock warrants were measured at fair value using valuation models that incorporate market inputs and our own assumptions about future cash flows.
We classified these assets as Level 3 because these assets are not traded in an active market.
Equity Method Investment in CESH — We have elected to account for our investment in CESH, which is included in Equity method investments in the
consolidated financial statements, at fair value by selecting the equity method fair value option available under GAAP (Note 8). We classified this
investment as Level 3 because we primarily used valuation models that incorporate unobservable inputs to determine its fair value.
W. P. Carey 2022 10-K – 89
Notes to Consolidated Financial Statements
Investment in Shares of Lineage Logistics — We have elected to apply the measurement alternative under ASU 2016-01, Financial Instruments — Overall
(Subtopic 825-10) to account for our investment in shares of Lineage Logistics (a cold storage REIT), which is included in Other assets, net in the
consolidated financial statements. Under this alternative, the carrying value is adjusted for any impairments or changes in fair value resulting from
observable transactions for similar or identical investments in the issuer. We classified this investment as Level 3 because it is not traded in an active
market. During the years ended December 31, 2022, 2021, and 2020, we recognized non-cash unrealized gains on our investment in shares of Lineage
Logistics totaling $38.6 million, $76.3 million, and $48.3 million, respectively, due to secondary market transactions at a higher price per share, which was
recorded within Other gains and (losses) in the consolidated financial statements. In addition, during the years ended December 31, 2022 and 2021, we
received cash dividends of $4.3 million and $6.4 million, respectively, from our investment in shares of Lineage Logistics, which was recorded within Non-
operating income in the consolidated financial statements. See Note 15 for further discussion of the impact of Lineage Logistics’s conversion to a REIT
during the first quarter of 2020. In addition, in October 2020, we purchased additional shares of Lineage Logistics for $95.5 million. The fair value of this
investment was $404.9 million and $366.3 million at December 31, 2022 and 2021, respectively.
Investment in Shares of GCIF — We account for our investment in shares of GCIF, which is included in Other assets, net in the consolidated financial
statements, at fair value. We classified this investment as Level 2 because we used a quoted price from an inactive market to determine its fair value.
During the year ended December 31, 2022, we received liquidating distributions from our investment in shares of GCIF totaling $2.6 million, which
reduced the cost basis of our investment (in March 2021, GCIF announced its intention to liquidate and to distribute substantially all of its assets). The fair
value of our investment in shares of GCIF was $1.7 million and $4.3 million at December 31, 2022 and 2021, respectively.
Investment in Preferred Shares of WLT — In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of
$65.0 million (based on the liquidation preference of $50.00 per share). Since this redemption was based on market conditions that existed as of December
31, 2021, during the year ended December 31, 2021, we recognized an unrealized gain on our investment in preferred shares of WLT of $18.7 million,
which was recognized within Other comprehensive (loss) income in the consolidated financial statements. In January 2022, in connection with this
redemption, we reclassified this $18.7 million unrealized gain from Accumulated other comprehensive loss to Other gains and (losses) in the consolidated
financial statements (Note 13). During the years ended December 31, 2022 and 2021, we received cash dividends of $0.9 million and $4.9 million,
respectively, from our investment in preferred shares of WLT, which was recorded within Non-operating income in the consolidated financial statements.
The fair value of our investment in preferred shares of WLT approximated its carrying value, which was $65.0 million as of December 31, 2021.
Investment in Common Shares of WLT — In January 2022, we reclassified our investment in 12,208,243 shares of common stock of WLT from equity
method investments to equity securities, since we no longer had significant influence over WLT, following the redemption of our investment in preferred
shares of WLT, as described above. As a result, we accounted for this investment, which was included in Other assets, net in the consolidated financial
statements, at fair value. We classified this investment as Level 3 because it is not traded in an active market. The carrying value of this investment was
$33.4 million as of December 31, 2021, which was included within Equity method investments in the consolidated financial statements. WLT completed its
previously announced sale to private real estate funds in October 2022 and we received $82.6 million in cash proceeds. As a result, we recognized non-cash
unrealized gains of $49.2 million on our investment in common shares of WLT during the year ended December 31, 2022, which was recorded within
Other gains and (losses) in the consolidated financial statements. Upon completion of this transaction, we have no remaining interest in WLT.
We did not have any transfers into or out of Level 1, Level 2, and Level 3 category of measurements during either the years ended December 31, 2022 or
2021. Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within
Other gains and (losses) on our consolidated financial statements.
Our other material financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):
Senior Unsecured Notes, net
Non-recourse mortgages, net
(a) (b) (c)
(a) (b) (d)
__________
Level
2 and 3
3
December 31, 2022
December 31, 2021
Carrying Value
Fair Value
Carrying Value
Fair Value
$
5,916,400 $
1,132,417
5,238,588 $
1,109,449
5,701,913 $
368,524
5,984,228
369,841
W. P. Carey 2022 10-K – 90
Notes to Consolidated Financial Statements
(a) The carrying value of Senior Unsecured Notes, net (Note 11) includes unamortized deferred financing costs of $25.9 million and $28.7 million at
December 31, 2022 and 2021, respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of less
than $0.1 million at both December 31, 2022 and 2021.
(b) The carrying value of Senior Unsecured Notes, net includes unamortized discount of $24.1 million and $29.2 million at December 31, 2022 and 2021,
respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $10.3 million and $0.8 million at December 31,
2022 and 2021, respectively.
(c) For those Senior Unsecured Notes for which there are no observable market prices (specifically, our private placement Senior Unsecured Notes (Note
11)), we used a discounted cash flow model that estimates the present value of future loan payments by discounting such payments at current estimated
market interest rates. We consider these notes to be within the Level 3 category. For all other Senior Unsecured Notes, we determined the estimated
fair value using observed market prices in an open market, which may experience limited trading volume. We consider these notes to be within the
Level 2 category.
(d) We determined the estimated fair value of our non-recourse mortgage loans using a discounted cash flow model that estimates the present value of the
future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates consider interest rate
risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until
maturity.
We estimated that our other financial assets and liabilities, including amounts outstanding under our Senior Unsecured Credit Facility (Note 11), but
excluding finance receivables (Note 6), had fair values that approximated their carrying values at both December 31, 2022 and 2021.
Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)
We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be
recoverable. Our impairment policies are described in Note 2.
The following table presents information about assets for which we recorded an impairment charge and that were measured at fair value on a non-recurring
basis (in thousands):
Impairment Charges
Real estate and intangibles
Investment Management goodwill
Equity method investments
2022
Years Ended December 31,
2021
2020
Fair Value
Measurements
Impairment
Charges
Fair Value
Measurements
Impairment
Charges
Fair Value
Measurements
Impairment
Charges
$
32,497 $
—
—
$
39,119 $
29,334
—
68,453
29,494 $
—
8,175
$
24,246 $
—
6,830
31,076
31,350 $
—
55,245
$
35,830
—
55,387
91,217
Impairment charges, and their related triggering events and fair value measurements, recognized during 2022, 2021, and 2020 were as follows:
Real Estate and Intangibles
The impairment charges described below are reflected within Impairment charges — real estate in our consolidated statements of income.
2022 — During the year ended December 31, 2022, we recognized impairment charges totaling $39.1 million on 11 properties in order to reduce their
carrying values to their estimated fair values, as follows:
•
•
$12.4 million on three properties based on their estimated selling prices; we sold one of these properties in August 2022;
$10.9 million on a property due to changes in expected cash flows related to the existing tenant’s lease expiration in 2023. The fair value
measurement was determined by estimating discounted cash flows using two significant unobservable inputs, which were the cash flow discount
rate (14.0%) and terminal capitalization rate (11.0%);
W. P. Carey 2022 10-K – 91
Notes to Consolidated Financial Statements
•
•
$9.3 million on six Pendragon PLC properties in order to reduce the carrying values of the properties to their estimated fair values. The fair value
measurements for the properties were determined using a direct capitalization rate analysis; the capitalization rate for the various scenarios ranged
from 4.75% to 10.00%. In March 2022, we entered into a transaction to restructure certain leases with Pendragon PLC (a tenant at certain
automotive dealerships in the United Kingdom). Under this restructuring, we extended the leases on 30 properties by 11 years (no change to rent)
and entered into an agreement to dispose of 12 properties, with the tenant continuing to pay rent until the earlier of sale date or certain specified
dates over the following 12 months; and
$6.5 million on a property due to a potential property vacancy.
2021 — During the year ended December 31, 2021, we recognized impairment charges totaling $24.2 million on two properties in order to reduce the
carrying values of the properties to their estimated fair values, as follows:
•
•
$16.3 million on a property due to the former tenant’s non-renewal of its lease expiring in 2022; the fair value measurement was determined by
estimating discounted cash flows using four significant unobservable inputs, which were the cash flow discount rate (range of 7.00% to 9.00%),
terminal capitalization rate (range of 6.00% to 7.00%), estimated market rents (range of $10 to $11 per square foot), and estimated capital
expenditures ($100 per square foot); we sold this property in September 2022; and
$7.9 million on a property due to a lease termination and resulting vacancy; the fair value measurement for the property was based on the sales
prices for comparable properties.
2020 — During the year ended December 31, 2020, we recognized impairment charges totaling $35.8 million on six properties in order to reduce the
carrying values of the properties to their estimated fair values, as follows:
•
•
•
•
•
$16.0 million on two properties leased to the same tenant, due to potential property vacancies; the fair value measurements for the properties were
determined using a direct capitalization rate analysis based on the probability of vacancy versus the tenant continuing in the lease; the
capitalization rate for the various scenarios ranged from 6% to 11%;
$12.6 million on an international property due to a tenant bankruptcy; the fair value measurement for the property was determined by using a
probability-weighted approach of lease restructure and vacancy scenarios;
$3.4 million on an international property based on its estimated selling price; we sold this property in September 2020;
$2.8 million on an international property due to a lease expiration and resulting vacancy; the fair value measurement for the property
approximated its estimated selling price; we sold this property in May 2022; and
$1.0 million on a property based on its estimated selling price; we sold this property in September 2021.
Investment Management Goodwill
The impairment charges described below are reflected within Impairment charges — Investment Management goodwill in our consolidated statements of
income.
2022 — During the year ended December 31, 2022, we recognized an impairment charge of $29.3 million on goodwill within our Investment Management
segment in order to reduce its carrying value to its estimated fair value of $0, since future Investment Management cash flows are expected to be minimal
following the CPA:18 Merger (Note 3).
Equity Method Investments
The other-than-temporary impairment charges described below are reflected within Earnings (losses) from equity method investments in our consolidated
statements of income.
2021 — During the year ended December 31, 2021, we recognized an other-than-temporary impairment charge of $6.8 million on a jointly owned real
estate investment to reduce the carrying value of our investment to its estimated fair value, which declined due to changes in expected cash flows related to
the existing tenant’s lease expiration in 2028. The fair value measurement was determined by estimating discounted cash flows using three significant
unobservable inputs, which were the cash flow discount rate (5.75%), residual discount rate (7.50%), and residual capitalization rate (6.75%).
W. P. Carey 2022 10-K – 92
Notes to Consolidated Financial Statements
2020 — During the year ended December 31, 2020, we recognized other-than-temporary impairment charges of $27.8 million and $19.3 million on our
equity method investments in CWI 1 and CWI 2, respectively, to reduce the carrying values of our investments to their estimated fair values, due to the
COVID-19 pandemic, which had an adverse effect on the operations of CWI 1 and CWI 2. The fair value measurements were estimated based on implied
asset value changes and changes in market capitalizations for publicly traded lodging REITs, all of which was obtained from third-party market data.
During the year ended December 31, 2020, we recognized an other-than-temporary impairment charge of $8.3 million on a jointly owned real estate
investment to reduce the carrying value of our investment to its estimated fair value, which declined due to an uncertain probability of lease renewal with
the tenant at the international office facility owned by the investment (lease expiration is in May 2023). The fair value measurement was determined by
relying on an estimate of the fair market value of the property and the related mortgage loan, both provided by a third party.
Note 10. Risk Management and Use of Derivative Financial Instruments
Risk Management
In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us:
interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including
our Senior Unsecured Credit Facility (Note 11) and unhedged variable-rate non-recourse mortgage loans. Credit risk is the risk of default on our operations
and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related
loans, Senior Unsecured Notes, other securities, and the limited partnership units we hold in CESH, due to changes in interest rates or other market factors.
We own investments in North America, Europe, and Japan and are subject to risks associated with fluctuating foreign currency exchange rates.
Derivative Financial Instruments
When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements.
We have not entered into, and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to entering into derivative
instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, and we may be granted common
stock warrants by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of
derivative instruments include a counterparty to a hedging arrangement defaulting on its obligation and a downgrade in the credit quality of a counterparty
to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into
hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to
limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as
transaction or breakage fees. We have established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative
financial instrument activities.
We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable
derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For derivatives designated and that
qualify as cash flow hedges, the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is
recognized in earnings. Gains and losses on the cash flow hedges representing hedge components excluded from the assessment of effectiveness are
recognized in earnings over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting
policy election. Such gains and losses are recorded within Other gains and (losses) or Interest expense in our consolidated statements of income. The
earnings recognition of excluded components is presented in the same line item as the hedged transactions. For derivatives designated and that qualify as a
net investment hedge, the change in the fair value and/or the net settlement of the derivative is reported in Other comprehensive (loss) income as part of the
cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive (loss) income into earnings (within Gain on sale
of real estate, net, in our consolidated statements of income) when the hedged net investment is either sold or substantially liquidated.
All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can
be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements.
At both December 31, 2022 and 2021, no cash collateral had been posted nor received for any of our derivative positions.
W. P. Carey 2022 10-K – 93
The following table sets forth certain information regarding our derivative instruments (in thousands):
Notes to Consolidated Financial Statements
Derivatives Designated as Hedging Instruments
Foreign currency collars
Interest rate swaps
Interest rate caps
(a)
Foreign currency collars
Interest rate swaps
Derivatives Not Designated as Hedging Instruments
Stock warrants
Foreign currency collars
Total derivatives
__________
Balance Sheet Location
Other assets, net
Other assets, net
Other assets, net
Accounts payable,
accrued expenses and
other liabilities
Accounts payable,
accrued expenses and
other liabilities
Other assets, net
Accounts payable,
accrued expenses and
other liabilities
Asset Derivatives Fair Value at
Liability Derivatives Fair Value at
December 31, 2022
$
32,631 $
2,679
14
December 31, 2021
December 31, 2022
December 31, 2021
19,484 $
—
1
— $
—
—
—
—
—
—
—
(1,445)
(1,311)
—
35,324
3,950
—
19,485
4,600
—
(1,445)
—
—
3,950
39,274 $
—
4,600
24,085 $
(248)
(248)
(1,693) $
$
(908)
(2,219)
—
—
—
(2,219)
(a)
In connection with the CPA:18 Merger on August 1, 2022, we acquired five interest rate swaps, which had an aggregate fair value of $0.4 million on
the date of acquisition.
The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands):
Derivatives in Cash Flow Hedging Relationships
Foreign currency collars
Interest rate swaps
Interest rate caps
Foreign currency forward contracts
Derivatives in Net Investment Hedging Relationships
Foreign currency collars
(b)
Total
Derivatives in Cash Flow Hedging Relationships
Foreign currency collars
Interest rate swaps and caps
Foreign currency forward contracts
(c)
Location of Gain (Loss) Recognized in Income
Non-operating income
Interest expense
Non-operating income
Total
__________
Amount of Gain (Loss) Recognized on Derivatives in
Other Comprehensive (Loss) Income
Years Ended December 31,
(a)
2022
2021
2020
13,013 $
3,068
16
—
—
16,097 $
29,805 $
4,198
6
—
—
34,009 $
(24,818)
(1,553)
6
(5,272)
9
(31,628)
Amount of Gain (Loss) on Derivatives Reclassified from
Other Comprehensive (Loss) Income
Years Ended December 31,
2022
2021
2020
17,483 $
(167)
—
17,316 $
854 $
(932)
—
(78) $
4,956
(1,818)
5,716
8,854
$
$
$
$
(a) Excludes net gains of $3.6 million, net gains of $1.3 million, and net losses of $0.3 million recognized on unconsolidated jointly owned investments
for the years ended December 31, 2022, 2021, and 2020, respectively.
W. P. Carey 2022 10-K – 94
Notes to Consolidated Financial Statements
(b) The changes in fair value of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income.
(c) Amount for the year ended December 31, 2021 excludes other comprehensive income totaling $3.1 million that was released from the consolidated
financial statements (along with the related liability balances) upon the termination of interest rate swaps in connection with certain prepayments of
non-recourse mortgage loans during the period (Note 11).
Amounts reported in Other comprehensive (loss) income related to interest rate derivative contracts will be reclassified to Interest expense as interest is
incurred on our variable-rate debt. Amounts reported in Other comprehensive (loss) income related to foreign currency derivative contracts will be
reclassified to Non-operating income when the hedged foreign currency contracts are settled. As of December 31, 2022, we estimate that an additional $1.6
million and $14.6 million will be reclassified as Interest expense and Non-operating income, respectively, during the next 12 months.
The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands):
Derivatives in Cash Flow Hedging Relationships
Foreign currency collars
Interest rate swaps
Foreign currency forward contracts
Derivatives Not in Cash Flow Hedging
Relationships
Stock warrants
Foreign currency collars
Interest rate swaps
Total
Location of Gain (Loss) Recognized in Income
Non-operating income
Interest expense
Non-operating income
Other gains and (losses)
Other gains and (losses)
Other gains and (losses)
See below for information on our purposes for entering into derivative instruments.
Interest Rate Swaps and Caps
Amount of Gain (Loss) on Derivatives Recognized in Income
Years Ended December 31,
2022
2021
2020
6,574 $
171
—
(650)
(248)
—
5,847 $
1,503 $
1,592
—
(1,200)
—
—
1,895 $
(2,477)
2,132
(43)
800
—
106
518
$
$
We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt
financing on a fixed-rate basis. However, from time to time, we or our investment partners have obtained, and may in the future obtain, variable-rate, non-
recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements
with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in
which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on
which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing
participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.
The interest rate swaps and caps that our consolidated subsidiaries had outstanding at December 31, 2022 are summarized as follows (currency in
thousands):
Interest Rate Derivatives
Designated as Cash Flow Hedging Instruments
Interest rate swaps
Interest rate swaps
Interest rate cap
__________
Number of Instruments
Notional
Amount
Fair Value at
December 31, 2022
(a)
5
2
1
34,918 USD
45,970 EUR
10,452 EUR
$
$
1,399
1,280
14
2,693
(a) Fair value amounts are based on the exchange rate of the euro at December 31, 2022, as applicable.
W. P. Carey 2022 10-K – 95
Notes to Consolidated Financial Statements
Foreign Currency Collars
We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling and certain other
currencies. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency collars. A foreign currency collar consists
of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar
guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency collars have
maturities of 62 months or less.
The following table presents the foreign currency derivative contracts we had outstanding at December 31, 2022 (currency in thousands):
Foreign Currency Derivatives
Designated as Cash Flow Hedging Instruments
Foreign currency collars
Foreign currency collars
Not Designated as Cash Flow Hedging Instruments
Foreign currency collars
Credit Risk-Related Contingent Features
Number of Instruments
Notional
Amount
Fair Value at
December 31, 2022
75
69
4
295,400 EUR
44,520 GBP
29,500 EUR
$
$
25,578
5,608
(248)
30,938
We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received.
No collateral was received as of December 31, 2022. At December 31, 2022, our total credit exposure and the maximum exposure to any single
counterparty was $33.8 million and $6.0 million, respectively.
Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our
derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At December 31, 2022, we had not been
declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $1.7 million and $2.2
million at December 31, 2022 and 2021, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of
these provisions at December 31, 2022 or 2021, we could have been required to settle our obligations under these agreements at their aggregate termination
value of $1.7 million and $2.3 million, respectively.
Net Investment Hedges
Borrowings under our Senior Unsecured Notes, Unsecured Revolving Credit Facility, and Unsecured Term Loans (all as defined in Note 11) denominated
in euro, British pounds sterling, or Japanese yen are designated as, and are effective as, economic hedges of our net investments in foreign entities.
Exchange rate variations impact our financial results because the financial results of our foreign subsidiaries are translated to U.S. dollars each period, with
the effect of exchange rate variations being recorded in Other comprehensive (loss) income as part of the cumulative foreign currency translation
adjustment. As a result, changes in the value of our borrowings under our euro-denominated senior notes and changes in the value of our euro, Japanese
yen, and British pound sterling borrowings under our Senior Unsecured Credit Facility, related to changes in the spot rates, will be reported in the same
manner as foreign currency translation adjustments, which are recorded in Other comprehensive (loss) income as part of the cumulative foreign currency
translation adjustment. Such gains (losses) related to non-derivative net investment hedges were $214.3 million, $255.9 million, and $(280.4) million for
the years ended December 31, 2022, 2021, and 2020, respectively.
W. P. Carey 2022 10-K – 96
Notes to Consolidated Financial Statements
Note 11. Debt
Senior Unsecured Credit Facility
On February 20, 2020, we entered into the Fourth Amended and Restated Credit Facility, which has capacity of approximately $2.1 billion, comprised of (i)
a $1.8 billion unsecured revolving credit facility for our working capital needs, acquisitions, and other general corporate purposes (our “Unsecured
Revolving Credit Facility”), (ii) a £150.0 million term loan (our “Term Loan”), and (iii) a €96.5 million delayed draw term loan (our “Delayed Draw Term
Loan”). We refer to our Term Loan and Delayed Draw Term Loan collectively as the “Unsecured Term Loans” and the entire facility collectively as our
“Senior Unsecured Credit Facility.” In December 2021, the Senior Unsecured Credit Facility was amended to transition certain London Inter-bank Offered
Rate (“LIBOR”)-based rates that were discontinued after December 31, 2021 to successor alternative reference rates. The updated reference rates are
included in the Senior Unsecured Credit Facility table below. As of December 31, 2022 and 2021, this reference rate transition impacted only our Senior
Unsecured Credit Facility.
In April 2022, we entered into a Second Amendment to the Credit Agreement to increase the Term Loan to £270.0 million and the Delayed Draw Term
Loan to €215.0 million, thereby increasing the total capacity of our Senior Unsecured Credit Facility to approximately $2.4 billion. There were no other
changes to the terms of our Credit Agreement. We used the approximately $300 million of proceeds from this increase in the capacity of our Unsecured
Term Loans to partially repay amounts outstanding under our Unsecured Revolving Credit Facility.
The Senior Unsecured Credit Facility includes the ability to borrow in certain currencies other than U.S. dollars and has a maturity date of February 20,
2025. As of December 31, 2022, the aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit Facility was
able to be increased up to an amount not to exceed the U.S. dollar equivalent of $2.75 billion, subject to the conditions to increase set forth in the Credit
Agreement. In January 2023, we entered into a Third Amendment to the Credit Agreement to (i) transition from LIBOR to the Secured Overnight
Financing Rate (“SOFR”) and (ii) increase the aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit
Facility to an amount not to exceed the U.S. dollar equivalent of $3.05 billion, subject to the conditions to increase set forth in the Credit Agreement. See
Note 18, Subsequent Events for more information about this amendment.
At December 31, 2022, our Unsecured Revolving Credit Facility had available capacity of approximately $1.5 billion (net of amounts reserved for standby
letters of credit totaling $0.6 million). We incur an annual facility fee of 0.20% of the total commitment on our Unsecured Revolving Credit Facility, which
is included within Interest expense in our consolidated statements of income.
The following table presents a summary of our Senior Unsecured Credit Facility (dollars in thousands):
Senior Unsecured Credit Facility
Unsecured Term Loans:
Interest Rate at December 31,
2022
(a)
Maturity Date at
December 31, 2022
Principal Outstanding Balance at
December 31,
2022
2021
Term Loan — borrowing in British pounds sterling
(b) (c) (d)
Delayed Draw Term Loan — borrowing in euros
(e)
SONIA + 0.85%
EURIBOR + 0.85%
2/20/2025
2/20/2025
Unsecured Revolving Credit Facility:
(e)
Borrowing in euros
Borrowing in Japanese yen
Borrowing in British pounds sterling
(f)
EURIBOR + 0.775%
TIBOR + 0.775%
N/A
2/20/2025
2/20/2025
2/20/2025
$
$
324,695 $
229,319
554,014
258,117
18,275
—
276,392
830,406 $
202,183
109,296
311,479
205,001
20,935
184,660
410,596
722,075
__________
(a) The applicable interest rate at December 31, 2022 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa1.
(b) Balance excludes unamortized discount of $1.5 million and $0.9 million at December 31, 2022 and 2021, respectively.
(c) SONIA means Sterling Overnight Index Average.
W. P. Carey 2022 10-K – 97
Notes to Consolidated Financial Statements
(d) Interest rate includes both a spread adjustment to the base rate and a credit spread.
(e) EURIBOR means Euro Interbank Offered Rate.
(f) TIBOR means Tokyo Interbank Offered Rate.
Senior Unsecured Notes
As set forth in the table below, we have euro and U.S. dollar-denominated senior unsecured notes outstanding with an aggregate principal balance
outstanding of $6.0 billion at December 31, 2022 (the “Senior Unsecured Notes”).
On September 28, 2022, we completed a private placement of (i) €150 million of 3.41% Senior Notes due 2029, which have a 7-year term and are
scheduled to mature on September 28, 2029, and (ii) €200 million of 3.70% Senior Notes due 2032, which have a 10-year term and are scheduled to mature
on September 28, 2032.
We redeemed the €500.0 million of 2.0% Senior Notes due 2023 in March 2021. In connection with this redemption, we paid a “make-whole” amount of
$26.2 million (based on the exchange rate of the euro as of the date of redemption) and recognized a loss on extinguishment of $28.2 million, which is
included within Other gains and (losses) on our consolidated statements of income for the year ended December 31, 2021.
Interest on the Senior Unsecured Notes is payable annually in arrears for our euro-denominated senior notes and semi-annually for U.S. dollar-denominated
senior notes. The Senior Unsecured Notes can be redeemed at par within three months of their respective maturities, or we can call the notes at any time for
the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 20 to 35 basis points. The following table
presents a summary of our Senior Unsecured Notes outstanding at December 31, 2022 (currency in thousands):
(a)
Senior Unsecured Notes, net
4.6% Senior Notes due 2024
2.25% Senior Notes due 2024
4.0% Senior Notes due 2025
2.250% Senior Notes due 2026
4.25% Senior Notes due 2026
2.125% Senior Notes due 2027
1.350% Senior Notes due 2028
3.850% Senior Notes due 2029
3.41% Senior Notes due 2029
0.950% Senior Notes due 2030
2.400% Senior Notes due 2031
2.450% Senior Notes due 2032
3.70% Senior Notes due 2032
2.250% Senior Notes due 2033
__________
Issue Date
3/14/2014
1/19/2017
1/26/2015
10/9/2018
9/12/2016
3/6/2018
9/19/2019
6/14/2019
9/28/2022
3/8/2021
10/14/2020
10/15/2021
9/28/2022
2/25/2021
Principal Amount
500,000
$
500,000
€
450,000
$
500,000
€
350,000
$
500,000
€
500,000
€
325,000
$
150,000
€
525,000
€
500,000
$
350,000
$
200,000
€
425,000
$
Coupon Rate
4.6 %
2.25 %
4.0 %
2.250 %
4.25 %
2.125 %
1.350 %
3.850 %
3.41 %
0.950 %
2.400 %
2.450 %
3.70 %
2.250 %
Maturity Date
4/1/2024
7/19/2024
2/1/2025
4/9/2026
10/1/2026
4/15/2027
4/15/2028
7/15/2029
9/28/2029
6/1/2030
2/1/2031
2/1/2032
9/28/2032
4/1/2033
Principal Outstanding Balance at December
31,
2022
2021
$
$
500,000 $
533,300
450,000
533,300
350,000
533,300
533,300
325,000
159,990
559,965
500,000
350,000
213,320
425,000
5,966,475 $
500,000
566,300
450,000
566,300
350,000
566,300
566,300
325,000
—
594,615
500,000
350,000
—
425,000
5,759,815
(a) Aggregate balance excludes unamortized deferred financing costs totaling $25.9 million and $28.7 million, and unamortized discount totaling $24.1
million and $29.2 million at December 31, 2022 and 2021, respectively.
In connection with the private placement of the €150 million of 3.41% Senior Notes due 2029 and the €200 million of 3.70% Senior Notes due 2032 in
September 2022, we incurred financing costs totaling $2.6 million during the year ended December 31, 2022, which are included in the Senior Unsecured
Notes, net in the consolidated financial statements and are being amortized to Interest expense over the term of their respective Senior Notes.
W. P. Carey 2022 10-K – 98
Notes to Consolidated Financial Statements
Covenants
The Credit Agreement, each of the Senior Unsecured Notes, and certain of our non-recourse mortgage loan agreements include customary financial
maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. The Credit Agreement also contains various
customary affirmative and negative covenants applicable to us and our subsidiaries, subject to materiality and other qualifications, baskets, and exceptions
as outlined in the Credit Agreement. We were in compliance with all of these covenants at December 31, 2022.
We may make unlimited Restricted Payments (as defined in the Credit Agreement), as long as no non-payment default or financial covenant default has
occurred before, or would on a pro forma basis occur as a result of, the Restricted Payment. In addition, we may make Restricted Payments in an amount
required to (i) maintain our REIT status and (ii) as a result of that status, not pay federal or state income or excise tax, as long as the loans under the Credit
Agreement have not been accelerated and no bankruptcy or event of default has occurred.
Obligations under the Unsecured Revolving Credit Facility may be declared immediately due and payable upon the occurrence of certain events of default
as defined in the Credit Agreement, including failure to pay any principal when due and payable, failure to pay interest within five business days after
becoming due, failure to comply with any covenant, representation or condition of any loan document, any change of control, cross-defaults, and certain
other events as set forth in the Credit Agreement, with grace periods in some cases.
Non-Recourse Mortgages
Non-recourse mortgages consist of mortgage notes payable, which are collateralized by the assignment of real estate properties. For a list of our
encumbered properties, please see Schedule III — Real Estate and Accumulated Depreciation. At December 31, 2022, the weighted-average interest rate
for our total non-recourse mortgage notes payable was 4.3% (fixed-rate and variable-rate non-recourse mortgage notes payable were 4.4% and 4.1%,
respectively), with maturity dates ranging from January 2023 to April 2039.
CPA:18 Merger
In connection with the CPA:18 Merger on August 1, 2022 (Note 3), we assumed property-level debt comprised of non-recourse mortgage loans with fair
values totaling $900.2 million and recorded an aggregate fair market value net discount of $13.1 million. The fair market value net discount will be
amortized to interest expense over the remaining lives of the related loans. These non-recourse mortgage loans had a weighted-average annual interest rate
of 5.1% on the merger date.
Repayments During 2022
During the year ended December 31, 2022, we (i) repaid non-recourse mortgage loans at or close to maturity with an aggregate principal balance of
approximately $104.7 million, and (ii) prepaid non-recourse mortgage loans totaling $10.4 million. We recognized an aggregate net loss on extinguishment
of debt of $1.3 million on these repayments, which is included within Other gains and (losses) on our consolidated statements of income. The weighted-
average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 4.4%.
Repayments During 2021
During the year ended December 31, 2021, we (i) prepaid non-recourse mortgage loans totaling $745.1 million, and (ii) repaid non-recourse mortgage
loans at or close to maturity with an aggregate principal balance of approximately $32.7 million. We recognized an aggregate net loss on extinguishment of
debt of $47.2 million on these repayments, primarily comprised of prepayment penalties totaling $45.2 million, which is included within Other gains and
(losses) on our consolidated statements of income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of
repayment was 4.8%.
Interest Paid
For the years ended December 31, 2022, 2021, and 2020, interest paid was $191.0 million, $190.8 million, and $190.6 million, respectively.
W. P. Carey 2022 10-K – 99
Foreign Currency Exchange Rate Impact
During the year ended December 31, 2022, the U.S. dollar strengthened against the euro, resulting in an aggregate decrease of $224.4 million in the
aggregate carrying values of our Non-recourse mortgages, net, Senior Unsecured Credit Facility, and Senior Unsecured Notes, net from December 31, 2021
to December 31, 2022.
Notes to Consolidated Financial Statements
Scheduled Debt Principal Payments
Scheduled debt principal payments as of December 31, 2022 are as follows (in thousands):
Years Ending December 31,
2023
2024
2025
2026
2027
Thereafter through 2039
Total principal payments
Unamortized discount, net
Unamortized deferred financing costs
Total
$
$
Total
456,708
1,231,468
1,664,276
983,425
533,760
3,070,039
7,939,676
(35,936)
(25,992)
7,877,748
Certain amounts are based on the applicable foreign currency exchange rate at December 31, 2022.
Note 12. Commitments and Contingencies
At December 31, 2022, we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending
against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.
Note 13. Equity
Common Stock
Dividends paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. Our dividends
per share are summarized as follows:
Ordinary income
Return of capital
Capital gains
Total dividends paid
Dividends Paid
During the Years Ended December 31,
2022
2021
2020
$
$
4.0329 $
0.1718
0.0273
4.2320 $
3.3300 $
0.5407
0.3253
4.1960 $
3.3112
—
0.8528
4.1640
During the fourth quarter of 2022, our Board declared a quarterly dividend of $1.065 per share, which was paid on January 13, 2023 to stockholders of
record as of December 30, 2022.
W. P. Carey 2022 10-K – 100
Earnings Per Share
The following table summarizes basic and diluted earnings (dollars in thousands):
Net income – basic and diluted
Weighted-average shares outstanding – basic
Effect of dilutive securities
Weighted-average shares outstanding – diluted
Notes to Consolidated Financial Statements
Years Ended December 31,
2022
2021
2020
$
599,139 $
409,988 $
455,359
199,633,802
793,322
200,427,124
182,486,476
640,622
183,127,098
174,504,406
335,022
174,839,428
For the years ended December 31, 2022, 2021, and 2020, potentially dilutive securities excluded from the computation of diluted earnings per share were
insignificant.
ATM Program
On May 2, 2022, we established a continuous “at-the-market” offering program (“ATM Program”) with a syndicate of banks, pursuant to which shares of
our common stock having an aggregate gross sales price of up to $1.0 billion may be sold (i) directly through or to the banks acting as sales agents or as
principal for their own accounts or (ii) through or to participating banks or their affiliates acting as forward sellers on behalf of any forward purchasers
pursuant to a forward sale agreement (our “ATM Forwards”). Effective as of that date, we terminated a prior ATM Program that was established on August
9, 2019, under which we were able to offer and sell shares of our common stock from time to time, up to an aggregate gross sales price of $750.0 million,
with a syndicate of banks.
The following table sets forth certain information regarding the issuance of shares of our common stock under our prior ATM Program during the periods
presented (net proceeds in thousands):
Shares of common stock issued
Weighted-average price per share
Net proceeds
Forward Equity
Years Ended December 31,
2022
2021
2020
$
$
2,740,295
80.79 $
218,081 $
4,690,073
73.42 $
339,968 $
2,500
72.05
159
We expect to settle the ATM Forwards in full on or prior to the maturity date of each ATM Forward via physical delivery of the outstanding shares of
common stock in exchange for cash proceeds. However, subject to certain exceptions, we may also elect to cash settle or net share settle all or any portion
of our obligations under any ATM Forwards. The forward sale price that we will receive upon physical settlement of the ATM Forwards will be (i) subject
to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread (i.e., if the specified daily rate is less than
the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price) and (ii) decreased based on amounts
related to expected dividends on shares of our common stock during the term of the ATM Forwards.
We determined that our ATM Forwards meet the criteria for equity classification and are therefore exempt from derivative accounting. We recorded the
ATM Forwards at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification.
From time to time, we have entered into underwriting agreements and forward sale agreements with syndicates of banks acting as underwriters, forward
sellers, and/or forward purchasers in connection with public offerings of our common stock. At the closing of these transactions, the offered shares were
borrowed from third parties by the banks acting as forward purchasers and sold to the underwriters for distribution at the respective gross offering prices.
As a result of this forward construct, we did not receive any proceeds from the sale of shares at the closing of each offering, but rather at later settlement
dates. We have determined that the forward sale agreements meet the criteria for equity classification and are therefore exempt from derivative accounting.
We recorded the forward sale agreements at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required
under equity classification.
W. P. Carey 2022 10-K – 101
We refer to our three forward equity offerings presented below as the June 2020 Equity Forwards, June 2021 Equity Forwards, and August 2021 Equity
Forwards (collectively, the “Equity Forwards”). Our ATM Forwards are also presented below (gross offering proceeds at closing in thousands):
Agreement Date
(a)
Shares Offered
(b)
Gross Offering Price
Gross Offering Proceeds
at Closing
Outstanding Shares as of
December 31, 2022
Notes to Consolidated Financial Statements
(c)
June 2020 Equity Forwards
June 2021 Equity Forwards
August 2021 Equity Forwards
ATM Forwards
(c)
(e)
(d)
6/17/2020
6/7/2021
8/9/2021
5/2/2022
5,462,500 $
6,037,500
5,175,000
6,524,437
70.00 $
75.30
78.00
84.09
382,375
454,624
403,650
548,626
—
—
—
6,524,437
6,524,437
__________
(a) We expect to settle the Equity Forwards in full within 18 months of the respective agreement dates via physical delivery of the outstanding shares of
common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations
under the Equity Forwards, subject to certain conditions.
(b) Includes 712,500, 787,500, and 675,000 shares of common stock purchased by certain underwriters in connection with the June 2020 Equity Forwards,
June 2021 Equity Forwards, and August 2021 Equity Forwards, respectively, upon the exercise of 30-day options to purchase additional shares.
(c) All remaining outstanding shares were settled during the year ended December 31, 2021.
(d) All remaining outstanding shares were settled during the year ended December 31, 2022.
(e) We sold shares under our ATM Forwards during the year ended December 31, 2022. We did not settle any of the shares sold and therefore did not
receive any proceeds from such sales. See Note 18, Subsequent Events for sales through our ATM Forwards subsequent to December 31, 2022 and
through the date of this Report.
The following table sets forth certain information regarding the settlement of our Equity Forwards during the periods presented (dollars in thousands):
Shares of common stock delivered
Net proceeds
Years Ended December 31,
2022
2021
2020
$
3,925,000
284,259 $
9,798,209
697,044 $
2,951,791
199,716
W. P. Carey 2022 10-K – 102
Notes to Consolidated Financial Statements
Reclassifications Out of Accumulated Other Comprehensive Loss
The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):
Balance at January 1, 2020
Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive loss to:
Non-operating income
Interest expense
Total
Net current period other comprehensive income
Net current period other comprehensive income attributable to noncontrolling
interests
Balance at December 31, 2020
Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense
Non-operating income
Total
Net current period other comprehensive income
Net current period other comprehensive income attributable to noncontrolling
interests
Balance at December 31, 2021
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other comprehensive loss to:
Non-operating income
Interest expense
Other gains and (losses) (Note 9)
Total
Net current period other comprehensive loss
Net current period other comprehensive income attributable to noncontrolling
interests
Balance at December 31, 2022
Gains and (Losses)
on Derivative
Instruments
Foreign Currency
Translation
Adjustments
Gains and (Losses)
on Investments
$
13,048 $
(23,124)
(268,715) $
47,746
— $
—
(10,672)
1,818
(8,854)
(31,978)
(7)
(18,937)
35,227
932
(854)
78
35,305
(21)
16,347
37,048
(17,483)
167
—
(17,316)
19,732
—
—
—
47,746
—
(220,969)
(35,736)
—
—
—
(35,736)
—
(256,705)
(63,149)
—
—
—
—
(63,149)
—
—
—
—
—
—
18,688
—
—
—
18,688
—
18,688
—
—
—
(18,688)
(18,688)
(18,688)
Total
(255,667)
24,622
(10,672)
1,818
(8,854)
15,768
(7)
(239,906)
18,179
932
(854)
78
18,257
(21)
(221,670)
(26,101)
(17,483)
167
(18,688)
(36,004)
(62,105)
—
36,079 $
(5)
(319,859) $
$
—
— $
(5)
(283,780)
See Note 10 for additional information on our derivatives activity recognized within Other comprehensive (loss) income for the periods presented.
W. P. Carey 2022 10-K – 103
Notes to Consolidated Financial Statements
Note 14. Stock-Based and Other Compensation
Stock-Based Compensation
At December 31, 2022, we maintained several stock-based compensation plans as described below. The total compensation expense (net of forfeitures) for
awards issued under these plans was $32.8 million, $24.9 million, and $15.9 million for the years ended December 31, 2022, 2021, and 2020, respectively,
which was included in Stock-based compensation expense in the consolidated financial statements. The tax (expense) benefit recognized by us related to
these awards totaled $(4.3) million, $0.8 million, and $4.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. The tax benefits
for the years ended December 31, 2022, 2021, and 2020 were reflected as a deferred tax benefit within (Provision for) benefit from income taxes in the
consolidated financial statements.
2017 Share Incentive Plan
We maintain the 2017 Share Incentive Plan, which authorizes the issuance of up to 4,000,000 shares of our common stock. The 2017 Share Incentive Plan
provides for the grant of various stock- and cash-based awards, including (i) share options, (ii) RSUs, (iii) PSUs, (iv) RSAs, and (v) dividend equivalent
rights. At December 31, 2022, 2,186,067 shares remained available for issuance under the 2017 Share Incentive Plan, which is more fully described in the
2019 Annual Report.
Employee Share Purchase Plan
We sponsor an employee share purchase plan (“ESPP”) pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain
limits, to purchase our common stock semi-annually at a price equal to 90% of the fair market value at certain plan defined dates. Compensation expense
under this plan for each of the years ended December 31, 2022, 2021, and 2020 was less than $0.1 million. Cash received from purchases under the ESPP
during the years ended December 31, 2022, 2021, and 2020 was $0.2 million, $0.3 million, and $0.4 million, respectively.
Restricted and Conditional Awards
Nonvested RSAs, RSUs, and PSUs at December 31, 2022 and changes during the years ended December 31, 2022, 2021, and 2020 were as follows:
(b)
Nonvested at January 1, 2020
Granted
(a)
Vested
Forfeited
Adjustment
Nonvested at December 31, 2020
Granted
(a)
Vested
Forfeited
Adjustment
Nonvested at December 31, 2021
Granted
(a)
Vested
Forfeited
Adjustment
(b)
(b)
(c)
Nonvested at December 31, 2022
(d)
__________
RSA and RSU Awards
PSU Awards
Shares
Weighted-Average Grant
Date Fair Value
Shares
Weighted-Average Grant
Date Fair Value
283,977 $
146,162
(163,607)
(5,555)
—
260,977
194,940
(137,267)
(11,656)
—
306,994
235,348
(154,028)
(12,016)
—
376,298 $
68.51
81.02
69.62
71.69
—
74.75
66.40
71.99
60.98
—
71.21
80.28
72.80
75.93
—
74.78
331,242 $
90,518
(156,838)
(6,715)
3,806
262,013
134,290
(151,678)
(16,463)
170,093
398,255
144,311
(165,615)
(4,262)
159,092
531,781 $
80.90
104.65
80.42
88.94
62.07
88.99
86.19
76.04
93.91
71.17
86.86
104.97
92.16
98.26
80.90
89.14
W. P. Carey 2022 10-K – 104
Notes to Consolidated Financial Statements
(a) The grant date fair value of shares vested during the years ended December 31, 2022, 2021, and 2020 was $26.5 million, $21.4 million, and $24.0
million, respectively. Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to
previously made deferral elections. At December 31, 2022 and 2021, we had an obligation to issue 1,181,947 and 1,104,020 shares, respectively, of our
common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $57.0
million and $49.8 million, respectively.
(b) Vesting and payment of the PSUs is conditioned upon certain company and/or market performance goals being met during the relevant three-year
performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from
zero to three times the original awards. As a result, we recorded adjustments to reflect the number of shares expected to be issued when the PSUs vest.
(c) The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a one-for-one basis. The grant date fair value of PSUs was
determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the three-year performance period and
(ii) future financial performance projections. To estimate the fair value of PSUs granted during the year ended December 31, 2022, we used a risk-free
interest rate of 1.2%, an expected volatility rate of 36.7%, and assumed a dividend yield of zero.
(d) At December 31, 2022, total unrecognized compensation expense related to these awards was approximately $34.4 million, with an aggregate
weighted-average remaining term of 1.8 years.
At the end of each reporting period, we evaluate the ultimate number of PSUs we expect to vest (based upon the extent to which we have met and expect to
meet the performance goals) and where appropriate, revise our estimate and associated expense. We do not revise the associated expense on PSUs expected
to vest based on market performance. Upon vesting, the RSUs and PSUs may be converted into shares of our common stock. Both the RSUs and PSUs
carry dividend equivalent rights. Dividend equivalent rights on RSUs issued under the predecessor employee plan are paid in cash on a quarterly basis,
whereas dividend equivalent rights on RSUs issued under the 2017 Share Incentive Plan are accrued and paid in cash only when the underlying shares vest,
which is generally on an annual basis. Dividend equivalents on PSUs accrue during the performance period and are converted into additional shares of
common stock at the conclusion of the performance period to the extent the PSUs vest. Dividend equivalent rights are accounted for as a reduction to
retained earnings to the extent that the awards are expected to vest.
Profit-Sharing Plan
We sponsor a qualified profit-sharing plan and trust that generally permits all employees, as defined by the plan, to make pre-tax contributions into the
plan. We are under no obligation to contribute to the plan and the amount of any contribution is determined by and at the discretion of our Board. In
December 2022, 2021, and 2020, our Board determined that the contribution to the plan for each of those respective years would be 10% of an eligible
participant’s cash compensation, up to the legal maximum allowable in each of those years of $30,500 for 2022, $29,000 for 2021, and $28,500 for 2020.
For the years ended December 31, 2022, 2021, and 2020, amounts expensed for contributions to the trust were $2.3 million, $2.2 million, and $1.9 million,
respectively, which were included in General and administrative expenses in the consolidated financial statements. The profit-sharing plan is a deferred
compensation plan and is therefore considered to be outside the scope of current accounting guidance for stock-based compensation.
W. P. Carey 2022 10-K – 105
Note 15. Income Taxes
Income Tax Provision
The components of our provision for (benefit from) income taxes for the periods presented are as follows (in thousands):
Notes to Consolidated Financial Statements
Federal
Current
Deferred
(a)
State and Local
Current
Deferred
(a)
Foreign
Current
Deferred
Total Provision for (Benefit from) Income Taxes
Years Ended December 31,
2022
2021
2020
$
$
5,329 $
13
5,342
3,388
—
3,388
27,077
(8,083)
18,994
27,724 $
(405) $
17
(388)
3,008
(30)
2,978
30,599
(4,703)
25,896
28,486 $
(1,118)
(33,040)
(34,158)
3,284
(7,756)
(4,472)
26,137
(8,266)
17,871
(20,759)
A reconciliation of effective income tax for the periods presented is as follows (in thousands):
Pre-tax income (loss) attributable to taxable subsidiaries
(a) (b)
Federal provision at statutory tax rate (21%)
Change in valuation allowance
Non-deductible expense
State and local taxes, net of federal benefit
Windfall tax benefit
Rate differential
Revocation of TRS Status
Tax expense related to allocation of goodwill based on portion of Investment Management
(c)
business sold (Note 4)
Non-taxable income
Other
Total provision for (benefit from) income taxes
__________
Years Ended December 31,
2022
2021
2020
55,604 $
37,861 $
(56,789)
11,677 $
8,082
6,972
2,920
(1,896)
(387)
—
—
—
356
27,724 $
7,951 $
13,178
3,148
2,713
(1,375)
(232)
—
—
—
3,103
28,486 $
(11,926)
13,946
6,303
2,336
(2,132)
(632)
(37,249)
7,203
(2)
1,394
(20,759)
$
$
$
(a) Pre-tax loss attributable to taxable subsidiaries for 2020 was primarily driven by: (i) a portion of the other-than-temporary impairment charges totaling
$47.1 million recognized on our equity method investments in CWI 1 and CWI 2 (Note 9), (ii) the allocation of $34.3 million of goodwill within our
Investment Management segment as a result of the WLT management internalization (Note 4), and (iii) an impairment charge of $12.6 million
recognized on an international property (Note 9).
(b) Pre-tax income attributable to taxable subsidiaries for 2022 includes taxable income, recognized in connection with the CPA:18 Merger, associated
with the accelerated vesting of shares previously issued by CPA:18 – Global to us for asset management services performed.
W. P. Carey 2022 10-K – 106
Notes to Consolidated Financial Statements
(c) Amount for the year ended December 31, 2020 includes an aggregate deferred tax benefit of $37.2 million as a result of the release of a deferred tax
liability relating to our investment in shares of Lineage Logistics (Note 9), which converted to a REIT during the year and is therefore no longer
subject to federal and state income taxes
Benefit from income taxes for the year ended December 31, 2020 includes a deferred tax benefit of $6.3 million as a result of the other-than-temporary
impairment charges that we recognized on our equity method investments in CWI 1 and CWI 2 during the year (Note 9).
In light of the COVID-19 outbreak during the first quarter of 2020, we continue to monitor domestic and international tax considerations and the potential
impact on our consolidated financial statements. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (U.S. federal legislation enacted
on March 27, 2020 in response to the COVID-19 pandemic) provides that net operating losses incurred in 2018, 2019, or 2020 may be carried back to
offset taxable income earned during the five-year period prior to the year in which the net operating loss was incurred. As a result, we recognized a $4.7
million current tax benefit during the year ended December 31, 2020 by carrying back certain net operating losses, which is included in Benefit from
income taxes disclosed in the tables above.
Deferred Income Taxes
Deferred income taxes at December 31, 2022 and 2021 consist of the following (in thousands):
Deferred Tax Assets
(a)
Net operating loss and other tax credit carryforwards
Basis differences — foreign investments
Unearned and deferred compensation
Lease liabilities
Other
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred Tax Liabilities
(a)
Basis differences — foreign investments
ROU assets
Basis differences — equity investees
Total deferred tax liabilities
Net Deferred Tax Liability
__________
December 31,
2022
2021
$
$
63,454 $
62,099
643
—
1,242
127,438
(106,185)
21,253
(179,761)
—
—
(179,761)
(158,508) $
55,147
52,705
15,895
14,752
374
138,873
(108,812)
30,061
(145,524)
(12,637)
(1,195)
(159,356)
(129,295)
(a) Balances represent our basis differences for our office leases on domestic taxable subsidiaries. Basis differences on our foreign ground leases are
included within the line item Basis differences — foreign investments.
Our deferred tax assets and liabilities are primarily the result of temporary differences related to the following:
•
•
•
Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, we
assume the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the
GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets;
Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs,
straight-line rent, prepaid rents, and intangible assets, as well as unearned and deferred compensation;
Basis differences in equity investments represents fees earned in shares recognized under GAAP into income and deferred for U.S. taxes based
upon a share vesting schedule; and
W. P. Carey 2022 10-K – 107
Notes to Consolidated Financial Statements
•
Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions, that may be realized in future periods if the
respective subsidiary generates sufficient taxable income. Certain net operating losses and interest carryforwards were subject to limitations as a
result of the CPA:18 Merger, and thus could not be applied to reduce future income tax liabilities.
As of December 31, 2022, U.S. federal and state net operating loss carryforwards were $17.5 million and $11.4 million, respectively, which will begin to
expire in 2033. As of December 31, 2022, net operating loss carryforwards in foreign jurisdictions were $90.6 million, which will begin to expire in 2023.
The net deferred tax liability in the table above is comprised of deferred tax asset balances, net of certain deferred tax liabilities and valuation allowances,
of $20.5 million and $16.3 million at December 31, 2022 and 2021, respectively, which are included in Other assets, net in the consolidated balance sheets,
and other deferred tax liability balances of $179.0 million and $145.6 million at December 31, 2022 and 2021, respectively, which are included in Deferred
income taxes in the consolidated balance sheets.
Our taxable subsidiaries recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained on
examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest
amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return
and amounts recognized in the financial statements.
The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits (in thousands):
Beginning balance
Decrease due to lapse in statute of limitations
Increase due to CPA:18 Merger
Addition based on tax positions related to the prior year
Foreign currency translation adjustments
Addition based on tax positions related to the current year
Ending balance
Years Ended December 31,
2022
2021
$
$
5,994 $
(2,847)
2,694
543
(407)
241
6,218 $
6,312
(508)
—
315
(451)
326
5,994
At December 31, 2022 and 2021, we had unrecognized tax benefits as presented in the table above that, if recognized, would have a favorable impact on
our effective income tax rate in future periods. These unrecognized tax benefits are recorded as liabilities within Accounts payable, accrued expenses and
other liabilities on our consolidated balance sheets. We recognize interest and penalties related to uncertain tax positions in income tax expense. At
December 31, 2022 and 2021, we had approximately $1.6 million and $2.1 million, respectively, of accrued interest related to uncertain tax positions.
Income Taxes Paid
Income taxes paid were $42.6 million, $44.3 million, and $43.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.
Real Estate Operations
We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. In order to maintain our
qualification as a REIT, we are required, among other things, to distribute at least 90% of our REIT net taxable income to our stockholders and meet certain
tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income taxes on our income and gains that we distribute to our
stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other
factors. We believe that we have operated, and we intend to continue to operate, in a manner that allows us to continue to qualify as a REIT. We conduct
business primarily in North America and Europe, and as a result, we or one or more of our subsidiaries file income tax returns in the United States federal
jurisdiction and various state, local, and foreign jurisdictions.
W. P. Carey 2022 10-K – 108
Notes to Consolidated Financial Statements
Investment Management Operations
We conduct our investment management services in our Investment Management segment through TRSs. Our use of TRSs enables us to engage in certain
businesses while complying with the REIT qualification requirements and also allows us to retain income generated by these businesses for reinvestment
without the requirement to distribute those earnings. Certain of our inter-company transactions that have been eliminated in consolidation for financial
accounting purposes are also subject to taxation.
Tax authorities in the relevant jurisdictions may select our tax returns for audit and propose adjustments before the expiration of the statute of limitations.
Our tax returns filed for tax years 2017 through 2021 or any ongoing audits remain open to adjustment in the major tax jurisdictions.
Note 16. Property Dispositions
We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality
through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We
may decide to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or
lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-
leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for
that investment. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet. All property
dispositions are recorded within our Real Estate segment and are also discussed in Note 5 and Note 6.
2022 — During the year ended December 31, 2022, we sold 23 properties for total proceeds, net of selling costs, of $234.7 million, and recognized a net
gain on these sales totaling $43.5 million (inclusive of income taxes totaling $5.3 million recognized upon sale). This disposition activity included two
properties acquired in the CPA:18 Merger, one of which was classified as assets held for sale and sold in August 2022 (Note 3, Note 5).
2021 — During the year ended December 31, 2021, we sold 24 properties for total proceeds, net of selling costs, of $163.6 million, and recognized a net
gain on these sales totaling $40.4 million (inclusive of income taxes totaling $4.7 million recognized upon sale).
2020 — During the year ended December 31, 2020, we sold 22 properties for total proceeds, net of selling costs, of $366.5 million (inclusive of $4.7
million attributable to a noncontrolling interest), and recognized a net gain on these sales totaling $109.4 million (inclusive of income taxes totaling $3.0
million recognized upon sale and $0.6 million attributable to a noncontrolling interest). Disposition activity included the sale of one of our two hotel
operating properties in January 2020 for total proceeds, net of selling costs, of $103.5 million (inclusive of $4.7 million attributable to a noncontrolling
interest).
W. P. Carey 2022 10-K – 109
Note 17. Segment Reporting
We evaluate our results from operations by our two major business segments: Real Estate and Investment Management (Note 1). The following tables
present a summary of comparative results and assets for these business segments (in thousands):
Notes to Consolidated Financial Statements
Real Estate
Revenues
Lease revenues
Income from direct financing leases and loans receivable
Operating property revenues
Other lease-related income
(a)
Operating Expenses
(b)
(b)
Depreciation and amortization
General and administrative
Reimbursable tenant costs
Property expenses, excluding reimbursable tenant costs
Impairment charges
Stock-based compensation expense
Operating property expenses
Merger and other expenses
(b)
Other Income and Expenses
Interest expense
Other gains and (losses)
Gain on sale of real estate, net
Non-operating income
Earnings (losses) from equity method investments in real estate
Gain on change in control of interests
Income before income taxes
(Provision for) benefit from income taxes
Net Income from Real Estate
Net loss (income) attributable to noncontrolling interests
Net Income from Real Estate Attributable to W. P. Carey
Years Ended December 31,
2022
2021
2020
$
$
1,301,617 $
74,266
59,230
32,988
1,468,101
1,177,438 $
67,555
13,478
53,655
1,312,126
503,403
88,952
73,622
50,753
39,119
32,841
27,054
19,384
835,128
(219,160)
97,149
43,476
30,289
16,221
11,405
(20,620)
612,353
(21,407)
590,946
657
591,603 $
475,989
81,888
62,417
47,898
24,246
24,881
9,848
(4,597)
722,570
(196,831)
(13,676)
40,425
13,778
(19,649)
—
(175,953)
413,603
(28,703)
384,900
(134)
384,766 $
1,080,623
74,893
11,399
11,082
1,177,997
441,948
70,127
56,409
44,067
35,830
15,247
9,901
(937)
672,592
(210,087)
37,104
109,370
8,970
(9,017)
—
(63,660)
441,745
18,498
460,243
(731)
459,512
W. P. Carey 2022 10-K – 110
Investment Management
Revenues
Asset management revenue
Reimbursable costs from affiliates
Operating Expenses
Impairment charges — Investment Management goodwill
Reimbursable costs from affiliates
Merger and other expenses
General and administrative
Subadvisor fees
Depreciation and amortization
Stock-based compensation expense
(b)
(b)
(b)
Other Income and Expenses
Gain on change in control of interests
Earnings (losses) from equity method investments in the Managed Programs
Other gains and (losses)
Non-operating income
Income before income taxes
(Provision for) benefit from income taxes
Net Income from Investment Management
Net income attributable to noncontrolling interests
Net Income (Loss) from Investment Management Attributable to W. P. Carey
Total Company
Revenues
Operating expenses
Other income and expenses
(Provision for) benefit from income taxes
Net loss (income) attributable to noncontrolling interests
Net income attributable to W. P. Carey
Real Estate
Investment Management
(c)
Total Company
__________
Notes to Consolidated Financial Statements
Years Ended December 31,
2022
2021
2020
8,467 $
2,518
10,985
15,363 $
4,035
19,398
29,334
2,518
3
—
—
—
—
31,855
22,526
13,288
(1,111)
20
34,723
13,853
(6,317)
7,536
—
7,536 $
—
4,035
51
—
—
—
—
4,086
—
8,820
791
82
9,693
25,005
217
25,222
—
25,222 $
22,467
8,855
31,322
—
8,855
1,184
5,823
1,469
987
691
19,009
—
(9,540)
61
617
(8,862)
3,451
2,261
5,712
(9,865)
(4,153)
Years Ended December 31,
2022
1,479,086 $
866,983
14,103
(27,724)
657
599,139 $
2021
1,331,524 $
726,656
(166,260)
(28,486)
(134)
409,988 $
2020
1,209,319
691,601
(72,522)
20,759
(10,596)
455,359
Total Assets at December 31,
2022
18,077,155 $
24,880
18,102,035 $
2021
15,344,703
135,927
15,480,630
$
$
$
$
$
$
(a) Operating property revenues from our hotels include (i) $12.0 million, $7.2 million, and $4.0 million for the years ended December 31, 2022, 2021,
and 2020, respectively, generated from a hotel in Bloomington, Minnesota (revenues reflect higher occupancy as the hotel’s business recovered from
the COVID-19 pandemic), and (ii) $1.9 million for the year ended December 31, 2020 generated from a hotel in Miami, Florida, which was sold in
January 2020 (Note 16).
W. P. Carey 2022 10-K – 111
Notes to Consolidated Financial Statements
(b) Beginning with the second quarter of 2020, general and administrative expenses attributed to our Investment Management segment are comprised of
the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no net expense for us).
All other general and administrative expenses are attributed to our Real Estate segment. Previously, general and administrative expenses were allocated
based on time incurred by our personnel for the Real Estate and Investment Management segments. In addition, beginning with the second quarter of
2020, stock-based compensation expense and corporate depreciation and amortization expense are fully recognized within our Real Estate segment. In
light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the WLT management internalization (Note 4), as well
as the termination of the advisory agreements with CPA:18 – Global in connection with the CPA:18 Merger (Note 3), we now view essentially all
assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental activities that are expected to wind down as we
manage CESH through the end of its life cycle (Note 2). These changes between the segments had no impact on our consolidated financial statements.
(c) Following the CPA:18 Merger on August 1, 2022, we no longer own an equity investment in CPA:18 – Global, which was previously included within
our Investment Management segment (Note 3, Note 8). In addition, during the year ended December 31, 2022, we recorded an impairment charge of
$29.3 million on goodwill within our Investment Management segment (Note 7, Note 9).
Our portfolio is comprised of domestic and international investments. At December 31, 2022, our international investments within our Real Estate segment
were comprised of investments in Poland, Germany, the Netherlands, Spain, the United Kingdom, France, Italy, Denmark, Croatia, Canada, Norway,
Mexico, Finland, Lithuania, Hungary, Portugal, Slovakia, the Czech Republic, Belgium, Austria, Sweden, Japan, Mauritius, Latvia, and Estonia. No tenant
or international country individually comprised at least 10% of our total lease revenues for the years ended December 31, 2022, 2021, or 2020, or at least
10% of our total long-lived assets at December 31, 2022 or 2021. Revenues and assets within our Investment Management segment are entirely domestic.
The following tables present the geographic information for our Real Estate segment (in thousands):
Revenues
Domestic
International
Total
Long-lived Assets
Domestic
International
Total
Equity Investments in Real Estate
Domestic
International
Total
Years Ended December 31,
2022
2021
2020
$
$
985,763 $
482,338
1,468,101 $
860,961 $
451,165
1,312,126 $
756,763
421,234
1,177,997
December 31,
2022
2021
10,053,422 $
5,435,476
15,488,898 $
8,170,448
4,866,921
13,037,369
286,708 $
38,569
325,277 $
236,643
55,260
291,903
$
$
$
$
W. P. Carey 2022 10-K – 112
Notes to Consolidated Financial Statements
Note 18. Subsequent Events
Acquisition
In January 2023, we completed one acquisition for approximately $64.8 million.
Disposition
In January 2023, we sold one property for gross proceeds of $11.2 million, which was classified as held for sale as of December 31, 2022 (Note 5).
Issuances Under our ATM Program
In January 2023, we sold 353,264 shares of our common stock through our ATM Forwards at a weighted-average price of $81.94 per share for anticipated
net proceeds of approximately $29 million (Note 13).
Amended Credit Facility
In January 2023, we entered into a Third Amendment to the Credit Agreement (Note 11) to (i) replace the benchmark rate at which U.S.-dollar-
denominated borrowings bear interest from LIBOR to the forward-looking SOFR and (ii) increase the aggregate principal amount (of revolving and term
loans) available under the Senior Unsecured Credit Facility from an amount not to exceed the U.S. dollar equivalent of $2.75 billion to $3.05 billion,
subject to the conditions to increase set forth in the Credit Agreement.
W. P. Carey 2022 10-K – 113
W. P. CAREY INC.
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2022, 2021, and 2020
(in thousands)
Description
Year Ended December 31, 2022
Valuation reserve for deferred tax assets
Year Ended December 31, 2021
Valuation reserve for deferred tax assets
Year Ended December 31, 2020
Valuation reserve for deferred tax assets
Balance at
Beginning
of Year
Other Additions
Deductions
Balance at
End of Year
108,812 $
34,894 $
(37,521) $
106,185
86,069 $
40,895 $
(18,152) $
108,812
73,643 $
31,470 $
(19,044) $
86,069
$
$
$
W. P. Carey 2022 10-K – 114
W. P. CAREY INC.
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Real Estate Subject to Operating Leases
Industrial facilities in
Erlanger, KY
$
— $
1,526 $ 21,427 $
2,966 $
(84) $
1,526 $ 24,309 $ 25,835 $
15,406
1979; 1987
Jan. 1998
40 yrs.
Industrial facilities in
Thurmont, MD and
Farmington, NY
Warehouse facility in
Commerce, CA
Industrial facility in
Toledo, OH
Industrial facility in
Goshen, IN
Office facility in Raleigh,
NC
Office facility in King of
Prussia, PA
Industrial facility in
Pinconning, MI
Industrial facilities in
Sylmar, CA
Retail facilities in the
United States
Land in Glendora, CA
Warehouse facility in
Doraville, GA
Office facility in
Collierville, TN and
warehouse facility in
Corpus Christi, TX
Land in Irving and
Houston, TX
Industrial facility in
Chandler, AZ
Office facility in Bridgeton,
MO
Warehouse facility in
Memphis, TN
Industrial facility in
Romulus, MI
Retail facility in Bellevue,
WA
Office facility in Rio
Rancho, NM
Office facility in
Moorestown, NJ
Industrial facility in
Winston-Salem, NC
Office facilities in Playa
Vista and Venice, CA
Warehouse facility in
Greenfield, IN
Warehouse facilities in
Apopka, FL
Land in San Leandro, CA
Fitness facility in Austin,
TX
Retail facility in Wroclaw,
Poland
Office facility in Fort
Worth, TX
Warehouse facility in
Mallorca, Spain
Net-lease hotels in the
United States
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
729
5,903
4,905
11,898
224
239
2,408
940
—
—
—
—
—
729
5,903
6,632
3,420
1964; 1983
Jan. 1998
(3,043)
4,573
9,187
13,760
5,820
1948
Jan. 1998
—
—
224
239
828
2,408
2,632
2,007
1966
Jan. 1998
940
1,179
604
1973
Jan. 1998
1,287
2,115
1,085
1983
Jan. 1998
1,638
2,844
187
(2,554)
1,219
6,283
1,295
32
1,692
2,052
5,322
9,382
1,135
—
—
—
—
238
—
—
—
1,219
7,578
8,797
4,627
1968
Jan. 1998
32
1,692
1,724
1,057
1948
Jan. 1998
(1,889)
1,494
3,991
5,485
2,504
1962; 1979
Jan. 1998
14,696
17
9,025
1,152
15,291
—
24,316
1,152
10,071
—
Various
N/A
Jan. 1998
Jan. 1998
3,288
9,864
17,079
(11,410)
3,288
15,533
18,821
2,797
2016
Jan. 1998
3,490
72,497
3,513
(15,608)
288
63,604
63,892
24,648
1989; 1999
Jan. 1998
40 yrs.
9,795
—
5,035
18,957
842
4,762
1,882
3,973
454
6,411
4,125
11,812
1,190
9,353
351
5,981
1,860
12,539
—
8,373
2,523
294
525
393
5,866
1,690
3,075
—
9,795
—
9,795
—
N/A
Jan. 1998
516
5,035
27,846
32,881
16,742
1989
Jan. 1998
(196)
(3,892)
—
842
328
454
7,089
7,931
4,307
1972
Jan. 1998
1,929
2,257
1,591
1969
Jan. 1998
6,936
7,390
2,766
1970
Jan. 1998
(123)
4,371
11,836
16,207
7,149
1994
Apr. 1998
(238)
2,287
13,884
16,171
7,639
1999
Jul. 1998
1
(7,325)
351
925
7,672
8,023
4,887
1964
Feb. 1999
9,224
10,149
5,591
1980
Sep. 2002
Sep. 2004;
Sep. 2012
19,523
2,032
10,152
52,817
1
5,889
59,113
65,002
20,644
1991; 1999
2,807
10,335
223
(8,383)
967
4,015
4,982
2,288
1995
Sep. 2004
362
1,532
10,855
—
1,195
—
(155)
—
337
1,532
11,920
—
12,257
1,532
4,891
—
1969
N/A
Sep. 2004
Dec. 2006
1,725
5,168
3,600
10,306
4,600
37,580
11,109
12,636
32,680
198,999
—
—
367
—
—
—
1,725
5,168
6,893
2,917
1995
Dec. 2006
(4,260)
2,667
6,979
9,646
2,596
2007
Dec. 2007
—
4,600
37,947
42,547
12,191
2003
Feb. 2010
(2,543)
9,901
11,301
21,202
3,553
2008
Jun. 2010
15 yrs.
40 yrs.
40 yrs.
40 yrs.
20 yrs.
40 yrs.
40 yrs.
40 yrs.
15 yrs.
N/A
40 yrs.
N/A
40 yrs.
40 yrs.
15 yrs.
10 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
N/A
29 yrs.
40 yrs.
40 yrs.
40 yrs.
(10,651)
30,099
190,929
221,028
56,001
1989; 1990
Sep. 2012
34 - 37 yrs.
W. P. Carey 2022 10-K – 115
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Industrial facilities in
Auburn, IN; Clinton
Township, MI; and Bluffton,
OH
Office facility in Irvine, CA
Industrial facility in
Alpharetta, GA
Office facilities in St.
Petersburg, FL
Movie theater in Baton
Rouge, LA
Industrial and office facility
in San Diego, CA
Industrial facility in
Richmond, CA
Warehouse facilities in the
United States
Industrial facilities in Rocky
Mount, NC and Lewisville,
TX
Industrial facilities in
Chattanooga, TN
Industrial facility in
Mooresville, NC
Industrial facility in
McCalla, AL
Office facility in Yardley,
PA
Industrial facility in Fort
Smith, AZ
Retail facilities in
Greenwood, IN and Buffalo,
NY
Industrial facilities in
Bowling Green, KY and
Jackson, TN
Education facilities in
Rancho Cucamonga, CA
and Exton, PA
Industrial facilities in St.
Petersburg, FL; Buffalo
Grove, IL; West Lafayette,
IN; Excelsior Springs, MO;
and North Versailles, PA
Industrial and warehouse
facility in Mesquite, TX
Industrial facilities in
Tolleson, AZ; Alsip, IL; and
Solvay, NY
Fitness facility in Memphis,
TN
Warehouse facilities in
Oceanside, CA and
Concordville, PA
Net-lease self-storage
facilities in the United
States
Warehouse facility in La
Vista, NE
Office facility in Pleasanton,
CA
Office facility in San
Marcos, TX
Office facility in Chicago,
IL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,403
4,173
20,298
—
2,198
6,349
3,280
24,627
4,168
5,724
7,804
16,729
895
1,953
—
—
1,247
4,627
3,200
5,939
—
16,386
84,668
10,959
(3,870)
13,766
2,589
4,173
18,242
13,766
20,831
17,939
5,915
665
1968; 1975;
1995
1981
Sep. 2012;
Jan. 2014
Sep. 2012
—
—
—
2,198
7,596
9,794
2,675
1997
Sep. 2012
3,280
29,254
32,534
9,207
1996; 1999
Sep. 2012
4,168
8,924
13,092
3,105
2003
Sep. 2012
(832)
7,804
21,836
29,640
7,626
2002
Sep. 2012
—
—
895
1,953
2,848
669
1999
Sep. 2012
16,386
95,627
112,013
29,926
Various
Sep. 2012
2,163
17,715
609
(8,389)
1,132
10,966
12,098
3,725
1948; 1989
Sep. 2012
558
756
5,923
9,775
—
—
—
—
558
756
5,923
6,481
2,006
1974; 1989
Sep. 2012
9,775
10,531
3,302
1997
Sep. 2012
960
14,472
42,662
(254)
2,076
55,764
57,840
12,717
2004
Sep. 2012
1,726
12,781
4,378
1,063
6,159
1,726
17,159
18,885
5,555
2002
Sep. 2012
1,063
6,159
7,222
2,058
1982
Sep. 2012
—
—
—
—
—
30 yrs.
31 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
30 yrs.
31 yrs.
30 yrs.
30 yrs.
2,519
—
19,990
—
19,990
19,990
6,608
2000; 2003
Sep. 2012
30 - 31 yrs.
—
1,492
8,182
600
—
1,492
8,782
10,274
2,771
1989; 1995
Sep. 2012
31 yrs.
—
14,006
33,683
9,428
(20,142)
6,638
30,337
36,975
8,207
2004
Sep. 2012
31 - 32 yrs.
—
—
—
—
6,559
19,078
3,285
2,702
13,029
6,080
23,424
—
546
—
—
6,559
22,363
28,922
6,657
Various
Sep. 2012
2,702
13,029
15,731
507
1972
Sep. 2012
—
6,080
23,970
30,050
7,690
1990; 1994;
2000
Sep. 2012
4,877
4,258
5,215
(2,353)
2,027
9,970
11,997
4,415
1990
Sep. 2012
31 yrs.
31 yrs.
31 yrs.
31 yrs.
1,045
3,333
8,270
—
74,551
319,186
17,095
4,196
23,148
—
—
—
3,675
7,468
440
688
2,169
19,010
—
—
—
—
—
83
—
3,333
8,270
11,603
2,719
1989; 1996
Sep. 2012
31 yrs.
(50)
74,501
319,186
393,687
103,823
Various
Sep. 2012
—
—
—
4,196
23,148
27,344
7,095
2005
Sep. 2012
3,675
7,468
11,143
2,423
2000
Sep. 2012
440
688
1,128
223
2000
Sep. 2012
(72)
2,169
19,021
21,190
6,125
1910
Sep. 2012
31 yrs.
33 yrs.
31 yrs.
31 yrs.
31 yrs.
W. P. Carey 2022 10-K – 116
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
3,639
1,269
808
4,304
1,755
4,493
—
77
—
—
—
(2,783)
3,639
1,269
4,908
409
1996
Sep. 2012
808
216
4,381
5,189
1,551
1998
Sep. 2012
3,249
3,465
1,046
1997
Sep. 2012
2,183
11,340
1,642
—
2,183
12,982
15,165
4,093
1995
Sep. 2012
Industrial facilities in
Hollywood and Orlando, FL
Warehouse facility in
Golden, CO
Industrial facility in
Texarkana, TX
Industrial facility in South
Jordan, UT
Warehouse facility in Ennis,
TX
Office facility in Paris,
France
Retail facilities in Poland
Industrial facilities in
Danbury, CT and Bedford,
MA
Industrial facility in
Brownwood, TX
Industrial facility in
Rochester, MN
Industrial and office facility
in Tampere, Finland
Office facility in Quincy,
MA
Office facility in Salford,
United Kingdom
Office facility in Lone Tree,
CO
Office facility in
Mönchengladbach, Germany
Fitness facility in Houston,
TX
Fitness facility in St.
Charles, MO
Office facility in Scottsdale,
AZ
Industrial facility in Aurora,
CO
Warehouse facility in
Burlington, NJ
Industrial facility in
Albuquerque, NM
Industrial facility in North
Salt Lake, UT
Industrial facility in
Lexington, NC
Industrial facility in Dallas,
TX
Land in Welcome, NC
Industrial facilities in
Evansville, IN; Lawrence,
KS; and Baltimore, MD
Industrial facilities in Colton,
CA; Bonner Springs, KS;
and Dallas, TX and land in
Eagan, MN
Retail facility in Torrance,
CA
Office facility in Houston,
TX
Land in Doncaster, United
Kingdom
Warehouse facility in
Norwich, CT
4,761
28,864
3,381
—
4,761
32,245
37,006
8,768
2001
Nov. 2013
27,642
2,154
6,917
50,626
(4,660)
2,048
52,989
55,037
9,449
2015
Dec. 2013
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
478
4,087
23,387
26,564
43,450
72,866
3,519
16,329
722
6,268
145
703
—
—
—
809
14,236
1,200
2,309
37,153
2,316
21,537
—
30,012
—
127
—
2,430
2,270
—
1,966
1,368
1,658
22,300
42,329
737
2,609
3,989
6,213
2,467
3,476
10,601
17,626
2,185
12,058
3,190
980
10,010
11,230
—
4,005
44,192
8,451
25,457
89
—
377
606
—
—
—
—
—
—
6,578
424
4,257
4,248
3,885
21,342
560
—
—
31 yrs.
30 yrs.
31 yrs.
31 yrs.
31 yrs.
29 yrs.
15 yrs.
31 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
23 yrs.
27 yrs.
34 yrs.
32 yrs.
26 yrs.
27 yrs.
26 yrs.
28 yrs.
32 yrs.
N/A
25 yrs.
27 yrs.
(145)
478
4,087
4,565
1,316
1989
Sep. 2012
(11,450)
(17,002)
19,397
21,993
36,693
60,435
56,090
82,428
11,375
26,047
1975
Various
Sep. 2012
Sep. 2012
32 yrs.
23 - 34 yrs.
—
—
—
3,519
16,329
19,848
5,608
1965; 1980
Sep. 2012
722
6,268
6,990
1,671
1964
Sep. 2012
809
15,436
16,245
673
1997
Sep. 2012
(7,176)
1,865
30,421
32,286
9,311
2012
Jun. 2013
—
2,316
21,664
23,980
5,594
1989
Jun. 2013
(6,940)
—
23,072
23,072
5,484
1997
Sep. 2013
—
—
—
—
—
—
2,430
2,270
4,700
903
1995
Jan. 2014
1,966
3,026
4,992
1,140
1987
Jan. 2014
22,300
42,418
64,718
3,052
1977
Jan. 2014
737
2,609
3,346
736
1985
Jan. 2014
3,989
6,590
10,579
2,323
1999
Jan. 2014
2,467
4,082
6,549
1,382
1993
Jan. 2014
(16,936)
4,388
6,903
11,291
2,352
1981
Jan. 2014
(2,519)
494
11,230
11,724
3,608
2003
Jan. 2014
—
(11,724)
3,190
486
10,010
—
13,200
486
133
—
1968
N/A
Jan. 2014
Jan. 2014
—
4,005
44,192
48,197
16,530
298
8,451
25,755
34,206
7,996
1911; 1967;
1982
1978; 1979;
1986
Jan. 2014
24 yrs.
Jan. 2014
17 - 34 yrs.
—
6,578
984
7,562
640
1978
Jan. 2014
(8,146)
359
—
359
—
N/A
Jan. 2014
N/A
2
3,885
21,344
25,229
6,736
1960
Jan. 2014
28 yrs.
W. P. Carey 2022 10-K – 117
8,412
12,241
2,227
(77)
8,335
14,468
22,803
5,219
1973
Jan. 2014
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Warehouse facility in
Norwich, CT
Warehouse facility in
Whitehall, PA
Retail facility in York, PA
Warehouse facilities in
Atlanta, GA and Elkwood,
VA
Warehouse facility in
Harrisburg, NC
Industrial facility in
Chandler, AZ; industrial,
office, and warehouse
facility in Englewood, CO;
and land in Englewood, CO
Industrial facility in
Cynthiana, KY
Industrial facilities in
Albemarle and Old Fort, NC
and Holmesville, OH
Industrial facility in
Columbia, SC
Movie theater in
Midlothian, VA
Net-lease student housing
facility in Laramie, WY
Warehouse facilities in
Mendota, IL; Toppenish,
WA; and Plover, WI
Land in Sunnyvale, CA
Industrial facilities in
Hampton, NH
Industrial facilities in
France
Retail facility in Fairfax, VA
Retail facility in Lombard,
IL
Warehouse facility in
Plainfield, IN
Retail facility in Kennesaw,
GA
Retail facility in Leawood,
KS
Office facility in Tolland,
CT
Warehouse facilities in
Lincolnton, NC and
Mauldin, SC
Retail facilities in Germany
Office facility in Southfield,
MI
Office facility in The
Woodlands, TX
Warehouse facilities in
Valdosta, GA and Johnson
City, TN
Industrial facility in
Amherst, NY
Industrial and warehouse
facilities in Westfield, MA
Office facility in
Bloomington, MN
1,437
9,669
—
—
1,437
9,669
11,106
3,052
2005
Jan. 2014
7,435
3,776
9,093
10,092
27,148
—
(9,545)
(6,413)
6,983
527
27,148
6,928
34,131
7,455
971
1,830
2021
2005
Jan. 2014
Jan. 2014
5,356
4,121
1,753
5,840
1,552
4,306
7,235
831
1,274
3,505
5,507
18,653
2,843
11,886
2,824
16,618
1,966
18,896
1,444
9,297
21,208
24,086
8,990
7,362
36,306
3,402
5,212
16,353
5,087
8,578
1,578
29,415
2,849
6,180
1,487
13,417
1,817
5,709
—
781
—
525
—
—
—
—
—
—
—
337
—
—
1,674
5,530
—
—
(2,104)
4,284
3,089
7,373
989
1975
Jan. 2014
(111)
1,642
6,621
8,263
2,071
2000
Jan. 2014
3
4,306
7,238
11,544
2,133
1978; 1987
Jan. 2014
(107)
1,274
3,923
5,197
1,257
1967
Jan. 2014
—
—
—
—
5,507
18,653
24,160
1955; 1966;
1970
722
Jan. 2014
2,843
11,886
14,729
4,692
1962
Jan. 2014
2,824
16,618
19,442
2,355
2000
Jan. 2014
1,966
18,896
20,862
5,920
2007
Jan. 2014
(623)
(26,077)
1,382
7,306
20,647
—
22,029
7,306
8,212
—
1996
N/A
Jan. 2014
Jan. 2014
—
8,990
7,362
16,352
2,164
1976
Jan. 2014
3,123
(6,219)
24,411
1,914
20,567
11,622
44,978
13,536
2,904
5,536
Various
1998
Jan. 2014
Jan. 2014
—
—
5,087
8,578
13,665
2,904
1999
Jan. 2014
1,578
31,089
32,667
8,786
1997
Jan. 2014
(76)
2,773
11,710
14,483
3,966
1999
Jan. 2014
—
11
1,487
13,417
14,904
4,542
1997
Jan. 2014
1,817
5,720
7,537
1,860
1968
Jan. 2014
1,962
81,109
9,247
153,927
—
10,510
—
(142,195)
1,962
26,287
9,247
77,064
11,209
103,351
2,936
22,737
1988; 1996
Various
Jan. 2014
Jan. 2014
1,726
4,856
3,204
24,997
89
—
—
1,080
14,998
1,841
5,893
674
7,971
—
1,922
9,755
7,435
—
—
—
—
9
1,726
4,945
6,671
1,425
1985
Jan. 2014
3,204
24,997
28,201
7,075
1997
Jan. 2014
1,080
16,839
17,919
5,395
1978; 1998
Jan. 2014
674
7,971
8,645
3,170
1984
Jan. 2014
1,922
17,199
19,121
5,850
1954; 1997
Jan. 2014
2,942
7,155
—
(3,257)
1,740
5,100
6,840
2,200
1988
Jan. 2014
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 yrs.
40 yrs.
34 yrs.
28 yrs.
26 yrs.
30 yrs.
31 yrs.
32 yrs.
23 yrs.
40 yrs.
33 yrs.
23 yrs.
N/A
30 yrs.
23 yrs.
26 yrs.
26 yrs.
30 yrs.
26 yrs.
26 yrs.
28 yrs.
28 yrs.
Various
31 yrs.
32 yrs.
27 yrs.
23 yrs.
28 yrs.
28 yrs.
W. P. Carey 2022 10-K – 118
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Warehouse facility in
Gorinchem, Netherlands
Retail facility in Cresskill,
NJ
Retail facility in Livingston,
NJ
Retail facility in Montclair,
NJ
Retail facility in
Morristown, NJ
Retail facility in Summit,
NJ
Industrial facilities in
Georgetown, TX and
Woodland, WA
Education facilities in
Union, NJ; Allentown and
Philadelphia, PA; and
Grand Prairie, TX
Industrial facility in
Salisbury, NC
Industrial facility in
Twinsburg, OH and office
facility in Plymouth, MI
Industrial facility in
Cambridge, Canada
Industrial facilities in Peru,
IL; Huber Heights, Lima,
and Sheffield, OH; and
Lebanon, TN
Industrial facility in Ramos
Arizpe, Mexico
Industrial facilities in Salt
Lake City, UT
Net-lease student housing
facility in Blairsville, PA
Education facility in
Mooresville, NC
Warehouse facilities in
Atlanta, Doraville, and
Rockmart, GA
Warehouse facility in
Muskogee, OK
Industrial facility in
Richmond, MO
Industrial facility in
Tuusula, Finland
Office facility in Turku,
Finland
Warehouse facility in
Phoenix, AZ
Land in Calgary, Canada
Industrial facilities in
Kearney, MO; York, NE;
Walbridge, OH; Rocky
Mount, VA; and
Martinsburg, WV
Industrial facilities in
Sandersville, GA; Erwin,
TN; and Gainesville, TX
Industrial facility in Buffalo
Grove, IL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,143
5,648
2,366
5,482
2,932
2,001
1,905
1,403
3,258
8,352
1,228
1,465
965
4,113
5,365
7,845
1,499
8,185
2,831
10,565
1,849
7,371
2,962
17,832
1,059
2,886
2,783
3,773
1,631
23,163
397
1,795
15,955
6,488
77,192
554
4,353
2,211
8,505
6,173
10,321
—
—
—
—
—
—
—
—
4,816
31,712
739
955
4,779
2,763
1,492
12,233
—
—
—
—
—
—
—
—
—
386
—
—
—
—
—
—
—
—
747
—
380
—
—
—
—
19
14
—
—
—
—
—
(1,470)
896
4,425
5,321
1,393
1995
Jan. 2014
2,366
5,501
7,867
1,574
1975
Jan. 2014
2,932
2,015
4,947
6
1,905
1,409
3,314
661
462
1966
1950
Jan. 2014
Jan. 2014
26
3,258
8,378
11,636
2,750
1973
Jan. 2014
8
1,228
1,473
2,701
483
1950
Jan. 2014
—
965
4,113
5,078
1,087
1998; 2001
Jan. 2014
33 - 35 yrs.
5
5,365
7,850
13,215
2,514
Various
Jan. 2014
—
1,499
8,185
9,684
2,629
2000
Jan. 2014
(2,244)
2,501
9,037
11,538
2,898
1991; 1995
Jan. 2014
(1,607)
1,526
6,087
7,613
1,737
2001
Jan. 2014
2,962
17,832
20,794
5,087
Various
Jan. 2014
1,059
2,886
3,945
821
2000
Jan. 2014
2,783
3,773
6,556
1,076
1983; 2002
Jan. 2014
31 - 33 yrs.
1,631
23,163
24,794
7,052
2005
Jan. 2014
1,795
15,955
17,750
983
2002
Jan. 2014
33 yrs.
33 yrs.
—
6,488
77,192
83,680
24,122
1959; 1962;
1991
Jan. 2014
23 - 33 yrs.
(3,437)
158
1,312
1,470
357
1992
Jan. 2014
—
2,211
9,252
11,463
2,938
1996
Jan. 2014
(3,570)
4,837
8,087
12,924
2,828
1975
Jan. 2014
28 yrs.
31 yrs.
27 yrs.
27 yrs.
27 yrs.
27 yrs.
28 yrs.
28 yrs.
27 yrs.
31 yrs.
31 yrs.
31 yrs.
33 yrs.
28 yrs.
26 yrs.
28 yrs.
28 yrs.
N/A
—
4,816
31,712
36,528
114
Various
Jan. 2014
31 yrs.
—
—
955
4,779
5,734
1,374
1950; 1986;
1996
Jan. 2014
1,492
12,233
13,725
3,527
1996
Jan. 2014
31 yrs.
31 yrs.
W. P. Carey 2022 10-K – 119
5,343
34,106
3,792
325
5,052
38,514
43,566
11,238
1981
Jan. 2014
6,747
3,721
21,352
—
—
(649)
6,747
3,072
21,732
—
28,479
3,072
7,056
—
1996
N/A
Jan. 2014
Jan. 2014
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Industrial facilities in West
Jordan, UT and Tacoma,
WA; office facility in
Eugene, OR; and warehouse
facility in Perris, CA
Office facility in Carlsbad,
CA
Movie theater in Pensacola,
FL
Movie theater in Port St.
Lucie, FL
Industrial facility in
Nurieux-Volognat, France
Industrial facility in
Monheim, Germany
Warehouse facility in
Suwanee, GA
Retail facilities in Wichita,
KS and Oklahoma City, OK
and warehouse facility in
Wichita, KS
Industrial facilities in Fort
Dodge, IA and Menomonie
and Oconomowoc, WI
Industrial facility in Mesa,
AZ
Industrial facility in North
Amityville, NY
Industrial facility in Fort
Collins, CO
Warehouse facility in Elk
Grove Village, IL
Office facility in
Washington, MI
Office facility in Houston,
TX
Industrial facilities in
Conroe, Odessa, and
Weimar, TX and industrial
and office facility in
Houston, TX
Education facility in
Sacramento, CA
Industrial facility in Sankt
Ingbert, Germany
Industrial facilities in City
of Industry, CA;
Chelmsford, MA; and
Lancaster, TX
Office facility in Tinton
Falls, NJ
Industrial facility in
Woodland, WA
Warehouse facilities in Gyál
and Herceghalom, Hungary
Industrial facility in
Windsor, CT
Industrial facility in Aurora,
CO
Office facility in Chandler,
AZ
Warehouse facility in
University Park, IL
Office facility in Stavanger,
Norway
—
—
—
—
—
—
—
8,989
5,435
3,230
5,492
1,746
—
4,654
2,576
121
5,328
2,500
5,727
2,330
8,406
—
—
—
—
—
—
—
8
—
8,989
5,443
14,432
1,728
Various
Jan. 2014
3,230
5,492
8,722
2,076
1999
Jan. 2014
5,181
1,746
5,181
6,927
—
4,654
2,576
7,230
361
840
2001
2000
Jan. 2014
Jan. 2014
(1,085)
94
4,270
4,364
1,177
2000
Jan. 2014
(664)
2,303
5,260
7,563
209
1992
Jan. 2014
—
2,330
8,406
10,736
2,215
1995
Jan. 2014
28 yrs.
24 yrs.
33 yrs.
27 yrs.
32 yrs.
32 yrs.
34 yrs.
—
1,878
8,579
3,128
(89)
1,878
11,618
13,496
3,434
1954; 1975;
1984
Jan. 2014
24 yrs.
—
—
—
—
—
—
—
1,403
11,098
2,888
4,282
3,486
11,413
821
7,236
4,037
7,865
4,085
7,496
—
—
—
—
—
—
522
7,448
227
—
—
—
—
—
—
—
1,403
11,098
12,501
6,089
1996
Jan. 2014
2,888
4,282
7,170
1,401
1991
Jan. 2014
3,486
11,413
14,899
3,913
1981
Jan. 2014
821
7,236
8,057
1,965
1993
Jan. 2014
4,037
7,865
11,902
1,160
1980
Jan. 2014
4,085
7,496
11,581
2,040
1990
Jan. 2014
522
7,675
8,197
2,610
1999
Jan. 2014
16 yrs.
27 yrs.
26 yrs.
33 yrs.
22 yrs.
33 yrs.
27 yrs.
—
4,049
13,021
23,843
—
13,715
—
2,226
17,460
—
—
—
—
—
—
—
—
—
5,138
8,387
1,958
7,993
707
1,562
14,601
21,915
453
574
637
3,999
5,318
27,551
7,962
32,756
10,296
91,744
—
—
—
—
725
—
—
3,422
—
105
221
—
133
4,049
13,154
17,203
6,282
Various
Jan. 2014
12 - 22 yrs.
—
—
13,715
13,715
3,659
2005
Jan. 2014
(380)
2,183
17,123
19,306
1,358
1960
Jan. 2014
43
—
—
5,138
8,430
13,568
2,712
1969; 1974;
1984
Jan. 2014
1,958
8,718
10,676
2,476
2001
Jan. 2014
707
1,562
2,269
395
2009
Jan. 2014
(7,903)
11,441
17,172
28,613
7,499
2002; 2004
Jan. 2014
(83)
—
—
—
453
574
3,976
4,429
3,999
4,573
5,318
27,656
32,974
7,962
32,977
40,939
671
908
7,032
8,126
1999
2012
2000
2008
Jan. 2014
Jan. 2014
Mar. 2014
May 2014
(37,742)
6,550
57,748
64,298
12,287
1975
Aug. 2014
34 yrs.
34 yrs.
27 yrs.
31 yrs.
35 yrs.
21 yrs.
33 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
W. P. Carey 2022 10-K – 120
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Laboratory facility in
Westborough, MA
Office facility in Andover,
MA
Office facility in Newport,
United Kingdom
Industrial facility in
Lewisburg, OH
Industrial facility in Opole,
Poland
Office facilities in Spain
Retail facilities in the
United Kingdom
Warehouse facility in
Rotterdam, Netherlands
Retail facility in Bad
Fischau, Austria
Industrial facility in
Oskarshamn, Sweden
Office facility in
Sunderland, United
Kingdom
Industrial facilities in
Gersthofen and Senden,
Germany and
Leopoldsdorf, Austria
Net-lease hotels in the
United States
Retail facilities in the
Netherlands
Office facility in Irvine, CA
Education facility in
Windermere, FL
Industrial facilities in the
United States
Industrial facilities in North
Dumfries and Ottawa,
Canada
Education facilities in
Coconut Creek, FL and
Houston, TX
Office facility in
Southfield, MI and
warehouse facilities in
London, KY and Gallatin,
TN
Industrial facilities in
Brampton, Toronto, and
Vaughan, Canada
Industrial facilities in
Queretaro and San Juan del
Rio, Mexico
Industrial facility in
Chicago, IL
Industrial facility in
Zawiercie, Poland
Office facility in Roseville,
MN
Industrial facility in
Radomsko, Poland
Warehouse facility in
Sellersburg, IN
Retail and warehouse
facilities in Appleton,
Madison, and Waukesha,
WI
3,409
37,914
53,065
3,980
45,120
323
—
—
3,409
90,979
94,388
12,853
1992
Aug. 2014
3,980
45,443
49,423
9,939
2013
Oct. 2014
—
22,587
1,627
13,721
2,151
51,778
21,438
257,624
—
—
—
10
(5,695)
—
16,892
16,892
3,512
2014
Oct. 2014
—
1,627
13,721
15,348
3,141
2014
Nov. 2014
(3,354)
(39,234)
1,845
47,944
18,390
222,234
20,235
270,178
4,338
46,368
2014
Various
Dec. 2014
Dec. 2014
40 yrs.
40 yrs.
40 yrs.
40 yrs.
38 yrs.
Various
66,319
230,113
277
(92,573)
43,593
160,543
204,136
42,766
Various
Jan. 2015
20 - 40 yrs.
—
33,935
20,767
(3,270)
—
51,432
51,432
8,516
2014
Feb. 2015
2,855
18,829
3,090
18,262
(221)
2,826
18,637
21,463
4,112
1998
Apr. 2015
(4,435)
2,447
14,470
16,917
2,999
2015
Jun. 2015
40 yrs.
40 yrs.
40 yrs.
—
2,912
30,140
(7,546)
2,247
23,259
25,506
4,949
2007
Aug. 2015
40 yrs.
—
—
—
—
—
—
9,449
15,838
—
(1,059)
9,053
15,175
24,228
3,354
—
49,190
17,396
—
17,396
49,190
66,586
10,402
2008; 2010
1988; 1989;
1990
Aug. 2015
40 yrs.
Oct. 2015
38 - 40 yrs.
5,698
7,626
38,130
16,137
79
—
(306)
—
5,658
7,626
37,943
16,137
43,601
23,763
8,397
2,974
Various
1977
Nov. 2015
Dec. 2015
30 - 40 yrs.
40 yrs.
5,090
34,721
15,333
—
5,090
50,054
55,144
11,366
1998
Apr. 2016
38 yrs.
66,845
87,575
65,400
(56,517)
49,680
113,623
163,303
28,399
Various
Apr. 2016
Various
—
17,155
10,665
—
(18,593)
5,723
3,504
9,227
1,626
1967; 1974
Apr. 2016
28 yrs.
—
15,550
83,862
63,830
—
15,550
147,692
163,242
26,642
1979; 1984 May 2016
37 - 40 yrs.
—
3,585
17,254
—
28,759
13,998
—
3,585
17,254
20,839
3,006
1969; 1987;
2000
Nov. 2016
35 - 36 yrs.
—
28,759
13,998
42,757
2,906
Various
Nov. 2016
28 - 35 yrs.
—
—
5,152
12,614
5,152
12,614
17,766
2,136
Various
Dec. 2016
28 - 40 yrs.
2,222
2,655
3,511
2,222
6,166
8,388
1,722
1985
Jun. 2017
395
102
10,378
(931)
361
9,583
9,944
1,124
2018
Aug. 2017
2,560
16,025
809
—
2,560
16,834
19,394
2,340
2001
Nov. 2017
1,718
59
37,496
(442)
1,573
37,258
38,831
1,686
2018
Nov. 2017
1,016
3,838
—
1,016
3,838
4,854
648
2000
Feb. 2018
30 yrs.
40 yrs.
40 yrs.
40 yrs.
36 yrs.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,512
61,230
—
5,465
61,277
66,742
9,046
1995; 2004 Mar. 2018
36 - 40 yrs.
W. P. Carey 2022 10-K – 121
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
20,304
185,481
38,475
117,127
786
6,589
—
—
—
(15,928)
18,733
171,124
189,857
24,289
Various
Jun. 2018
25 - 41 yrs.
(13,057)
35,246
107,299
142,545
16,996
Various
Jul. 2018
26 - 30 yrs.
—
786
6,589
7,375
1,318
2002
Jul. 2018
3,251
12,858
126
(1,288)
2,992
11,955
14,947
2,145
1976
Jul. 2018
13,527
35,631
28,051
(6,533)
12,463
58,213
70,676
6,890
1994
Sep. 2018
—
2,582
18,731
11,338
(2,036)
2,420
28,195
30,615
3,550
Various
Oct. 2018
27 - 37 yrs.
Office and warehouse
facilities in Denmark
Retail facilities in the
Netherlands
Industrial facility in
Oostburg, WI
Warehouse facility in
Kampen, Netherlands
Warehouse facility in
Azambuja, Portugal
Retail facilities in
Amsterdam, Moordrecht,
and Rotterdam,
Netherlands
Office and warehouse
facilities in Bad
W✔nnenberg and Soest,
Germany
Industrial facility in
Norfolk, NE
Education facility in
Chicago, IL
Fitness facilities in
Phoenix, AZ and
Columbia, MD
Retail facility in Gorzow,
Poland
Industrial facilities in
Sergeant Bluff, IA; Bossier
City, LA; and Alvarado,
TX
Industrial facility in
Glendale Heights, IL
Industrial facilities in
Mayodan, Sanford, and
Stoneville, NC
Warehouse facility in
Dillon, SC
Office facility in
Birmingham, United
Kingdom
Retail facilities in Spain
Warehouse facility in
Gadki, Poland
Office facility in The
Woodlands, TX
Office facility in Hoffman
Estates, IL
Warehouse facility in
Zagreb, Croatia
Industrial facilities in
Middleburg Heights and
Union Township, OH
Retail facility in Las Vegas,
NV
Industrial facilities in the
United States
Warehouse facility in
Bowling Green, KY
Warehouse facilities in the
United Kingdom
Industrial facility in
Evansville, IN
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,916
39,687
802
3,686
7,720
17,266
18,286
33,030
1,736
8,298
8,986
6,460
49,462
—
4,237
45,484
—
—
—
—
—
—
—
—
3,505
20,913
3,424
43,114
7,383
17,626
7,687
44,501
1,376
6,137
1,697
52,289
5,550
14,214
15,789
33,287
3,899
1,295
13,384
—
79,720
20,517
14,135
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,718)
2,730
37,155
39,885
4,152
1982; 1986
Oct. 2018
—
802
3,686
4,488
521
1975
Oct. 2018
(7,945)
5,113
11,928
17,041
1,764
1912
Oct. 2018
—
18,286
33,030
51,316
3,655
2006
Oct. 2018
(640)
1,625
7,769
9,394
932
2008
Oct. 2018
—
—
—
—
6,460
49,462
55,922
5,927
Various
Oct. 2018
4,237
45,484
49,721
3,008
1991
Oct. 2018
3,505
20,913
24,418
2,157
1992; 1997;
1998
Oct. 2018
3,424
43,114
46,538
5,166
2001
Oct. 2018
(1,044)
(3,964)
6,872
16,502
7,154
41,661
14,026
58,163
783
4,702
2009
Various
Oct. 2018
Oct. 2018
(480)
1,288
5,745
7,033
655
2011
Oct. 2018
—
—
1,697
52,289
53,986
5,583
2009
Oct. 2018
5,550
14,214
19,764
1,574
2009
Oct. 2018
(3,132)
14,781
31,163
45,944
5,163
2001
Oct. 2018
—
—
1,295
13,384
14,679
1,468
1990; 1997
Oct. 2018
—
79,720
79,720
8,322
2012
Oct. 2018
30,060
22,585
42,127
64,712
3,476
Various
Oct. 2018
35 yrs.
26 yrs.
28 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
38 yrs.
29 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
26 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
2,652
51,915
72,976
—
2,652
124,891
127,543
7,605
2011
Oct. 2018
6,791
2,315
180
22,095
—
—
(631)
6,321
2,154
8,475
264
Various
Oct. 2018
—
180
22,095
22,275
2,362
2009
Oct. 2018
W. P. Carey 2022 10-K – 122
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Office facilities in Tampa,
FL
Warehouse facility in
Elorrio, Spain
Industrial and office
facilities in Elberton, GA
Office facility in Tres
Cantos, Spain
Office facility in Hartland,
WI
Retail facilities in Dugo
Selo, Kutina, Samobor,
Spansko, and Zagreb,
Croatia
Office and warehouse
facilities in the United
States
Warehouse facilities in
Breda, Elst, Gieten, Raalte,
and Woerden, Netherlands
Warehouse facilities in
Oxnard and Watsonville,
CA
Retail facilities in Italy
Land in Hudson, NY
Office facility in Houston,
TX
Office facility in
Martinsville, VA
Land in Chicago, IL
Industrial facility in Fraser,
MI
Net-lease self-storage
facilities in the United
States
Warehouse facility in
Middleburg Heights, OH
Net-lease self-storage
facility in Fort Worth, TX
Retail facilities in Delnice,
Pozega, and Sesvete,
Croatia
Office facilities in Eagan
and Virginia, MN
Retail facility in Orlando,
FL
Industrial facility in Avon,
OH
Industrial facility in
Chimelow, Poland
Net-lease self-storage
facility in Fayetteville, NC
Retail facilities in the
United States
Education facilities in
Montgomery, AL and
Savannah, GA
Office facilities in St.
Louis, MO
3,889
49,843
1,498
—
3,889
51,341
55,230
5,585
1985; 2000
Oct. 2018
—
—
—
7,858
12,728
879
2,014
47,277
24,344
39,646
2,228
1,454
6,406
—
—
—
—
(1,313)
7,357
11,916
19,273
1,503
1996
Oct. 2018
—
879
2,014
2,893
303
1997; 2002
Oct. 2018
(4,084)
22,790
37,116
59,906
4,209
2002
Oct. 2018
—
1,454
6,406
7,860
752
2001
Oct. 2018
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
—
5,549
12,408
1,625
5,048
6,373
18,257
24,630
2,841
2000; 2002;
2003
Oct. 2018
26 yrs.
—
42,793
193,666
—
—
42,793
193,666
236,459
22,416
Various
Oct. 2018
40 yrs.
—
37,755
91,666
4,787
(8,402)
35,346
90,460
125,806
9,515
Various
Oct. 2018
40 yrs.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
22,453
75,492
2,405
78,814
138,280
—
2,136
2,344
1,082
9,887
8,108
—
1,346
9,551
19,583
108,971
542
691
2,507
6,295
—
7,242
—
—
(14,891)
—
22,453
70,675
2,405
78,814
135,448
—
101,267
206,123
2,405
8,695
15,617
—
1975; 1994;
2002
Various
N/A
Oct. 2018
Oct. 2018
Oct. 2018
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,136
2,344
4,480
1,082
9,887
8,108
—
9,190
9,887
301
950
—
1982
Oct. 2018
2011
N/A
Oct. 2018
Oct. 2018
1,346
9,551
10,897
1,084
2012
Oct. 2018
19,583
108,971
128,554
12,879
Various
Oct. 2018
542
691
2,507
3,049
6,295
6,986
275
761
2002
Oct. 2018
2004
Oct. 2018
5,519
9,930
1,291
(1,212)
5,167
10,361
15,528
1,707
2011
Oct. 2018
16,302
91,239
6,262
25,134
1,447
5,564
6,158
28,032
1,839
4,654
19,529
42,318
5,508
12,032
—
430
—
—
—
—
—
1,297
5,362
7,951
(722)
15,954
90,865
106,819
10,510
Various
Oct. 2018
—
—
6,371
25,455
31,826
2,692
2011
Oct. 2018
1,447
5,564
7,011
662
2001
Oct. 2018
(2,182)
5,765
26,243
32,008
2,999
2012
Oct. 2018
—
—
—
—
1,839
4,654
6,493
718
2001
Oct. 2018
19,529
42,318
61,847
4,892
Various
Oct. 2018
5,508
12,032
17,540
1,375
1969; 2002
1,836
12,774
14,610
1,545
1995; 1999
Oct. 2018
Oct. 2018;
Aug. 2021
40 yrs.
40 yrs.
N/A
40 yrs.
40 yrs.
N/A
40 yrs.
40 yrs.
40 yrs.
40 yrs.
27 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
W. P. Carey 2022 10-K – 123
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
—
2,062
10,034
—
(772)
1,931
9,393
11,324
1,101
2013
Oct. 2018
40 yrs.
3,198
23,981
78,728
(462)
6,767
98,678
105,445
7,277
1980; 2020
Oct. 2018;
Dec. 2018
5,511
10,766
3,861
3,450
7,797
3,662
23,711
2
—
—
—
—
—
5,511
10,768
16,279
1,203
1961
Oct. 2018
3,450
7,797
11,247
982
1970
Oct. 2018
3,662
23,711
27,373
2,614
2002
Oct. 2018
13,507
25,301
6,586
(11,253)
11,035
23,106
34,141
2,368
2007
Oct. 2018
—
2,977
16,168
19,145
1,732
1913
Oct. 2018
—
(5,811)
23,161
7,305
105,384
10,301
128,545
17,606
11,173
1,504
1973
Various
Oct. 2018
Oct. 2018
40 yrs.
29 - 37 yrs.
Office and warehouse
facility in Zary, PL
Industrial facilities in San
Antonio, TX and Sterling,
VA
Industrial facility in Elk
Grove Village, IL
Industrial facility in
Portage, WI
Office facility in
Warrenville, IL
Warehouse facility in
Saitama Prefecture, Japan
Retail facility in Dallas,
TX
Office facility in Houston,
TX
Retail facilities in Croatia
Office facility in
Northbrook, IL
Education facilities in
Chicago, IL
Warehouse facility in
Dillon, SC
Net-lease self-storage
facilities in New York City,
NY
Net-lease self-storage
facility in Hilo, HI
Net-lease self-storage
facility in Clearwater, FL
Warehouse facilities in
Gadki, Poland
Net-lease self-storage
facility in Orlando, FL
Retail facility in
Lewisville, TX
Industrial facility in
Wageningen, Netherlands
Net-lease self-storage
facility in Palm Coast, FL
Office facility in Auburn
Hills, MI
Net-lease self-storage
facility in Holiday, FL
Office facility in Tempe,
AZ
Office facility in Tucson,
AZ
Industrial facility in
Drunen, Netherlands
Industrial facility New
Concord, OH
Office facility in Krakow,
Poland
Retail facility in
Gelsenkirchen, Germany
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,977
16,168
23,161
9,000
104,266
13,002
—
18,510
493
163
3,516
44,933
29,223
77,202
769
12,869
1,247
5,733
10,422
47,727
1,070
8,686
3,485
11,263
5,227
18,793
1,994
4,982
1,910
6,773
1,730
4,213
—
1,118
1,415
447
—
—
714
—
—
57
—
—
—
—
—
—
—
13,417
—
19,533
2,448
17,353
869
—
—
940
940
212
2007
Oct. 2018
(16,831)
1,793
49
1,842
39
2014; 2015
Oct. 2018
—
3,516
44,933
48,449
5,343
2013
Oct. 2018
—
—
—
29,223
77,916
107,139
8,175
Various
Oct. 2018
769
12,869
13,638
1,361
2007
Oct. 2018
1,247
5,733
6,980
690
2001
Oct. 2018
(3,714)
9,756
44,736
54,492
5,185
2007; 2010
Oct. 2018
—
—
1,070
8,686
9,756
986
2000
Oct. 2018
3,485
11,263
14,748
1,256
2004
Oct. 2018
(1,266)
4,894
17,860
22,754
2,039
2013
Oct. 2018
—
—
—
—
—
1,994
4,982
6,976
1,910
6,773
8,683
1,730
4,213
5,943
704
771
580
2001
Oct. 2018
2012
Oct. 2018
1975
Oct. 2018
—
19,533
19,533
2,152
2000
Oct. 2018
2,448
18,222
20,670
1,940
2002
Oct. 2018
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
2,316
9,370
1,248
958
2,309
—
2,381
6,212
11,156
2,178
17,097
—
—
—
—
(745)
2,169
8,772
10,941
—
958
2,309
3,267
(548)
2,229
5,816
8,045
976
313
652
2014
Oct. 2018
1999
Oct. 2018
2003
Oct. 2018
(1,230)
2,039
16,006
18,045
1,774
2000
Oct. 2018
W. P. Carey 2022 10-K – 124
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Warehouse facilities in
Mszczonow and Tomaszow
Mazowiecki, Poland
Office facility in Plymouth,
MN
Office facility in San
Antonio, TX
Warehouse facility in
Sered, Slovakia
Industrial facility in
Tuchomerice, Czech
Republic
Office facility in Warsaw,
Poland
Warehouse facility in
Kaunas, Lithuania
Net-lease student housing
facility in Jacksonville, FL
Warehouse facilities in
Houston, TX
Office facility in Oak
Creek, WI
Warehouse facilities in
Shelbyville, IN;
Kalamazoo, MI; Tiffin,
OH; Andersonville, TN;
and Millwood, WV
Warehouse facility in
Perrysburg, OH
Warehouse facility in
Dillon, SC
Warehouse facility in Zabia
Wola, Poland
Office facility in Buffalo
Grove, IL
Warehouse facilities in
McHenry, IL
Industrial facilities in
Chicago, Cortland, Forest
View, Morton Grove, and
Northbrook, IL and
Madison and Monona, WI
Warehouse facility in
Kilgore, TX
Industrial facility in San
Luis Potosi, Mexico
Industrial facility in
Legnica, Poland
Industrial facility in Meru,
France
Education facility in
Portland, OR
Office facility in
Morrisville, NC
Warehouse facility in
Inwood, WV
Industrial facility in
Hurricane, UT
Industrial facility in
Bensenville, IL
Industrial facility in
Katowice, Poland
Industrial facilities in
Westerville, OH and North
Wales, PA
—
—
—
—
8,782
53,575
2,871
26,353
3,094
16,624
3,428
28,005
—
7,864
27,006
31,475
—
44,990
34,541
10,199
47,391
11,562
906
17,020
—
—
—
—
—
791
1,990
2,858
11,055
2,868
37,571
806
11,922
620
46,319
—
686
—
—
—
—
—
—
—
—
—
—
434
(3,979)
8,222
50,156
58,378
6,025
1995; 2000
Oct. 2018
—
—
2,871
27,039
29,910
2,982
1999
Oct. 2018
3,094
16,624
19,718
1,867
2002
Oct. 2018
(2,006)
3,209
26,218
29,427
2,935
2004
Oct. 2018
(2,226)
7,362
25,282
32,644
2,794
1998
Oct. 2018
(2,871)
—
42,119
42,119
4,540
2015
Oct. 2018
(3,675)
9,548
44,367
53,915
5,022
2008
Oct. 2018
—
—
—
—
—
—
906
17,020
17,926
1,834
2015
Oct. 2018
791
1,990
2,781
234
1972
Oct. 2018
2,858
11,055
13,913
1,310
2000
Oct. 2018
2,868
37,571
40,439
4,527
Various
Oct. 2018
806
11,922
12,728
1,483
1974
Oct. 2018
620
46,753
47,373
4,422
2019
Oct. 2018
14,507
4,742
23,270
5,636
(2,118)
4,439
27,091
31,530
2,974
1999
Oct. 2018
—
—
—
—
—
—
—
—
—
—
—
—
—
2,224
6,583
5,794
21,141
23,267
9,166
—
—
—
3,002
36,334
14,096
2,787
12,945
—
—
—
—
(6)
—
2,224
6,583
8,807
749
1992
Oct. 2018
5,794
21,141
26,935
3,539
1990; 1999
Dec. 2018
27 - 28 yrs.
23,267
9,166
32,433
1,459
Various
Dec.
2018;
Dec. 2019
35 - 40 yrs.
3,002
50,424
53,426
5,454
2007
Dec. 2018
2,787
12,945
15,732
1,527
2009
Dec. 2018
995
9,787
6,007
(1,088)
930
14,771
15,701
1,915
2002
Dec. 2018
4,231
14,731
8
(1,186)
3,966
13,818
17,784
2,094
1997
Dec. 2018
2,396
23,258
2,374
30,140
3,265
36,692
1,914
37,279
8,640
4,948
4,177
2,172
—
—
—
—
—
—
—
2,396
27,435
29,831
3,355
2006
Feb. 2019
2,374
32,312
34,686
3,375
1998
Mar. 2019
3,265
36,692
39,957
3,817
2000
Mar. 2019
1,914
37,279
39,193
3,668
2011
Mar. 2019
300
8,940
4,948
13,888
782
1981
Mar. 2019
—
764
15,163
(484)
—
15,443
15,443
1,195
2019
Apr. 2019
—
1,545
6,508
—
—
1,545
6,508
8,053
781
1960; 1997 May 2019
40 yrs.
W. P. Carey 2022 10-K – 125
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
37 yrs.
39 yrs.
29 yrs.
29 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Industrial facilities in
Fargo, ND; Norristown,
PA; and Atlanta, TX
Industrial facilities in
Chihuahua and Juarez,
Mexico
Warehouse facility in
Statesville, NC
Industrial facilities in
Searcy, AR and Conestoga,
PA
Industrial facilities in
Hartford and Milwaukee,
WI
Industrial facilities in
Brockville and Prescott,
Canada
Industrial facility in
Dordrecht, Netherlands
Industrial facilities in York,
PA and Lexington, SC
Industrial facility in
Queretaro, Mexico
Office facility in Dearborn,
MI
Industrial facilities in
Houston, TX and Metairie,
LA and office facilities in
Houston, TX and Mason,
OH
Industrial facility in
Pardubice, Czech Republic
Warehouse facilities in
Brabrand, Denmark and
Arlandastad, Sweden
Retail facility in Hamburg,
PA
Warehouse facility in
Charlotte, NC
Warehouse facility in
Buffalo Grove, IL
Industrial facility in
Hvidovre, Denmark
Warehouse facility in
Huddersfield, United
Kingdom
Warehouse facility in
Newark, United Kingdom
Industrial facility in
Langen, Germany
Industrial facility in
Aurora, OR
Warehouse facility in
Vojens, Denmark
Office facility in Kitzingen,
Germany
Warehouse facility in
Knoxville, TN
Industrial facilities in
Bluffton and Plymouth, IN;
and Lawrence, KS
Industrial facility in
Huntley, IL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,616
5,589
—
—
3,426
7,286
1,683
13,827
—
—
—
—
1,616
5,589
7,205
818
Various
May 2019
40 yrs.
—
—
3,426
7,286
10,712
1983; 1986;
1991
965
May 2019
1,683
13,827
15,510
1,489
1979
Jun. 2019
—
4,290
51,410
21,027
—
4,678
72,049
76,727
6,511
1950; 1951
Jun. 2019;
Apr. 2021
—
1,471
21,293
—
1,471
21,293
22,764
2,203
1964; 1992;
1993
Jul. 2019
40 yrs.
2,025
9,519
3,233
10,954
4,155
22,930
2,851
12,748
1,431
5,402
—
—
—
—
—
—
—
2,025
9,519
11,544
990
1955; 1995
Jul. 2019
(424)
3,140
10,623
13,763
890
1986
Sep. 2019
—
(3)
—
4,155
22,930
27,085
2,600
1968; 1971
Oct. 2019
2,851
12,745
15,596
1,305
1999
Oct. 2019
1,431
5,402
6,833
567
2002
Oct. 2019
6,130
24,981
1,694
8,793
2,145
436
—
6,130
27,126
33,256
2,444
Various
Nov. 2019
(377)
1,639
8,907
10,546
742
1970
Nov. 2019
6,499
27,899
146
(1,659)
6,140
26,745
32,885
2,294
2012; 2017
Nov. 2019
4,520
34,167
6,481
82,936
3,287
10,167
1,931
4,243
8,659
29,752
21,869
74,777
—
—
—
—
—
—
—
—
—
4,520
34,167
38,687
2,994
2003
Dec. 2019
6,481
82,936
89,417
7,128
1995
Dec. 2019
3,287
10,167
13,454
1,049
1987
Dec. 2019
(265)
1,856
4,053
5,909
436
2007
Dec. 2019
(3,428)
7,886
27,097
34,983
2,156
2005
Dec. 2019
(8,170)
20,020
68,456
88,476
5,111
2006
Jan. 2020
14,160
7,694
32,169
(5,999)
12,461
35,563
48,024
1,695
2021
Jan. 2020
2,914
21,459
1,031
8,784
4,812
41,125
2,455
47,446
—
—
—
—
(5,000)
2,914
16,459
19,373
1,209
1976
Jan. 2020
(296)
1,000
8,519
9,519
622
2020
Jan. 2020
(3,171)
4,481
38,285
42,766
2,694
1967
Mar. 2020
—
2,455
47,446
49,901
2,988
2020
Jun. 2020
674
33,519
20,542
5,260
26,617
—
—
—
1,064
53,671
54,735
2,440
1981; 2014;
2021
Sep 2020;
Dec. 2021
5,260
26,617
31,877
1,500
1996
Sep. 2020
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
W. P. Carey 2022 10-K – 126
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Industrial facilities in
Winter Haven, FL;
Belvedere, IL; and
Fayetteville, NC
Retail facilities in Spain
Warehouse facility in
Little Canada, MN
Warehouse facility in
Hurricane, UT
Industrial facilities in
Bethlehem, PA and Waco,
TX
Industrial facilities in
Pleasanton, KS; Savage,
MN; Grove City, OH; and
Mahanoy City, PA
Outdoor advertising in
Fort Washington,
Huntington Valley, and
West Chester, PA
Warehouse facilities in
Grove City, OH and
Anderson, SC
Office and retail facilities
in NJ and PA
Land and warehouse
facilities in CA
Research and
development facility in
Wageningen, Netherlands
Retail facilities in France
Warehouse facility in
Detroit, MI
Warehouse facility in
Solihull, United Kingdom
Net-lease student housing
facility in New Rochelle,
NY
Industrial facility in
Groveport, OH
Industrial facility in
Dakota, IL
Industrial facility in San
Jose, CA
Warehouse facility in
Opelika, AL
Warehouse facilities in
Elk Grove Village and
Niles, IL; and Guelph,
Canada
Warehouse facility in
Rome, NY
Warehouse facility in
Frankfort, IN
Warehouse facility in
Rogers, MN
Industrial facilities in
Chattanooga, TN
Warehouse facility in
Mankato, MN
Retail facilities in
Denmark
Retail facilities in Poland
—
—
—
—
8,232
34,216
31,745
57,151
3,384
23,422
—
239
—
5,154
22,893
20,517
—
(8,069)
8,232
31,198
31,745
52,339
39,977
83,537
1,763
2,842
1954; 1984;
1997
Various
Oct. 2020
Oct. 2020
—
—
3,384
23,422
26,806
1,272
1987
Oct. 2020
5,154
43,410
48,564
1,602
2005
Dec. 2020
40 yrs.
40 yrs.
40 yrs.
40 yrs.
—
4,673
19,111
—
7,717
21,569
—
4,673
19,111
23,784
984
Various
Dec. 2020
40 yrs.
—
7,717
21,569
29,286
1,078
Various
Dec. 2020
40 yrs.
—
—
—
—
—
6
—
—
—
—
—
492
492
2011; 2014;
2016
24
Jan. 2021
40 yrs.
1,415
15,151
16,566
724
1995; 2001
Feb. 2021
17,537
25,987
43,524
1,226
Various
Feb. 2021
8,516
45,672
54,188
2,158
Various
Feb. 2021
1,429
5,777
18,848
1,244
1,494
25,804
27,298
(11,082)
14,487
94,963
109,450
315
4,163
2022
1968; 1981;
1983
Mar. 2021
Apr. 2021
—
3,625
47,743
51,368
2,008
1991
Apr. 2021
(21,832)
36,577
107,043
143,620
4,450
2021
May 2021
—
—
—
—
—
—
—
—
—
—
—
3,617
21,590
25,207
896
2018
May 2021
—
29,543
29,543
1,165
1982
May 2021
1,970
50,369
52,339
2,066
1978
May 2021
12,808
31,714
44,522
1,299
1984
May 2021
2,115
39,980
42,095
1,569
2005
Jun. 2021
12,932
25,096
38,028
1962; 1976;
1983
981
Jun. 2021
1,480
47,781
49,261
1,865
2021
Jun. 2021
5,423
95,915
101,338
3,239
2015
Aug. 2021
1,871
20,959
22,830
688
2005
Sep. 2021
4,859
29,302
34,161
881
2006; 2017
Oct. 2021
2,979
11,619
14,598
330
1976
Nov. 2021
(2,157)
(3,313)
2,553
14,311
36,413
44,997
38,966
59,308
973
1,177
Various
Various
Dec. 2021
Dec. 2021
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
492
1,415
15,151
17,537
25,987
8,513
45,669
15,954
104,578
3,625
47,743
42,137
123,315
3,617
21,590
—
—
—
—
—
26,639
2,904
1,970
50,369
12,808
31,714
2,115
39,980
12,932
25,096
1,480
47,781
5,423
95,915
1,871
20,959
4,859
29,302
2,979
11,619
2,695
15,110
38,428
47,511
—
—
—
—
—
—
—
—
—
—
—
W. P. Carey 2022 10-K – 127
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to
Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
4,568
31,977
9,342
32,770
—
—
—
4,568
31,977
36,545
808
1975
Dec. 2021
(2,373)
8,816
30,923
39,739
779
Various
Dec. 2021
1,025
397
832
—
1,025
1,229
2,254
18
Various
Dec. 2021
Industrial facility in Cary,
IL
Retail facilities in the
Netherlands
Outdoor advertising in
Flemington and
Pennsauken, NJ
Industrial facility in
Pleasant Prairie, WI
Funeral homes in Spain
Retail facilities in Denmark
Industrial facility in Laval,
Canada
Warehouse facility in
Chattanooga, TN
Industrial facility in
Coatzacoalcos, Mexico
Industrial facility in
Lowbanks, CA
Industrial facilities in
Chicago, IL; Geismar, LA;
and Nashville, TN
Industrial and warehouse
facilities in the United
States
Retail facilities in Denmark
Industrial facility in
Medina, OH
Warehouse facility in Bree,
Belgium
Retail facilities in Spain
Industrial and warehouse
facilities in the United
States
Retail facilities in Denmark
Office facility in Austin,
TX
Land in Chicago, IL
Retail facilities in Croatia
Warehouse in Streetsboro,
OH
Office facility in Norcross,
GA
Warehouse in University
Park, IL
Office facility in Oslo,
Norway
Industrial facilities in
Surprise, AZ; Temple, GA;
and Houston, TX
Office facility in
Farmington Hills, MI
Warehouse facility in
Jonesville, SC
Warehouse facility in
Albany, GA
Office facility in Eagan,
MN
—
—
—
—
—
—
—
—
—
—
1,443
26,735
3,295
16,532
99,822
35,898
4,014
16,037
5,063
36,645
9,805
17,622
3,574
1,605
—
9,300
26,945
—
—
—
—
—
—
—
72,295
1,885
14,788
9,847
2,228
88,227
31,774
2,029
22,938
—
4,906
73,302
12,825
27,543
2,690
31,095
3,873
1,367
192,197
33,703
45,393
—
23,337
2,576
2,435
9,333
2,936
1,795
2,676
46,812
15,377
63,299
43,560
15,763
33,250
9,640
2,994
26,100
6,188
2,195
5,213
25,198
2,895
32,152
5,232
3,108
12,220
8,573
1,298
7,445
—
(6,953)
(1,477)
1,443
25,266
3,154
16,532
94,338
34,562
17,975
119,604
37,716
(1,237)
3,766
15,048
18,814
5,063
36,645
41,708
9,805
17,622
27,427
—
—
—
403
2,145
625
327
761
301
2001
Various
Various
Jan. 2022
Feb. 2022
Various
1966
Feb. 2022
2003
Mar. 2022
1960
Apr. 2022
3,574
1,605
5,179
27
1967
Apr. 2022
—
9,300
26,945
36,245
437
Various
May 2022
40 yrs.
—
251
9,847
2,246
88,227
32,007
98,074
34,253
1,390
443
Various
Various
May 2022
Various
—
2,029
22,938
24,967
1,972
813
—
5,131
75,316
13,413
75,316
18,544
311
954
151
1963
Jun. 2022
1964
Various
Jun. 2022
Jul. 2022
192,197
34,916
219,740
37,705
2,093
297
Various
Various
Jul. 2022
Various
27,543
2,789
31,095
3,873
1,425
45,393
—
24,325
76,488
3,873
25,750
2,435
9,333
11,768
1,795
2,676
4,471
15,377
63,299
78,676
(1,085)
15,414
32,514
47,928
2,994
26,100
29,094
—
1,312
—
—
1,046
—
—
—
—
—
—
—
—
2,195
5,213
7,408
55
2001
Aug. 2022
2,895
32,152
35,047
3,108
12,220
15,328
337
128
1997
Aug. 2022
1977
Aug. 2022
1,298
7,445
8,743
78
2013
Aug. 2022
476
—
255
98
28
663
341
274
1993
N/A
2001; 2006
Aug. 2022
Aug. 2022
Aug. 2022
1993
Aug. 2022
1999
Aug. 2022
2003
Aug. 2022
2013
Aug. 2022
1998; 2007;
2011
Aug. 2022
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
N/A
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
—
—
—
—
—
—
—
—
—
—
—
42
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
W. P. Carey 2022 10-K – 128
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which
Carried at Close of Period
(c) (d)
Land
Buildings
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation in Latest
Statement of
Income
is Computed
Office facility in
Plymouth, MN
Industrial facilities
in Dallas/Forth
Worth, TX
Warehouse facility
in Byron Center,
MI
Net-lease hotel in
Albion, Mauritius
Office facility in
Warstein,
Germany
Net-lease hotel in
Munich, Germany
Office facility in
Plano, TX
Industrial facility
in Plymouth, MN
Net-lease hotel in
Hamburg,
Germany
Retail facility in
Oslo, Norway
Office facility in
Jacksonville, FL
Industrial facility
in Michalovce,
Slovakia
Office facility in
Warrenville, IL
Office facility in
Coralville, IA
Net-lease hotel in
Stuttgart,
Germany
Industrial facility
in Menomonee
Falls, WI
Warehouse facility
in Iowa Falls, IA
Warehouse facility
in Westlake, OH
Industrial facility
in Hebron, Ohio
and warehouse
facility in
Strongsville, OH
Warehouse facility
in Scarsborough,
Canada
Specialty facilities
in West Des
Moines, IA and
Clifton Park, NY
Industrial facility
in Orzinuovi, Italy
Outdoor
advertising in
West Chester, PA
Industrial facilities
in the United
States
Warehouse facility
in Romulus, MI
Industrial facility
in Salisbury, NC
54,079
27,948
64,033
725
(2,032)
27,330
63,344
90,674
25,187
4,624
29,243
4,336
3,918
9,817
6,407
1,925
10,098
10,972
7,633
29,274
—
3,917
4,049
45,331
17,892
61,405
21,221
3,667
28,073
9,969
3,693
13,242
15,419
7,328
17,467
—
—
—
—
20
—
—
9
—
9,310
2,084
6,673
—
4,538
19,009
21,433
3,285
11,666
—
2,222
35,695
13,338
—
31,276
11,841
2,726
17,453
6,138
997
8,819
—
1,928
24,353
—
—
—
—
—
—
—
—
4,671
5,494
5,092
1,868
3,229
17,080
2,473
9,892
—
559
11,117
41,107
2,788
33,353
1,308
13,082
—
—
387
—
—
—
—
—
—
—
—
—
—
—
—
—
4,624
29,243
33,867
306
1982
3,918
9,817
13,735
103
1990; 2008
337
4,083
4,240
8,323
44
2011
1,925
10,098
12,023
1,562
7,956
30,513
38,469
3,356
18,649
64,004
82,653
—
—
3,667
28,073
31,740
3,693
13,251
16,944
1,050
7,639
18,206
25,845
106
320
2015
2007
671
294
139
191
672
2016
2001
1975
2017
1971
—
2,084
6,673
8,757
70
2001
996
4,730
19,813
24,543
—
—
3,285
12,053
15,338
2,222
35,695
37,917
208
129
374
2006
2001
2015
1,324
—
32,600
32,600
342
1965
2,726
17,453
20,179
183
1974
997
8,819
9,816
92
2001
1,928
24,353
26,281
252
1972
4,671
5,494
10,165
54
1969; 1999
5,092
1,868
6,960
18
1980
3,229
17,080
20,309
166
1971; 2021
2,636
10,544
13,180
91
1978
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
Aug.
2022
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
—
559
559
10
2022
Oct. 2022
40 yrs.
11,117
41,107
52,224
31
Various
Dec. 2022
2,788
33,353
36,141
1,308
13,082
14,390
5
2
2017
Dec. 2022
2015
Dec. 2022
40 yrs.
40 yrs.
40 yrs.
—
—
—
—
—
—
—
—
—
815
—
—
—
—
$
782,663 $ 2,628,187 $ 10,520,207 $
1,013,116 $
(844,878) $ 2,400,002 $ 10,916,630 $ 13,316,632 $
1,672,091
W. P. Carey 2022 10-K – 129
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Initial Cost to Company
Cost Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at
which Carried at
Close of Period
Total
Date of
Construction
Date
Acquired
Direct Financing Method
Industrial facilities in Irving and Houston, TX
Retail facility in Freehold, NJ
Office facilities in Corpus Christi, Odessa, San Marcos, and Waco,
TX
Retail facilities in Germany
Warehouse facility in Brierley Hill, United Kingdom
Retail facilities in El Paso and Fabens, TX
Industrial facility in Eagan, MN
Retail facility in Gronau, Germany
Industrial facility in Mount Carmel, IL
Retail facility in Vantaa, Finland
Retail facility in Linköping, Sweden
Industrial facility in Calgary, Canada
Industrial facilities in Fair Bluff, NC and Valencia, PA
Industrial facility in Göppingen, Germany
Industrial and office facility in Nagold, Germany
Warehouse facilities in Bristol, Leeds, Liverpool, Luton, Newport,
Plymouth, and Southampton, United Kingdom
Warehouse facility in Gieten, Netherlands
Warehouse facility in Oxnard, CA
Industrial facilities in Bartow, FL; Momence, IL; Smithfield, NC;
Hudson, NY; and Ardmore, OK
Industrial facility in Countryside, IL
Industrial facility in Clarksville, TN
Industrial facility in Bluffton, IN
Warehouse facility in Houston, TX
Warehouse in Chicago, IL
Less: allowance for credit losses
$
— $
2,925
— $
—
27,599 $
17,067
— $
—
(4,227) $
(435)
713
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,973
1,634
—
5,131
2,089
28,734
2,147
4,777
—
281
135
5,291
1,484
—
5,780
10,717
4,553
1,062
—
—
4,454
563
1,680
503
—
—
14,211
145,854
12,357
17,823
11,548
4,401
3,265
15,522
9,402
7,076
40,860
60,120
17,675
23,087
15,258
10,960
87,030
1,457
10,180
3,407
5,977
10,517
—
5,582
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1,572)
(64,558)
(2,554)
(102)
(628)
(1,013)
(303)
(4,505)
(4,105)
(1,232)
(37,179)
(20,026)
(1,419)
(1,784)
(1,027)
(1,427)
2,921
37
(155)
(44)
(128)
26
(8,733)
23,372
16,632
14,728
115,612
11,950
22,498
10,920
3,669
3,097
16,308
6,781
5,844
9,461
50,811
20,809
22,365
14,231
9,533
94,405
2,057
11,705
3,866
5,849
10,543
(8,733)
1978
2004
1969; 1996; 2000
Various
1996
Various
1975
1989
1896
2004
2004
1965
1968; 1976
1930
1994
Various
1985
1975
Various
1981
1998
1975
1972
1942
Jan. 1998
Sep. 2012
Sep. 2012
Sep. 2012
Sep. 2012
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Jan. 2014
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Aug. 2022
$
13,376 $
74,250 $
572,653 $
5,582 $
(154,172) $
498,313
W. P. Carey 2022 10-K – 130
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Personal
Property
Initial Cost to Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which Carried
at Close of Period
(c) (d)
Land
Buildings
Personal
Property
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation
in Latest
Statement of
Income is
Computed
Operating Real Estate – Hotels
Bloomington,
MN
$
— $ 3,810 $ 29,126 $ 3,622 $
Operating Real Estate – Student Housing Facilities
Austin, TX
Swansea,
United
Kingdom
12,994
28,533
43,134
—
32,884
60,006
Operating Real Estate – Self-Storage Facilities
Loves Park, IL
Cherry Valley,
IL
1,412
—
—
—
—
—
—
—
—
—
—
1,339
695
87
454
444
268
721
338
821
4,853
4,160
3,873
785
4,724
4,944
3,290
2,973
1,310
3,180
6,386
2,147
17,164
6,842
1,505
16,229
2,563
904
10,779
6,481
1,036
22,714
3,546
2,854
2,875
1,425
3,680
2,481
12,267
7,215
5,217
3,316
2,889
16,397
2,869
1,227
10,897
5,294
6,094
4,771
6,156
2,709
10,157
5,694
1,544
1,952
813
2,368
655
6,826
1,423
15,841
8,826
6,459
20,802
10,455
20,254
11,316
4,891
1,534
14,416
Rockford, IL
Rockford, IL
Rockford, IL
Peoria, IL
East Peoria, IL
Loves Park, IL
Winder, GA
Winder, GA
Kissimmee,
FL
St. Petersburg,
FL
Corpus Christi,
TX
Palm Desert,
CA
Kailua-Kona,
HI
Miami, FL
Columbia, SC
Kailua-Kona,
HI
Pompano
Beach, FL
Jensen Beach,
FL
Dickinson, TX
Humble, TX
Temecula, CA
Cumming, GA
Naples, FL
Valrico, FL
Tallahassee,
FL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,329 $
(314) $ 3,874 $ 31,265 $ 7,434 $ 42,573 $
14,303
2008
Jan. 2014
34 yrs.
44
—
12,994
60,033
17
73,044
629
2020
Aug. 2022
40 yrs.
33,936
3,526
—
70,346
—
70,346
364
2022
Aug. 2022
40 yrs.
35
9
44
—
12
238
108
27
69
34
4
4
40
—
30
6
—
—
—
42
—
—
—
5
18
8
6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,412
4,862
1,339
695
87
454
444
268
721
338
821
4,160
3,903
785
4,733
5,164
3,375
3,000
1,354
3,198
26
9
14
—
3
18
23
—
25
16
6,300
5,508
4,612
872
5,190
5,626
3,666
3,721
1,717
4,035
2,147
17,168
—
19,315
1,505
16,229
4
17,738
904
10,819
—
11,723
1,036
22,714
—
23,750
1,425
3,680
2,481
12,297
7,215
5,217
—
6
—
13,722
10,901
7,698
2,889
16,397
—
19,286
1,227
10,897
—
12,124
1,544
1,952
813
2,368
655
6,826
1,423
15,878
8,826
6,459
20,802
10,455
20,264
11,316
5
—
—
—
5
8
8
17,427
10,778
7,272
23,170
11,115
27,098
12,747
1,534
14,416
6
15,956
777
640
545
98
546
849
528
429
218
486
180
170
114
238
129
76
55
172
114
166
92
68
218
110
213
119
151
1997
1988
1979
1979
1957
1990
1986
1978
2006
2001
2005
2007
1998
2006
1991
1986
1988
2004
1992
1989
2001
2009
2006
1994
1974
2009
1999
Oct. 2018
40 yrs.
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
Oct. 2018
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
Aug. 2022
Aug. 2022
40 yrs.
40 yrs.
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
40 yrs.
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
Aug. 2022
40 yrs.
W. P. Carey 2022 10-K – 131
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Description
Encumbrances
Land
Buildings
Personal
Property
Initial Cost to Company
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which Carried
at Close of Period
(c) (d)
Land
Buildings
Personal
Property
Sebastian, FL
Lady Lake, FL
Panama City
Beach, FL
Hesperia, CA
Hesperia, CA
Hesperia, CA
Highland, CA
Lancaster, CA
Rialto, CA
Thousand
Palms, CA
Lilburn, GA
Stockbridge
GA
Louisville, KY
St. Peters, MO
Crystal Lake,
IL
Las Vegas, NV
Panama City
Beach, FL
Sarasota, FL
Sarasota, FL
Leesburg, FL
Palm Bay, FL
Houston, TX
Hudson, FL
Las Vegas, NV
Las Vegas, NV
Ithaca, NY
Kissimmee,
FL
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
1,847
3,923
2,605
—
—
—
—
—
—
—
2,325
1,614
6,564
2,309
2,615
6,328
6,134
5,204
3,806
2,407
7,156
4,619
3,253
2,342
2,212
2,297
—
3,704
2,542
3,612
3,628
1,428
3,718
529
928
736
1,416
639
699
1,465
598
3,502
2,465
1,555
308
3,115
386
1,325
717
666
1,076
638
1,272
2,814
1,878
669
918
829
890
626
2,126
1,053
994
1,295
587
1,143
7,917
11,881
7,581
18,691
9,412
12,896
11,966
12,100
16,924
17,632
6,225
7,238
13,908
5,521
6,056
20,963
17,086
13,597
10,175
5,888
21,425
8,719
6,092
12,355
11,275
4,484
13,147
5,628
4,583
7,451
6,318
3,121
5,894
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
7
—
—
—
4
—
—
6
—
16
43
115
40
2
24
8
7
8
—
21
57
6
—
12
8
—
—
3
105
36
14
92
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
529
928
736
1,416
639
699
1,465
598
3,502
2,465
1,555
308
3,115
386
1,325
717
666
1,076
638
1,272
2,814
1,878
669
918
829
890
626
2,126
1,053
994
1,295
587
1,143
7,927
11,881
7,581
18,691
9,412
12,900
11,966
12,100
16,924
17,632
6,225
7,268
14,020
5,552
6,056
20,985
17,094
13,597
10,175
5,888
21,425
8,776
6,092
12,355
11,275
4,484
13,147
5,628
4,583
7,556
6,354
3,121
5,986
—
7
—
—
—
—
—
—
6
—
16
13
3
9
2
2
—
7
8
—
21
—
6
—
12
8
—
—
3
—
—
14
—
Total
8,456
12,816
8,317
20,107
10,051
13,599
13,431
12,698
20,432
20,097
7,796
7,589
17,138
5,947
7,383
21,704
17,760
14,680
10,821
7,160
24,260
10,654
6,767
13,273
12,116
5,382
13,773
7,754
5,639
8,550
7,649
3,722
7,129
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation
in Latest
Statement of
Income is
Computed
83
124
79
196
99
135
125
127
178
185
66
77
151
59
64
220
179
142
107
62
225
91
64
129
118
47
138
59
48
79
67
34
63
1986
2010
1997
2004
2007
1985
2003
1989
2007
2007
1998
2003
1998
1991
1977
1996
2008
2003
2001
1988
2000
1971
2008
1984
1987
1988
2015
1983
1980
1980
1986
1985
1980
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
Aug. 2022
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
40 yrs.
W. P. Carey 2022 10-K – 132
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2022
(in thousands)
Initial Cost to Company
Description Encumbrances
Land
Buildings
Personal
Property
Cost
Capitalized
Subsequent to
(a)
Acquisition
Increase
(Decrease)
in Net
Investments
(b)
Gross Amount at which Carried
at Close of Period
(c) (d)
Land
Buildings
Personal
Property
Total
Accumulated
Depreciation
(d)
Date of
Construction
Date
Acquired
Life on which
Depreciation
in Latest
Statement of
Income is
Computed
Fernandina
Beach, FL
Kissimmee,
FL
Houston,
TX
Houston,
TX
Portland,
OR
Greensboro,
NC
Avondale,
LA
Washington,
D.C.
Kissimmee,
FL
Milford,
MA
Millsboro,
DE
New Castle,
DE
Rehoboth,
DE
Chicago, IL
Gilroy, CA
7,269
2,664
25,000
3,448
2,149
6,223
2,758
1,350
6,257
2,957
1,112
8,044
6,348
994
10,176
4,036
1,389
15,175
3,422
1,154
9,090
6,470
3,371
13,655
—
—
—
1,770
7,034
951
11,935
1,180
14,286
4,367
1,110
15,787
8,215
—
—
1,565
787
3,058
18,284
4,931
13,014
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7
20
12
16
—
—
—
—
10
1
—
—
10
67
8
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,664
25,007
2,149
6,234
1,350
6,257
1,112
8,055
994
10,176
1,389
15,175
1,154
9,090
3,371
13,655
1,770
7,034
951
11,935
1,180
14,286
1,110
15,787
1,565
787
3,058
18,284
4,971
13,022
—
9
12
5
—
—
—
—
10
1
—
—
10
27
—
27,671
262
1986
Aug. 2022
40 yrs.
8,392
7,619
9,172
11,170
16,564
10,244
17,026
8,814
12,887
15,466
16,897
19,859
5,785
16,080
65
66
85
107
159
1981
Aug. 2022
40 yrs.
1998
Aug. 2022
40 yrs.
2001
Aug. 2022
40 yrs.
2000
Aug. 2022
40 yrs.
1953
Aug. 2022
40 yrs.
95
2008
Aug. 2022
40 yrs.
143
1962
Aug. 2022
40 yrs.
74
2000
Aug. 2022
40 yrs.
125
150
165
192
53
137
2003
Aug. 2022
40 yrs.
2001
Aug. 2022
40 yrs.
2005
Aug. 2022
40 yrs.
1999
1990
1999
Aug. 2022
Aug. 2022
Aug. 2022
40 yrs.
40 yrs.
40 yrs.
$
292,647 $122,253 $906,396 $ 3,622 $
41,843 $
3,212 $ 122,317 $ 947,171 $ 7,838 $ 1,077,326 $
28,295
__________
(a) Consists of the cost of improvements subsequent to acquisition and acquisition costs, including construction costs on build-to-suit transactions, legal
fees, appraisal fees, title costs, and other related professional fees. For business combinations, transaction costs are excluded.
(b) The increase (decrease) in net investment was primarily due to (i) sales of properties, (ii) impairment charges, (iii) changes in foreign currency
exchange rates, (iv) allowances for credit loss (Note 6), (v) reclassifications from net investments in direct financing leases to real estate subject to
operating leases, and (vi) the amortization of unearned income from net investments in direct financing leases, which produces a periodic rate of return
that at times may be greater or less than lease payments received.
(c) Excludes (i) gross lease intangible assets of $3.4 billion and the related accumulated amortization of $1.6 billion, (ii) gross lease intangible liabilities of
$309.9 million and the related accumulated amortization of $125.3 million, (iii) sale-leasebacks classified as loans receivable of $234.2 million, (iv)
secured loans receivable of $39.3 million (as disclosed in Schedule IV – Mortgage Loans on Real Estate), (v) assets held for sale, net of $57.9 million,
and (vi) real estate under construction of $40.8 million.
(d) A reconciliation of real estate and accumulated depreciation follows:
W. P. Carey 2022 10-K – 133
W. P. CAREY INC.
NOTES TO SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION
(in thousands)
Beginning balance
Acquisitions
Acquisitions through CPA:18 Merger
Foreign currency translation adjustment
Dispositions
Reclassification from real estate under construction
Reclassification from direct financing leases
Impairment charges
Capital improvements
Reclassification to assets held for sale
Ending balance
Beginning balance
Depreciation expense
Dispositions
Foreign currency translation adjustment
Reclassification to assets held for sale
Ending balance
Beginning balance
Acquisitions through CPA:18 Merger
Reclassification from real estate under construction
Foreign currency translation adjustment
Capital improvements
Ending balance
Beginning balance
Depreciation expense
Foreign currency translation adjustment
Ending balance
Reconciliation of Real Estate Subject to Operating Leases
Years Ended December 31,
2022
11,677,185 $
997,937
881,613
(269,272)
(165,516)
147,982
67,001
(36,624)
29,419
(13,093)
13,316,632 $
2021
10,736,752 $
1,144,757
—
(267,018)
(80,129)
86,179
76,929
(24,246)
14,589
(10,628)
11,677,185 $
2020
9,703,504
555,032
—
290,559
(167,671)
176,211
183,789
(26,343)
35,722
(14,051)
10,736,752
Reconciliation of Accumulated Depreciation for
Real Estate Subject to Operating Leases
Years Ended December 31,
2022
1,448,020 $
298,972
(47,463)
(26,400)
(1,038)
1,672,091 $
2021
1,206,912 $
286,347
(17,582)
(25,298)
(2,359)
1,448,020 $
2020
950,452
259,337
(24,786)
24,764
(2,855)
1,206,912
Reconciliation of Operating Real Estate
Years Ended December 31,
2022
2021
2020
83,673 $
922,161
66,820
3,526
1,146
1,077,326 $
83,476 $
—
—
—
197
83,673 $
83,083
—
—
—
393
83,476
Reconciliation of Accumulated Depreciation for
Operating Real Estate
Years Ended December 31,
2022
2021
2020
16,750 $
11,541
4
28,295 $
14,004 $
2,746
—
16,750 $
11,241
2,763
—
14,004
$
$
$
$
$
$
$
$
At December 31, 2022, the aggregate cost of real estate that we and our consolidated subsidiaries own for federal income tax purposes was approximately
$16.5 billion.
W. P. Carey 2022 10-K – 134
W. P. CAREY INC.
SCHEDULE IV — MORTGAGE LOANS ON REAL ESTATE
December 31, 2022
(dollars in thousands)
Description
Financing agreement — Cipriani
Financing agreement — observation wheel
Beginning balance
Repayments
Acquisition through CPA:18 Merger (Note 6)
Gain on repayment of secured loan receivable
Change in allowance for credit losses (Note 6)
Ending balance
Interest Rate
10.0 %
7.5 %
Final Maturity Date
Jul. 2024
Jun. 2023
Carrying Amount
$
$
28,000
11,250
39,250
Reconciliation of Mortgage Loans on Real Estate
Years Ended December 31,
2022
2021
2020
$
$
24,143 $
(34,000)
28,000
10,613
10,494
39,250 $
24,143 $
—
—
—
—
24,143 $
47,737
(11,000)
—
—
(12,594)
24,143
W. P. Carey 2022 10-K – 135
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to
be disclosed in this and other reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed,
summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and
communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It
should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the
effectiveness of a system of controls.
Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of
the design and operation of our disclosure controls and procedures as of December 31, 2022, have concluded that our disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Exchange Act) were effective as of December 31, 2022 at a reasonable level of assurance.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States
of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our
receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with policies or procedures may deteriorate.
We assessed the effectiveness of our internal control over financial reporting at December 31, 2022. In making this assessment, we used criteria set forth in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our
assessment, we concluded that, at December 31, 2022, our internal control over financial reporting is effective based on those criteria.
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, and in connection therewith, PricewaterhouseCoopers LLP has issued an attestation report on the
Company’s effectiveness of internal controls over financial reporting as of December 31, 2022, as stated in their report in Item 8.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B. Other Information.
None.
W. P. Carey 2022 10-K – 136
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
W. P. Carey 2022 10-K – 137
Item 10. Directors, Executive Officers and Corporate Governance.
PART III
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
Item 11. Executive Compensation.
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following
the end of our fiscal year, and is incorporated herein by reference.
W. P. Carey 2022 10-K – 138
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(1) and (2) — Financial statements and schedules: see index to financial statements and schedules included in Item 8.
(3) Exhibits:
The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
Exhibit
No.
3.1
Articles of Amendment and Restatement of W. P. Carey Inc. dated
June 15, 2017
Description
3.2 Fifth Amended and Restated Bylaws of W. P. Carey Inc. dated June
15, 2017
Form of Common Stock Certificate
4.1
4.2
Indenture, dated as of March 14, 2014, by and between W. P. Carey
Inc., as issuer and U.S. Bank National Association, as trustee
4.3 First Supplemental Indenture, dated as of March 14, 2014, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.4 Form of Global Note Representing $500,000,000 Aggregate
Principal Amount of 4.60% Senior Notes due 2024
4.5 Third Supplemental Indenture, dated January 26, 2015, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.6 Form of Note representing $450 Million Aggregate Principal
Amount of 4.000% Senior Notes due 2025
4.7 Fourth Supplemental Indenture, dated as of September 12, 2016, by
and between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.8 Form of Note representing $350 Million Aggregate Principal
4.9
Amount of 4.250% Senior Notes due 2026
Indenture, dated as of November 8, 2016, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S.
Bank National Association, as trustee
4.10 First Supplemental Indenture, dated as of January 19, 2017, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee.
Method of Filing
Incorporated by reference to Exhibit 3.1 to Current Report on Form
8-K filed June 16, 2017
Incorporated by reference to Exhibit 3.2 to Current Report on Form
8-K filed June 16, 2017
Incorporated by reference to Exhibit 4.1 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed January 26, 2015
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed January 26, 2015
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed September 12, 2016
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed September 12, 2016
Incorporated by reference to Exhibit 4.3 to Automatic shelf
registration statement on Form S-3 (File No. 333-233159) filed
August 9, 2019
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed January 19, 2017
W. P. Carey 2022 10-K – 139
Exhibit
No.
Description
4.11 Form of Note representing €500 Million Aggregate Principal
Amount of 2.250% Senior Notes due 2024
4.12 Second Supplemental Indenture dated as of March 6, 2018, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.13 Form of Note representing €500 Million Aggregate Principal
Amount of 2.125% Senior Notes due 2027
4.14 Third Supplemental Indenture dated as of October 9, 2018, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.15 Form of Note representing €500 Million Aggregate Principal
Amount of 2.250% Senior Notes due 2026
4.16 Fifth Supplemental Indenture, dated June 14, 2019, by and between
W. P. Carey Inc., as issuer, and U.S. Bank National Association, as
trustee
4.17 Form of Note representing $325 Million Aggregate Principal
Amount of 3.850% Senior Notes due 2029
4.18 Fourth Supplemental Indenture, dated as of September 19, 2019, by
and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.19 Form of Note representing €500 Million Aggregate Principal
Amount of 1.350% Senior Notes due 2028
4.20 Description of Securities Registered under Section 12 of the
Exchange Act
4.21 Sixth Supplemental Indenture, dated October 14, 2020, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.22 Form of Note representing $500 Million Aggregate Principal
Amount of 2.400% Senior Notes due 2031
4.23 Seventh Supplemental Indenture, dated February 25, 2021, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.24 Form of Note representing $425 Million Aggregate Principal
Amount of 2.250% Senior Notes Due 2033
4.25 Fifth Supplemental Indenture dated as of March 8, 2021, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
Method of Filing
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed January 19, 2017
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
10-Q filed August 2, 2019
Incorporated by reference to Exhibit 4.2 to Current Report on Form
10-Q filed August 2, 2019
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed September 19, 2019
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed September 19, 2019
Incorporated by reference to Exhibit 4.22 to Annual Report on Form
10-K for the year ended December 31, 2019 filed February 21, 2020
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed October 14, 2020
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed October 14, 2020
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed February 25, 2021
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed February 25, 2021
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 8, 2021
W. P. Carey 2022 10-K – 140
Exhibit
No.
Description
4.26 Form of Note representing €525 Million Aggregate Principal
Amount of 0.950% Senior Notes Due 2030
4.27 Eighth Supplemental Indenture, dated October 15, 2021, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.28 Form of Note representing $350 Million Aggregate Principal
Amount of 2.450% Senior Notes due 2032
4.29 Form of Note Representing €150,000,000 Aggregate Principal
Amount of 3.41% Senior Notes due 2029
4.30 Form of Note Representing €200,000,000 Aggregate Principal
Amount of 3.70% Senior Notes due 2032
10.1 W. P. Carey Inc. 1997 Share Incentive Plan, as amended *
10.2 W. P. Carey Inc. (formerly W. P. Carey & Co. LLC) Long-Term
Incentive Program as amended and restated effective as of
September 28, 2012 *
10.3 W. P. Carey Inc. Amended and Restated Deferred Compensation
Plan for Employees *
Method of Filing
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 8, 2021
Incorporated by reference Exhibit 4.2 to Current Report on Form 8-
K filed October 15, 2021
Incorporated by reference Exhibit 4.3 to Current Report on Form 8-
K filed October 15, 2021
Incorporated by reference to Exhibit 4.1 to Quarterly Report on
Form 10-Q filed November 4, 2022
Incorporated by reference to Exhibit 4.2 to Quarterly Report on
Form 10-Q filed November 4, 2022
Incorporated by reference to Exhibit 10.2 to Annual Report on Form
10-K for the year ended December 31, 2014 filed March 2, 2015
Incorporated by reference to Exhibit 10.3 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Incorporated by reference to Exhibit 10.4 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
10.4 Amended and Restated W. P. Carey Inc. 2009 Share Incentive Plan * Incorporated by reference to Appendix A of Schedule 14A filed
April 30, 2013
10.5 2017 Annual Incentive Compensation Plan
10.6 2017 Share Incentive Plan
10.7 Form of Share Option Agreement under the 2017 Share Incentive
Plan
10.8 Form of Restricted Share Agreement under the 2017 Share Incentive
Plan
10.9 Form of Restricted Share Unit Agreement under the 2017 Share
Incentive Plan
10.10 Form of Long-Term Performance Share Unit Award Agreement
pursuant to the W. P. Carey Inc. 2017 Share Incentive Plan
10.11 Form of Non-Employee Director Restricted Share Agreement under
the 2017 Share Incentive Plan
Incorporated by reference to Exhibit A of Schedule 14A filed April
11, 2017
Incorporated by reference to Exhibit B of Schedule 14A filed April
11, 2017
Incorporated by reference to Exhibit 4.9 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.7 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.8 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.6 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.5 to Registration Statement on
Form S-8, filed June 27, 2017
W. P. Carey 2022 10-K – 141
Description
Method of Filing
Exhibit
No.
10.12
W. P. Carey Inc. 2009 Non-Employee Directors’ Incentive Plan *
10.13 Fourth Amended and Restated Credit Agreement, dated as of
February 20, 2020, among W. P. Carey Inc. and Certain of its
Subsidiaries identified therein as Guarantors, Bank of America,
N.A., as Administrative Agent, Bank of America, N.A., JPMorgan
Chase Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers, Bank
of America, N.A., as Swing Line Lender, and the Lenders party
thereto
10.14 First Amendment (LIBOR Transition), dated as of December 1,
2021, to the Fourth Amended and Restated Credit Agreement, dated
as of February 20, 2020, among W. P. Carey Inc. and Bank of
America, N.A., as administrative agent
10.15 Second Amendment, dated as of April 19, 2022, to the Fourth
Amended and Restated Credit Agreement, dated as of February 20,
2020, by and among W. P. Carey Inc. as Borrower, certain
Subsidiaries of W. P. Carey identified therein, from time to time as
Guarantors, Bank of America, N.A., as Administrative Agent, Bank
of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo
Bank, N.A., as L/C
10.16 Third Amendment, dated as of January 26, 2023, to the Fourth
Amended and Restated Credit Agreement, dated as of February 20,
2020, is entered into among W. P. Carey Inc., as Parent Borrower,
each of the Lenders party hereto, each of the L/C Issuers party
hereto, and Bank of America, N.A., as administrative agent
10.17 Agency Agreement dated as of January 19, 2017, by and among
WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor,
Elavon Financial Services DAC, UK Branch, as paying agent and
U.S. Bank National Association, as transfer agent, registrar and
trustee
10.18 Agency Agreement dated as of March 6, 2018, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, UK Branch, as paying agent and U.S. Bank
National Association, as transfer agent, registrar and trustee
10.19 Agency Agreement dated as of October 9, 2018, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, UK Branch, as paying agent and U.S. Bank
National Association, as transfer agent, registrar and trustee
10.20 Agency Agreement dated as of March 8, 2021, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, as paying agent and U.S. Bank National
Association, as transfer agent, registrar and trustee
Incorporated by reference to Exhibit 10.2 to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2013 filed August 6, 2013
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed February 20, 2020
Incorporated by reference to Exhibit 10.18 to Annual Report on
Form 10-K filed February 11, 2022
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed April 22, 2022
Filed herewith
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed January 19, 2017
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed March 8, 2021
W. P. Carey 2022 10-K – 142
Exhibit
No.
Description
10.21 Equity Sales Agreement, dated May 2, 2022, by and among W. P.
Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets
Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc.,
BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc.,
Jefferies LLC, JMP Securities LLC, J.P. Morgan Securities LLC,
RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital
(USA) Inc., and Wells Fargo Securities, LLC, as agents, and each of
Barclays Bank PLC, Bank of Montreal, The Bank of New York
Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase
Bank, National Association, Regions Securities LLC, Royal Bank of
Canada, The Bank of Nova Scotia and Wells Fargo Bank, National
Association, as forward purchasers
10.22 Form of Forward Confirmation
10.23 Note Purchase Agreement, dated August 31, 2022, by and among W.
P. Carey Inc. and the purchasers listed in the purchaser schedule
thereto
18.1 Preferability letter of Independent Registered Public Accounting
Firm
21.1 List of Registrant Subsidiaries
23.1 Consent of PricewaterhouseCoopers LLP
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
99.1 Director and Officer Indemnification Policy
101.INS XBRL Instance Document – the instance document does not appear
in the Interactive Data File because its XBRL tags are embedded
within the Inline XBRL Document.
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
Method of Filing
Incorporated by reference to Exhibit 1.1 to Current Report on Form
8-K, filed May 3, 2022
Incorporated by reference to Exhibit 1.2 to Current Report on Form
8-K, filed May 3, 2022
Incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed September 1, 2022
Incorporated by reference to Exhibit 18.1 to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2013 filed
November 5, 2013
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Incorporated by reference to Exhibit 99.1 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Filed herewith
Filed herewith
Filed herewith
W. P. Carey 2022 10-K – 143
Exhibit
No.
Description
Method of Filing
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 101)
Filed herewith
Filed herewith
Filed herewith
Filed herewith
______________________
*The referenced exhibit is a management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 (a)(3) of
Form 10-K.
W. P. Carey 2022 10-K – 144
Item 16. Form 10-K Summary.
None.
W. P. Carey 2022 10-K – 145
Pursuant to the requirements of Section 13 or 15(d) 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.
SIGNATURES
Date:
February 10, 2023
By:
W. P. Carey Inc.
/s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Signature
Title
/s/ Jason E. Fox
Jason E. Fox
/s/ ToniAnn Sanzone
ToniAnn Sanzone
/s/ Brian Zander
Brian Zander
/s/ Christopher J. Niehaus
Christopher J. Niehaus
/s/ Mark A. Alexander
Mark A. Alexander
/s/ Constantin H. Beier
Constantin H. Beier
/s/ Tonit M. Calaway
Tonit M. Calaway
/s/ Peter J. Farrell
Peter J. Farrell
/s/ Robert J. Flanagan
Robert J. Flanagan
/s/ Jean Hoysradt
Jean Hoysradt
/s/ Margaret G. Lewis
Margaret G. Lewis
/s/ Nicolaas J. M. van Ommen
Nicolaas J. M. van Ommen
/s/ Elisabeth Stheeman
Elisabeth Stheeman
Director and Chief Executive Officer
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
Chief Accounting Officer
(Principal Accounting Officer)
Date
February 10, 2023
February 10, 2023
February 10, 2023
Chairman of the Board and Director
February 10, 2023
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
February 10, 2023
W. P. Carey 2022 10-K – 146
The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
EXHIBIT INDEX
Exhibit
No.
3.1
Articles of Amendment and Restatement of W. P. Carey Inc. dated
June 15, 2017
Description
3.2 Fifth Amended and Restated Bylaws of W. P. Carey Inc. dated June
15, 2017
Form of Common Stock Certificate
4.1
4.2
Indenture, dated as of March 14, 2014, by and between W. P. Carey
Inc., as issuer and U.S. Bank National Association, as trustee
4.3 First Supplemental Indenture, dated as of March 14, 2014, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.4 Form of Global Note Representing $500,000,000 Aggregate
Principal Amount of 4.60% Senior Notes due 2024
4.5 Third Supplemental Indenture, dated January 26, 2015, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.6 Form of Note representing $450 Million Aggregate Principal
Amount of 4.000% Senior Notes due 2025
4.7 Fourth Supplemental Indenture, dated as of September 12, 2016, by
and between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.8 Form of Note representing $350 Million Aggregate Principal
4.9
Amount of 4.250% Senior Notes due 2026
Indenture, dated as of November 8, 2016, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S.
Bank National Association, as trustee
4.10 First Supplemental Indenture, dated as of January 19, 2017, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee.
Method of Filing
Incorporated by reference to Exhibit 3.1 to Current Report on Form
8-K filed June 16, 2017
Incorporated by reference to Exhibit 3.2 to Current Report on Form
8-K filed June 16, 2017
Incorporated by reference to Exhibit 4.1 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 14, 2014
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed January 26, 2015
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed January 26, 2015
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed September 12, 2016
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed September 12, 2016
Incorporated by reference to Exhibit 4.3 to Automatic shelf
registration statement on Form S-3 (File No. 333-233159) filed
August 9, 2019
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed January 19, 2017
Exhibit
No.
Description
4.11 Form of Note representing €500 Million Aggregate Principal
Amount of 2.250% Senior Notes due 2024
4.12 Second Supplemental Indenture dated as of March 6, 2018, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.13 Form of Note representing €500 Million Aggregate Principal
Amount of 2.125% Senior Notes due 2027
4.14 Third Supplemental Indenture dated as of October 9, 2018, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.15 Form of Note representing €500 Million Aggregate Principal
Amount of 2.250% Senior Notes due 2026
4.16 Fifth Supplemental Indenture, dated June 14, 2019, by and between
W. P. Carey Inc., as issuer, and U.S. Bank National Association, as
trustee
4.17 Form of Note representing $325 Million Aggregate Principal
Amount of 3.850% Senior Notes due 2029
4.18 Fourth Supplemental Indenture, dated as of September 19, 2019, by
and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
4.19 Form of Note representing €500 Million Aggregate Principal
Amount of 1.350% Senior Notes due 2028
4.20 Description of Securities Registered under Section 12 of the
Exchange Act
4.21 Sixth Supplemental Indenture, dated October 14, 2020, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.22 Form of Note representing $500 Million Aggregate Principal
Amount of 2.400% Senior Notes due 2031
4.23 Seventh Supplemental Indenture, dated February 25, 2021, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.24 Form of Note representing $425 Million Aggregate Principal
Amount of 2.250% Senior Notes Due 2033
4.25 Fifth Supplemental Indenture dated as of March 8, 2021, by and
among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as
guarantor, and U.S. Bank National Association, as trustee
Method of Filing
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed January 19, 2017
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 4.1 to Current Report on Form
10-Q filed August 2, 2019
Incorporated by reference to Exhibit 4.2 to Current Report on Form
10-Q filed August 2, 2019
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed September 19, 2019
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed September 19, 2019
Incorporated by reference to Exhibit 4.22 to Annual Report on Form
10-K for the year ended December 31, 2019 filed February 21, 2020
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed October 14, 2020
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed October 14, 2020
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K filed February 25, 2021
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed February 25, 2021
Incorporated by reference to Exhibit 4.3 to Current Report on Form
8-K filed March 8, 2021
Exhibit
No.
Description
4.26 Form of Note representing €525 Million Aggregate Principal
Amount of 0.950% Senior Notes Due 2030
4.27 Eighth Supplemental Indenture, dated October 15, 2021, by and
between W. P. Carey Inc., as issuer, and U.S. Bank National
Association, as trustee
4.28 Form of Note representing $350 Million Aggregate Principal
Amount of 2.450% Senior Notes due 2032
4.29 Form of Note Representing €150,000,000 Aggregate Principal
Amount of 3.41% Senior Notes due 2029
4.30 Form of Note Representing €200,000,000 Aggregate Principal
Amount of 3.70% Senior Notes due 2032
10.1 W. P. Carey Inc. 1997 Share Incentive Plan, as amended *
10.2 W. P. Carey Inc. (formerly W. P. Carey & Co. LLC) Long-Term
Incentive Program as amended and restated effective as of
September 28, 2012 *
10.3 W. P. Carey Inc. Amended and Restated Deferred Compensation
Plan for Employees *
Method of Filing
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K filed March 8, 2021
Incorporated by reference Exhibit 4.2 to Current Report on Form 8-
K filed October 15, 2021
Incorporated by reference Exhibit 4.3 to Current Report on Form 8-
K filed October 15, 2021
Incorporated by reference to Exhibit 4.1 to Quarterly Report on
Form 10-Q filed November 4, 2022
Incorporated by reference to Exhibit 4.2 to Quarterly Report on
Form 10-Q filed November 4, 2022
Incorporated by reference to Exhibit 10.2 to Annual Report on Form
10-K for the year ended December 31, 2014 filed March 2, 2015
Incorporated by reference to Exhibit 10.3 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Incorporated by reference to Exhibit 10.4 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
10.4 Amended and Restated W. P. Carey Inc. 2009 Share Incentive Plan * Incorporated by reference to Appendix A of Schedule 14A filed
April 30, 2013
10.5 2017 Annual Incentive Compensation Plan
10.6 2017 Share Incentive Plan
10.7 Form of Share Option Agreement under the 2017 Share Incentive
Plan
10.8 Form of Restricted Share Agreement under the 2017 Share Incentive
Plan
10.9 Form of Restricted Share Unit Agreement under the 2017 Share
Incentive Plan
10.10 Form of Long-Term Performance Share Unit Award Agreement
pursuant to the W. P. Carey Inc. 2017 Share Incentive Plan
10.11 Form of Non-Employee Director Restricted Share Agreement under
the 2017 Share Incentive Plan
Incorporated by reference to Exhibit A of Schedule 14A filed April
11, 2017
Incorporated by reference to Exhibit B of Schedule 14A filed April
11, 2017
Incorporated by reference to Exhibit 4.9 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.7 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.8 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.6 to Registration Statement on
Form S-8 filed June 27, 2017
Incorporated by reference to Exhibit 4.5 to Registration Statement on
Form S-8, filed June 27, 2017
Exhibit
No.
10.12
Description
Method of Filing
W. P. Carey Inc. 2009 Non-Employee Directors’ Incentive Plan *
10.13 Fourth Amended and Restated Credit Agreement, dated as of
February 20, 2020, among W. P. Carey Inc. and Certain of its
Subsidiaries identified therein as Guarantors, Bank of America,
N.A., as Administrative Agent, Bank of America, N.A., JPMorgan
Chase Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers, Bank
of America, N.A., as Swing Line Lender, and the Lenders party
thereto
10.14 First Amendment (LIBOR Transition), dated as of December 1,
2021, to the Fourth Amended and Restated Credit Agreement, dated
as of February 20, 2020, among W. P. Carey Inc. and Bank of
America, N.A., as administrative agent
10.15 Second Amendment, dated as of April 19, 2022, to the Fourth
Amended and Restated Credit Agreement, dated as of February 20,
2020, by and among W. P. Carey Inc. as Borrower, certain
Subsidiaries of W. P. Carey identified therein, from time to time as
Guarantors, Bank of America, N.A., as Administrative Agent, Bank
of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo
Bank, N.A., as L/C
10.16 Third Amendment, dated as of January 26, 2023, to the Fourth
Amended and Restated Credit Agreement, dated as of February 20,
2020, is entered into among W. P. Carey Inc., as Parent Borrower,
each of the Lenders party hereto, each of the L/C Issuers party
hereto, and Bank of America, N.A., as administrative agent
10.17 Agency Agreement dated as of January 19, 2017, by and among
WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor,
Elavon Financial Services DAC, UK Branch, as paying agent and
U.S. Bank National Association, as transfer agent, registrar and
trustee
10.18 Agency Agreement dated as of March 6, 2018, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, UK Branch, as paying agent and U.S. Bank
National Association, as transfer agent, registrar and trustee
10.19 Agency Agreement dated as of October 9, 2018, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, UK Branch, as paying agent and U.S. Bank
National Association, as transfer agent, registrar and trustee
10.20 Agency Agreement dated as of March 8, 2021, by and among WPC
Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon
Financial Services DAC, as paying agent and U.S. Bank National
Association, as transfer agent, registrar and trustee
Incorporated by reference to Exhibit 10.2 to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2013 filed August 6, 2013
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed February 20, 2020
Incorporated by reference to Exhibit 10.18 to Annual Report on
Form 10-K filed February 11, 2022
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed April 22, 2022
Filed herewith
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed January 19, 2017
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed March 6, 2018
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed October 9, 2018
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K filed March 8, 2021
Exhibit
No.
Description
10.21 Equity Sales Agreement, dated May 2, 2022, by and among W. P.
Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets
Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc.,
BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc.,
Jefferies LLC, JMP Securities LLC, J.P. Morgan Securities LLC,
RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital
(USA) Inc., and Wells Fargo Securities, LLC, as agents, and each of
Barclays Bank PLC, Bank of Montreal, The Bank of New York
Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase
Bank, National Association, Regions Securities LLC, Royal Bank of
Canada, The Bank of Nova Scotia and Wells Fargo Bank, National
Association, as forward purchasers
10.22 Form of Forward Confirmation
10.23 Note Purchase Agreement, dated August 31, 2022, by and among W.
P. Carey Inc. and the purchasers listed in the purchaser schedule
thereto
18.1 Preferability letter of Independent Registered Public Accounting
Firm
21.1 List of Registrant Subsidiaries
23.1 Consent of PricewaterhouseCoopers LLP
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
99.1 Director and Officer Indemnification Policy
101.INS XBRL Instance Document – the instance document does not appear
in the Interactive Data File because its XBRL tags are embedded
within the Inline XBRL Document.
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
Method of Filing
Incorporated by reference to Exhibit 1.1 to Current Report on Form
8-K, filed May 3, 2022
Incorporated by reference to Exhibit 1.2 to Current Report on Form
8-K, filed May 3, 2022
Incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed September 1, 2022
Incorporated by reference to Exhibit 18.1 to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2013 filed
November 5, 2013
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Incorporated by reference to Exhibit 99.1 to Annual Report on
Form 10-K for the year ended December 31, 2012 filed February 26,
2013
Filed herewith
Filed herewith
Filed herewith
Exhibit
No.
Description
Method of Filing
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 101)
Filed herewith
Filed herewith
Filed herewith
Filed herewith
______________________
*The referenced exhibit is a management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 (a)(3) of
Form 10-K.
Exhibit 10.16
Execution Copy
THIRD AMENDMENT
TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of January 26, 2023, is entered into among W.P. CAREY INC. (the “Company” or the “Parent
Borrower”), each of the Lenders party hereto, each of the L/C Issuers party hereto, and BANK OF AMERICA, N.A., as
administrative agent (in such capacity, the “Administrative Agent”). Capitalized terms used herein but not otherwise defined
herein shall have the meanings provided to such terms in the Amended Credit Agreement described below.
RECITALS
WHEREAS, the Company, the Designated Borrowers from time to time party thereto, the Guarantors from time to time
party thereto, the Lenders from time to time party thereto, the Administrative Agent, Bank of America, N.A., JPMorgan Chase
Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers and Bank of America, N.A., as Swing Line Lender have entered into that
certain Fourth Amended and Restated Credit Agreement, dated as of February 20, 2020 (as heretofore amended, modified,
extended, restated, replaced, or supplemented, the “Existing Credit Agreement” and, as amended by this Amendment, the
“Amended Credit Agreement”).
WHEREAS, the Company and the Lenders party hereto have agreed to modify the Existing Credit Agreement as herein
set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. Amendments to Credit Agreement. The parties hereto agree that effective as of the Third
Amendment Effective Date (defined below) the Existing Credit Agreement (other than, except as described in clause (b), the
schedules and exhibits thereto) shall be amended:
(a)
hereto; and
to incorporate the changes marked on the copy of the Amended Credit Agreement attached as Annex I
(b)
by replacing Exhibit A to the Existing Credit Agreement with the Exhibit A attached hereto as Annex II.
SECTION 2. Conditions to Effectiveness. This Amendment shall become effective as of the first date each of
the following conditions precedent has been satisfied (the first date each of such conditions precedent has been satisfied being
referred to herein as the “Third Amendment Effective Date”):
(a) The Administrative Agent shall have received counterparts of this Amendment duly executed by the
Company, the Administrative Agent, each Lender, and each L/C Issuer, each of which shall be originals, telecopies or in
.pdf or other electronic format (followed promptly by originals) in each case in accordance with Section 7 hereof.
(b)
No Default or Event of Default has occurred and is continuing on the Third Amendment Effective Date.
(c)
The representations and warranties contained in Section 4 of this Amendment are true and correct in all
material respects on and as of the Third Amendment Effective Date, except to the extent that (1) 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 (2) any representation or warranty that is already by its terms qualified as to “materiality”, “Material
Adverse Effect” or similar language shall be true and correct in all respects as of such date after giving effect to such
qualification.
(d)
The Administrative Agent shall have received a certificate of the Company dated as of the Third
Amendment Effective Date signed by a Responsible Officer of the Company certifying that before and after giving effect
to this Amendment, (i) the representations and warranties contained in Article V of the Amended Credit Agreement or
any other Loan Document, or which are contained in any document furnished at any time under or in connection
therewith or with this Amendment are true and correct in all material respects on and as of the Third Amendment
Effective Date, except to the extent that (1) with respect to the representations and warranties set forth in Section 5.20(b)
of the Amended Credit Agreement, in which case they are true and correct in all respects, (2) 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, (3) any representation or warranty that is already by its terms qualified as to “materiality”, “Material Adverse
Effect” or similar language shall be true and correct in all respects as of such date after giving effect to such qualification,
and (4) for purposes of such certificate, the representations and warranties contained in subsections (a) and (b) of Section
5.05 of the Amended Credit 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 Credit Agreement, and (ii) no Default exists.
SECTION 3. Representations and Warranties of Loan Parties. The Company represents and warrants (which
representations and warranties shall survive the execution and delivery hereof) to the Administrative Agent and each Lender that
before and after giving effect to this Amendment:
(a)
Each Loan Party has all requisite power and authority to execute, deliver and perform its obligations under,
and consummate the transactions contemplated by, this Amendment.
(b)
The execution, delivery and performance by each Loan Party of, and the consummation by each Loan
Party of the transactions contemplated by, this Amendment have been duly authorized by all necessary corporate or other
organizational action and do not and will not (i) contravene the terms of any of such Person's Organization Documents;
(ii) 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 (x) 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 (y) any order, injunction, writ or decree of any Governmental Authority
or any arbitral award to which such Person or its property is subject; or (iii) violate any Law.
(c)
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 Loan Party of this Amendment, or for the consummation of the transactions
contemplated by this Amendment.
(d)
This Amendment has been duly executed and delivered by each Loan Party and constitutes the legal, valid
and binding obligation of each Loan Party, enforceable against each Loan Party in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and
subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(e)
The representations and warranties of each Loan Party contained in Article V of the Amended Credit
Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in
connection herewith or therewith, are true and correct in all material respects on and as of the Third Amendment Effective
Date with the same force and effect as if made on such date, except (i) with respect to the representations and warranties
set forth in Section 5.20(b) of the Amended Credit Agreement, in which case they are true and correct in all respects, (ii)
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, (iii) any representation or warranty that is already by its terms
qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects as of
such date after giving effect to such qualification, and (iv) for purposes of this Amendment, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 of the Amended Credit Agreement shall be deemed to refer
to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01 of the Amended
Credit Agreement.
(f)
No Default or Event of Default has occurred and is continuing. SECTION 4. Ratification
and Confirmation.
(a)
Except as herein agreed, the Amended Credit Agreement and the other Loan Documents remain in full
force and effect and are hereby ratified and affirmed by the Loan Parties. Each of the Loan Parties hereby (i) confirms and agrees
that the Borrower is truly and justly indebted to the Administrative Agent, the L/C Issuers and the Lenders in the aggregate
amount of the Obligations without defense, counterclaim or offset of any kind whatsoever, and (ii) reaffirms and admits the
validity and enforceability of the Amended Credit Agreement and the other Loan Documents.
(b)
This Amendment shall be limited precisely as written and, except as expressly provided herein, shall not be
deemed (i) to be a consent granted pursuant to, or a waiver,
modification or forbearance of, any term or condition of the Amended Credit Agreement or any of the instruments or agreements
referred to therein or a waiver of any Default or Event of Default under the Amended Credit Agreement, whether or not known to
the Administrative Agent, the Swing Line Lender, any of the L/C Issuers or any of the Lenders, or (ii) to prejudice any right or
remedy which the Administrative Agent, the Swing Line Lender, any of the L/C Issuers or any of the Lenders may now have or
have in the future against any Person under or in connection with the Amended Credit Agreement, any of the instruments or
agreements referred to therein or any of the transactions contemplated thereby.
SECTION 5. Continuing Effect. The Loan Parties acknowledge and agree that this Amendment constitutes a
Loan Document. From and after the Third Amendment Effective Date, each reference in the Amended Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in each other Loan Document (and the
other documents and instruments delivered pursuant to or in connection therewith) to the “Credit Agreement”, “thereunder”,
“thereof” or words of like import, shall mean and be a reference to the Amended Credit Agreement, as the Amended Credit
Agreement may in the future be amended, restated, supplemented or modified from time to time.
SECTION 6. Governing Law. THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR
CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 7. Miscellaneous. This Amendment may be in the form of an Electronic Record (in “.pdf” form or
otherwise) and may be executed using Electronic Signatures, which shall be considered as originals and shall have the same legal
effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping system. This
Amendment may be executed in as many counterparts as necessary or convenient, including both paper and electronic
counterparts, but all such counterparts shall be one and the same Amendment. For the avoidance of doubt, the authorization under
this paragraph may include, without limitation, use or acceptance by the Administrative Agent of a manually signed Amendment
which has been converted into electronic form (such as scanned into “.pdf” format), or an electronically signed Amendment
converted into another format, for transmission, delivery and/or retention. Notwithstanding anything contained herein to the
contrary, the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless
expressly agreed to by such Person pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to
the extent the Administrative Agent has agreed to accept such Electronic Signature, the Administrative Agent and each of the
Lenders shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any party without further
verification and regardless of the appearance or form of such Electronic Signature and (ii) upon the request of any party, any
Electronic Signature shall be promptly followed by such manually
executed counterpart. “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by
15 USC §7006, as it may be amended from time to time.
SECTION 8. Severability. Any provision of this Amendment held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or enforceability without
affecting the legality, validity or enforceability of the remaining provisions hereof and the illegality, invalidity or unenforceability
of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 9. Successors and Assigns. The provisions of this Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
SECTION 10. Loan Document. This Amendment is a Loan Document.
SECTION 11. Headings. Section headings in this Amendment are included for convenience of reference only
and are not to affect the interpretation of this Amendment.
SECTION 12. Entire Agreement. This Amendment constitutes the entire contract among the parties relating to
the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Without limitation of the foregoing:
THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF 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.
[The remainder of this page left blank intentionally]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their
respective proper and duly authorized officers as of the day and year first above written.
PARENT BORROWER:
W.P. CAREY INC.
By:
/s/ Mark J. Foresi
Name: Mark J. Foresi
Title:
Executive Director, Capital Markets
LENDERS:
BANK OF AMERICA, N.A., as a Lender and
an L/C Issuer
By:
/s/ Cheryl Sneor
Name:
Cheryl Sneor
Title:
Vice President
JPMORGAN CHASE BANK, N.A., as a Lender and an L/C Issuer
By:
Name:
/s/ David Glenn
David Glenn
Authorized Signatory
Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
and an L/C Issuer
By:
Name:
/s/ Terrance Alewine
Terrance Alewine
Vice President
Title:
BARCLAYS BANK PLC, as a Lender
By:
Name: Warren Veech III
/s/ Warren Veech III
Vice President
Title:
CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender
By:
Name:
/s/ Jessica W. Phillips
Jessica W. Phillips
Authorized Signatory
Title:
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
Name:
/s/ Patrick T. Brooks
Patrick T. Brooks
Assistant Vice President
Title:
BMO HARRIS BANK N.A., as a Lender
By:
Name:
/s/ Ashley Bake
Ashley Bake
Managing Director
Title:
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By:
Name:
/s/ Brian Kelly
Brian Kelly
Senior Vice President
Title:
REGIONS BANK, as a Lender
By:
Name: William Chalmers
/s/ William Chalmers
Senior Vice President
Title:
CITIZENS BANK, N.A., as a Lender
By:
Name:
/s/ Donald Woods
Donald Woods
SVP
Title:
FIFTH THIRD BANK, NATIONAL ASSOCIATION, as a Lender
By:
Name:
/s/ Casey Ciccone
Casey Ciccone
Senior Vice President
Title:
THE BANK OF NOVA SCOTIA, as a Lender
By:
Name:
Title:
/s/ Sacha Boxill
Sacha Boxill
Director, Corporate Banking – U.S. Real Estate, Gaming &
Leisure
ROYAL BANK OF CANADA, as a Lender
/s/ William Behuniak
By:
Name: William Behuniak
Title:
Authorized Signatory
THE BANK OF NEW YORK MELLON, as a Lender
By:
Name:
Title:
/s/ Cody Mainc
Cody Mainc
Vice President
SIGNATURE BANK, as a Lender
By:
/s/ Alfred Quaye
Name:
Title:
Alfred Quaye
Senior Lender, VP
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By:
/s/ Henry Pennell
Name:
Title:
Henry Pennell
Vice President
ANNEX I
TO THIRD AMENDMENT
AMENDED CREDIT AGREEMENT
(see attached)
Annex I to Third Amendment
to Fourth Amended and Restated Credit Agreement
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Published Deal CUSIP Number: 92937YAL4
Dated as of February 20, 2020
among
W.P. CAREY INC.
as Borrower
Certain Subsidiaries of W.P. CAREY INC. identified herein,
as Guarantors
BANK OF AMERICA, N.A.,
as Administrative Agent
BANK OF AMERICA, N.A., JPMORGAN CHASE BANK, N.A., and WELLS FARGO BANK, N.A.,
as L/C Issuers
BANK OF AMERICA, N.A.,
as Swing Line Lender
JPMORGAN CHASE BANK, N.A., and WELLS FARGO BANK, N.A.,
as Co-Syndication Agents
and
The Other Lenders Party Hereto
_____________________________________
BofA SECURITIES, INC. and JPMORGAN CHASE BANK, N.A.,
as Joint Bookrunners
BofA SECURITIES, INC., JPMORGAN CHASE BANK, N.A., and WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers
BARCLAYS BANK PLC,
CAPITAL ONE, NATIONAL ASSOCIATION and U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agents
BMO HARRIS BANK N.A., PNC BANK, NATIONAL ASSOCIATION, and REGIONS BANK,
as Senior Managing Agents
BBVA USA, CITIZENS BANK, N.A., FIFTH THIRD BANK, NATIONAL ASSOCIATION,
THE BANK OF NOVA SCOTIA and ROYAL BANK OF CANADA,
as Managing Agents
and
Section
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
Defined Terms
Other Interpretive Provisions
Accounting Terms
Rounding
Times of Day
Letter of Credit Amounts
Exchange Rates; Currency Equivalents; Interest Rates
Additional Alternative Currencies
Change of Currency
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
The Loans
Borrowings, Conversions and Continuations of Loans
Competitive Loans
Letters of Credit
Swing Line Loans
Prepayments
Termination or Reduction of Commitments
Repayment of Loans
Interest
Fees
Computation of Interest and Fees
Evidence of Debt
Payments Generally; Administrative Agent’s Clawback
Sharing of Payments by Lenders
[Intentionally Omitted].
Increase in Commitments
Cash Collateral
Defaulting Lenders
Designated Borrowers
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01
3.02
Taxes
Illegality
i
1
56
57
58
58
58
59
59
61
62
64
67
70
81
85
87
89
89
90
91
91
92
94
95
95
58
59
60
60
60
60
61
63
63
66
69
73
84
88
90
91
92
93
94
95
95
98
99
99
101
102
105
98
99
101
108
114
104
111
3.03
3.04
3.05
3.06
3.07
Inability to Determine Rates; Replacement of Relevant Rates or Successor Rates
Increased Costs; Reserves on Eurocurrency Rate Loans, Daily Floating Eurocurrency Rate Loans and
LIBOR Floating Rate Loans
Compensation for Losses
Mitigation Obligations; Replacement of Lenders
Survival
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01
4.02
Conditions of Effectiveness and Term Loans
Conditions to All Credit Extensions
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5.09
5.10
5.11
5.12
5.13
5.14
5.15
5.16
5.17
5.18
5.19
5.20
5.21
5.22
5.23
Existence, Qualification and Power
Authorization; No Contravention
Governmental Authorization; Other Consents
Binding Effect
Financial Statements; No Material Adverse Effect
Litigation
No Default
Ownership of Property; Liens
Environmental Compliance
Taxes
ERISA Compliance
Subsidiaries; Equity Interests; Loan Parties
Margin Regulations; Investment Company Act
Disclosure
Compliance with Laws
Intellectual Property; Licenses, Etc.
Solvency
Casualty, Etc.
SEC Reports
Anti-Money Laundering; Sanctions; Anti-Corruption Laws
Affected Financial Institutions
Covered Entity
Representations as to Foreign Obligors
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01
Financial Statements
ii
116
111
119
121
122
122
115
116
117
118
122
125
118
121
126
127
127
127
127
128
128
128
128
128
129
130
130
130
131
131
131
131
131
132
132
132
132
122
122
122
123
123
123
123
124
124
124
124
125
125
126
126
126
126
126
127
127
127
127
127
133
129
6.02
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
6.17
6.18
6.19
7.01
7.02
7.03
7.04
7.05
7.06
7.07
7.08
7.09
7.10
7.11
7.12
7.13
7.14
7.15
Certificates; Other Information
Notices
Payment of Obligations
Preservation of Existence, Etc.
Maintenance of Properties
Maintenance of Insurance
Compliance with Laws
Books and Records
Inspection Rights
Use of Proceeds
Additional Guarantors
Compliance with Environmental Laws
Distributions in the Ordinary Course
Company Status
Further Assurances
Compliance with Terms of Leaseholds
Material Contracts
Anti-Corruption Laws
Liens
Indebtedness
Investments
Fundamental Changes
Dispositions
Restricted Payments
Change in Nature of Business
Transactions with Affiliates
ARTICLE VII
NEGATIVE COVENANTS
Amendments of Organizational Documents
Use of Proceeds
Financial Covenants
Prepayments, Etc. of Indebtedness
Fiscal Year Changes
Anti-Money Laundering; Sanctions; Anti-Corruption Laws
Company Covenants
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01
8.02
Events of Default
Remedies Upon Event of Default
iii
134
137
137
138
138
138
138
139
139
139
139
140
141
141
141
141
141
142
142
142
143
144
145
145
146
146
146
146
146
147
147
147
148
129
132
132
133
133
133
133
133
133
134
134
135
135
135
135
136
136
136
136
137
137
138
139
139
140
140
140
140
141
141
141
141
142
149
151
143
145
8.03
Application of Funds
152
145
9.01
9.02
9.03
9.04
9.05
9.06
9.07
9.08
9.09
9.10
9.11
9.12
10.01
10.02
10.03
10.04
10.05
10.06
10.07
10.08
10.09
10.10
10.11
10.12
ARTICLE IX
ADMINISTRATIVE AGENT
Appointment and Authority
Rights as a Lender
Exculpatory Provisions
Reliance by Administrative Agent
Delegation of Duties
Resignation of Administrative Agent
Non-Reliance on Administrative Agent and Other Lenders
No Other Duties, Etc.
Administrative Agent May File Proofs of Claim
Guaranty Matters
Certain ERISA Matters
Recovery of Erroneous Payments
ARTICLE X
CONTINUING GUARANTY
Guaranty
Rights of Lenders
Certain Waivers
Obligations Independent
Subrogation
Termination; Reinstatement
Subordination
Stay of Acceleration
Condition of Loan Parties
Release of Subsidiary Guarantors that are not Intermediate Holding Companies
Contribution
Release of Company
ARTICLE XI
MISCELLANEOUS
11.01
11.02
11.03
11.04
11.05
11.06
11.07
Amendments, Etc.
Notices; Effectiveness; Electronic Communications
No Waiver; Cumulative Remedies; Enforcement
Expenses; Indemnity; Damage Waiver
Payments Set Aside
Successors and Assigns
Treatment of Certain Information; Confidentiality
iv
153
153
153
154
155
155
157
157
157
158
158
159
160
160
161
161
161
162
162
162
162
163
164
146
147
147
148
148
149
150
150
151
151
151
153
153
154
154
154
154
155
155
155
156
156
157
158
165
168
170
171
173
173
179
158
162
164
164
166
167
172
v
11.08
11.09
11.10
11.11
11.12
Right of Setoff
Interest Rate Limitation
CounterpartsIntegration; Effectiveness
Survival of Representations and Warranties
Severability
Replacement of Lenders
Governing Law; Jurisdiction; Etc.
11.13
11.14
11.15 WAIVER OF JURY TRIAL
11.16
11.17
11.18
11.19
11.20
11.21
11.22
11.23
11.24
11.25
No Advisory or Fiduciary Responsibility
Electronic Execution of Assignments and Certain Other Documents; Electronic Records; Counterparts
USA PATRIOT Act
Judgment Currency
ENTIRE AGREEMENT
Original Notes
Amendment and Restatement
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
Acknowledgement Regarding any Supported QFCs
UPREIT Reorganization
SCHEDULES
1.01(A)
1.01(B)
2.01
5.11(d)
5.12
7.02
11.02
Managed Programs
Existing Letters of Credit
Commitments and Applicable Percentages
ERISA
Subsidiaries and Other Equity Investments; Loan Parties
Existing Indebtedness
Administrative Agent’s Office, Certain Addresses for Notices
180
181
181
181
181
182
183
184
184
185
185
186
186
186
187
188
188
189
173
174
174
174
175
175
176
177
177
178
179
179
180
180
181
181
182
183
EXHIBITS
Form of
A
B-1
B-2
B-3
C
D-1
D-2
E
F-1
Loan Notice
Competitive Bid Request
Competitive Bid
Competitive Loan Note
Swing Line Loan Notice
[Term][Delayed Draw Term] Note
Revolving Credit Note
Compliance Certificate
Assignment and Assumption
v
F-2
G
H
I
J
K
L
M
Administrative Questionnaire
Joinder Agreement
Solvency Certificate
United States Tax Compliance Certificate
Supplemental Addendum
Designated Borrower Request and Assumption Agreement
Designated Borrower Notice
Notice of Loan Prepayment
vi
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of
February 20, 2020, among W.P. Carey Inc. (together with its permitted successors and assigns, the “Company”), each Designated
Borrower from time to time party hereto, certain Subsidiaries of the Company identified herein, as guarantors, each lender from
time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), Bank of America, N.A., as Administrative
Agent, Bank of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers and Bank of America,
N.A., as Swing Line Lender.
PRELIMINARY STATEMENTS:
WHEREAS, the Company, the Administrative Agent and certain Lenders party hereto are party to a certain Third
Amended and Restated Credit Agreement, dated as of February 22, 2017, as amended through but excluding the date hereof (as
so amended, the “Original Credit Agreement”); and
a novation, on the terms and subject to the conditions hereinafter set forth.
WHEREAS, the parties hereto desire to amend and restate the Original Credit Agreement in its entirety, but not as
In consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree that the
Original Credit Agreement shall be, and hereby is, amended and restated in its entirety as follows, effective on and as of the
Closing Date and hereby further agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
Article a
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 Competitive Loan that bears interest at a rate determined with reference to an
Absolute Rate.
“Adjusted Total EBITDA” means, for any period, an amount equal to:
(a)
(b)
EBITDA of the Company and its Subsidiaries during such period; plus
Joint Venture EBITDA for such period; plus
(c)
Programs during such period; plus
distributions in cash received by the Company and its Subsidiaries in respect of equity in Managed
(d)
distributions in cash received by the Company and its Subsidiaries in respect of common or preferred
equity investments.
“Adjustment” has the meaning specified in Section 3.03(c).
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents,
or any successor administrative agent.
“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02 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 Parent Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit F-2 or any
other form approved by the Administrative Agent.
“Affected Borrower” has the meaning specified in Section 2.06(b)(vi).
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“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 Alternative Currency Tranche Commitments” means, at any time, the aggregate amount of the Lenders’
Alternative Currency Tranche Commitments at such time.
“Aggregate Commitments” means, at any time, the aggregate amount of the Revolving Credit Facility, the Lenders’
Delayed Draw Term Commitments and the Lenders’ Term Commitments at such time.
“Aggregate Dollar Tranche Commitments” means, at any time, the aggregate amount of the Lenders’ Dollar Tranche
Commitments at such time.
“Agreement” means this Credit Agreement.
“Agreed Currency” means Dollars or any Alternative Currency, as applicable.
“Alternative Currency” means each of Euro, Sterling, Canadian Dollars, Swedish Krona, Norwegian Krone, Danish
Krone, Australian Dollars, Yen, Swiss Franc and Mexican Pesos; provided that for each Alternative Currency, such requested
currency is an Eligible Currency.
“Alternative Currency Daily Rate” means, for any day, with respect to any extension of credit under the Credit
Agreement:
to the definition thereof;
(a)
any Swing Line Borrowing denominated in Euro, the rate per annum equal to €STR determined pursuant
(b)
(a) any Credit Extension denominated in Sterling, the rate per annum equal to SONIA determined pursuant
to the definition thereof plus the SONIA Adjustment; and
pursuant to the definition thereof plus the SARON Adjustment;
(c)
(b) any Credit Extension denominated in Swiss Francs, the rate per annum equal to SARON determined
provided, that, if any Alternative Currency Daily Rate shall be less than zero, such rate shall be deemed zero for purposes of this
Agreementthe Loan Documents. Any change in an Alternative Currency Daily Rate shall be effective from and including the date
of such change without further notice.
2
“Alternative Currency Daily Rate Loan” means a Loan, other than a Swing Line Loan, that bears interest at a rate based
on the definition of “Alternative Currency Daily Rate.” All Alternative Currency Daily Rate Loans must be denominated in
Sterling or Swiss Francsan Alternative Currency.
“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 an 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)by reference to
Bloomberg (or such other publicly available service for displaying exchange rates), to be the exchange rate for the purchase of
such Alternative Currency with Dollars at approximately 11:00 a.m. on the date two (2) Business Days prior to the date as of
which the foreign exchange computation is made; provided, however, that if no such rate is available, the “Alternative Currency
Equivalent” shall be determined by the Administrative Agent or an L/C Issuer, as the case may be, using any reasonable method
of determination its deems appropriate in its sole discretion (and such determination shall be conclusive absent manifest error).
“Alternative Currency L/C Issuer” means Bank of America in its capacity as the L/C Issuer in respect of Letters of Credit
issued in denominations other than Dollars.
“Alternative Currency Loan” means an Alternative Currency Daily Rate Loan or an Alternative Currency Term Rate
Loan, as applicable.
“Alternative Currency Sublimit” means an amount equal to the lesser of (a) $1,000,000,000 and (b) the Revolving Credit
Facility. The Alternative Currency Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Alternative Currency Term Rate” means, for any Interest Period, with respect to any extension of credit under the Credit
AgreementExtension:
(a)
denominated in Euros (other than a Swing Line Borrowing denominated in Euros), the rate per annum
equal to the Euro Interbank Offered Rate (“EURIBOR”), as published on the applicable Reuters screen page (or such other
commercially available source providing such quotations as may be designated by the Administrative Agent from time to time)
on the day that is two TARGET Days preceding the first day of such Interest Period with a term equivalent to such Interest
Period; and
(b)
denominated in Canadian Dollars, the rate per annum equal to the Canadian Dollar Offered Rate, as
published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may
be designated by the Administrative Agent from time to time) (“CDOR”) on the Rate Determination Date with a term equivalent
to such Interest Period;
(c)
(b) denominated in Japanese Yen, the rate per annum equal to the Tokyo Interbank Offered Rate
(“TIBOR”), as published on the applicable Reuters screen page (or such other commercially available source providing such
quotations as may be designated by the Administrative Agent from time to time) on the day that is two Business Days preceding
the first day of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such
interbank market, as determined by the Administrative Agent; provided that, to the extent such market practice is not
administratively feasible for the Administrative Agent, then such date shall be such other day as otherwise reasonably determined
by the Administrative Agent)Rate Determination Date with a term equivalent to such Interest Period;
3
(d)
denominated in Australian Dollars, the rate per annum equal to the Bank Bill Swap Reference Bid Rate
(“BBSY”), as published on the applicable Reuters screen page (or such other commercially available source providing such
quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date with a term
equivalent to such Interest Period;
(e)
denominated in Swedish Krona, the rate per annum equal to the Stockholm Interbank Offered Rate
(“STIBOR”), as published on the applicable Reuters screen page (or such other commercially available source providing such
quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date with a term
equivalent to such Interest Period;
(f)
denominated in Danish Krone, the rate per annum equal to the Copenhagen Interbank Offered Rate
(“CIBOR”), as published on the applicable Reuters screen page (or such other commercially available source providing such
quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date with a term
equivalent to such Interest Period;
(g)
denominated in Norwegian Krone, the rate per annum equal to the Norwegian Interbank Offered Rate
(“NIBOR”), as published on the applicable Reuters screen page (or such other commercially available source providing such
quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date with a term
equivalent to such Interest Period; and
(h)
denominated in Mexican Pesos, the rate per annum equal to the Interbanking Equilibrium Interest Rate
(“TIIE”), as published by Banco de Mexico in the Federation’s Official Gazette (or such other commercially available source
providing such quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date
with a term equivalent to such Interest Period;
provided, that, if any Alternative Currency Term Rate shall be less than zero, such rate shall be deemed zero for purposes of this
Agreementthe Loan Documents.
“Alternative Currency Term Rate Loan” means a Loan that bears interest at a rate based on the definition of “Alternative
Currency Term Rate.” All Alternative Currency Term Rate Loans must be denominated in Euro or Yenan Alternative Currency.
“Alternative Currency Tranche” means, at any time, Alternative Currency Tranche Commitments of all the Lenders.
“Alternative Currency Tranche Commitment” means, as to each Lender, its obligation to (a) make Revolving Credit
Loans pursuant to Section 2.01(b)(ii), in Dollars and Alternative Currencies and (b) purchase participations in Swing Line Loans
in Euro and Sterling, in an aggregate principal amount for each such Alternative Currency not to exceed the Dollar amount (if
any) set forth opposite such Lender’s name on Schedule 2.01 under the caption “Acceptable Alternative Currencies” or opposite
such caption in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Lender becomes a
party hereto, in an aggregate principal amount for all such Revolving Credit Loans at any one time outstanding not to exceed the
Dollar amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Alternative Currency Tranche
Commitment” or under such caption in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which
such Lender becomes a party hereto, as applicable, as such amount may be increased by such Lender pursuant to Section 2.16 or
otherwise adjusted from time to time in accordance with this Agreement.
4
“Alternative Currency Tranche Lender” means any Person that is a Lender hereunder in respect of the Alternative
Currency Tranche in its capacity as a Lender in respect of such Tranche.
“Alternative Currency Tranche Loan” has the meaning specified in Section 2.01(b)(ii).
“Applicable Authority” means (a) with respect to SOFR, the SOFR Administrator or any Governmental Authority having
jurisdiction over the Administrative Agent or the SOFR Administrator with respect to its publication of SOFR, in each case
acting in such capacity, (b) with respect to Term SOFR, CME or any successor administrator of the Term SOFR Screen Rate or
any Governmental Authority having jurisdiction over the Administrative Agent or such administrator with respect to its
publication of Term SOFR and/or the Term SOFR Screen Rate, in each case acting in such capacity and (c) with respect to any
Alternative Currency, the applicable administrator for the Relevant Rate for such Alternative Currency or any Governmental
Authority having jurisdiction over the Administrative Agent or such administrator with respect to its publication of the applicable
Relevant Rate, in each case acting in such capacity.
“Applicable Percentage” means (a) in respect of the Term Facility, with respect to any Term Lender at any time, the
percentage (carried out to the ninth decimal place) of the Term Facility represented by (i) on or prior to the Closing Date, such
Term Lender’s Term Commitment at such time and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at
such time, (b) in respect of the Delayed Draw Term Facility, with respect to any Delayed Draw Term Lender at any time, the
percentage (carried out to the ninth decimal place) of the Delayed Draw Term Facility represented by (i) on or prior to the
Delayed Draw Termination Date, such Delayed Draw Term Lender’s Delayed Draw Term Commitment at such time, subject to
adjustment as provided in Section 2.18, and (ii) thereafter, the principal amount of such Delayed Draw Term Lender’s Delayed
Draw Term Loans at such time and (c) in respect of the Revolving Credit Facility, with respect to any Revolving Credit Lender at
any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving
Credit Lender’s Revolving Credit Commitment at such time, subject to adjustment as provided in Section 2.18. If the
commitment of each Lender to make Loans and the obligation of each L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, or if all Commitments have expired, then the Applicable Percentage of each Lender in
respect of the applicable Facility shall be determined based on the Applicable Percentage of such Lender in respect of such
Facility most recently in effect, giving effect to any subsequent assignments and to any Lender’s status as a Defaulting Lender at
the time of determination. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the
name of such Lender on Schedule 2.01 or in the Assignment and Assumption or New Lender Joinder Agreement pursuant to
which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means, for any day, with respect to any Eurocurrency Rate Loan, LIBOR Floating Rate Loan, Daily
Floating Eurocurrency RateAlternative Currency Loan, SOFR Loan, Base Rate Loan, Letter of Credit Fee and Facility Fee, as the
case may be, the applicable rate per annum set forth below, based upon such Debt Ratings as set forth below applicable on such
date:
5
Revolving Credit Facility
Term Facility/Delayed Draw Term
Facility
Eurocurrency
RateAlternative
Currency Loans,
LIBOR Floating
Rate Loans, Daily
Floating
Eurocurrency Rate
SOFR Loans and
Letters of Credit Base Rate Loans
0.725%
0.775%
0.850%
1.050%
1.400%
0.000%
0.000%
0.000%
0.050%
Facility Fee
0.125%
0.150%
0.200%
0.250%
0.400%
0.300%
Eurocurrency Rate
Loans, LIBOR
Floating Rate
Loans, Daily
Floating
Eurocurrency Rate
LoansAlternative
Currency Loans,
and SOFR Loans Base Rate Loans
0.800%
0.850%
0.950%
1.200%
1.600%
0.000%
0.000%
0.000%
0.200%
0.600%
Pricing Level
Category 1
Category 2
Category 3
Category 4
Category 5
Debt Ratings
(S&P and
Fitch / Moody’s):
A- / A3 or better
BBB+ / Baa1
BBB / Baa2
BBB- / Baa3
Lower than
BBB- / Baa3
For purposes of the foregoing, (i) if a Debt Rating is issued by only two of S&P, Moody’s and Fitch, and such Debt Ratings are
split, then the higher of such Debt Ratings shall apply, unless there is a split in Debt Ratings of more than one level, in which case
the level that is one level lower than the higher Debt Rating shall apply in determining the Applicable Rate, (ii) if a Debt Rating
is issued by all three of S&P, Moody’s and Fitch, and such Debt Ratings are split, then the highest of such Debt Ratings shall
apply, unless there is a split in Debt Ratings of more than one level between the highest and lowest such Debt Ratings, in which
case the level that is the average of the two highest such Debt Ratings shall apply, and if such average is not a recognized rating
category, then the level of the second highest Debt Rating of the three shall apply in determining the Applicable Rate and (iii) if
at any time a Debt Rating is issued by only one of S&P, Moody’s or Fitch, then (A) if such Debt Rating is issued by S&P or
Moody’s, such Debt Rating shall apply in determining the Applicable Rate and (B) if such Debt Rating is issued by
6
Fitch, the Applicable Rate shall be at Pricing Level Category 5. Initially, the Applicable Rate shall be determined based upon the
Debt Ratings in effect on the Closing Date. Thereafter, each change in the Applicable Rate resulting from a publicly announced
change in a Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by the
Parent Borrower to the Administrative Agent of notice thereof pursuant to Section 6.03(e) and ending on the date immediately
preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change. If
the rating system of Moody’s, S&P or Fitch shall change, or if any such rating agency shall cease to be in the business of rating
companies or corporate debt obligations, the Parent Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect
prior to such change or cessation.
“Applicable Revolving Credit Percentage” means with respect to any Revolving Credit Lender at any time, such
Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.
“Applicable Time” means, with respect to any borrowingsBorrowings 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
Alternative Currency L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with
normal banking procedures in the place of payment.
“Applicable Tranche Percentage” means, at any time, with respect to any Alternative Currency Tranche Lender and any
currency with respect to which such Alternative Currency Tranche Lender holds an Alternative Currency Tranche Commitment,
(a) in the case of a Revolving Credit Borrowing denominated in such currency, the quotient (expressed as a percentage carried out
to the ninth decimal place) of (i) the lesser of (x) such Alternative Currency Tranche Lender’s unfunded Alternative Currency
Tranche Commitment with respect to such currency and (y) such Alternative Currency Tranche Lender’s unfunded Alternative
Currency Tranche Commitment divided by (ii) the lesser of (x) the aggregate amount of unfunded Alternative Currency Tranche
Commitments with respect to such currency of all Revolving Credit Lenders and (y) the aggregate amount of unfunded
Alternative Currency Tranche Commitments of all Revolving Credit Lenders and (b) in the case of any payment or prepayment
of a Revolving Credit Loan denominated in such currency, the quotient of (i) the aggregate outstanding principal amount of
Alternative Currency Tranche Loans denominated in such currency made by such Alternative Currency Tranche Lender divided
by (ii) the aggregate outstanding principal amount of Alternative Currency Tranche Loans denominated in such currency made by
all Alternative Currency Tranche Lenders. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans
and the obligation of each L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if all
Aggregate Alternative Currency Tranche Commitments have expired, then the Applicable Tranche Percentage of such
Alternative Currency Tranche Lender shall be determined based on the Applicable Tranche Percentage of such Lender most
recently in effect, giving effect to any subsequent assignments.
“Applicant Borrower” has the meaning specified in Section 2.19(a).
“Appropriate Lender” means, at any time, (a) with respect to the Term Facility, the Delayed Draw Term Facility or the
Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan, Delayed Draw
Term Loan or a Revolving Credit Loan, respectively, at such time, (b) with respect to the Letter of Credit Sublimit, (i) the L/
7
C Issuers and (ii) if any Letters of Credit have been issued pursuant to Section 2.04(a), a Dollar Tranche Lender, (c) with respect
to the Swing Line Sublimit, (i) the Swing Line Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section
2.05(a), an Alternative Currency Tranche Lender with respect to Euro or Sterling, as applicable, (d) with respect to the Dollar
Tranche, a Dollar Tranche Lender and (e) with respect to the Alternative Currency Tranche, an Alternative Currency Tranche
Lender.
“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 BofA Securities, Inc., JPMorgan Chase Bank and Wells Fargo Securities, LLC, each in its capacity as
a lead arranger.
“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 11.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit F-1 or any other form (including electronic documentation generated by use of an electronic
platform) approved by the Administrative Agent.
“Assumption Conditions” has the meaning specified in Section 11.25.
“Assumption Date” means the first date all the Assumption Conditions are satisfied or waived in accordance with Section
11.01.
“Assumption Transaction” has the meaning specified in Section 11.25.
“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease 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, (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant
lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all
Synthetic Debt of such Person.
“Audited Financial Statements” means the audited consolidated balance sheet of the Company and its Subsidiaries for the
fiscal year ended December 31, 2018, and the related consolidated statements of income or operations, shareholders’ equity and
cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.
“Authorizing Lender” has the meaning specified in Section 1.08.
“Availability Period” means the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the
date of termination of the Revolving Credit Commitments pursuant to Section 2.07, and (iii) the date of termination of the
commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of the L/C Issuer to make
L/C Credit Extensions pursuant to Section 8.02.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority
in respect of any liability of an Affected Financial Institution.
8
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive
2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or
requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b)
with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any
other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment
firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency
proceedings).
“Bank of America” means Bank of America, N.A. and its successors.
“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,”
(c) the Eurocurrency RateTerm SOFR plus 1.00% and (d) 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. Notwithstanding anything to the contrary contained herein or elsewhere, on and after the Second
Amendment Effective Date, If the Base Rate is being used as an alternate rate of interest pursuant to Section 3.03, then the Base
Rate shall be the greatest of clauses (a), (b) and (d) above and shall be determined without reference to the Eurocurrency Rate
component thereofclause (c) above.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All Base Rate Loans are only available to the
Parent Borrower and Designated Borrowers that are Domestic Subsidiaries and shall be denominated in Dollars.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b)
a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA
Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee
benefit plan” or “plan”.
“Bookrunners” means BofA Securities, Inc., and JPMorgan Chase Bank, each in its capacity as a bookrunner.
“Borrowers” means, at any time, collectively, the Parent Borrower and each Designated Borrower.
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrowing” means a Revolving Credit Borrowing, a Swing Line Borrowing, a Competitive Borrowing, a Delayed Draw
Term Borrowing or a Term 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; provided that
9
(a)
(a) if such day relates to any interest rate settings as to an Alternative Currencya Loan denominated in
Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Alternative Currency Loan, or any
other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Alternative Currency Loan, means a
Business Day that is also a TARGET Day;
(b)
(b) if such day relates to any interest rate settings as to an Alternative Currencya Loan denominated in (i)
Sterling, means a day other than a day banks are closed for general business in London because such day is a Saturday, Sunday or
a legal holiday under the laws of the United Kingdom; (ii) Swiss Francs, means a day other than when banks are closed for
settlement and payments of foreign exchange transactions in Zurich because such day is a Saturday, Sunday or a legal holiday
under the laws of Switzerland; and (iii) Japanese Yen, means a day other than when banks are closed for general business in
Japan; and
(c) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Euro in
respect of an Alternative Currency Loan denominated in a currency other than Euro, or any other dealings in any currency other
than Euro to be carried out pursuant to this Agreement in respect of any such Alternative Currency 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.
1
“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 LIBOR Floating
Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate
Loan or LIBOR Floating Rate Loan, means any such day that is also a London Banking Day;
(b) if such day relates to any interest rate settings as to a Loan denominated in Euro, any fundings,
disbursements, settlements and payments in Euro in respect of any such Loan, or any other dealings in Euro to be carried out
pursuant to this Agreement in respect of any such Loan, means a TARGET Day;
if such day relates to any interest rate settings as to a Loan denominated in a currency other than Dollars
or, Euro, Sterling, Swiss Francs or Yen, 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
(a)
(b)
if such day relates to any fundings, disbursements, settlements and payments in a currency other than
Dollars or Euro in respect of a 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 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.
2
1
From First Amendment
2
From original Credit Agreement
10
“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or
other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to
current operations).
“Capitalization Rate” means seven percent (7.00%).
“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized
leases.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the
Administrative Agent, one or more of the L/C Issuers or the Swing Line Lender (as applicable) and the Lenders, as collateral for
L/C Obligations, Obligations in respect of Swing Line Loans, or obligations of the Lenders to fund participations in respect of
either thereof (as the context may require), cash or deposit account balances or, if the Administrative Agent, the L/C Issuers and
the Swing Line Lender shall agree in their sole discretion, other credit support, in each case, pursuant to documentation in form
and substance satisfactory to, and in such currencies as may be requested by (a) the Administrative Agent and (b) the applicable
L/C Issuers or the Swing Line Lender (as applicable). “Cash Collateral” has a meaning correlative to the foregoing and shall
include the proceeds of such cash collateral and other credit support.
“Cash and Cash Equivalents” means unrestricted (a) cash, (b) marketable direct obligations issued or unconditionally
guaranteed by the United States government (or any other sovereign nation with an equivalent rating by S&P or Moody’s) and
backed by the full faith and credit of the United States government or such other nation; and (c) domestic and eurocurrency
certificates of deposit and time deposits, bankers’ acceptances and floating rate certificates of deposit issued by any commercial
bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches
or agencies (fully protected against currency fluctuations), which are rated A-1 (or better) by S&P or P-1 (or better) by Moody’s
provided that, in the case of each of clauses (b) and (c), the maturities of such Cash and Cash Equivalents shall not exceed one
year.
“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 or treaty, (b) any change in any law, rule, regulation or treaty or in the administration,
interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) 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 be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.
“Change of Control” means an event or series of events by which:
(a)
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right
11
to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)),
directly or indirectly, of 50% or more of the equity securities of the Company entitled to vote for members of the board of
directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that
such “person” or “group” has the right to acquire pursuant to any option right); or
(b)
any Person or two or more Persons acting in concert shall have acquired by contract, or shall have entered
into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies of the Company, or control over the equity
securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on
a fully-diluted basis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to
any option right) representing 50% or more of the combined voting power of such securities; or
(c)
at any time that the OpCo is the Parent Borrower (i) the Company or a Wholly-Owned Subsidiary of the
Company (such Subsidiary referred to herein as the “OpCo GP”) shall cease to be the sole general partner, manager or managing
member, as applicable, of the OpCo, or (ii) the Company shall cease to exclusively Control the OpCo, the OpCo GP or any
Intermediate Holding Company; or
at any time that the OpCo is the Parent Borrower, the Company shall cease to own, directly or indirectly,
(i) all of the Equity Interests in the OpCo GP or any Intermediate Holding Company or (ii) 70% or more of the Equity Interests in
the Parent Borrower, in each case free and clear of all Liens; or
(d)
result of a release of such Subsidiary Guarantor pursuant to Section 10.10; or
(e)
the Parent Borrower shall cease, directly or indirectly, to Control any Subsidiary Guarantor except as the
qualifying shares) in any of the Designated Borrowers, free and clear of all Liens.
(f)
the Parent Borrower shall cease to own, directly or indirectly, all of the Equity Interests (except directors’
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with
Section 11.01.
“CME” means CME Group Benchmark Administration Limited.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commitment” means, as to each Lender, its Dollar Tranche Commitment, Alternative Currency Tranche Commitment,
Term Commitment, Delayed Draw Term Commitment or Revolving Credit Commitment, as the context may require.
“Communication” means this Agreement, any Loan Document and any document, amendment, approval, consent,
information, notice, certificate, request, statement, disclosure or authorization related to any Loan Document.
“Company” has the meaning specified in the preamble hereto.
“Company Release Conditions” means, with respect to the release of the Company and the Intermediate Holding
Companies from their respective obligations under the Guaranty each of the following:
12
(a)
neither the Company, the OpCo GP nor any Intermediate Holding Company conducts, directly or
indirectly, any business other than in connection with the ownership, acquisition and disposition of interests in the Parent
Borrower, OpCo GP or any Intermediate Holding Company, and the management of the business of the Parent Borrower, and
such activities as are incidental thereto, all of which shall be solely in furtherance of the business of the Parent Borrower;
(b)
the Company does not, directly or indirectly, own any assets other than (i) interests, rights, options,
warrants or convertible or exchangeable securities of the Parent Borrower, (ii) Equity Interests in the Intermediate Holding
Companies and the OpCo GP, (iii) assets that have been distributed to the Company by its Subsidiaries in accordance with
Section 7.06 that are held for ten (10) Business Days or less pending further distribution to equity holders of the Company, (iv)
assets received by the Company from third parties (including the net cash proceeds from any issuance and sale by the Company
of any of its Equity Interests), that are held for ten (10) Business Days or less pending contribution of same to the Parent
Borrower (whether directly or through an Intermediate Holding Company), (v) such bank accounts or similar instruments as it
deems necessary to carry out its responsibilities under its own Organization Documents and the Organization Documents of the
Parent Borrower and (vi) other tangible and intangible assets that, taken as a whole, are de minimis in relation to the net assets of
the Company and its Subsidiaries, but which shall in no event include any Equity Interests other than those permitted in clauses
(i) and (ii) of this clause (b) or have any Investments other than as permitted under this clause (b);
(c)
neither the Company, the OpCo GP nor any Intermediate Holding Company is an obligor in respect of any
Indebtedness (other than Indebtedness of the type described in clause (g)(ii) of the definition of Indebtedness (or any Guarantee
thereof)); and
(d)
none of the properties, assets or revenues of the Company, the OpCo GP or any Intermediate Holding
Company is subject to any Liens (other than those permitted under clauses (a), (g) or (j) of the definition of Permitted
Encumbrances).
“Company Release Notice” has the meaning specified in Section 10.12.
“Competitive Bid” means a written offer by a Lender to make one or more Competitive Loans substantially in the form of
Exhibit B-2, duly completed and signed by such Lender.
“Competitive Bid Request” means a written request for one or more Competitive Loans substantially in the form of
Exhibit B-1.
“Competitive Borrowing” means a borrowing consisting of simultaneous Competitive Loans of the same Type from each
of the Lenders whose offer to make one or more Competitive Loans as part of such borrowing has been accepted under the
auction bidding procedures described in Section 2.03.
“Competitive Loan” has the meaning specified in Section 2.03.
“Competitive Loan Lender” means, in respect of any Competitive Loan, the Lender making such Competitive Loan.
“Competitive Loan Note” means a promissory note made by a Borrower in favor of a Competitive Loan Lender
evidencing Competitive Loans made by such Competitive Loan Lender to such Borrower, substantially in the form of Exhibit B-
3.
13
“Competitive Loan Sublimit” means an amount equal to 50% of the Revolving Credit Facility. The Competitive Loan
Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Compliance Certificate” means a certificate substantially in the form of Exhibit E.
“Conforming Changes” means, with respect to the use, administration of or any conventions associated with SONIA,
SARON, EURIBOR, TIBORany of SOFR, Daily Simple SOFR, Term SOFR, any Alternative Currency Daily Rate, any
Alternative Currency Term Rate, any Relevant Rate or any proposed Successor Rate for any currency, as applicable, any
conforming changes to the definitions ofrelated thereto, including “Base Rate”, “Daily Simple SOFR”, “SOFR”, “Term SOFR”,
“Term SOFR Screen Rate”, “SONIA”, “SARON”, “EURIBOR”, “TIBOR”, “Interest Period”, timing and frequency of
determining rates and making payments of interest and other technical, administrative or operational matters (including, for the
avoidance of doubt, the definitiondefinitions of “Business Day” and “U.S. Government Securities Business Day”, timing of
borrowing requests or prepayment, conversion or continuation notices and length of lookback periods) as may be appropriate, in
the discretion of the Administrative Agent, to reflect the adoption and implementation of such applicable rate(s) and to permit the
administration thereof by the Administrative Agent in a manner substantially consistent with market practice for such currency
(or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or
that no market practice for the administration of such rate for such currencyAgreed Currency exists, in such other manner of
administration as the Administrative Agent determines is reasonably necessary in connection with the administration of this
Agreement and any other Loan Document in consultation with the Parent Borrower).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however
denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Businesses” means the Company and its Subsidiaries, on a consolidated basis (without taking into account
any non-wholly owned Person or entity).
“Contingent Obligation” as to any Person means, without duplication, (a) any contingent obligation of such Person
required to be shown on such Person’s balance sheet in accordance with GAAP, and (b) any obligation required to be disclosed in
the footnotes to such Person’s financial statements in accordance with GAAP, guaranteeing partially or in whole any non-
recourse Indebtedness, lease, dividend or other obligation, exclusive of contractual indemnities (including, without limitation,
any indemnity or price adjustment provision relating to the purchase or sale of securities or other assets) and guarantees of non-
monetary obligations (other than guarantees of completion) which have not yet been called on or quantified, of such Person or of
any other Person. The amount of any Contingent Obligation described in clause (b) shall be deemed to be (i) with respect to a
guaranty of interest or interest and principal, or operating income guaranty, the sum of all payments required to be made
thereunder (which in the case of an operating income guaranty shall be deemed to be equal to the debt service for the note
supported thereby), calculated at the interest rate applicable to such Indebtedness, through (x) in the case of an interest or interest
and principal guaranty, the stated maturity of the obligation (and commencing on the date interest could first be payable
thereunder), or (y) in the case of an operating income guaranty, the date through which such guaranty will remain in effect, and
(ii) with respect to all guarantees not covered by the preceding clause (i) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet
and on the footnotes to the most recent financial statements of the Company required to be
14
delivered pursuant hereto. Notwithstanding anything contained herein to the contrary, guarantees of completion and of
Nonrecourse Carveouts shall not be deemed to be Contingent Obligations unless and until a claim for payment has been made
thereunder, at which time any such guaranty of completion or of Nonrecourse Carveouts shall be deemed to be a Contingent
Obligation in an amount equal to any such claim. Subject to the preceding sentence, (a) in the case of a joint and several guaranty
given by such Person and another Person (but only to the extent such guaranty is recourse, directly or indirectly to the applicable
Person), the amount of such guaranty shall be deemed to be 100% thereof unless and only to the extent that (i) such other Person
has delivered Cash and Cash Equivalents to secure all or any part of such Person’s guaranteed obligations or (ii) such other
Person holds an Investment Grade Credit Rating from any of Moody’s, S&P or Fitch (for avoidance of doubt, if any of the joint
and several parties to a guaranty holds such a rating, such guaranty will be treated the same as if it were fully cash collateralized),
and (b) in the case of a guaranty (whether or not joint and several) of an obligation otherwise constituting Indebtedness of such
Person, the amount of such guaranty shall be deemed to be only that amount in excess of the amount of the obligation
constituting Indebtedness of such Person. Notwithstanding anything contained herein to the contrary, “Contingent Obligations”
shall not be deemed to include guarantees of loan commitments or of construction loans or construction costs to the extent the
same have not been drawn.
“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.
“Covered Entity” has the meaning specified in Section 11.24(b).
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Creditor Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuers and each co-agent or sub-
agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons to whom the
Obligations are owing.
“Daily Floating Eurocurrency Rate” means, as of any date of determination, with respect to any Swing Line LoanSimple
SOFR” means the rate per annum equal to LIBOR, or a comparable or successor rate which rate is approved by the
Administrative Agent, as published on the applicable Bloomberg screen page (or such other page or commercially available
source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00
a.m. London time two Business Days prior toSOFR determined for any day pursuant to the definition thereof plus the SOFR
Adjustment. Any change in Daily Simple SOFR shall be effective from and including the date of determination for LIBOR (or, if
any such day is not a Business Day, on the immediately preceding Business Day) for deposits in the relevant currency being
delivered in the London or other applicable offshore interbank market for a term of one month commencing on that day. If the
Daily Floating Eurocurrency Rate as of any date of determination shallsuch change without further notice. If the rate as so
determined would be less than zero, such rate shall be deemed to be zero as of such date of determination for all purposes of the
Loan Documents.
“Daily Floating Eurocurrency RateSOFR Loan” means a Swing Line Loan that bears interest at a rate based on the Daily
Floating Eurocurrency RateSimple SOFR. All Daily
15
Floating Eurocurrency RateSOFR Loans shallmust be denominated in either Euro or SterlingDollars.
“Debt Rating” means, as of any date of determination, the rating as determined by any of S&P, Moody'’s and/or Fitch
(collectively, the “Debt Ratings”) of the Company'’s senior unsecured non-credit enhanced long-term Indebtedness for borrowed
money.
“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 when used with respect to (a) Obligations other than Loans and Letter of Credit Fees, an interest
rate equal to (i) the Base Rate plus (ii) the Applicable Rate for Base Rate Loans under the Revolving Credit Facility (assuming
that Category 5 applied in the pricing grid set forth in the definition of “Applicable Rate”) plus (iii) 2% per annum; (b) a Base
Rate Loan, an interest rate equal to (i) the Base Rate, plus (ii) the Applicable Rate for Base Rate Loans for the Facility under
which such Loan was made (assuming that Category 5 applied in the pricing grid set forth in the definition of “Applicable Rate”),
plus (iii) 2% per annum; (c) a Eurocurrencyan Alternative Currency Daily Rate Loan, a Daily Floating Eurocurrencyan
Alternative Currency Term Rate Loan, a Daily SOFR Loan or a LIBOR Floating RateTerm SOFR Loan, an interest rate equal to
(i) the Eurocurrency Rate, Daily Floating EurocurrencyAlternative Currency Daily Rate, Alternative Currency Term Rate or
LIBOR, Daily Floating RateSimple SOFR or Term SOFR, as applicable, plus (ii) the Applicable Rate for the applicable Type of
Loan for the Facility under which such Loan was made (assuming that Category 5 applied in the pricing grid set forth in the
definition of “Applicable Rate”), plus (iii) 2% per annum; and (d) Letter of Credit Fees, a rate equal to the Applicable Rate then
applicable to Letter of Credit Fees (assuming that Category 5 applied in the pricing grid set forth in the definition of “Applicable
Rate”) plus 2% per annum.
“Defaulting Lender” means, subject to Section 2.18(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 Parent Borrower in writing that such failure is the result of such Lender’s 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, any 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 Parent Borrower, the
Administrative Agent, any 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 upon such Lender’s determination that a
condition precedent to funding (which conditions 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 Parent Borrower confirm in writing to the Administrative Agent and the Parent 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 Parent Borrower), or
16
(d) 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 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 or (iii) become the subject of a Bail-In Action; 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 2.18(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 Parent Borrower, the L/C Issuers, the Swing Line Lender and each other
Lender promptly following such determination.
“Delayed Draw Funding Date” has the meaning specified in Section 2.01(c).
“Delayed Draw Term Borrowing” means a borrowing consisting of simultaneous Delayed Draw Term Loans of the same
Type, in the same currency and, in the case of EurocurrencyTerm Rate Loans, having the same Interest Period made by each of
the Delayed Draw Term Lenders pursuant to Section 2.01(c).
“Delayed Draw Term Commitment” means, as to each Delayed Draw Term Lender, its obligation to make Delayed Draw
Term Loans pursuant to Section 2.01(c) and/or Section 2.16 in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Delayed Draw Term Lender'’s name on Schedule 2.01 under the caption “Delayed
Draw Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Delayed Draw
Term Lender becomes a party hereto, as applicable, as such amount may be increased by such Delayed Draw Term Lender
pursuant to Section 2.16 or otherwise adjusted from time to time in accordance with this Agreement, including pursuant to
Section 2.01(c).
“Delayed Draw Term Facility” means (a) at any time on or prior to the Delayed Draw Termination Date, the aggregate
amount of the Delayed Draw Term Commitments at such time and (b) thereafter, the aggregate principal amount of the Delayed
Draw Term Loans of all Delayed Draw Term Lenders outstanding at such time. On the SecondThird Amendment Effective Date
the Delayed Draw Term Facility is €215,000,000.
“Delayed Draw Term Lender” means (a) at any time on or prior to the Delayed Draw Termination Date, any Lender that
has a Delayed Draw Term Commitment or holds a Delayed Draw Term Loan at such time and (b) thereafter, any Lender that
holds a Delayed Draw Term Loan at such time.
“Delayed Draw Term Loan” has the meaning specified in Section 2.01(c) and, unless the context requires otherwise,
includes each loan made in connection with any increase in the Delayed Draw Term Facility pursuant to Section 2.16. For the
avoidance of doubt, on and after the Second Amendment Effective Date, except to the extent required by Section 2.02(c), all
Delayed Draw Term Loans shall be denominated in Euro.
17
“Delayed Draw Term Loan Unused Fee” has the meaning specified in Section 2.10(b).
“Delayed Draw Term Note” means a promissory note made by a Borrower in favor of a Delayed Draw Term Lender
evidencing Delayed Draw Term Loans made by such Delayed Draw Term Lender to such Borrower, substantially in the form of
Exhibit D-1.
“Delayed Draw Termination Date” means the earliest of (i) the first anniversary of the Closing Date, (ii) the date on which
the first Delayed Draw Term Borrowing (if any) is made (after giving effect thereto), and (iii) the date of termination of the
commitment of each Delayed Draw Term Lender to make Delayed Draw Term Loans pursuant to Section 2.07 or Section 8.02.
“Departing Lender” has the meaning set forth in Section 11.22.
“Designated Borrower” means any Wholly-Owned Subsidiary of the Parent Borrower that becomes party to this
Agreement pursuant to Section 2.19 to the extent such Wholly-Owned Subsidiary’s status as a Designated Borrower has not been
terminated in accordance with Section 2.19(e).
“Designated Borrower Notice” has the meaning specified in Section 2.19(b).
“Designated Borrower Request and Assumption Agreement” has the meaning specified in Section 2.19(a).
“Designated Jurisdiction” means any country, region or territory to the extent that such country, region or territory itself is
the subject of any Sanction.
“Designated UK Borrower” means a Designated Borrower that is incorporated under the laws of England and Wales,
resident in the United Kingdom or carrying on business in the United Kingdom through a permanent establishment.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback
transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), 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.
“Dividing Person” has the meaning assigned to it in the definition of “Division.”
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two
or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing
Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any
portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the
consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division
shall be deemed a Division Successor upon the occurrence of such Division.
“Dollar” and “$” mean lawful money of the United States.
“Dollar Equivalent” means, for any amount, at anythe time of determination thereof, (a) with respect to anyif such amount
denominatedis expressed in Dollars, such amount, and (b) with respect to any(b) if such amount is expressed in an Alternative
Currency, the equivalent of such
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amount in Dollars determined by using the rate of exchange for the purchase of Dollars with the Alternative Currency last
provided (either by publication or otherwise provided to the Administrative Agent or the applicable L/C Issuer, as applicable) by
the applicable Bloomberg source (or such other publicly available source for displaying exchange rates) on date that is two (2)
Business Days immediately preceding the date of determination (or if such service ceases to be available or ceases to provide
such rate of exchange, the equivalent of such amount in Dollars as determined by the Administrative Agent or the applicable L/C
Issuer, as applicable using any commercially reasonable method of determination it deems appropriate in its reasonable
discretion) and (c) if such amount is denominated in any Alternative Currencyother currency, the equivalent of such amount
thereof in Dollars as determined by the Administrative Agent or the applicable 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 Currencyapplicable, using any commercially reasonable method of determination it deems appropriate in its
reasonable discretion. Any determination by the Administrative Agent or an L/C Issuer pursuant to clauses (b) or (c) above shall
be conclusive absent manifest error.
“Dollar Tranche” means, at any time, Dollar Tranche Commitments of all the Lenders.
“Dollar Tranche Commitment” means, as to each Lender, its obligation to (a) make Dollar Tranche Loans pursuant to
Section 2.01(b)(i) and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time
outstanding not to exceed the Dollar amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Dollar
Tranche Commitment” or in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be increased by such Lender pursuant to Section 2.16 or otherwise
adjusted from time to time in accordance with this Agreement; provided that so long as Dollar Tranche Loans may be requested
as Loans that bear interest at a rate based on LIBOR, no Lender’s Dollar Tranche Commitment shall be increased pursuant to
Section 2.16.
“Dollar Tranche Lender” means any Person that is a Lender hereunder in respect of the Dollar Tranche in its capacity as a
Lender in respect of such Tranche.
“Dollar Tranche Loan” has the meaning specified in Section 2.01(b)(i).
“Dollar Tranche Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth
decimal place) of the Aggregate Dollar Tranche Commitments represented by such Lender’s Dollar Tranche Commitment at such
time, subject to adjustment as provided in Section 2.18. If the commitment of each Lender to make Revolving Credit Loans and
the obligation of each L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the
Aggregate Dollar Tranche Commitments have expired, then the Dollar Tranche Percentage of each Lender shall be based on the
Dollar Tranche Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Dollar
Tranche Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 under the caption “Dollar
Tranche Percentage” or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Domestic Designated Borrower” means a Designated Borrower organized under the laws of the United States, any state
thereof or the District of Columbia.
“Domestic Subsidiary” or “Domestic Wholly-Owned Subsidiary” means, with respect to any Person, a Subsidiary or a
Wholly-Owned Subsidiary of such Person organized under the laws of the United States, any state thereof or the District of
Columbia.
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“EBITDA” means, for any Person for any period and without duplication, the Net Income (Loss) of such Person for such
period taken as a single accounting period, plus (a) the sum of the following amounts of such Person and its Subsidiaries for such
period determined on a consolidated basis in conformity with GAAP to the extent included in the determination of such Net
Income (Loss): (i) depreciation expense, (ii) amortization expense and other non-cash charges, (iii) interest expense, (iv) income
tax expense, (v) extraordinary losses and other non-recurring charges (and other losses on asset sales not otherwise included in
extraordinary losses and other non-recurring charges), and (vi) adjustments as a result of the straight lining of rents and above and
below market rent intangibles, less (b) extraordinary gains (and in the case of the Company and its consolidated Subsidiaries,
gains on asset sales not otherwise included in extraordinary gains) of such Person and its Subsidiaries determined on a
consolidated basis in conformity with GAAP to the extent included in the determination of such Net Income (Loss). For purposes
of this definition, nonrecurring items shall be deemed to include, but not be limited to, (1) gains and losses on early
extinguishment of Indebtedness, (2) severance and other restructuring charges, (3) transaction costs of acquisitions, dispositions,
capital markets offerings, debt financings and amendments thereto not permitted to be capitalized pursuant to GAAP (including,
without limitation, any portion of the purchase price payable with respect to an acquisition that is not permitted to be capitalized
pursuant to GAAP), (4) impairment losses, and (5) equity based, non-cash compensation.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which
is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA
Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public
administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any
EEA Financial Institution.
“Electronic Copy” shall have the meaning specified in Section 11.17.
“Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC
§7006, as it may be amended from time to time.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii), (v) and
(vi) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).
“Eligible Currency” means any lawful currency other than Dollars that is readily available, freely transferable and
convertible into Dollars in the international interbank market available to the Lenders or the Alternative Currency L/C Issuer, as
applicable, in such market and as to which a Dollar Equivalent may be readily calculated. If, after the designation by the Lenders
or the Alternative Currency L/C Issuer, as applicable, of any currency as Supplemental Currency (or if, with respect to any
currency that constituted an Alternative Currency on the Closing Date, after the Closing Date), any change in currency controls
or exchange regulations or any change in the national or international financial, political or economic conditions are imposed in
the country in which such currency is issued, result in, in the reasonable opinion of the Administrative Agent (in the case of any
Loans to be denominated in an Alternative Currency) or the Alternative Currency L/C Issuer (in the case of any Letter of Credit
to be
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denominated in an Alternative Currency), (a) such currency no longer being readily available, freely transferable and convertible
into Dollars, (b) a Dollar Equivalent is no longer readily calculable with respect to such currency, (c) providing such currency is
impracticable for the Lenders or the Alternative Currency L/C Issuer, as applicable, or (d) no longer a currency in which the
Required Lenders are willing to make such Credit Extensions (each of clauses (a), (b), (c), and (d) a “Disqualifying Event”), then
the Administrative Agent shall promptly notify the Lenders and the Parent Borrower, and such country’s currency shall no longer
be an Alternative Currency until such time as the Disqualifying Event(s) no longer exist(s). Within five (5) Business Days after
receipt of such notice from the Administrative Agent, the Borrowers shall repay all Loans in such currency to which the
Disqualifying Event applies or convert such Loans into the Dollar Equivalent of Loans in Dollars, subject to the other terms
contained herein.
“Eligible Ground Lease” means a ground lease that (a) has a minimum remaining term of thirty (30) years, including
tenant controlled options, as of any date of determination, (b) has customary notice rights, default cure rights, bankruptcy new
lease rights and other customary provisions for the benefit of a leasehold mortgagee or has equivalent protection for a leasehold
permanent mortgagee by a subordination to such leasehold permanent mortgagee of the landlord'’s fee interest, and (c) is
otherwise acceptable for non-recourse leasehold mortgage financing under customary prudent lending requirements.
“Eligible Project” means a Project (a) which is free of all title defects, except for Permitted Defects, and material
structural defects, and (b) which is free of Hazardous Materials except as would not materially affect the value of such Project.
“Environment” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and subsurface
strata, and natural resources such as wetlands, flora and fauna.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, agreements or governmental restrictions relating to pollution or the protection of the
Environment or of human health (to the extent related to exposure to Hazardous Materials), including those relating to the
manufacture, generation, handling, transport, storage, treatment, Release or threat of Release of Hazardous Materials.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of any Loan Party or any of their respective Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the presence, 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 or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Permit” means any permit, approval, identification number, license or other authorization required under
any Environmental Law.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit
interests in) such Person, all of the 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, all of the securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such
Person (including partnership, member
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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.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with any Loan Party
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 any Loan Party 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 any Loan Party 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 or 4041A of ERISA; (e) the institution by the PBGC of
proceedings to terminate a Pension 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; (g) the determination that any Pension 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; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; or (i) a failure by
any Loan Party or any ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a
Pension Plan, whether or not waived, or the failure by any Loan Party or any ERISA Affiliate to make any required contribution
to a Multiemployer Plan.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association
(or any successor person), as in effect from time to time.
“Euro” and “EUR” mean the single currency of the Participating Member States.
“Euro Tranche Lender” means an Alternative Currency Tranche Lender with an Alternative Currency Tranche
Commitment that includes Euro.
“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 Competitive Loan that bears interest at a rate based upon the Eurocurrency
Rate.
“Eurocurrency Rate” means:
(a) With respect to any Credit Extension for any Interest Period:
(i) denominated in a LIBOR Quoted Currency, the rate per annum equal to the London Interbank Offered Rate
(“LIBOR”), or a comparable or successor rate which rate is approved by the Administrative Agent, as published on the
applicable Bloomberg screen page (or such other page or commercially available source providing such quotations as
may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two
Business Days prior to the
22
commencement of the applicable 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;
(ii) denominated in Canadian dollars, the rate per annum equal to the Canadian Dealer Offered Rate, or a
comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable
Bloomberg screen page (or such other page or commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 10:00 a.m. (Toronto, Ontario time) on the Rate
Determination Date with a term equivalent to such Interest Period;
(iii) denominated in Australian dollars, the rate per annum equal to the Bank Bill Swap Reference Bid Rate, or
a comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable
Bloomberg screen page (or such other page or commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 10:30 a.m. (Melbourne, Australia time) on the
Rate Determination Date with a term equivalent to such Interest Period;
(iv) denominated in Swedish Krona, the rate per annum equal to the Stockholm Interbank Offered Rate, or a
comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable
Bloomberg screen page (or such other page or commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 11:00 a.m. (Stockholm, Sweden time) on the
Rate Determination Date with a term equivalent to such Interest Period;
(v) denominated in Danish Krone, the rate per annum equal to the Copenhagen Interbank Offered Rate, or a
comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable
Bloomberg screen page (or such other page or commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 11:00 a.m. (Copenhagen, Denmark time) on the
Rate Determination Date with a term equivalent to such Interest Period;
(vi) denominated in Norwegian Krone, the rate per annum equal to the Norwegian Interbank Offered Rate, or a
comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable
Bloomberg screen page (or such other page or commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 12:00 noon CET, 11:00 a.m. GMT (Oslo,
Norway time) on the Rate Determination Date with a term equivalent to such Interest Period;
(vii) denominated in Mexican Pesos, the rate per annum equal to the Interbanking Equilibrium Interest Rate, or
a comparable or successor rate which rate is approved by the Administrative Agent, as published by Banco de Mexico
in the Federation’s Official Gazette (or such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 2:00 p.m. (Mexico City, Mexico time) on the
Rate Determination Date with a term equivalent to such Interest Period; and
(viii) denominated in a Non-LIBOR Quoted Currency other than those currencies listed above, the rate per
annum as designated with respect to such
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Alternative Currency at the time such Alternative Currency is approved by the Administrative Agent and the Lenders
and, if applicable, one or more L/C Issuers pursuant to Section 1.08; and
(b) for any rate calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at
or about 11:00 a.m., London time determined two Business Days prior to such date for U.S. Dollar deposits with a term of one
month commencing that day;
provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection with any rate
set forth in this definition, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market
practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent,
such approved rate shall be applied to the applicable Interest Period in a manner as otherwise reasonably determined by the
Administrative Agent; and if the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of the
Loan Documents.
“Eurocurrency Rate Committed Loan” means a Eurocurrency Rate Loan other than a Eurocurrency Margin Bid Loan.
“Eurocurrency Rate Loan” means a Revolving Credit Loan, a Delayed Draw Term Loan or a Term Loan that bears
interest at a rate based on clause (a) of the definition of “Eurocurrency Rate.” Eurocurrency Rate Loans may be denominated in
Dollars or in an Alternative Currency. All Loans denominated in an Alternative Currency must be Eurocurrency Rate Loans.
“Event of Default” has the meaning specified in Section 8.01.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be
withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws
of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or
any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding
Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment
(other than pursuant to an assignment request by the Parent Borrower under Section 11.13) or (ii) such Lender changes its
Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c), amounts with respect to such Taxes
were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section
3.01(e) and (d) any Taxes imposed under, or as a result of the failure of such Recipient to satisfy the applicable requirements
under, FATCA.
“Existing Credit Agreement” means this Agreement, as in effect immediately prior to when the Third Amendment
becomes effective on the Third Amendment Effective Date.
“Existing Letter of Credit” means a “Letter of Credit” issued pursuant to the terms of, and as defined in, the Original
Credit Agreement and outstanding on the Closing Date and described on Schedule 1.01(B).
“Existing Swing Line Loans” means the “Swing Line Loans” made pursuant to the terms of, and as defined in, the
Original Credit Agreement and outstanding on the Closing Date immediately prior to the effectiveness of this Agreement.
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“Existing Term Loans” means, collectively, the “Term Loans” and “Delayed Draw Term Loans” made pursuant to the
terms of, and as defined in, the Original Credit Agreement and outstanding on the Closing Date immediately prior to the
effectiveness of this Agreement.
“Facility” means the Term Facility, the Delayed Draw Term Facility or the Revolving Credit Facility, as the context may
require.
“Facility Fee” has the meaning specified in Section 2.10(a).
“Fair Market Value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s-length
transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy. Fair Market Value shall be determined by an officer of the Parent Borrower acting in good faith and shall be
evidenced by an Officer’s Certificate. The Fair Market Value of any readily marketable securities shall be the number of such
securities multiplied by the average Market Price per share or per unit of such securities during the five consecutive trading days
immediately preceding the date of determination. The “Market Price” of any security on any trading day shall mean, with respect
to any security which is listed on a national securities exchange, the last sale price regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices regular way, in either case on the New York Stock Exchange,
or, if such security is not listed or admitted to trading on such exchange, on the principal national securities exchange on which
such security is listed or admitted to trading, or, if such security is not listed or admitted to trading on any national securities
exchange but is designated as a national market system security by the National Association of Securities Dealers, the last sale
price, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported
on the National Association of Securities Dealers Automated Quotation/National Market System, or if such security is not so
designated as a national market systems security, the average of the highest reported bid and lowest reported asked prices as
furnished by the National Association of Securities Dealers or similar organization if the National Association of Securities
Dealers is no longer reporting such information. With respect to operating partnership units of any REIT, such operating
partnership units shall in no event have a value greater than the value of the number of shares of the REIT into which such
operating partnership units are then convertible.
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor
version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or
official interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended
or successor version described above) and any intergovernmental agreements implementing the foregoing (together with any law
implementing such agreements).
“Federal Funds Rate” means, for any day, the rate per annum calculated by the Federal Reserve Bank of New York based
on such day’s federal funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of
New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the
Federal Reserve Bank of New York as the federal funds effective rate; provided that if the Federal Funds Rate as so determined
would be less than zero, such rate shall be deemed to be zero for purposes of the Loan Documents.
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“Fee Letter” means, collectively, the letter agreement, dated December 11, 2019, among the Company, the Administrative
Agent and the Bookrunners and the letter agreement, dated January 17, 2020, among the Company, Wells Fargo Securities, LLC
and Wells Fargo Bank.
“First Amendment” means that certain First Amendment (LIBOR Transition), dated as of December 1, 2021, among the
Parent Borrower and the Administrative Agent.
“Fitch” means Fitch, Inc. and any successor thereto.
“Fixed Charges” means, with respect to any period, the sum of (a) Interest Expense for such period plus (b) the aggregate
of all scheduled principal payments on Total Outstanding Indebtedness according to GAAP made or required to be made during
such period by the Company and its Subsidiaries (but excluding balloon payments of principal due upon the stated maturity of
any Indebtedness) plus (c) the aggregate of all dividends payable on the Company'’s or any of its consolidated Subsidiaries'’
preferred equity interests (if any) plus (d) the Company’s and its Subsidiaries’ allocable share of amounts of the type described in
clauses (a) and (b) above in respect of Joint Ventures.
“Foreign Lender” means, with respect to any Borrower, (a) if such Borrower is a U.S. Person, a Lender that is not a U.S.
Person, and (b) if such Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other
than that in which such Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign Obligor” means a Loan Party that is a Foreign Subsidiary.
“Foreign Subsidiary” means any Subsidiary of the Company that is organized under the laws of a jurisdiction other than
the United States, a state thereof or the District of Columbia.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any L/C Issuer, such Defaulting
Lender’s Applicable Percentage of the Outstanding Amount of all 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 Tranche Percentage of each
Swing Line Loan other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated
to other Lenders or Cash Collateralized 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 activities.
“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 any political subdivision
thereof, whether state or local, and any agency, authority,
26
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 or other obligation 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 or other obligation, (ii) to
purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other obligation, (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 other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation 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 or other obligation 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.
“Guaranteed Obligations” has the meaning specified in Section 10.01.
“Guarantor Release Notice” has the meaning specified in Section 10.10(b).
“Guarantors” means, collectively, (a) each Subsidiary Guarantor, (b) with respect to Obligations owing by any Designated
Borrower, the Parent Borrower and each Designated Borrower that is a Domestic Wholly-Owned Subsidiary and (c) at any time
on and after the Assumption Date that the Company is required to Guarantee the Obligations in accordance with Section 6.12 or
Section 11.25, the Company.
“Guaranty” means the Guaranty made by the Guarantors under Article X in favor of the Creditor Parties.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances or
wastes, including petroleum or petroleum distillates, natural gas, natural gas liquids, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes and all other substances, wastes, chemicals,
pollutants, contaminants or compounds of any nature in any form regulated pursuant to any Environmental Law.
“Honor Date” has the meaning specified in Section 2.04(c)(i).
“HMRC DT Treaty Passport” means a passport granted by H.M. Revenue & Customs under the H.M. Revenue &
Customs Double Taxation Treaty Passport Scheme.
“Impacted Alternative Currency” means each of Euro, Sterling, Yen and Swiss Franc.
27
“Impacted Loans” has the meaning specified in Section 3.03.
“Increase Effective Date” has the meaning specified in Section 2.16(b).
“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:
debentures, notes, loan agreements or other similar instruments;
(a)
all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds,
(b)
the maximum amount of all direct or contingent obligations of such Person in respect of letters of credit
(including standby and commercial), bankers’ acceptances and similar instruments (including bank guaranties, surety bonds,
comfort letters, keep-well agreements and capital maintenance agreements) to the extent such instruments or agreements support
financial, rather than performance, obligations;
the aggregate net obligations, if any, of such Person under all Swap Contracts, taken as a whole; provided,
that if the aggregate net amount of such obligations is less than $0, the amount of such Person’s Indebtedness under this clause
(c) shall be $0;
(c)
accounts payable in the ordinary course of business);
(d)
all obligations of such Person to pay the deferred purchase price of property or services (other than trade
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)
Person and all Synthetic Debt of such Person;
(f)
all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such
(g)
all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Equity Interest (i) in such Person or any warrant, right or option to acquire such Equity Interest or (ii) in any other
Person or any warrant, right or option to acquire such Equity Interest, in each case valued, in the case of a redeemable preferred
interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and
(h)
all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, 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 a
joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. 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.
“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or
on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause
(a), Other Taxes.
“Indemnitee” has the meaning specified in Section 11.04(b).
28
“Information” has the meaning specified in Section 11.07.
“Interest Expense” means, for any period, an amount equal to (a) interest expense (including capitalized interest expense)
of the Company and its Subsidiaries during such period, plus (b) the portion of the interest expense of Joint Ventures allocable to
the Company and its Subsidiaries in accordance with GAAP on account of ownership of an interest in a Joint Venture during such
period minus (c) extraordinary interest expense related to debt prepayments or defeasance of loans minus (d) amortization of
deferred costs associated with new financings or refinancings of existing Indebtedness minus (e) capitalized interest expense
related to Real Property under construction minus (f) any fees related to the Facilities.
“Interest Payment Date” means, (a) as to any Daily SOFR Loan, any Base Rate Loan and any Swing Line Loan, the last
Business Day of each March, June, September and December and the Maturity Date, (b) as to any Alternative Currency Daily
Rate Loan, the last Business Day of each month and the Maturity Date, and (bc) as to any Term SOFR Loan or Alternative
Currency Term Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however,
that if any Interest Period for a Term SOFR Loan or an Alternative Currency Term Rate Loan exceeds three months, the
3
respective dates that fall every three months after the beginning of such Interest Period shall be Interest Payment Dates.
“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, a LIBOR Floating Rate Loan or a Swing
Line Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any
Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the
beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, any LIBOR Floating
Rate Loan or any Swing Line Loan, the last Business Day of each March, June, September and December and the Maturity
4
Date.
“Interest Period” means (a) as to each Alternative Currency Term RateSOFR Loan and Alternative Currency Term Rate
Loan, the period commencing on the date such Alternative Currency Term RateSOFR Loan is disbursed or converted to or
continued as ana Term SOFR Loan or Alternative Currency Term Rate Loan, as applicable, and ending on the date one, three or
six months thereafter (in each case, subject to availability for the interest rate applicable to the relevant currency), as selected by
the Parent Borrower in the applicable Loan Notice, (b) as to each Term SOFR Margin Bid Loan, the period commencing on the
date such Term SOFR Margin Bid Loan is disbursed and ending on the date one week, two weeks, one month, two months, three
months, four months or six months thereafter, as selected by the Parent Borrower in its Competitive Bid Request, and (c) as to
each Absolute Rate Loan, a period of not less than 7 days and not more than 180 days as selected by the Parent Borrower in its
Competitive Bid Request; provided that:
(i)
(a) 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 Term SOFR Loan or an Alternative Currency Term 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)
(b) any Interest Period pertaining to a Term SOFR Loan or an Alternative Currency Term 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
3
From First Amendment
4
From original Credit Agreement
29
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)
(c) no Interest Period shall extend beyond the Maturity Date set forth in the Credit Agreement.
5
Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan.
For purposes hereof, the date of an Alternative Currency Term Rate Loan initially shall be the date on which such
“Interest Period” means, (a) as to each Eurocurrency Rate Loan other than a Eurocurrency Margin Bid Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan
and ending on the date one, two, three or six months thereafter (in each case, subject to availability), as selected by the Parent
Borrower in its Loan Notice, (b) as to each Eurocurrency Margin Bid Loan, the period commencing on the date such
Eurocurrency Margin Bid Loan is disbursed and ending on the date one week, two weeks, one month, two months, three months,
four months or six months thereafter, as selected by the Parent Borrower in its Competitive Bid Request, and (c) as to each
Absolute Rate Loan, a period of not less than 7 days and not more than 180 days as selected by the Parent Borrower in its
Competitive Bid Request; provided that:
(a) 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;
(b) 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;
(c) no Interest Period shall extend beyond the Maturity Date;
(iv)
(d) with respect to any EurocurrencyAlternative Currency Rate Loan denominated in Mexican Pesos, only
Interest Periods of one month (28 days), three months (91 days) and six months (182 days) will be available;
(v) with respect to any Alternative Currency Rate Loan denominated in Canadian Dollars, only Interest
Periods of one (1) month and three (3) months will be available; and
(vi)
(e) in order to consolidate two (2) or more EurocurrencyTerm SOFR Loans or two (2) or more Alternative
Currency Term Rate Loans denominated in the same currency, to facilitate an increase of the Facilities pursuant to
Section 2.16 and in such other circumstances as the Lenders may agree, the Interest Period for Eurocurrency Ratesuch
Term SOFR Loans or Alternative Currency Term Loans may be such period that is shorter than one (1) month as the
Lenders may agree.
5
From First Amendment
30
For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and, in the case of a Revolving
Credit Loan, Delayed Draw Term Loan or Term Loan, thereafter shall be the effective date of the most recent conversion or
continuation of such Loan.
6
“Intermediate Holding Company” means, other than the OpCo GP, a Subsidiary of the Company that owns, directly or
indirectly, an Equity Interest in the OpCo.
“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 Equity Interests 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, (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such
Person or (d) the purchase, acquisition or other investment in any real property or real property-related assets (including, without
limitation, mortgage loans and other real estate-related debt investments, investments in land holdings, and costs to construct real
property assets under development). 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.
“Investment Grade Credit Rating” means, with respect to any Person, receipt by such Person of a Debt Rating of BBB- or
higher by S&P or Fitch, or Baa3 or higher by Moody’s.
“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, Inc. (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 an L/C Issuer and the Parent Borrower (or any Subsidiary thereof) or in favor of an L/C
Issuer and relating to such Letter of Credit.
“Joint Venture” means a partnership, limited liability company, joint venture (including a tenancy in common ownership
pursuant to a written agreement providing for substantially the same rights and obligations relating to such property that would be
in a joint venture agreement), or corporation which is not wholly-owned by the Company (or one of its Subsidiaries).
“Joint Venture EBITDA” means, for any period, EBITDA from a Joint Venture, calculated as revenue allocated to the
Company and its Subsidiaries based on such Person’s ownership interest in such Joint Venture, minus 2% of such revenue.
“JPMorgan Chase” means JPMorgan Chase Bank, N.A. and its successors.
“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
6
From original Credit Agreement
31
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 Credit Lender, such Lender’s funding of its participation in any
L/C Borrowing in accordance with its Dollar Tranche 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 Revolving Credit 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 Draw Notice” has the meaning specified in Section 2.04(c)(i).
“L/C Issuer” means each of Bank of America, JPMorgan Chase and Wells Fargo Bank in its capacity as an issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder; provided that for so long as any Existing
Letter of Credit remains outstanding hereunder, the issuer of such Existing Letter of Credit shall continue to be the L/C Issuer
with respect to such Existing Letter of Credit.
“L/C Obligations” means, 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 1.06 and Section 1.07. 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.
“L/C Reimbursement Date” has the meaning specified in Section 2.04(c)(i).
“Lease” means a lease, license, concession agreement or other agreement providing for the use or occupancy of any
portion of any Project, including all amendments, supplements, modifications and assignments thereof and all side letters or side
agreements relating thereto.
“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing
Line Lender.
“Lender Parties” and “Lender Recipient Parties” mean, collectively, the Lenders, the Swing Line Lender and the L/C
Issuers.
“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 Parent Borrower and
the Administrative Agent which office may include any Affiliate of such Lender or any domestic or foreign branch of such
Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending
Office.
“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the
honoring of a presentation thereunder and shall include the Existing Letters of Credit. Letters of Credit may be issued in Dollars
or in an Alternative Currency.
32
“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 an L/C Issuer.
“Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date (or, if such day is not a
Business Day, the next preceding Business Day).
“Letter of Credit Fee” has the meaning specified in Section 2.04(h).
“Letter of Credit Sublimit” means, at any time, the lesser of (a) $50,000,000 and (b) the Aggregate Dollar Tranche
Commitments. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Leverage Ratio” as of any date means the ratio, expressed as a percentage, of Total Outstanding Indebtedness as of such
date to Total Value as of such date.
“LIBOR” has the meaning specified in the definition of Eurocurrency Rate.
“LIBOR Daily Floating Rate” means, for any day, a fluctuating rate of interest per annum equal to LIBOR as published
on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be
designated by Administrative Agent from time to time), at approximately 11:00 a.m., London time, two (2) London Banking
Days prior to such day, for Dollar deposits with a term of one (1) month commencing that day; provided that if the LIBOR Daily
Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of the Loan Documents.
“LIBOR Floating Rate Loan” means a Loan that bears interest at a rate based on the LIBOR Daily Floating Rate. All
LIBOR Floating Rate Loans shall be denominated in Dollars.
“LIBOR Quoted Currency” means each of the following currencies: Dollars, Euro, Sterling, Yen and Swiss Franc; in each
case as long as there is a published LIBOR rate with respect thereto.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority 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, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the
foregoing).
“Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Term Loan, a Delayed
Draw Term Loan, a Revolving Credit Loan, a Competitive Loan or a Swing Line Loan.
“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Guaranty, (d) the Fee Letter, (e) each
Issuer Document, (f) each Designated Borrower Request and Assumption Agreement, (g) the OpCo Assumption Agreement, (h)
any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.17 and (i) each other
agreement, instrument, and document heretofore, now or hereafter delivered in connection with this Agreement or evidencing,
securing, guaranteeing, or otherwise relating to any of the Obligations or any other aspect of the transactions contemplated by
this Agreement.
“Loan Notice” means a notice of (a) a Term Borrowing, (b) a Delayed Draw Term Borrowing, (c) a Revolving Credit
Borrowing, (d) a conversion of Loans from one Type to another, or (e) a continuation of EurocurrencyTerm Rate Loans, pursuant
to Section 2.02(a),
33
which shall be substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent
(including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative
Agent), appropriately completed and signed by a Responsible Officer of the Parent Borrower.
“Loan Parties” means, collectively, each Borrower, the Company and each Guarantor.
“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the
London interbank Eurodollar market.
“Managed Programs” means an investment vehicle funded, in whole or in part, with third party capital (including without
limitation, a fund, REIT, partnership or BDC), in each case, managed or advised by the Company or a Subsidiary thereof and
listed on Schedule 1.01(A) (as updated from time to time by the Parent Borrower).
“Management Contract” means a management contract or advisory agreement under which the Company or one of its
Subsidiaries provides management and advisory services to a third party (including Managed Programs), consisting of
management of properties or provision of advisory services on property acquisition and dispositions, equity and debt placements
and related transactional matters.
“Marketable Securities” means (a) short term marketable securities, issued by any entity (other than the Company or an
Affiliate of the Company) organized and existing under the laws of the United States of America, with a long term unsecured
indebtedness rating with Moody’s or S&P of Baa2/BBB or better, respectively, and (b) in the case of any Subsidiary of the
Company other than a Domestic Subsidiary thereof, local short term marketable securities comparable to those described in
clause (a) of this definition.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of
operations of the Company and the Subsidiaries taken as a whole or (b) the validity or enforceability of the Loan Documents or
the rights or remedies of the Administrative Agent and the Lenders under the Loan Documents.
“Material Indebtedness” means Indebtedness (other than the Loans, Letters of Credit and Nonrecourse Indebtedness) or
obligations in respect of one or more Swap Contracts, of any one or more of the Company and its Subsidiaries in an aggregate
principal amount exceeding $100,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Company or any Subsidiary thereof in respect of any Swap Contract at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Company or such Subsidiary would be required to pay if such
Swap Contract were terminated at such time.
“Material Subsidiary” means, at any date of determination, (a) each Subsidiary or group of Subsidiaries of the Company
whose contribution to Total Value at the last day of the most recent fiscal period for which a Compliance Certificate was
delivered pursuant to Section 6.02(a) was equal to or greater than 5% of Total Value at such date (it being understood that such
calculations shall be determined in the aggregate for all Subsidiaries of the Company subject to any of the events specified in
clause (f) and (g) of Section 8.01), (b) the OpCo GP and (c) each Intermediate Holding Company.
“Maturity Date” means the fifth anniversary of the Closing Date; provided, however, that if such date is not a Business
Day, the Maturity Date shall be the next preceding Business Day.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
34
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which
any Loan Party 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.
“Net Asset Value” means the value of a security determined on a net asset value basis by an officer of the Parent
Borrower in good faith and evidenced by an Officer’s Certificate, which determination shall be based on an appraisal of an
independent third-party appraiser regularly engaged in the valuation of securities of the same type as the securities being valued.
“Net Income (Loss)” means, for any Person for any period, the aggregate of net income (or loss) of such Person and its
Subsidiaries for such period, determined on a consolidated basis in conformity with GAAP.
“Net Operating Income” means, with respect to any Property at any time and without duplication, an amount equal to the
difference (if positive) between (a) the aggregate gross revenues from the operation of such Property from tenants paying rent
(including proceeds from rent loss insurance) during the then most recently ended fiscal quarter of the Company for which
financial statements have been provided to the Administrative Agent and the Lenders, and (b) the sum of (i) all expenses and
other proper charges incurred by the Company or one or more Subsidiaries of the Company (or by any Joint Venture in which the
Company, directly or indirectly, owns an interest) during such fiscal quarter in connection with the operation of such Property
(including accruals for real estate taxes and insurance, but excluding debt service charges, income taxes, depreciation,
amortization and other non-cash expenses), which expenses and accruals shall be calculated in accordance with GAAP and (ii) a
management, advisory or similar fee in an amount equal to the greater of (x) one percent (1.00%) of the net lease rental payments
payable in respect of such Property during such fiscal quarter and (y) actual management, advisory or similar fees paid in cash
during such fiscal quarter. Notwithstanding the foregoing, the Net Operating Income with respect to any Property that has not at
the time of determination been owned by the Company or one or more Subsidiaries of the Company (or by any Joint Venture in
which the Company, directly or indirectly, owns an interest) for an entire fiscal quarter shall be deemed to be the Projected
Property NOI of such Property.
“New Lender Joinder Agreement” has the meaning specified in Section 2.16(a).
“New Term Facility” has the meaning specified in Section 2.16(a).
“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires
the approval of all Lenders, all Lenders of a Facility or all affected Lenders in accordance with the terms of Section 11.01 and (ii)
has been approved by the Required Lenders, the Required Term Lenders, the Required Delayed Draw Term Lenders or the
Required Revolving Lenders, as applicable.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-LIBOR Quoted Currency” means any currency other than a LIBOR Quoted CurrencySOFR Successor Rate” has
the meaning specified in Section 3.03(c).
“Nonrecourse Carveouts” means the personal liability of an obligor under Indebtedness for fraud, misrepresentation,
misapplication or misappropriation of cash, waste, environmental liability, bankruptcy filing or any other circumstances
customarily excluded from non-recourse provisions and non-recourse financing of real estate.
35
“Nonrecourse Indebtedness” of any Person means all Indebtedness of such Person with respect to which recourse for
payment is limited to specific assets encumbered by a Lien securing such Indebtedness (other than Nonrecourse Carveouts);
provided, that if in connection therewith a personal recourse claim is established by judgment decree or award by any court of
competent jurisdiction or arbitrator of competent jurisdiction and execution or enforcement thereof shall not be effectively stayed
for 30 consecutive days and such Indebtedness shall not be paid or otherwise satisfied within such 30 day period, then such
Indebtedness in an amount equal to the personal recourse claim established by judgment or award shall not constitute
Nonrecourse Indebtedness for purposes of this Agreement.
“Note” means a Term Note, a Delayed Draw Term Note, a Revolving Credit Note or a Competitive Loan Note, as the
context may require.
“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the
form of Exhibit M or such other form as may be approved by the Administrative Agent (including any form on an electronic
platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and
signed by a Responsible Officer of the Parent Borrower.
“Obligations” means, collectively, all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan
Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, in each case whether direct or
indirect (including those acquired by assumption), 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 Loan 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.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Officer’s Certificate” means a certificate signed by a Responsible Officer of the Parent Borrower or by such other officer
as may be specified herein, and delivered to the Administrative Agent hereunder.
“OpCo” has the meaning specified in Section 11.25.
“OpCo GP” has the meaning specified in the definition of “Change of Control”.
“OpCo Assumption Agreement” has the meaning specified in Section 11.25.
“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.
“Original Credit Agreement” has the meaning specified in the preliminary statements hereto.
36
“Original Note” means a Note (as defined in the Original Credit Agreement).
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former
connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient
having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a
security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).
“Other Taxes” means any and all present or future stamp, court, documentary, intangible, recording, filing, or any other
excise, property or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the
execution, delivery, transfer or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except
any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant
to Sections 3.06 and 11.13).
“Outstanding Amount” means (a) with respect to Revolving Credit Loans, Alternative Currency Tranche Loans, Term
Loans, Swing Line Loans and Delayed Draw Term Loans on any date, the Dollar Equivalent of the aggregate outstanding
principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Revolving Credit Loans,
Alternative Currency Tranche Loans, Term Loans, Swing Line Loans and Delayed Draw Term Loans, as the case may be,
occurring on such date; (b) with respect to Dollar Tranche Loans and Competitive Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Dollar Tranche Loans and
Competitive Loans, as the case may be, occurring on such date; and (c) with respect to any L/C Obligations on any date, the
Dollar Equivalent of the 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 Borrowers of Unreimbursed Amounts.
“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, an 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.
“Parent Borrower” means, (a) prior to the Assumption Date, the Company and (b) on and after the Assumption Date, the
OpCo.
“Participant” has the meaning specified in Section 11.06(d).
“Participant Register” has the meaning specified in Section 11.06(d).
“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in
accordance with legislation of the European Union relating to Economic and Monetary Union.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Act” means the Pension Protection Act of 2006.
37
“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,
Sections 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 (including a Multiple Employer Plan or a Multiemployer Plan)
that is maintained or is contributed to by any Loan Party 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 Defects” means, with respect to any Project:
being contested in compliance with Section 6.04;
(a)
Liens imposed by law for taxes, assessments, governmental charges or levies that are not yet due or are
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 6.04;
(b)
(c)
easements, zoning restrictions, rights of way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct of business of any direct or indirect owner of such
Project;
8.01(h);
(d)
Liens securing judgments for the payment of money not constituting an Event of Default under Section
provided that such Liens encumber only the applicable assets pending consummation of the Disposition;
(e)
Liens consisting of an agreement to Dispose of any property in a Disposition permitted by Section 7.05;
(f)
(i) leases, licenses, subleases or sublicenses granted to other Persons in the ordinary course of business
which do not (A) interfere in any material respect with the business of the Company and its Subsidiaries, taken as a whole, or (B)
secure any Indebtedness and (ii) the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or
permit held by any of the direct or indirect owners of such Project); and
(g)
Liens with respect to Capitalized Leases of equipment entered into in the ordinary course of business of the
Consolidated Businesses.
“Permitted Encumbrances” means:
being contested in compliance with Section 6.04;
(a)
Liens imposed by law for taxes, assessments, governmental charges or levies that are not yet due or are
(b)
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 6.04;
38
pledges and deposits made in the ordinary course of business in compliance with workers'’ compensation,
unemployment insurance and other social security laws or regulations or to secure the performance of bids, purchases, contracts
(other than for the payment of borrowed money) and surety, appeal and performance bonds;
(c)
bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(d)
deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal
(e)
easements, zoning restrictions, rights of way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct of business of any direct or indirect owner of the
affected property;
(f)
(g)
8.01(h);
statutory and common law landlord Liens;
Liens securing judgments for the payment of money not constituting an Event of Default under Section
provided that such Liens encumber only the applicable assets pending consummation of the Disposition;
(h)
Liens consisting of an agreement to Dispose of any property in a Disposition permitted by Section 7.05;
(i)
(i) leases, licenses, subleases or sublicenses granted to other Persons in the ordinary course of business
which do not (A) interfere in any material respect with the business of the Company and its Subsidiaries, taken as a whole, or (B)
secure any Indebtedness, and (ii) the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or
permit held by any direct or indirect owner of the property subject to such terms;
(j)
(i) statutory and common law rights of set-off and other similar rights and remedies as to deposits of cash,
securities, commodities and other funds in favor of banks, other depositary institutions, securities or commodities intermediaries
or brokerages and (ii) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the UCC in
effect in the relevant jurisdiction and covering only the items being collected upon; and
leases entered into by the Company or any of its Domestic Subsidiaries;
(k)
Liens arising from precautionary UCC financing statements or similar filings made in respect of operating
provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“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 within the meaning of Section 3(3) of ERISA (including a Pension Plan),
maintained for employees of any Loan Party or any ERISA Affiliate or any such Plan to which any Loan Party or any ERISA
Affiliate is required to contribute on behalf of any of its employees.
“Platform” has the meaning specified in Section 6.02.
39
“Project” means any land and the structures thereon, including, without limitation, any office, industrial/manufacturing
facility, educational facility, retail facility, distribution/warehouse facility, assembly or production facility, laboratory facility,
hotel, day care center,
station,
broadcasting/communication facility (including any transmission facility), signage, theater, fitness facilities, parking facilities,
student housing or residential facilities, any combination of any of the foregoing, or any land to be developed into any one or
more of the foregoing pursuant to a written agreement with respect to such land for a transaction involving a Lease (or franchise
agreement, in the case of a hotel), in each case owned, directly or indirectly, by any of the Consolidated Businesses.
facility, health care/hospital
radio or TV
self-storage
restaurant,
facility,
“Projected Property NOI” means, with respect to any Property that has not at the time of determination been owned by
one or more Subsidiaries of the Company (or by any Joint Venture in which the Company, directly or indirectly, owns an interest)
for an entire fiscal quarter, the projected, pro forma Net Operating Income for such Property for such fiscal quarter as mutually
agreed by the Parent Borrower and the Administrative Agent based on (i) if available, historical financial statements for such
Property under prior ownership for the full fiscal quarter ended immediately prior to the date of determination or (ii) if such
historical financial statements are not available, the projected aggregate gross revenues from the operation of such Property from
tenants in occupancy and paying rent for the fiscal quarter during which such determination is made (calculated on a pro forma
basis based on the assumption that such tenants were in occupancy and paying rent from and after the first day of such fiscal
quarter through and including the last day thereof).
“Property” means any Real Property or personal property, plant, building, facility, structure, equipment, general
intangible, receivable, or other asset owned or leased by any of the Consolidated Businesses or any Joint Venture in which the
Company, directly or indirectly, owns an interest.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption
may be amended from time to time.
“Public Lender” has the meaning specified in Section 6.02.
“Rate Determination Date” means two (2) Business Days prior to the commencement of such Interest Period (or such
other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the
Administrative Agent; provided that to the extent such market practice is not administratively feasible for the Administrative
Agent, such other day as otherwise reasonably determined by the Administrative Agent).
“Real Property” means any present and future right, title and interest (including, without limitation, any leasehold estate)
in (a) any plots, pieces or parcels of land, (b) any buildings, fixtures, structures, parking areas and related facilities and amenities
(including all sitework, utilities, infrastructure, paving, striping, signage, curb and gutter, landscaping and other improvements
whether existing now or hereafter constructed), together with all machinery and mechanical, electrical, HVAC and plumbing
systems presently located thereon and used in the operation thereof, excluding (i) any such items owned by utility service
providers, (ii) any such items owned by tenants or other third parties that are not Affiliates of the Company and (iii) any items of
personal property (the rights and interests described in clauses (a) and (b) above being the “Premises”), (c) all easements, rights
of way, gores of land or any lands occupied by streets, ways, alleys, passages, sewer rights, water courses, water rights and
powers, air rights and public places adjoining such land, and any other interests in property constituting appurtenances to the
Premises, or which hereafter shall in any way belong, relate or be appurtenant thereto, (d) all hereditaments, gas, oil, minerals
(with the right to extract, sever and remove such gas, oil and
40
minerals), and easements, of every nature whatsoever, located in, on or benefiting the Premises and (e) all other rights and
privileges thereunto belonging or appertaining and all extensions, additions, improvements, betterments, renewals, substitutions
and replacements to or of any of the rights and interests described in clauses (c) and (d) above.
“Recipient” means the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be
made by or on account of any obligation of any Loan Party hereunder.
“Register” has the meaning specified in Section 11.06(c).
“REIT” means a domestic trust or corporation that qualifies as a real estate investment trust under the provisions of
Sections 856 et seq. of the Code.
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a REIT 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, trustees, advisors, consultants, service providers, auditors (including internal auditors), attorneys and
representatives of such Person and of such Person’s Affiliates.
“Release” means any release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping, emptying,
injection or leaching into the Environment, or into, from or through any building, structure or facility.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a
committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the
purpose of recommending a benchmark rate to replace LIBOR in loan agreements similar to this Agreement.
“Relevant Rate” means with respect to any Credit Extension denominated in (a) Dollars, Term SOFR and SOFR, (b)
Sterling, SONIA, (c) Swiss Francs, SARON, (d) Euros, EURIBOR, (e) Canadian Dollars, CDOR, (f) Yen, TIBOR, (g) Australian
Dollars, BBSY, (h) Swedish Krona, STIBOR, (i) Danish Krone, CIBOR, (j) Norwegian Krone, NIBOR and (k) Mexican Pesos,
TIIE, as applicable.
“Removal Effective Date” has the meaning specified in Section 9.06(b).
“Reorganization” has the meaning specified in Section 11.25.
“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 Term Loans,
Delayed Draw Term Loans or Revolving Credit Loans, a Loan Notice, (b) with respect to a Competitive Loan, a Competitive Bid
Request, (c) with respect to an L/C Credit Extension, a Letter of Credit Application, and (d) with respect to a Swing Line Loan, a
Swing Line Loan Notice.
“Required Delayed Draw Term Lenders” means, as of any date of determination, Delayed Draw Term Lenders holding
more than 50% of the Delayed Draw Term Facility on such date; provided that the portion of the Delayed Draw Term Facility
held by any Defaulting Lender
41
shall be excluded for purposes of making a determination of Required Delayed Draw Term Lenders.
“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total
Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) other
than the Outstanding Amount of Competitive Loans and (b) aggregate unused Revolving Credit Commitments (determined
without giving effect to any Competitive Loans outstanding on such date); provided that the unused Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders; provided further that, the amount of any participation in any Swing
Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and
funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or the applicable L/C Issuer, as
the case may be, in making such determination.
“Required Revolving Lenders” means, as of any date of determination, Revolving Credit Lenders holding more than 50%
of the sum of the (a) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit
Lender for purposes of this definition) other than the Outstanding Amount of Competitive Loans and (b) aggregate unused
Revolving Credit Commitments (determined without giving effect to any Competitive Loans outstanding on such date); provided
that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders;
provided further that, the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting
Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the
Lender that is the applicable Swing Line Lender or L/C Issuer, as the case may be, in making such determination.
“Required Term Lenders” means, as of any date of determination, Term Lenders holding more than 50% of the Term
Facility on such date; provided that the portion of the Term Facility held by any Defaulting Lender shall be excluded for purposes
of making a determination of Required Term Lenders.
“Rescindable Amount” has the meaning as specified in Section 2.13(b)(ii).
“Resignation Effective Date” has the meaning specified in Section 9.06(a).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK
Resolution Authority.
“Responsible Officer” means the chief executive officer, president, chief operating officer, chief accounting officer, chief
financial officer, Managing Director, Executive Vice PresidentDirector or Senior Vice President of Capital Markets, treasurer or
controller of a Loan Party or any entity authorized to act on behalf of a Loan Party, solely for purposes of the delivery of
incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of a Loan Party or entity authorized to
act on behalf of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer of the applicable
Loan Party or entity authorized to act on behalf of such Loan Party so designated by any of the foregoing officers in a notice to
the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party or entity
authorized to act on behalf of a Loan Party shall be
42
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect
to any equity securities or other Equity Interests of the Company or any Subsidiary thereof (except dividends payable solely in
equity securities of the Company or in rights to subscribe for or purchase equity securities of the Company), or any payment
(whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such equity securities or other Equity Interests, or on
account of any return of capital to the Company’s stockholders, partners or members (or the equivalent Person thereof).
“Revaluation Date” means, (i) with respect to any Revolving Credit Loan, each of the following: (a) each date of a
Borrowing of a Eurocurrency Rate Loan denominated in an Alternative Currency Loan, (b) with respect to an Alternative
Currency Daily Rate Loan, each Interest Payment Date, (c) each date of a continuation of a Eurocurrency Rate Loan denominated
in an Alternative Currency Term Rate Loan pursuant to Section 2.02, and (cd) such additional dates as the Administrative Agent
shall determine or, in the case of a Eurocurrencyan Alternative Currency Rate Loan, the Tranche Required Lenders with respect
to the Alternative Currency Tranche, shall require, (ii) with respect to any Delayed Draw Term Loan denominated in an
Alternative Currency, (a) the Delayed Draw Funding Date and (b) such additional dates as the Administrative Agent or the
Required Delayed Draw Term Lenders shall require, and (iii) with respect to any Letter of Credit, each of the following: (a) each
date of issuance and/or extension of a Letter of Credit denominated in an Alternative Currency, (b) each date of an amendment of
any such Letter of Credit having the effect of increasing the amount thereof, (c) each date of any payment by anthe Alternative
Currency L/C Issuer under any Letter of Credit denominated in an Alternative Currency and (d) such additional dates as the
Administrative Agent or anthe Alternative Currency L/C Issuer shall determine or the Tranche Required Lenders with respect to
the Dollar Tranche shall require.
“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type,
in the same currency and, in the case of EurocurrencyTerm Rate Loans, having the same Interest Period made by each of the
applicable Revolving Credit Lenders pursuant to Section 2.01(b).
“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its Dollar Tranche Commitment and/or
Alternative Currency Tranche Commitment, as the context may require.
“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit
Commitments at such time. On the Closing Date, the Revolving Credit Facility is $1,800,000,000.
“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.
“Revolving Credit Loan” means a Dollar Tranche Loan or an Alternative Currency Tranche Loan.
“Revolving Credit Note” means a promissory note made by a Borrower in favor of a Revolving Credit Lender evidencing
Revolving Credit Loans and/or Swing Line Loans, as the case may be, made by such Revolving Credit Lender to such Borrower,
substantially in the form of Exhibit D-2.
43
“Rule 144A Transaction” means a sale or issuance of notes or bonds that are exempt from registration with the SEC under
Rule 144A of the Securities Act.
“S&P” means Standard & Poor’s Financial Services LLC, 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 applicable 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.
“Sanction(s)” means any sanction administered or enforced by the United States Government (including without
limitation, OFAC), the United Nations Security Council, the European Union, HerHis Majesty’s Treasury or other relevant
sanctions authority.
“SARON” means, with respect to any applicable determination date, the Swiss Average Rate Overnight published on the
fifth Business Day preceding such date on the applicable Reuters screen page (or such other commercially available source
providing such quotations as may be designated by the Administrative Agent from time to time); provided however that if such
determination date is not a Business Day, SARON means such rate that applied on the first Business Day immediately prior
thereto.
“SARON Adjustment” means, with respect to SARON, -0.0571% per annum.
“Scheduled Unavailability Date” has the meaning specified in Section 3.03(c).
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its
principal functions.
“SEC Reports” has the meaning specified in Section 5.19.
“Second Amendment” means that certain Second Amendment to Fourth Amended and Restated Credit Agreement, dated
as of April 19, 2022, among the Parent Borrower, each of the Lenders and L/C Issuers party thereto, and the Administrative
Agent.
“Second Amendment Effective Date” has the meaning specified in the Second Amendment.
“Secured Indebtedness” means any Indebtedness secured by a Lien (excluding Indebtedness arising under this
Agreement).
“SOFR” means, with respect to any day means the secured overnight financing rate published forapplicable determination
date, the Secured Overnight Financing Rate published on the fifth U.S. Government Securities Business Day preceding such
daydate by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator)SOFR
Administrator on the Federal Reserve Bank of New York’s website (or any successor source) and, in each case, that has been
selected or recommended by the Relevant Governmental Body; provided however that if such determination date is not a U.S.
Government Securities Business Day, then SOFR means such rate that applied on the first U.S. Government Securities Business
Day immediately prior thereto.
44
“SOFR Adjustment” means 0.10% per annum.
“SOFR Administrator” means the Federal Reserve Bank of New York, as the administrator of SOFR, or any successor
administrator of SOFR designated by the Federal Reserve Bank of New York or other Person acting as the SOFR Administrator
at such time that is satisfactory to the Administrative Agent.
“SOFR-Based Rate Loan” means SOFR ora Term SOFR Committed Loan or a Daily SOFR Loan, as applicable.
“SOFR Scheduled Unavailability Date” has the meaning specified in Section 3.03(b).
“SOFR Successor Rate” has the meaning specified in Section 3.03(b).
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair
value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such
Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent
obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
“Solvency Certificate” means a Solvency Certificate of the chief financial officer of the Company substantially in the
form of Exhibit H.
“SONIA” means, with respect to any applicable determination date, the Sterling Overnight Index Average Reference Rate
published on the fifth Business Day preceding such date on the applicable Reuters screen page (or such other commercially
available source providing such quotations as may be designated by the Administrative Agent from time to time); provided
however that if such determination date is not a Business Day, SONIA means such rate that applied on the first Business Day
immediately prior thereto.
“SONIA Adjustment” means, with respect to SONIA, 0.0326% per annum.
“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.
“Specified Jurisdictions” means, collectively, the United States, Germany, Poland, the Netherlands, Spain, United
Kingdom, France, Denmark, Finland, Canada, Norway, Austria, Japan, Sweden and Belgium.
“Spot Rate” for a currency means the rate determined by the Administrative Agent or an 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 applicable
L/C Issuer may obtain such spot rate from another
45
financial institution designated by the Administrative Agent or such 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 such 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.
“Sterling Tranche Lender” means an Alternative Currency Tranche Lender with an Alternative Currency Tranche
Commitment that includes Sterling.
“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.
“Subsidiary Guarantors” means, collectively, (a) each Intermediate Holding Company and (b) each other Subsidiary of
the Company (other than Carey Financial, LLC) that (i) (A) receives fees under a Management Contract, (B) is a Wholly-Owned
REIT Subsidiary or (C) owns, directly or indirectly, an Unencumbered Eligible Project or a portion thereof and (ii) is a borrower
or guarantor of, or otherwise has a payment obligation in respect of, any Indebtedness of the type described in clause (a) of such
definition that is not (A) owing to any of the Consolidated Businesses or (B) Secured Indebtedness (including, without limitation
and for the avoidance of doubt, Indebtedness (other than Secured Indebtedness) that is incurred under or in connection with notes
or bonds issued in a Rule 144A Transaction); provided that if any such Subsidiary referenced in clause (b) above is not a
Domestic Wholly-Owned Subsidiary, then Subsidiary Guarantor shall mean each of the most immediate parents of such
Subsidiary that are Domestic Wholly-Owned Subsidiaries of the Company (if any), and including any Domestic Wholly-Owned
Subsidiary of the Company that joins as a Guarantor pursuant to Section 6.12 or otherwise, in each case, together with their
successors and permitted assigns, to the extent such Domestic Wholly-Owned Subsidiary has not been released from its
obligations hereunder in accordance with Section 10.10.
“Successor Rate” has the meaning specified in Section 3.03(c).
“Successor Rate Amendment” has the meaning specified in Section 3.03(c).
“Successor Rate Amendment Effective Date” means the date, if any, on which (a) a Successor Rate Amendment entered
into by the Administrative Agent and the Parent Borrower for the purpose of replacing LIBOR for Dollar denominated Loans has
become effective pursuant to Section 3.03 and (b) the Successor Rate adopted pursuant to such amendment applies to all Dollar
denominated Loans.
“Successor Rate Conforming Changes” means, with respect to any proposed Successor Rate, any conforming changes to
the definition of Base Rate, LIBOR Daily Floating Rate, Daily Floating Eurocurrency Rate, Interest Period, timing and frequency
of determining rates and making payments of interest and other technical, administrative or operational matters as may be
appropriate, in the discretion of the Administrative Agent, to reflect the adoption and implementation of such Successor Rate and
to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if
the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that
no market practice for the administration of such Successor Rate
46
exists, in such other manner of administration as the Administrative Agent determines is reasonably necessary in connection with
the administration of this Agreement in consultation with the Parent Borrower).
“Supplemental Addendum” has the meaning specified in Section 1.08.
“Supplemental Currency” has the meaning specified in Section 1.08.
“Supplemental Request” has the meaning specified in Section 1.08.
“Supplemental Tranche Effective Date” has the meaning specified in Section 1.08.
“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 Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.
“Swing Line Lender” means Bank of America, in its capacity as provider of Swing Line Loans hereunder, or any
successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.05(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b), which shall be
substantially in the form of Exhibit C or such other form as approved by the Administrative Agent (including any form on an
electronic platform or electronic transmission system as shall be approve by the Administrative Agent), appropriately completed
and signed by a Responsible Officer of the Parent Borrower.
“Swing Line Sublimit” means, at any time, the lesser of (a) $75,000,000150,000,000 and (b) an amount equal to the then
existing Aggregate Alternative Currency Tranche Commitments. The Swing Line Sublimit is part of, and not in addition to, the
Revolving Credit Facility.
47
“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person
in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including
any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet
or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in
each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any
Debtor Relief Laws to such Person, would be characterized as indebtedness of such Person (without regard to accounting
treatment).
“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which
utilizes a single shared platform and which was launched on November 19, 2007.
“TARGET Day” means any day on which TARGET2 (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 (including backup
withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type, in the same currency
and, in the case of Alternative Currency Term Rate Loans, having the same Interest Period made by each of the Term Lenders
pursuant to Section 2.01(a).
“Term Commitment” means, as to each Term Lender, its obligation to make Term Loans pursuant to Section 2.01(a)
and/or Section 2.16 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite
such Term Lender’s name on Schedule 2.01 under the caption “Term Commitment” or under such caption in the Assignment and
Assumption or the New Lender Joinder Agreement pursuant to which such Term Lender becomes a party hereto, as applicable, as
such amount may be increased by such Term Lender pursuant to Section 2.16 or otherwise adjusted from time to time in
accordance with this Agreement.
“Term Facility” means (a) on or prior to the Closing Date, the aggregate amount of the Term Commitments at such time
and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time. On the
SecondThird Amendment Effective Date, the Term Facility is £270,000,000.
“Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such
time and (b) at any time after the Closing Date, any Lender that holds Term Loans at such time.
“Term Loan” has the meaning specified in Section 2.01(a) and, unless the context requires otherwise, includes each loan
made in connection with any increase in the Term Facility or any New Term Facility pursuant to Section 2.16. For the avoidance
of doubt, on and after the Second Amendment Effective Date, except to the extent required by Section 2.02(c), all Term Loans
shall be denominated in Sterling.
48
“Term Note” means a promissory note made by a Borrower in favor of a Term Lender evidencing Term Loans made by
such Term Lender to such Borrower, substantially in the form of Exhibit D-1.
“Term Rate Loan” means a Term SOFR Committed Loan or an Alternative Currency Term Rate Loan, as applicable.
“Term SOFR” means:
(a)
for any Interest Period with respect to a Term SOFR Loan, the rate per annum equal to the Term SOFR
Screen Rate two U.S. Government Securities Business Days prior to the commencement of such Interest Period with a term
equivalent to such Interest Period; provided that if the rate is not published prior to 11:00 a.m. on such determination date then
Term SOFR means the Term SOFR Screen Rate on the first U.S. Government Securities Business Day immediately prior thereto,
in each case plus the SOFR Adjustment; and
Term SOFR Screen Rate with a term of one month commencing that day;
(b)
for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to the
provided, that if Term SOFR determined in accordance with either of the foregoing provisions (a) or (b) of this definition would
otherwise be less than zero, Term SOFR shall be deemed zero for purposes of the Loan Documents.
“Term SOFR Bid Margin” means the margin above or below Term SOFR to be added to or subtracted from Term SOFR,
which margin shall be expressed in multiples of 1/100th of one basis point.
“Term SOFR Committed Loan” means a Term SOFR Loan other than a Term SOFR Margin Bid Loan.
“Term SOFR Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Term SOFR.” All
Term SOFR Loans must be denominated in Dollars.
“Term SOFR Margin Bid Loan” means a Competitive Loan that bears interest at a rate based upon Term SOFR.
“Term SOFR Screen Rate” means the forward-looking SOFR term rate for any period that is approximately (as
determined byadministered by CME (or any successor administrator satisfactory to the Administrative Agent) as long as any
available interest period option under the Loan Documents and that is based on SOFR and that has been selected or
recommended by the Relevant Governmental Body, in each case as published on an information service as selectedand published
on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time in its reasonable discretion).
“Third Amendment” means that certain Third Amendment to Fourth Amended and Restated Credit Agreement, dated as
of January 26, 2023, among the Company, the Lenders, the L/C Issuers, and the Administrative Agent.
“Third Amendment Effective Date” means January 26, 2023.
“Total Outstanding Indebtedness” means, as of any date, the sum, without duplication, of (a) the amount of Indebtedness
(secured and unsecured and recourse or non-recourse) of the
49
Company and its Subsidiaries, including, without limitation, mortgage loans, outstanding balances on lines of credit and notes
payable, in each case, as set forth in the then most recent Compliance Certificate delivered pursuant to Section 6.02(b) plus (b)
the outstanding amount of Indebtedness of Joint Ventures allocable in accordance with GAAP on account of ownership of
interests in Joint Ventures to the Company and its Subsidiaries as of the time of determination (with appropriate adjustments for
minority interests) plus (c) the Contingent Obligations of the Company and its Subsidiaries in respect of Indebtedness and, to the
extent allocable to the Company and its Subsidiaries in accordance with GAAP on account of ownership of interests in Joint
Ventures, of the Joint Ventures in respect of Indebtedness (with appropriate adjustments for minority interests).
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.
“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing
Line Loans, Competitive Loans and L/C Obligations.
“Total Secured Outstanding Indebtedness” means, as of any date, the portion of Total Outstanding Indebtedness that is
Secured Indebtedness.
“Total Unsecured Outstanding Indebtedness” means, as of any date, the portion of Total Outstanding Indebtedness that is
not Secured Indebtedness.
“Total Value” means, as of any date, the sum, without duplication, of:
(a)
unrestricted Cash and Cash Equivalents which would be included on the Consolidated Businesses’
consolidated balance sheet as of such date including fully refundable deposits associated with any potential acquisition and
unrestricted cash in respect of Section 1031 exchanges; plus
(b)
Fair Market Value of Marketable Securities; plus
in respect of Projects (excluding Projects described in clause (e), (h), (k) or (l) below) owned or ground-
leased by the Company and its Subsidiaries for at least four full fiscal quarters, (i) the Net Operating Income for such Projects for
the then most recently ended fiscal quarter multiplied by four, divided by (ii) the Capitalization Rate; plus
(c)
or (l) below) owned or ground-leased by the Company or its Subsidiaries for less than four full fiscal quarters; plus
(d)
the investment (at cost without depreciation) in Projects (excluding Projects described in clause (e), (h), (k)
adjusted in accordance with GAAP to reflect impairment charges; plus
(e)
an amount equal to 50% of the book value of Property that has been vacant for less than twelve months, as
the investment in Joint Ventures, valued according to the methodologies under clauses (c) or (d) above
which is allocable to the Company or its Subsidiaries based on their ownership interests in the related Joint Ventures in
accordance with GAAP; plus
(f)
equal to accrued amortization payments in respect thereof; plus
(g)
investments in notes secured by mortgages on the Real Property of any Person at cost, less an amount
to purchase obligations, repurchase obligations, forward
(h)
contractual purchase price of Projects owned or ground-leased by the Company and its Subsidiaries subject
50
commitments and unfunded obligations to the extent such obligations and commitments are included in determinations of Total
Outstanding Indebtedness; plus
accordance with GAAP to reflect impairment charges; plus
(i)
the book value of all loans made by the Company or its Subsidiaries to Managed Programs, as adjusted in
(j)
the Net Asset Value of all investments in the securities of Managed Programs and other common and
preferred equity investments published as of the end of the most recent fiscal quarter for which financial statements have been
delivered pursuant to Section 6.01 (or, to the extent no such published Net Asset Value exists for a Managed Program or other
common and preferred equity investments, the amount of the investment by the Company and its Subsidiaries in such Managed
Program or other common and preferred equity investments (as applicable) as of the end of such fiscal quarter determined in
accordance with the equity method of accounting); plus
investments in Real Property under construction which is proceeding to completion in the ordinary course
(valued at the aggregate costs incurred and paid to date); provided that the amount under this clause (k) shall be limited to 10% of
Total Value; plus
(k)
(l)
investments (at the lower of cost or market value) in Real Property consisting of undeveloped land.
Notwithstanding the foregoing and solely for the purposes of this definition, the sum of the aggregate investments
described in clauses (f), (g) and (l) above shall not exceed 30% of Total Value with any excess over the foregoing limits being
excluded from Total Value.
“Tranche” means each of the Dollar Tranche and the Alternative Currency Tranche.
“Tranche Required Lenders” means, at any time, with respect to a Tranche, Lenders under such Tranche holding more
than 50% of the sum of the (a) Total Revolving Credit Outstandings (with the aggregate amount of each Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for
purposes of this definition) of such Tranche other than the Outstanding Amount of Competitive Loans and (b) aggregate unused
Commitments of such Tranche (determined without giving effect to any Competitive Loans outstanding on such date); provided
that the unused Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of Tranche Required Lenders; provided further that,
the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to
fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing
Line Lender or the applicable L/C Issuer, as the case may be, in making such determination.
“Treaty” has the meaning specified in the definition of “UK Treaty State.”
“Type” means, (a) with respect to a Competitive Loan, its character as an Absolute Rate Loan or a Term SOFR Margin
Bid Loan and (b) with respect to aany other Loan, its character as a Base Rate Loan, a Eurocurrency RateDaily SOFR Loan, a
Term SOFR Loan, an Alternative Currency Daily Rate Loan or an Alternative Currency Term Rate Loan.
7
“Type” means, (a) with respect to a Competitive Loan, its character as an Absolute Rate Loan or a Eurocurrency Margin
Bid Loan and (b) with respect to any other Loan, its character as
7
From First Amendment
51
8
a Base Rate Loan, a Eurocurrency Rate Loan, a LIBOR Floating Rate Loan or a Daily Floating Eurocurrency Rate Loan.
“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the
effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as
in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.
“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of
issuance).
“UK Borrower DTTP Filing” means an H.M. Revenue & Customs’ Form DTTP2 duly completed and filed by a
Designated UK Borrower, which contains the scheme reference number and jurisdiction of tax residence provided by a UK
Treaty Lender under Section 3.01(e)(iii) and which (a) where it relates to a UK Treaty Lender that was a Lender on the date such
Designated UK Borrower joined this Agreement as a Designated Borrower, is filed within 30 days of such date, or (b) where is
relates to a UK Treaty Lender which becomes a Lender after the date such Designated UK Borrower joined this Agreement as a
Designated Borrower, is filed within 30 days of the date on which that UK Treaty Lender becomes a Lender.
“UK CTA” means the Corporation Tax Act 2009.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended
formfrom time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU
11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority,
which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment
firms.
“UK ITA” means the UK Income Tax Act 2007.
“UK Non-Bank Lender” means a Lender that is making an advance to a Designated UK Borrower and gives a UK Tax
Confirmation to that Designated UK Borrower.
“UK Qualifying Lender” means:
(a) a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan
Document and is:
(i) a Lender:
(A) that is a bank (as defined for the purpose of section 879 of the UK ITA) making an advance under a Loan
Document and is within the charge to United Kingdom corporation tax as respects any payments of interest
made in respect of that advance or would be within such charge as respects such payment apart from
section 18A of the UK CTA; or
(B) in respect of an advance made under a Loan Document by a Person that was a bank (as defined for the
purpose of section 879 of the UK ITA) at
8
From original Credit Agreement
52
the time that that advance was made and within the charge to United Kingdom corporation tax as respects
any payments of interest made in respect of that advance; or
(ii) a Lender that is:
(A) a company resident in the United Kingdom for United Kingdom tax purposes;
(B) a partnership each member of which is:
(1) a company so resident in the United Kingdom; or
(2) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom
through a permanent establishment and which brings into account in computing its chargeable profits
(within the meaning of section 19 of the UK CTA) the whole of any share of interest payable in respect
of that advance that falls to it by reason of Part 17 of the UK CTA; (C) a company not so resident in the
United Kingdom which carries on a trade in the United Kingdom through a permanent establishment
and which brings into account interest payable in respect of that advance in computing the chargeable
profits (within the meaning of section 19 of the UK CTA) of that company; or
(iii) a UK Treaty Lender; or
(b) a Lender that is a building society (as defined for the purposes of section 880 of the UK ITA) making an advance
under a Loan Document.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility
for the resolution of any UK Financial Institution.
“UK Tax Confirmation” means a confirmation by a Lender that the Person beneficially entitled to interest payable to that
Lender in respect of an advance under a Loan Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes;
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account in computing its chargeable profits (within the
meaning of section 19 of the UK CTA) the whole of any share of interest payable in respect of that advance
that falls to it by reason of Part 17 of the UK CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable
profits (within the meaning of section 19 of the UK CTA) of that company.
“UK Treaty Lender” means a Lender that
53
(a) is treated as a resident of a UK Treaty State for the purposes of the Treaty; and
(b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender'’s
participation in a Loan or Letter of Credit is effectively connected.
“UK Treaty State” means a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which
makes provision for full exemption from tax imposed by the United Kingdom on interest.
“Unencumbered Asset Value” means, as of any date, the sum, without duplication, of:
(a)
unrestricted Cash and Cash Equivalents which would be included on the Consolidated Businesses’
consolidated balance sheet as of such date including fully refundable deposits associated with any potential acquisition and
unrestricted cash in respect of Section 1031 exchanges;
(b)
in respect of Unencumbered Eligible Projects (excluding Unencumbered Eligible Projects described in
clause (d) or (e) below) owned or ground-leased by the Property Borrower and its Subsidiaries for at least four full fiscal quarters,
(i) the portion of Unencumbered Property NOI derived from such Unencumbered Eligible Projects for the then most recently
ended fiscal quarter multiplied by four, divided by (ii) the Capitalization Rate;
(c)
in Unencumbered Eligible Projects (excluding
Unencumbered Eligible Projects described in clause (d) or (e) below) owned or ground-leased by the Company or its Subsidiaries
for less than four full fiscal quarters;
investment (at cost without depreciation)
the
(d)
an amount equal to 50% of the book value of investments made by the Company and its Subsidiaries in
Unencumbered Eligible Projects consisting of properties that have been vacant for less than twelve months, as adjusted in
accordance with GAAP to reflect impairment charges; and
(valued at the aggregate costs incurred and paid to date).
(e)
investments in Real Property under construction which is proceeding to completion in the ordinary course
Notwithstanding the foregoing and solely for the purposes of this definition:
(A) the sum of the aggregate investments described in clauses (d) and (e) above shall not exceed 15% of
Unencumbered Asset Value, in each case, with any excess over the foregoing limits being excluded from the
Unencumbered Asset Value; and
(B) not more than 25% of the Unencumbered Asset Value at any time may be in respect of Unencumbered
Eligible Projects that are not located in Specified Jurisdictions, with any excess over such limit being excluded from the
Unencumbered Asset Value.
“Unencumbered Eligible Project” means an Eligible Project (a) with respect to which either (i) one or more of the Loan
Parties has a direct or indirect ownership interest of 100% or a ground leasehold interest under an Eligible Ground Lease, or (ii)
(A) one or more of the Loan Parties has an ownership interest (whether directly or indirectly through a Subsidiary or through an
interest in a Joint Venture) of more than 25%, (B) one or more Managed Programs has all of the remaining ownership interests in
such Eligible Project and (C) the Company (whether directly or through a Subsidiary or a Joint Venture Controlled by the
Company) controls the
54
management of such Project, and (b) which is not subject (nor are any equity interests therein owned by the Company and
Subsidiaries thereof subject) to any Liens or preferred equity interests, except for Permitted Encumbrances and buy sell rights
with respect to Joint Ventures on customary terms and conditions. As used in this definition only, the term “control” shall mean
the authority, with sole discretion, to make major management decisions with respect to the applicable Project, including with
respect to sale, financing, refinancing, capital improvements, leasing and the grant of Liens on such Project and to manage the
day to day operations of such Project. Notwithstanding the foregoing, (x) an Eligible Project located in a Designated Jurisdiction
shall not qualify as an Unencumbered Eligible Project and (y) if any Consolidated Business that directly or indirectly owns an
Eligible Project or a portion thereof is a borrower or guarantor of, or otherwise incurs a payment obligation in respect of, any
Indebtedness of the type described in clause (a) of such definition that is not (1) owing to any of the Consolidated Businesses or
(2) Secured Indebtedness (including, without limitation and for the avoidance of doubt, Indebtedness (other than Secured
Indebtedness) that is incurred under or in connection with notes or bonds issued in a Rule 144A Transaction) and is not a
Guarantor, such Eligible Project shall not qualify as an Unencumbered Eligible Project.
“Unencumbered Property NOI” means the aggregate Net Operating Income from the Unencumbered Eligible Projects.
Unencumbered Property NOI from Unencumbered Eligible Projects owned by Joint Ventures with Managed Programs will be
calculated as the Net Operating Income from such Unencumbered Eligible Projects allocated to the Company and its Subsidiaries
based on their ownership interest in such Joint Venture.
“United States” and “U.S.” mean the United States of America.
“Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).
“U.S. Government Securities Business Day” means any Business Day, except any Business Day on which any of the
Securities Industry and Financial Markets Association, the New York Stock Exchange or the Federal Reserve Bank of New York
is not open for business because such day is a legal holiday under the federal laws of the United States or the laws of the State of
New York, as applicable.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).
“Wells Fargo Bank” means Wells Fargo Bank, N.A. and its successors.
“Wholly-Owned REIT Subsidiary” means any REIT in which the Company or the Parent Borrower owns, directly or
indirectly, 100% of the voting equity thereof.
“Wholly-Owned Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or
other business entity all of the Equity Interests of which (except directors’ qualifying shares) are at the time directly or indirectly
owned by such Person and/or another Wholly-Owned Subsidiary of such Person. For purposes hereof, so long as the Parent
Borrower remains a Subsidiary of the Company, the Parent Borrower and its Wholly-Owned Subsidiaries shall be deemed to be
Wholly-Owned Subsidiaries of the Company.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and
conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA
Member Country, which write-
55
down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom,
any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of
a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of
that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or
instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any
of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
“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, 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 “hereto,” “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, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Preliminary Statements, 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.
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.”
(b)
and shall not affect the interpretation of this Agreement or any other Loan Document.
(c)
Section headings herein and in the other Loan Documents are included for convenience of reference only
(d)
Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale,
disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation
of assets to a series of a limited liability company (or the unwinding of such a division or allocation)Division, as if it were a
merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as
applicable, to, of or with a separate Person. Any division of a limited liability companyDivision Successor shall constitute a
separate Person hereunder (and each
56
divisionDivision of any limited liability companyPerson that is a Subsidiary, joint venture or any other like term shall also
constitute such a Person or entity).
1.03 Accounting Terms. (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, Indebtedness of the Consolidated Businesses shall be
deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC
470-20 on financial liabilities shall be disregarded.
(a)
Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio
or requirement set forth in any Loan Document, and either the Parent Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Parent 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 (subject to the approval of the Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Parent Borrower shall provide to the Administrative Agent and 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.
(b)
Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the
Company and its Subsidiaries or to the determination of any amount for the Company and its Subsidiaries on a consolidated basis
or any similar reference shall, in each case, be deemed to include each variable interest entity that the Company is required to
consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.
(c)
Pro Forma Calculation. With respect to any reference herein to determining compliance with Section 7.11
on a pro forma basis after giving effect to a transaction or other event, such determination or compliance shall be calculated as
though such transaction or other event had been consummated or made as of the first day of the four fiscal quarter period most
recently ended for which financial information pursuant to Section 6.01(a) or (b) has been delivered to the Administrative Agent
and the Lenders, and on the basis of such financial information.
1.04 Rounding. Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).
1.05
Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time
(daylight or standard, as applicable).
1.06
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
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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.
1.07
Exchange Rates; Currency Equivalents; Interest Rates. (a) The Administrative Agent or the Alternative Currency
L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar
Equivalents of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies as of each Revaluation Date.
Such Spot RatesDollar Equivalent shall become effective as of such Revaluation Date and shall be the Spot Rates employed in
converting anyDollar Equivalent of such 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 as so determined by the Administrative Agent or the Alternative Currency L/C Issuer,
as applicable.
(a) Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of a
Eurocurrency Rate Loan or a Daily Floating Eurocurrency Ratean Alternative Currency 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
Borrowing, Eurocurrency Rate Loan, Daily Floating 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
Alternative Currency L/C Issuer, as the case may be.
(b)
The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent
have any liability with respect to the administration, submission or any other matter related to the rates in the definition of
“Eurocurrency Rate”, “Daily Floating Eurocurrency Rate”, “LIBOR Daily Floating Rate” or with respect to any reference rate
that is an alternative or replacement for or successor to any of such rates (including, without limitation, any Successor Rate) or
the effect of any of the foregoing, or of any Successor Rate Conforming Changes.
Interest Rates. The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative
Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definitions of
“Alternative Currency Daily Rate” or “Alternative Currency Term Rate”referred to herein or with respect to any rate (including,
for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternative or
replacement for or successor to any such rate (including, without limitation, any Successor Rate) (or any component of any of the
foregoing) or the effect of any of the foregoing, or of any Conforming Changes. The Administrative Agent and its affiliates or
other related entities may engage in transactions or other activities that affect any reference rate referred to herein, or any
alternative, successor or replacement rate (including, without limitation, any Successor Rate) (or any component of any of the
foregoing) or any related spread or other adjustments thereto, in each case, in a manner adverse to the Borrower. The
Administrative Agent may select information sources or services in its reasonable discretion to ascertain any reference rate
referred to herein or any Successor Rate (or any component of any of the foregoing), in each case pursuant to the terms of this
Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damag
9
9
From First Amendment
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es of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses
(whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or
component thereof) provided by any such information source or service.
1.08 Additional Alternative Currencies. (a) The Parent Borrower may from time to time request (each, a “Supplemental
Request”) that the Alternative Currency Tranche Lenders provide one or more commitments for Eurocurrency RateAlternative
Currency Loans to be made and/or that Letters of Credit to be issued in a currency (each, a “Supplemental Currency”) other than
those specifically listed in the definition of “Alternative Currency” at the time such request is made; provided that the requested
Supplemental Currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible
into Dollarsan Eligible Currency. Each Supplemental Request shall be (i) subject to the approval of the Administrative Agent
and, in the case of a Supplemental Request with respect to the issuance of Letters of Credit, shall be subject to the approval of the
Alternative Currency L/C Issuer and (ii) made in writing to the Administrative Agent not later than 11:00 a.m., 20 Business Days
prior to the date that the desired commitment in such Supplemental Currency would take effect (or such other time or date as may
be agreed by the Administrative Agent and, in the case of a Supplemental Request pertaining to Letters of Credit, the Alternative
Currency L/C Issuer, in its or their sole discretion) in substantially the form of Exhibit J (a “Supplemental Addendum”) and shall
set forth the proposed Supplemental Currency and the other matters set forth on the form of Supplemental Addendum.
The Administrative Agent shall promptly notify each Alternative Currency Tranche Lender following its
receipt of a Supplemental Request; and in the case of a Supplemental Request pertaining to Letters of Credit, the Administrative
Agent shall also promptly notify the Alternative Currency L/C Issuer thereof.
(a)
(b)
No Alternative Currency Tranche Lender shall be obligated to provide a commitment in a Supplemental
Currency. Each Alternative Currency Tranche Lender that agrees to provide a commitment in a Supplemental Currency (each, an
“Authorizing Lender”) shall notify the Administrative Agent, not later than 11:00 a.m., ten (10) Business Days after receipt of
such Supplemental Request whether it agrees to provide a commitment for Eurocurrency RateAlternative Currency Loans in the
applicable Supplemental Currency. Any Alternative Currency Tranche Lender that has failed to respond to such request within
the time period specified in the preceding sentence shall be deemed to have declined to provide a commitment in the applicable
Supplemental Currency.
(c)
If the Administrative Agent and, if applicable, the Alternative Currency L/C Issuer, consent to a
Supplemental Request, and one or more Alternative Currency Tranche Lenders agree to provide a commitment in the applicable
Supplemental Currency, and the Administrative Agent and such Alternative Currency Tranche Lenders reasonably determine that
an appropriate interest rate is available to be used for such requested Supplemental Currency, the Administrative Agent shall so
notify the Parent Borrower, and (i) the Administrative Agent and the applicable Authorizing Lenders may amend the definition of
Alternative Currency Daily Rate or Alternative Currency Term Rate, as applicable, and the definition of Relevant Rate, in each
case, to the extent necessary to add the applicable rate for such Supplemental Currency and any applicable adjustment for such
rate and (ii) to the extent the definition of Alternative Currency Daily Rate or Alternative Currency Term Rate, as applicable, and
the definition of Relevant Rate have been amended to reflect the appropriate rate for such Supplemental Currency, the
Administrative Agent and the Parent Borrower shall determine the date such commitmentcommitments in the Supplemental
Currency shall become effective (the “Supplemental Tranche Effective Date”), and any other terms relating thereto. The
Administrative Agent shall promptly distribute a revised Schedule 2.01 to each Revolving Credit
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Lender reflecting such new commitment and notify each Revolving Credit Lender of the Supplemental Tranche Effective Date.
For the avoidance of doubt, from and after the Supplemental Tranche Effective Date with respect to any Supplemental Currency,
all references in this Agreement to Alternative Currency or Alternative Currencies shall be deemed, unless the context otherwise
requires, to include a reference to such Supplemental Currency. If the Administrative Agent shall fail to obtain any requisite
consent to a Supplemental Request or no Alternative Currency Tranche Lender agrees to provide a commitment in the applicable
Supplemental Currency, the Administrative Agent shall promptly so notify the Parent Borrower.
(d)
As a condition precedent to the addition of a commitment in a Supplemental Currency to this Agreement:
(i) each applicable Authorizing Lender must be able to make Revolving Credit Loans in the Supplemental Currency in
accordance with applicable laws and regulations, (ii) each applicable Authorizing Lender providing a commitment in the
Supplemental Currency and the Administrative Agent, and the Alternative Currency L/C Issuer if its consent to the addition of
such commitment is required, must execute the requested Supplemental Addendum, (iii) the Parent Borrower and each other
Loan Party must execute the Supplemental Addendum and (iv) any other documents or certificates that shall be reasonably
requested by the Administrative Agent in connection with the addition of such commitment shall have been delivered to the
Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent.
(e)
In connection with the addition of a commitment in a Supplemental Currency, the Administrative Agent,
the Parent Borrower and the Alternative Currency L/C Issuer and Authorizing Lenders with such commitments may, without the
consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the Parent Borrower, to implement the provisions of this
Section, a copy of which shall be made available to each Lender.
(f)
This Section shall supersede any provisions in Section 11.01 to the contrary to the extent necessary to give
effect to this Section 1.08.
1.09 Change of Currency. (a) Each obligation of any 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. 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 Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take
effect, with respect to such Borrowing, at the end of the then current Interest Period.
(a)
Each provision of this Agreement shall be subject to such reasonable changes of construction as the
Administrative Agent 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, and the Administrative Agent shall
provide three (3) Business Days prior notice to the Parent Borrower and the Lenders of any such changes of construction prior to
application thereof to any provision of this Agreement.
Administrative Agent may from time to time specify to be
(b)
Each provision of this Agreement also shall be subject to such reasonable changes of construction as the
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appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the
change in currency.
Article b
THE COMMITMENTS AND CREDIT EXTENSIONS
1.01
The Loans. (a) The Term Borrowing.
(i)
Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make one or
more loans (each such loan, a “Term Loan”) to the Parent Borrower each in Euro or Sterling on the Closing Date, in an
aggregate amount not to exceed such Term Lender’s Term Commitment. Each Term Borrowing on the Closing Date
shall consist of Term Loans made simultaneously by the Term Lenders in the same currency in accordance with their
respective Applicable Percentages of the Term Facility. Amounts borrowed under this Section 2.01(a) and repaid or
prepaid may not be reborrowed. On and after the Third Amendment Effective Date, Term Loans shall only be
EurocurrencyAlternative Currency Daily Rate Loans or Alternative Currency Term Rate Loans, in each case as further
provided herein.
(ii)
If the Term Loans are to be made in more than one currency, then on the Closing Date each Term Lender’s
Term Commitment and the Term Facility shall be allocated by the Administrative Agent into tranches to reflect the
Term Loans made by such Term Lender in each currency and the Administrative Agent shall restate Schedule 2.01 to
reflect the Term Commitments and the Term Facility as so tranched (which restated schedule the Administrative Agent
will make available to the Lenders and the Parent Borrower). The Administrative Agent and the Parent Borrower may,
without the consent of any Lenders, effect such amendments to this Agreement and the other Loan Documents as may
be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Parent Borrower, to reflect
any tranching of the Term Facility as contemplated above.
(a)
The Revolving Credit Borrowings.
(i) Dollar Tranche Loans. Subject to the terms and conditions set forth herein, each Dollar Tranche Lender
severally agrees to make loans (each such loan, a “Dollar Tranche Loan”) to the Parent Borrower and any Domestic
Designated Borrower in Dollars from time to time, on any Business Day during the Availability Period, in an aggregate
amount as to all Borrowers not to exceed at any time outstanding the amount of such Revolving Credit Lender’s Dollar
Tranche Commitment; provided, however, that after giving effect to any Revolving Credit Borrowing under this Section
2.01(b)(i), (w) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (x)
the Outstanding Amount of Dollar Tranche Loans plus the Outstanding Amount of all L/C Obligations, plus the
Outstanding Amount of all Swing Line Loans shall not exceed the Aggregate Dollar Tranche Commitments, (y) the
Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit
Lender’s Dollar Tranche Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit
Lender’s Dollar Tranche Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such
Revolving Credit Lender’s Revolving Credit Commitment and (z) the Outstanding Amount of the Dollar Tranche Loans
of any Revolving Credit Lender, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the Outstanding
Amount of all L/C Obligations, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Dollar Tranche Commitment. Within the
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limits of each Revolving Credit Lender’s Dollar Tranche Commitment, and subject to the other terms and conditions
hereof, each Borrower may borrow under this Section 2.01(b)(i), prepay under Section 2.06, and reborrow under this
Section 2.01(b)(i). Dollar Tranche Loans may be Base Rate Loans, LIBOR Floating RateDaily SOFR Loans or
Eurocurrency RateTerm SOFR Loans, as further provided herein.
(ii) Alternative Currency Tranche Loans. Subject to the terms and conditions set forth herein, each Alternative
Currency Tranche Lender severally agrees to make loans (each such loan, an “Alternative Currency Tranche Loan”) to
the Parent Borrower and any Designated Borrower in Dollars or in an Alternative Currency for which such Alternative
Currency Tranche Lender has an Alternative Currency Tranche Commitment from time to time, on any Business Day
during the Availability Period, in an aggregate amount as to all Borrowers not to exceed at any time outstanding the
amount of such Revolving Credit Lender’s Alternative Currency Tranche Commitment or, with respect to any single
Alternative Currency, not to exceed the maximum amount (if any) that such Revolving Credit Lender has committed to
provide with respect to such Alternative Currency as part of its Alternative Currency Tranche Commitment; provided,
however, that after giving effect to any Revolving Credit Borrowing under this Section 2.01(b)(ii), (w) the Total
Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (x) the Outstanding Amount
of Alternative Currency Tranche Loans shall not exceed the Aggregate Alternative Currency Tranche Commitments, (y)
the Outstanding Amount of all Revolving Credit Loans (including Swing Line Loans) denominated in Alternative
Currencies shall not exceed the Alternative Currency Sublimit and (z) the Outstanding Amount of the Revolving Credit
Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the
Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit
Commitment. Within the limits of each Revolving Credit Lender’s Alternative Currency Tranche Commitment, and
subject to the other terms and conditions hereof, each Borrower may borrow under this Section 2.01(b)(ii), prepay under
Section 2.06, and reborrow under this Section 2.01(b)(ii). Alternative Currency Tranche Loans in Dollars may be Base
Rate Loans, LIBOR Floating RateDaily SOFR Loans or Eurocurrency RateTerm SOFR Loans and Alternative Currency
Tranche Loans in currencies other than Dollars shall only be EurocurrencyAlternative Currency Daily Rate Loans or
Alternative Currency Term Rate Loans, in each case as further provided herein.
(iii) Selection of Tranches. A Borrower may borrow from one or more Tranches as selected by the Parent
Borrower in the applicable Loan Notice, but each Borrowing within a Tranche shall be made in a currency permitted
under such Tranche of the same Type made simultaneously by all Revolving Credit Lenders with a Commitment with
respect to such Tranche and currency ratably according to their Commitments with respect to such Tranche and
currency.
(b)
The Delayed Draw Term Borrowing.
(i)
Subject to the terms and conditions set forth herein, each Delayed Draw Term Lender severally agrees to
make one or more loans (each such loan, a “Delayed Draw Term Loan”) to the Parent Borrower or any Designated
Borrower each in Dollars, Euro or Sterling on any single Business Day (the “Delayed Draw Funding Date”) on or prior
to the Delayed Draw Termination Date, in an aggregate amount not to exceed such Delayed Draw Term Lender’s
Delayed Draw Term Commitment. Each Delayed Draw Term Borrowing on the Delayed Draw Funding Date shall
consist of Delayed
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Draw Term Loans made simultaneously by the Delayed Draw Term Lenders in the same currency in accordance with
their respective Applicable Percentages of the Delayed Draw Term Facility. Amounts borrowed under this Section
2.01(c) and repaid or prepaid may not be reborrowed. On and after the Third Amendment Effective Date, Delayed Draw
Term Loans in Dollars may be Base Rate Loans, Eurocurrency RateDaily SOFR Loans or LIBOR Floating RateTerm
SOFR Loans, and Delayed Draw Term Loans in Euro or Sterling shall only be EurocurrencyAlternative Currency Daily
Rate Loans or Alternative Currency Term Rate Loans, in each case as further provided herein.
(ii)
If the Delayed Draw Term Loans are to be made in more than one currency, then on the Delayed Draw
Funding Date each Delayed Draw Term Lender’s Delayed Draw Term Commitment and the Delayed Draw Term
Facility shall be allocated by the Administrative Agent into tranches to reflect the Delayed Draw Term Loans made by
such Delayed Draw Term Lender in each currency and the Administrative Agent shall restate Schedule 2.01 to reflect
the Delayed Draw Term Commitments and the Delayed Draw Term Facility as so tranched (which restated schedule the
Administrative Agent will make available to the Lenders and the Parent Borrower). The Administrative Agent and the
Parent Borrower may, without the consent of any Lenders, effect such amendments to this Agreement and the other
Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the
Parent Borrower, to reflect any tranching of the Delayed Draw Term Facility as contemplated above.
(iii) For the avoidance of doubt, notwithstanding the foregoing, on and after the Second Amendment Effective
Date, no Delayed Draw Term Loans denominated in Dollars shall be requested or made hereunder.
1.02 Borrowings, Conversions and Continuations of Loans. (a) Each Term Borrowing, each Delayed Draw Term
Borrowing, each Revolving Credit Borrowing, each conversion of Delayed Draw Term Loans or Revolving Credit Loans
denominated in Dollars from one Type to the otheranother, and each continuation of EurocurrencyTerm Rate Committed Loans
shall be made upon the Parent Borrower’s (on its own behalf and on behalf of any Designated Borrower) irrevocable notice to the
Administrative Agent, which may be given by (A) telephone or (B) a Loan Notice; provided that any telephone notice must be
confirmed promptly by delivery to the Administrative Agent of a Loan Notice. Each such Loan Notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) two Business Days prior to the requested date of any Borrowing of, conversion
to or continuation of Eurocurrency RateTerm SOFR Committed Loans denominated in Dollars or of any conversion of
Eurocurrency RateTerm SOFR Committed Loans denominated in Dollars to Daily SOFR Loans or Base Rate Loans, (ii) three
Business Days (or four Business Days in the case of a Special Notice Currency) prior to the requested date of any Borrowing of
Alternative Currency Loans or any continuation of EurocurrencyAlternative Currency Term Rate Committed Loans denominated
in Alternative Currencies, and (iii) on the requested date of any Borrowing of Daily SOFR Loans or Base Rate Loans or the
conversion of Daily SOFR Loans to Base Rate Loans or of Base Rate Loans to Daily SOFR Loans. Each Borrowing of,
conversion to or continuation of Eurocurrency RateTerm SOFR Committed Loans, Daily SOFR Loans and Alternative Currency
Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in
Sections 2.04(c) and 2.05(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Loan Notice shall specify (i) whether the Parent Borrower is requesting a
Term Borrowing, a Delayed Draw Term Borrowing, a Revolving Credit Borrowing, a conversion of Revolving Credit Loans of
Delayed Draw Term Loans denominated in Dollars from one Type to the otheranother, or a continuation of EurocurrencyTerm
Rate Committed Loans, (ii) the
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requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the
currency and principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Revolving Credit Loans or Delayed Draw Term Loans denominated in Dollars are to be converted, (v) if
applicable, the duration of the Interest Period with respect thereto, (vi) the Tranche and currency of any Revolving Credit Loans
requested to be borrowed or continued, and (vii) the name of the Borrower (which shall be the Parent Borrower or a permitted
Designated Borrower). If the Parent Borrower fails to specify a currency in a Loan Notice requesting a Revolving Credit
Borrowing, then the Loan so requested shall be made in Dollars. If the Parent Borrower fails to specify a Tranche in a Loan
Notice requesting a Revolving Credit Borrowing, then the Loan Notice shall be deemed to be a request for a Borrowing under the
Dollar Tranche if the request is for a Borrowing in Dollars and the Alternative Currency Tranche if the request is for a Borrowing
in an Alternative Currency. If the Parent Borrower fails to specify a Type of Loan in a Loan Notice requesting a Revolving Credit
Borrowing or if the Parent Borrower fails to give a timely notice requesting a conversion or continuation of Revolving
CreditTerm Rate Loans, then the applicable Revolving 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 Loans denominated in an Alternative
CurrencyAlternative Currency Term Rate Loans, such Loans shall be continued as EurocurrencyAlternative Currency Term Rate
Committed 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 RateTerm
SOFR Committed Loans. If the Parent Borrower requests a Borrowing of, conversion to, or continuation of EurocurrencyTerm
Rate Committed Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month. No Loan may be converted into or continued as a Loan denominated in a different currency or in a
different Tranche, but instead must be prepaid in the original currency of such Loan and reborrowed in the other currency or
reborrowed in a different Tranche to the extent permitted herein. Notwithstanding anything to the contrary herein, (x) a Swing
Line Loan may not be converted to a Eurocurrencyan Alternative Currency Term Rate Loan and, except to the extent required by
Section 2.02(c), (y) no Term Loan or Delayed Draw TermAlternative Currency Loan may be converted to a Base Rate Loan and
(z) on and after the Second Amendment Effective Date, this Section 2.02(a) shall remain subject to the provisions of the First
Amendment with respect to Borrowings of Alternative Currency Loans and continuations of Alternative Currency Term Rate
Loans.
Alternative Currency Loans. Each Borrowing of Alternative Currency Loans, and each continuation of an Alternative
Currency Term Rate Loan shall be made upon the Parent Borrower’s (on its own behalf and on behalf of any Designated
Borrower) irrevocable notice to the Administrative Agent, which may be given by (A) telephone or (B) a Loan Notice; provided
that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Loan Notice. Each such
Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. three Business Days prior to the requested
date of any Borrowing of Alternative Currency Loans or, in the case of Alternative Currency Term Rate Loans, any continuation.
Each Borrowing of or continuation of Alternative Currency Loans shall be in a principal amount of the Dollar Equivalent of
$5,000,000 or a whole multiple of the Dollar Equivalent of $1,000,000 in excess thereof. Each Loan Notice shall specify (i)
whether the Parent Borrower is requesting a Borrowing of Alternative Currency Loans or a continuation of Alternative Currency
Term Rate Loans, (ii) the requested date of the Borrowing or continuation, as the case may be (which shall be a Business Day),
(iii) the currency and principal amount of Loans to be borrowed or continued, (iv) the Type of Loans to be borrowed, (v) if
applicable, the duration of the Interest Period with respect thereto and (vi) the name of the Borrower (which shall be the Parent
Borrower or a permitted Designated Borrower). If the Parent Borrower fails to specify a currency in a Loan Notice requesting a
Borrowing, then the Loans so requested shall be made in Dollars. If the Parent Borrower fails to specify a Tranche in a Loan
Notice requesting a
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Revolving Credit Borrowing, then the Loan Notice shall be deemed to be a request for a Borrowing under the Dollar Tranche if
the request is for a Borrowing in Dollars and the Alternative Currency Tranche if the request is for a Borrowing in an Alternative
Currency. If the Parent Borrower fails to specify a Type of Loan in a Loan Notice or if the Parent Borrower fails to give a timely
notice requesting a continuation, then the applicable Loans shall be made as Base Rate Loans denominated in Dollars; provided,
however, that in the case of a failure to timely request a continuation of Alternative Currency Term Rate Loans, such Loans shall
be continued as Alternative Currency Term Rate Loans in their original currency with an Interest Period of one month. If the
Parent Borrower requests a Borrowing of Alternative Currency Loans or continuation of Alternative Currency Term Rate Loans
in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one
month. Except as otherwise specified in the Credit Agreement, no Alternative Currency Loan may be converted into or continued
as a Loan denominated in a different currency or in a different Tranche, but instead must be prepaid in the original currency of
such Alternative Currency Loan and reborrowed in the other currency or reborrowed in a different Tranche.
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(a)
Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Appropriate
Lender of the amount (and currency) of its Applicable Percentage under the applicable Facility (and Applicable Tranche
Percentage in the case of Revolving Credit Loans) of the applicable Term Loans, Delayed Draw Term Loans or Revolving Credit
Loans, and if no timely notice of a conversion or continuation is provided by the Parent Borrower, the Administrative Agent shall
notify each Appropriate Lender of the details of any automatic conversion to Base Rate Loans or continuation of Loans
denominated in a currency other than Dollars, in the case described in Section 2.02(a). In the case of a Term Borrowing, a
Delayed Draw Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan
available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not
later than 1:00 p.m., in the case of any Loan denominated in Dollars, and not later than the Applicable Time specified by the
Administrative Agent in the case of any Loan in an Alternative Currency, in each case on the Business Day specified in the
applicable 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 Parent
Borrower or the applicable Designated Borrower in like funds as received by the Administrative Agent either by (i) crediting the
account of such 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 Parent
Borrower; provided, however, that if, on the date a Loan Notice with respect to a Revolving Credit Borrowing denominated in
Dollars is given by the Parent Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit
Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the
applicable Borrower as provided above.
(b)
Except as otherwise provided herein, a Eurocurrency RateTerm SOFR Committed Loan may be continued
or converted only on the last day of an Interest Period for such Eurocurrency RateTerm SOFR Committed Loan, and an
Alternative Currency Term Rate Loan may be continued only on the last day of an Interest Period for such Alternative Currency
Term Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurocurrency
Rate CommittedSOFR Loans (whether in Dollars or any Alternative Currency) Loans without the consent of the Required
Revolving Lenders (in the case of any Revolving Credit Loans) or, the Required Delayed Draw Term Lenders (in the case of any
Delayed Draw Term Loans), or the Required Term Lenders (in the case of any Term Loans), as applicable, and the Required
Revolving Lenders (in the case of any Revolving Credit Loans) or,
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From First Amendment
65
the Required Delayed Draw Term Lenders (in the case of any Delayed Draw Term Loans) or the Required Term Lenders (in the
case of any Term Loans) may demand that any or all of the then outstanding Eurocurrency Rate CommittedAlternative Currency
Loans under the applicable Facility denominated in an Alternative Currency be prepaid, or redenominated into Dollars and
converted into Base Rate Loans in the amount of the Dollar Equivalent thereof, immediately or, in the case of Term SOFR Loans
and Alternative Currency Term Rate Loan, on the last day of the then current Interest Period with respect thereto. Once any such
Loan is converted into a Base Rate Loan, unless and until the occurrence of the Successor Amendment Effective Date, such Loan
shall remain a Base Rate Loan until prepaid or repaid in accordance with the terms of this Agreement.
(c)
The Administrative Agent shall promptly notify the Parent Borrower and the Lenders of the interest rate
applicable to any Interest Period for Eurocurrency RateTerm SOFR Loans upon determination of such interest rate.
(d)
After giving effect to all Term Borrowings and all continuations of Term Loans, there shall not be more
than five Interest Periods in effect in respect of the Term Facility. After giving effect to all Revolving Credit Borrowings, all
conversions of Revolving Credit Loans denominated in Dollars from one Type to theanother other, and all continuations of
Revolving Credit Loans as the same Type, there shall not be more than 15 Interest Periods in effect in respect of the Revolving
Credit Facility. After giving effect to all Delayed Draw Term Borrowings, all conversions of Delayed Draw Term Loans
denominated in Dollars from one Type to the otheranother, and all continuations of Delayed Draw Term Loans as the same Type,
there shall not be more than five Interest Periods in effect in respect of the Delayed Draw Term Facility.
(e)
Notwithstanding anything to the contrary in this Agreement, any Lender may exchange, continue or
rollover all of the portion of its Loans in connection with any refinancing, extension, loan modification or similar transaction
permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Company, the
Administrative Agent, and such Lender.
(f)
(f) Conforming Changes. With respect to any of SOFR, Daily Simple SOFR, Term SOFR, any Alternative
Currency Daily Rate and, any Alternative Currency Term Rate, any Relevant Rate or any Successor Rate, the Administrative
Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein,
in the Credit Agreement or in any other Loan Document, any amendments implementing such Conforming Changes will become
effective without any further action or consent of any other party to this Agreement, the Credit Agreement or any other Loan
Document; provided, that, with respect to any such amendment effected, the Administrative Agent shall post each such
amendment implementing such Conforming Changes to the Parent Borrower and the Lenders reasonably promptly after such
amendment becomes effective.
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(g)
Notwithstanding anything to the contrary contained herein or elsewhere: (a) Each Eurocurrency Rate Loan
(as defined in the Existing Credit Agreement) that is outstanding on the Third Amendment Effective Date and denominated in
Dollars shall continue to accrue interest at the per annum interest rate that would apply to such Eurocurrency Rate Loan under the
Existing Credit Agreement, and such interest shall be payable on the dates that such interest would be payable under the Existing
Credit Agreement and otherwise in accordance with the terms thereof and (b) on the last day of the Interest Period (solely for
purposes of this paragraph, as defined in the Existing Credit Agreement) with respect to each Eurocurrency Rate Loan
outstanding on the Third Amendment Effective Date, each such Eurocurrency Rate Loan
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From First Amendment
66
denominated in Dollars shall, at the election of the Parent Borrower made in accordance with Sections 2.01(a) and 2.02, be
converted to a Term SOFR Loan, Daily SOFR Loan or Base Rate Loan. In the event that the Parent Borrower fails to provide a
Loan Notice with respect to the conversion of any such Eurocurrency Rate Loan in accordance with Section 2.02(a), such
Eurocurrency Rate Loan shall be converted to a Base Rate Loan at the end of the relevant Interest Period.
1.03 Competitive Loans. (a) General. Subject to the terms and conditions set forth herein, as long as the Company
maintains at least two Investment Grade Credit Ratings from S&P, Moody’s or Fitch each Lender agrees that the Parent Borrower
may from time to time prior to the Maturity Date request the Lenders to submit offers to make loans in Dollars (each such loan, a
“Competitive Loan”) to the Parent Borrower and any Designated Borrower pursuant to this Section 2.03; provided, however, that
after giving effect to any Competitive Borrowing, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving
Credit Facility, and (ii) the Outstanding Amount of all Competitive Loans shall not exceed the Competitive Loan Sublimit. There
shall not be more than five different Interest Periods in effect with respect to Competitive Loans at any time. Notwithstanding
anything to the contrary contained herein, only a Revolving Credit Lender may make a Competitive Loan.
(a)
Requesting Competitive Bids. The Parent Borrower (on its own behalf and on behalf of any Designated
Borrower) may request the submission of Competitive Bids by delivering a Competitive Bid Request to the Administrative Agent
not later than 11:00 a.m. (i) one Business Day prior to the requested date of any Competitive Borrowing that is to consist of
Absolute Rate Loans or (ii) three Business Days prior to the requested date of any Competitive Borrowing that is to consist of
EurocurrencyTerm SOFR Margin Bid Loans. Each Competitive Bid Request shall specify (i) the requested date of the
Competitive Borrowing (which shall be a Business Day), (ii) the aggregate principal amount of Competitive Loans requested
(which must be $5,000,000 or a whole multiple of $1,000,000 in excess thereof), (iii) the Type of Competitive Loans requested,
(iv) the duration of the Interest Period with respect thereto and (v) the name of the Borrower (which shall be the Parent Borrower
or a Designated Borrower), and shall be signed by a Responsible Officer of the Parent Borrower. No Competitive Bid Request
shall contain a request for Competitive Loans having more than three different Interest Periods. Unless the Administrative Agent
otherwise agrees in its sole discretion, the Parent Borrower may not submit a Competitive Bid Request (on its own behalf or on
behalf of any Designated Borrower) if it has submitted another Competitive Bid Request within the prior five Business Days.
(b)
Submitting Competitive Bids.
(i)
The Administrative Agent shall promptly notify each Lender of each Competitive Bid Request received by
it from the Parent Borrower and the contents of such Competitive Bid Request.
(ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid containing an offer to make
one or more Competitive Loans in response to such Competitive 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 Competitive Borrowing that is to
consist of Absolute Rate Loans, and (B) two Business Days prior to the requested date of any Competitive Borrowing
that is to consist of EurocurrencyTerm SOFR Margin Bid Loans; provided, however, that any Competitive Bid
submitted by Bank of America in its capacity as a Lender in response to any Competitive 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 Competitive Bid Request. Each Competitive Bid
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shall specify (A) the proposed date of the Competitive Borrowing; (B) the principal amount of each Competitive Loan
for which such Competitive Bid is being made, which principal amount (x) may be equal to, greater than or less than the
Revolving Credit Commitment of the bidding Lender, (y) must be $5,000,000 or a whole multiple of $1,000,000 in
excess thereof, and (z) may not exceed the principal amount of Competitive Loans for which Competitive Bids were
requested; (C) if the proposed Competitive 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 Competitive Borrowing is
to consist of EurocurrencyTerm SOFR Margin Bid Loans, the EurocurrencyTerm SOFR Bid Margin with respect to
each such EurocurrencyTerm SOFR 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 Competitive Bid Request. Any Lender may correct a Competitive
Bid containing a manifest 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.
(c)
Notice to Parent Borrower of Competitive Bids. Not later than 11:00 a.m. (i) on the requested date of any
Competitive Borrowing that is to consist of Absolute Rate Loans or (ii) two Business Days prior to the requested date of any
Competitive Borrowing that is to consist of EurocurrencyTerm SOFR Margin Bid Loans, the Administrative Agent shall notify
the Parent Borrower of the identity of each Lender that has submitted a Competitive Bid that complies with Section 2.03(c) and
of the terms of the offers contained in each such Competitive Bid.
(d)
Acceptance of Competitive Bids. Not later than 11:30 a.m. (i) on the requested date of any Competitive
Borrowing that is to consist of Absolute Rate Loans and (ii) two Business Days prior to the requested date of any Competitive
Borrowing that is to consist of EurocurrencyTerm SOFR Margin Bid Loans, the Parent Borrower shall notify the Administrative
Agent of its acceptance or rejection of the Competitive Bids notified to it pursuant to Section 2.03(d). The Parent 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 Parent
Borrower may accept any Competitive Bid in whole or in part; provided that:
(i)
the aggregate principal amount of each Competitive Borrowing may not exceed the applicable amount set
forth in the related Competitive Bid Request;
(ii)
the principal amount of each Competitive Loan must be $5,000,000 or a whole multiple of $1,000,000 in
excess thereof;
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(iii)
the acceptance of Competitive Bids may be made only on the basis of ascending Absolute Rates or
EurocurrencyTerm SOFR Bid Margins within each Interest Period; and
(iv)
the Parent Borrower may not accept any Competitive Bid that is described in Section 2.03(c)(iii) or that
otherwise fails to comply with the requirements hereof.
(e)
Procedure for Identical Bids. If two or more Lenders have submitted Competitive Bids at the same
Absolute Rate or EurocurrencyTerm SOFR 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
EurocurrencyTerm SOFR Bid Margins, as the case may be, accepted for such Interest Period in conformity with the requirements
of Section 2.03(e)(iii)) would be to cause the aggregate outstanding principal amount of the applicable Competitive Borrowing to
exceed the amount specified therefor in the related Competitive Bid Request, then, unless otherwise agreed by the Parent
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.
(f)
Notice to Lenders of Acceptance or Rejection of Competitive Bids. The Administrative Agent shall
promptly notify each Lender having submitted a Competitive Bid whether or not its Competitive Bid has been accepted and, if its
Competitive Bid has been accepted, of the amount of the Competitive Loan or Competitive Loans to be made by it on the date of
the applicable Competitive Borrowing. Any Competitive Bid or portion thereof that is not accepted by the Parent Borrower by
the applicable time specified in Section 2.03(e) shall be deemed rejected.
(g)
Notice of EurocurrencyTerm SOFR Rate. If any Competitive Borrowing is to consist of EurocurrencyTerm
SOFR Margin Bid Loans, the Administrative Agent shall determine the Eurocurrency RateTerm SOFR for the relevant Interest
Period, and promptly after making such determination, shall notify the Parent Borrower and the Lenders that will be participating
in such Competitive Borrowing of such Eurocurrency Raterate.
(h)
Funding of Competitive Loans. Each Lender that has received notice pursuant to Section 2.03(g) that all or
a portion of its Competitive Bid has been accepted by the Parent Borrower shall make the amount of its Competitive Loan(s)
available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00
p.m. on the date of the requested Competitive 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 Parent Borrower or the applicable Designated
Borrower in like funds as received by the Administrative Agent.
(i)
Notice of Range of Competitive Bids. After each Competitive Bid auction pursuant to this Section 2.03,
the Administrative Agent shall notify each Lender that submitted a Competitive Bid in such auction of the ranges of Competitive
Bids submitted (without the bidder’s name) and accepted for each Competitive Loan and the aggregate amount of each
Competitive Borrowing.
1.04
Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A)
each L/C Issuer agrees, in reliance upon the agreements of the Dollar Tranche Lenders set forth in this Section 2.04, (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, and, solely in the case of the Alternative Currency L/C
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Issuer, in one or more Alternative Currencies, in each case, for the account of the Parent Borrower or a Subsidiary thereof, and to
amend or extend Letters of Credit previously issued by it, in accordance with Section 2.04(b), and (2) to honor compliant
drawings under the Letters of Credit; and (B) the Dollar Tranche Lenders severally agree to participate in Letters of Credit issued
for the account of the Parent Borrower or a Subsidiary thereof and any drawings thereunder; provided that after giving effect to
any L/C Credit Extension with respect to any Letter of Credit, (v) the Total Revolving Credit Outstandings shall not exceed the
Revolving Credit Facility at such time, (w) the Outstanding Amount of Dollar Tranche Loans plus the Outstanding Amount of all
L/C Obligations, plus the Outstanding Amount of all Swing Line Loans shall not exceed the Aggregate Dollar Tranche
Commitments, (x) the Outstanding Amount of the Dollar Tranche Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Dollar Tranche Commitment, (y) the Outstanding Amount of the
Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Dollar Tranche Percentage of the Outstanding Amount of all
Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and (z) the Outstanding
Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Parent Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Parent 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 Parent Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Parent 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. All Existing Letters of Credit shall be deemed to have
been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions
hereof.
(i) No L/C Issuer shall issue any Letter of Credit if:
(A)
subject to Section 2.04(b)(iii) the expiry date of the requested Letter of Credit would occur more
than twelve months after the date of issuance or last extension, unless the Administrative Agent and such L/C
Issuer have approved such expiry date; provided that in no event will any Letter of Credit have an expiry date that
is later than the first anniversary of the Maturity Date; or
(B)
the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration
Date, unless the Administrative Agent and such L/C Issuer have approved such expiry date.
(ii) No L/C Issuer shall 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 such L/C Issuer from issuing that Letter of Credit, or any Law applicable to such L/C
Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters
of credit generally or that Letter of Credit in particular or shall impose upon such L/C Issuer with respect to that
Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise
compensated hereunder) not in effect on
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the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which such 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 such L/C Issuer applicable to
letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an
initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars or, in the case of the Alternative
Currency L/C Issuer, an Alternative Currency;
(E) such 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) any Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements,
including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Parent Borrower
or such Lender to eliminate such L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.18(a)
(iv)) with respect to the Defaulting Lender arising from that Letter of Credit and all other L/C Obligations as to which
such L/C Issuer has actual or potential Fronting Exposure with respect to such Defaulting Lender, as it may elect in its
sole discretion; or
(G) after giving effect to any L/C Credit Extension with respect to such Letter of Credit, the L/C Obligations
with respect to all Letters of Credit issued by such L/C Issuer would exceed one-third of the Letter of Credit Sublimit (the
“L/C Commitment Amount”); provided that, subject to the limitations set forth in the proviso to Section 2.04(a)(i), any
L/C Issuer may issue Letters of Credit in excess of such L/C Issuer’s L/C Commitment Amount.
(iii) No L/C Issuer other than the Alternative Currency L/C Issuer shall issue a Letter of Credit denominated in
a currency other than Dollars.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to
issue that Letter of Credit in its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would
have no obligation at such time to issue that Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of that Letter of Credit does not accept the proposed amendment to that Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith, and each 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 such 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 Issuers with
respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuers.
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(a)
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 Parent Borrower delivered to an 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 Parent Borrower. Such Letter of Credit Application may be sent by facsimile, by United
States mail, by overnight courier, by electronic transmission using the system provided by the applicable L/C Issuer, by personal
delivery or by any other means acceptable to such L/C Issuer. Such Letter of Credit Application must be received by the
applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and
time as the Administrative Agent and such 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 applicable L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency 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; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable
L/C Issuer may 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 applicable L/C Issuer (1) the Letter of Credit to be amended; (2)
the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4)
such other matters as the applicable L/C Issuer may require. Additionally, the Parent Borrower shall furnish to the applicable 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 such L/C Issuer or the Administrative Agent may require.
(i)
Promptly after receipt of any Letter of Credit Application, the applicable 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 Parent Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a
copy thereof. Unless an L/C Issuer has received written notice from any Revolving Credit Lender, the Administrative
Agent or any Loan Party, 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, such L/C Issuer shall, on the requested date, issue a Letter of Credit for
the account of the Parent Borrower or the applicable Subsidiary or enter into the applicable amendment, as the case may
be, in each case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Dollar Tranche Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from such L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Revolving Credit Lender’s Dollar Tranche Percentage times the amount of such Letter of Credit.
(ii)
If the Parent Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer
may, in its sole 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 such 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 a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of Credit is
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issued. Unless otherwise directed by an L/C Issuer, the Parent Borrower shall not be required to make a specific request
to such L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving
Credit Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than the first anniversary of the Maturity Date;
provided, however, that no L/C Issuer shall permit any such extension if (A) such 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 2.04(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have
elected not to permit such extension or (2) from the Administrative Agent, any Revolving Credit Lender or the Parent
Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such
case directing such L/C Issuer not to permit such extension.
(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 applicable L/C Issuer will also deliver to the Parent Borrower
and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(iv)
If the expiry date of any Letter of Credit (including any Auto-Extension Letter of Credit) would occur after
the Maturity Date, the Parent Borrower hereby agrees that it will not later than the Letter of Credit Expiration Date (or,
in the case of a Letter of Credit issued or extended on or after the Letter of Credit Expiration Date, on the date of such
issuance or extension, as applicable) Cash Collateralize such Letter of Credit in an amount equal to the L/C Obligations
arising in connection with such Letter of Credit.
(b)
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 applicable L/C Issuer shall notify the Parent Borrower
and the Administrative Agent thereof (such notification provided by such L/C Issuer to the Parent Borrower and the
Administrative Agent being referred to herein as an “L/C Draw Notice”). If an L/C Draw Notice with respect to a Letter of Credit
is received by the Parent Borrower (x) on or prior to 11:00 a.m. on the date of any payment by the applicable 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 applicable L/C Issuer
under a Letter of Credit to be reimbursed in an Alternative Currency (each such date a payment is made by an L/C Issuer under a
Letter of Credit being referred to herein as an “Honor Date”), then, not later than 1:00 p.m. on the Honor Date under a Letter of
Credit to be reimbursed in Dollars, or the Applicable Time on the Honor Date under a Letter of Credit to be reimbursed in an
Alternative Currency, the Parent Borrower shall (or shall cause the applicable Subsidiary to) reimburse the applicable L/C Issuer
through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency or (y) after
11:00 a.m. on the Honor Date under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the Honor Date
under a Letter of Credit to be reimbursed in an Alternative Currency, then, not later than 1:00 p.m. under a Letter of Credit to be
reimbursed in Dollars, or the Applicable Time under a Letter of Credit to be reimbursed in an Alternative Currency on the first
Business Day following the Honor Date, Parent Borrower shall (or shall cause the applicable Subsidiary to) reimburse the
applicable L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable
currency (such date on which the Parent Borrower, pursuant to clauses (x) and (y) of this sentence, is required to reimburse (or
cause to be reimbursed) the applicable L/C Issuer for a drawing under a Letter of Credit is
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referred to herein as the “L/C Reimbursement Date”); provided, however, that if the L/C Reimbursement Date for a drawing
under a Letter of Credit is the Business Day following the Honor Date pursuant to clause (y) of this sentence, the Unreimbursed
Amount shall accrue interest from and including the Honor Date until such time as the applicable L/C Issuer is reimbursed in full
therefor (whether through payment by the Parent Borrower or the applicable Subsidiary and/or through a Loan or L/C Borrowing
made in accordance with paragraph (ii) or (iii) of this Section 2.04(c)) at a rate equal to (A) for the period from and including the
Honor Date to but excluding the first Business Day to occur thereafter, the rate of interest then applicable to a Revolving Credit
Loan that is a Base Rate Loan and (B) thereafter, at the Default Rate applicable to a Revolving Credit Loan that is a Base Rate
Loan. Interest accruing on the Unreimbursed Amount pursuant to the proviso to the immediately preceding sentence shall be
payable by the Parent Borrower promptly to the Administrative Agent, solely for the account of the applicable L/C Issuer. If the
Parent Borrower fails to (or fails to cause the applicable Subsidiary to) timely reimburse the applicable L/C Issuer by such time,
the Administrative Agent shall promptly notify each Dollar Tranche Lender of the Honor Date, the amount of the unreimbursed
drawing (expressed in Dollars in 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 Revolving Credit Lender’s Dollar Tranche Percentage thereof.
In such event, the Parent Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans under
the Dollar Tranche 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 Dollar Tranche Commitments and the conditions set forth in Section 4.02 (other than the delivery of a
Loan Notice). Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.04(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. For the avoidance of doubt, in the case of a Letter of Credit denominated in an
Alternative Currency, the Parent Borrower shall (or shall cause the applicable Subsidiary to) reimburse the applicable L/C Issuer
in such Alternative Currency, unless (A) such L/C Issuer (at its option) shall have specified in its L/C Draw Notice that it will
require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the Parent
Borrower shall have notified such L/C Issuer promptly following receipt of the L/C Draw Notice that the Parent Borrower will
(or will cause the applicable Subsidiary to) reimburse such 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 applicable L/C Issuer shall notify the
Parent Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. In the
event that (A) a drawing denominated in an Alternative Currency is to be reimbursed in Dollars pursuant to the preceding two
sentences and (B) the Dollar amount paid (or caused to be paid by) the Parent Borrower, whether on or after the Honor Date,
shall not be adequate on the date of that payment to purchase in accordance with normal banking procedures a sum denominated
in the Alternative Currency equal to the drawing, the Parent Borrower agrees, as a separate and independent obligation, to
indemnify the applicable L/C Issuer for the loss resulting from its inability on that date to purchase the Alternative Currency in
the full amount of the drawing.
(i)
Each Dollar Tranche Lender shall upon any notice pursuant to Section 2.04(c)(i) make funds available (and
the Administrative Agent may apply Cash Collateral for this purpose) for the account of the applicable L/C Issuer, in
Dollars, at the Administrative Agent’s Office for Dollar denominated payments in an amount equal to its Dollar Tranche
Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii), each Dollar Tranche Lender that so
makes funds available shall be deemed to have made a Revolving Credit Loan under the Dollar Tranche that is a Base
Rate Loan to the Parent Borrower in such
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amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer in Dollars.
(ii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of
Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Parent
Borrower shall be deemed to have incurred from the applicable 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 Dollar Tranche Lender’s payment to the
Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.04(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 Lender in
satisfaction of its participation obligation under this Section 2.04.
(iii) Until each Dollar Tranche Lender funds its Revolving Credit Loan or L/C Advance pursuant to this
Section 2.04(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Lender’s Dollar Tranche Percentage of such amount shall be solely for the account of such L/C Issuer.
(iv) Each Dollar Tranche Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse
an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by 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 such L/C Issuer, the Parent Borrower, any Subsidiary thereof
or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Dollar
Tranche Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Parent Borrower of a Loan Notice). No such making of
an L/C Advance shall relieve or otherwise impair the obligation of the Parent Borrower to reimburse the L/C Issuer for
the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided
herein.
(v)
If any Dollar Tranche Lender fails to make available to the Administrative Agent for the account of an L/C
Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the
time specified in Section 2.04(c)(ii), then, without limiting the other provisions of this Agreement, such L/C Issuer shall
be entitled to recover from such 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 such 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 such 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
Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be
as of the date of such Borrowing or L/C Advance. A certificate of the applicable L/C Issuer submitted to any Dollar
Tranche Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.04(c)(vi)
shall be conclusive absent manifest error.
Credit and has received from any Dollar Tranche Lender such
(c)
Repayment of Participations. (i) At any time after an L/C Issuer has made a payment under any Letter of
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Lender’s L/C Advance or proceeds of such Dollar Tranche Lender’s Revolving Credit Loan in respect of such payment in
accordance with Section 2.04(c), if the Administrative Agent receives for the account of an L/C Issuer any payment in respect of
the related Unreimbursed Amount or interest thereon (whether directly from the Parent Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender
its Dollar Tranche Percentage thereof in Dollars and in the same funds as those received by the Administrative Agent.
(i)
If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section
2.04(c)(i) and paid to the Dollar Tranche Lenders entitled thereto is required to be returned under any of the
circumstances described in Section 11.05 (including pursuant to any settlement entered into by an L/C Issuer in its
discretion), each Dollar Tranche Lender shall pay to the Administrative Agent for the account of such L/C Issuer its
Dollar Tranche 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 Lender, at a rate per annum equal to the Overnight Rate from time
to time in effect; provided that, any demand made by the Administrative Agent after 2:00 p.m. on any Business Day
shall be deemed received by the Lenders on the immediately following Business Day. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(d)
Obligations Absolute. The Parent Borrower’s obligation to reimburse the applicable L/C Issuer for each
drawing under each Letter of Credit and to repay each L/C Borrowing and each Revolving Credit Loan made pursuant to Section
2.04(c) 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)
Document;
any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan
(ii)
the existence of any claim, counterclaim, setoff, defense or other right that the Parent Borrower or any
Subsidiary thereof 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 applicable L/C Issuer, any Lender 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) waiver by the applicable L/C Issuer of any requirement that exists for such L/C Issuer’s protection and not
the protection of the Parent Borrower;
(v)
honor of a demand for payment presented electronically even if such Letter of Credit requires that demand
be in the form of a draft;
(vi) any payment made by the applicable L/C Issuer in respect of an otherwise complying item presented after
the date specified as the expiration date of, or the date
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by which documents must be received under, such Letter of Credit if presentation after such date is authorized by the
UCC, the ISP or the UCP, as applicable;
(vii) any payment by the applicable 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 applicable
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;
(viii) any adverse change in the relevant exchange rates or in the availability of the relevant Alternative
Currency to the Parent Borrower or any Subsidiary thereof or in the relevant currency markets generally; or
(ix) 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 Parent Borrower or
any of its Subsidiaries.
The Parent 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 Parent Borrower’s instructions or other irregularity, the
Parent Borrower will immediately notify the applicable L/C Issuer. The Parent Borrower shall be conclusively deemed to have
waived any such claim against the applicable L/C Issuer and its correspondents unless such notice is given as aforesaid.
(e)
Role of L/C Issuer. Each Lender and the Parent Borrower agree that, in paying any drawing under a Letter
of Credit, no L/C Issuer shall 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 any L/C Issuer, the Administrative
Agent, any Lender, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall
be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the
Revolving Credit Lenders, the Required Revolving Lenders or the Required Dollar Tranche Lender, 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 Parent 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 Parent 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 any L/C Issuer, the
Administrative Agent, any Lender, any of their respective Related Parties nor any correspondent, participant or assignee of any
L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (vii) of Section 2.04(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the Parent Borrower may have a claim against an L/C
Issuer, and such L/C Issuer may be liable to the Parent Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Parent Borrower which the Parent Borrower proves were caused by such
L/C Issuer’s willful misconduct or gross negligence or such 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 (other than as a result of an order of a court of competent jurisdiction). In furtherance and not in limitation of the
foregoing,
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an 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 such 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. An L/C Issuer
may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank
Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of
communicating with such beneficiary.
(f)
Applicability of ISP and UCP 600; Limitation of Liability. Unless otherwise expressly agreed by an L/C
Issuer and the Parent Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter
of Credit), the rules of the ISP or UCP 600 shall apply to such Letter of Credit. Notwithstanding the foregoing, no L/C Issuer
shall be responsible to the Parent Borrower for, and no L/C Issuer’s rights and remedies against the Parent Borrower shall be
impaired by, any action or inaction of such L/C Issuer required or permitted under any law, order, or practice that is required or
permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where such L/C
Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice
statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade -
International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or
not any Letter of Credit chooses such law or practice.
(g)
Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent for the account of each Dollar
Tranche Lender in accordance, subject to adjustment as provided in Section 2.18, with its Dollar Tranche Percentage, in Dollars,
a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the Dollar
Equivalent of the daily amount available to be drawn under such Letter of Credit; provided, however, any Letter of Credit Fees
otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender
has not provided Cash Collateral satisfactory to the L/C Issuer pursuant to this Section 2.04 shall be payable, to the maximum
extent permitted by applicable Law, to the other Dollar Tranche Lenders in accordance with the upward adjustments in their
respective Dollar Tranche Percentages allocable to such Letter of Credit pursuant to Section 2.18(a)(iv), with the balance of such
fee, if any, payable to the L/C Issuer for its own account. 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 1.06. Letter of
Credit Fees shall be (i) due and payable on the last Business Day 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 expiry date of such Letter of Credit and
thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any
quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate 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.
(h)
Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The Borrowers shall pay
directly to each L/C Issuer for its own account, in Dollars, a fronting fee with respect to each Letter of Credit issued by such L/C
Issuer, at a rate per annum equal to 0.125%, computed on the Dollar Equivalent of the daily amount available to be drawn under
such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after
the end of each March, June, September and December
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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 expiry date of such Letter of Credit and thereafter on
demand. 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 1.06. In addition, the Borrowers shall pay directly to each 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 such 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.
Issuer Document, the terms hereof shall control.
(i)
Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any
(j)
Letters of Credit Issued for the Parent Borrower and its Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of the Parent Borrower, or is for the account of a
Subsidiary thereof, the Parent Borrower shall be obligated to reimburse the applicable L/C Issuer hereunder for any and all
drawings under such Letter of Credit. The Parent Borrower hereby acknowledges that the issuance of such Letters of Credit
inures to the benefit of the Parent Borrower, and that the Parent Borrower’s business derives substantial benefits from the
businesses of such Subsidiaries.
(k)
Letters of Credit Issued Under Dollar Tranche. Without regard to the currency in which a Letter of Credit
is denominated, each Letter of Credit may only be issued under the Dollar Tranche. Letters of Credit may not be issued under any
other Tranche.
all Letters of Credit issued by such L/C Issuer and outstanding as of the end of each fiscal quarter of the Parent Borrower.
(l)
Outstanding Letters of Credit. Each L/C Issuer shall deliver to the Administrative Agent an accounting of
1.05
Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line
Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.05, may in its sole discretion, make loans
in Euro or Sterling (each such loan, a “Swing Line Loan”) to the Parent Borrower and any Designated 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 and when aggregated with (i) the Outstanding Amount of Revolving Credit Loans of any
Revolving Credit Lender that is an Affiliate of the Swing Line Lender and the Dollar Tranche Percentage of L/C Obligations of
such Revolving Credit Lender, may not exceed the amount of such Revolving Credit Lender’s Revolving Credit Commitment
and (ii) the Outstanding Amount of the Alternative Currency Tranche Loans of any Alternative Currency Tranche Lender that is
an Affiliate of the Swing Line Lender, may not exceed the amount of such Alternative Currency Tranche Lender’s Alternative
Currency Tranche Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving
Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (ii) the Outstanding Amount of the Revolving
Credit Loans of any Revolving Credit Lender at such time, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the
Outstanding Amount of all L/C Obligations at such time, plus the aggregate amount of such Revolving Credit Lender’s
Applicable Tranche Percentage of the Outstanding Amount of each Swing Line Loan at such time shall not exceed such
Revolving Credit Lender’s Revolving Credit Commitment, (iii) the Outstanding Amount of the Alternative Currency Tranche
Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Tranche Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Alternative Currency Tranche Commitment
and (iv) the Outstanding Amount of all Alternative Currency Tranche Loans, plus the Outstanding Amount of all Swing Line
Loans shall not exceed the Alternative Currency Sublimit, and provided further that (x) the Parent
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Borrower or relevant Designated Borrower, as applicable, shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan and (y) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it
shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Credit
Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the
Parent Borrower and any Designated Borrower may borrow under this Section 2.05, prepay under Section 2.06, and reborrow
under this Section 2.05. Each Swing Line Loan shall bear interest at a rate based on the applicable Alternative Currency Daily
Floating Eurocurrency Rate. Immediately upon the making of a Swing Line Loan denominated in Euro, each Euro Tranche
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 Credit Lender’s Applicable Tranche
Percentage times the amount of such Swing Line Loan, and immediately upon the making of a Swing Line Loan denominated in
Sterling, each Sterling Tranche 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 Credit
Lender’s Applicable Tranche Percentage times the amount of such Swing Line Loan.
(a)
Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Parent Borrower’s (on its own
behalf or on behalf of any Designated Borrower) irrevocable notice to the Swing Line Lender and the Administrative Agent,
which may be given by (A) telephone or (B) by a Swing Line Loan Notice; provided that any telephonic notice must be
confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice. Each such
Swing Line Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 11:00 a.m.
(London time) on the requested borrowing date (or with respect to Swing Line Loans requested for a day on which banks are not
open for general business in New York but are open for general business in London, one Business Day prior to the requested
borrowing date), and shall specify (i) the aggregate amount to be borrowed, which shall be a minimum of $100,000, (ii) the
currency of the Swing Line Loan being requested and (iii) the requested borrowing date, which shall be a Business Day.
Following receipt by the Swing Line Lender of any 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 any Revolving Credit Lender) prior to 2:00 p.m. (London time) 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 first proviso to
the first sentence of Section 2.05(a), or (B) that one or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. (London time) on
the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Parent
Borrower or the applicable Designated Borrower in Same Day Funds either by (i) crediting the account of such Borrower on the
books of the Swing Line Lender 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 Parent Borrower (on its own behalf or on behalf of the applicable
Designated Borrower).
(b)
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 Parent Borrower (which hereby irrevocably authorizes the Swing Line Lender to so
request on its behalf), that each Euro Tranche Lender or Sterling Tranche Lender, as the case may be, make a Eurocurrency Rate
Committedan Alternative Currency Loan denominated in Euro or Sterling, as applicable, in an amount equal to
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such Lender’s Applicable Tranche Percentage of the amount of Swing Line Loans denominated in such currency then
outstanding. Such request shall be made in writing (which written request shall be deemed to be a 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 Eurocurrency RateAlternative Currency Loans, but subject to the unutilized portion of the Aggregate
Alternative Currency Tranche Commitments with respect to each such currency and the conditions set forth in Section 4.02. The
Swing Line Lender shall furnish the Parent Borrower with a copy of the applicable Loan Notice promptly after delivering such
notice to the Administrative Agent. Each Euro Tranche Lender and/or Sterling Tranche Lender, as applicable, shall make an
amount equal to its Applicable Tranche Percentage of the amount specified in such 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 the applicable currency not
later than 11:00 a.m. on the day specified in such Loan Notice (or on the immediately following Business Day if such notice is
received by the Lenders after 11:00 a.m. on the specified funding date), whereupon, subject to Section 2.05(c)(ii), each
Alternative Currency Tranche Lender that so makes funds available shall be deemed to have made a Eurocurrency Rate
Committedan Alternative Currency Loan to the Parent Borrower in such amount. The Administrative Agent shall remit the funds
so received to the Swing Line Lender.
(i)
If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in
accordance with Section 2.05(c)(i), the request for Eurocurrency Rate CommittedAlternative Currency 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
Euro Tranche Lenders or Sterling Tranche Lenders, as applicable, fund its risk participation in the relevant Swing Line
Loan and each such Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant
to Section 2.05(c)(i) shall be deemed payment in respect of such participation.
(ii)
If any Euro Tranche Lender or Sterling Tranche 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 Lender pursuant to the foregoing
provisions of this Section 2.05(c) by the time specified in Section 2.05(c)(i), the Swing Line Lender shall be entitled to
recover from such 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 Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute
such Lender’s Loan included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the
case may be, as of the date of such Borrowing or the required date of funding of such participations. A certificate of the
Swing Line Lender submitted to any Euro Tranche Lender or Sterling Tranche Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iii) Each Euro Tranche Lender’s and each Sterling Tranche Lender’s obligation to make Alternative Currency
Tranche Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.05(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 Parent Borrower or
any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other
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occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each such
Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.05(c) is subject to the conditions set
forth in Section 4.02 other than Section 4.02(b). No such funding of risk participations shall relieve or otherwise impair
the obligation of the Parent Borrower to repay Swing Line Loans, together with interest as provided herein.
(c)
Repayment of Participations. (i) At any time after any Euro Tranche Lender or Sterling Tranche Lender has
purchased and funded a risk participation in a Swing Line Loan or made a Revolving Credit Loan pursuant to Section 2.05(c), if
the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such
Lender its Applicable Tranche Percentage thereof in the same funds as those received by the Swing Line Lender.
(i)
If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line
Loan paid to the Euro Tranche Lenders or the Sterling Tranche Lenders is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by
the Swing Line Lender in its discretion), each Euro Tranche Lender or Sterling Tranche Lender, as applicable, shall pay
to the Swing Line Lender its Applicable Tranche 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 Euro Tranche Lenders and the Sterling Tranche Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.
(d)
Interest for Account of Swing Line Lender. The Administrative Agent shall invoice the Parent Borrower
(on its own behalf and on behalf of any Designated Borrower) for interest on all Swing Line Loans. Until each Euro Tranche
Lender or Sterling Tranche Lender, as the case may be, funds its Eurocurrency Rate CommittedAlternative Currency Loan or risk
participation pursuant to this Section 2.05 to refinance such Revolving Credit Lender’s Applicable Tranche Percentage of any
Swing Line Loan, interest in respect of such Applicable Tranche Percentage shall be solely for the account of the Swing Line
Lender.
(e)
Payments to Swing Line Lender. Each Borrower shall make all payments of principal and interest in
respect of the Swing Line Loans to such Borrower through the Administrative Agent for the account of the Swing Line Lender.
under the Alternative Currency Tranche. Swing Line Loans may not be made under any other Tranche.
(f)
Swing Line Loan Made Under Alternative Currency Tranche. Each Swing Line Loan may only be made
1.06
Prepayments. (a) Optional. (i) Each Borrower may, upon notice from the Parent Borrower (on its own behalf and
on behalf of any Designated Borrower) to the Administrative Agent pursuant to delivery to the Administrative Agent of a Notice
of Loan Prepayment, at any time or from time to time voluntarily prepay its Term Loans, Delayed Draw Term Loans and
Revolving Credit Loans, as applicable, in whole or in part without premium or penalty; provided that (A) such notice must be
received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of
Eurocurrency RateTerm SOFR Committed Loans denominated in Dollars, (2) four Business Days (or five Business Days, in the
case of prepayment of Loans denominated in a Special Notice CurrenciesCurrency) prior to any date of prepayment of
Eurocurrency Rate Committed Loans denominated in Alternative CurrenciesCurrency Loans, and (3) on the date of prepayment
of Base Rate Loans and LIBOR
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Floating RateDaily SOFR Loans; (B) any prepayment of Eurocurrency RateTerm SOFR Committed Loans (whether denominated
in Dollars or inand Alternative Currencies)Currency Loans shall be in a minimum principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a minimum 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 and amount of such prepayment, the Facility, the name of the Borrower
(which shall be the Parent Borrower or a Designated Borrower), the Tranche (if applicable) and the Type(s) of Loans to be
prepaid and, if EurocurrencyTerm Rate Committed Loans are to be prepaid, the currency and Interest Period(s) of such Loans.
The Administrative Agent will promptly notify each Appropriate Lender of its receipt of each such notice, and of the amount of
such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of any prepayment
of the Term Facility or the Delayed Draw Term Facility and such Lender’s Applicable Tranche Percentage in respect of any
prepayment of any Tranche under the Revolving Credit Facility). If such notice is given by the Parent Borrower, the Parent
Borrower or the applicable Designated Borrower shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein. Any prepayment of a EurocurrencyTerm Rate Committed Loan shall be
accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section
3.05. Subject to Section 2.18, each such prepayment shall be promptly paid to the Lenders in accordance with their respective
Applicable Percentages in respect of any prepayment of the Term Facility or the Delayed Draw Term Facility, their respective
Dollar Tranche Percentage in respect of any prepayment of the Dollar Tranche and their respective Applicable Tranche
Percentage in respect of any prepayment of the Alternative Currency Tranche.
(i) No Competitive Loan may be prepaid without the prior consent of the applicable Competitive Loan
Lender.
(ii) Any Borrower may, upon notice from the Parent Borrower (on its own behalf or on behalf of any
Designated Borrower) to the Swing Line Lender pursuant to delivery to the Swing Line Lender of a Notice of Loan
Prepayment (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 (A) such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 11:00 a.m. (London time) on the date of the prepayment, and
(B) 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 Parent Borrower, the Parent Borrower or applicable
Designated Borrower shall make such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.
(a)
Mandatory. (i) If the Administrative Agent notifies the Parent Borrower at any time that the Total
Revolving Credit Outstandings exceed the Revolving Credit Facility then in effect, then within two Business Days after receipt of
such notice, the Borrowers shall prepay Revolving Credit Loans (including Swing Line Loans and L/C Borrowings) and/or Cash
Collateralize the L/C Obligations (other than the L/C Borrowings) in an aggregate amount at least equal to such excess; provided,
however, that, the Borrowers shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.06(b)
unless after the prepayment in full of the Revolving Credit Loans the Total Revolving Credit Outstandings exceed the Revolving
Credit Facility then in effect. The Administrative Agent may, at any time and from time to time after the initial deposit of such
Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of further exchange rate
fluctuations which have occurred.
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(i)
If the Administrative Agent notifies the Parent Borrower at any time that the Outstanding Amount of all
Revolving Credit Loans (including Swing Line Loans) denominated in Alternative Currencies at such time exceeds an
amount equal to 105% of the Alternative Currency Sublimit then in effect, then, within two Business Days after receipt
of such notice, the Borrowers shall prepay Revolving Credit Loans (including Swing Line Loans, which for the
avoidance of doubt shall be prepaid in the currency in which such Swing Line Loan is denominated) 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.
(ii) Prepayments of the Revolving Credit Facility made pursuant to the foregoing provisions of this Section
2.06(b), first, shall be applied ratably to the L/C Borrowings and the Swing Line Loans, second, shall be applied ratably
to the outstanding Revolving Credit Loans, and, third, shall be used to Cash Collateralize the remaining L/C
Obligations. Upon a drawing under any Letter of Credit that has been Cash Collateralized, the funds held as Cash
Collateral shall be applied (without any further action by or notice to or from any Loan Party) to reimburse the L/C
Issuers or the Revolving Credit Lenders, as applicable.
(iii)
If the Administrative Agent notifies the Parent Borrower at any time that the Outstanding Amount of the
L/C Obligations exceeds 105% of the Letter of Credit Sublimit then in effect, then, within two Business Days after
receipt of such notice, the Borrowers shall Cash Collateralize the L/C Obligations to the extent necessary, such that,
after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder does not
exceed 100% of the Letter of Credit Sublimit.
(iv)
If the Administrative Agent notifies the Parent Borrower at any time or the Parent Borrower notifies the
Administrative Agent at any time that the obligations of the Parent Borrower under Article X with respect to any
outstanding Guaranteed Obligations owing by any Designated Borrower (herein, the “Affected Borrower”) shall for any
reason (1) be terminated, (2) cease to be in full force and effect or (3) not be the legal, valid and binding obligations of
the Parent Borrower enforceable against the Parent Borrower in accordance with its terms, then, within two Business
Days after receipt of such notice, the Affected Borrower shall prepay (or the Parent Borrower shall prepay or cause to
be prepaid) the full principal of and interest on the Loans owing by such Affected Borrower and all other amounts
whatsoever payable hereunder by such Affected Borrower (including, without limitation, all amounts payable under
Section 3.05 as a result of such prepayment).
1.07
Termination or Reduction of Commitments. (a) Optional. The Parent Borrower may, upon notice to the
Administrative Agent, (x) terminate the Revolving Credit Facility, the Letter of Credit Sublimit, the Swing Line Sublimit or the
Alternative Currency Sublimit, (y) from time to time permanently reduce the Revolving Credit Facility, the Letter of Credit
Sublimit, the Swing Line Sublimit or the Alternative Currency Sublimit or (z) prior to the Delayed Draw Termination Date,
terminate or permanently reduce the Delayed Draw Term Facility; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five 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, and (iii)
the Parent Borrower shall not terminate or reduce (A) the Revolving Credit Facility if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility (as so
reduced), (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully
Cash Collateralized hereunder would exceed the Letter of Credit Sublimit (as so reduced), (C) the Swing Line Sublimit if, after
giving effect thereto and to
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any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit (as
so reduced), (D) the Alternative Currency Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder,
the Outstanding Amount of all Revolving Credit Loans (including Swing Line Loans) denominated in Alternative Currencies
would exceed the Alternative Currency Sublimit (as so reduced), (E) the Aggregate Dollar Tranche Commitments if, after giving
effect thereto and to any concurrent prepayments hereunder, the aggregate Outstanding Amount of Dollar Tranche Loans would
exceed the Aggregate Dollar Tranche Commitments (as so reduced), or (F) the Aggregate Alternative Currency Tranche
Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate Outstanding Amount of
Alternative Currency Tranche Loans would exceed the Aggregate Alternative Currency Tranche Commitments (as so reduced).
(a)
Mandatory. (i) The aggregate Term Commitments shall be automatically and permanently reduced to zero
on the date of the Term Borrowing after giving effect thereto.
(i)
If, after giving effect to any reduction or termination of (x) Revolving Credit Commitments under this
Section 2.07, the Letter of Credit Sublimit, the Aggregate Dollar Tranche Commitments or the Aggregate Alternative
Currency Tranche Commitments exceeds the Revolving Credit Facility at such time, the Letter of Credit Sublimit, the
Aggregate Dollar Tranche Commitments or the Aggregate Alternative Currency Tranche Commitments, as the case may
be, shall be automatically reduced by the amount of such excess, (y) the Aggregate Dollar Tranche Commitments under
this Section 2.07, the Letter of Credit Sublimit exceeds the Aggregate Dollar Tranche Commitments at such time, the
Letter of Credit Sublimit shall be automatically reduced by the amount of such excess or (z) the Aggregate Alternative
Currency Tranche Commitments under this Section 2.07, the Swing Line Sublimit exceeds the Aggregate Alternative
Currency Tranche Commitments at such time, the Swing Line Sublimit shall be automatically reduced by the amount of
such excess.
(ii) The aggregate unfunded Delayed Draw Term Commitments shall be automatically and permanently
reduced to zero on the Delayed Draw Termination Date.
(b)
Application of Commitment Reductions; Payment of Fees. (i) The Administrative Agent will promptly
notify the Lenders of any termination or reduction of the Letter of Credit Sublimit, the Swing Line Sublimit, the Alternative
Currency Sublimit or the Revolving Credit Facility under this Section 2.07. Upon any reduction of the Revolving Credit Facility,
the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender’s Applicable Revolving
Credit Percentage of such reduction amount. All fees in respect of the Revolving Credit Facility accrued until the effective date of
any termination of the Revolving Credit Facility shall be paid on the effective date of such termination.
(i)
The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Delayed
Draw Term Facility under this Section 2.07. Upon any reduction of the Delayed Draw Term Facility, the Delayed Draw
Term Commitment of each Delayed Draw Term Lender shall be reduced by such Lender’s ratable portion of such
reduction amount. All fees in respect of the Delayed Draw Term Facility accrued until the effective date of any
termination of the Delayed Draw Term Facility shall be paid on the effective date of such termination.
1.08 Repayment of Loans. (a) Term Loans. The Parent Borrower shall repay to the Term Lenders on the Maturity Date
the aggregate principal amount of all Term Loans outstanding on such date.
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the aggregate principal amount of all Revolving Credit Loans made to such Borrower outstanding on such date.
(a)
Revolving Credit Loans. Each Borrower shall repay to the Revolving Credit Lenders on the Maturity Date
Date the aggregate principal amount of all Delayed Draw Term Loans made to such Borrower outstanding on such date.
(b)
Delayed Draw Term Loans. Each Borrower shall repay to the Delayed Draw Term Lenders on the Maturity
day of the Interest Period in respect thereof.
(c)
Competitive Loans. Each Borrower shall repay each Competitive Loan made to such Borrower on the last
(d)
Swing Line Loans. Each Borrower shall repay each Swing Line Loan made to such Borrower on the earlier
to occur of (i) the date ten Business Days after such Swing Line Loan is made and (ii) the Maturity Date. At any time that there
shall exist a Defaulting Lender, promptly upon the request of the Swing Line Lender, the Borrowers shall repay the outstanding
Swing Line Loans made by the Swing Line Lender in an amount sufficient to eliminate any Fronting Exposure in respect of such
Swing Line Loans.
1.09
Interest. (a) Subject to the provisions of Section 2.09(b), (i) each Eurocurrency RateDaily SOFR Loan shall bear
interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Daily
Simple SOFR plus the Applicable Rate for the Facility under which such Loan was made; (ii) each Term SOFR Committed Loan
shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the
Eurocurrency RateTerm SOFR for such Interest Period plus the Applicable Rate for the Facility under which such Loan was
made; (iii) each Alternative Currency Daily Rate Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Alternative Currency Daily Rate plus the Applicable Rate for the
Facility under which such Loan was made; (iv) each Alternative Currency Term Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to the Alternative Currency Term Rate for such
Interest Period plus the Applicable Rate for the Facility under which such Loan was made; (iiv) 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 for the Facility under which such Loan was made; (iiivi) each Competitive Loan shall bear interest
on the outstanding principal amount thereof for the Interest Period therefor at a rate per annum equal to the Eurocurrency
RateTerm SOFR for such Interest Period plus (or minus) the EurocurrencyTerm SOFR Bid Margin, or at the Absolute Rate for
such Interest Period, as the case may be, and (ivvii) 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 Alternative Currency Daily Floating Eurocurrency
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Rate plus the Applicable Rate for the Revolving Credit Facility.
Subject to the provisions of the Credit Agreement with respect to default interest, (x) each Alternative Currency
Daily Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per
annum equal to the Alternative Currency Daily Rate plus the Applicable Rate applicable to Eurocurrency Rate Loans; and (y)
each Alternative Currency Term Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period
at a rate per annum equal to the Alternative Currency Term Rate for such Interest Period plus the Applicable Rate applicable to
Eurocurrency Rate Loans.
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12
From original Credit Agreement
13
From First Amendment
86
(a)
(i) While any Event of Default arising under Section 8.01(a)(i) exists, or upon the request of the Required
Lenders while any other Event of Default exists, the Borrowers 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.
(i) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and
payable upon demand.
Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto
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.
(b)
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Interest on each Alternative Currency Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified the Credit Agreement. Interest on each Alternative Currency Loan
shall be due and payable in accordance with the terms hereof and of the Credit Agreement before and after judgment, and before
and after the commencement of any proceeding under any debtor relief law.
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1.10
Fees. In addition to certain fees described in Sections 2.04(h) and (i):
(a)
Revolving Credit Facility Fees. At all times during the Availability Period, including at any time during
which one or more of the conditions in Article IV is not met, the Borrowers agree to pay to the Administrative Agent for the
account of each Revolving Credit Lender a facility fee (the “Facility Fee”) equal to the Applicable Rate on the actual daily
amount of the Revolving Credit Facility (or, if the Revolving Credit Commitments have terminated, on the Total Revolving
Credit Outstandings) times its Applicable Revolving Credit Percentage. Accrued Facility Fees shall be payable quarterly in
arrears on the last Business Day of March, June, September and December of each year commencing on the first such date after
the Closing Date, and on the date on which the Revolving Credit Commitments terminate; provided that any Facility Fees
accruing after the date on which the Revolving Credit Commitments terminate shall be payable 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)
Delayed Draw Term Facility Fees. At all times during the period from the Closing Date through the
Delayed Draw Termination Date, including at any time during which one or more of the conditions in Article IV is not met, the
Borrowers shall pay to the Administrative Agent, for the account of each Delayed Draw Term Lender in accordance with its
Applicable Percentage of the Delayed Draw Term Facility, a per annum unused line fee (the “Delayed Draw Term Loan Unused
Fee”) equal to 0.20% times the actual daily amount of the Delayed Draw Term Facility, subject to adjustment as provided in
Section 2.18. Accrued Delayed Draw Term Loan Unused Fees 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 Delayed Draw Termination Date.
respective accounts, in Dollars, fees in the amounts and at
(c)
Other Fees. (i) The Parent Borrower shall pay to the Arrangers and the Administrative Agent for their own
14
From original Credit Agreement
15
From First Amendment
87
the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason
whatsoever.
(i)
The Parent Borrower shall pay to the Lenders, in Dollars, such fees 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.
1.11 Computation of Interest and Fees. All computations of interest for Base Rate Loans (including Base Rate Loans
determined by reference to Term SOFR) and for Alternative Currency Loans (other than Alternative Currency Loans with respect
to SARON and EURIBOR) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed,
or, in the case of interest in respect of Loans denominated in Alternative Currency LoansCurrencies as to which market practice
differs from the foregoing, in accordance with such market practice. All other computations of fees and interest, including those
with respect to Daily SOFR Loans and Alternative Currency Loans determined by reference to SARON and EURIBOR, 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 Alternative Currency Loan for the day on which the
Alternative Currency Loan is made, and shall not accrue on an Alternative Currency Loan, or any portion thereof, for the day on
which the Alternative Currency Loan or such portion is paid, provided that any Alternative Currency Loan that is repaid on the
same day on which it is made shall, subject to Section 2.13(a) of the Credit Agreement, 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.
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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 extensions of credit denominated in Alternative Currencies as to which market practice differs from the foregoing, in
accordance with such market practice. Upon request by the Parent Borrower upon the making of a Loan denominated in an
Alternative Currency, the Administrative Agent will endeavor to confirm to the Parent Borrower whether any differing market
practice exists with respect to such Alternative Currency. 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 2.13(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. With respect to all Non-LIBOR Quoted Currencies, the calculation of the applicable interest rate shall be
determined in accordance with market practice.
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1.12
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 each of the Borrowers 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 any Borrower hereunder to pay any amount owing
with
16
From First Amendment
17
From original Credit Agreement
88
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 to a Borrower through the
Administrative Agent, such Borrower shall execute and deliver to such Lender (through the Administrative Agent) one or more
Notes, which shall evidence such Lender’s Loans to such Borrower in addition to such accounts or records. Each Lender may
attach schedules to its Notes and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and
payments with respect thereto.
(d)
In addition to the accounts and records referred to in Section 2.12(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.
1.13
Payments Generally; Administrative Agent’s Clawback. (a) General. All payments to be made by any Loan Party
shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Each
prepayment of a EurocurrencyTerm Rate Loan shall be accompanied by any additional amount required pursuant to Section 3.05.
Subject to Section 2.18, (i) each prepayment of a Loan under the Term Facility or the Delayed Draw Term Facility shall be paid
to the Appropriate Lenders in accordance with their Applicable Percentages, (ii) each prepayment of a Dollar Tranche Loan
under the Revolving Credit Facility shall be paid to the Appropriate Lenders in accordance with their respective Applicable
Dollar Tranche Percentages and (iii) each prepayment of an Alternative Currency Tranche Loan under the Revolving Credit
Facility shall be paid to the Lenders holding an Alternative Currency Tranche Commitment with respect to such Alternative
Currency in accordance with their Applicable Tranche Percentages. 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 any Loan 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 2:00 p.m. on the date specified
herein. Except as otherwise expressly provided herein, all payments by any Loan Party hereunder with respect to principal of 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, any Loan Party is prohibited by any Law from making any required
payment hereunder in an Alternative Currency, such Loan Party 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 such Lender’s
applicable share 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 2:00 p.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
any Loan Party 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.
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(e)
(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 of Eurocurrency RateTerm SOFR Committed Loans
or Alternative Currency Loans (or, in the case of any Borrowing of Base Rate Loans or LIBOR Floating RateDaily SOFR Loans,
prior to 12:00 noon on the date of such 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 (or, in the case of a Borrowing of Base Rate Loans or LIBOR Floating RateDaily
SOFR Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and
may, in reliance upon such assumption, make available to the applicable 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 Parent
Borrower and the applicable Designated Borrower if any, jointly and severally, and the applicable Lender 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 applicable 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 applicable Overnight Rate, plus any
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 Parent Borrower or a Designated Borrower, the interest rate applicable to Base
Rate Loans under the applicable Facility. If the Parent Borrower or a Designated 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
Parent Borrower or such Designated Borrower, as applicable, the amount of such interest paid by the Parent Borrower or such
Designated 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 as of the date of such Borrowing. Any
payment by the Parent Borrower or a Designated Borrower shall be without prejudice to any claim the Parent Borrower or such
Designated Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(i)
Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Parent Borrower (on its own behalf or on behalf of any Designated Borrower) prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or any L/C Issuer
hereunder that the Borrower designated in such notice will not make such payment, the Administrative Agent may
assume that such payment has been made on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Appropriate Lenders or the applicable L/C Issuer, as the case may be, the amount due. In
such event, if such payment has not in fact been made,
With respect to any payment that the Administrative Agent makes for the account of the Lenders or any L/C
Issuer hereunder as to which the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that any of the following applies (such payment referred to as the “Rescindable Amount”): (1) the
applicable Borrower has not in fact made such payment; (2) the Administrative Agent has made a payment in excess of
the amount so paid by such Borrower (whether or not then owed); or (3) the Administrative agent has for any reason
otherwise erroneously made such payment; then each of the Appropriate Lenders or the applicable L/C IssuerIssuers, as
the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amountRescindable
Amount so distributed to such Appropriate Lender or such 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 greater of the
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Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
A notice of the Administrative Agent to any Lender or the Parent Borrower with respect to any amount owing under this
subsection (b) shall be conclusive, absent manifest error.
(f)
Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender to any Borrower as provided in the foregoing provisions of this Article II, and such
funds are not made available to such 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
return such funds (in like funds as received from such Lender) to such Lender, without interest.
(g)
Obligations of Lenders Several. The obligations of the Lenders hereunder to make Term Loans, Delayed
Draw Term Loans and Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make
payments pursuant to Section 11.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 11.04(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, to purchase its participation or to make its payment under Section 11.04(c).
(h)
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.
(i)
Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i)
first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due such parties, and (ii) second, toward payment of principal and L/C Borrowings then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due
such parties.
1.14
Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of (a) Obligations in respect of any of the Facilities due and payable to such Lender under
the Loan Documents at such time in excess of its ratable share (according to the proportion of (i) Total Outstandings then due and
payable to such Lender (with the aggregate amount of such Lender’s risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed “owing” to such Lender for purposes hereof) to (ii) Total Outstandings then due
and payable to all Lenders) of payments on account of the Obligations due and payable to all Lenders under the Loan Documents
at such time or (b) Obligations in respect of any of the Facilities owing (but not due and payable) to such Lender under the Loan
Documents at such time in excess of its ratable share (according to the proportion of (i) Total Outstandings owing (but not due
and payable) to such Lender at such time (with the aggregate amount of such Lender’s risk participation and funded participation
in L/C Obligations and Swing Line Loans being deemed “owing” to such Lender for purposes hereof) to (ii) Total Outstandings
owing (but not due and payable) at such time) of payments obtained by all of the Lenders at such time on account of the
Obligations owing (but not due and payable) to all Lenders under the Loan Documents at such time, then the Lender receiving
such greater proportion shall (x) notify the Administrative Agent of such fact, and (y) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C
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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 Obligations then due and
payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:
(i)
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
(ii)
the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of
any Borrower 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
2.17, or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of
its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an
assignment to the Company or any Affiliate thereof (as to which the provisions of this Section shall apply).
Revolving Credit Loans denominated in Alternative Currencies will automatically, at any time that the Administrative
Agent determines it necessary or desirable to calculate the pro rata share of the Lenders under this Section 2.14 or Section 8.03,
be converted on a notional basis into the Dollar Equivalent thereof solely for the purposes of making any allocations required
under this Section 2.14 or Section 8.03.
Each Loan 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 Loan Party rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount
of such participation.
1.15
[Intentionally Omitted].
1.16
Increase in Commitments.
(a)
Request for Increase. Provided there exists no Default, upon written notice to the Administrative Agent,
the Parent Borrower, may from time to time, elect to increase the Facilities to an amount not exceeding the Dollar Equivalent of
$2,750,000,0003,050,000,000 (as determined by the Administrative Agent on the applicable Increase Effective Date) by
increasing the Revolving Credit Facility and/or the Term Facility and/or after the Delayed Draw Termination Date, the Delayed
Draw Term Facility, or, if the Term Facility has been terminated or is otherwise no longer outstanding, with a new term facility on
substantially the same terms as the Term Facility (and after the Increase Effective Date with respect thereto all references to the
“Term Facility” herein and in any other Loan Documents shall mean such new term facility (the “New Term Facility”)); provided
that any such request for an increase shall be in a minimum amount of $25,000,000 or a whole multiple of $5,000,000 in excess
thereof, or such other amount agreed to by the Parent Borrower and the Administrative Agent. In such written notice, the Parent
Borrower shall specify the Facility that it proposes to increase or that it is requesting a New Term Facility, the currency it
proposes to borrow in the case of an increase in the Term Facility or the Delayed Draw Term Facility or a New Term Facility
(which shall be Dollars, Euro or Sterling) and the identity of each Appropriate Lender and each Eligible Assignee that it proposes
to approach to provide all or a portion of such increase (subject in each case to any requisite consents required under Section
11.06); provided, however, that (i) any existing
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Appropriate Lender approached to provide all or a portion of such increase may elect or decline, in its sole discretion, to provide
all or a portion of such increase in the applicable Facility or New Term Facility offered to it (and any Lender that has failed to
respond to any such request shall be deemed to have declined to increase its Revolving Credit Commitment, Term Commitment
or Delayed Draw Term Commitment or participate in the New Term Facility, as applicable) and (ii) any Eligible Assignee
providing any portion of such increase in the applicable Facility or New Term Facility that is not an existing Lender shall become
a Lender pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its
counsel (a “New Lender Joinder Agreement”). For the avoidance of doubt, notwithstanding the foregoing, on and after the
Second Amendment Effective Date, (x) any increase of the Term Facility shall be in Sterling, (y) any increase of the Delayed
Draw Term Facility shall be in Euro, and (z) unless and until the occurrence of the Successor Amendment Effective Date, any
New Term Facility shall be in Sterling or Euro (and not Dollars) and there shall not be any increase in the Revolving Credit
Facility.
(b)
Effective Date and Allocations. If any of the Facilities is increased or a New Term Facility is established in
accordance with this Section, the Administrative Agent and the Parent Borrower shall determine the effective date (each an
“Increase Effective Date”) and the final allocation of such increase among the Appropriate Lenders.
(c)
Conditions to Effectiveness of Increase. As conditions precedent to each such increase, on or prior to the
applicable Increase Effective Date, (i) the Administrative Agent shall have received a certificate of each Loan Party dated as of
such Increase Effective Date signed by a Responsible Officer of such Loan Party (x) (1) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to such increase or (2) solely in connection with the first Increase Effective
Date to occur after the Closing Date, certifying that, as of such Increase Effective Date, the resolutions delivered to the
Administrative Agent and the Lenders on the Closing Date (which resolutions include approval to increase the Facilities to an
amount at least equal to the Dollar Equivalent of $2,750,000,000) are and remain in full force and effect and have not been
modified, rescinded or superseded since the date of adoption, and (y) in the case of the Parent Borrower, certifying that, before
and after giving effect to such increase, (A) 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 such Increase Effective Date, except to the extent that (1)
such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, (2) any representation or warranty that is already by its terms qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct in all respects as of such date after giving effect to such qualification, and (3) for
purposes of this Section 2.16, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no
Default exists, (ii) the Administrative Agent shall have received (x) a New Lender Joinder Agreement duly executed by the
Parent Borrower and each Eligible Assignee that is becoming a Lender in connection with such increase, which New Lender
Joinder Agreement shall be acknowledged and consented to in writing by the Administrative Agent and, if such Eligible
Assignee is becoming a Revolving Credit Lender, by the Swing Line Lender and each L/C Issuer and (y) written confirmation
from each existing Lender, if any, participating in such increase of the amount by which its Commitment will be increased, which
confirmation, if from a Revolving Credit Lender, shall be acknowledged and consented to in writing by the Swing Line Lender
and each L/C Issuer, (iii) the Parent Borrower shall pay such fees to the Bookrunners, and to the Administrative Agent, for its
own account and for the benefit of the Lenders providing such increase, as are agreed mutually at the time such increase is
established and (iv) upon the reasonable request of any Lender made at least ten days prior to the applicable Increase Effective
Date, the Parent Borrower shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the
documentation and other information so requested in connection
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with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the USA
PATRIOT Act and the Beneficial Ownership Regulation, in each case at least five days prior to such effectiveness date.
(d)
Settlement Procedures. On each Increase Effective Date, promptly following fulfillment of the conditions
set forth in clause (c) of this Section 2.16, the Administrative Agent shall notify the Appropriate Lenders of the occurrence of the
increase of the applicable Facility or New Term Facility effected on such Increase Effective Date and the amount of the
applicable Commitments and Applicable Percentage of each Appropriate Lender as a result thereof. In the event that the increase
in the applicable Facility results in any change to the Applicable Percentage of any Appropriate Lender, then on the Increase
Effective Date, as applicable, (i) the participation interests of the Appropriate Lenders in any outstanding Letters of Credit and
Swing Line Loans shall be automatically reallocated among the Appropriate Lenders in accordance with their respective
Applicable Dollar Tranche Percentages or Applicable Tranche Percentages, as the case may be, after giving effect to such
increase, (ii) any new Lender, and any existing Lender whose Commitment has increased, shall pay to the Administrative Agent
such amounts as are necessary to fund its new or increased share of all Revolving Credit Loans, Delayed Draw Term Loans or
Term Loans, as applicable, (iii) the Administrative Agent will use the proceeds thereof to pay to all existing Lenders whose
Applicable Percentage with respect to any Facility is decreasing such amounts as are necessary so that each Lender’s share of all
Revolving Credit Loans, Delayed Draw Term Loans or Term Loans, as applicable, will be equal to its adjusted Applicable
Percentage of such Facility, and (iv) if the Increase Effective Date occurs on a date other than the last day of an Interest Period
applicable to any outstanding Loan that is a EurocurrencyTerm Rate Loan, then the Borrowers shall pay any amounts required
pursuant to Section 3.05 on account of the payments made pursuant to clause (iii) of this sentence.
contrary.
(e)
Conflicting Provisions. This Section shall supersede any provisions in Section 2.14 or 11.01 to the
1.17 Cash Collateral. (a) Certain Credit Support Events. Upon the request of the Administrative Agent or any L/C
Issuer (i) if an 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, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrowers shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent,
the applicable L/C Issuer or the Swing Line Lender, the Borrowers shall deliver to the Administrative Agent Cash Collateral in an
amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.18(a)(iv) and any Cash Collateral provided by
all Defaulting Lenders). If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to
any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the
Outstanding Amount of all L/C Obligations, the Borrowers will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such
Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim. Upon the drawing under any Letter of Credit for which funds are on
deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the applicable
L/C Issuer.
(f)
Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to
deposit) shall be maintained in blocked, interest bearing deposit accounts at Bank of America. The Borrowers shall pay on
demand therefor from time to time all customary account opening, activity and other administrative fees and charges in
connection with
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the maintenance and disbursement of Cash Collateral and shall earn all interest paid on such account. The Borrowers, and to the
extent provided by any Defaulting Lender, such Defaulting Lender, hereby grant to (and subject to the control of) the
Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuers and the Lenders (including the Swing Line
Lender), and agree to maintain, a first priority security interest in all such cash, such 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 2.17(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 as herein
provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations
secured thereby, the Borrowers or the relevant Defaulting Lender 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.
(g)
Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral
provided under any of this Section 2.17 or Sections 2.04, 2.05, 2.06, 2.07, 2.18 or 8.02 in respect of Letters of Credit or Swing
Line Loans shall be held and applied to the satisfaction of the specific L/C Obligations, Swing Line Loans, 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.
(h)
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 11.06(b)(vi))) or (ii) the Administrative Agent’s good faith
determination that there exists excess Cash Collateral; provided, however, (x) that Cash Collateral furnished by or on behalf of a
Loan Party shall not be released during the continuance of a Default (and following application as provided in this Section 2.17
may be otherwise applied in accordance with Section 8.03), and (y) the Person providing Cash Collateral and the L/C Issuers or
the Swing Line Lender, as applicable, may agree that Cash Collateral shall not be released but instead held to support future
anticipated Fronting Exposure or other obligations.
1.18 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. That 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”,
“Required Revolving Lenders”, “Required Term Lenders”, “Required Delayed Draw Term Lenders” , “Tranche
Required Lenders” and Section 11.01.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant
to Article VIII or otherwise, and including any amounts made available to, or received by, the Administrative Agent
from a Defaulting Lender pursuant to Section 11.08), 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 that Defaulting Lender to the
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Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting
Lender to any L/C Issuer or the Swing Line Lender hereunder; third, if so determined by the Administrative Agent or
requested by any L/C Issuer or the Swing Line Lender, to be held as Cash Collateral for future funding obligations of
that Defaulting Lender of any participation in any Swing Line Loan or Letter of Credit; fourth, as the Parent Borrower
may request (so long as no Default exists), to the funding of any Revolving Credit Loan in respect of which that
Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, in the case of a Defaulting Lender that is a Revolving Credit Lender or a Delayed Draw
Term Lender, if so determined by the Administrative Agent and the Parent Borrower, to be held in a non-interest
bearing deposit account and released pro rata in order to (x) satisfy potential future funding obligations of that
Defaulting Lender to fund Revolving Credit Loans and/or Delayed Draw Term Loans, as applicable under this
Agreement and (y) Cash Collateralize the L/C Issuers’ and the Swing Line Lender’s future Fronting Exposure with
respect to such Defaulting Lender with respect to future Letters of Credit issued and Swing Line Loans made under this
Agreement, in accordance with Section 2.17; sixth, to the payment of any amounts owing to the Lenders, any L/C Issuer
or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, such
L/C Issuer or the Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default exists, to the payment of any amounts owing to the
Parent Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Parent Borrower
against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement;
and eighth, to that 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 that Defaulting
Lender has not fully funded its appropriate share and (y) such Loans or L/C Borrowings 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, that 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 2.18(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 2.18(a)(ii) shall be deemed
paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees.
(A)
No Defaulting Lender shall be entitled to receive any fee payable under Section 2.10(a) or
Section 2.10(b) for any period during which that Lender is a Defaulting Lender (and the Borrowers 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 2.17.
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(C)
With respect to any fee payable under Section 2.10(a), Section 2.10(b) or any Letter of Credit
Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers 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 or Swing Line Loans that has been
reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuers and the Swing
Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent
allocable to such L/C Issuers’ or the Swing Line Lender’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 Dollar Tranche Percentages and Applicable Tranche Percentages to Reduce
Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated
among the Non-Defaulting Lenders in accordance with their respective Applicable Dollar Tranche Percentages
(calculated without regard to such Defaulting Lender’s Commitment), and all or any part of such Defaulting Lender’s
participation in Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their
respective Applicable Tranche Percentages (calculated without regard to such Defaulting Lender’s Commitment) but, in
each case, only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-
Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. Subject to Section 11.23, 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 Borrowers 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 Issuers’ Fronting Exposure in accordance with the
procedures set forth in Section 2.17.
(i)
Defaulting Lender Cure. If the Parent Borrower, the Administrative Agent, the Swing Line Lender and the
L/C Issuers agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be 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 Revolving Credit 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 the
provisions of this Agreement (without giving effect to Section 2.18(a)(iv)), whereupon that 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 Borrowers 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.
1.19 Designated Borrowers. (a) The Parent Borrower may at any time, upon not less than 30 days’ notice from the
Parent Borrower to the Administrative Agent (or such shorter
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period as may be agreed by the Administrative Agent in its sole discretion), designate any Wholly-Owned Subsidiary of the
Parent Borrower (an “Applicant Borrower”) as a Designated Borrower to receive Revolving Credit Loans, Swing Line Loans,
Competitive Loans and Delayed Draw Term Loans hereunder by delivering to the Administrative Agent (which shall promptly
deliver counterparts thereof to each Lender) a duly executed notice and agreement in substantially the form of Exhibit K (a
“Designated Borrower Request and Assumption Agreement”); provided that the designation of an Applicant Borrower organized
under the laws of a jurisdiction other than the United States, Canada, the United Kingdom, Netherlands or Germany as a
Designated Borrower shall require the consent of each Alternative Currency Tranche Lender and the Swing Line Lender;
provided, further that the designation of an Applicant Borrower organized under the laws of Canada, the United Kingdom,
Netherlands or Germany shall require the consent of each Alternative Currency Tranche Lender and the Swing Line Lender if
any Change in Law adversely affects the legality or ability of an Alternative Currency Tranche Lender to make Loans to such
Applicant Borrower or to conduct business in the jurisdiction of organization of such Applicant Borrower. The Administrative
Agent shall promptly notify each Lender of each such designation by the Parent Borrower and the identity of the Applicant
Borrower. Following delivery of a Designated Borrower Request and Assumption Agreement, the Parent Borrower shall
promptly upon the request of the Administrative Agent or any Lender provide all documentation and other information
concerning such Applicant Borrower that the Administrative Agent or such Lender requests in order to comply with its
obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA
PATRIOT Act and the Beneficial Ownership Regulation. The parties hereto acknowledge and agree that prior to any Applicant
Borrower becoming entitled to utilize the credit facilities provided for herein the Administrative Agent and the Lenders shall
have received (i) all documentation and other information concerning such Applicant Borrower that the Administrative Agent or
any Lender requests in order to comply with its obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation (the “Required Information”),
(ii) such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form,
content and scope reasonably satisfactory to the Administrative Agent, as may be required by the Administrative Agent or the
Required Lenders in their sole discretion, and (iii) one or more Notes signed by such Applicant Borrower to the extent any
Lenders so require.
(j)
Promptly following receipt of all resolutions, incumbency certificates, opinions of counsel and other
documents or information requested or required pursuant to the last sentence of Section 2.19(a), but in no event earlier than the
later of (i) 10 Business Days following receipt by the Administrative Agent and the Lenders of the Required Information and (ii)
15 Business Days following the Administrative Agent’s receipt of such Designated Borrower Request and Assumption
Agreement and subject to the Administrative Agent’s consent (such consent not to be unreasonably withheld or delayed) to the
Applicant Borrower’s designation as a Designated Borrower, the Administrative Agent shall send a notice in substantially the
form of Exhibit L (a “Designated Borrower Notice”) to the Parent Borrower and the Lenders specifying the effective date upon
which the Applicant Borrower shall constitute a Designated Borrower for purposes hereof, whereupon each of the Lenders agrees
to permit such Designated Borrower to receive Revolving Credit Loans, Swing Line Loans, Competitive Loans and Delayed
Draw Term Loans, as applicable, hereunder, on and subject to the terms and conditions set forth herein, and each of the parties
agrees that such Designated Borrower otherwise shall be a Borrower for all purposes of this Agreement; provided that only a
Domestic Designated Borrower may receive Dollar Tranche Loans; provided further that no Loan Notice, Swing Line Loan
Notice or Competitive Bid Request may be submitted on behalf of such Designated Borrower until the date five Business Days
after such effective date.
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(k)
The Obligations of the Parent Borrower and each Domestic Designated Borrower shall be joint and several
in nature. The Obligations of all Designated Borrowers that are Foreign Subsidiaries shall be several in nature, and no Designated
Borrower that is a Foreign Subsidiary shall be required to become a Guarantor. The Parent Borrower and each Domestic
Designated Borrower shall guarantee the Obligations of all Designated Borrowers pursuant to Article X. The obligations of the
Parent Borrower and each Domestic Designated Borrower are those of primary obligor, and not merely as surety, and are
independent of the Obligations and the obligations of any other Borrower or any part thereof, and a separate action may be
brought against any of the Parent Borrower or any Domestic Designated Borrower to enforce this Agreement whether or not any
other Borrower or any other Person is joined as a party. The Parent Borrower and each Domestic Designated Borrower waive (i)
any defense arising by reason of any disability or other defense of any other Borrower, any other Loan Party or any other
guarantor of the Obligations or any part thereof, or the cessation from any cause whatsoever (including any act or omission of
any Creditor Party) of the liability of any Borrower (other than the defense of prior payment in full of the Obligations); (ii) any
defense based on any claim that such Person’s obligations exceed or are more burdensome than those of another Borrower; (iii)
the benefit of any statute of limitations affecting such Person’s liability hereunder; (iv) any requirement to proceed against any
other Borrower or any other Loan Party, proceed against or exhaust any security for the Obligations, or pursue any other remedy
in the power of any Creditor Party whatsoever; (v) any benefit of and any right to participate in any security now or hereafter
held by any Creditor Party; and (vi) to the fullest extent permitted by law, any and all other defenses (other than the defense of
prior payment in full of the Obligations) or benefits that may be derived from or afforded by applicable law limiting the liability
of or exonerating guarantors or sureties. The Parent Borrower and each Domestic Designated Borrower expressly waive all
setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to
the Obligations, and all notices of acceptance of this Agreement or of the existence, creation or incurrence of new or additional
Obligations.
(l)
Each Subsidiary of the Parent Borrower that becomes a “Designated Borrower” pursuant to this Section
2.19 hereby irrevocably appoints and consents to the Parent Borrower as its agent for all purposes relevant to this Agreement and
each of the other Loan Documents, including (i) the giving and receipt of notices and of service of any and all process which may
be served in any suit, action or proceeding of the nature referred to in Section 11.14 (and the Parent Borrower hereby accepts
such appointment for service), (ii) the execution and delivery of all documents, instruments and certificates contemplated herein
and all modifications hereto, and (iii) the receipt of the proceeds of any Loans made by the Lenders to any such Designated
Borrower hereunder. Any acknowledgment, consent, direction, certification or other action which might otherwise be valid or
effective only if given or taken by all Borrowers, or by each Borrower acting singly, shall be valid and effective if given or taken
only by the Parent Borrower, whether or not any such other Borrower joins therein. Any notice, demand, consent,
acknowledgement, direction, certification or other communication delivered to the Parent Borrower in accordance with the terms
of this Agreement shall be deemed to have been delivered to each Designated Borrower.
(m)
The Parent Borrower may from time to time, upon not less than 15 Business Days’ notice from the Parent
Borrower to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole
discretion), terminate a Designated Borrower’s status as such, provided that there are no outstanding Loans payable by such
Designated Borrower, or other amounts payable by such Designated Borrower on account of any Loans made to it, as of the
effective date of such termination. Such Designated Borrower shall also be released from its obligations under the Guaranty and
the other Loan Documents, provided that such Designated Borrower (or if such Designated Borrower is not a Domestic
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Subsidiary, the most immediate parents of such Subsidiary that are Domestic Wholly-Owned Subsidiaries of the Parent Borrower
(if any)) is not, or substantially contemporaneously with the termination of such Designated Borrower’s status as such would not
be, required to be a Subsidiary Guarantor under this Agreement. The Administrative Agent will (at the sole cost of the
Borrowers), and each of the Lenders and the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver
such documents as the Parent Borrower or such terminated Designated Borrower may reasonably request to evidence the release
of such Designated Borrower from its obligations hereunder, including under the Guaranty, and under the other Loan Documents,
which documents shall be reasonably satisfactory to the Administrative Agent. The Administrative Agent will promptly notify
the Lenders of any such termination of a Designated Borrower’s status.
TAXES, YIELD PROTECTION AND ILLEGALITY
Article c
1.01
Taxes. (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. (i) Any and all
payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith
discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the
Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party 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 any Loan Party 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
Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be
required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent 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 applicable Loan Party 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 Recipient receives an amount equal to the sum it would have received had no such withholding or
deduction been made.
(iii) If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code
to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by
such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental
Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Loan Party 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 Recipient receives an amount equal to the sum it would have received had no such
withholding or deduction been made.
Loan Parties shall timely pay to the relevant
(a)
Payment of Other Taxes by the Loan Parties. Without limiting the provisions of subsection (a) above, the
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Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for
the payment of, any Other Taxes.
(b)
Tax Indemnifications. (i) Each of the Loan Parties shall, and does hereby, jointly and severally indemnify
each Recipient, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section
3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 Parent Borrower by a Lender or an 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 an L/C Issuer, shall be conclusive absent manifest error. Each
of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in
respect thereof within 10 days after demand therefor, for any amount which a Lender or an L/C Issuer for any reason fails to pay
indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(i)
Each Lender and each 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 such L/C Issuer (but only to the extent that any Loan Party has not already indemnified
the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Party to do so), (y)
the Administrative Agent and the Loan Party, as applicable, against any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) the
Administrative Agent and the Loan Party, as applicable, against any Excluded Taxes attributable to such Lender or such
L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party 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 each 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 such L/C Issuer, as the case may be, under this Agreement or any other Loan
Document against any amount due to the Administrative Agent under this clause (ii).
(c)
Evidence of Payments. Upon request by the Parent Borrower or the Administrative Agent, as the case may
be, after any payment of Taxes by any Loan Party or by the Administrative Agent to a Governmental Authority as provided in
this Section 3.01, the Parent Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the
Parent Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment
reasonably satisfactory to the Parent Borrower or the Administrative Agent, as the case may be.
(d)
Status of Lenders; Tax Documentation. (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall deliver to the Parent Borrower and the
Administrative Agent, at the time or times reasonably requested by the Parent Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable law or the taxing authorities of
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a jurisdiction pursuant to such applicable law or reasonably requested by the Parent Borrower or the Administrative Agent as will
permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Parent Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable
law or reasonably requested by the Parent Borrower or the Administrative Agent as will enable the Parent Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation either (A) set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)
(D) below or (B) required by applicable law other than the Code or the taxing authorities of the jurisdiction pursuant to such
applicable law to comply with the requirements for exemption or reduction of withholding tax in that jurisdiction) shall not be
required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any
material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(i) Without limiting the generality of the foregoing, in the event that a Borrower is a U.S. Person,
(A) any Lender that is a U.S. Person shall deliver to the Parent Borrower and the Administrative Agent
on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Parent Borrower or the Administrative Agent), executed copies of
IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Parent 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 Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Parent Borrower or the Administrative Agent), whichever of the following is
applicable:
(I) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the
United States is a party (x) with respect to payments of interest under any Loan Document, executed copies
of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any
other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable)
establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty,
(II) executed 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 substantially in the form of Exhibit I-1 to the effect that
such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of the Parent Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the
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Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-
8BEN, as applicable); or
(IV) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-
8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax
Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio
interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in
the form of Exhibit I-4 on behalf of each such direct and indirect partner;
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Parent 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 Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Parent Borrower or the Administrative Agent), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal
withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by
applicable law to permit the Parent Borrower or the Administrative Agent to determine the withholding or
deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal
withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Parent Borrower and the Administrative Agent at the time or times prescribed by law
and at such time or times reasonably requested by the Parent Borrower or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and
such additional documentation reasonably requested by the Parent Borrower or the Administrative Agent as may
be necessary for the Parent Borrower and the Administrative Agent to comply with their obligations under FATCA
and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the
amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.
(ii)
In case of an advance by a Lender to a Designated UK Borrower:
(A)
A UK Treaty Lender and a Designated UK Borrower which makes a payment to which that UK
Treaty Lender is entitled shall cooperate in completing any procedural formalities necessary for that Designated
UK Borrower to obtain authorization to make that payment without a deduction or withholding for or on account
of Tax.
(B)
A UK Treaty Lender which becomes a party to this Agreement on the date on which this
Agreement is entered into which holds a passport under the
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HMRC DT
Treaty Passport scheme and which desires that such scheme should apply to this Agreement shall on or before the
date on which this Agreement is entered into indicate to the Administrative Agent that it wishes the scheme to
apply to Credit Extensions made by it to a Designated UK Borrower under this Agreement and provide the
Administrative Agent and the Parent Borrower with its scheme reference number and its jurisdiction of tax
residence.
(C)
A UK Treaty Lender which becomes a party to this Agreement after the Closing Date and which
holds a passport under the HMRC DT Treaty Passport scheme and desires that such scheme should apply to this
Agreement shall indicate to the Administrative Agent that it wishes the scheme to apply to Credit Extensions
made by it to a Designated UK Borrower under this Agreement and provide the Administrative Agent with its
scheme reference number and its jurisdiction of tax residence in the Assignment and Assumption which it
executes, and having done so, that UK Treaty Lender shall be under no obligation pursuant to Section (iii)(A)
above.
(D)
If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in
accordance with Section (B) or (C) above and (1) a Designated UK Borrower that is making a payment to that
Lender has not made a UK Borrower DTTP Filing in respect of that Lender or (2) a Designated UK Borrower that
is making a payment to that Lender has made a UK Borrower DTTP Filing in respect of that Lender but (a) that
UK Borrower DTTP Filing has been rejected by H.M. Revenue & Customs or (b) H.M. Revenue & Customs has
not given such Designated UK Borrower authority to make payments to that Lender without any deduction or
withholding for or on account of Tax within 60 days of the date of the UK Borrower DTTP Filing, and, in each
case, such Designated UK Borrower has notified that Lender in writing, that Lender and such Designated UK
Borrower shall co-operate in completing any additional procedural formalities necessary for that Designated UK
Borrower to obtain authorization to make that payment without any deduction or withholding for or on account of
Tax.
(E)
If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in
accordance with Section (B) or (C) above, no Designated UK Borrower shall make a UK Borrower DTTP Filing
or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender'’s Commitment
or its participation in any utilization of a Credit Extension unless the Lender otherwise agrees.
(F)
Each Designated UK Borrower shall, promptly on making a UK Borrower DTTP Filing, deliver
a copy of that UK Borrower DTTP Filing to the Administrative Agent and to the relevant Lender.
(G)
In the case of a Credit Extension made to a Designated UK Borrower, a UK Non-Bank Lender
shall promptly notify the Administrative Agent if there is any change in the position from that set out in the UK
Tax Confirmation.
(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01
expires or becomes obsolete or inaccurate in any respect, it
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shall update such form or certification or promptly notify the Parent Borrower and the Administrative Agent in writing
of its legal inability to do so.
(iv) For purposes of determining withholding Taxes imposed under FATCA, from and after the Closing Date,
the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to
treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation
Section 1.1471-2(b)(2)(i).
(e)
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 an L/C Issuer, or have any obligation to pay to
any Lender or any L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or such
L/C Issuer, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a
refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid
additional amounts pursuant to this Section 3.01, it shall pay to such Loan Party an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the
Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each
Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to such Loan Party (plus any penalties (other
than those stated to be imposed as a result of the gross negligence or willful misconduct of the Administrative Agent or such
Lender), interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is
required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no
event will the applicable Recipient be required to pay any amount to such Loan Party pursuant to this subsection the payment of
which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be
construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems
confidential) to any Loan Party or any other Person.
Administrative Agent to any Lender shall be treated as payments made by the applicable Loan Party.
(f)
Payments made by Administrative Agent. For the avoidance of doubt, any payments made by the
Lender treated as Partnership. If any Lender is treated as a partnership for purposes of an applicable
Indemnified Tax or Other Tax, any withholding made by such Lender shall be treated as if such withholding had been made by
the Parent Borrower or a Designated Borrower or the Administrative Agent.
(g)
L/C Issuers and the Swing Line Lender.
(h)
L/C Issuers and Swing Line Lender. For purposes of this Section 3.01, the term “Lender” shall include the
(i)
Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of
the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or an L/C Issuer, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
1.02
Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable
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Lending Office to perform any of its obligations hereunder or make, maintain or fund Loans whose interest is determined by
reference to the Eurocurrency Rate, the Daily Floating Eurocurrency Rate or the LIBOR Daily Floating Rate (whether
denominated in Dollars or an Alternative Currency)a Relevant Rate, or to determine or charge interest rates based upon the
Eurocurrency Rate, the Daily Floating Eurocurrency Rate or the LIBOR Daily Floating Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lendera Relevant Rate or to purchase or sell, or to take deposits of, Dollars
or any Alternative Currency in the applicable interbank market, then, onupon notice thereof by such Lender to the Parent
Borrower Borrowers (through the Administrative Agent), (ia) any obligation of such Lender to issue, make, or maintain, fund or
charge interest with respect to any such Credit Extension or to make or continue Eurocurrency Rate Alternative Currency Loans
in the affected currency or currencies or, in the case of Eurocurrency Rate Loans denominated in Dollars, to make or maintain
Daily SOFR Loans, to make or continue Term SOFR Loans or to convert Base Rate Loans or LIBOR Floating RateDaily SOFR
Loans to EurocurrencyTerm SOFR Loans or Base Rate Loans or Term SOFR Loans, to Daily SOFR Loans shall be, in each case,
suspended, or, in the case of LIBOR Floating Rate Loans, to convert Base Rate Loans or Eurocurrency Rate Loans in Dollars to
LIBOR Floating Rate Loans and (iib) 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 RateTerm SOFR 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 RateTerm SOFR component of the Base Rate, in each case until
such Lender notifies the Administrative Agent and the Parent BorrowerBorrowers that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, (xi) the Borrowers shall, upon demand from such Lender (with a copy
to the Administrative Agent), prepay all SOFR Loans or Alternative Currency Loans, as applicable, in the affected currency or
currencies or, if applicable and such Loans are denominated in Dollars, convert all such Eurocurrency Rate Loans and/or LIBOR
Floating RateSOFR 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 RateTerm
SOFR component of the Base Rate), in each case, immediately, or, in the case of LIBOR Floating RateTerm SOFR Loans and, in
the case of Eurocurrency Alternative Currency Term Rate Loans, eitherLoan, on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurocurrency RateTerm SOFR Loans or Alternative Currency Term Rate
Loans, as applicable, to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate
Loans and (yii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the
Eurocurrency RateTerm SOFR, the Administrative Agent shall during the period of such suspension compute the Base Rate
applicable to such Lender without reference to the Eurocurrency RateTerm SOFR component thereof until the Administrative
Agent 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 RateTerm SOFR. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest
on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 3.05.
Notwithstanding the foregoing, if the Parent Borrower has been notified that any Lender has made a determination
described in the first sentence of this Section, the Administrative Agent, in consultation with the Parent Borrower and the affected
Lenders, may establish an alternative interest rate for the Loans, if any, made by such affected Lenders in an Alternative Currency
(the “Affected Loans”), in which case, such alternative rate of interest shall apply with respect to the Affected Loans of each
affected Lender until (1) such Lender revokes the notice delivered under the first sentence of this Section, (2) the Administrative
Agent or the affected Lenders notify the Administrative Agent and the Parent Borrower that such alternative interest rate does not
adequately and fairly reflect the cost to such Lenders of funding the Affected Loans, or (3) any Lender determines that any Law
has made it unlawful, or that any
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Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or
fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates
based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any
of the foregoing and provides the Administrative Agent and the Parent Borrower written notice thereof.
1.03
Inability to Determine Rates; Replacement of Relevant Rates or Successor Rates. (a)
(a)
Inability to Determine Rates. If in connection with any request for a Eurocurrency Rate Loan, Daily
Floating Eurocurrency RateSOFR Loan or LIBOR Floating Ratean Alternative Currency Loan, a conversion to a Eurocurrencyof
Base Rate LoanLoans or a LIBOR Floating Rate Loan,Term SOFR Loans to Daily SOFR Loans, a conversion of Base Rate
Loans or Daily SOFR Loans to Term SOFR Loans or a continuation of a Eurocurrency Rate Loanany of such Loans, as
applicable, (i) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (xA)
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 or theno Successor Rate
for the Relevant Rate for the applicable Agreed Currency has been determined in accordance with Section 3.03(b) or Section
3.03(c) and the circumstances under clause (i) of Section 3.03(b) or of Section 3.03(c) or the Scheduled Unavailability Date, or
the SOFR Scheduled Unavailability Date, as applicable term, has occurred with respect to any Daily Floating Eurocurrency Rate
Loan or LIBOR Floating Rate Loansuch Relevant Rate (as applicable), or (yB) adequate and reasonable means do not otherwise
exist for determining the EurocurrencyRelevant Rate for the applicable Agreed Currency for any determination date(s) or
requested Interest Period, as applicable, with respect to a proposed Eurocurrency RateSOFR Loan (whether denominated in
Dollars or an Alternative Currency) Loan or in connection with an existing or proposed Base Rate Loan or LIBOR Floating Rate
Loan or the Daily Floating Eurocurrency Rate in connection with an existing or proposed Daily Floating Eurocurrency Rate Loan
(in each case with respect to clause (i) above, “Impacted Loans”),, or (ii) the Administrative Agent or the affectedRequired
Lenders determine that for any reason that the EurocurrencyRelevant Rate with respect to a proposed Loan denominated in an
Agreed Currency for any requested Interest Period with respect to a proposed Eurocurrency Rate Loanor determination date(s)
does not adequately and fairly reflect the cost to such Lenders of funding such Loan or (iii) the Administrative Agent or the
Swing Line Lender determines that for any reason the Daily Floating Eurocurrency Rate for any requested Interest Period with
respect to a proposed Daily Floating Eurocurrency Rate Loan does not adequately and fairly reflect the cost to the Swing Line
Lender of funding such Loan, the Administrative Agent will promptly so notify the Parent BorrowerBorrowers and each Lender.
Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans in the affected currency or
currencies, as applicable, or to convert Base Rate Loans or Term SOFR Loans to Daily SOFR Loans or to convert Base Rate
Loans or Daily SOFR Loans to Term SOFR Loans, shall be suspended (in each case to the extent of the affected Eurocurrency
RateAlternative Currency Loans or Interest Periods)Period or determination date(s), as applicable, and (y) in the event of a
determination described in the preceding sentence with respect to the Eurocurrency RateTerm SOFR component of the Base
Rate, the utilization of the Eurocurrency RateTerm SOFR component in determining the Base Rate shall be suspended, in each
case until the Administrative Agent (or, in the case of a determination by the Required Lenders described in clause (ii) of Section
3.03(a), until the Administrative Agent upon the instruction of the affectedRequired Lenders) revokes such notice.
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Upon receipt of such notice, (i) the Parent BorrowerBorrowers may revoke any pending request for a Committed
Borrowing of, or conversion to Daily SOFR Loans, Borrowing of, conversion to, or continuation of Eurocurrency RateTerm
SOFR Loans in the affected currency or currencies (, or Borrowing of, or continuation of Alternative Currency Loans to the
extent of the affected Eurocurrency RateAlternative Currency Loans or Interest Periods)Period or any pending request for a
Borrowing of LIBOR Floating Rate Loans (to the extent of the affected LIBOR Floating Rate Loans or periods)determination
date(s), as applicable or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate
Loans denominated in Dollars in the amount (or Dollar Equivalent thereof)of the amount specified therein and (ii) (A) any
outstanding SOFR Loans shall be deemed to have been converted to Base Rate Loans immediately, in the case of a Daily SOFR
Loan, or at the end of the applicable Interest Period, in the case of a Term SOFR Loan, and (B) any outstanding affected
Alternative Currency Loans, at the Borrowers’ election, shall either (1) be converted into a Borrowing of Base Rate Loans
denominated in Dollars in the Dollar Equivalent of the amount of such outstanding Alternative Currency Loan immediately, in
the case of an Alternative Currency Daily Rate Loan or at the end of the applicable Interest Period, in the case of an Alternative
Currency Term Rate Loan or (2) be prepaid in full immediately, in the case of an Alternative Currency Daily Rate Loan, or at the
end of the applicable Interest Period, in the case of an Alternative Currency Term Rate Loan; provided that if no election is made
by the Borrowers (x) in the case of an Alternative Currency Daily Rate Loan, by the date that is three (3) Business Days after
receipt by the Borrowers of such notice or (y) in the case of an Alternative Currency Term Rate Loan, by the last day of the
current Interest Period for the applicable Alternative Currency Term Rate Loan, the Borrowers shall be deemed to have elected
clause (1) above.
(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause
(i) of Section 3.03(a), the Administrative Agent, in consultation with the Parent Borrower and the affected Lenders, may establish
an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the
Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause
(i) of Section 3.03(a), (2) the Administrative Agent or the affected Lenders notify the Administrative Agent and the Parent
Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted
Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it
is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by
reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental
Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the
Administrative Agent and the Parent Borrower written notice thereof.
(b)
(c) Replacement of SOFR or SOFR Successor Rate. Notwithstanding anything to the contrary in this
Agreement or any other Loan Documents (including any interest rate or related definitions contained in Section 1.01), if the
Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Parentany Borrower or
the Required Lenders notify(ies) the Administrative Agent (with, in the case of the Required Lenders, a copy to the Parent
Borrower) that the Parent BorrowerBorrowers or the Required Lenders (as applicable) have determined, that:
(i)
adequate and reasonable means do not exist for ascertaining LIBOR in Dollars or an Alternative Currency
for any requestedSOFR and one month, three month and six month Interest PeriodPeriods of Term SOFR, including,
without limitation, because SOFR or the Term SOFR Screen Rate, as applicable rate, is not available or published on a
current basis and such circumstances are unlikely to be temporary,; or
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(ii)
the Applicable Authority has made a public statement identifying a specific date after which SOFR and
one month, three month and six month Interest Periods of Term SOFR or the Term SOFR Screen Rate, as applicable
shall or will no longer be made available, or permitted to be used for determining the interest rate of syndicated loans
denominated in Dollars, or shall or will otherwise cease, provided that, in each case, at the time of such statement, there
are no successor administrators that are satisfactory to the Administrative Agent that will continue to provide SOFR or
such Interest Periods of Term SOFR, as applicable, after such specific date (the latest date on which SOFR or one
month, three month and six month Interest Periods of Term SOFR or the Term SOFR Screen Rate are no longer
available permanently or indefinitely, the “SOFR Scheduled Unavailability Date”);
or if the events or circumstances of the type described in Section 3.03(b)(i) or (ii) have occurred with respect to the SOFR
Successor Rate then in effect, then, the Administrative Agent and the Borrowers may amend this Agreement solely for the
purpose of replacing SOFR and/or Term SOFR for Dollars or any then current SOFR Successor Rate for Dollars in accordance
with this Section 3.03 with an alternative benchmark rate giving due consideration to any evolving or then existing convention
for similar credit facilities syndicated and agented in the U.S. and denominated in Dollars for such alternative benchmarks, and,
in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or
then existing convention for similar credit facilities syndicated and agented in the U.S. and denominated in Dollars for such
benchmarks (any such proposed rate, including for the avoidance of doubt, any adjustment thereto, a “SOFR Successor Rate”),
and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have
posted such proposed amendment to all Lenders and the Borrowers unless, prior to such time, Lenders comprising the Required
Lenders have delivered to the Administrative Agent written notice that such Required Lenders object to such amendment.
(c)
Replacement of Relevant Rate or Non-SOFR Successor Rate. Notwithstanding anything to the contrary in
this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive
absent manifest error), or any Borrower or Required Lenders notify(ies) the Administrative Agent (with, in the case of the
Required Lenders, a copy to the Parent Borrower) that the Borrowers or Required Lenders (as applicable) have determined, that:
(i)
adequate and reasonable means do not exist for ascertaining the Relevant Rate (other than SOFR) for an
Agreed Currency (other than Dollars) because none of the tenors of such Relevant Rate (other than SOFR) under this
Agreement is available or published on a current basis, and such circumstances are unlikely to be temporary; or
(ii)
the administrator of the applicable rate or a GovernmentalApplicable Authority having jurisdiction over
the Administrative Agent has made a public statement identifying a specific date after which LIBORall tenors of the
Relevant Rate (other than SOFR) for an Agreed Currency (other than Dollars) under this Agreement shall or will no
longer be representative or made available with respect to Dollars or an Alternative Currency, or permitted to be used
for determining the interest rate of Loanssyndicated loans denominated in Dollars or an Alternativesuch Agreed
Currency (other than Dollars), or shall or will otherwise cease, provided that, in each case, at the time of such statement,
there is no successor administrator that is satisfactory to the Administrative Agent, that will continue to provide LIBOR
for the applicable currency(iessuch representative tenor(s) of the Relevant Rate (other than SOFR) afterfor such specific
date (such specific dateAgreed Currency (other than Dollars) (the latest date on which all tenors of the Relevant Rate for
such Agreed Currency (other
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than Dollars) under this Agreement are no longer representative or available permanently or indefinitely, the
“Scheduled Unavailability Date”), or;
(iii) syndicated loans denominated in Dollars or an Alternative Currency that are currently being executed, or
that include language similar to that contained in this section, are being executed or amended (as applicable) to
incorporate or adopt a new benchmark interest rate to replace LIBOR for the applicable currency(ies),
then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such
notice, as applicable, or if the events or circumstances of the type described in Section 3.03(c)(i) or (ii) have occurred with
respect to the Successor Rate then in effect, then, the Administrative Agent and the Parent BorrowerBorrowers may amend this
agreementAgreement solely for the purpose of replacing LIBOR (a “the Relevant Rate for an Agreed Currency or any then
current Successor Rate Amendment”)for an Agreed Currency in accordance with this sectionSection 3.03 with (1) in the case of
Dollar denominated Loans (x) one or more SOFR-Based Rates or (y) another alternatean alternative benchmark rate giving due
consideration to any evolving or then existing convention for similar Dollar denominated syndicated credit facilities for such
alternative benchmarkssyndicated and (2)agented in the case of LoansU.S. and denominated in an Alternativesuch Agreed
Currency, another alternate benchmark rate giving due consideration to any evolving or then existing convention for syndicated
credit facilities denominated in such currency for such alternative benchmarks;, and, in each case, including any mathematical or
other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similarly
denominated syndicatedsimilar credit facilities syndicated and agented in the U.S. and denominated in such Agreed Currency for
such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service as
selected by the Administrative Agent from time to time in its reasonable discretion and may be periodically updated (the
“Adjustment;” and (any such proposed rate, including for the avoidance of doubt, any adjustment thereto, a “Non-SOFR
Successor Rate”, and collectively with the SOFR Successor Rate, each a “Successor Rate”), and any such amendment shall
become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have posted such proposed
amendment to all Lenders and the Parent Borrower unless, prior to such time, Lenders comprising the Required Lenders have
delivered to the Administrative Agent written notice that such Required Lenders (A) in the case of an amendment to replace
LIBOR with a rate described in clause (1)(x) above, object to the Adjustment; or (B) in the case of an amendment to replace
LIBOR with a rate described in clause (1)(y) or (2) above, object to such amendment; provided that for the avoidance of doubt, in
the case of clause (A), the Required Lenders shall not be entitled to object toobject to such amendment.
(d)
Successor Rates. The Administrative Agent will promptly (in one or more notices) notify the Parent
Borrower and each Lender of the implementation of any SOFR-BasedSuccessor Rate contained in any such amendment. Such.
Any Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market
practice is not administratively feasible for the Administrative Agent, such Successor Rate shall be applied in a manner as
otherwise reasonably determined by the Administrative Agent.
If no Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability
Date has occurred (as applicable), the Administrative Agent will promptly so notify the Parent Borrower and each Lender.
Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans and/or LIBOR Daily Floating Rate
Loans and/or Swing Line Loans shall be suspended (to the extent of the affected Loans or Interest Periods), and (y) the
Eurocurrency Rate component shall no longer be utilized in determining the
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Base Rate. Upon receipt of such notice and subject to clause (y) of the preceding sentence, the Parent Borrower may revoke any
pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans (to the extent of the affected
Loans or Interest Periods), or a Borrowing of or conversion to LIBOR Daily Floating Rate Loans, or a Borrowing of Swing Line
Loans; or, failing that will be deemed to have converted such request for a Loan into a request for a Borrowing of or conversion
to (as applicable) a Base Rate Loan under the same Tranche or Facility as that requested (and, in the case of a request for a Loan
denominated in a LIBOR Quoted Currency other than Dollars, such Base Rate Loan shall be the requested loan amount converted
into Dollars determined at a spot rate selected by the Administrative Agent in consultation with the Parent Borrower as in effect
on the date two Business Days immediately prior to the date of the requested funding).
Notwithstanding anything to the contraryelse herein, if at any definition oftime any Successor Rate shall provide that in
no event shall such Successor Rateas so determined would otherwise be less than zero, the Successor Rate will be deemed to be
zero for the purposes of this Agreement and the other Loan Documents.
In connection with the implementation of a Successor Rate, the Administrative Agent will have the right to make
Successor Rate Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan
Document, any amendments implementing such Successor Rate Conforming Changes will become effective without any further
action or consent of any other party to any Loan Document; provided that, with respect to any such amendment effected, the
Administrative Agent shall post each such amendment implementing such Successor Conforming Changes to the Borrowers and
the Lenders reasonably promptly after such amendment becomes effective.
Any Adjustmentadjustment and Successor Rate agreed and proposed to the Required Lenders in the context of a
Successor Rate Amendment shall be in form and substance acceptable to each of the Administrative Agent and the Parent
Borrower;; provided, however, that the Administrative Agent shall in any event approve such terms as are generally no less
favorable to the Parent Borrower than corresponding terms included in similar facilities for similarly situated borrowers in
general, but not necessarily all such borrowers in transactions in which Bank of America serves as administrative agent;;
provided, further, that nothing herein shall obligate the Administrative Agent to disclose any information regarding other
borrowers or facilities.
(e)
Exclusion of Certain Lenders. For purposes of this Section 3.03, those Lenders that either have not made,
or do not have an obligation under this Agreement to make, the relevant Loans in the relevant Alternative Currency shall be
excluded from any determination of Required Lenders.
1.04
Floating Rate Loans.
Increased Costs; Reserves on Eurocurrency Rate Loans, Daily Floating Eurocurrency Rate Loans and LIBOR
(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) other than as set forth below) or
any L/C Issuer;
(ii)
subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in
clauses (b) through (d) of the definition of
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Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or
other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)
impose on any Lender or any L/C Issuer or the Londonany applicable interbank market any other
condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans, Daily Floating Eurocurrency
Rate Loans or LIBOR Floating Rate, SOFR Loans made by such Lender or Alternative Currency Loans made by
such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or
maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such
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 such L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Parent
Borrower will pay (or cause the applicable Designated Borrower to pay) to such Lender or such L/C Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional
costs incurred or reduction suffered.
(b)
Capital Requirements. If any Lender or any L/C Issuer determines that any Change in Law affecting such
Lender or such L/C Issuer or any Lending Office of such Lender or such Lender’s or such L/C Issuer’s holding company, if any,
regarding capital or liquidity ratios or requirements has or would have the effect of reducing the rate of return on such Lender’s or
such L/C Issuer’s capital or on the capital of such Lender’s or such 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 or Swing Line Loans
held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or such L/C
Issuer or such Lender’s or such L/C Issuer’s holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such L/C Issuer’s policies and the policies of such Lender’s or such L/C Issuer’s holding company
with respect to capital adequacy and liquidity), then from time to time the Parent Borrower will pay (or cause the applicable
Designated Borrower to pay) to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such reduction
suffered.
(c)
Certificates for Reimbursement. A certificate of a Lender or an L/C Issuer setting forth the amount or
amounts necessary to compensate such Lender or such 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 Parent Borrower shall be conclusive absent manifest error. The Parent
Borrower shall pay (or cause the applicable Designated Borrower to pay) such Lender or such 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 any L/C Issuer to demand compensation
pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or such L/C Issuer’s right to
demand such compensation, provided that no Borrower shall be required to compensate a Lender or an L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the
date that such Lender or such L/C Issuer, as the case may be, notifies the Parent Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender’s or such L/C Issuer’s intention to claim compensation therefor
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(except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect thereof).
(e) Additional Reserve Requirements. The Parent Borrower shall pay (or cause the applicable Designated
Borrower to 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 and/or Daily Floating Eurocurrency Rate Loan and/or
LIBOR Floating 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), 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 and/or Daily Floating
Eurocurrency Rate Loans and/or LIBOR Floating 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), which in each case shall
be due and payable on each date on which interest is payable on such Loan, provided the Parent 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.
1.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Parent Borrower shall promptly compensate (or cause the applicable Designated Borrower to compensate) such Lender
for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day
other than the last day of the Interest Period, relevant interest payment date or payment period, as applicable, for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(a)
any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay,
borrow, continue or convert into any Loan other than a Base Rate Loan on the date or in the amount notified by the Parent
Borrower (on its own behalf or on behalf of any Designated Borrower);
(b)
any failure by any 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;
(c)
therefor as a result of a request by the Parent Borrower pursuant to Section 11.13; or
(d)
any assignment of a EurocurrencyTerm Rate Loan on a day other than the last day of the Interest Period
(e)
the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan.
including any loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds
were obtained or from the
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performance of any foreign exchange contract. The Parent Borrower shall also pay (or cause the applicable Designated Borrower
to pay) any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Parent Borrower (or the applicable Designated Borrower) to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each EurocurrencyTerm Rate Loan made by it at the
Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the offshore interbank market for such currency for
a comparable amount and for a comparable period, whether or not such EurocurrencyTerm Rate Loan was in fact so funded.
A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender as specified in this Section
and delivered to the Parent Borrower shall be conclusive absent manifest error.
1.06 Mitigation Obligations; Replacement of Lenders. (a) Designation of a Different Lending Office. Each Lender may
make any Credit Extension to any Borrower through any Lending Office, provided that the exercise of this option shall not affect
the obligation of any Borrower to repay the Credit Extension made to such Borrower in accordance with the terms of this
Agreement. If any Lender requests compensation under Section 3.04, or any Borrower is required to pay any Indemnified Taxes
or additional amounts to any Lender, any L/C Issuer, or any Governmental Authority for the account of any Lender or any L/C
Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then, at the request of the Parent
Borrower, such Lender or such L/C Issuer shall, as applicable, 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 or such L/C Issuer, 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 or such L/C Issuer, as the case may be, to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or such L/C Issuer, as the case may
be. The Parent Borrower hereby agrees to pay (or cause the applicable Designated Borrower to pay) all reasonable costs and
expenses incurred by any Lender or any L/C Issuer in connection with any such designation or assignment.
(a)
Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is
required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending
office in accordance with Section 3.06(a), the Parent Borrower may replace such Lender in accordance with Section 11.13.
1.07
Survival. All obligations of the Loan Parties under this Article III shall survive termination of the Aggregate
Commitments, repayment of all obligations under any Loan Document, and resignation of the Administrative Agent.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Article d
1.01 Conditions of Effectiveness and Term Loans. The effectiveness of this Agreement and the obligation of each Term
Lender to make its Term Loan hereunder on the Closing Date is subject to satisfaction (or valid waiver) of the following
conditions precedent.
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(a)
The Administrative Agent’s receipt of the following, each of which shall be originals, e-mails (in a .pdf
format) or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible
Officer or a duly authorized officer of the signing Loan Party, 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)
an executed counterpart of this Agreement;
(ii)
a Revolving Credit Note, Term Note and/or Delayed Draw Term Note, as applicable, in each case, duly
executed by the Parent 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 Loan 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
Agreement and the other Loan Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and each Loan Party is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;
(v)
a favorable opinion of DLA Piper LLP (US), counsel to the Loan Parties, addressed to the Administrative
Agent and each Lender, as to such matters concerning the Loan Parties and the Loan Documents as the Administrative
Agent may reasonably request;
(vi) a certificate of a Responsible Officer of the Parent Borrower either (A) attaching copies of all consents,
licenses and approvals required in connection with the execution, delivery and performance by each Loan Party and the
validity against such Loan Party of the Loan Documents to which it is a party, 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;
(vii) a certificate signed by a Responsible Officer of the Parent Borrower certifying (A) that the conditions
specified in this Section 4.01 and Sections 4.02(a) and (b) have been satisfied (other than those conditions contingent
upon the satisfaction of the Administrative Agent and/or the Lenders with respect to certain items received by them
under this Section 4.01), and (B) that no action, suit, investigation or proceeding is pending or, to the knowledge of any
Loan Party, threatened in any court or before any arbitrator or Governmental Authority related to the Facility or that
could reasonably be expected to be adversely determined and, if adversely determined, could reasonably be expected to
have a Material Adverse Effect;
(viii) a Solvency Certificate from the Company certifying that each Loan Party is Solvent after giving effect to
the Credit Extensions to occur on the Closing Date;
(ix) a duly completed Compliance Certificate as of the last day of the fiscal quarter of the Company ended
immediately prior to the Closing Date for which
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financial statements were required to be delivered to the Administrative Agent under the Original Credit Agreement,
signed by a Responsible Officer of the Company and evidencing that both immediately before and after giving effect to
all transactions contemplated to occur on the Closing Date (including, without limitation, all Credit Extensions to occur
on the Closing Date) the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11;
(x)
evidence that the Existing Swing Line Loans and the Existing Term Loans have been or concurrently with
the Closing Date are being repaid in full; and
(xi) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, any L/C
Issuer, the Swing Line Lender or the Required Lenders reasonably may require.
Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.
(b)
(i) All fees required to be paid to the Administrative Agent and the Arrangers on or before the Closing
(c)
Unless waived by the Administrative Agent, all reasonable fees, charges and disbursements of counsel to
the Administrative Agent shall have been paid (directly to such counsel if requested by the Administrative Agent) to the extent
invoiced at least one Business Day prior to the Closing Date, plus such reasonable 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
Company and the Administrative Agent).
(d)
Confirmation that the Company has delivered a written notice to each Departing Lender terminating as of
the Closing Date all commitments of the Departing Lenders under the Original Credit Agreement, and all amounts owing
(whether or not due) under the Original Credit Agreement and related documents through and including the Closing Date to each
Departing Lender shall have been paid in full.
(e)
The Administrative Agent and each Lender shall have received, at least five (5) Business Days prior to the
Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation, in each case
as requested at least ten (10) Business Days prior to the Closing Date.
Without limiting the generality of the provisions of the last paragraph of Section 9.03, 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 written notice from
such Lender prior to the proposed Closing Date specifying its objection thereto.
Notwithstanding anything contained elsewhere in this Agreement, each Lender that is a “Lender” (as defined in the Original
Credit Agreement) hereby waives any right to indemnification for any funding loss or expense that such Lender may sustain or
incur as a result of a prepayment by the Company of the Existing Term Loans or any prepayment of any Revolving Credit Loans
outstanding under the Original Credit Agreement on the Closing Date prior to the last day of the “Interest Period” (as defined in
the Original Credit Agreement) applicable thereto required to effect the refinancing of the Existing Term Loans with the Term
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Loans and/or Revolving Credit Loans or as a result of the reallocation of such Revolving Credit Loans to Lenders that were not
“Lenders” under the Original Credit Agreement.
1.02 Conditions to All Credit Extensions. The obligation of each Lender to honor any Request for a Credit Extension
(other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of EurocurrencyTerm Rate
Loans) is subject to the following conditions precedent:
(a)
The representations and warranties of each Loan 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 in all material respects on and as of the date of the proposed Credit Extension, except (i) to the extent that such
representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier
date, (ii) any representation or warranty that is already by its terms qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct in all respects as of such date after giving effect to such qualification, (iii) the
representations and warranties set forth in Sections 5.05(c), 5.06(b) and 5.17 shall be made only as of the Closing Date and (iv)
for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01;
(b)
proceeds thereof;
No Default shall exist, or would result from such proposed Credit Extension or from the application of the
Request for Credit Extension in accordance with the requirements hereof;
(c)
The Administrative Agent and, if applicable, an L/C Issuer or the Swing Line Lender shall have received a
(d)
If such Credit Extension is a Competitive Borrowing, on or before the date of such Competitive
Borrowing, but prior to such Competitive Borrowing, the Administrative Agent shall have received, if requested by the
applicable Competitive Loan Lender, a Competitive Loan Note payable to the order of such Competitive Loan Lender for each of
the one or more Competitive Loans to be made by such Competitive Loan Lender as part of such Competitive Borrowing, in a
principal amount equal to the principal amount of the Competitive Loan to be evidenced thereby and otherwise on such terms as
were agreed to for such Competitive Loan in accordance with Section 2.03;
(e)
If such Credit Extension is a Revolving Credit Borrowing or an L/C Credit Extension, after giving effect to
the proposed Credit Extension, the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such
time;
(f)
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 and the Required Revolving Lenders (in the case
of any Revolving Credit Loans to be denominated in an Alternative Currency), the Required Term Lenders (in the case of the
Term Loans), the Required Delayed Draw Term Lenders (in the case of any Delayed Draw Term Loans to be denominated in an
Alternative Currency), the Swing Line Lender (in the case of any Swing Line Loans) or the applicable 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; and
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(g)
If the applicable Borrower is a Designated Borrower, then the conditions of Section 2.19 to the designation
of such Borrower as a Designated Borrower shall have been met to the satisfaction of the Administrative Agent.
Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to another Type or a
continuation of EurocurrencyTerm Rate Loans) submitted by the Parent Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a), (b) and (e) have been satisfied on and as of the date of the applicable
Credit Extension.
REPRESENTATIONS AND WARRANTIES
Article e
The Company and each Loan Party represent and warrant to the Administrative Agent and the Lenders that:
1.01
Existence, Qualification and Power. Each Loan Party, and each of its Subsidiaries, (a) is duly organized or formed,
validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization,
except, solely in the case of a Subsidiary of the Company that is not a Loan Party, to the extent that the failure of such Subsidiary
to be duly organized or formed and in good standing could not reasonably be expected to have a Material Adverse Effect, (b) has
all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or
lease 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 and consummate the transactions contemplated by the Loan Documents, and (c) is duly qualified and is licensed and,
as applicable, 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; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect.
1.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of, and the
consummation by each Loan Party of the transactions contemplated by, each Loan Document to which such Person is a 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.
1.03 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 (a) the
execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document,
or for the consummation of the transactions contemplated by the Loan Documents or (b) the exercise by the Administrative
Agent or any Lender of its rights under the Loan Documents.
1.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have
been, duly executed and delivered by each Loan Party that is party
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thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding
obligation of each Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.
1.05
Financial Statements; No Material Adverse Effect. (a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein;
and (ii) fairly present the financial condition of the Company and its Subsidiaries as of the date thereof and their results of
operations, cash flows and changes in shareholders’ equity for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein.
(a)
The unaudited consolidated balance sheet of the Company and its Subsidiaries dated September 30, 2019,
and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended
on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial condition of the Company and its Subsidiaries as of the date
thereof and their results of operations, cash flows and changes in shareholders’ equity for the period covered thereby, subject, in
the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.
that has had or could reasonably be expected to have a Material Adverse Effect.
(b)
Since December 31, 2018, there has been no event or circumstance, either individually or in the aggregate,
1.06
Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Loan
Party, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any of its
Subsidiaries or against any of their respective properties or revenues that (a) could reasonably be expected to adversely affect this
Agreement, any other Loan Document or any of the transactions contemplated hereby or thereby, or (b) either individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
1.07 No Default. Neither any Loan Party nor any Subsidiary thereof 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 has occurred and is continuing or would result from the consummation of the transactions contemplated by
this Agreement or any other Loan Document.
1.08 Ownership of Property; Liens. Each Loan Party and each of its Subsidiaries has good record and marketable title
to, or valid leasehold interests in, all its Property material to 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 each Loan Party and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
1.09
Environmental Compliance. Except with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither a Loan Party nor any of its Subsidiaries (i) has failed to
comply with any applicable Environmental Law or to obtain, maintain or comply with any Environmental Permit required under
any applicable Environmental Law, (ii) has become subject to any Environmental
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Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
1.10
Taxes. Each Loan Party, and each of its Subsidiaries, has timely filed all federal, state and other material tax
returns and reports required to be filed, and has timely paid all federal, state and other material Taxes (whether or not shown on a
tax return), including in its capacity as a withholding agent, levied or imposed upon it or its properties, income or assets
otherwise due and payable, except in each case, with respect to those Taxes or tax returns (i) which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with
GAAP, or (ii) where the failure to timely file or timely pay could not reasonably be expected to, individually or in the aggregate,
result in a Material Adverse Effect. There is no proposed tax assessment against any Loan Party or any Subsidiary thereof that, if
made, could reasonably be expected to have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement. Except as could not be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect, neither any Loan Party nor any of its Subsidiaries has ever “participated” in a “listed transaction” within
the meaning of Treasury Regulation Section 1.6011-4.
1.11
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 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 Loan 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 Loan 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)
Except as could not, either individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) no ERISA Event has occurred, and neither the Company 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)
the Company 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 and neither the Company 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; (iv) neither the Company nor any ERISA Affiliate has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid;
(v) neither the Company nor any ERISA Affiliate has engaged in a transaction that is subject to Section 4069 or Section 4212(c)
of ERISA; and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or
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circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV
of ERISA to terminate any Pension Plan.
(d)
Neither the Company nor any ERISA Affiliate maintains or contributes to, or has any unsatisfied
obligation to contribute to, or liability under, any active or terminated Pension Plan other than those listed on Schedule 5.11(d)
hereto.
1.12
Subsidiaries; Equity Interests; Loan Parties. As of the Closing Date (based on the Compliance Certificate
delivered pursuant to Section 4.01(a)(ix)) and as of the date of each delivery of a Compliance Certificate concurrently with the
financial statements referred to in Section 6.01(a), Part (a) of Schedule 5.12 is a complete and accurate list of the Company and
its Subsidiaries, showing the correct name of each such Subsidiary and whether such Subsidiary is a Subsidiary Guarantor or a
Borrower. The outstanding equity interests of the Company and all of its Subsidiaries are validly issued, fully paid and non-
assessable and are owned free and clear of all Liens, except for Liens permitted by this Agreement, as indicated in Part (a) of
Schedule 5.12. As of the Closing Date, no Loan Party has any equity investments in any other corporation or entity other than
those specifically disclosed in Part (b) of Schedule 5.12. Set forth on Part (c) of Schedule 5.12 is a complete and accurate list of
all Loan Parties, showing as of the Closing Date (as to each Loan Party) the jurisdiction of its incorporation or organization, the
address of its chief executive office and principal place of business, the type of organization it is and its U.S. taxpayer
identification number. The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Section
4.01(a)(iv) is a true and correct copy of each such document, each of which is valid and in full force and effect.
1.13 Margin Regulations; Investment Company Act. (a) No Borrower is engaged or will engage, principally or as one
of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by
the FRB), or extending credit for the purpose of purchasing or carrying margin stock.
(e)
None of the Company, any Person Controlling the Company, or any Subsidiary of the Company is or is
required to be registered as an “investment company” under the Investment Company Act of 1940.
1.14 Disclosure. The Parent Borrower 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, as of the Closing Date, and all
other matters known to it as of the Closing Date, that, individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the SEC Reports and none of the reports, financial statements, certificates or other information
furnished (whether in writing or orally) by or on behalf of the Parent Borrower or any other Loan 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 as modified or supplemented by other information so furnished)
when taken as a whole as at such time, 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 misleading; provided that, with
respect to projected financial information, the Parent Borrower represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
1.15 Compliance with Laws. Each Loan Party and each Subsidiary thereof is 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
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individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
1.16
Intellectual Property; Licenses, Etc. Each Loan Party, and each of its Subsidiaries, owns, or possesses the right to
use, all trademarks, trade names, copyrights, patents and other intellectual property material to its business, and the use thereof by
the Loan Parties and their Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
1.17
Solvency. Immediately after giving effect to the initial Credit Extensions made on the Closing Date, the Loan
Parties are, together with their Subsidiaries on a consolidated basis, Solvent.
1.18 Casualty, Etc. Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance), condemnation or eminent domain that, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
1.19
SEC Reports. As of the Closing Date, the Company has filed all forms, reports, statements (including proxy
statements) and other documents (such filings by the Company are collectively referred to as the “SEC Reports”), required to be
filed by it with the Securities and Exchange Commission. The SEC Reports, including all SEC Reports filed after the Closing
Date or on or prior to the date of this Agreement, (i) were or will be prepared in all material respects in accordance with the
requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, as the case may
be, and the rules and regulations of the Securities and Exchange Commission thereunder applicable to such SEC Reports at the
time of filing thereof and (ii) did not at the time they were filed, or will not at the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
1.20 Anti-Money Laundering; Sanctions; Anti-Corruption Laws. (a) Neither the Company, nor any of its Subsidiaries,
nor, to the knowledge of the Company and its Subsidiaries, any director, officer, employee, agent, affiliate or representative
thereof (i) has violated or is in violation of any applicable anti-money laundering law or (ii) has engaged or engages in any
transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category
of offenses designated in any applicable law, regulation or other binding measure implementing the “Forty Recommendations”
and “Nine Special Recommendations” published by the Organisation for Economic Cooperation and Development’s Financial
Action Task Force on Money Laundering.
(f)
Neither the Company, nor any of its Subsidiaries, nor, to the knowledge of the Company and its
Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is
owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s
List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or
any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated
Jurisdiction.
Foreign Corrupt Practices Act of 1977, the UK Bribery Act
(g)
The Company and its Subsidiaries have conducted their businesses in compliance with the United States
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2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and
procedures designed to promote and achieve compliance with such laws.
1.21 Affected Financial Institutions. No Loan Party is an Affected Financial Institution.
1.22 Covered Entity. No Loan Party is a Covered Entity.
1.23 Representations as to Foreign Obligors. With respect to each Foreign Obligor:
(a)
Such Foreign Obligor is subject to civil and commercial Laws with respect to its obligations under this
Agreement and the other Loan Documents to which it is a party (collectively as to such Foreign Obligor, the “Applicable Foreign
Obligor Documents”), and the execution, delivery and performance by such Foreign Obligor of the Applicable Foreign Obligor
Documents constitute and will constitute private and commercial acts and not public or governmental acts. Neither such Foreign
Obligor nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the
jurisdiction in which such Foreign Obligor is organized and existing in respect of its obligations under the Applicable Foreign
Obligor Documents.
(b)
The Applicable Foreign Obligor Documents are in proper legal form under the Laws of the jurisdiction in
which such Foreign Obligor is organized and existing for the enforcement thereof against such Foreign Obligor under the Laws
of such jurisdiction, and to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable
Foreign Obligor Documents. It is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence
of the Applicable Foreign Obligor Documents that the Applicable Foreign Obligor Documents be filed, registered or recorded
with, or executed or notarized before, any court or other authority in the jurisdiction in which such Foreign Obligor is organized
and existing or that any registration charge or stamp or similar tax be paid on or in respect of the Applicable Foreign Obligor
Documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been
made or is not required to be made until the Applicable Foreign Obligor Document or any other document is sought to be
enforced and (ii) any charge or tax as has been timely paid.
(c)
There is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or
withholding, imposed by any Governmental Authority in or of the jurisdiction in which such Foreign Obligor is organized and
existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Obligor Documents or (ii) on any
payment to be made by such Foreign Obligor pursuant to the Applicable Foreign Obligor Documents, except as has been
disclosed to the Administrative Agent.
(d)
The execution, delivery and performance of the Applicable Foreign Obligor Documents executed by such
Foreign Obligor are, under applicable foreign exchange control regulations of the jurisdiction in which such Foreign Obligor is
organized and existing, not subject to any notification or authorization except (i) such as have been made or obtained or (ii) such
as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (ii) shall be
made or obtained as soon as is reasonably practicable).
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Article f
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain
unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties shall, and shall cause each of their
respective Subsidiaries to (or, solely in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03 the Parent Borrower
shall, and solely in the case of the covenants set forth in Sections 6.12(b) and 6.15 the Company shall):
1.01
Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:
(a)
as soon as available, but in any event within 90 days after the end of each fiscal year of the Company (or, if
earlier, 15 days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC))
(commencing with the fiscal year ended December 31, 2019), a consolidated balance sheet of the Company and its Subsidiaries
as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity,
and cash flows for such fiscal year on Form 10-K, setting forth in each case in comparative form the figures as of the end of and
for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report
and opinion of PricewaterhouseCoopers LLP or other “Big 4” accounting firm, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit, and which report shall state that such financial
statements fairly present the consolidated financial condition of the Company and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which PricewaterhouseCoopers LLP or any such other independent certified public
accountants, if applicable, shall concur and which shall have been disclosed in the notes to such financial statements) (which
report shall be subject to the confidentiality limitations set forth herein); and
(b)
as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of the Company (or, if earlier, five days after the date required to be filed with the SEC (without giving effect
to any extension permitted by the SEC)), a consolidated balance sheet of the Company and its Subsidiaries as at the end of such
fiscal quarter, and the related consolidated statements of income or operations for such fiscal quarter and for the portion of the
Company’s fiscal year then ended, and the related consolidated statements of changes in shareholders’ equity and cash flows for
the portion of the Company’s fiscal year then ended on Form 10-Q, in each case setting forth in comparative form, as applicable,
the figures as of the end of and for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of
the previous fiscal year, all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or
controller of the Company as fairly presenting the consolidated financial condition, results of operations, shareholders’ equity and
cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and
the absence of footnotes.
As to any information contained in materials furnished pursuant to Section 6.02(b), the Parent Borrower shall not be separately
required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the
obligation of the Parent Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the
times specified therein.
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1.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Required Lenders:
(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 of the Company (which delivery may, unless the
Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax or email and shall
be deemed to be an original authentic counterpart thereof for all purposes) representing and certifying (1) that the officer
signatory thereto has reviewed the terms of this Agreement, and has made, or caused to be made under his/her supervision, a
review in reasonable detail of the transactions contemplated hereby and the consolidated financial condition of the Company and
its Subsidiaries, during the accounting period covered by such reports, that such review has not disclosed the existence during or
at the end of such accounting period, and that such officer does not have knowledge of the existence as at the date of such
Officer’s Certificate, of any condition or event which constitutes a Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the Company or any of its Subsidiaries has taken, is taking
and proposes to take with respect thereto, (2) calculations evidencing whether there has been compliance with each of the
financial covenants set forth in Section 7.11 and (3) an update of Part (a) of Schedule 5.12, if applicable;
(b)
promptly after the same are available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders or other equity holders of the Company, and copies of all annual, regular,
periodic and special reports and registration statements which any Loan Party may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not
otherwise required to be delivered to the Administrative Agent pursuant hereto;
(c)
promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt
securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement
and not otherwise required to be furnished pursuant to Section 6.01 or any other clause of this Section 6.02;
(d)
promptly, and in any event within five Business Days after receipt thereof by any Loan Party, copies of
each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction)
concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational
results of any Loan Party (in each case, to the extent such Loan Party is permitted to disclose such information to the
Administrative Agent and the Lender);
promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could
reasonably be expected to have a Material Adverse Effect;
(e)
(f)
promptly following any request therefor, such other information regarding the operations, business affairs
and financial condition of the Loan Parties or any of their Subsidiaries, or compliance with the terms of this Agreement, as the
Administrative Agent may reasonably request including without limitation, tax returns, title reports, insurance certificates and
results of environmental site assessments; and
promptly following any request therefor, information and documentation reasonably requested by the
Administrative Agent, any L/C Issuer or any Lender for purposes of compliance with applicable “know your customer” and anti-
money-laundering rules and
(g)
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regulations, including, without limitation, the USA PATRIOT Act and the Beneficial Ownership Regulation.
Documents required to be delivered pursuant to Section 6.01(a) or (b) (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 Company posts such documents, or provides a link thereto on the Company’s website on
the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Company’s 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); provided that the Parent Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender upon its request to the Company to 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 of or to maintain paper copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by any Loan Party with any such request by a Lender
for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
Each of the Loan Parties hereby acknowledges that (a) the Administrative Agent, the Arrangers and/or the Bookrunners
may, but shall not be obligated to, make available to the Lenders and the L/C Issuers materials and/or information provided by or
on behalf of any Loan Party hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks,
Syndtrak, ClearPar, or a substantially similar electronic transmission (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material non-public information with respect to any of the
Borrowers or their respective Affiliates, or the respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Persons’ securities. Each of the Loan Parties hereby agrees
that it will identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such
Borrower Materials 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 Loan Parties
shall be deemed to have authorized the Administrative Agent, the Arrangers, the Bookrunners, the L/C Issuers and the Lenders to
treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and
proprietary) with respect to any Loan Party or its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section
11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information;” and (z) the Administrative Agent, the Bookrunners and the Arrangers shall be entitled to
treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Side Information.”
1.03 Notices. Notify the Administrative Agent and each Lender promptly upon a Responsible Officer of the Company
or the Parent Borrower having actual knowledge thereof:
(a)
of the occurrence of any Default;
(b)
any agreements, instruments which, and any corporate or other restrictions to which, it or any of its
Subsidiaries enters into or becomes subject to after the Closing Date, and all other matters known to it, that, individually or in the
aggregate, have or could reasonably be expected to result in a Material Adverse Effect, including any of the following if it could
reasonably be expected to result in a Material Adverse Effect: (i) any breach or non-performance
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of, or any default under, a Contractual Obligation of any Loan Party or any Subsidiary thereof; (ii) any dispute, litigation,
investigation, proceeding or suspension between any Loan Party or any Subsidiary thereof and any Governmental Authority; or
(iii) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any
Subsidiary thereof, including pursuant to any applicable Environmental Laws;
(c)
of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $5,000,000;
Subsidiary thereof; and
(d)
of any material change in accounting policies or financial reporting practices by any Loan Party or any
(e)
of any announcement by Moody’s, S&P or Fitch of any change in a Debt Rating.
Each notice pursuant to this Section 6.03 (other than Section 6.03(e)) shall be accompanied by a statement of a
Responsible Officer of the Company or the Parent Borrower setting forth details of the occurrence referred to therein and stating
what action the Loan Parties and their Subsidiaries have taken and/or propose to take with respect thereto. Each notice pursuant
to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that
have been breached.
1.04
Payment of Obligations. (a) Pay and discharge as the same shall become due and payable, (i) all federal, state and
other material Tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same
are being contested in good faith by appropriate proceedings diligently conducted (which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to any such Lien) and adequate reserves in accordance with
GAAP are being maintained by such Loan Party or such Subsidiary, (ii) all lawful material claims which, if unpaid, would by law
become a Lien (other than a Lien permitted under Section 7.01) upon its property; and (iii) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness,
except to the extent that the failure to pay such Indebtedness would not constitute an Event of Default under Section 8.01(e); and
(b) timely file all tax returns required to be filed, except where the failure to file such tax returns would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
1.05
Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and
good standing under the Laws of the jurisdiction of its organization except (i) in a transaction permitted by Section 7.04 or 7.05
or (ii) solely in the case of a Subsidiary of the Parent Borrower that is not a Loan Party, the failure to do so could not reasonably
be expected to have a Material Adverse Effect; (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 of which could reasonably be expected to have a Material Adverse Effect.
1.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof; and (c) use the standard of care typical in the industry for
similar facilities in similar locations in the operation and maintenance of its facilities, except in the case
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of clauses (a), (b) and (c) where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
1.07 Maintenance of Insurance. Maintain or cause each of its Subsidiaries to, maintain, or cause tenants of Projects to
maintain, with financially sound and reputable insurance companies not Affiliates of the Company, insurance with respect to its
properties and its business against general liability, property casualty and such casualties and contingencies as shall be
commercially reasonable and in accordance with the customary and general practices of businesses having similar operations and
real estate portfolios in similar geographic areas and in amounts, containing such terms, in such forms and for such periods as
may be reasonable and prudent for such businesses, including without limitation, insurance policies and programs sufficient to
cover (a) the replacement value of the improvements at Projects owned by the Loan Parties and their Subsidiaries (less
commercially reasonable deductible amounts) and (b) liability risks associated with such ownership (less commercially
reasonable deductible amounts).
1.08 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.
1.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in all
material respects and in any event in conformity with GAAP consistently applied shall be made of all financial transactions and
matters involving its assets and business; and (b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory jurisdiction over it.
1.10
Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each
Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public
accountants, all at the expense of the Borrowers and at such reasonable times during normal business hours and as often as may
be reasonably desired, upon reasonable advance notice to the Parent Borrower, provided that except as provided in the following
proviso the Borrowers shall not be obligated to reimburse the Administrative Agent or any Lender (or any representative thereof)
for more than one visit, inspection or examination conducted during any fiscal year of the Company; provided, however, that
when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or
independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours
and without advance notice.
1.11 Use of Proceeds. Use the proceeds of the Credit Extensions for working capital needs of the Company and its
Subsidiaries, for acquisitions, including the acquisition of Managed Programs, and for other general corporate purposes not in
contravention of any Law or of any Loan Document.
1.12 Additional Guarantors.
(a)
If, after the Closing Date, any Subsidiary of the Company (including any Division Successor resulting
from the consummation of a Division by a Subsidiary) that (x) either (i) receives fees under a Management Contract, (ii) is a
Wholly-Owned REIT Subsidiary or (iii) owns, directly or indirectly, an Unencumbered Eligible Project and (y) is not a
Subsidiary Guarantor becomes a borrower or guarantor of, or otherwise incurs a payment obligation in respect of, any
Indebtedness of the type described in clause (a) of such definition that is not (A)
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owing to any of the Consolidated Businesses or (B) Secured Indebtedness (including, without limitation and for the avoidance of
doubt, Indebtedness (other than Secured Indebtedness) that is incurred under or in connection with notes or bonds issued in a
Rule 144A Transaction), then within 15 Business Days of such event (or such other period as may be agreed by the
Administrative Agent in its sole discretion), the Company may cause such Subsidiary, and shall cause such Subsidiary if it is a
Domestic Wholly-Owned Subsidiary of the Company (and otherwise shall cause the most immediate parents of such Subsidiary
that are Domestic Wholly-Owned Subsidiaries of the Company (if any)), to become a Subsidiary Guarantor under this Agreement
and to execute and deliver a joinder agreement in substantially the form of Exhibit G, and the Company shall (x) as and to the
extent requested by the Administrative Agent, deliver to the Administrative Agent the items referenced in Section 4.01(a)(iii),
(iv) and (vi) with respect to each such Subsidiary, (y) as and to the extent requested by the Administrative Agent, deliver to the
Administrative Agent a favorable opinion of counsel, which counsel shall be reasonably acceptable to the Administrative Agent,
addressed to the Administrative Agent and each Lender, as to such matters concerning each such Subsidiary and the Loan
Documents as the Administrative Agent may reasonably request and (z) provide the Administrative Agent with the U.S. taxpayer
identification number for each such Domestic Wholly-Owned Subsidiary and the unique identification number issued by its
jurisdiction of organization for each such Foreign Subsidiary and all documentation and other information concerning each such
Subsidiary that the Administrative Agent or any Lender requests in order to comply with its obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the Act.
(b)
If at any time that the Company is not a Guarantor a Default occurs under Section 7.15, then within fifteen
(15) Business Days (or such later date as the Required Lenders may agree) of the occurrence of such Default, the Company shall
either (i) take such actions necessary to terminate the continuance of such Default or (ii) deliver to the Administrative Agent (A)
a duly executed joinder agreement in form reasonably acceptable to the Administrative Agent pursuant to which the Company
and each Intermediate Holding Company that is not at such time a Guarantor (if any) shall become party to this Agreement as a
Guarantor, (B) the items referenced in Section 4.01(a)(iii), (iv) and (vi) with respect to the Company and each such Intermediate
Holding Company and (C) a favorable opinion of counsel, which counsel shall be reasonably acceptable to the Administrative
Agent, addressed to the Administrative Agent and each Lender, as to such matters concerning the Company, the Intermediate
Holding Companies and the Loan Documents as the Administrative Agent may reasonably request.
1.13 Compliance with Environmental Laws. Comply in all material respects, with all applicable Environmental Laws
and Environmental Permits held by it; obtain and renew or require the applicable tenant to obtain and renew, all Environmental
Permits necessary for its operations; and conduct or require the applicable tenant to conduct any investigation, study, sampling
and testing, and undertake any cleanup, response or other corrective action required under and in material compliance with
Environmental Law necessary to remediate all Hazardous Materials at, on, under or emanating from any of the properties owned,
leased or operated by it, in accordance with the requirements of all applicable Environmental Laws, except, in each case, where
the failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided, however, that the Loan
Parties and their Subsidiaries shall not be required to undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances in accordance with GAAP.
1.14 Distributions in the Ordinary Course. Continue to follow its ordinary course of business practice of causing all of
its Subsidiaries to make transfers of net cash and cash equivalents upstream to the Parent Borrower and not make net transfers of
cash and cash equivalents downstream from the Parent Borrower to its Subsidiaries, except in the ordinary
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course of business consistent with past practice and otherwise subject to the terms of this Agreement.
1.15 Company Status. At all times (i) remain publicly traded with securities listed on the New York Stock Exchange or
another national stock exchange located in the United States, (ii) except as the result of a disposition otherwise permitted under
this Agreement, retain Control of all Subsidiary Guarantors and all Borrowers, and (iii) continue to be organized and operated in
a manner that will allow it to qualify for REIT Status.
1.16
Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the
Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register
and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or
any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, and (ii) assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Administrative Agent for the benefit of the Lenders, the rights granted or now or hereafter intended to be
granted to the Administrative Agent for the benefit of the Lenders under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and
cause each of its Subsidiaries to do so.
1.17 Compliance with Terms of Leaseholds. Make all payments and otherwise perform all obligations in respect of all
material leases of Real Property to which the Company or any of its Subsidiaries is a party, keep such leases in full force and
effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, except, in
any case, where (a) the Company or such Subsidiary determines in its reasonable business judgment that it will allow such lease
to lapse or be terminated, or (b) the failure to do so, either individually or in the aggregate, could not be reasonably likely to have
a Material Adverse Effect.
1.18 Material Contracts. Perform and observe all the terms and provisions of each material contract to be performed or
observed by it, maintain each such material contract in full force and effect, enforce each such material contract in accordance
with its terms, except, in any case, where (a) the Company or a Subsidiary thereof determines in its reasonable business judgment
that it will agree to a work out, deliver a deed-in-lieu or allow such material contract to expire or that it will not enforce such
material contract, or (b) where the failure to do so, either individually or in the aggregate, could not reasonably be likely to have a
Material Adverse Effect.
1.19 Anti-Corruption Laws. Conduct its businesses in compliance in all material respects with the United States
Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other
jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such laws.
Article g
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain
unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties shall not, nor shall they permit any of
their respective Subsidiaries to, directly or indirectly (and solely in the case of the covenants set forth in Section 7.15 the
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Company, the OpCo GP and each Intermediate Holding Company shall not directly or indirectly):
1.01
Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired, or sign or file or suffer to exist under the Uniform Commercial Code of any jurisdiction a financing
statement that names the Company or any of its Subsidiaries as debtor, or assign any accounts or other right to receive income,
other than the following:
(a)
Permitted Encumbrances;
Consolidated Businesses; and
(b)
Liens with respect to Capitalized Leases of equipment entered into in the ordinary course of business of the
(c)
Liens securing Secured Indebtedness, the incurrence of which is not prohibited by this Article VII.
1.02
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a)
the Obligations;
Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11;
(b)
Secured Indebtedness; provided that taking into account the incurrence of such Secured Indebtedness, the
(c)
unsecured obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that
(i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (ii) such Swap Contract does not
contain any provision exonerating the non-defaulting party from its obligation to make payments to the defaulting party on
outstanding transactions;
unsecured Indebtedness outstanding on the Closing Date and listed on Schedule 7.02 and any refinancings,
refundings, renewals or extensions thereof; provided that the Loan Parties shall be in compliance, on a pro forma basis, with the
provisions of Section 7.11; and
(d)
(e)
any other unsecured Indebtedness; provided that taking into account the incurrence of such Indebtedness,
the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11.
1.03
Investments. Make or hold any Investments, except:
Equivalents;
(a)
Investments held by the Loan Parties and their respective Subsidiaries in the form of Cash and Cash
(b)
(i) Investments made on or prior to the Closing Date by the Loan Parties and their Subsidiaries in their
respective Subsidiaries, (ii) additional Investments by the Loan Parties and their Subsidiaries in Loan Parties (other than the
Company), (iii) additional Investments by Subsidiaries of the Company that are not Loan Parties in Subsidiaries of the Parent
Borrower that are not Loan Parties, (iv) Investments made on or prior to the Closing Date in Joint Ventures and (v) additional
Investments by the Loan Parties in Subsidiaries of the Parent Borrower that are not Loan Parties and Joint Ventures; provided that
(A) no Default has occurred and is continuing or would result from such Investment and (B) taking into account the making
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of such Investment, the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11;
(c)
(d)
(e)
Guarantees permitted by Section 7.02;
Investments existing on the date hereof (other than those referred to in Section 7.03(b)(i) and (iv));
[reserved];
(f)
aggregate at any time outstanding;
loans and advances to employees in the ordinary course of business not to exceed $2,500,000 in the
Investments by the Loan Parties and their Subsidiaries in the Parent Borrower or any Subsidiary thereof
not otherwise permitted under this Section 7.03; provided that, with respect to each Investment made pursuant to this Section
7.03(g):
(g)
(i)
such Investment shall not include or result in any contingent liabilities that could reasonably be expected to
be material to the business, financial condition, operations or prospects of the Company and its Subsidiaries, taken as a
whole (as determined in good faith (A) by the board of directors (or persons performing similar functions) of the
Company or such Subsidiary if such board of directors is otherwise approving such transaction and (B) in each other
case, by a Responsible Officer of the Company);
(ii)
such Investment shall be in property that is part of, or in lines of business that are substantially the same
lines of business as one or more of the principal businesses of the Parent Borrower and its Subsidiaries in the ordinary
course or Persons that own such property; and
(iii)
(A) immediately before and immediately after giving pro forma effect to any such Investment, no Default
shall have occurred and be continuing or would result and (B) immediately after giving effect to such Investment, the
Company and its Subsidiaries shall be in compliance, on a pro forma basis, with the provisions of Section 7.11.
1.04
Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether
in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) all or substantially all of
its assets or all of substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired)
to or in favor of any Person, except that, so long as no Default exists or would result therefrom:
(a)
(i) any Person (other than the Company or the Parent Borrower) may merge into a Loan Party or a
Subsidiary thereof in a transaction in which such Loan Party or such Subsidiary is the surviving Person, subject to the
requirements of Section 6.12 and provided that if the Person merging into such Loan Party or Subsidiary is a Designated
Borrower, then the Person surviving such merger shall be the Company, the Parent Borrower or a Designated Borrower
(including any newly designated Designated Borrower pursuant to Section 2.19), (ii) any Loan Party or any Subsidiary thereof
may sell, lease, transfer or otherwise Dispose of its assets to another Loan Party or another Subsidiary thereof, subject to the
requirements of Section 6.12, (iii) any Subsidiary of the Company (other than a Subsidiary Guarantor or a Borrower) may
liquidate or dissolve if the Company determines in good faith that such liquidation or dissolution is in the best interests of the
Company and is not materially disadvantageous to the Lenders, and
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(iv) if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing or would
result, any Loan Party or any Subsidiary thereof may sell, transfer or otherwise Dispose of Equity Interests of a Subsidiary
thereof (other than a Subsidiary Guarantor or a Borrower). For purposes of clarification, nothing in this Section 7.04 shall prevent
the release of any Subsidiary Guarantor as permitted hereunder; and
(b)
in connection with any acquisition permitted under Section 7.03, any Subsidiary of the Company (other
than a Borrower) may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate
with it; provided that the Person surviving such merger shall be a Wholly-Owned Subsidiary of the Company and, if required
thereby, shall comply with the requirements of Section 6.12.
1.05 Dispositions. Make any Disposition (whether in one transaction or in a series of transactions and whether effected
pursuant to a Division or otherwise) or enter into any agreement to make any Disposition, except:
course of business;
(a)
Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary
Dispositions of property by any Subsidiary of the Company to the Company or to a Wholly-Owned
Subsidiary thereof; provided that if the transferor of such property is a Borrower or a Subsidiary Guarantor, then the transferee
thereof must be a Borrower or a Subsidiary Guarantor;
(b)
(c)
Dispositions permitted by Section 7.04;
(d)
(i) the Disposition of any Project or other Property and (ii) the sale or other Disposition of all, but not less
than all, of the Equity Interests of any Subsidiary of the Parent Borrower that is not a Wholly-Owned REIT Subsidiary; provided
that such Disposition shall not result in a Material Adverse Effect and at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing or would result therefrom.
1.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except that the following shall be permitted:
Interests;
(a)
each Subsidiary of the Parent Borrower may make Restricted Payments pro rata to the holders of its Equity
(b)
the Parent Borrower may make Restricted Payments in an aggregate amount in any fiscal year not to
exceed (i) the amount of Restricted Payments required to be paid by the Company (in the Company’s reasonable judgment) in
order for the Company to (x) maintain its REIT Status and (y) avoid the payment of federal or state income or excise tax plus (ii)
additional Restricted Payments, so long as no Default arising under Section 8.01(a) or Section 8.01(b) (with respect to any of the
covenants contained in Section 7.11) exists, both before and after giving effect to any such Restricted Payment on a pro forma
basis; provided, that notwithstanding the foregoing, no Restricted Payments will be permitted following acceleration of any
amount owing under any of the Facilities or during the existence of an Event of Default arising under Section 8.01(f) or (g); and
amounts received by it directly or indirectly from the Parent Borrower pursuant to Section 7.06(b).
(c)
following the Reorganization, the Company shall be permitted to make Restricted Payments with any
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1.07 Change in Nature of Business. (a) Engage to any material extent in any business other than businesses of the type
conducted by the Loan Parties and their Subsidiaries on the Closing Date and businesses reasonably related thereto, and (b) the
Company shall not engage in any line of business which is not permitted to be engaged in by real estate investment trusts and
shall not permit any of its taxable REIT Subsidiaries to engage in any line of business which is not permitted to be engaged in by
taxable REIT Subsidiaries thereof.
1.08
Transactions with Affiliates. Enter into or permit to exist any transaction of any kind with any Affiliate of the
Company (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service),
whether or not in the ordinary course of business, with any holder or holders of more than 5% of any class of equity securities of
the Company, or with any Affiliate of the Company which is not its Subsidiary of the Company, on terms that are less favorable
to the Company or any of its Subsidiaries, as applicable, than those that might be obtained in an arm’s length transaction at the
time from Persons who are not such a holder or Affiliate. Nothing contained in this Section 7.08 shall prohibit (a) increases in
compensation and benefits for officers and employees of the Loan Parties or any of their Subsidiaries which are customary in the
industry or consistent with the past business practice of such Loan Party or such Subsidiary, provided that no Default has
occurred and is continuing or would result; (b) payment of customary partners’ indemnities; (c) performance of any obligations
arising under the Loan Documents, (d) transactions between or among the Loan Parties, (e) Investments permitted by Section
7.03, (f) Dispositions permitted by Section 7.05; and (g) any Restricted Payment permitted by Section 7.06.
1.09 Amendments of Organizational Documents. Permit any Subsidiary of the Company to, at any time cause or permit
its certificate of formation, limited liability company agreement, certificate of limited partnership, partnership agreement, articles
of incorporation, by-laws, or other charter documents, as the case may be, to be modified, amended or supplemented in any
respect whatsoever, without, in each case, the express prior written consent or approval of the Administrative Agent, if such
changes would materially adversely affect the rights of the Administrative Agent or the Lenders hereunder or under any of the
other Loan Documents; provided that if such prior consent or approval is not required, such Loan Party shall nonetheless notify
the Administrative Agent in writing promptly after any such modification, amendment or supplement to the charter documents of
such Loan Party.
1.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for
such purpose.
1.11
Financial Covenants. (a) Maximum Leverage. Permit, as of the last day of each calendar quarter, the Leverage
Ratio to exceed 60% (or, as of the last day of the four consecutive calendar quarters following the Company’s acquisition,
pursuant to one transaction or a series of related transactions occurring contemporaneously, of one or more entities or property
portfolios with total assets of at least $500,000,000, 65%); provided that in no event may the Leverage Ratio exceed 60% for
more than four consecutive fiscal quarters in any five fiscal quarter period.
(a)
Maximum Secured Debt. Permit, as of the last day of each calendar quarter Total Secured Outstanding
Indebtedness to exceed 40% of Total Value (or, as of the last day of the four consecutive calendar quarters following the
Company’s acquisition, pursuant to one transaction or a series of related transactions occurring contemporaneously, of one or
more entities or property portfolios with total assets of at least $500,000,000, 45% of Total Value); provided that in no event may
such ratio exceed 40% for more than four consecutive fiscal quarters in any five fiscal quarter period.
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Minimum Fixed Charge Coverage Ratio. Permit, as of the last day of each calendar quarter, the ratio of (i)
Adjusted Total EBITDA for such calendar quarter to (ii) Fixed Charges for the same calendar quarter to be less than 1.50 to 1.00
for each calendar quarter.
(b)
(c)
Unsecured Debt to Unencumbered Asset Value. Permit, as of the last day of each calendar quarter, Total
Unsecured Outstanding Indebtedness to exceed 60% of Unencumbered Asset Value (or, as of the last day of the four consecutive
calendar quarters following the Company’s acquisition, pursuant to one transaction or a series of related transactions occurring
contemporaneously, of one or more entities or property portfolios with total assets of at least $500,000,000, 65% of
Unencumbered Asset Value); provided that in no event may such ratio exceed 60% for more than four consecutive fiscal quarters
in any five fiscal quarter period.
1.12
Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner any Indebtedness at any time that an Event of Default exists or would result therefrom, except the
prepayment of the Credit Extensions in accordance with the terms of this Agreement.
1.13
Fiscal Year Changes. Make any change in its fiscal year.
1.14 Anti-Money Laundering; Sanctions; Anti-Corruption Laws. (a) Engage in any transaction, investment,
undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses
designated in any applicable law, regulation or other binding measure by the Organisation for Economic Cooperation and
Development’s Financial Action Task Force on Money Laundering or violate these laws or any other applicable anti-money
laundering law or engage in these actions.
(d)
Use the proceeds of any Credit Extension, or lend, contribute or otherwise make available such proceeds to
any Subsidiary thereof, joint venture partner or other individual or entity, to fund any activities of or business with any individual,
or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner
that will result in a violation by any individual or entity (including any individual or entity participating in the transaction,
whether as Lender, Arranger, Bookrunner, Administrative Agent, L/C Issuer, Swing Line Lender, or otherwise) of Sanctions.
Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions.
(e)
Use the proceeds of any Credit Extension for any purpose which would breach the United States Foreign
1.15 Company Covenants. Notwithstanding anything to the contrary contained in any Loan Document, at any time that
the Company is not a Borrower or a Guarantor:
(a)
enter into or conduct any business other than in connection with the ownership, acquisition and disposition
of interests in the Parent Borrower, the OpCo GP or any Intermediate Holding Company, as applicable, and the management of
the business of the Parent Borrower, and such activities as are incidental thereto, all of which shall be solely in furtherance of the
business of the Parent Borrower;
(b)
own any assets other than (i) interests, rights, options, warrants or convertible or exchangeable securities of
the Parent Borrower, (ii) Equity Interests in the Intermediate Holding Companies and the OpCo GP, (iii) assets that have been
distributed to the Company by its Subsidiaries in accordance with Section 7.06 that are held for ten (10) Business Days or less
pending further distribution to equity holders of the Company, (iv) assets received by the Company from third parties (including
the net cash proceeds from any issuance and sale
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by the Company of any of its Equity Interests), that are held for ten (10) Business Days or less pending contribution of same to
the Parent Borrower (whether directly or through an Intermediate Holding Company), (v) such bank accounts or similar
instruments as it deems necessary to carry out its responsibilities under its own Organization Documents and the Organization
Documents of the Parent Borrower and (vi) other tangible and intangible assets that, taken as a whole, are de minimis in relation
to the net assets of the Company and its Subsidiaries, but which shall in no event include any Equity Interests other than those
permitted in clauses (i) and (ii) of this clause (b);
clause (g)(ii) of the definition of Indebtedness or any Guarantee thereof);
(c)
create, incur, assume or suffer to exist any Indebtedness (other than Indebtedness of the type described in
(d)
make any Investment other than as permitted under clause (b) of this Section 7.15; or
permitted under clauses (a), (g) or (j) of the definition of Permitted Encumbrances.
(e)
create, incur, assume or suffer to exist any Liens on any of its property, assets or revenues other than those
Nothing in this Section 7.15 shall prevent the Company or any Intermediate Holding Company from (i) the maintenance of its
legal existence (including the ability to incur fees, costs and expenses relating to such maintenance), (ii) the performance of its
obligations with respect to the Loan Documents, (iii) any public offering of its common stock or any other issuance or sale of its
Equity Interests, (iv) the payment of dividends, (v) making contributions directly or indirectly to the capital of the Parent
Borrower, (vi) participating in tax, accounting and other administrative matters as a member of the consolidated group of the
Company and the Parent Borrower, (vii) providing indemnification to officers, managers and directors, (viii) any activities
incidental to compliance with the provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, any rules and regulations promulgated thereunder, and the rules of national securities exchanges, in each case, as
applicable to companies with listed equity or debt securities, as well as activities incidental to investor relations, shareholder
meetings and reports to shareholders or debt holders and (ix) any activities incidental to the foregoing.
Article h
EVENTS OF DEFAULT AND REMEDIES
1.01
Events of Default. Any of the following shall constitute an Event of Default:
(a)
Non-Payment. Any Loan Party fails to (i) pay when and as required to be paid herein, and in any currency
hereunder, any amount of principal of any Loan or any L/C Obligation (whether upon demand at maturity, by reason of
acceleration or otherwise) or deposit any funds as Cash Collateral in respect of L/C Obligations, or (ii) pay within five Business
Days after the same becomes due, any interest on any Loan or on any L/C Obligation, any fee due hereunder, or any other amount
payable hereunder or under any other Loan Document; or
(b)
Specific Covenants. (i) Any Loan Party fails to perform or observe any term, covenant or agreement
contained in any of Section 2.04(b)(v), 6.01, 6.02(a), 6.02(f), 6.03, 6.05, 6.10, 6.11, or Article VII (other than Section 7.15), (ii)
the Company, the OpCo GP or any Intermediate Holding Company fails to perform or observe any term, covenant or agreement
contained in Section 7.15 on its part to be performed or observed and such failure continues for fifteen (15) Business Days or (iii)
any Guarantor fails to perform or observe any term, covenant or agreement contained in the Guaranty; or
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(c)
Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified
in Section 8.01(a) or (b)) contained in any Loan Document on its part to be performed or observed and such failure continues for
30 days after the earlier of (i) a Responsible Officer thereof obtaining actual knowledge of such failure and (ii) the Parent
Borrower receiving notice of such failure from the Administrative Agent (which notice shall be given at the request of any
Lender); or
Representations and Warranties. Any representation, warranty, certification or statement of fact made or
deemed made by or on behalf of any Loan Party herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or
(d)
(e)
Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure continues after the
applicable grace period, if any, in respect of any Material Indebtedness, or (B) fails to observe or perform any other agreement or
condition relating to any Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating
thereto, and such failure continues after the applicable grace period, if any, or any other event occurs, the effect of which default
or other event is to cause, or to permit the holder or holders of such Material Indebtedness (or, with respect to a Guarantee, the
beneficiary or beneficiaries (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries)) to cause,
with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased
or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, (or, in the case of a Guarantee, such Guarantee to become payable or cash collateral in respect thereof
to be demanded); provided that this clause (e) shall not apply to Secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness; or
(f)
Insolvency Proceedings, Etc. Any Loan Party or any Material Subsidiary thereof 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 Loan Party or any Material Subsidiary thereof 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 Loan Party or any Subsidiary thereof (i) one or more final
judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) in an aggregate
amount in excess of $50,000,000 (to the extent not covered by independent third-party insurance as to which the insurer is rated
at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage and excluding
judgments entered in respect of Nonrecourse Indebtedness and judgments entered in respect of Indebtedness that is recourse
solely to a Subsidiary of the Company (x) that is not a Loan Party, (y) was formed solely to own a particular Project, and (z)
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does not engage in any business other than the ownership of such Project), or (ii) any one or more non-monetary final judgments
that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30
consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in
effect; or
(i)
ERISA. (i) 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 Company and its Subsidiaries under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000, or (ii) the Company 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
$5,000,000; 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 satisfaction in full of all the Obligations,
ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of
any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any
provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or
(k)
(l)
Change of Control. There occurs any Change of Control; or
REIT Status. The Company shall, for any reason, lose or fail to maintain its REIT Status.
1.02 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:
Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;
(a)
declare the commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C
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 Loan Parties;
(b)
(c)
Outstanding Amount thereof); and
require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the then
Lenders and the L/C Issuers under the Loan Documents or applicable Laws;
(d)
exercise on behalf of itself, the Lenders and the L/C Issuers all rights and remedies available to it, the
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Loan Party
under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of each L/C
Issuer to make L/C Credit Extensions 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 Borrowers to Cash
Collateralize the L/C Obligations as aforesaid shall
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automatically become effective, in each case without further act of the Administrative Agent or any Lender.
1.03 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, subject to the
provisions of Sections 2.17 and 2.18 be applied 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, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and
disbursements of counsel to the respective Lenders and the L/C Issuers arising under the Loan Documents and amounts payable
under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees, Delayed Draw
Term Loan Unused Fees, Facility Fees and interest on the Loans, L/C Borrowings and other Obligations arising under the Loan
Documents, ratably among the Lenders and the L/C Issuers 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 and L/C Borrowings,
ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized pursuant to
Sections 2.04 and 2.17; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Parent Borrower or as
otherwise required by Law.
Subject to Sections 2.04(c) and 2.17, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit
pursuant to clause Fifth 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 or cancelled, such
remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
Article i
ADMINISTRATIVE AGENT
1.01 Appointment and Authority. Each of the Lenders and each of the L/C Issuers 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
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Agent, the Lenders and the L/C Issuers, and neither the Company nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan
Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter
of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
1.02 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, own securities of, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrowers 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.
1.03
Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly
set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the
generality of the foregoing, the Administrative Agent:
(a)
and is continuing;
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred
(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, including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a
Defaulting Lender in violation of any Debtor Relief 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 any of the Borrowers or any of their respective
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 or percentage 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 11.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and
nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given in writing to the Administrative Agent by the Parent Borrower, a Lender or an L/C Issuer;
and
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
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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.
1.04 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, extension, renewal or
increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender or such 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 Loan Parties), 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.
1.05 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. The
Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court
of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross
negligence or willful misconduct in the selection of such sub-agents.
1.06 Resignation of Administrative Agent. (a) The Administrative Agent may at any time give notice of its resignation
to the Lenders, the L/C Issuers and the Parent Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Parent Borrower, 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 and shall have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective
Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuers,
appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such
successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation shall
become effective in accordance with such notice on the Resignation Effective Date.
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(a)
If the Person serving as Administrative Agent is (i) a Defaulting Lender pursuant to clause (d) of the
definition thereof or (ii) determined, by a court of competent jurisdiction by final and nonappealable judgment, to be grossly
negligent in the performance of its material obligations and/or duties hereunder or to have engaged in willful misconduct in the
performance of such obligations and/or duties, the Required Lenders may, to the extent permitted by applicable law, by notice in
writing to the Parent Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Parent
Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective
Date.
(b) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the
retiring or removed 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 Issuers under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is appointed) and (2) except for any indemnity payments
or other amounts then owed to the retiring or removed Administrative Agent, 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 each L/C Issuer
directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. 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 removed) Administrative Agent (other than as
provided in Section 3.01(j) and other than any rights to indemnity payments or other amounts owed to the retiring or removed
Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or
removed 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 Borrowers to a
successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Parent
Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under
the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring
or removed 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 (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after
such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan
Documents, including (a) acting as collateral agent or otherwise holding any collateral security on behalf of any of the Lenders
and (b) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.
(c)
Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute
its resignation as an L/C Issuer and the Swing Line Lender. If Bank of America, JPMorgan Chase or Wells Fargo Bank, resigns as
an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of
Credit issued by it and outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect
thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.04(c). If Bank of America resigns as the 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 Loans or fund risk participations in outstanding Swing
Line Loans pursuant to
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Section 2.05(c). Upon the appointment by the Parent Borrower of a successor L/C Issuer or Swing Line Lender hereunder (which
successor shall in all cases be a Lender other than a Defaulting 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 or the retiring Swing Line Lender, as applicable, (b)
the retiring L/C Issuer and the retiring Swing Line Lender, as applicable, shall be discharged from all of their respective duties
and obligations hereunder or under the other Loan Documents, and (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 arrangements 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.
1.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and each 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 and each 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.
1.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers, Co-
Syndication Agents, Documentation Agents, Senior Managing Agents or Managing Agents listed on the cover page hereof 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 an L/C Issuer hereunder.
1.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor
Relief Law or any other judicial proceeding relative to any Loan 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 any Loan Party) 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, the 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 Issuers and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the
Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the
Administrative Agent under Sections 2.04(h) and (i), 2.10 and 11.04) allowed in such judicial proceeding; and
distribute the same;
(b)
to collect and receive any monies or other property payable or deliverable on any such claims and to
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.10 and
11.04.
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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 any L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting
the Obligations or the rights of any Lender or any L/C Issuer to authorize the Administrative Agent to vote in respect of the claim
of any Lender or any L/C Issuer or in any such proceeding.
1.10 Guaranty Matters. Without limiting the provisions of Section 9.09, the Lenders and the L/C Issuers irrevocably
authorize the Administrative Agent, at its option and in its discretion to release any Subsidiary Guarantor from its obligations
under the Guaranty if required pursuant to Section 10.10 hereof. Upon request by the Administrative Agent at any time, the
Required Lenders will confirm in writing the Administrative Agent’s authority to release any Subsidiary Guarantor from its
obligations under the Guaranty pursuant to this Section 9.10.
1.11 Certain ERISA Matters.
(a)
Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party
hereto, for the benefit of, the Administrative Agent, the Arrangers, the Bookrunners and their respective Affiliates and not, for the
avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that at least one of the following is and will be
true:
(i)
such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one
or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of
the Loans, the Letters of Credit, the Commitments or this Agreement,
(ii)
the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain
transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for
certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain
transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain
transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions
determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in,
administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii)
(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the
meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on
behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the
Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the
Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through
(g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of
PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance
of the Loans, the Letters of Credit, the Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative
Agent, in its sole discretion, and such Lender.
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(b)
In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a
Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender
party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being
a Lender party hereto, for the benefit of, the Administrative Agent, the Arrangers, the Bookrunners and their respective Affiliates
and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that none of the Administrative
Agent, any Arranger, any Bookrunner or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender
involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit,
the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the
Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
1.12 Recovery of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time the
Administrative Agent makes a payment hereunder in error to any Lender Recipient Party, whether or not in respect of an
Obligation due and owing by any Borrower at such time, where such payment is a Rescindable Amount, then in any such event,
each Lender Recipient Party receiving a Rescindable Amount severally agrees to repay to the Administrative Agent forthwith on
demand the Rescindable Amount received by such Lender Recipient Party in Same Day Funds in the currency so received, with
interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation. Each Lender Recipient Party irrevocably waives any and
all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly
paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount.
The Administrative Agent shall inform each Lender Recipient Party promptly upon determining that any payment made to such
Lender Recipient Party comprised, in whole or in part, a Rescindable Amount.
Article j
CONTINUING GUARANTY
1.01 Guaranty. Each Guarantor, jointly and severally with the other Guarantors, hereby absolutely, irrevocably and
unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt
payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses
or otherwise, and whether arising hereunder or under any other Loan Document (including all renewals, extensions, amendments,
refinancings and other modifications thereof and all costs, reasonable and documented attorneys’ fees and expenses incurred in
connection with the collection or enforcement thereof) (for each Guarantor, subject to the proviso in this sentence, its
“Guaranteed Obligations”); provided, that the liability of each Subsidiary Guarantor and each Guarantor that is a Designated
Borrower individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code of the United States or
any comparable provisions of any applicable state law. The Administrative Agent’s books and records showing the amount of the
Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Guarantors, and
conclusive for the purpose of establishing the amount of the Guaranteed Obligations. This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any
Guaranteed Obligations,
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or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or
circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to the obligations of any
Guarantor under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire
in any way relating to any or all of the foregoing.
1.02 Rights of Lenders. Each Guarantor consents and agrees that the Creditor Parties may, at any time and from time to
time, without notice or demand, without the consent of such Guarantor, and without affecting the enforceability or continuing
effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or
the terms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, sell, or otherwise
dispose of, or impair or fail to perfect any Lien on, any security for the payment of this Guaranty or any Guaranteed Obligations;
(c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the L/C Issuers and the
Lenders in their sole discretion may determine; and (d) release or substitute any other Guarantor or one or more of any endorsers
or other guarantors of any of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Guarantor
consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the
Guarantors under this Guaranty or which, but for this provision, might operate as a discharge of one or more of the Guarantors.
1.03 Certain Waivers. Each Guarantor waives (a) any defense arising by reason of any disability or other defense of any
Borrower, any other Loan Party or any other guarantor of the Guaranteed Obligations or any part thereof, or the cessation from
any cause whatsoever (including any act or omission of any Creditor Party) of the liability of any Borrower (other than the
defense of prior payment in full of the Guaranteed Obligations); (b) any defense based on any claim that such Guarantor’s
obligations exceed or are more burdensome than those of any Borrower; (c) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder; (d) any requirement to proceed against any Borrower or any other Loan Party, proceed against or
exhaust any security for the Guaranteed Obligations, or pursue any other remedy in the power of any Creditor Party whatsoever;
(e) any benefit of and any right to participate in any security now or hereafter held by any Creditor Party; and (f) to the fullest
extent permitted by law, any and all other defenses (other than the defense of prior payment in full of the Guaranteed Obligations)
or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties.
Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance,
notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of
any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation or incurrence of new or additional Guaranteed Obligations.
1.04 Obligations Independent. The obligations of each Guarantor hereunder are those of primary obligor, and not
merely as surety, and are independent of the Guaranteed Obligations and the obligations of any other guarantor of the Guaranteed
Obligations or any part thereof, and a separate action may be brought against any Guarantor to enforce this Guaranty whether or
not any Borrower or any other Person is joined as a party. For the avoidance of doubt, all obligations of each Guarantor under this
Guaranty are joint and several obligations of all the Guarantors.
1.05
Subrogation. No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or
similar rights with respect to any payments it makes under this Guaranty until all of the Guaranteed Obligations and any amounts
payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments and the Facilities are
terminated. If any amounts are paid to any Guarantor in violation of the foregoing limitation, then such amounts shall be held in
trust by such Guarantor for the benefit of the Creditor Parties
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and shall forthwith be paid to the Administrative Agent for the benefit of the Creditor Parties to reduce the amount of the
Guaranteed Obligations, whether matured or unmatured.
1.06
Termination; Reinstatement. This Guaranty is a continuing, absolute, unconditional and irrevocable guaranty of all
Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until all Guaranteed Obligations and
any other amounts payable under this Guaranty are indefeasibly paid in full in cash and the Commitments and the Facilities with
respect to the Guaranteed Obligations are terminated. Notwithstanding the foregoing, this Guaranty shall continue in full force
and effect or be revived, as the case may be, if any payment by or on behalf of any Borrower or any Guarantor is made, or any of
the Creditor Parties exercises its right of setoff, in respect of the Guaranteed Obligations 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 any of the Creditor Parties in their discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment
had not been made or such setoff had not occurred and whether or not the Creditor Parties are in possession of or have released
this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of the Guarantors
under this paragraph shall survive termination of this Guaranty.
1.07
Subordination. Each Guarantor hereby subordinates the payment of all obligations and indebtedness of any Loan
Party owing to such Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of any
Borrower to such Guarantor as subrogee of the Creditor Parties or resulting from such Guarantor’s performance under this
Guaranty, to the indefeasible payment in full in cash of all Guaranteed Obligations; provided that such Guarantor may receive
regularly scheduled payments of principal and interest on such obligations and indebtedness from any Borrower, except upon the
occurrence and continuance of an Event of Default. If any amounts are paid to any Guarantor in violation of the foregoing
subordination, then such amounts shall be held in trust for the benefit of the Creditor Parties and shall forthwith be paid to the
Creditor Parties to reduce the amount of the Guaranteed Obligations, whether matured or unmatured. Upon the occurrence and
continuance of an Event of Default, if the Creditor Parties so request, any such obligation or indebtedness of any Borrower to any
Guarantor shall be enforced and performance received by such Guarantor as trustee for the Creditor Parties and the proceeds
thereof shall be paid over to the Creditor Parties on account of the Guaranteed Obligations, but without reducing or affecting in
any manner the liability of any Guarantor under this Guaranty.
1.08
Stay of Acceleration. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed, in
connection with any case commenced by or against any Borrower or any other Loan Party under any Debtor Relief Laws, or
otherwise, all such amounts shall nonetheless be payable by the Guarantors immediately upon demand by the Creditor Parties.
1.09 Condition of Loan Parties. Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from the Loan Parties and any other guarantor of the Guaranteed Obligations such information
concerning the financial condition, business and operations of the Loan Parties and any such other guarantor as such Guarantor
requires, and that none of the Creditor Parties has any duty, and such Guarantor is not relying on the Creditor Parties at any time,
to disclose to such Guarantor any information relating to the business, operations or financial condition of any Loan Party or any
other guarantor of the Guaranteed Obligations (such Guarantor waiving any duty on the part of the Creditor Parties to disclose
such information and any defense relating to the failure to provide the same).
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1.10 Release of Subsidiary Guarantors that are not Intermediate Holding Companies. With respect to any Subsidiary
Guarantor that is not an Intermediate Holding Company:
(a)
In the event that (i) all of the capital stock or other Equity Interests of such Subsidiary Guarantor is sold or
otherwise disposed of in a transaction permitted by Section 7.05(d) (except to the extent that such sale or disposition is to a
Borrower or any other Loan Party) or (ii) such Subsidiary Guarantor will no longer be a borrower or guarantor of, or otherwise
have payment obligations in respect of, any Indebtedness of the type described in clause (a) of such definition that is not (x)
owing to any of the Consolidated Businesses or (y) Secured Indebtedness (including, without limitation and for the avoidance of
doubt, Indebtedness (other than Secured Indebtedness) that is incurred under or in connection with notes or bonds issued in a
Rule 144A Transaction), then such Subsidiary Guarantor shall be released from its obligations under this Guaranty and the other
Loan Documents; provided, that the Parent Borrower shall have delivered to the Administrative Agent, at least two Business
Days prior to the date of the proposed release (or such shorter period of time as agreed to by the Administrative Agent in
writing), a written request for release (a “Guarantor Release Notice”), together with an certificate of a Responsible Officer of the
Parent Borrower certifying that (x) in the case of clause (i) above, such sale or disposition is as a result of a transaction permitted
under this Agreement and (y) in the case of clause (ii) above, as of the effective date of such release (as set forth in the Guarantor
Release Notice) such Subsidiary Guarantor will not be a borrower or guarantor of, or otherwise have payment obligations in
respect of, any Indebtedness of the type described in clause (a) of such definition that is not (A) owing to any of the Consolidated
Businesses or (B) Secured Indebtedness (including, without limitation and for the avoidance of doubt, Indebtedness (other than
Secured Indebtedness) that is incurred under or in connection with notes or bonds issued in a Rule 144A Transaction). The
Administrative Agent will (at the sole cost of the Borrowers) following receipt of such Guarantor Release Notice and certificate
of a Responsible Officer, and each of the Lenders and the L/C Issuers irrevocably authorizes the Administrative Agent to, execute
and deliver such documents as the Parent Borrower or any such Subsidiary Guarantor may reasonably request to evidence the
release of such Subsidiary Guarantor from its obligations hereunder and under the other Loan Documents, which documents shall
be reasonably satisfactory to the Administrative Agent.
The Administrative Agent shall promptly notify the Lenders of any such release hereunder, and this
Agreement and each other Loan Document shall be deemed amended to delete the name of any Subsidiary Guarantor released
pursuant to Section 10.10(a).
(b)
1.11 Contribution. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the
right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a
payment (a “Relevant Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant
Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment exceeding such Guarantor’s Contribution Percentage (as defined
below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor shall have a right of contribution
against each other Guarantor who either has not made any payments or has made payments in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor’s
Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in
respect of the Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an amount
equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which
is the Aggregate Excess Amount of all Guarantors multiplied by (y) the
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Aggregate Deficit Amount of such other Guarantor. A Guarantor’s right of contribution pursuant to the preceding sentences shall
arise at the time of each computation, subject to adjustment at the time of each computation; provided, that no Guarantor may
take any action to enforce such right until after all Guaranteed Obligations and any other amounts payable under this Guaranty
are indefeasibly paid in full in cash and the Commitments and the Facilities with respect to the Guaranteed Obligations are
terminated, it being expressly recognized and agreed by all parties hereto that any Guarantor’s right of contribution arising
pursuant to this Section 10.11 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor’s
obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used
in this Section 10.11, (i) each Guarantor’s “Contribution Percentage” shall mean the percentage obtained by dividing (x) the
Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the
“Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and
(y) zero; and (iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair saleable value of such Guarantor’s
assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but
without giving effect to any Guaranteed Obligations arising under this Guaranty) on such date. All parties hereto recognize and
agree that, except for any right of contribution arising pursuant to this Section 10.11, each Guarantor who makes any payment in
respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of
such payment until after all Guaranteed Obligations and any other amounts payable under this Guaranty are indefeasibly paid in
full in cash and the Commitments and the Facilities with respect to the Guaranteed Obligations are terminated. Each of the
Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has the right to waive its contribution right against any
Guarantor to the extent that after giving effect to such waiver such Guarantor would remain Solvent, in the determination of the
Administrative Agent or the Required Lenders.
1.12 Release of Company. At any time the Company Release Conditions are satisfied, then the Company and the
Intermediate Holding Companies shall be entitled to be released from their respective obligations under this Guaranty; provided,
that the Company shall have delivered to the Administrative Agent, at least five Business Days prior to the date of the proposed
release (or such shorter period of time as agreed to by the Administrative Agent in writing), a written notice of the Company’s
election, on behalf of itself and the Intermediate Holding Companies, to be released from their respective obligations under this
Guaranty (a “Company Release Notice”), together with a certificate of a Responsible Officer of the Company certifying that as of
the proposed effective date of such release (as set forth in the Guarantor Release Notice) and immediately before and after giving
effect thereto, each of the Company Release Conditions are satisfied. The Administrative Agent will (at the sole cost of the
Borrowers) following receipt of such Company Release Notice and certificate of a Responsible Officer, and each of the Lenders
and the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver such documents as the Company may
reasonably request to evidence the release of the Company and the Intermediate Holding Companies from their respective
obligations under this Guaranty, which documents shall be reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall promptly notify the Lenders of any such release pursuant to this Section 10.12.
1.01 Amendments, Etc. NoSubject to Sections 1.08, 2.02(g), 2.16(e), 3.03 and the last paragraph of this Section 11.01,
no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by
the Company or any other Loan
Article k
MISCELLANEOUS
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Party therefrom, shall be effective unless in writing signed by the Required Lenders (or, to the extent such amendment or waiver
(i) relates solely to a specific Tranche, the Tranche Required Lenders with respect to such Tranche, (ii) changes Section 1.08, the
Tranche Required Lenders with respect to the Alternative Currency Tranche, (iii) except as otherwise provided in Section 1.08,
amends the definition of “Alternative Currency”, each Revolving Credit Lender, or (iv) waives any obligation to pay interest or
Letter of Credit Fees at the Default Rate, the Required Revolving Lenders), the Parent Borrower, the applicable Loan Party, as the
case may be, and acknowledged by the Administrative Agent, 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 (i) the Administrative Agent and the
Parent Borrower may, without the consent of any Lender or any Loan Party then party hereto, amend this Agreement to add a
Subsidiary of the Company as a “Subsidiary Guarantor” hereunder pursuant to a joinder agreement in substantially the form of
Exhibit G, to add a Designated Borrower pursuant to a Designated Borrower Request and Assumption Agreement and
Designated Borrower Notice, to add the OpCo as the Parent Borrower in accordance with the provisions of Section 11.25 or to
join the Company and Intermediate Holding Companies as Guarantors in accordance with the provisions of Section 6.12 or
Section 11.25 and (ii) notwithstanding the foregoing provisions of this Section 11.01 (including the first proviso above), 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;
without limiting the generality of clause (a) above, waive any condition set forth in Section 4.02 as to any
Credit Extension under a particular Facility without the written consent of the Required Revolving Lenders, the Required
Delayed Draw Term Lenders or the Required Term Lenders, as the case may be;
(b)
Section 8.02) without the written consent of such Lender;
(c)
extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to
(d)
postpone any date fixed by this Agreement or any other Loan Document for (i) any payment (excluding
mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such
other Loan Document without the written consent of each Lender entitled to such payment or (ii) any scheduled reduction of any
Facility hereunder or under any other Loan Document without the written consent of each Appropriate Lender;
(e)
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 11.01) any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the
Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any
Loan or L/C Borrowing or to reduce any fee payable hereunder;
(f)
change any of the terms or provisions in any Loan Document requiring pro rata payments, distributions,
commitment reductions or sharing of payments without the consent of each Lender, including (i) Section 2.14 or 8.03 in a manner
that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of
application of any reduction in the Commitments or any prepayment of Loans among the Facilities from the application thereof
set forth in the applicable provisions of Section 2.06(b) or 2.07(b), respectively, in any manner that materially and adversely
affects the Lenders under a Facility without the written consent of (A) if such Facility is the Term Facility, each Term
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Lender, (B) if such Facility is the Delayed Draw Term Facility, each Delayed Draw Term Lender and (B) if such Facility is the
Revolving Credit Facility, each Revolving Credit Lender; provided, that with the consent of the Required Lenders, such terms
and provisions may be amended on customary terms in connection with an “amend and extend” transaction, but only if all
Lenders that consent to such “amend and extend” transaction are treated on a pro rata basis;
(g)
(i) change any provision of this Section 11.01 or the definition of “Required Lenders”, without the written
consent of each Lender, (ii) change the definition of “Required Revolving Lenders” or “Appropriate Lenders” (as it applies to the
Revolving Credit Facility) without the written consent of each Revolving Lender, (iii) change the definition of “Tranche Required
Lenders” as it applies to any Tranche without the written consent of each Revolving Lender in the applicable Tranche, (iv)
change the definition of “Required Delayed Draw Term Lenders” or “Appropriate Lenders” (as it applies to the Delayed Draw
Term Facility) without the written consent of each Delayed Draw Lender, (v) change the definition of “Required Term Lenders”
or “Appropriate Lenders” (as it applies to the Term Facility) without the written consent of each Term Lender or (vi) change any
other provision hereof specifying the number or percentage of Lenders, or otherwise identifying a specific group 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 directly affected thereby;
(h)
release (i) all or substantially all of the value of the Guaranty, without the written consent of each Lender,
except as expressly provided in the Loan Documents or (ii) the Guarantee obligations or joint and several liability of the Parent
Borrower pursuant to Section 2.19 and Article X, without the written consent of each Lender or (iii) the Company from its
Guarantee obligation under Section 6.12(b) and Article X, without the written consent of each Lender, except as provided in
Section 10.12; or
(i)
impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or
obligations hereunder without the written consent of (i) if such Facility is the Term Facility, each Term Lender, (ii) if such
Facility is the Delayed Draw Term Facility, each Delayed Draw Term Lender and (iii) if such Facility is the Revolving Credit
Facility, each Revolving Credit Lender;
and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by an L/C Issuer in addition to
the Lenders required above, affect the rights or duties of such 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, (x) affect the rights or duties of the Administrative Agent under this Agreement or any other Loan
Document or (y) modify, change, waive or consent to any departure from, or have the effect of modifying, changing, waiving or
consenting to any departure from, Section 3.03, any term defined in such section, any term defined in any other section or
provision in this Agreement relating to SOFR, Daily Simple SOFR, Term SOFR, any Alternative Currency Daily Rate, any
Alternative Currency Term Rate, any Relevant Rate or any Successor Rate, or any term or provision relating to the replacement
of any such rate or Successor Rate; and (iv) the Fee Letter 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
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requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender in a
disproportionately adverse manner relative to other affected Lenders shall require the consent of such Defaulting Lender.
Notwithstanding any provision herein to the contrary,
(i)
the Administrative Agent, with the consent of the Parent Borrower, may amend, modify or supplement any
Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any
ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document so
long as such amendment, modification or supplement does not impose additional obligations on, or otherwise affect in
any material respect the interests of, any Lender; provided that the Administrative Agent shall promptly give the
Lenders notice of any such amendment, modification or supplement;
(ii)
this Agreement may be amended with the written consent of the Required Lenders, the Administrative
Agent, the Company and the other Loan Parties (i) to add one or more additional revolving credit or term loan facilities
to this Agreement, and to permit the extensions of credit and all related obligations and liabilities arising in connection
therewith from time to time outstanding to share ratably (or on a basis subordinated to the existing facilities hereunder)
in the benefits of this Agreement and the other Loan Documents with the obligations and liabilities from time to time
outstanding in respect of the existing facilities hereunder, and (ii) in connection with the foregoing, to permit, as deemed
appropriate by the Administrative Agent and approved by the Required Lenders, the Lenders providing such additional
credit facilities to participate in any required vote or action required to be approved by the Required Lenders or by any
other number, percentage or class of Lenders hereunder; and
(iii)
this Agreement and the other Loan Documents may be amended (or amended and restated), modified or
supplemented, without the consent of any Lender to the extent necessary or appropriate in the opinion of the
Administrative Agent and the Company to (A) effect the OpCo’s assumption of all of the Company’s liabilities and
obligations as a Borrower under, and the Company’s transfer and assignment to the OpCo of all of the Company’s rights
and benefits as a Borrower under, this Agreement and the other Loan Documents to which the Company is a party as a
Borrower, and (B) effect such other amendment (or amendment and restatement of), modification or supplement of this
Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Company, to effect the provisions of Section 11.25, including, without limitations, to
amend representations, covenants and events of default as appropriate to permit consummation of the Reorganization
and reflect the OpCo as the Parent Borrower and, to the extent required by Section 11.25, the Company and
Intermediate Holding Companies as Guarantors, in each case, so long as such amendment, modification or supplement
does not impose additional obligations on, or otherwise affect in any material respect the interests of, any Lender;
provided that the Administrative Agent shall promptly give the Lenders notice of any such amendment, modification or
supplement.
1.02 Notices; Effectiveness; Electronic Communications. (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,
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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 Loan Party, the Administrative Agent, an L/C Issuer or the Swing Line Lender, to the address,
telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and
(ii)
if to any other Lender, to the address, telecopier number, electronic mail address or telephone number
specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person
designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain
material non-public information relating to the Loan Parties).
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been
given when sent (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 and other communications delivered through
electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).
(a)
Electronic Communications. Notices and other communications to the Lenders and the L/C Issuers
hereunder may be delivered or furnished by electronic communication (including e-mail, FpML messaging, 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 any L/C Issuer pursuant to Article II if such Lender or such 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, the Swing Line Lender, any L/C Issuer or a Loan Party may each, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant to procedures approved by it, 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), 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; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient.
(b)
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
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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 any Loan Party, any Lender, any 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 Loan Party’s or the
Administrative Agent’s transmission of Borrower Materials or notices through the platform, any other electronic platform or
electronic messaging service, or through the Internet. In addition, in no event shall any Agent Party have any liability to any Loan
Party, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as
opposed to direct or actual damages).
(c)
Change of Address, Etc. Each of the Loan Parties, the Administrative Agent, the L/C Issuers 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 Parent Borrower, the Administrative Agent, each 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. Furthermore, each
Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the
“Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public
Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United
States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public
Side Information” portion of the Platform and that may contain material non-public information with respect to one of more of
the Company and its Subsidiaries or their respective securities for purposes of United States Federal or state securities laws.
(d)
Reliance by Administrative Agent, L/C Issuers and Lenders. The Administrative Agent, the L/C Issuers
and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices or Loan Notices, Letter of Credit
Applications and Swing Line Loan Notices) purportedly given by or on behalf of a Loan Party 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 Borrowers shall
indemnify the Administrative Agent, each 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 a Loan
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.
1.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, any 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 or under any
other Loan Document 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, and provided under each other Loan Document, are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights
and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively
in, and all actions
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and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative
Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuers; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to
its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any L/C Issuer or
the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an L/C Issuer or
the Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising
setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.14), or (d) any Lender from filing proofs of claim
or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any
Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and
under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative
Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and
subject to Section 2.14, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to
it and as authorized by the Required Lenders.
1.04
Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Borrowers shall pay, or cause to be paid, (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Arrangers and Bookrunners and their respective
Affiliates (including the reasonable documented fees, charges and disbursements of counsel for the Administrative Agent and the
Arrangers and Bookrunners), 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 any 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 or any L/C Issuer (including the fees, charges and disbursements of
any counsel for the Administrative Agent, any Lender or any 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 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.
(a)
Indemnification. The Borrowers shall indemnify the Administrative Agent (and any sub-agent thereof),
each Arranger, each Bookrunner, the Swing Line Lender, each Lender and each 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 fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any
Person (including the Company or any other Loan Party) other than such Indemnitee and its Related Parties 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 (including, without limitation, the Indemnitee’s reliance on any Communication
executed using an Electronic Signature, or in the form of an Electronic Record), the performance by the parties hereto or thereto
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 (including in respect of any matters addressed
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in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by
any 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 at, on, under or emanating from any property owned, leased or operated by the any Loan Party or any of its
Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of its 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 Loan Party or any of such Loan Party’s directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses 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 any Affiliate Controlled by or under common Control with such Indemnitee).
(b)
Reimbursement by Lenders. To the extent that the Borrowers 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), any Arranger, any Bookrunner, the Swing Line Lender, any L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Arranger, such Bookrunner, the
Swing Line Lender, such L/C Issuer or such Related Party, as the case may be, such Lender’s ratable share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought according to the proportion of (a) the sum of the
(i) Total Outstandings owing to such Lender (with the aggregate amount of such Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes hereof) other than the
Outstanding Amount of Competitive Loans and (ii) the aggregate unused Commitments (determined without giving effect to any
Competitive Loans outstanding on such date) of such Lender to (b) the sum of (i) Total Outstandings other than the Outstanding
Amount of Competitive Loans and (ii) the aggregate unused Commitments (determined without giving effect to any Competitive
Loans outstanding on such date)) 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), any Arranger, any Bookrunner, the Swing Line Lender or any 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), the Swing Line Lender or such
L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions
of Section 2.13(d).
(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Loan Party,
nor any Subsidiary thereof, shall assert, and each Loan Party hereby waives, and acknowledges that no other Person shall have,
any claim against any Indemnitee, 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 or thereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. 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 to such unintended recipients by
such Indemnitee 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 other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.
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(d)
demand therefor.
Payments. All amounts due under this Section shall be payable not later than ten Business Days after
(e)
Survival. The agreements in this Section and the indemnity provisions of Section 11.02(c) shall survive the
resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.
1.05
Payments Set Aside. To the extent that any payment by or on behalf of any Loan Party is made to the
Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any 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,
such 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 each L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount received by such Lender or such L/C Issuer and 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 Issuers under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.
1.06
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 no
Loan Party 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 any attempted such assignment or transfer without such consent shall be null and
void) and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 11.06(b), (ii) by way of participation in accordance with the provisions of Section
11.06(d), or (iii) by way of pledge or assignment, or grant of a security interest, subject to the restrictions of Section 11.06(f),
(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 Issuers and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(a)
Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for
purposes of this Section 11.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided
that (in each case with respect to any Facility) 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
under any Facility and/or the Loans at the time
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owing to it under any Facility or contemporaneous assignments to related Approved Funds that equal at least the
amount specified in subsection (b)(i)(B) of this Section in the aggregate 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 applicable Commitment is
not then in effect, the principal outstanding balance of the applicable 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 in the case of any assignment in respect of any Facility, unless each
of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent
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 Eligible Assignee (or to an Eligible 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 (A) apply to rights in respect of Bid Loans or the Swing Line Lender’s
rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its
rights and obligations among separate Facilities on a non-pro rata basis;
(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 Parent 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, (2) if
such assignment is with respect to the Revolving Credit Facility, such assignment is to a Revolving Credit Lender
or (3) if such assignment is with respect to the Term Facility or the Delayed Draw Term Facility, such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Parent Borrower shall be deemed
to have consented to any such assignment unless it shall object thereto by written notice to the Administrative
Agent within ten Business Days after having received notice thereof;
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed)
shall be required if (1) such assignment is with respect to the Revolving Credit Facility and is to a Person that is
not a Revolving Credit Lender or (2) such assignment is with respect to the Term Facility or the Delayed Draw
Term Facility and is to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund;
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(C) the consent of each L/C Issuer and the Swing Line Lender shall be required for any assignment in
respect of the Revolving Credit Facility if such assignment is to a Person that is not a Revolving Credit Lender.
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, and shall pay or cause to be paid to the Administrative Agent a
processing and recordation fee in the amount of $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, and such fee shall be
waived in the event of an assignment by a Lender to its Affiliate. The assignee, if it is not 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) the Company or any of the
Company’s 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), or (C) a
natural person (or to a holding company, investment vehicle or trust for, or owned and operated for the primary benefit
of a natural person).
(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 Parent Borrower and the Administrative Agent, the applicable pro rata share of Loans previously
requested but not funded by such 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, any L/C Issuer 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 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 11.04 with respect to facts and circumstances occurring prior to the
effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no
assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that
Lender’s having been a Defaulting Lender. Upon request, each Borrower (at its expense) shall execute and deliver a Note to (i)
the assignee Lender and/or (ii) in
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the case of a partial assignment by a Lender of its rights or obligations under this Agreement, the assigning 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 Section 11.06(d).
(b)
Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such
agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of 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 Borrowers, 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 any Loan Party and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(c)
Participations. Any Lender may at any time, without the consent of, or notice to, the Parent Borrower, any
other Loan Party or the Administrative Agent, sell participations to any Person (other than a natural person, or a holding
company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person, a Defaulting Lender
or the Company or any of the Company’s 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 and/or Swing Line 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 Parent Borrower, the other Loan Parties, the Administrative Agent, the Lenders and
the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section
11.04(c) without regard to the existence of any participation.
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 11.01 that affects such
Participant. Subject to subsection (e) of this Section, the Parent Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations of such sections) to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b) (it being understood that the
documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b)); provided that such Participant agrees
to be subject to the provisions of Sections 3.06(a) and 11.13 as if it were an assignee under Section 11.06(b). Each Lender that
sells a participation agrees, at the Parent Borrower’s request and expense, to use reasonable efforts to cooperate with the Parent
Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender, provided that such Participant agrees
to be subject to Section 2.14 as though it were a Lender.
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Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Parent 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.
(d)
Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation
would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation or unless the sale of the participation to such
Participant is made with the Parent 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 Parent Borrower is notified of the Participation sold to such
Participant and such Participant agrees, for the benefit of the Parent Borrower, to comply with Section 3.01(e) as though it were a
Lender.
(e)
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 or any other central bank;
provided that no such pledge or assignment or grant 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.
(f)
Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time a Lender that is an L/C Issuer or the Swing Line Lender assigns all of its Revolving
Credit Commitment and Revolving Credit Loans pursuant to Section 11.06(b), such L/C Issuer or the Swing Line Lender may (i)
upon 30 days’ notice to the Parent Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days’ notice to the
Parent Borrower, resign as the Swing Line Lender. In the event of any such resignation as an L/C Issuer or the Swing Line
Lender, the Parent Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Parent Borrower to appoint any such successor shall affect the resignation of
such Lender as an L/C Issuer or the Swing Line Lender, as the case may be. If a Lender that is an L/C Issuer resigns as an 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
issued by it and outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.04(c)). If a Lender that is the Swing Line Lender 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 Loans or fund risk participations in
outstanding Swing Line Loans
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pursuant to Section 2.05(c). Upon the appointment of a successor L/C Issuer and/or Swing Line 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 or Swing Line
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 the retiring L/C Issuer to effectively
assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.
1.07
Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C
Issuers agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates, its auditors and its Related Parties (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent
required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties
(including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to
Section 2.16 or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under
which payments are to be made by reference to any Loan Party and its obligations, this Agreement or payments hereunder, (g) on
a confidential basis to (i) any rating agency in connection with rating the Company or any of its Subsidiaries or the credit
facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the
consent of the Parent Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than any Loan Party or any Subsidiary thereof. In addition, the
Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to
market data collectors, similar service providers to the lending industry and service providers to the Administrative Agent and the
Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.
For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof
relating to any Loan Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential basis prior to disclosure by any Loan
Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such Subsidiary after
the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledges that (a) the Information may include
material non-public information concerning a Loan Party or a Subsidiary thereof, as the case may be, (b) it has developed
compliance procedures regarding the
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use of material non-public information and (c) it will handle such material non-public information in accordance with applicable
Law, including United States Federal and state securities Laws.
1.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each 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 (and subject to Section 2.14), 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, such L/C Issuer or any such Affiliate to or for the credit or the account of the Parent Borrower or any other Loan
Party against any and all of the obligations of the Parent Borrower or such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender or such L/C Issuer or their respective Affiliates, irrespective of whether
or not such Lender, L/C Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Parent Borrower or such Loan Party may be contingent or unmatured or are owed to a branch,
office or Affiliate of such Lender or such L/C Issuer different from the branch, office or Affiliate holding such deposit or
obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (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 2.18 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, the L/C Issuers 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, each 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, such
L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Parent 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.
1.09
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 Parent 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.
1.10 CounterpartsIntegration; 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, the other
Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent or any L/C Issuer,
constitute a singlethe 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
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page of this Agreement by telecopy or other electronic imaging means (e.g., “pdf” or “tif”), and thereafter shall be effective as
delivery of a manually executed counterpart of this Agreementbinding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
1.11
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
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.
1.12
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 11.12, 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.
1.13 Replacement of Lenders. If the Parent Borrower is entitled to replace a Lender pursuant to the provisions of
Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, or if any other circumstance exists hereunder
that gives the Parent Borrower the right to replace a Lender as a party hereto, then the Parent Borrower may, at its 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 11.06), all of its
interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this
Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:
the assignment fee (if any) specified in Section 11.06(b);
(a)
the Parent Borrower shall have paid (or caused a Designated Borrower to pay) to the Administrative Agent
(b)
such Lender shall have received payment of an amount equal to (i) from the assignee, the outstanding
principal of its Loans and L/C Advances and all accrued interest and fees payable to it hereunder and under the other Loan
Documents and (ii) from the Parent Borrower or applicable Designated Borrower, all other amounts payable by the Parent
Borrower or applicable Designated Borrower hereunder and under the other Loan Documents (including pursuant to Section
3.01, 3.04 or 3.05) (it being understood that the Assignment and Assumption relating to such assignment shall provide that any
interest and fees that accrued prior to the effective date of the assignment shall be for the account of the replaced Lender and such
amounts that accrue on and after the effective date of the assignment shall be for the account of the replacement Lender);
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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;
(c)
(d)
such assignment does not conflict with applicable Laws; and
assignee shall have consented to the applicable amendment, waiver or consent.
(e)
in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable
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 Parent Borrower to require such assignment and delegation cease to apply.
Each Lender agrees that, if the Parent Borrower elects to replace such Lender in accordance with this Section 11.13, it shall
promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence the assignment and shall
deliver to the Administrative Agent any Note (if a Note has been issued in respect of such Lender’s Loans) subject to such
Assignment and Assumption; provided that the failure of any such Lender to execute an Assignment and Assumption shall not
render such assignment invalid and such assignment shall be recorded in the Register.
Notwithstanding anything to the contrary provided herein, in no event shall the Parent Borrower or any other Borrower
have the right to replace a Lender as a result of such Lender (a) not consenting to the designation of an Applicant Borrower
organized under the laws of a jurisdiction other than the United States, Canada, the United Kingdom, Netherlands or Germany as
a Designated Borrower or (b) declining to provide a commitment in a Supplemental Currency.
1.14 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT
OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(f)
SUBMISSION TO JURISDICTION. THE COMPANY AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION
OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR
IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY L/C ISSUER, OR ANY
RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION 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,
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LITIGATION 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 ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ANY OTHER LOAN PARTY
OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(g) WAIVER OF VENUE. EACH PARTY HERETO 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.
(h)
SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.
1.15 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.
1.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the
Loan Parties acknowledges and agrees, and acknowledges its respective Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent, the Bookrunners and the Arrangers are arm’s-
length commercial transactions between the Parent Borrower, each of the other Loan Parties and their respective Affiliates, on the
one hand, and the Administrative Agent, the Bookrunners and the Arrangers, on the other hand, (B) each of the Parent Borrower
and the other Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (C) each of the Parent Borrower and the other Loan Parties is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the
Administrative Agent, each of the Lenders, each of the Bookrunners and each of the Arrangers each is and has been acting solely
as a principal and, except as expressly agreed in writing by the
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relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Parent Borrower, any other
Loan Party or any of their respective Affiliates, or any other Person and (B) none of the Administrative Agent, any Lender, any
Bookrunner or any Arranger has any obligation to the Parent Borrower, any other Loan Party 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; and (iii) the Administrative Agent, the Lenders, the Bookrunners and the Arrangers and their respective Affiliates
may be engaged in a broad range of transactions that involve interests that differ from those of the Parent Borrower, the other
Loan Parties and their respective Affiliates, and none of the Administrative Agent, any Lender, any Bookrunner or any Arranger
has any obligation to disclose any of such interests to the Parent Borrower, the other Loan Parties or any of their respective
Affiliates. To the fullest extent permitted by law, each of the Parent Borrower and each of the other Loan Parties hereby waives
and releases any claims that it may have against the Administrative Agent, any Lender, any Bookrunner or any Arranger with
respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated
hereby.
1.17
Electronic Execution of Assignments and Certain Other Documents; Electronic Records; Counterparts. The words
“execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection
with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions,
amendments or other modifications, Loan Notices, Swing Line Loan Notices, waivers and consents) shall be deemed to include
electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by
the Administrative Agent, 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 State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no
obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative
Agent pursuant to procedures approved by it. This Agreement, any Loan Document and any other Communication, including
Communications required to be in writing, may be in the form of an Electronic Record and may be executed using Electronic
Signatures. Each of the Loan Parties and each of the Administrative Agent and each Lender Party agrees that any Electronic
Signature on or associated with any Communication shall be valid and binding on such Person to the same extent as a manual,
original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding
obligation of such Person enforceable against such Person in accordance with the terms thereof to the same extent as if a
manually executed original signature was delivered. Any Communication may be executed in as many counterparts as necessary
or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication.
For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance of a
manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an
electronically signed Communication converted into another format, for transmission, delivery and/or retention. The
Administrative Agent and each of the Lender Parties may, at its option, create one or more copies of any Communication in the
form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s
business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an
Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability
as a paper record. Notwithstanding anything contained herein to the contrary, neither the Administrative Agent, any L/C Issuer
nor the Swing Line Lender is under any obligation to accept an Electronic Signature in any form or in any format unless
expressly agreed to by such
167
Person pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the
Administrative Agent, L/C Issuer and/or Swing Line Lender has agreed to accept such Electronic Signature, the Administrative
Agent and each of the Lender Parties shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf
of any Loan Party and/or any Lender Party without further verification and regardless of the appearance or form of such
Electronic Signature and (b) upon the request of the Administrative Agent or any Lender Party, any Electronic Signature shall be
promptly followed by such manually executed counterpart.
Neither the Administrative Agent, any L/C Issuer nor the Swing Line Lender shall be responsible for or have any duty to
ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document (including, for the avoidance of doubt, in connection with the Administrative Agent’s, any
L/C Issuer’s or the Swing Line Lender’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other
electronic means). The Administrative Agent, each L/C Issuer and the Swing Line Lender shall be entitled to rely on, and shall
incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any Communication (which
writing may be a fax, any electronic message, Internet or intranet website posting or other distribution or signed using an
Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or
otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the
maker thereof).
Each of the Loan Parties and each Lender Party hereby waives (i) any argument, defense or right to contest the legal
effect, validity or enforceability of this Agreement, any other Loan Document based solely on the lack of paper original copies of
this Agreement, such other Loan Document, and (ii) waives any claim against the Administrative Agent, each Lender Party and
each Related Party for any liabilities arising solely from the Administrative Agent’s and/or any Lender Party’s reliance on or use
of Electronic Signatures, including any liabilities arising as a result of the failure of the Loan Parties to use any available security
measures in connection with the execution, delivery or transmission of any Electronic Signature.
1.18 USA PATRIOT Act. 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 Loan Parties 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 each Loan Party, which information includes the name and address of each Loan Party and
other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in
accordance with the Act. Each Loan Party shall, promptly following a request by the Administrative Agent or any Lender,
provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the
Act.
1.19
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 Borrower 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
168
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 to the
Administrative Agent or any Lender from any Borrower in the Agreement Currency, such Borrower 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 Borrower (or to any other Person who may be entitled thereto under applicable law).
1.20
ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF
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.
1.21 Original Notes. On the Closing Date, the Original Notes, if any, held by each Lender shall be deemed to be
cancelled and, if such Lender has requested a Revolving Credit Note or a Term Note hereunder, amended and restated by the
Revolving Credit Note or Term Note, as applicable, delivered hereunder on or about the Closing Date (regardless of whether any
Lender shall have delivered to the Company for cancellation the Original Note held by it). Each Lender, whether or not
requesting a Revolving Credit Note or Term Note hereunder, shall use its commercially reasonable efforts to deliver the Original
Notes held by it to the Company for cancellation and/or amendment and restatement. All amounts owing under, and evidenced
by, the Original Notes as of the Closing Date shall continue to be outstanding hereunder, and shall from and after the Closing
Date, if requested by the Lender holding such Original Note(s), be evidenced by the Revolving Credit Notes and Term Notes, as
applicable, and shall in any event be evidenced by, and governed by the terms of, this Agreement. Each Lender hereby agrees to
indemnify and hold harmless the Loan Parties from and against any and all liabilities, losses, damages, actions or claims that may
be imposed on, incurred by or asserted against any Loan Party arising out of such Lender’s failure to deliver the Original Notes
held by it to the Company for cancellation, subject to the condition that the Company shall not make any payment to any Person
claiming to be the holder of such Original Notes unless such Lender is first notified of such claim and is given the opportunity, at
such Lender’s sole cost and expense, to assert any defenses to such payment.
1.22 Amendment and Restatement. As of the Closing Date, the Commitments of certain “Lenders” under (and as
defined in) the Original Credit Agreement shall be terminated by the Company (such Lenders, the “Departing Lenders”), and
JPMorgan Chase and Wells Fargo Bank shall each resign as a Swing Line Lender. The remaining “Lenders” under (and as
defined in) the Original Credit Agreement shall be Lenders under this Agreement with Commitments as set forth on Schedule
2.01 hereto, and Bank of America shall be the only Lender acting as the Swing Line Lender under this Agreement. By its
execution and delivery of this Agreement, each Lender that was a “Lender” under (and as defined in) the Original Credit
Agreement hereby consents to the execution and delivery of this Agreement and to the non-pro rata reduction of Revolving
Credit Commitments (under and as defined in the Original Credit Agreement) occurring on the Closing Date as a result of the
termination of the Revolving Credit Commitments of the Departing Lenders, and the concurrent repayment in full of all loans and
other obligations owing (whether or not due) to the Departing Lenders. On the Closing Date, effective immediately following
such termination and repayment and the repayment in full of the Existing Term Loans and any Existing Swing Line Loans, the
Original Credit Agreement shall
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be amended, restated and superseded in its entirety by this Agreement. The parties hereto acknowledge and agree that (a) this
Agreement and the other Loan Documents, whether executed and delivered in connection herewith or otherwise, do not
constitute a novation, payment and reborrowing, or termination of the rights, obligations and liabilities of the respective parties
(including the Obligations) existing under the Original Credit Agreement as in effect prior to the Closing Date (except with
respect to the Existing Term Loans and the Departing Lenders, except that the provisions of the Original Credit Agreement that
by their express terms survive the termination of the Original Credit Agreement shall continue for the Departing Lenders) and (b)
such obligations are in all respects continuing (as amended and restated hereby) with only the terms thereof being modified as
provided in this Agreement. Without limiting the generality of the foregoing (i) all Revolving Credit Loans and Competitive
Loans outstanding under the Original Credit Agreement shall on the Closing Date become Revolving Credit Loans and
Competitive Loans, as the case may be, hereunder, (ii) all Existing Letters of Credit shall on the Closing Date become Letters of
Credit hereunder and (iii) all other Obligations outstanding under the Original Credit Agreement shall on the Closing Date be
Obligations under this Agreement. To the extent the Original Credit Agreement provides that certain terms survive the
termination of the Original Credit Agreement or survive the payment in full of principal, interest and all other amounts payable
thereunder, then such terms shall survive the amendment and restatement of the Original Credit Agreement.
1.23
Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Solely to the extent any
Lender or any L/C Issuer that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the
contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Lender or any L/C Issuer that is an Affected Financial Institution arising under any
Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any
such liabilities arising hereunder which may be payable to it by any Lender or any L/C Issuer that is an Affected Financial
Institution; and
(a)
(b)
the effects of any Bail-In Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such
Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with
respect to any such liability under this Agreement or any other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the Write-Down and
Conversion Powers of the applicable Resolution Authority.
1.24 Acknowledgement Regarding any Supported QFCs. To the extent that the Loan Documents provide support,
through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC
Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special
Resolution Regimes”)
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in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan
Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States):
(a)
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject
to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in
property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit
Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the
United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a
U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC
or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent
than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan
Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it
is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the
rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b)
As used in this Section 11.24, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance
with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§
252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in
accordance with, 12 U.S.C. 5390(c)(8)(D).
1.25 UPREIT Reorganization. If the Company elects to reorganize its corporate organizational structure to implement
an “umbrella partnership” real estate investment trust structure by forming (or converting) a limited partnership, limited liability
company or other registered business organization (other than a general partnership) under the laws of any state of the United
States or the District of Columbia (the “OpCo”) of which the Company (or a Wholly-Owned Subsidiary of the Company) is to be
the sole general partner, manager, or managing member, as applicable (the “Reorganization”), then, on the Assumption Date, the
OpCo may assume all of the Company’s liabilities and obligations as a Borrower under, and the Company may transfer and
assign to the OpCo all of the Company’s rights and benefits as a Borrower under, this Agreement and the other Loan Documents,
and the Company shall be released solely from its liabilities and obligations as a Borrower (but not as a Guarantor) under this
Agreement and the other Loan Documents (collectively, the “Assumption Transaction”).
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The effectiveness of the Assumption Transaction is subject to satisfaction (or valid waiver) of the following
conditions (the “Assumption Conditions”):
(a)
The Company shall have given the Administrative Agent and the Lenders prior written notice of the
Company’s intent to exercise its rights under this Section 11.25 at least 30 days (or such shorter period as may be agreed in
writing by the Administrative Agent in its sole discretion, but in no event less than 15 Business Days) prior to the proposed
effective date of the Assumption Transaction as set forth in such notice.
(b)
The Administrative Agent’s receipt of the following, each of which shall be originals, e-mails (in a .pdf
format) or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible
Officer or a duly authorized officer of the OpCo, the Company and each other signing Loan Party, each dated the Assumption
Date (or, in the case of certificates of governmental officials, a recent date before the Assumption Date) and each in form and
substance reasonably satisfactory to the Administrative Agent:
(i)
an assignment and assumption agreement executed by the Company and the OpCo, acknowledged by the
other Loan Parties (if any), providing for the OpCo’s assumption of all of the Company’s liabilities and obligations as a
Borrower under, and the Company’s transfer and assignment to the OpCo of all of the Company’s rights and benefits as
a Borrower under, this Agreement and the other Loan Documents (the “OpCo Assumption Agreement”);
(ii)
unless the Company Release Conditions have been satisfied on the Assumption Date, a joinder agreement
executed by the Company, each Intermediate Holding Company that is not at such time a Guarantor and the OpCo
pursuant to which the Company and each such Intermediate Holding Company shall become party hereto as a
Guarantor;
(iii) amendments to this Agreement and the other Loan Documents executed by the Company, the OpCo and
the other Loan Parties, as appropriate, requested or approved by the Administrative Agent in accordance with Section
11.01;
(iv) a Revolving Credit Note, Term Note and/or Delayed Draw Term Note, as applicable, in each case, duly
executed by the OpCo, payable to each applicable Lender that has requested that it receive such Notes, and complying
with the terms of Section 2.12 (it being understood that, upon delivery of the originals of such Note(s) to a requesting
Lender on or about the Assumption Date, the previously issued notes, if any, held by such Lender shall be deemed to be
amended and restated by such Note(s) regardless of whether such Lender shall have delivered to the Company for
cancellation the previously issued note(s) held by it and all amounts owing by the Company under, and evidenced by,
the previously issued note(s) as of the Assumption Date shall be evidenced by such applicable Note(s));
(v)
a favorable opinion of counsel to the OpCo and the other Loan Parties, addressed to the Administrative
Agent and each Lender, as to such matters concerning the OpCo and the other Loan Parties and the Loan Documents as
the Administrative Agent may reasonably request;
(vi)
the items referenced in Section 4.01(a)(iii), (iv) and (vi) with respect to the Company, the OpCo and all
Intermediate Holding Companies that become Guarantors pursuant to clause (ii) above (if any);
172
(vii) an updated Schedule 5.12 that includes the OpCo, the OpCo GP and all Intermediate Holding Companies
that become Guarantors pursuant to clause (ii) above (if any);
(viii) no Default or Event of Default shall exist as of the date of the Reorganization or on the Assumption Date,
or will exist immediately after giving effect to the Reorganization or the Assumption Transaction;
(ix)
the representations and warranties made or deemed made by the Company, the OpCo or any other Loan
Party in any Loan Document (as amended to incorporate any revisions associated with the Reorganization) to which
such Loan Party is a party shall be true and correct in all material respects (except in the case of a representation or
warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects)
on and as of the Assumption Date (as if any reference in any Loan Documents with respect to such representations and
warranties to “the date of this Agreement”, “as of the Closing Date”, “on the date hereof”, “on the Closing Date” or
similar words which refer to the Closing Date of the Agreement are deemed to be references to the Assumption Date);
(x)
the Administrative Agent shall have received an officer’s certificate from a Responsible Officer of the
OpCo certifying the matters referred to in the immediately preceding clauses (viii) and (ix); and
(xi) such other documents and instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably request.
(c)
The Administrative Agent and each Lender shall have received, at least five (5) Business Days prior to the
Assumption Date, all documentation and other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation,
in each case as requested at least ten (10) Business Days prior to the Assumption Date.
[signature pages immediately follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above
written.
[Signature Page to Fourth Amended and Restated Credit Agreement]
Name of Subsidiary
(CA) ADS, LLC
24 HR TX (TX) Limited Partnership
24 HR-TX (MD) Business Trust
24 HR-TX GP (TX) QRS 12-66, Inc.
25th Street Storage 18 (FL) LLC
308 Route 38 LLC
3265 University Parkway Storage 18 (FL) LLC
500 Jefferson Tower (TX) LLC
5150 University Parkway Storage 18 (FL) LLC
601 Jefferson Manager (DE) LLC
601 Jefferson Tower (TX) LLC
6000 Nathan (MN) LLC
ADCIR (CO) QRS 16-60, Inc.
ADCIR EXP (CO) LLC
ADS2 (CA) QRS 11-41, Inc.
ADVA 15 (GA) LLC
ADV-QRS 15 (GA) QRS 15-4, Inc.
AFD (MN) LLC
AIR (IL) QRS 14-48, Inc.
AIR ENT (OH) LLC
AIRLIQ (TX) LLC
Airliq II (IL) LLC
Airport Storage 18 (FL) LLC
Alamo WPC Storage (TX) LLC
ALAN JATHOO JV (MULTI) LLC
ALL-IN (PA-OH) LLC
Alphabet Multi Holding (CAN) ULC
ALUSA (TX) Limited Partnership
ALUSA-GP (TX) QRS 16-72, Inc.
ALUSA-LP (DE) QRS 16-73, Inc.
American GL Cathedral Storage 17 (CA) LLC
American GL Pearl Storage 17 (HI) LLC
American JH Storage 17 (Multi) LLC
American Subsequent Storage 17 (Multi) LLC
American WPC Storage (Multi) LLC
American WPC Storage TRS 17-1 (DE) Inc.
Amtoll (NM) QRS 14-39, Inc.
Ang (Multi) LLC
Ang II (Multi) LLC
Ang III (Multi) LLC
ANTH Campus (CA) LLC
ANT-LM LLC
Appleton Store, LLC
Applied Utah (UT) QRS 14-76, Inc.
W. P. CAREY INC.
SUBSIDIARIES OF REGISTRANT
Exhibit 21.1
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % California
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
90 % Delaware
100 % Delaware
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Wisconsin
100 % Delaware
Name of Subsidiary
Araxos Sp. z o.o.
Arboretum Group, L.L.C.
ARNOLD POLYMER (MULTI) LP
ARNOLD POLYMER GP (MULTI) LLC
Assembly (MD)
ATCHI (IL) LLC
Atlanta Self Storage 18 (GA) LLC
Auto (FL) QRS 11-39, Inc.
Auto Investor 17 (DE) LLC
AutoPress (GER) LLC
AUTOPRO (GA) LLC
Autosafe Airbag 14 (CA) LP
Avondale Storage GP 18 (LA) LLC
Avondale Storage Owner 18 (LA) LP
Avasu (AZ) LLC
AW WPC (KY) LLC
AZO Driver (DE) LLC
AZO Mechanic (DE) LLC
AZO Navigator (DE) LLC
AZO Valet (DE) LLC
AZO-A L.P.
AZO-B L.P.
AZO-C L.P.
AZO-D L.P.
Baltic Retail Properties IISUTI UAB
Barn Cement (TX) LLC
BBQ Storage 17 (NY) LLC
BBrands (Multi) QRS 16-137, Inc.
BDF (CT) QRS 16-82, Inc.
Bear T (OH) LLC
Beaumont Storage 17 (CA) LLC
Beechnut Storage 18 (TX) LLC
Beechnut Storage Owner 18 (TX) LP
BEL BTS (SC) LLC
Berrocal Sp. z o.o.
Beverage (GER) QRS 16-141 LLC
BFS (DE) LP
BFS (DE) QRS 14-74, Inc.
BG FEE OWNER (KY) LLC
BG Ground Terminal (CA) LLC
BG Terminal (CA) LLC
BG Terminal Investor (CA) LLC
BG Terminal Investor II LP
BG Terminal Investor II TRS LLC
Bill-GP (TX) QRS 14-56, Inc.
Bill-MC 14 LP
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Poland
100 % Wisconsin
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Florida
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
70 % Lithuania
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
90 % Delaware
Name of Subsidiary
Blair Road Storage 18 (DC) LLC
BM-LP (TX) QRS 14-57, Inc.
BMOC-HOU GP Holder (TX) LLC
BMOC-HOU (TX) LP
BMOC-MIA (FL) LLC
BMOC-ORL (FL) LLC
BN(MA) QRS 11-58, Inc.
BOBS (CT) QRS 16-25, Inc.
Bohr Bolt (OH) LLC
Bohr Bolt II (OH) LLC
Bolder (CO) QRS 11-44, Inc.
Bolt (DE) Limited Partnership
Bolt (DE) QRS 15-26, Inc.
Bolt (DE) Trust
Bone (DE) LLC
Bone (DE) QRS 15-12, Inc.
Bone Manager, Inc.
Boom (MN) LLC
BORLAND (MN) LLC
BOS West (MA) LLC
Bplast 16 Manager (DE) QRS 16-129, Inc.
Bplast 16 Member (DE) QRS 16-128, Inc.
Bplast 17 Member (DE) LLC
Bplast Expansion Landlord (IN) LLC
Bplast Expansion Member (IN) 17 LLC
Bplast Landlord (DE) LLC
Bplast Two Landlord (IN) LLC
Bplast Two Manager (IN) QRS 16-152, Inc.
Bplast Two Member (IN) 17 LLC
Bplast Two Member (IN) QRS 16-151, Inc.
BPS Nevada, LLC
Bronson Storage 18 (FL) LLC
BRY-PL (DE) Limited Partnership
BRY-PL (MD) Trust
BRY-PL GP (DE) QRS 15-57, Inc.
BSL Caldwell (NC) LLC
BST Torrance Landlord (CA) QRS 14-109, Inc.
BT (Multi) LLC
BT (PA) QRS 12-25, Inc.
BUCKLE UP (MX) LLC
BUD HEAVY (MN) LLC
Build (CA) QRS 12-24, Inc.
BUILT IN A DAY (NY) LLC
Buyersburg (IN) LLC
CII Landlord (IL) LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
15 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Pennsylvania
100 % Delaware
100 % Delaware
100 % California
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
C3PL (MI) LLC
Call LLC
Camborne Sp. z o.o.
Can (WI) QRS 12-34, Inc.
Can Storage 18 (TOR) LLC
Canelli Sp. z o.o.
Cantina 17 Landlord (IL) LLC
Cantina 17 Manager (IL) LLC
Can-Two (DE) QRS 12-67, Inc.
Cards (CA) QRS 11-37, Inc.
Cards (CA) QRS 12-12, Inc.
Carey 17 Harmon LLC
Carey Alfabeto Holding Mx, S. de R.L. de C.V.
Carey Alfabeto Landlord Mx, S. de R.L. de C.V.
Carey Alphabet (DE) Inc.
Carey Alphabet B.V.
Carey Asset Management Corp.
Carey Asset Management Dallas LLC
Carey Credit Advisors, LLC
Carey European Management LLC
Carey European SH, LLC
Carey Management LLC
Carey Market LLC
Carey REIT II, Inc.
Casting Landlord (GER) QRS 16-109 LLC
Casting Member (GER) QRS 16-108 LLC
CAT LOG (WI) LLC
CATALINA WM (OR) LLC
Cathedral City Storage 17 (CA) LLC
Cherry Valley Storage 17 (IL) LLC
CHIRO MANAGER (DE) LLC
CIP 18 (NY) MEZZ LLC
CIP Acquisition Incorporated
Citrus Heights (CA) GP, LLC
CIV-News GP (DE) LLC
CIV-News (Multi) LP
CLA (MO) LLC
Clean (KY) LLC
Clean (KY) QRS 16-22, Inc.
CM6-GROUND (MULTI) LLC
CM6-Hotel (Multi) LLC
CMAR 18 Investor (DE) LLC
CMAR Hotel Landlord 18 (Mauritius) Ltd
CM Nathan (MN) LLC
Coco (WY) QRS 16-51, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Poland
100 % Wisconsin
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Mexico
100 % Mexico
100 % Delaware
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Mauritius
100 % Delaware
100 % Delaware
SUBSIDIARIES OF REGISTRANT (Continued)
Name of Subsidiary
Coco-Dorm (PA) QRS 16-52, Inc.
Coco-Dorm (PA) Trust
Coco-Dorm (PA), LP
Contrato de Fideicomiso Irrevocable Traslativo de Dominio en Zona Restringida y de Administracion
numero 3908
Contrato De Fideicomiso Revocable de Administracion de Bienes Inmuebles Numero 3801
CONTRATO DE FIDEICOMISO REVOCABLE DE ADMINISTRACION DE BIENES INMUEBLES
NUMERO 3890
Contrato De Fideicomiso Revocable de Adminstracion de Bienes Inmuebles Numero 3968
Consys (SC) QRS 16-66, Inc.
Consys-9 (SC) LLC
Containers (DE) Limited Partnership
Containers (DE) QRS 15-36, Inc.
COOP (GA) LLC
Corporate Property Associates
Corporate Property Associates 15 Incorporated
Corporate Property Associates 4, A California Limited Partnership
Corporate Property Associates 6, A California Limited Partnership
Corporate Property Associates 9, L.P., A Delaware Limited Partnership
Courtyard Albuquerque Airport Operator LLC
Courtyard Baltimore Washington Airport Operator LLC
Courtyard Chicago OHare Operator LLC
Courtyard Indianapolis Airport Operator LLC
Courtyard Irvine John Wayne Airport Operator LLC
Courtyard Louisville East Operator LLC
Courtyard Newark Liberty international Airport Operator LLC
Courtyard Orlando Airport Operator LLC
Courtyard Orlando International Drive Convention Center Operator LLC
Courtyard Sacramento Operator LLC
Courtyard San Diego Sorrento Operator LLC
Courtyard Spokane Downtown Operator LLC
CP GAL (IN) QRS 16-61, Inc.
CP GAL Fairfax, LLC
CP GAL Kennesaw, LLC
CP GAL Leawood, LLC
CP GAL Lombard, LLC
CP GAL Plainfield, LLC
CPA 15 Merger Sub Inc.
CPA 16 LLC
CPA 16 Merger Sub Inc.
CPA 17 International Holding and Financing LLC
CPA17 Merger Sub LLC
CPA 17 Pan-European Holding Cooperatief U.A.
CPA 17 SB1 Lender LLC
CPA 17 SB2 Lender LLC
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Maryland
100 % Delaware
100 % Mexico
100 % Mexico
100 % Mexico
100 % Mexico
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % California
100 % Maryland
100 % California
100 % California
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Maryland
100 % Delaware
100 % Maryland
100 % Netherlands
100 % Delaware
100 % Delaware
Name of Subsidiary
CPA 17 SBOP JV Member LLC
CPA 17 SBPROP JV Member LLC
CPA17 SBOP MANAGER LLC
CPA17 SBPROP MANAGER LLC
CPA 18 Con s.r.o.
CPA 18 GH Member LLC
CPA 18 Integras GH Investor Limited
CPA 18 Integras JV (DE) LLC
CPA 18 International Holding and Financing LLC
CPA18 Merger Sub LLC
CPA 18 Pan-European Holding Coöperatief U.A.
CPA 18 SH (TX) LIMITED PARTNER LLC
CPA 18 SH (TX) Special General Partner LLC
CPA Paper, Inc.
CPA:17 Limited Partnership
CPA:18 Limited Partnership
CPA16 German (DE) Limited Partnership
CPA16 German GP (DE) QRS 16-155, Inc.
CPA-CS Holdings LP
CQ Landlord (MI) LLC
CQ Landlord (Multi) LLC
CQ Mezz Manager (Multi) LLC
Crafty (AL) LLC
Crate (GER) QRS 16-142 LLC
CRI (AZ-CO) QRS 16-4, Inc.
Crystal Lake Storage 18 (IL) LLC
CSH Malaga Student Housing Holding, S.L.
CS-GP 18 (TOR) LLC
Cups (DE) LP
Cups Number One (DE) LLC
Cusona Sp. z o.o.
CU-SOL (VA) LLC
Dan (FL) QRS 15-7, Inc.
Darnekusa sp. z o. o.
DCNETH Landlord (NL) LLC
DCNETH Member (NL) QRS 15-102 Inc.
Delaware Frame (TX), LP
Deliver (TN) QRS 14-49, Inc.
Delmo (DE) QRS 11/12-1, Inc.
Delmo (PA) QRS 11-36
Delmo (PA) QRS 12-10
Delmo 11/12 (DE) LLC
Desert Storage 18 (CA) LP
Desert Storage GP 18 (CA) LLC
DES-Tech GP (TN) QRS 16-49, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Slovakia
100 % Delaware
100 % Ghana
100 % Delaware
100 % Delaware
100 % Maryland
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
90 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Pennsylvania
100 % Pennsylvania
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
DES-Tech LP (TN) QRS 16-50, Inc.
Develop (TX) LP
Dfence (Belgium) 15 SRL
Dfence (Belgium) 16 SRL
Dfend 15 LLC
Dfend 16 LLC
Diagalves Sp. z o.o.
DIFUSÃO – SOCIEDADE IMOBILIÁRIA S.A.
DIY Poland Sp. z o.o.
DKSN Storage 18 (TX) LLC
DOPPIO (IL) LLC
Dough (DE) QRS 14-77, Inc.
Dough (MD)
Dough Lot (DE) QRS 14-110, Inc.
Dough Lot (MD)
DP WPC (TX) LLC
Drill (DE) Trust
Drill GmbH & Co. KG
Drug (AZ) QRS 14-42, Inc.
DSG (IN) QRS 15-44, Inc.
DSG GP (PA) QRS 14-103, Inc.
DSG Landlord (PA) L.P.
DSG LP (PA) Trust
DT Memphis New TRS (DE) LLC
Dunkelfelder sp. z o. o.
Duras sp. z o. o.
DYNAMITE (MULTI) LLC
Dyne (DE) LP
ED Landlord (GA) LLC
Ed Landlord Two (DE) LLC
El Paso Six Storage 18 (TX) LLC
ELECTRIC TRUSTOR (MX) LLC
Eleventh Storage 18 (GA) LLC
ELL (GER) QRS 16-37, Inc.
Fabric (DE) GP
Fast (DE) QRS 14-22, Inc.
Faur WPC (OH) LLC
Faverga Sp. z o.o.
Fayetteville Storage 17 (NC) LLC
Fernandina Beach Storage 18 (FL) LLC
FELIX (MULTI) LLC
Film (FL) QRS 14-44, Inc.
Finistar (CA-TX) Limited Partnership
Finistar GP (CA-TX) QRS 16-21, Inc.
Finistar LP (DE) QRS 16-29, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Belgium
100 % Belgium
100 % Delaware
100 % Delaware
100 % Poland
100 % Portugal
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Maryland
100 % Delaware
100 % Maryland
100 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Poland
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Finnestadveien 44 II AS
FIRED UP (IL) LLC
FIS (MI) LLC
Fit(TX)GP QRS 12-60, Inc.
Fit(TX) LP
Fit(TX) Trust
Flagland Spain, S.L.
Flan 1 (IL) LLC
Flan 4 (Multi) LLC
Flan Hud (NY) LLC
Flatlands Self Storage NYC Mezz, LLC
Flatlands Self Storage NYC, LLC
Flavortown (IL) LLC
Flex (NE) LLC
Flex Member (NE) LLC
Flipper (FL) LLC
FLOUR POWER (ID) LLC
FLOUR POWER (IL) LLC
FLOUR POWER (MULTI) LLC
FLOUR POWER (OH) LLC
FLOUR POWER (UT) LLC
FLUX CAPACITOR 121 GW LLC
FM Naples Storage 18 (FL) LLC
Food (DE) QRS 12-49, Inc.
Forever Metal (QC) Ltd.
FORT-BEN HOLDINGS (ONQC) LTD.
FORT-NOM HOLDINGS (ONQC) INC.
Forterra Canada GP LLC
Forterra Canada Holdings LP
Fortune Road Storage 18 (FL) LLC
Foss (NH) QRS 16-3, Inc.
Four World Landlord (GA) LLC
Four World Manager (GA) LLC
Frame (TX) QRS 14-25, Inc.
Freight (IL) LLC
FRO 16 (NC) LLC
FRO Man Member 17 (NC) LLC
FRO Spin (NC) LLC
Furniture Exch Manager (WI) LLC
Furniture Exch Manager Too (WI) LLC
Furniture Owner (WI) LLC
Furniture Owner Too (WI) LLC
GAL III (IN) QRS 15-49, Inc.
GAL III (NJ) QRS 15-45, Inc.
GAL III (NY) QRS 15-48, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Norway
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Canada
100 % Canada
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Galadean Sp. z o.o.
Galleria Storage 18 (TX) LLC
GEMCHI (IL) LLC
GERB TOLLAND QRS (CT) 16 Inc.
Gibson Mass Member Two LLC
Gilroy Storage GP 18 (CA) LLC
Gilroy Storage Owner 18 (CA) LP
GIVE ME A BRAKE (OH) LLC
Global Cerit, SL
Global Negan S.L.
Global Sagres, S.L.
Global Windu, S.L.
Go Green (OH) LLC
Goldyard, S.L.
GONE FISHING (PA) LLC
Granite Landlord (GA) LLC
GRC (TX) Limited Partnership
GRC (TX) QRS 15-47, Inc.
GRC (TX) Trust
GRC-II (TX) Limited Partnership
GRC-II (TX) QRS 15-80, Inc.
GRC-II (TX) Trust
Greens (Finland) QRS 16-14, Inc.
Greens Shareholder (Finland) QRS 16-16, Inc.
Greensboro Storage GP 18 (NC) LLC
Greensboro Storage Owner 18 (NC) LP
GROVEPORT OWNER (OH) LLC
Guggenheim Credit Income Fund
Guitar Mass (TN) QRS 14-36, Inc.
Guitar Plus (TN) QRS 14-37, Inc.
H2 17 Investor (GER) LLC
H2 Investor (GER) QRS 14-104 LLC
H2 Investor (GER) QRS 15-91, Inc.
H2 Investor (GER) QRS 16-100, Inc.
Hammer (DE) Limited Partnership
Hammer (DE) LP QRS 12-65, Inc.
Hammer (DE) LP QRS 14-100, Inc.
Hammer (DE) LP QRS 15-33, Inc.
Hammer (DE) QRS 15-32, Inc.
Hammer (DE) Trust
Hammer Time (TX) LLC
Hammer Time Owner (TX) LP
Hammered Home (OH) LLC
Hans Gruber Godo Kaisha
Hawk (IA) LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Spain
75 % Spain
100 % Spain
90 % Spain
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
3 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Japan
100 % Delaware
Name of Subsidiary
Hawk JV Landlord (IA) LLC
Hawk JV Landlord Two (IA) LLC
Hawk Landlord (IA) LLC
Hawk Landlord Two (IA) LLC
Hawk Two (IA) LLC
HCF GP (CA) LLC
HCF Landlord (CA) LP
Health Landlord (MN) LLC
HEF (NC-SC) QRS 14-86, Inc.
Hellweg GmbH & Co. Vermögensverwaltungs KG
Hesperia Storage 17 (CA) LLC
HF Landlord (SC) LLC
HF Member (SC) LLC
HF Three Landlord (SC) LLC
HF Two Landlord (SC) LLC
HILLTOP SH VENTURE (TX) LP
HLWG B Note Purchaser (DE) LLC
HLWG Two (GER) LLC
HM Benefits (MI) QRS 16-18, Inc.
HNGS AUTO (MI) LLC
HOAGIES (FL) LLC
HOB (TX) LLC
Hoe Management GmbH
Holiday Storage 17 (FL) LLC
Honey Badger GP LLC
Honey Badger (NC) LP
HOT AIR (CANADA) LLC
HOT AIR (MULTI) LLC
HOT AIR NOMINEE CORP.
Hotel Airport Stuttgart Grundst✔cks GmbH
Hotel (MN) QRS 16-84, Inc.
Hotel Operator (MN) TRS 16-87, Inc.
House Money (Multi) LLC
Hulikoa Kona Storage 18 (HI) LLC
Hum (DE) QRS 11-45, Inc.
Humble Storage 18 (TX) LLC
Huntwood (TX) Limited Partnership
Huntwood (TX) QRS 16-8, Inc.
ICALL BTS (VA) LLC
ICG (TX) Limited Partnership
ICG-GP (TX) QRS 15-3, Inc.
ICG-LP (TX) Trust
ID Wheel (FL) LLC
IDrive Mezz Lender (FL) LLC
IH37 Storage 18 (TX) LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
90 % Delaware
100 % Delaware
90 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
90 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
95 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Ijobbers (DE) QRS 14-41, Inc.
Ijobbers LLC
Image (NY) QRS 16-67, Inc.
Industrial Center 7 Sp. z o.o.
INGESCORP 2008, S.L.
Initiator (CA) QRS 14-62, Inc.
Inversiones Holmes, S.L.
Ithaca Storage 18 (NY) LLC
Jamaica (IL) LLC
Jamesinvest SRL
Jandoor (MULTI) LLC
Jax Costa (FL) LLC
Jen (MA) QRS 12-54, Inc.
Jensen Beach Storage 18 (FL) LLC
Joan Storage 18 (FL) LLC
John McCLane (NY) LLC
JPCentre (TX) LLC
JPTampa Management (FL) LLC
JX STORAGE (MULTI) 1 LLC
JX STORAGE (MULTI) 2 LLC
Kabushiki Kaisha Mure Property
Kaloko Storage 18 (HI) LLC
KIDNEY BEANS (TN) LLC
Kiinteistöosakeyhtiö Ruskontie 55
KITKAT (IL) LLC
KNOT JUST A SNACK (MULTI) LLC
KRO (IL) LLC
KSM Cresskill (NJ) QRS 16-80, Inc.
KSM Livingston (NJ) QRS 16-76, INC.
KSM Montclair (NJ) QRS 16-78, INC.
KSM Morristown (NJ) QRS 16-79, INC.
KSM Summit (NJ) QRS 16-75, Inc.
Labels-Ben (DE) QRS 16-28, Inc.
Labrador (AZ) LP
Lady L Storage 18 (FL) LLC
Lake Street Storage 17 (IL) LLC
Landsberger StraBe 68-76 Grundstϋcks GmbH
LASER GP (CA) LLC
LASER LANDLORD (CA) LP
Laurken (IL) LLC
Leather (DE) QRS 14-72, Inc.
Leesburg Storage 18 (FL) LLC
Lewisville Dealer 17 (TX) LLC
Lincoln (DE) LP
Longboom (Finland) QRS 16-131, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Spain
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Belgium
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % New York
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Japan
100 % Delaware
100 % Delaware
100 % Finland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
95 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Longboom Finance (Finland) QRS 16-130, Inc.
Louisville Storage 18 (KY) LLC
Loznica d.o.o.
LPD (CT) QRS 16-132, Inc.
LPORT (WA-TX) QRS 16-92, Inc.
LPORT 2 (WA) QRS 16-147, Inc.
LT Fit (AZ-MD) LLC
LTI (DE) QRS 14-81, Inc.
LTI Trust (MD)
LV Storage Portfolio 18 (NV) LLC
M DUE
Madde Investments Sp. z o.o.
Madison Storage NYC, LLC
Mala-IDS (DE) QRS 16-71, Inc.
Mallika PBJ LLC
Mapinvest Delaware LLC
Marcourt Investments Incorporated
Master (DE) QRS 15-71, Inc.
Mauritius International I LLC
MBM-Beef (DE) QRS 15-18, Inc.
MCDORMY (NY) LLC
Medi (PA) Limited Partnership
Medi (PA) QRS 15-21, Inc.
Medi (PA) Trust
Medical (Multi) LLC
MERCURY (MI) LLC
Merge (WI) LLC
Meri (NC) LLC
MERI(NC)MM QRS 14-98, Inc.
MET WST (UT) QRS 16-97, Inc.
Metal (DE) QRS 14-67, Inc.
Metal (GER) QRS 15-94, Inc.
Metaply (MI) LLC
MFF Mezz (Multi) LLC
Miami Storage 18 (FL) LLC
Milford Storage 18 (MA) LLC
Mill Storage 17 (CA) LLC
Millsboro Storage 18 (DE) LLC
MIS EGN (MN) LLC
MK (Mexico) QRS 16-48, Inc.
MK GP BEN (DE) QRS 16-45, Inc.
MK Landlord (DE) Limited Partnership
MK LP Ben (DE) QRS 16-46, Inc.
MK-Ben (DE) Limited Partnership
MK-GP (DE) QRS 16-43, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Croatia
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Italy
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
MK-LP (DE) QRS 16-44, Inc.
MK-Nom (ONT), Inc.
MM(UT) QRS 11-59, Inc.
Module (DE) Limited Partnership
Mons (DE) QRS 15-68, Inc.
MOPROBLEMS (MI) LLC
More Applied Utah (UT) LLC
Morisek Hoffman (IL) LLC
Morrisville Landlord GP (NC) LLC
Morrisville Landlord (NC) LP
Movie (VA) QRS 14-24, Inc.
MR Lender (TX) LLC
MSTEEL (IL) LLC
Mustek Rank S.L.
MWI Investor 17 (TX) LP
MWI Investor GP 17 (TX) LLC
Nail (DE) Trust
NAILED IT GP LLC
NAILED IT (MULTI) LP
NAKATOMI PLAZA (DE) LLC
Namesti Rank S.L.
National Storage 17 (Multi) LLC
Neonatal Finland Inc.
New Castle Storage 18 (DE) LLC
Nord (GA) QRS 16-98, Inc.
Northwest Storage 17 (IL) LLC
Oak Creek 17 Investor (WI) LLC
Olimpia Investments Sp. z o.o.
OLIVIA (IL) LLC
OLIVIA (ON) HOLDINGS CORP.
OLIVIA (ONTARIO) LLC
OPH Storage 17 (FL) LLC
Optical (CA) QRS 15-8, Inc.
Orb (MO) QRS 12-56, Inc.
Orlando Storage 17 (FL) LLC
OSCAR (IL) LLC
ØAV 88 AS
OTC (MULTI) LLC
OTC RX Holdings ULC
OTC RX Nominee CORP.
OTC RX (ONTARIO) LLC
OUI CHEF (MULTI) GP LLC
OUI CHEF (MULTI) LP
Overtape (CA) QRS 15-14, Inc.
OX (AL) LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Norway
100 % Delaware
100 % Canada
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
OX-GP (AL) QRS 15-15, Inc.
Pacpress (IL-MI) QRS 16-114, Inc.
Pallet (FRA) SARL
Palm Bay Storage 18 (FL) LLC
Panama Storage 18 (FL) LLC
Panel (UK) QRS 14-54, Inc.
Paper Limited Liability Company
Parts (DE) QRS 14-90, Inc.
PDC Industrial Center 83 Sp. z o.o.
Pem (MN) QRS 15-39, Inc.
Pend (WI) LLC
Pend II (OH-IN) LLC
PERFECT STORM (UT) LLC
PET(TX)GP QRS 11-62, INC.
Pet(TX) LP
Pet(TX) Trust
Pewaukee Development, LLC
PG (Multi-16) L.P.
PG (Multi-16) QRS 16-7, Inc.
PG (Multi-16) Trust
PG-Ben (CAN) QRS 16-9, Inc.
PG-Nom (Alberta), Inc.
PILDRAX INVEST, S.L.
Pipe Portfolio GP LLC
Pipe Portfolio Owner (Multi) LP
Plants (Sweden) QRS 16-13, Inc.
Plants Shareholder (Sweden) QRS 16-15, Inc.
Plastic (DE) Limited Partnership
Plastic (DE) QRS 15-56, Inc.
Plastic (DE) Trust
Plastic II (IL) LLC
Plastic II (IL) QRS 16-27, Inc.
Plastix (WI) LLC
Plates (DE) QRS 14-63, Inc.
Pleasant Hill GL 18 (FL) LLC
Pleasant Hill Storage 18 (FL) LLC
Pliers (DE) Trust
Plum (DE) QRS 15-67, Inc.
Pol (NC) QRS 15-25, Inc.
Pold (GER) QRS 16-133 LLC
Pole Landlord (LA-TX) LLC
Polkinvest Sprl
Poly (Multi) Limited Partnership
Poly GP (Multi) QRS 16-35, Inc.
Poly LP (MD) Trust
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % France
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Wisconsin
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Canada
90 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Belgium
100 % Delaware
100 % Delaware
100 % Maryland
Name of Subsidiary
Pompano Storage 18 (FL) LLC
Popcorn (TX) QRS 14-43, Inc.
Portland Storage 18 (OR) LLC
PRA (OH) LLC
Primo (MS) QRS 16-94, Inc.
Print (WI) QRS 12-40, Inc.
Projector (FL) QRS 14-45, Inc.
Pump (MO) QRS 14-52, Inc.
PWE (Multi) QRS 14-85, Inc.
QRS 10-1 (ILL), Inc.
QRS 10-18 (FL), LLC
QRS 11-2 (AR), LLC
QS ARK (DE) QRS 15-38, Inc.
RACO (AZ) LLC
RACO TWO (AZ) LLC
Rails (UK) QRS 15-54, Inc.
Randolph/Clinton Limited Partnership
Rankin Storage 18 (TX) LLC
Rankin Storage Owner 18 (TX) LP
REDEALER (NJ-PA) LLC
Redrock Storage 18 (NV) LLC
Rehoboth Storage 18 (DE) LLC
REIT Brickan AB
RI(CA) QRS 12-59, Inc.
RII (CA) QRS 15-2, Inc.
Ring Spin (GA) LLC
RRD (IL) LLC
Rubbertex (TX) QRS 16-68, Inc.
Rush It LLC
SAB (IA) LLC
SALE-LEAFBACK (MN) LLC
Salted Peanuts (LA) QRS 15-13, LLC
SBOP INVESTOR LLC
SBPROP INVESTOR LLC
SCHNEI-ELEC (MA) LLC
Sealtex (DE) QRS 16-69, Inc.
Sebastian Storage 18 (FL) LLC
Sekeslog 17 UAB
SF(TX)GP QRS 11-61, INC.
SF(TX) LP
SF(TX) Trust
SFC (TN) QRS 11-21, Inc.
SFCO (GA) QRS 16-127, INC.
SFT INS (TX) LLC
Shaq (DE) QRS 15-75, Inc.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Wisconsin
100 % Delaware
100 % Delaware
100 % Delaware
100 % Illinois
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Sweden
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Lithuania
100 % Delaware
100 % Delaware
100 % Maryland
100 % Tennessee
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Shep (KS-OK) QRS 16-113, Inc.
SHOTS-ORL (FL) LLC
Shovel Management GmbH
SINGLE USE (MULTI) LLC
Sixth Sense GP (NC) LLC
Sixth Sense (NC) LP
SM(NY) QRS 14-93, Inc.
Smalvollveien 65 Eiendom AS
Smalvollvn 65 ANS
SNAP INTO (IN) LLC
SP Label (TN) LLC
SPARE ME (MULTI) LLC
Sparky's Storage 18 (CA) LP
Sparky's Storage GP 18 (CA) LLC
Speed (NC) QRS 14-70, Inc.
Spencer Storage 18 (MO) LLC
ST(TX)GP QRS 11-63, INC.
ST(TX) LP
ST(TX) Trust
State Road Storage 18 (FL) LLC
Steely Dan (WI) LLC
STOCKSANDEN, S.L.
Stone Cold (CA) LP
Stone Cold GP (CA) LLC
Stone Oak 17 (TX) LLC
Storage 18 ES Account (DE) LLC
Stor-Move UH 14 Business Trust
Stor-Move UH 15 Business Trust
Stor-Move UH 16 Business Trust
Stradella Sp. z o.o.
STRUCK OIL (MULTI) LLC
Sun (SC) QRS 12-68, Inc.
Sunpro (KY) LLC
Suspension (DE) QRS 15-1, Inc.
SW Chicago Storage 18 (IL) LLC
Tallahassee Storage 18 (FL) LLC
TASTY KALE (UT) LLC
TDG Cold 17-14 B.V.
Tech (GER) 17-1 B.V.
Tech (GER) QRS 16-144, Inc.
Tech Landlord (GER) LLC
Teeth Finance (Finland) QRS 16-106, Inc.
Teeth Landlord (Finland) LLC
Teeth Member (Finland) QRS 16-107, Inc.
Telegraph (MO) LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
91 % Norway
91 % Norway
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Spain
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Massachusetts
100 % Massachusetts
100 % Massachusetts
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Netherlands
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
Name of Subsidiary
Telegraph Manager (MO) WPC, Inc.
Temecula Storage 18 (CA) LP
Temecula Storage GP 18 (CA) LLC
TENACIOUS HOLDINGS ULC
TENACIOUS NOMINEE CORP.
Tenacious WPC (Multi) LLC
Terrier (AZ) QRS 14-78, Inc.
Tfarma (CO) QRS 16-93, Inc.
THAT'S A WRAP (WI) LLC
Third Avenue Self Storage NYC, LLC
Three Aircraft Seats (DE) Limited Partnership
THREE AMIGOS (US MULTI) LLC
Three Cabin Seats (DE) LLC
TICKTOCK (TX-PA) LLC
Tissue SARL
Toner (DE) QRS 14-96, Inc.
Toolbelt (PA-SC) LLC
Toolbox (MX) LLC
TOOL TIME (WV) LLC
TOOTH FAIRY (IL) LLC
Tower (DE) QRS 14-89, Inc.
Tower 14 (DE)
Townline Storage 17 (IL) LLC
Toys (NE) QRS 15-74, Inc.
Trinity UK Holding II Limited
Trinity WPC (Manchester) Limited
Trinity WPC (UK) Limited
Trinity WPC (UK) LLC
TRUCKIN' (IL) LLC
Truth (MN) LLC
Trucks (France) SARL
TR-VSS (MI) QRS 16-90, Inc.
TSO-Hungary Kft.
Turbo Headquarters (TX) LLC
Two Notch Storage 18 (SC) LLC
UH Storage (DE) Limited Partnership
UH Storage GP (DE) QRS 15-50, Inc.
UK Panel LLC
Under Pressure (Multi) LLC
Uni-Tech (CA) QRS 15-64, Inc.
Uni-Tech (PA) QRS 15-51, Inc.
Uni-Tech (PA) QRS 15-63, Inc.
Uni-Tech (PA) Trust
Uni-Tech (PA), L.P.
URubber (TX) Limited Partnership
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Canada
100 % Canada
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % France
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % United Kingdom
100 % United Kingdom
100 % United Kingdom
100 % Delaware
100 % Delaware
100 % Delaware
100 % France
100 % Delaware
100 % Hungary
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
SUBSIDIARIES OF REGISTRANT (Continued)
Name of Subsidiary
USHOLL (MI) LLC
USO Landlord (TX) LLC
UTI-SAC (CA) QRS 16-34, Inc.
Valrico Storage 18 (FL) LLC
Vellam Investments sp z o.o.
Venice (CA) LP
Veritas Group IX - NYC, LLC
Vinyl (DE) QRS 14-71, Inc.
VIPER 63 (NV) LLC
VIPER LB 63 (NV) LLC
VIPER LENDER 63 (NV) LLC
W. P. Carey & Co. B.V.
W.P. Carey & Co. Limited
W. P. Carey International LLC
W. P. Carey Management LLC
W. P. Carey Property Investor LLC
Wadd-II (TN) LP
Wadd-II General Partner (TN) QRS 15-19, INC.
Wallers (Multi) LLC
Wals (IN) LLC
Weg (GER) QRS 15-83, Inc.
Wegell GmbH & Co. KG
Wegell Verwaltungs GmbH
West Farms Self Storage NYC Mezz, LLC
West Farms Self Storage NYC, LLC
WGN (GER) LLC
WGN 15 Holdco (GER) QRS 15-98, Inc.
WGN 15 Member (GER) QRS 15-99, Inc.
WGS (Multi) LLC
Wheeler Dealer 17 Multi, LLC
Wheeler Mezzanine JV (DE) LLC
WILLFA (IL) LLC
Willow Festival Annex Property Owners Association
WILSON NEIGHBOR (IL) LLC
Windough (DE) LP
Windough Lot (DE) LP
Wlgrn (NV) LLC
Wolv (DE) Limited Partnership
Wolv Trust, a Maryland Business Trust
Work (GER) QRS 16-117, Inc.
WPC 17 Green Sp. z o. o.
WPC 17 Polk Sp. z o.o.
WPC Agro I 17-13 B.V.
WPC Agro II 17-17 B.V.
WPC AX Sp. z o.o.
Ownership
State or Country of
Incorporation
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Netherlands
100 % United Kingdom
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Germany
100 % Germany
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Illinois
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Poland
100 % Poland
100 % Netherlands
100 % Netherlands
100 % Poland
Name of Subsidiary
WPC Barca 18-22 B.V.
WPC BILLBOARD LENDER LLC
WPC Boavista 18-27 B.V.
WPC CM6-Hotel Manager, LLC
WPC Coimbra 18-21 B.V.
WPC Crown Colony (MA) LLC
WPC Cube Czech s.r.o.
WPC Deville Denmark ApS
WPC DF Denmark ApS
WPC DF III Denmark ApS
WPC DISPLAY OWNER (MULTI) LLC
WPC Drunen 17-27 B.V.
WPC Eurobond B.V.
WPC EXCH BUYERSBURG (IN) LLC
WPC EXCH Morrisville Landlord (NC) LLC
WPC Exch Sublandlord (DE) LLC
WPC Fau Czech sro
WPC FINANCING GP INC.
WPC FINANCING LP
WPC FM Czech s.r.o.
WPC FM Slovakia s.r.o.
WPC FriesCamp 17-30 B.V.
WPC Gam Holding B.V.
WPC GELSENKIRCHEN 17-33 B.V.
WPC GP LLC
WPC Granada II 18-20 B.V.
WPC Hamburg 18-12 B.V.
WPC Holdco LLC
WPC Hornbachplatz 1 GmbH
WPC Infin 18 GmbH & Co. KG
WPC Infin 18 Verwaltungs GmbH
WPC Infin 18-4 B.V.
WPC International Holding and Financing LLC
WPC International Holding LP
WPC Jumb 17-19 B.V.
WPC KEN SCI
WPC LER SCI
WPC Lipowy Sp. z o.o.
WPC Leo 17-38 B.V.
WPC MAN Denmark ApS
WPC MAN-Strasse 1 GmbH
WPC Meru SCI
WPC NatExp 17-9 B.V.
WPC Noki Sp. z o.o.
WPC Pan-European Holding Cooperatief U.A.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
90 % Netherlands
100 % Delaware
90 % Netherlands
100 % Delaware
90 % Netherlands
100 % Delaware
100 % Czech Republic
100 % Denmark
100 % Denmark
100 % Denmark
100 % Delaware
100 % Netherlands
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Delaware
100 % Czech Republic
100 % Delaware
100 % Delaware
100 % Czech Republic
100 % Slovakia
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Maryland
90 % Netherlands
100 % Netherlands
100 % Maryland
100 % Austria
100 % Germany
100 % Germany
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Netherlands
100 % France
100 % France
100 % Poland
100 % Netherlands
100 % Denmark
100 % Austria
100 % France
100 % Netherlands
100 % Poland
100 % Netherlands
Name of Subsidiary
WPC Pola Sp. z o.o.
WPC PR6 (CO) LLC
WPC PR6 OPT (CO) LLC
WPC QBE Manager, LLC
WPC Rab 18-11 B.V.
WPC REIT ADMIR 8 B.V.
WPC REIT AXL 39 B.V.
WPC REIT Cargo 4 B.V.
WPC REIT DS 43 B.V.
WPC REIT Fau 42 B.V.
WPC REIT Financing B.V.
WPC REIT Gam 21 B.V.
WPC REIT Gam 22 B.V.
WPC REIT Gam 23 B.V.
WPC REIT Gam 24 B.V.
WPC REIT Gam 25 B.V.
WPC REIT HF Sp. z o.o.
WPC REIT INEEDATOW 47 B.V.
WPC REIT Kampen 29 B.V.
WPC REIT Kar 26 B.V.
WPC REIT MAN 16 B.V.
WPC REIT Merger Sub Inc.
WPC REIT MX-AB 19 B.V.
WPC REIT MX-AB 37 TRS B.V.
WPC REIT NEWCO B.V.
WPC REIT Nipp 13 B.V.
WPC REIT Npow 17 B.V.
WPC REIT PD 12 B.V.
WPC REIT PeRo 40 B.V.
WPC REIT Rem (IT) Srl
WPC REIT Rock Sp. z o. o
WPC REIT Sant 5 B.V.
WPC REIT Son 30 B.V.
WPC REIT Son 31 B.V.
WPC REIT Son 32 B.V.
WPC REIT Son 33 B.V.
WPC REIT Son 34 B.V.
WPC REIT Ster 18 B.V.
WPC REIT Stretch 41 B.V.
WPC REIT TRS 27 B.V.
WPC REIT UP 46 B.V.
WPC REIT VAC 44 B.V.
WPC REIT Vert (BE) SRL
WPC REIT VM 28 B.V.
WPC REIT VM (BE) B.V.
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Poland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Poland
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Maryland
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Italy
100 % Poland
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Netherlands
100 % Belgium
100 % Netherlands
100 % Belgium
Name of Subsidiary
WPC REIT VM II 48 B.V.
WPC REIT VM II (BE) SRL
WPC REIT VM III (BE) S.A.
WPC REIT Wait 45 B.V.
WPC Seville 18-28 B.V.
WPC Shaft (GER) LLC
WPC Smalvollveien Holding AS
WPC Smalvollveien Purchaser AS
WPC Smucker Manager, LLC
WPC Star Denmark ApS
WPC Starbuilders Sweden AB
WPC Storage TRS 18-1 (DE) Inc.
WPC Swansea 18-24 B.V.
WPC Swansea Student Housing 18-33 B.V.
WPC Swansea TRS 18-32 B.V.
WPC Tesc 17-3 B.V.
WPC VM III 17-40 B.V.
WPC VUL SCI
WPC WGN 17-2 B.V.
WPC-CPA:18 Holdings, LLC
Wrench (DE) Limited Partnership
Wrench (DE) QRS 15-31, Inc.
Wrench (DE) Trust
Wyckoff Self Storage NYC Mezz, LLC
Wyckoff Self Storage NYC, LLC
XPD (NJ) LLC
XPD Member (NJ) QRS 16-12, Inc.
You Scream (PA) LLC
YOURE IT (TN) LLC
Zerega Self Storage NYC Mezz, LLC
Zerega Self Storage NYC, LLC
SUBSIDIARIES OF REGISTRANT (Continued)
Ownership
State or Country of
Incorporation
100 % Netherlands
100 % Belgium
100 % Belgium
100 % Netherlands
75 % Netherlands
100 % Delaware
100 % Norway
90 % Norway
100 % Delaware
100 % Denmark
100 % Sweden
100 % Delaware
97 % Netherlands
97 % Netherlands
97 % Netherlands
100 % Netherlands
100 % Netherlands
100 % France
100 % Netherlands
100 % Delaware
100 % Delaware
100 % Delaware
100 % Maryland
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
100 % Delaware
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-56121, 333-90880, 333-160078, 333-160079,
333-187729, 333-189999, and 333-219007) and Form S-3 (No. 333-264613) of W. P. Carey Inc. of our report dated February 10, 2023 relating to the
financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
Exhibit 23.1
/s/ PricewaterhouseCoopers LLP
New York, New York
February 10, 2023
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.1
I, Jason E. Fox, certify that:
1.
I have reviewed this Annual Report on Form 10-K of W. P. Carey Inc.;
2. 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;
3. 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;
4. 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
5. 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: February 10, 2023
/s/ Jason E. Fox
Jason E. Fox
Chief Executive Officer
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2
I, ToniAnn Sanzone, certify that:
1.
I have reviewed this Annual Report on Form 10-K of W. P. Carey Inc.;
2. 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;
3. 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;
4. 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
5. 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: February 10, 2023
/s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer
Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of W. P. Carey Inc. on Form 10-K for the period ended December 31, 2022 as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), each of the undersigned officers of W. P. Carey Inc., does hereby certify, to the best of such officer’s
knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of W. P. Carey Inc.
Exhibit 32
Date: February 10, 2023
/s/ Jason E. Fox
Jason E. Fox
Chief Executive Officer
Date: February 10, 2023
/s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer
The certification set forth above is being furnished as an exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as
part of the Report as a separate disclosure document of W. P. Carey Inc. or the certifying officers.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature
that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to W. P. Carey Inc. and will be
retained by W. P. Carey Inc. and furnished to the Securities and Exchange Commission or its staff upon request.