Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
 _________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012
Or
¨
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: 001-35568
_________________________ 
Healthcare Trust of America, Inc.
(Exact name of registrant as specified in its charter)
 _________________________
Maryland
 
20-4738467
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
16435 N. Scottsdale Road,
Suite 320, Scottsdale, Arizona
 
85254
(Address of principal executive offices)
 
(Zip Code)
(480) 998-3478
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
 _________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 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.     x   Yes     o   No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     x   Yes     ¨   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
¨
  
 
 
Accelerated filer
 
¨
 
 
 
 
 
Non-accelerated filer
 
x
  
(Do not check if a smaller reporting company)
 
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     ¨   Yes     x   No
As of August 6, 2012, there were 42,532,346 shares of Class A common stock, and 171,845,988 shares of Class B common stock of Healthcare Trust of America, Inc. outstanding.
 
Healthcare Trust of America, Inc.
(A Maryland Corporation)
TABLE OF CONTENTS
 
Item 1.
  
  
 
  
  
 
  
  
 
  
  
 
  
  
 
  
  
Item 2.
  
  
Item 3.
  
  
Item 4.
  
  
Item 1.
  
  
Item 1A.
  
  
Item 2.
  
  
Item 3.
  
  
Item 4.
  
  
Item 5.
  
  
Item 6.
  
  
 
 
  
 

Table of Contents

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2012 and December 31, 2011
(Unaudited)
 
 
 
June 30, 2012
 
December 31, 2011
ASSETS
 
 
 
 
Real estate investments, net
 
$
2,001,932,000

 
$
1,806,471,000

Real estate notes receivable, net
 
20,000,000

 
57,459,000

Cash and cash equivalents
 
23,977,000

 
69,491,000

Accounts and other receivables, net
 
11,297,000

 
12,658,000

Restricted cash and escrow deposits
 
16,649,000

 
16,718,000

Identified intangible assets, net
 
295,665,000

 
272,390,000

Other assets, net
 
67,347,000

 
56,442,000

Total assets
 
$
2,436,867,000

 
$
2,291,629,000

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Debt, net
 
$
859,318,000

 
$
639,149,000

Accounts payable and accrued liabilities
 
59,217,000

 
47,801,000

Derivative financial instruments—interest rate swaps
 
6,998,000

 
1,792,000

Security deposits, prepaid rent and other liabilities
 
20,404,000

 
19,930,000

Identified intangible liabilities, net
 
12,284,000

 
11,832,000

Total liabilities
 
958,221,000

 
720,504,000

Commitments and contingencies
 



Redeemable noncontrolling interest of limited partners
 
3,641,000

 
3,785,000

Stockholders’ Equity:
 
 
 
 
Preferred stock, $0.01 par value; 200,000,000 shares authorized; none issued and outstanding
 
—

 
—

Common stock, $0.01 par value; 1,000,000,000 shares authorized; 228,491,312 shares issued and outstanding as of December 31, 2011
 
—

 
2,284,000

Class A common stock, $0.01 par value; 700,000,000 shares authorized; 57,379,033 shares issued and outstanding as of June 30, 2012
 
573,000

 
—

Class B common stock, $0.01 par value; 300,000,000 shares authorized; 171,845,262 shares issued and outstanding as of June 30, 2012
 
1,718,000

 
—

Additional paid-in capital
 
2,039,925,000

 
2,032,305,000

Accumulated deficit
 
(567,211,000
)
 
(467,249,000
)
Total stockholders’ equity
 
1,475,005,000

 
1,567,340,000

Total liabilities and stockholders' equity
 
$
2,436,867,000

 
$
2,291,629,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

2
Table of Contents

Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2012 and 2011
(Unaudited)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
 
Rental income
 
$
74,953,000

 
$
66,426,000

 
$
144,888,000

 
$
135,669,000

Interest income from mortgage notes receivable and other income
 
1,308,000

 
1,648,000

 
2,616,000

 
3,297,000

Total revenues
 
76,261,000

 
68,074,000

 
147,504,000

 
138,966,000

Expenses:
 
 
 

 
 
 
 
Rental expenses
 
24,730,000

 
21,724,000

 
47,445,000

 
45,582,000

General and administrative expenses
 
4,908,000

 
5,331,000

 
10,915,000

 
10,668,000

Acquisition-related expenses  
 
2,970,000

 
361,000

 
5,292,000

 
1,423,000

Depreciation and amortization
 
30,964,000

 
26,701,000

 
58,321,000

 
53,451,000

Listing expenses
 
12,544,000

 
—

 
12,544,000

 
—

Non-traded REIT expenses
 
1,704,000

 
1,424,000

 
3,847,000

 
3,395,000

Total expenses
 
77,820,000

 
55,541,000

 
138,364,000

 
114,519,000

(Loss) income before other income (expense)
 
(1,559,000
)
 
12,533,000

 
9,140,000

 
24,447,000

Other income (expense):
 
 
 
 
 
 
 
 
Interest expense (including amortization of deferred financing costs and debt premium/discount):
 
 
 
 
 
 
 
 
Interest expense related to debt
 
(10,498,000
)
 
(9,953,000
)
 
(20,731,000
)
 
(19,939,000
)
Interest expense related to derivative financial instruments and net change in fair value of derivative financial instruments
 
(5,434,000
)
 
(1,444,000
)
 
(6,234,000
)
 
(1,300,000
)
Debt extinguishment costs
 
(1,886,000
)
 
—

 
(1,886,000
)
 
—

Interest and dividend income
 
63,000

 
26,000

 
91,000

 
144,000

Net (loss) income
 
$
(19,314,000
)
 
$
1,162,000

 
$
(19,620,000
)
 
$
3,352,000

Less: net (income) loss attributable to noncontrolling interest of limited partners
 
(8,000
)
 
9,000

 
(16,000
)
 
(31,000
)
Net (loss) income attributable to controlling interest
 
$
(19,322,000
)
 
$
1,171,000

 
$
(19,636,000
)
 
$
3,321,000

Net (loss) income per share attributable to controlling interest on distributed and undistributed earnings — basic and diluted
 
$
(0.08
)
 
$
0.01

 
$
(0.09
)
 
$
0.01

Weighted average number of shares outstanding 
 
 
 

 
 
 
 
Basic
 
229,436,425

 
228,340,776

 
229,158,939

 
221,606,526

Diluted
 
229,436,425

 
228,800,828

 
229,158,939

 
222,066,578

Distributions declared per common share
 
$
0.17

 
$
0.18

 
$
0.35

 
$
0.36

The accompanying notes are an integral part of these condensed consolidated financial statements.

3
Table of Contents

Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Six Months Ended June 30, 2012 and 2011
(Unaudited)
 
 
 
 
 
 
 
 
Common Stock Issued
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Class A
 
Class B
 
Par Value
 
Additional
Paid-In Capital
 
Accumulated
Deficit
 
Total Stockholders' Equity
BALANCE — December 31, 2010
 
202,643,705

 
—

 
—

 
$
2,026,000

 
$
1,795,413,000

 
$
(310,193,000
)
 
$
1,487,246,000

Issuance of common stock
 
21,767,175

 
—

 
—

 
220,000

 
211,410,000

 
—

 
211,630,000

Offering costs
 
—

 
—

 
—

 
—

 
(15,355,000
)
 
—

 
(15,355,000
)
Issuance of restricted common stock
 
25,000

 
—

 
—

 
—

 
—

 
—

 
—

Amortization of share based compensation
 
—

 
—

 
—

 
—

 
1,542,000

 
—

 
1,542,000

Issuance of common stock under the DRIP
 
3,909,772

 
—

 
—

 
39,000

 
37,104,000

 
—

 
37,143,000

Repurchase and cancellation of common stock
 
(1,834,141
)
 
—

 
—

 
(18,000
)
 
(17,666,000
)
 
—

 
(17,684,000
)
Distributions
 
—

 
—

 
—

 
—

 
—

 
(79,450,000
)
 
(79,450,000
)
Net income attributable to controlling interest
 
—

 
—

 
—

 
—

 
—

 
3,321,000

 
3,321,000

BALANCE — June 30, 2011
 
226,511,511

 
—

 
—

 
$
2,267,000

 
$
2,012,448,000

 
$
(386,322,000
)
 
$
1,628,393,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE — December 31, 2011
 
228,491,312

 
—

 
—

 
$
2,284,000

 
$
2,032,305,000

 
$
(467,249,000
)
 
$
1,567,340,000

Issuance of restricted common stock
 
625,667

 
—

 
—

 
6,000

 
(6,000
)
 
—

 
—

Amortization of share based compensation
 
—

 
—

 
—

 
—

 
7,647,000

 
—

 
7,647,000

Issuance of common stock under the DRIP
 
3,362,473

 
—

 
—

 
33,000

 
31,882,000

 
—

 
31,915,000

Repurchase and cancellation of common stock
 
(3,070,013
)
 
(46,289
)
 
(138,855
)
 
(32,000
)
 
(31,903,000
)
 
—

 
(31,935,000
)
Conversion
 
(229,409,439
)
 
57,425,322

 
171,984,117

 
—

 
—

 
—

 
—

Distributions
 
—

 
—

 
—

 
—

 
—

 
(80,326,000
)
 
(80,326,000
)
Net loss attributable to controlling interest
 
—

 
—

 
—

 
—

 
—

 
(19,636,000
)
 
(19,636,000
)
BALANCE — June 30, 2012
 
—

 
57,379,033

 
171,845,262

 
$
2,291,000

 
$
2,039,925,000

 
$
(567,211,000
)
 
$
1,475,005,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

4
Table of Contents

Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2012 and 2011
(Unaudited)
 
 
Six Months Ended June 30,
 
2012
 
2011
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net (loss) income
$
(19,620,000
)
 
$
3,352,000

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Depreciation and amortization (including deferred financing costs, above/below market leases, debt premium/discount, leasehold interests, deferred rent receivable, note receivable closing costs and discount, and lease inducements)
56,966,000

 
51,073,000

Amortization of share based compensation
7,647,000

 
1,542,000

Bad debt expense
476,000

 
454,000

Change in fair value of derivative financial instruments
5,295,000

 
574,000

Changes in operating assets and liabilities:
 
 
 
Accounts and other receivables, net
947,000

 
2,798,000

Other assets
(5,069,000
)
 
(2,129,000
)
Accounts payable and accrued liabilities
1,297,000

 
2,594,000

Security deposits, prepaid rent and other liabilities
(78,000
)
 
528,000

Net cash provided by operating activities
47,861,000

 
60,786,000

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
Acquisition of real estate operating properties
(213,900,000
)
 
(29,733,000
)
Capital expenditures
(12,349,000
)
 
(5,886,000
)
Restricted cash and escrow deposits
(511,000
)
 
(2,890,000
)
Release of restricted cash
580,000

 
14,463,000

Real estate deposits paid
(2,810,000
)
 
(2,000,000
)
Real estate deposits used
3,800,000

 
3,500,000

Net cash used in investing activities
(225,190,000
)
 
(22,546,000
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
Borrowings on secured term loan
—

 
125,500,000

Borrowings on unsecured revolving credit facility
268,000,000

 
—

Payments on unsecured revolving credit facility
(268,000,000
)
 
(7,000,000
)
Borrowings on unsecured term loan
300,000,000

 
—

Payments on mortgage loans payable
(79,774,000
)
 
(163,907,000
)
Deferred financing costs
(4,934,000
)
 
(3,261,000
)
Security deposits
193,000

 
231,000

Proceeds from issuance of common stock
—

 
211,630,000

Repurchase and cancellation of common stock
(31,935,000
)
 
(17,684,000
)
Payment of offering costs
—

 
(17,627,000
)
Distributions
(51,237,000
)
 
(41,011,000
)
Payment on earnout liability
(328,000
)
 
—

Distributions to noncontrolling interest limited partners
(170,000
)
 
(94,000
)
Net cash provided by financing activities
131,815,000

 
86,777,000

NET CHANGE IN CASH AND CASH EQUIVALENTS
(45,514,000
)
 
125,017,000

CASH AND CASH EQUIVALENTS — Beginning of period
69,491,000

 
29,270,000

CASH AND CASH EQUIVALENTS — End of period
$
23,977,000

 
$
154,287,000

 
 
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
Cash paid for:
 
 
 
Interest
$
19,531,000

 
$
23,310,000

Income taxes
621,000

 
576,000

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
 
 
 
Investing Activities:
 
 
 
Accrued capital expenditures
$
(3,795,000
)
 
$
2,325,000

The following represents the significant increase (decrease) in certain assets and liabilities in connection with our acquisitions of operating properties:
 
 
 
Debt, net
$
—

 
$
6,657,000

Real estate investments
43,497,000

 
—

Real estate notes receivable, net
(37,403,000
)
 
—

Identified intangible assets
10,503,000

 
—

Accounts payable and accrued liabilities
16,597,000

 
—

Financing Activities:
 
 
 
Issuance of common stock under the DRIP
$
31,915,000

 
$
37,143,000

Distributions declared, but not paid, including common stock issued under the DRIP
11,284,000

 
13,642,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

5
Table of Contents

Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
As of and for the Three and Six Months Ended June 30, 2012 and 2011
The use of the words “we,” “us” or “our” refers to Healthcare Trust of America, Inc. and its subsidiaries, including Healthcare Trust of America Holdings, LP, except where the context otherwise requires.

1. Organization and Description of Business
Healthcare Trust of America, Inc., a Maryland corporation, was incorporated on April 20, 2006. We were initially capitalized on April 28, 2006 and consider that to be our date of inception.
We are a fully integrated, self-administered and internally managed real estate investment trust, or REIT, primarily focused on acquiring, owning and operating high-quality medical office buildings that are predominantly located on or aligned with campuses of nationally or regionally recognized healthcare systems. We are one of the largest public REITs focused on medical office buildings in the United States based on gross leasable area, or GLA, and have strong industry relationships, a stable and diversified tenant mix and an extensive and active acquisition network. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments and to provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we (i) target mid-sized acquisitions of high-quality medical office buildings in markets with dominant healthcare systems, attractive demographics and that complement our existing portfolio, (ii) actively manage our balance sheet to maintain flexibility with conservative leverage, and (iii) seek internal growth through proactive asset management, leasing and property management oversight. We have qualified to be taxed as a REIT for federal income tax purposes and we intend to continue to be taxed as a REIT. We conduct substantially all of our operations through Healthcare Trust of America Holdings, LP, or our operating partnership.
We invest primarily in high-quality medical office buildings in our target markets, and have acquired high-quality medical office buildings and other facilities that serve the healthcare industry with an aggregate purchase price of $2,548,860,000 through June 30, 2012 . As of June 30, 2012 , our portfolio consisted of 245 medical office buildings and 19 other facilities that serve the healthcare industry, as well as mortgage loans receivable secured by medical office buildings.
On June 6, 2012, we listed our Class A common stock on the New York Stock Exchange, or the NYSE, under the symbol "HTA", or the Listing. In accordance with an amendment to our charter approved by our stockholders on December 20, 2010, all of our common stock was converted into Class A, Class B-1, Class B-2 and Class B-3 common stock. Our Class B common stock is identical to our Class A common stock except that our Class B common stock is not currently listed on a national exchange. The shares of our Class B common stock will convert into shares of our Class A common stock at specified times and all of our Class B common stock will have converted into our Class A common stock within 18 months of the Listing. For the three and six months ended June 30, 2012, we incurred $12,544,000 of expenses associated with the Listing and related activities. These expenses were primarily for professional fees, share based compensation expense and other previously deferred offering costs.
From September 20, 2006 to February 28, 2011, we completed two public offerings of shares of our common stock for $10.00 per share. In addition, we offered shares of our common stock pursuant to our distribution reinvestment plan, or the DRIP, at $9.50 per share. In the aggregate, we received and accepted subscriptions in our initial offering and our follow-on offerings for 220,673,545 shares of our common stock, or $2,195,655,000 , excluding shares of our common stock issued under the DRIP.
Our principal executive offices are located at 16435 N. Scottsdale Road, Suite 320, Scottsdale, Arizona, 85254. Our telephone number is (480) 998-3478. For investor services, contact DST Systems, Inc. at telephone number (888) 801-0107.

2. Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding our interim condensed consolidated financial statements. Such interim condensed consolidated financial statements and the accompanying notes are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying interim condensed consolidated financial statements.

6
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Basis of Presentation
Our accompanying interim condensed consolidated financial statements include our accounts and those of our operating  
partnership, the wholly-owned subsidiaries of our operating partnership and any consolidated variable interest entities, or VIEs, as defined in the Financial Accounting Standards Board, or the FASB, Accounting Standard Codification, or ASC, 810, Consolidation , or ASC 810. All significant inter-company balances and transactions have been eliminated in the condensed consolidated financial statements. We operate in an umbrella partnership REIT, or UPREIT, structure in which subsidiaries of our operating partnership own all of the properties acquired on our behalf. We are the sole general partner of our operating partnership and, as of June 30, 2012 and December 31, 2011 , we owned an approximately 99.93% general partner interest in our operating partnership. As of June 30, 2012 and December 31, 2011 , approximately 0.07% of our operating partnership was owned by certain physician investors who obtained limited partner interests in connection with the Fannin acquisition in June 2010 (see Note 11).
Because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership), the accounts of our operating partnership are consolidated in our interim condensed consolidated financial statements.
In our previously issued statements of operations for the three and six months ended June 30, 2011, non-traded REIT expenses were included in general and administrative expenses. These amounts have been reclassified to conform to current-period presentation in our condensed consolidated statements of operations.
Interim Unaudited Financial Data
Our accompanying interim condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying interim condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying interim condensed consolidated financial statements reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable. Our accompanying interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the 2011 Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements
In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS ( Included in ASC 820, Fair Value Measurement ), or ASU 2011-04, which amends existing guidance to provide common fair value measurements and related disclosure requirements between GAAP and International Financial Reporting Standards, or IFRS. Additional disclosure requirements in the amendment include: (1) for Level 3 fair value measurements, a description of the valuation processes used by the entity and a discussion of the sensitivity of the fair value measurements to changes in unobservable inputs; (2) discussion of the use of a non-financial asset that differs from the asset’s highest and best use; and (3) the level of the fair value hierarchy of financial instruments for items that are not measured at fair value but for which disclosure of fair value is required. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, with early adoption not permitted. We adopted ASU 2011-04 in fiscal 2012; we have reflected the adoption of ASU 2011-04 in the disclosures to our interim condensed consolidated financial statements.

3. Real Estate Investments, Net
Our investments in our consolidated properties consisted of the following as of June 30, 2012 and December 31, 2011 :
 
 
June 30, 2012
 
December 31, 2011
Land
 
$
171,463,000

 
$
168,065,000

Building and improvements
 
2,030,065,000

 
1,803,174,000

Furniture and equipment
 
5,000

 
15,000

 
 
2,201,533,000

 
1,971,254,000

Accumulated depreciation
 
(199,601,000
)
 
(164,783,000
)
Total
 
$
2,001,932,000

 
$
1,806,471,000


7
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Depreciation expense for the three months ended June 30, 2012 and 2011 was $18,704,000 and $16,148,000 , respectively. Depreciation expense for the six months ended June 30, 2012 and 2011 was $35,833,000 and $32,173,000 , respectively.

4. Business Combinations
For the six months ended June 30, 2012 , we have completed three new acquisitions, expanded one of our existing portfolios through the purchase of an additional medical office building and consolidated a variable interest entity, or VIE. The aggregate purchase price for these acquisitions was $268,187,000 in addition to closing costs attributable to these acquisitions of $1,938,000 . Results of operations for these acquisitions are reflected in our interim condensed consolidated statements of operations for the three and six months ended June 30, 2012 for the periods subsequent to the acquisition dates.
As of June 30, 2012 , the aggregate purchase price of the acquisitions and consolidation of the VIE was allocated in the amounts set forth in the table below. Due to the timing of the consolidation of the VIE, we have not finalized the appraisal and valuation related thereto. Since the acquisitions were determined to be individually not significant, but material on a collective basis, the allocations for these acquisitions are set forth below in the aggregate in accordance with the guidance prescribed by ASC 805.
2012 Acquisitions
Total
Land
$
3,398,000

Building
204,031,000

Site improvements
2,507,000

Unamortized tenant improvement costs
12,496,000

Leasehold interest in land, net
3,284,000

Below market leases
(1,415,000
)
Unamortized lease origination costs
10,134,000

In place leases
14,193,000

Tenant relationships
19,272,000

Net assets acquired
267,900,000

Liability assumed
287,000

Aggregate purchase price
$
268,187,000

For the six months ended June 30, 2011 , we completed the acquisition of one new property portfolio and we purchased two additional medical office buildings within our existing property portfolios. The aggregate purchase price associated with these acquisitions was $36,314,000 in addition to closing costs attributable to these acquisitions of $336,000 . The aggregate purchase price of these acquisitions was allocated in the amount of $945,000 to land, $24,539,000 to building and improvements, $1,794,000 to tenant improvements, $852,000 to lease commissions, $4,867,000 to leases in place, $2,887,000 to tenant relationships, $603,000 to above market leasehold interest in land, $(76,000) to above market debt, $20,000 to above market leases, and $(117,000) to below market leases.
In accordance with ASC 805, Business Combinations, or ASC 805, we, with assistance from independent valuation specialists, allocate the purchase price of completed acquisitions to tangible and identified intangible assets and liabilities based on their respective fair values. The allocation to tangible assets (building and land) is based upon our determination of the value of the property as if it were to be replaced and vacant using discounted cash flow models similar to those used by market participants. Factors considered by us include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. Additionally, the purchase price of the applicable completed acquisition is allocated to the above or below market value of in place leases, the value of in place leases, tenant relationships, above or below market debt assumed, and any contingent consideration transferred in the combination. The weighted average useful lives of the acquired intangibles above approximates the amount listed in Note 6 as of June 30, 2012.

8
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

As of June 30, 2012 , we owned one property, purchased during the third quarter of 2010, which is subject to an earnout provision whereby we may be obligated to pay additional consideration to the seller contingent on the future leasing and occupancy of vacant space at the property subject to the terms of the applicable agreements. This contingent earnout payment is based on a predetermined formula and has a set 24 -month time period regarding the obligation to make these payments. If, at the end of this time period, which expired on August 4, 2012, certain space has not been leased and occupied, we will have no further obligation under the earnout. The total possible liability associated with the earnout at June 30, 2012 , which is recorded within “Security deposits, prepaid rent, and other liabilities” in our interim condensed consolidated balance sheet, was $2,153,000 . During the six months ended June 30, 2012 , we made one payment of $328,000 under the earnout agreement. See Note 13, Fair Value of Financial Instruments for further discussion.
The property acquisitions completed during the six months ended June 30, 2012 , were all cash transactions, no mortgage loans payable were assumed or put in place, and we acquired a 100% ownership interest in each property acquisition. See below for a brief description of each of the acquisitions.
•
On January 13, 2012, we completed the acquisition of St. John Providence MOB, an on-campus medical office building located in Novi, Michigan for $51,320,000 . The St. John Providence MOB is connected directly to the Providence Park Hospital via an enclosed walkway. Providence Park Hospital is part of Ascension Health Systems (Moody's Investors Services rated Aa1).
•
On January 31, 2012, we completed the acquisition of an additional medical office building on the Camp Creek campus in Atlanta, Georgia for $8,867,000 . This is our third building in our Camp Creek portfolio; the other two buildings comprising this portfolio were purchased by us in the second quarter of 2010.
•
On March 1, 2012, we completed the acquisition of Penn Avenue Place in Pittsburgh, Pennsylvania for a purchase price of $54,000,000 . Penn Avenue Place is an eight story, healthcare integrated Class A office building which was completely renovated in 1997. The building is anchored by Highmark, Inc. (Standard & Poor's Rating Service rated A) which renewed its lease for an additional 10 -year term beginning on January 1, 2012.
•
On March 29, 2012, we completed the acquisition of the Steward Portfolio located in Boston, Massachusetts for a purchase price of $100,000,000 . This portfolio consists of 13 medical office buildings located on the campuses of Steward Care network. This portfolio is 100% master leased on a triple net basis by Steward Health Care System LLC until 2024.
We recorded revenues and net income for the three months ended June 30, 2012 of approximately $7,462,000 and $2,213,000 , respectively, related to the above acquisitions.
We recorded revenues and net income for the six months ended June 30, 2012 of approximately $10,028,000 and $2,782,000 , respectively, related to the above acquisitions.
Consolidation of Variable Interest Entity
ASC 810, Consolidation , establishes accounting standards for reviewing a VIE to determine who is the primary beneficiary. In December 2009, we acquired a net $37,135,000 mortgage loan receivable collateralized by the Rush medical office building, or Rush. We also entered into a put option agreement with the borrower of the loan receivable. In June 2012, the borrower exercised the put option and we became the primary beneficiary of the building. As of June 30, 2012, we have consolidated the operations of Rush. We expect to close on the acquisition of Rush for $54,000,000 during the third quarter of 2012.

9
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Supplementary Pro Forma Information
The following pro forma consolidated results of operations for the three and six months ended June 30, 2012 and 2011 assumes the 2012 acquisitions, including the consolidation of the VIE, all occurred on January 1, 2011 and exclude $1,938,000 of acquisition related expenses.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Revenues
$
76,573,000

 
$
75,225,000

 
$
153,023,000

 
$
153,269,000

Net (loss) income attributable to controlling interest
(19,703,000
)
 
2,279,000

 
(17,019,000
)
 
5,538,000

 
 
 
 
 
 
 
 
Net (loss) income attributable to controlling interest per basic share
$
(0.09
)
 
$
0.01

 
$
(0.07
)
 
$
0.02

Net (loss) income attributable to controlling interest per diluted share
(0.09
)
 
0.01

 
(0.07
)
 
0.02


Assuming the fiscal 2011 property acquisitions discussed above had occurred on January 1, 2011, for the six months ended June 30, 2011, pro forma revenues, net income attributable to controlling interest and net income per basic and diluted share attributable to controlling interest would have been $139,872,000 , $3,382,000 and $0.02 , respectively. Supplemental pro forma earnings for the six months ended June 30, 2011 were adjusted to exclude $265,000 of acquisition-related costs incurred during the six months ended June 30, 2011. The fiscal 2011 acquisitions were completed during the first quarter and the results of operations were included in the historical results for the three months ended June 30, 2011.
The pro forma results are not necessarily indicative of the operating results that would have been obtained had the acquisitions occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.


5. Real Estate Notes Receivable, Net
Real estate notes receivable, net consisted of the following as of June 30, 2012 and December 31, 2011 :
 
 
June 30, 2012
 
December 31, 2011
Real estate notes receivable - portfolio 1
 
$
20,000,000

 
$
20,000,000

Real estate notes receivable - portfolio 2
 
—

 
41,150,000

Add: Notes receivable closing costs, net
 
—

 
324,000

Less: Discount, net
 
—

 
(4,015,000
)
Real estate notes receivable, net
 
$
20,000,000

 
$
57,459,000

 
The first portfolio consists of four promissory notes receivables secured by medical office buildings. The interest rates on the promissory notes in the portfolio range from 10.85% per annum to 10.95% per annum and the weighted average effective interest rate at June 30, 2012 was 14.57% per annum. The promissory notes in the portfolio were set to mature on May 1, 2012, but were extended to November 1, 2012 for an extension fee payable to us of $50,000 .
The second portfolio consists of one promissory note receivable secured by a medical office building. In June 2012, a put option on the building was exercised by the borrower and we became the primary beneficiary of the building. As of June 30, 2012, we have consolidated the operations of the building. See Note 4, Business Combinations for further discussion. The interest rate was 7.76% per annum and the effective interest rate at June 30, 2012 was 8.6% per annum. The promissory note matures on December 1, 2014.
We monitor the credit quality of our real estate notes receivable portfolios on an ongoing basis by tracking possible credit quality indicators. As of June 30, 2012 , all of our real estate notes receivable are current and we have not provided for any allowance for losses on notes receivable, and as of June 30, 2012 , we have had no impairment with respect to our notes receivable. We made no significant purchases or sales of notes or other receivables during the six months ended June 30, 2012 .



10
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

6. Identified Intangibles, Net
Identified intangible assets and liabilities, net for our properties consisted of the following as of June 30, 2012 and December 31, 2011 :
 
 
 
 
June 30, 2012
 
December 31, 2011
Assets:
 
 
 
 
 
In place leases
 
$
176,514,000

 
$
156,578,000

 
Above market leases
 
21,746,000

 
22,585,000

 
Tenant relationships
 
178,055,000

 
163,842,000

 
Below market leasehold interests
 
30,608,000

 
27,323,000

 
 
 
406,923,000

 
370,328,000

 
Accumulated amortization
 
(111,258,000
)
 
(97,938,000
)
 
Total
 
$
295,665,000

 
$
272,390,000

 
 
 
 
 
 
 
Weighted average remaining life in years
 
16.4

 
16.3

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Below market leases
 
$
13,129,000

 
$
12,378,000

 
Above market leasehold interests
 
3,827,000

 
3,827,000

 
 
 
16,956,000

 
16,205,000

 
Accumulated amortization
 
(4,672,000
)
 
(4,373,000
)
 
Total
 
$
12,284,000

 
$
11,832,000

 
 
 
 
 
 
 
Weighted average remaining life in years
 
19.5

 
20.6

The following is a summary of the intangible amortization for the three and six months ended June 30, 2012 and 2011:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental income related to above or below market leases
$
295,000

 
$
486,000

 
$
715,000

 
$
987,000

Rental expenses related to above or below market leasehold interests
132,000

 
174,000

 
307,000

 
351,000

Amortization expense related to in place leases and tenant relationships
11,783,000

 
10,277,000

 
21,620,000

 
20,784,000

 
 
 
 
 
 
 
 
As of June 30, 2012, the amortization of intangible assets and liabilities for the six months ending December 31, 2012 and for each of the next four years ending December 31 and thereafter is as follows:
 
 
 
 
 
Year
 
Assets
 
Liabilities
2012
 
$
21,080,000

 
$
808,000

2013
 
37,027,000

 
1,476,000

2014
 
33,631,000

 
1,079,000

2015
 
30,203,000

 
900,000

2016
 
26,859,000

 
735,000

Thereafter
 
146,865,000

 
7,286,000

Total
 
$
295,665,000

 
$
12,284,000



11
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)


7. Other Assets, Net
Other assets, net for our properties consisted of the following as of June 30, 2012 and December 31, 2011 :
 
 
 
June 30, 2012
 
December 31, 2011
Deferred financing costs
 
$
17,613,000

 
$
13,183,000

Lease commissions
 
10,700,000

 
9,761,000

Lease inducements
 
1,825,000

 
1,820,000

Deferred rent receivable (net of allowance)
 
34,939,000

 
29,627,000

Prepaid expenses, deposits and other
 
8,851,000

 
9,421,000

Tenant note receivable
 
3,028,000

 
—

 
 
76,956,000

 
63,812,000

Accumulated amortization
 
(9,609,000
)
 
(7,370,000
)
Total
 
$
67,347,000

 
$
56,442,000

During 2012, we capitalized $4,934,000 of deferred financing costs associated with the new unsecured revolving credit and term loan facility.
The tenant note receivable is for a loan to a tenant for building improvements. The maximum amount of the loan is $4,500,000 and the interest rate is 9.0% per annum. This note requires monthly principal and interest payments through July 2027. As of June 30, 2012, this note is current and we have not provided for any allowance for losses, and as of June 30, 2012, we have had no impairment with respect to this note.
The following is a summary of amortization of other assets for the three and six months ended June 30, 2012 and 2011:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization expense related to lease commissions and related lease fees
$
477,000

 
$
276,000

 
$
868,000

 
$
494,000

Interest expense related to deferred financing costs
891,000

 
858,000

 
2,118,000

 
1,870,000

Rental income related to lease inducements
88,000

 
34,000

 
201,000

 
88,000



8. Debt, Net

Debt, net consisted of the following as of June 30, 2012 and December 31, 2011 :
 
 
June 30, 2012
 
December 31, 2011
Unsecured Term Loan
 
$
300,000,000

 
$
—

Fixed Rate Mortgages
 
392,906,000

 
461,248,000

Variable Rate Mortgages
 
38,377,000

 
49,810,000

Secured Real Estate Term Loan
 
125,500,000

 
125,500,000

 
 
856,783,000

 
636,558,000

Add: Net Premium
 
2,535,000

 
2,591,000

Total
 
$
859,318,000

 
$
639,149,000


We are required by the terms of the applicable loan documents to meet certain financial covenants, such as debt service coverage ratios, rent coverage ratios and reporting requirements. As of June 30, 2012 , we believe that we were in compliance with all such financial covenants and reporting requirements.

12
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Unsecured Revolving Credit Facility and Term Loan
On March 29, 2012, we entered into a new credit agreement, or the new credit agreement, with JPMorgan Chase Bank, N.A., as administrative agent, or JPMorgan Securities, LLC, Wells Fargo Securities, LLC and Deutsche Bank Securities Inc., as syndication agents, U.S. Bank National Association, Fifth Third Bank, Capital One, N.A., Regions Bank, and Compass Bank, as documentation agents, and the lenders named therein, to obtain an unsecured revolving credit facility in an aggregate maximum principal amount of $575,000,000 , or the unsecured revolving credit facility, and an unsecured term loan of $300,000,000 , or the unsecured term loan. The new credit agreement matures in March 2016 and includes a one year extension option, subject to certain conditions. The new credit agreement replaces the previous $575,000,000 credit agreement that would have matured in May 2014. See below for a further discussion of the previous credit agreement.
The actual amount of credit available under the new credit agreement is a function of certain loan-to-value and debt service coverage ratios contained in the new credit agreement. Subject to the terms of the new credit agreement, the maximum principal amount of the new credit agreement may be increased, subject to such additional financing being offered and provided by existing lenders or new lenders under the new credit agreement.
Borrowings under the unsecured revolving credit facility portion of the new credit agreement accrue interest at a rate per annum equal to the Adjusted LIBOR plus a margin ranging from 1.10% to 1.75% based on our operating partnership’s credit ratings. Our operating partnership also pays a facility fee ranging from 0.20% to 0.50% on the aggregate commitments under the unsecured revolving credit facility. The margin associated with borrowings as of June 30, 2012 was 1.55% and the facility fee as of June 30, 2012 was 0.35% . As of June 30, 2012 , we had no amounts outstanding under the unsecured revolving credit facility.
Borrowings under the unsecured term loan portion of the new credit agreement accrue interest at a rate per annum equal to the Adjusted LIBOR plus a margin ranging from 1.30% to 2.25% based on our operating partnership's credit ratings. The margin associated with borrowings as of June 30, 2012 was 1.85% . As of June 30, 2012 , we had $300,000,000 outstanding under our unsecured term loan.
On March 29, 2012, we entered into an interest rate swap with Wells Fargo Bank N.A., as counterparty, for a notional amount of $200,000,000 , and with a maturity date of March 29, 2017. On May 21, 2012, we entered into a interest rate swap with JPMorgan Chase Bank, N.A., Fifth Third Bank and Regions Bank for a notional amount of $100,000,000 , and with a maturity date of June 15, 2016. These swaps fix the interest rate on our $300,000,000 unsecured term loan at 2.95% per annum.
The new credit agreement contains various affirmative and negative covenants that we believe are customary for facilities of this type, including limitations on the incurrence of debt by us, our operating partnership and its subsidiaries that own unencumbered assets, limitations on the nature of our operating partnership’s business, and limitations on distributions by our operating partnership and its subsidiaries that own unencumbered assets.  The new credit agreement imposes a number of financial covenants on us and our operating partnership, including: a maximum ratio of total indebtedness to total asset value; a minimum ratio of EBITDA to fixed charges; a minimum tangible net worth covenant; a maximum ratio of unsecured indebtedness to unencumbered asset value; and a minimum ratio of unencumbered net operating income to unsecured interest expense. As of June 30, 2012 , we were in compliance with all applicable covenants. In addition, the new credit agreement includes events of default that we believe are customary for facilities of this type, including restricting us from making distributions to our stockholders in the event we are in default under the new credit agreement, except to the extent necessary for us to maintain our REIT status.
Previous Credit Agreement
As of December 31, 2011, we had no amounts outstanding under our former unsecured revolving credit facility and we were in compliance with all of the covenants therein. During the three months ended March 31, 2012, we had draws of $182,000,000 on this unsecured revolving credit facility in order to fund the acquisition of properties. During March 2012, these amounts were repaid and our former unsecured revolving credit facility was terminated in conjunction with the execution of the new credit agreement.
New Unsecured Term Loan
On July 20, 2012, we entered into a new term loan, or the new term loan, with Wells Fargo Bank, N.A, as the administrative agent, and Capital One, N.A and PNC Bank, as the co-documentation agents, in the amount of $155,000,000 . Borrowings under the new term loan accrue interest at a rate per annum equal to LIBOR plus a margin ranging from 1.55% to 2.40% based on our operating partnership's credit rating. The new term loan matures in July 2019.

13
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

In anticipation of the new term loan, we entered into an interest rate swap on June 14, 2012 with Wells Fargo Bank, N.A., as counterparty, for a notional amount of $50,000,000 , and with a maturity date of July 17, 2019. The interest rate swap fixes our LIBOR rate at 1.392% .
Fixed and Variable Rate Mortgages
As of June 30, 2012 , we had fixed and variable rate mortgage loans with interest rates ranging from 1.89% to 12.75%  per annum and a weighted average interest rate of 5.58%  per annum. As of June 30, 2012 , we had fixed rate interest rate swaps on $17,304,000 of this variable rate debt, thereby effectively fixing our interest rate on those debt instruments. After giving the effect to the impact of our interest rate swaps, the weighted average interest rate associated with our fixed and variable rate debt is 5.73% per annum.
As of December 31, 2011 , we had fixed and variable rate mortgage loans with interest rates ranging from 1.77% to 12.75%  per annum and a weighted average interest rate of 5.63%  per annum. As of December 31, 2011, we had fixed rate interest rate swaps and caps on $25,908,000 of this variable rate debt, thereby effectively fixing our interest rate on those debt instruments. After giving the effect to the impact of our interest rate swaps and caps, the weighted average interest rate associated with our fixed and variable rate debt is 5.76% per annum.
Secured Real Estate Term Loan
We have a senior secured real estate term loan in the amount of $125,500,000 with Wells Fargo Bank, N.A. Interest is payable monthly at a rate of one-month LIBOR plus 2.35% , which, as of June 30, 2012 , equaled 2.60% . After giving effect to the impact of the interest rate swap, which fixes the rate at 3.42% on $75,000,000 of the note, the weighted average interest rate associated with this term loan is 3.09% per annum. This secured term loan matures on December 31, 2013 and includes two 12-month extension options, subject to the satisfaction of certain conditions. The loan agreement for this secured term loan includes financial covenants that we believe are customary for loans of this type, including a maximum ratio of total indebtedness to total assets, a minimum ratio of EBITDA to fixed charges, and a minimum level of tangible net worth. In addition, the term loan agreement for this secured term loan includes events of default that we believe are customary for loans of this type. This secured term loan is secured by 25 buildings within 12 property portfolios in 13 states and has a two year period in which no prepayment is permitted through March 1, 2013. Our operating partnership has guaranteed 25% of the principal balance (or $31,375,000 ) and 100% of the interest under this secured term loan.
Future Debt Maturities
As of June 30, 2012 , the principal payments due on debt for the six months ending December 31, 2012 , and for each of the next four years ending December 31 and thereafter is as follows:
Year
 
Amount
2012
 
$
41,715,000

2013
 
157,018,000

2014
 
13,393,000

2015
 
72,625,000

2016
 
404,696,000

Thereafter
 
167,336,000

Total
 
$
856,783,000

 
 
 
The amounts reflected as maturing in 2012 include $17,698,000 of principal maturities that can be extended by us to 2013 under certain conditions.



14
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

9. Derivative Financial Instruments
ASC 815, Derivatives and Hedging , or ASC 815, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. We utilize derivatives, such as fixed interest rate swaps and interest rate caps, to add stability to interest expense and to manage our exposure to interest rate movements. Consistent with ASC 815, we record derivative financial instruments on our accompanying condensed consolidated balance sheets as either an asset or a liability measured at fair value. ASC 815 permits special hedge accounting if certain requirements are met. Hedge accounting allows for gains and losses on derivatives designated as hedges to be offset by the change in value of the hedged item(s) or to be deferred in other comprehensive income.
As of June 30, 2012 and December 31, 2011 , none of our derivatives were designated as fair value hedges or cash flow hedges. Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the hedge accounting requirements of ASC 815. Changes in the fair value of derivative financial instruments are recorded within the line item entitled “Interest expense related to derivative financial instruments and net change in fair value of derivative financial instruments” in our accompanying condensed consolidated statements of operations.
The following table lists the derivative financial instruments held by us as of June 30, 2012 :
 
Notional Amount

 
Index
 
Rate
 
Fair Value
 
Instrument
 
Maturity
$
17,304,000

 
LIBOR
 
3.79%
 
$
(726,000
)
 
Swap
 
9/28/2013
75,000,000

 
LIBOR
 
1.07
 
(844,000
)
 
Swap
 
12/31/2013
200,000,000

 
LIBOR
 
1.23
 
(4,094,000
)
 
Swap
 
3/29/2017
100,000,000

 
LIBOR
 
0.86
 
(840,000
)
 
Swap
 
6/15/2016
50,000,000

 
LIBOR
 
1.39
 
(494,000
)
 
Swap
 
7/17/2019
 
The following table lists the derivative financial instruments held by us as of December 31, 2011 :
 
Notional Amount
 
Index
 
Rate
 
Fair Value
 
Instrument
 
Maturity
$
16,578,000

 
LIBOR
 
3.79%
 
$
(946,000
)
 
Swap
 
9/28/2013
75,000,000

 
LIBOR
 
1.07
 
(846,000
)
 
Swap
 
12/31/2013
9,330,000

(a)
LIBOR
 
2.00
 
89,000

 
Cap
 
12/31/2014
As of June 30, 2012 and December 31, 2011 , the fair value of our derivative financial instruments was as follows:
 
 
Asset Derivatives
 
Liability Derivatives
   
 
June 30, 2012
 
December 31, 2011
 
June 30, 2012
 
December 31, 2011
Derivatives Not Designated as Hedging Instruments:
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
Interest Rate Swaps
 
n/a
 
n/a
 
n/a
 
n/a
 
Derivative
Financial
Instruments
 
$
6,998,000

 
Derivative
Financial
Instruments
 
$
1,792,000

Interest Rate Cap (a)
 
Other Assets
 
$
—

 
Other Assets
 
$
89,000

 
n/a
 
n/a
 
n/a
 
n/a

(a) The associated mortgage loans were paid off in April and May 2012.

15
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

For the three and six months ended June 30, 2012 and 2011 , the derivative financial instruments associated with our operating properties had the following effect on our condensed consolidated statements of operations:
 
Derivatives Not Designated as Hedging Instruments Under:
 
Location of Gain (Loss)
Recognized
 
Recognized For the
Three Months Ended
 
Recognized For the
Six Months Ended
June 30, 2012
 
June 30, 2011
 
June 30, 2012
 
June 30, 2011
Interest Rate Swaps
 
Interest expense related to derivative financial instruments and net change in fair value of derivative financial instruments
 
$
(4,728,000
)
 
$
(934,000
)
 
$
(5,206,000
)
 
$
(455,000
)
Interest Rate Cap
 
Interest expense related to derivative financial instruments and net change in fair value of derivative financial instruments
 
(59,000
)
 
(144,000
)
 
(89,000
)
 
(119,000
)
We have agreements with each of our interest rate swap derivative counterparties that contain a provision whereby if we default on certain of our unsecured indebtedness, then our counterparties could declare us in default on our interest rate swap derivative obligations resulting in an acceleration of the indebtedness. In addition, we are exposed to credit risk in the event of non-performance by our derivative counterparties. We believe we mitigate the credit risk by entering into agreements with credit-worthy counterparties. We record counterparty credit risk valuation adjustments on interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty. In addition, our fair value of interest rate swap derivative liabilities is adjusted to reflect the impact of our credit quality. As of June 30, 2012 , there have been no termination events or events of default related to the interest rate swaps.


10. Commitments and Contingencies
Litigation
We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.  
Environmental Matters
We follow the policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material adverse effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency.
Tax Status
During first quarter of 2012 we entered into a closing agreement, or the Closing Agreement, with the Internal Revenue Service, or the IRS, pursuant to which (i) the IRS agreed not to challenge our dividends as preferential for our taxable years 2007, 2008, 2009 and 2010, and (ii) we paid a compliance fee in an immaterial amount to the IRS. In accordance with the terms of the Closing Agreement, any reimbursement to us for our payment of this compliance fee will be considered gross income. As a result of the Closing Agreement, we continue to qualify as a REIT and to satisfy our distribution requirements.
Other
Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In our opinion, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.



16
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

11. Redeemable Noncontrolling Interest of Limited Partners
As of June 30, 2012 and December 31, 2011 , respectively, we owned a 99.93% general partner interest in our operating partnership. As of June 30, 2012 and December 31, 2011 , respectively, 0.07% of our operating partnership was owned by individual investors that elected to exchange their partnership interests in the Fannin partnership that owns the 7900 Fannin Medical Office Building for limited partner units in our operating partnership. In connection with this transaction we acquired the majority interest in the Fannin partnership on June 30, 2010. In the aggregate, as of June 30, 2012 , approximately 0.07% of the earnings of our operating partnership are allocated to the redeemable noncontrolling interest of limited partners.
On May 16, 2012, we implemented a long-term incentive plan for certain executive officers, non-employee directors and other employees, which consisted of issuing Series C units in our operating partnership. Currently, these non-vested partnership units are entitled to certain distributions and income in accordance with our Amended and Restated Limited Partnership Agreement. See Note 12, Stockholders' Equity for further discussion.
Redeemable noncontrolling interests are accounted for in accordance with ASC 480, Distinguishing Liabilities From Equity, or ASC 480, at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the redemption value from the purchase date to the earliest redemption date are accreted using the straight-line method. Additionally, as the noncontrolling interests provide for redemption features not solely within the control of the issuer, we classify such interests outside of permanent equity. As of June 30, 2012 and 2011 , redeemable noncontrolling interest of limited partners was $3,641,000 and $3,775,000 , respectively. The carrying amount was higher than the redemption value as of June 30, 2012. The redemption value is based on our stock price which is considered a Level 1 input. Below is a table reflecting the activity of the redeemable noncontrolling interests for the six months ended June 30, 2012 and 2011.
 
Balance as of December 31, 2010
$
3,867,000

Net income attributable to noncontrolling interest of limited partners
31,000

Distributions
(123,000
)
Balance as of June 30, 2011
$
3,775,000

 
 
Balance as of December 31, 2011
$
3,785,000

Net income attributable to noncontrolling interest of limited partners
16,000

Distributions
(160,000
)
Balance as of June 30, 2012
$
3,641,000

The $ 16,000 and $ 31,000 of net income attributable to noncontrolling interest shown on our interim condensed consolidated statements of operations reflects the net income attributable to the noncontrolling interest of limited partners during the six months ended June 30, 2012 and 2011 , respectively.

12. Stockholders’ Equity

Common Stock
On June 6, 2012, we listed our Class A common stock on the New York Stock Exchange, or NYSE, under the symbol "HTA". In accordance with an amendment to our charter approved by our stockholders on December 20, 2010, all of our common stock was converted into Class A, Class B-1, Class B-2 and Class B-3 common stock. Our Class B-1, Class B-2 and Class B-3 shares are collectively referred to as our Class B common stock, while Class A and Class B common stock are collectively referred to as our common stock. Our Class B common stock is identical to our Class A common stock except that our Class B common stock is not listed on a national exchange and the shares of our Class B common stock will convert into shares of our Class A common stock at specified times. The shares of our Class B-1, Class B-2 and Class B-3 common stock will convert automatically into shares of our Class A common stock, six months following the Listing, 12 months following the Listing and 18 months following the Listing, respectively. On the 18 month anniversary of the Listing, all shares of our Class B common stock will have converted into our Class A common stock. Our Board of Directors has the discretion to convert all of our Class B common stock to our Class A common stock on the six month anniversary of the Listing. Shares of our Class A and Class B common stock participate in distributions equally.
Preferred Stock
Our charter authorizes us to issue 200,000,000 shares of our $0.01 par value preferred stock. As of June 30, 2012 and December 31, 2011 no shares of preferred stock were issued and outstanding.

17
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Tender Offer
On June 6, 2012, we commenced a modified "Dutch Auction" cash tender offer, or the Tender Offer, to purchase up to $150,000,000 in value of our Class A common stock. As a result of the Tender Offer, on July 25, 2012, we purchased 14,851,485 shares of our Class A common stock at a purchase price of $10.10 per share, for an aggregate cost of approximately $150,000,000 , excluding fees and expenses.
Distribution Reinvestment Plan
We had a Distribution Reinvestment Plan, or the DRIP, whereby stockholders could have their distributions reinvested in our common stock at $9.50 per share. In connection with the Listing, we terminated the DRIP. For the six months ended June 30, 2012 and 2011 , $31,915,000 and $37,143,000 , respectively, in distributions were reinvested and 3,362,473 and 3,909,772 shares of our common stock, respectively, were issued under the DRIP.
Share Repurchase Plan
We had a share repurchase plan whereby stockholders could sell their shares of our common stock to us in limited circumstances. In connection with the Listing, we terminated the share repurchase plan. For the six months ended June 30, 2012 , we repurchased 3,070,013 shares of our common stock pursuant to the share repurchase plan, at an average price of $9.80 per share, for an aggregate amount of $30,098,000 . For the six months ended June 30, 2011 , we repurchased 1,834,141 shares of our common stock pursuant to the share repurchase plan, at an average price of $9.64 per share, for an aggregate amount of $17,684,000 .
Long-Term Incentive Program
On May 16, 2012, our Compensation Committee approved a long term-term incentive program, or LTIP, for the benefit of our executive officers, non-employee directors and other employees selected to participate in the program. Awards under the LTIP consist of membership units in Healthcare Trust of America Holdings, LP, or our operating partnership, and are subject to the achievement of certain performance and market conditions. Upon vesting, the LTIP units will be converted into common units and may be converted into shares of our common stock in accordance with the Amended and Restated Limited Partnership Agreement. The Compensation Committee authorized 2,905,000 shares for grant and the contractual term is 4 years. ASC 718, Compensation - Stock Compensation, establishes accounting and reporting standards for LTIP awards. With the assistance of our third party valuation experts, we utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of the awards of $5.56 per share using the following assumptions:
2012 Assumptions
 
Volatility
21.25
%
Dividend yield
5.80
%
Expected term in years
0.74 to 0.82

Risk-free rate
0.576
%
Stock price (per share)
$
9.92


During the three and six months ended June 30, 2012, we issued 2,875,000 LTIP shares, all of which are unvested and outstanding as of June 30, 2012. We recognized $1,457,000 of expense associated with the LTIP awards during the three and six months ended June 30, 2012. As of June 30, 2012, there was $12,016,000 of unrecognized expense that will be recognized over a period of less than one year. The unrecognized expense does not include $4,464,000 of expense associated with 450,000 shares that will only vest as a result of a change in control of the Company. We will not recognize any expense associated with these shares until such event occurs or is probable.
Amended and Restated 2006 Incentive Plan and 2006 Independent Directors Compensation Plan
Our Amended and Restated 2006 Plan, or the Plan, permits the grant of incentive awards to our employees, officers, non-employee directors, and consultants as selected by our Board of Directors or the Compensation Committee. Our philosophy regarding compensation is to structure employee compensation to promote and reward performance-based behavior, which results in risk-managed, added value to our company and stockholders. The Plan is designed to provide us with maximum flexibility to our company consistent with our current size, the stage of our life cycle, and our overall strategic plan.

18
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

The Plan authorizes the granting of awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; other stock-based awards; including units in operating partnership; and cash-based awards. Subject to adjustment as provided in the Plan, the aggregate number of shares of our common stock reserved and available for issuance pursuant to awards granted under the Plan is 10,000,000 . As of June 30, 2012, there were 8,756,000 shares available for grant under the Plan.
Prior to the Listing, we issued and/or redeemed each share of restricted common stock and restricted common stock unit that has been granted under the Plan at $10.00 per share. Subsequent to the Listing, the fair value of each share of restricted common stock and restricted common stock unit is the closing price of our common stock on the NYSE. Shares of restricted common stock and restricted common stock units may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. Such restrictions expire upon vesting.
For the three months ended June 30, 2012 and 2011 , we recognized compensation expense of $5,188,000 and $645,000 , respectively, related to the restricted common stock grants. For the six months ended June 30, 2012 and 2011 , we recognized compensation expense of $6,190,000 and $1,542,000 , respectively, related to the restricted common stock grants. In connection with the Listing, previously issued restricted shares of certain executives and the Board of Directors were accelerated and became fully vested. The $4,683,000 of expense recognized as a result of the accelerations was included in listing expenses in our accompanying interim condensed and consolidated statements of operations for the three and six months ended June 30, 2012. The non-accelerated expense was included in non-traded REIT expenses in our accompanying interim condensed consolidated statements of operations for all periods presented. Shares of restricted common stock have full voting rights and rights to dividends. Shares of restricted common stock units do not have voting rights or rights to dividends.
A portion of our awards to our executives may be paid in cash in lieu of stock in accordance with the respective employment agreement and vesting schedule of such awards. For the six months ended June 30, 2012 and 2011 , 305,834 shares and 41,667 shares, respectively, were settled in cash. As of June 30, 2012, there are no outstanding cash shares.
As of June 30, 2012 , there was approximately $617,500 of total unrecognized compensation expense net of estimated forfeitures, related to nonvested shares of restricted common stock which will be recognized over a remaining weighted average period of 2.7 years .
A summary of the status of the nonvested shares of restricted common stock and restricted common stock units as of June 30, 2012 and December 31, 2011 , respectively, and the changes for the six months ended June 30, 2012 , is presented below:
 
 
 
Restricted
Common
Stock/Units
 
Weighted
Average  Grant
Date Fair Value
Balance — December 31, 2011
 
616,506

 
$
10.00

Granted
 
359,000

 
9.99

Vested
 
(817,500
)
 
9.99

Forfeited
 
(74,006
)
 
10.00

Balance — June 30, 2012
 
84,000

 
$
10.00

Nonvested Shares Expected to vest — June 30, 2012
 
84,000

 
$
10.00

 
13. Fair Value of Financial Instruments
ASC 820, Fair Value Measurements and Disclosures , or ASC 820, defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is a market-based measurement, as opposed to a transaction-specific measurement and most of the provisions were effective for our consolidated financial statements beginning January 1, 2008.
Fair value is defined by ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:
Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

19
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).
Level 3 — Unobservable inputs, only used to the extent that observable inputs are not available, reflect our assumptions about the pricing of an asset or liability.
ASC 825, Financial Instruments , or ASC 825, requires disclosure of fair value of financial instruments in interim financial statements as well as in annual financial statements.
We use fair value measurements to record fair value of certain assets and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value.
Financial Instruments Reported at Fair Value
Cash and Cash Equivalents
We invest in money market funds which are classified within Level 1 of the fair value hierarchy because they are valued using unadjusted quoted market prices in active markets for identical securities.
Derivative Financial Instruments
Currently, we use interest rate swaps to manage interest rate risk associated with floating rate debt. The valuation of these instruments is determined by a third-party expert using a proprietary model that utilizes widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative, and observable inputs. As such, we classify these inputs as Level 2 inputs. The proprietary model reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair values of interest rate swaps and interest rate caps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.
To comply with the provisions of ASC 820, 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 contracts 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.
Although we have determined that the majority of the inputs used to value our interest rate swap and interest rate cap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of June 30, 2012 , we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate swap derivative positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our interest rate swap and interest rate cap derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.  
Assets and Liabilities at Fair Value
The table below presents our assets and liabilities measured at fair value on a recurring basis as of June 30, 2012 , aggregated by the level in the fair value hierarchy.
 
 
 
Quoted Prices in
Active Markets for
Identical Assets
and Liabilities
(Level 1 )
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable  Inputs
(Level 3)
 
Total
Assets
 
 
 
 
 
 
 
 
Derivative financial instruments
 
$
—

 
$
—

 
$
—

 
$
—

Total assets at fair value
 
$
—

 
$
—

 
$
—

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Derivative financial instruments
 
$
—

 
$
(6,998,000
)
 
$
—

 
$
(6,998,000
)
Earnout liability
 
—

 
—

 
(2,153,000
)
 
(2,153,000
)
Total liabilities at fair value
 
$
—

 
$
(6,998,000
)
 
$
(2,153,000
)
 
$
(9,151,000
)

20
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

As of June 30, 2012 , there have been no transfers of assets or liabilities between levels. We will record any such transfers at the end of the reporting period in which a change of event occurs that results in a transfer.
The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 , aggregated by the level in the fair value hierarchy.
 
 
 
Quoted Prices in
Active  Markets for
Identical Assets
and Liabilities
(Level 1 )
 
Significant Other
Observable  Inputs
(Level 2)
 
Significant
Unobservable  Inputs
(Level 3)
 
Total
Assets
 
 
 
 
 
 
 
 
Derivative financial instruments
 
$
—

—

$
89,000

—

$
—

 
$
89,000

Total assets at fair value
 
$
—

 
$
89,000

 
$
—

 
$
89,000

Liabilities
 
 
 
 
 
 
 
 
Derivative financial instruments
 
$
—

 
$
(1,792,000
)
 
$
—

 
$
(1,792,000
)
Earnout liability
 
—

 
—

 
(2,481,000
)
 
(2,481,000
)
Total liabilities at fair value
 
$
—

 
$
(1,792,000
)
 
$
(2,481,000
)
 
$
(4,273,000
)
The potential earnout liability is associated with a property that was purchased in the third quarter of 2010, which is subject to an earnout provision, payment of which is contingent on the future leasing and occupancy of the vacant space. The contingent liability is valued based on our judgment as to the probability of the predetermined formula obligating us to pay additional consideration to the seller over a 24 month period that expired on August 4, 2012. The probability of occurrence is dependent on the seller providing us with qualified leases that meet all requirements under the applicable agreement. During the six months ended June 30, 2012, we paid the seller $328,000 which decreased fair value of the liability to $2,153,000 . During the six months ended June 30, 2011, there was no change in the fair value of the liability.
Financial Instruments Disclosed at Fair Value
ASC 825 requires disclosure of the fair value of financial instruments, whether or not recognized on the face of the balance sheet. Fair value is defined under ASC 820.
Our accompanying interim condensed consolidated balance sheets include the following financial instruments: real estate notes receivable, net, cash and cash equivalents, restricted cash, accounts and other receivables, net, accounts payable and accrued liabilities, and debt.
We consider the carrying values of cash and cash equivalents, restricted cash, accounts and other receivables, net, and accounts payable and accrued liabilities to approximate fair value for these financial instruments because of the short period of time between origination of the instruments and their expected realization. All of these financial instruments are considered Level 2.
The fair value of the debt is estimated using borrowing rates available to us with similar terms and maturities. As of June 30, 2012 , the fair value of the debt was $915,579,000 compared to the carrying value of $859,318,000 . As of December 31, 2011 , the fair value of the debt was $687,862,000 compared to the carrying value of $639,149,000 . All of these financial instruments are considered Level 2.
The fair value of the notes receivable is estimated by discounting the expected cash flows on the notes at current rates at which management believes similar loans would be made. As of June 30, 2012 , the fair value of these notes was $20,505,000 as compared to the carrying value of $20,000,000 . As of December 31, 2011 , the fair value of these notes $64,046,000 as compared to the carrying value of $57,459,000 . All of these financial instruments are considered Level 2.


14. Per Share Data
We report (losses) earnings per share pursuant to ASC 260, Earnings Per Share, or ASC 260. We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” in the computation of basic and diluted (loss) income per share pursuant to the two-class method as described in ASC 260. We have two classes of common stock for purposes of calculating our earnings per share. These classes are our common stock and our restricted stock. For the three and six month periods ended June 30, 2012 and 2011, all of our earnings were distributed and the calculated (losses) earnings per share amount would be the same for both classes as they all have the same rights to distributed earnings.

21
Healthcare Trust of America, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)–(Continued)

Basic (losses) earnings per share attributable for each of the three and six months ended June 30, 2012 and 2011 are computed by dividing net (loss) income by the weighted average number of shares of our common stock outstanding during the period. Diluted (losses) earnings per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any. For the three and six months ended June 30, 2012, 177,386 shares, respectively, were excluded from the computation of diluted shares as their impact would have been anti-dilutive.
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Numerator:
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(19,314,000
)
 
$
1,162,000

 
$
(19,620,000
)
 
$
3,352,000

Net (income) loss attributable to noncontrolling interest of limited partners
 
(8,000
)
 
9,000

 
(16,000
)
 
(31,000
)
Net (loss) income attributable to controlling interest
 
$
(19,322,000
)
 
$
1,171,000

 
$
(19,636,000
)
 
$
3,321,000

Denominator:
 
 
 
 
 
 
 
 
Weighted average number of shares outstanding — basic
 
229,436,425

 
228,340,776

 
229,158,939

 
221,606,526

Dilutive restricted stock
 
—

 
460,052

 
—

 
460,052

Weighted average number of shares outstanding — diluted
 
229,436,425

 
228,800,828

 
229,158,939

 
222,066,578

Basic (losses) earnings per common share:
 
 
 
 
 
 
 
 
Net (loss) income per share attributable to controlling interest
 
$
(0.08
)
 
$
0.01

 
$
(0.09
)
 
$
0.01

Diluted (losses) earnings per common share:
 
 
 
 
 
 
 
 
Net (loss) income per share attributable to controlling interest
 
$
(0.08
)
 
$
0.01

 
$
(0.09
)
 
$
0.01


15. Subsequent Events
The significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the condensed consolidated financial statements are summarized below.
Tender Offer
On July 25, 2012, we repurchased 14,851,485 shares of our Class A common stock at an average price of $10.10 per share, for an aggregate amount of $150,000,000 , excluding fees and expenses. See Note 12, Stockholders' Equity for further discussion.
New Unsecured Term Loan
On July 20, 2012, we entered into a new $155,000,000 unsecured term loan. See Note 8, Debt, Net for further discussion.
Distributions
On July 2, 2012, we paid cash distributions of $10,985,000 for June 2012.
On August 1, 2012, our Board of Directors authorized a cash distribution for the quarter ending September 30, 2012. The distribution will be paid on October 1, 2012 to stockholders of record on September 28, 2012. This distribution of $0.14375 per share represents an annualized rate of $0.575 per share and will be paid on all of our Class A, Class B-1, Class B-2 and Class B-3 common stock.
Pending Acquisitions
On July 23, 2012, we entered into a definitive agreement to acquire the Rush medical office building for $54,000,000 pursuant to a put option associated with our net $37,135,000 mortgage loan receivable. See Note 4, Business Combination for further discussion.
Stock Repurchase Program
On August 3, 2012, our Board of Directors authorized a stock repurchase program up to $100,000,000 of our Class A common stock from time to time prior to August 5, 2014. At our discretion, stock may be repurchased in the open market or in private negotiated transactions, and the timing and the amount of any repurchases are subject to a number of conditions.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The use of the words “we,” “us” or “our” refers to Healthcare Trust of America, Inc. and its subsidiaries, including Healthcare Trust of America Holdings, LP, except where the context otherwise requires.
The following discussion should be read in conjunction with our accompanying interim condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as with the audited consolidated financial statements, accompanying notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2011 Annual Report on Form 10-K as filed with the SEC on March 27, 2012. Such interim condensed consolidated financial statements and information have been prepared to reflect our financial position as of June 30, 2012 and December 31, 2011 , together with our results of operations for the three and six months ended June 30, 2012 and 2011 , and cash flows for the six months ended June 30, 2012 and 2011 .
Forward-Looking Statements
Certain statements contained in this quarterly report on Form 10-Q constitute forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act). Such statements include, in particular, statements about our plans, strategies and prospects and estimates regarding future medical office building market performance. Such statements are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially and in adverse ways from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Forward-looking statements are generally identifiable by use of the terms such as “expect,” “project,” “may,” “will,” “should,” “could,” “would,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” "opinion," “predict,” “potential,” “pro forma” or the negative of such terms and other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this quarterly report on Form 10-Q is filed with the SEC. We cannot guarantee the accuracy of any such forward-looking statements contained in this quarterly report on Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Any such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide dividends to stockholders, and maintain the value of our real estate properties, may be significantly hindered. The following factors, as well as any cautionary language in this quarterly report on Form 10-Q, provide examples of certain risks, uncertainties and events that could cause actual results to differ materially and adverse ways from those presented in our forward-looking statements:
•
changes in economic conditions affecting the healthcare property sector, the commercial real estate market and the credit market;
•
competition for acquisition of medical office buildings and other facilities that serve the healthcare industry;
•
economic fluctuations in certain states in which our property investments are geographically concentrated;
•
retention of our senior management team;
•
financial stability and solvency of our tenants;
•
supply and demand for operating properties in the market areas in which we operate;
•
our ability to acquire real properties, and to successfully operate those properties once acquired;
•
changes in property taxes;
•
legislative and regulatory changes, including changes to laws governing the taxation of REITs and changes to laws governing the healthcare industry;
•
fluctuations in reimbursements from third party payors such as Medicare and Medicaid;
•
delays in liquidating defaulted mortgage loan investments;
•
changes in interest rates;
•
the availability of capital and financing;
•
restrictive covenants in our credit facilities;
•
changes in our credit ratings;

23
Table of Contents

•
our ability to remain qualified as a REIT; and
•
the factors included in this quarterly report on Form 10-Q and our annual report on Form 10-K, including those set forth under the headings “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations”.
Forward-looking statements express expectations of future events. All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected. Due to these inherent uncertainties, our stockholders are urged not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date made. In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview
We are a fully integrated, self-administered and internally managed real estate investment trust, or REIT, primarily focused on acquiring, owning and operating high-quality medical office buildings that are predominantly located on or aligned with campuses of nationally or regionally recognized healthcare systems. We are one of the largest public REITs focused on medical office buildings in the United States based on gross leasable area, or GLA. We have strong industry relationships, a stable and diversified tenant mix and an extensive and active acquisition network. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments and to provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we target mid-sized acquisitions of high-quality medical office buildings in markets with dominant healthcare systems, attractive demographics and that complement our existing portfolio, actively manage our balance sheet to maintain flexibility with conservative leverage, and seek internal growth through proactive asset management, leasing and property management oversight.
We invest primarily in high-quality medical office buildings in our target markets. We have invested $2.5 billion in high-quality medical office buildings and other facilities that serve the healthcare industry through June 30, 2012 . As of June 30, 2012 , our portfolio consisted of 245 medical office buildings and 19 other facilities that serve the healthcare industry, as well as mortgage loans receivable secured by medical office buildings. Our portfolio is comprised of approximately 12.4 million square feet of GLA, with an occupancy of approximately 91%, including leases we have executed, but which have not yet commenced. Approximately 96% of our portfolio, based on GLA, is located on or aligned with campuses of nationally or regionally recognized healthcare systems. Our portfolio is diversified geographically across 26 states, with no state having more than 11.0% of the total portfolio GLA as of June 30, 2012 . We are concentrated in locations that we have determined to be strategic based on demographic trends and projected demand for medical office buildings and we expect to continue to invest in these markets. We have concentrations in the following key markets: Phoenix, Arizona; Greenville, South Carolina; Indianapolis, Indiana; Albany, New York; Houston, Texas; Atlanta, Georgia; Pittsburgh, Pennsylvania; Dallas, Texas; Boston, Massachusetts; Raleigh, North Carolina; and Oklahoma City, Oklahoma.
On June 6, 2012, we listed our Class A common stock on the New York Stock Exchange, or the NYSE, under the symbol "HTA", or the Listing. In accordance with an amendment to our charter approved by our stockholders on December 20, 2010, all of our common stock was converted into Class A, Class B-1, Class B-2 and Class B-3 common stock. The Class B-1, Class B-2 and Class B-3 shares are collectively referred to as our Class B common stock, while our Class A and Class B common stock are collectively referred to as our common stock. The Class B common stock is identical to the Class A common stock except that our Class B common stock is not listed on a national exchange and the shares of our Class B common stock will convert into shares of our Class A common stock at specified times. The shares of our Class B-1, Class B-2 and Class B-3 common stock will convert automatically into shares of our Class A common stock, six months following the Listing, 12 months following the Listing and 18 months following the Listing, respectively. On the 18 month anniversary of the Listing, all shares of our Class B common stock will have converted into our Class A common stock. Our Board of Directors has the discretion to convert all of our Class B common stock to our Class A common stock on the six month anniversary of the Listing. Each share of our Class A and Class B common stock participate in distributions equally.
On June 6, 2012, we commenced a modified "Dutch Auction" cash tender offer, or the Tender Offer, to purchase up to $150.0 million in value of our Class A common stock. As a result of the Tender Offer, on July 25, 2012, we purchased 14,851,485 shares of our Class A common stock at a purchase price of $10.10 per share, for an aggregate cost of approximately $150.0 million, excluding fees and expenses.

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Company Highlights
Portfolio Operating Performance
•
Normalized funds from operations, or Normalized FFO, was $35.7 million and $29.2 million for the three months ended June 30, 2012 and 2011, respectively. This represents an increase of $6.5 million , or 22.2% , compared to the same period in 2011 . Normalized FFO was $65.6 million and $57.4 million for the six months ended June 30, 2012 and 2011, respectively. This represents an increase of $8.2 million , or 14.4% , compared to the same period in 2011 . The increases over 2011 were driven by acquisitions, strength in leasing and continued focus on reducing operating expenses. Normalized FFO is a non-GAAP financial measure. For a reconciliation of Normalized FFO to net (loss) income, see "Funds from Operations and Normalized Funds from Operations" below.
•
For the three months ended June 30, 2012 , net operating income, or NOI, increased 11.2% , or $5.2 million to $51.5 million as compared to the three months ended June 30, 2011 . For the six months ended June 30, 2012 , NOI increased 7.1% , or $6.7 million to $100.1 million as compared to the six months ended June 30, 2011 . NOI is a non-GAAP financial measure. For a reconciliation of NOI to net (loss) income, see "Net Operating Income" below.
•
For the three months ended June 30, 2012, revenue was $76.3 million as compared to $68.1 million for the three months ended June 30, 2011. For the six months ended June 30, 2012, revenue was $147.5 million as compared to $139.0 million for the six months ended June 30, 2011.
•
For the three months ended June 30, 2012 , we had a net loss of $19.3 million compared to net income of $1.2 million for the same period in 2011 . For the six months ended June 30, 2012 , we had a net loss of $19.6 million compared to net income of $3.4 million for the six months ended June 30, 2011 . The losses in 2012 were primarily due to expenses associated with the Listing and related activities.
Maximize Internal Growth through Proactive Asset Management, Leasing and Property Management
•
The occupancy rate on our portfolio of properties, including leases that have been executed, but which have not yet commenced, was approximately 91% as of June 30, 2012 . Tenant retention for the portfolio was approximately 83% for the quarter and 86% for the year-to-date, indicative of our commitment to maintaining high-quality buildings in desirable locations and fostering strong tenant relationships. Tenant retention is calculated by taking the sum of the total GLA of tenants that renew an expiring lease divided by the total GLA of expiring leases.
•
Our portfolio of 12.4 million square feet of GLA is focused on strategically located on-campus medical office buildings in locations with high barriers to entry. As of June 30, 2012 , approximately 96% of our portfolio, based on GLA, was located on or adjacent to, or anchored by the campuses of nationally and regionally recognized healthcare systems.
•
Investment grade rated tenants as a percent of annualized base rent was approximately 39% at June 30, 2012 . We continue to focus on building relationships with strong tenants and health systems that are leaders in their markets. As of June 30, 2012 , approximately 56% of our annualized base rent was derived from tenants that have (or whose parent companies have) a credit rating from a nationally recognized rating agency.
•
To establish more direct relationships and in an effort to reduce fees paid to third parties, we continue to focus on transitioning property management, leasing and construction management of our portfolio from third party teams to our internal teams. In the past year, we have focused on internalizing the property management in our largest markets, including Indiana, Arizona and South Carolina. We expect to continue to transition our property management function during 2012 to our in-house property management platform and anticipate having approximately 70% of our current portfolio's GLA managed internally by the end of the year. During the three and six months ended June 30, 2012, we transitioned 1.2 million and 2.1 million square feet of GLA to our in-house property management platform, respectively.
Conservative Financial Strategy and Balance Sheet Flexibility
•
As of June 30, 2012 , we had a flexible balance sheet with total assets of $2.4 billion, cash and cash equivalents of $24.0 million, and a leverage ratio of total debt to total capitalization of 27.4%.
•
As of June 30, 2012 , our $575.0 million new revolving credit facility was fully available, which has approximately four years remaining until the initial maturity, with a one-year extension option, subject to certain conditions. We believe our borrowing capacity under our new revolving credit facility as well as our access to other sources of debt and equity capital, while remaining within our low leverage range, should allow us to capitalize on favorable transactions that increase stockholder value.


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•
During the first half of 2012, inclusive of the $155.0 million term loan which closed on July 20, 2012, we entered into over $1.0 billion of new credit facilities, including the refinancing of $650.3 million of existing mortgage and credit facilities. The net impact from these transactions has been to lower the average borrowing rate and extend maturities. Our weighted average borrowing cost, inclusive of the term loan which closed on July 20, 2012 and our interest rate swaps and cap, has decreased to 4.10% per annum, down significantly from 5.25% per annum as of December 31, 2011. Additionally, the weighted average remaining term of our debt portfolio increased from 3.8 years to 4.2 years. As part of the refinancing actions, we retired approximately $75.3 million of secured mortgage loans with a weighted average interest rate of 6.0% per annum.
Execution of Relationship-Focused Growth Strategy
•
On January 13, 2012, we completed the acquisition of St. John Providence MOB, an approximately 203,000 square foot on-campus medical office building located in Novi, Michigan, for $51.3 million. The St. John Providence MOB, which was 99% leased as of the date of acquisition, is connected directly to the Providence Park Hospital via an enclosed walkway. Providence Park Hospital is part of Ascension Health Systems (Moody's Investors Services rated Aa1).
•
On January 31, 2012, we completed the acquisition of an additional medical office building on the Camp Creek campus in Atlanta, Georgia, for $8.9 million. This building was approximately 30,000 square feet of GLA and is our third building in our Camp Creek portfolio; the other two buildings comprising this portfolio were purchased by us in the second quarter of 2010.
•
On March 1, 2012, we completed the acquisition of Penn Avenue Place in Pittsburgh, Pennsylvania, for a purchase price of $54.0 million. Penn Avenue Place is an eight story, approximately 558,000 square foot, healthcare integrated Class A office building which was completely renovated in 1997. The building is approximately 99.6% occupied as of the date of our acquisition and is anchored by Highmark, Inc. (Standard & Poor's Rating Service rated A) which renewed its lease for an additional 10-year term beginning on January 1, 2012. Highmark, Inc., which leases and occupies 92.4% of the building, is one of the largest Blue Cross affiliates in the nation.
•
On March 29, 2012, we completed the acquisition of the Steward Portfolio located in Boston, Massachusetts, for a purchase price of $100.0 million. This portfolio consists of 13 medical office buildings located on the campuses of Steward Care network. This portfolio is 100% master leased on a triple net basis by Steward Health Care System LLC until 2024 and totals approximately 372,000 square foot. Steward Healthcare system is the largest fully integrated community care organization in New England and is the third largest employer in Massachusetts.
•
On July 23, 2012, we entered into a definitive agreement to purchase the Rush MOB located in Oak Park, Illinois for $54.0 million. The Rush MOB is a 135,000 square foot, on-campus medical office building that is 100% master leased under a triple-net lease through 2019 to Rush University Medical Center. Rush University Medical Center, rated A2 by Moody's, is a not-for-profit academic medical center comprising Rush University Medical Center, Rush University, Rush Oak Park Hospital and Rush Health. The building is connected with an enclosed walkway to Rush Oak Park Hospital, which is considered one of the dominant hospitals in the market. As of June 30, 2012, we consolidated the operations of the Rush MOB as a result of the seller exercising a put option.
Corporate Strategies
Achieve Growth through Targeted Acquisitions
We plan to continue to focus primarily on mid-sized acquisitions, in the $25 million to $75 million range, of high-quality medical office buildings in our target markets as discussed above. We also have completed larger acquisitions from time to time and expect to continue to do so when attractive opportunities emerge. In particular, we seek to acquire properties that have the following attributes:
•
high occupancy and located on or aligned with campuses of recognized healthcare systems, which we believe provide for better tenant retention rates and rental rate growth as compared to facilities not affiliated with a healthcare system;
•
affiliated with top national and regional healthcare systems which are dominant in their respective markets, which we believe attract top physicians seeking healthcare systems, with significant market share and high credit quality;
•
located in markets with attractive demographics and favorable regulatory environments in business friendly states or those with high barriers to entry;
•
a strategic mix of high-credit quality single-tenant buildings with long-term, triple-net leases and fixed rental increases and multi-tenant buildings with short-term leases; and
•
provide accretive returns based on our cost of capital.

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Leverage and Expand Our Strategic Relationships to Generate New Opportunities
In order to access acquisition opportunities for our future growth, we plan to continue to emphasize building long-term relationships, cultivated by our senior management team, with key industry participants, which have traditionally provided us with valuable sources of potential investment opportunities. We have significant relationships with large and nationally recognized healthcare systems such as Aurora Health, Banner Health, Catholic Healthcare Partners, Greenville Hospital System and Indiana University Health, among others. Through these relationships, we believe that we have developed a reputation of reliability, trustworthiness and high tenant satisfaction. In this regard, approximately 69% of our acquisitions since January 1, 2009, based on purchase price, were sourced directly from hospitals and developers. We intend to continue building upon our existing relationships with healthcare systems to establish long-term lease arrangements, and to develop other strategic alignments with new healthcare systems.
Actively Maintain Strong, Flexible Capital Structure and Balance Sheet
We seek to actively manage our balance sheet to maintain conservative leverage and financing flexibility with carefully staged debt maturities, thereby positioning us to take advantage of strategic investment opportunities. We believe our borrowing capacity under our new revolving credit facility, as well as our access to other sources of debt and equity capital, while remaining within our targeted leverage range, should allow us to capitalize on favorable acquisition opportunities that arise. While we believe our new revolving credit facility will enable us to take advantage of acquisition opportunities on a short-term basis, we intend to take advantage of multiple sources of capital that we can use to effectively manage our long-term leverage strategy, repay our secured debt maturities, or finance future acquisition opportunities. These other sources of capital include unsecured public debt financing, additional equity issuances, unsecured bank loans, and secured property-level debt. Over the long-term, we intend to continue to focus on migrating our capital structure toward a higher volume of unsecured debt. We also will seek to maintain our investment grade credit ratings, which we first received in July 2011. We believe this is important to preserving our access to these capital sources on favorable terms. In addition, we may also pursue dispositions of properties that we believe no longer align with our strategic objectives in order to redeploy capital.
Maximize Internal Growth through Proactive Asset Management, Leasing and Property Management Oversight
Our asset management strategy focuses on achieving internal growth through initiatives to lease vacant space and increase rental rates while maximizing operating efficiencies at our properties. Specific components of our overall strategy include:
•
migrating our properties toward our in-house property management platform in geographic areas where we have significant portfolio concentrations and can achieve the necessary scale (in particular, we are targeting approximately 70% of our existing portfolio to be managed internally by December 31, 2012);
•
leveraging and proactively partnering with recognized property management and leasing companies in markets where our in-house property management platform is not currently active;
•
increasing our average rental rates, maintaining or increasing renewal rates and actively leasing our vacant space;
•
improving the quality of service provided to our tenants by being attentive to their needs, managing expenses, and strategically investing capital;
•
maintaining the high quality of our properties and building our reputation as a desirable recognized landlord;
•
maintaining regional offices in markets where we have a significant presence, which enables us to create closer relationships with national and regional healthcare systems and other tenants and better respond to their needs; and
•
using market knowledge and economies of scale to continually reduce our operating costs.
We believe that we are well positioned for future rental growth in our medical office buildings. We believe that we will be able to generate cash flow growth through the leasing of vacant space in our medical office buildings as well as rent increases, particularly due to the limited supply of medical office space, the recovering economy and the general reluctance of medical office building tenants to move or relocate because of the desire to remain close to nationally or regionally affiliated healthcare systems. As of June 30, 2012 , our buildings were approximately 91% leased, including leases that we have executed, but which have not yet commenced.

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Factors Which May Influence Results of Operations
We are not aware of any material trends or uncertainties, other than national economic conditions affecting healthcare and real estate generally, and those listed in Part II, Item 1A of this report and those Risk Factors previously disclosed in Part I, Item 1A in our 2011 Annual Report on Form 10-K, as filed with the SEC on March 27, 2012, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition, management and operation of properties.
Rental Income
The amount of rental income generated by our operating properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that has become available from unscheduled lease terminations at the existing rental rates. Negative trends in one or more of these factors could adversely affect our rental income in future periods.
Acquisitions
During the six months ended June 30, 2012 , we completed three new portfolio acquisitions, expanded one of our existing portfolios through the purchase of an additional medical office building and consolidated a variable interest entity. The aggregate purchase price of these acquisitions was $268.2 million.
Offering Proceeds
With the termination of our follow-on offering and our DRIP, we will use other means, such as debt financing, to finance our acquisition of additional real estate assets. To the extent our portfolio is not sufficiently diversified, we could have increased exposure to local and regional economic downturns and the poor performance of one or more of our properties and, therefore, expose our stockholders to increased risk.
General and Administrative Expenses
Some of our general and administrative expenses are fixed regardless of the size of our real estate portfolio. Therefore, we could spend a larger portion of our income on operating expenses. This would reduce our profitability and, in turn, the amount of net income available for distribution to our stockholders.
Scheduled Lease Expirations
As of June 30, 2012 , the occupancy rate of our portfolio of properties, including leases signed, but which have not yet commenced, was 91%. Our leasing strategy for 2012 focuses on negotiating renewals for leases scheduled to expire during the remainder of the year. If we are unable to negotiate such renewals, we will seek to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy. Of the leases expiring in 2012 , we anticipate, but cannot provide assurance, that a majority of the tenants will renew for another term.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2012 and 2011
Our operating results are primarily comprised of income derived from our portfolio of properties. As of June 30, 2012 , we owned and operated 245 medical office buildings and 19 other facilities that serve the healthcare industry, comprised of 12.4 million square feet of GLA. As of June 30, 2011 , we owned and operated 227 medical office buildings and 19 other facilities that serve the healthcare industry, comprised of 11.1 million square feet of GLA.
Rental Income
For the three months ended June 30, 2012 and 2011 , rental income attributable to our properties was $75.0 million and $66.4 million, respectively. For the three months ended June 30, 2012 , rental income was comprised of contractual rental income of $72.2 million, straight-line rent of $2.5 million and other operating revenue of $0.3 million. For the three months ended June 30, 2011 , rental income was comprised of contractual rental income of $63.7 million, straight-line rent of $2.5 million and other operating revenue of $0.2 million. The increase in rental income is due to the acquisition of additional buildings in our portfolio.

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For the six months ended June 30, 2012 and 2011 , rental income attributable to our properties was $144.9 million and $135.7 million, respectively. For the six months ended June 30, 2012 , rental income was comprised of contractual rental income of $138.9 million, straight-line rent of $5.4 million and other operating revenue of $0.6 million. For the six months ended June 30, 2011 , rental income was comprised of contractual rental income of $127.6 million, straight-line rent of $6.4 million and other operating revenue of $1.7 million. The increase in rental income is due to the acquisition of additional buildings in our portfolio, partially offset by $1.4 million of revenue from lease terminations included in rental revenues for the six months ended June 30, 2011 .
The aggregate occupancy for our operating properties including leases we have executed, but which have not commenced was approximately 91% as of June 30, 2012 and 2011 .
Rental Expenses
For the three months ended June 30, 2012 and 2011 , rental expenses attributable to our properties were $24.7 million and $21.7 million, respectively. For the six months ended June 30, 2012 and 2011 , rental expenses attributable to our properties were $47.4 million and $45.6 million, respectively. The increase in rental expense is due to the acquisition of additional buildings in our portfolio.
  General and Administrative Expenses
For the three months ended June 30, 2012 and 2011 , general and administrative expenses were $4.9 million and $5.3 million, respectively. For the six months ended June 30, 2012 and 2011 , general and administrative expenses were $10.9 million and $10.7 million, respectively. General and administrative expenses include such costs as salaries, corporate office overhead, professional and legal fees, among others. For the three and six months ended June 30, 2012, general and administrative expense were relatively comparable to the same periods in 2011.
Acquisition-Related Expenses
For the three months ended June 30, 2012 and 2011 , acquisition-related expenses attributable to our properties were $3.0 million and $0.4 million, respectively. For the six months ended June 30, 2012 and 2011 , acquisition-related expenses attributable to our properties were $5.3 million and $1.4 million, respectively. The increase in acquisition-related expenses for both the three and six months ended June 30, 2012 was as a result of the increased acquisitions activity and certain purchase price adjustments.
Depreciation and Amortization
For the three months ended June 30, 2012 and 2011 , depreciation and amortization expense was $31.0 million and $26.7 million, respectively. For the six months ended June 30, 2012 and 2011 , depreciation and amortization expense was $58.3 million and $53.5 million, respectively. For both the three and six months ended June 30, 2012, the increase in depreciation and amortization expense was due to the increase in our portfolio over the respective periods, as discussed above.
Listing Expenses
In connection with the Listing, we incurred expenses totaling $12.5 million for the three and six months ended June 30, 2012, which were primarily for professional fees, share based compensation expense, and other previously deferred offering costs.
Non-Traded REIT Expenses
For the three months ended June 30, 2012 and 2011, non-traded REIT expenses were $1.7 million and $1.4 million, respectively. For the six months ended June 30, 2012 and 2011, non-traded REIT expenses were $3.8 million and $3.4 million, respectively. For the three months ended June 30, 2012 and 2011, these expenses include $0.8 million and $0.6 million of stockholder services cost, respectively, and $1.5 million and $1.2 million for the six months ended June 30, 2012 and 2011, respectively. Shareholder services costs relate to daily, monthly and quarterly services provided to our approximately 58,000 stockholders, including the printing and mailing of shareholder statements, the maintenance of an online investor portal, and other significant mailings and promotional investor materials traditionally borne by an advisor, which we do not have. Additionally, these expenses include $0.9 million and $0.8 million of share-based compensation attributable to the executives and board of directors for the three months ended June 30, 2012 and 2011, respectively, and $2.3 million and $2.2 million for the six months ended June 30, 2012 and 2011, respectively.  These related shares were accelerated pursuant to the Listing and were applicable to past service relative to our non-traded REIT status.

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Interest Expense and Net Change in Fair Value of Derivative Instruments
Interest expense, which included the amortization of deferred financing costs and debt premium/discount, and net change in fair value of derivative financial instruments was $15.9 million and $11.4 million for the three months ended June 30, 2012 and 2011, respectively, and $27.0 million and $21.2 million for the six months ended June 30, 2012 and 2011 , respectively.
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Interest expense on our debt
 
$
9,036,000

 
$
8,698,000

 
$
17,514,000

 
$
17,399,000

Amortization of deferred financing costs and debt discount/premium
 
953,000

 
707,000

 
2,062,000

 
1,634,000

Unused credit facility fees
 
509,000

 
548,000

 
1,155,000

 
906,000

Total interest expense
 
10,498,000

 
9,953,000

 
20,731,000

 
19,939,000

Interest expense related to our derivative financial instruments and net change in fair value of derivative financial instruments
 
5,434,000

 
1,444,000

 
6,234,000

 
1,300,000

Total interest expense and net change in fair value of derivative financial instruments
 
$
15,932,000

 
$
11,397,000

 
$
26,965,000

 
$
21,239,000


During the first half of 2012, inclusive of the $155.0 million term loan which closed on July 20, 2012, we entered into over $1.0 billion of new credit facilities, including the refinancing of $650.3 million of existing mortgage and credit facilities. The net impact from these transactions has been to lower our average borrowing rate and extend maturities on our indebtedness. Our weighted average borrowing cost, inclusive of the term loan which closed on July 20, 2012 and our interest rate swaps and cap, has decreased to 4.10% per annum, down significantly from 5.25% per annum as of December 31, 2011. Additionally, the weighted average remaining term of our debt portfolio increased from 3.8 years to 4.2 years. As part of the refinancing actions, we retired approximately $75.3 million of secured mortgage loans with a weighted average interest rate of 6.0% per annum. The debt extinguishment costs associated with these mortgage loans totaled $1.9 million, but will result in annual cash savings of $2.3 million.
The increase in interest expense and net change in fair value of derivative financial instruments for the three and six months ended June 30, 2012 as compared to the three and six months ended June 30, 2011 was primarily due to the increased loss on the change in the fair value of our derivative financial instruments.
Debt Extinguishment Costs
During the three and six months ended June 30, 2012, we incurred $1.9 million of debt extinguishment costs associated with the debt retired as discussed above.
Funds from Operations and Normalized Funds from Operations
We define funds from operations, or FFO, a non-GAAP measure, as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property and impairment write downs of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

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We compute FFO in accordance with the current standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. The NAREIT reporting guidance directs companies, for the computation of NAREIT FFO, to exclude impairments of depreciable real estate and impairments to investments in affiliates when write-downs are driven by measurable decreases in the fair value of depreciable real estate held by the affiliate. FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. FFO should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay distributions.
Changes in the accounting and reporting rules under GAAP have prompted a significant increase in the amount of non-operating items included in FFO, as defined. Therefore, we use normalized funds from operations, or Normalized FFO, which excludes from FFO acquisition-related expenses, net change in fair value of derivative financial instruments, listing expenses, transitional expenses, debt extinguishment costs, and other normalizing items. Other normalizing items are are nonrecurring items such as legal settlements, lease termination fees and the write-off of deferred financing costs. Normalized FFO should not be considered as an alternative to net income or to cash flows from operating activities and is not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs, including our ability to make distributions. Normalized FFO should be reviewed in connection with other GAAP measurements.
The following is the calculation of FFO and Normalized FFO for the three and six months ended June 30, 2012 and 2011 :
    
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net (loss) income
$
(19,314,000
)
 
$
1,162,000

 
$
(19,620,000
)
 
$
3,352,000

Depreciation and amortization 
30,964,000

 
26,701,000

 
58,321,000

 
53,451,000

FFO
$
11,650,000

 
$
27,863,000

 
$
38,701,000

 
$
56,803,000

FFO per share — basic and diluted
$
0.05

 
$
0.12

 
$
0.17

 
$
0.26

Acquisition-related expenses
2,970,000

 
361,000

 
5,292,000

 
1,423,000

Net change in fair value of derivative financial instruments
4,787,000

 
1,078,000

 
5,295,000

 
574,000

Listing expenses
12,544,000

 
—

 
12,544,000

 
—

Transitional expenses
1,704,000

 
—

 
1,704,000

 
—

Debt extinguishment costs
1,886,000

 
—

 
1,886,000

 
—

Other normalizing items
135,000

 
(111,000
)
 
200,000

 
(1,417,000
)
Normalized FFO
$
35,676,000

 
$
29,191,000

 
$
65,622,000

 
$
57,383,000

Normalized FFO per share — basic and diluted
$
0.16

 
$
0.13

 
$
0.29

 
$
0.26

Weighted average common shares outstanding — basic
229,436,425

 
228,340,776

 
229,158,939

 
221,606,526

Weighted average common shares outstanding — diluted
229,613,811

 
228,800,828

 
229,336,325

 
222,066,578

Net Operating Income
Net operating income is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from our total portfolio of properties before general and administrative expenses, acquisition-related expenses, depreciation and amortization expenses, listing expenses, non-traded REIT expenses, interest expense and net change in fair value of derivative financial instruments, debt extinguishment costs and interest and dividend income. We believe that net operating income provides an accurate measure of the operating performance of our operating assets because net operating income excludes certain items that are not associated with management of the properties. Additionally, we believe that net operating income is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term net operating income may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

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To facilitate understanding of this financial measure, a reconciliation of net (loss) income to net operating income has been provided for the three and six months ended June 30, 2012 and 2011 :
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Net (loss) income
 
$
(19,314,000
)
 
$
1,162,000

 
$
(19,620,000
)
 
$
3,352,000

Add:
 
 
 
 
 
 
 
 
General and administrative expenses
 
4,908,000

 
5,331,000

 
10,915,000

 
10,668,000

Acquisition-related expenses
 
2,970,000

 
361,000

 
5,292,000

 
1,423,000

Depreciation and amortization
 
30,964,000

 
26,701,000

 
58,321,000

 
53,451,000

Listing expenses
 
12,544,000

 
—

 
12,544,000

 
—

Non-traded REIT expenses
 
1,704,000

 
1,424,000

 
3,847,000

 
3,395,000

Interest expense and net change in fair value of derivative financial instruments
 
15,932,000

 
11,397,000

 
26,965,000

 
21,239,000

Debt extinguishment costs
 
1,886,000

 
—

 
1,886,000

 
—

Less:
 
 
 
 
 
 
 
 
Interest and dividend income
 
63,000

 
26,000

 
91,000

 
144,000

Net operating income
 
$
51,531,000

 
$
46,350,000

 
$
100,059,000

 
$
93,384,000

Liquidity and Capital Resources
We are dependent upon the proceeds from our operating cash flows and the proceeds from debt to conduct our activities. We stopped offering shares in our follow-on offering as of February 28, 2011 and terminated our DRIP during the second quarter of 2012. We may conduct additional public offerings of our common stock in the future. Our ability to raise funds is dependent on general economic conditions, general market conditions for REITs, and our operating performance. Our total capacity to purchase real estate and other related assets is a function of our current cash position, our borrowing capacity on our revolving credit facility and from any future indebtedness that we may incur, and any possible future equity offerings. Because we are no longer receiving offering proceeds from our primary offering, we will rely on our operating cash flows and borrowings to fund our acquisitions and satisfy our other capital needs.
Our principal demands for funds continue to be for acquisitions of medical office buildings and other facilities that serve the healthcare industry, to pay operating expenses and principal and interest on our outstanding indebtedness, to repay our debt as appropriate, and to make distributions to our stockholders.
Generally, cash needs for items other than acquisitions of medical office buildings and other facilities that serve the healthcare industry continue to be met from operations and borrowings. We believe that these cash resources will be sufficient to satisfy our cash requirements for the foreseeable future, including our requirements to meet our debt maturities coming due during the year ending December 31, 2012, and we do not anticipate a need to, though we may, raise funds from other than these sources within the next 12 months.
When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include a credit facility or other loan established with respect to the investment, operating cash generated by the investment, additional equity investments from us or joint venture partners or, when necessary, capital reserves. Any capital reserve would be established from the proceeds from sales of other investments, operating cash generated by other investments, or other cash on hand. In some cases, a lender may require us to establish capital reserves for a particular investment. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs.
Other Liquidity Needs
In the event that there is a shortfall in net cash available due to various factors, including, without limitation, the timing of distributions or the timing of the collections of receivables, we may seek to obtain capital to pay distributions by means of secured or unsecured debt financing through one or more third parties. We may also pay distributions from cash from capital transactions, including, without limitation, the sale of one or more of our properties.

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As of June 30, 2012 , we estimate that our expenditures for capital improvements will require up to approximately $9.0 million for the coming six months. As of June 30, 2012 , we had $8.7 million of restricted cash in loan impounds and reserve accounts for such capital expenditures. We cannot provide assurance, however, that we will not exceed these estimated expenditure levels or be able to obtain additional sources of financing on commercially favorable terms or at all. As of June 30, 2012 , we had $41.7 million of debt maturing during the last six months of the year. We will use cash flows from operations, cash on hand and our unsecured revolving credit facility to fund these debt maturities. As of June 30, 2012 , we had cash and cash equivalents of $24.0 million and full access to our unsecured revolving credit facility of $575.0 million. Additionally, as of June 30, 2012 , we had unencumbered properties with a gross book value of approximately $1.6 billion that may be used as collateral to secure additional financings in future periods or as additional collateral to facilitate the refinancing of current mortgage debt as it becomes due.
If we experience lower occupancy levels, reduced rental rates, reduced revenues as a result of asset sales, or increased capital expenditures and leasing costs compared to historical levels due to competitive market conditions for new and renewal leases, the effect would be a reduction of net cash provided by operating activities. If such a reduction of net cash provided by operating activities is realized, we may have a cash flow deficit in subsequent periods. Our estimate of net cash available is based on various assumptions which are difficult to predict, including the levels of leasing activity and related leasing costs. Any changes in these assumptions could impact our financial results and our ability to fund working capital and unanticipated cash needs.
Cash Flows
 
 
Six Months Ended June 30,
 
 
 
 
2012
 
2011
 
Change
Cash and cash equivalents, beginning of period
 
$
69,491,000

 
$
29,270,000

 
$
40,221,000

Net cash provided by operating activities
 
47,861,000

 
60,786,000

 
(12,925,000
)
Net cash used in investing activities
 
(225,190,000
)
 
(22,546,000
)
 
(202,644,000
)
Net cash provided by financing activities
 
131,815,000

 
86,777,000

 
45,038,000

Cash and cash equivalents, end of period
 
$
23,977,000

 
$
154,287,000

 
$
(130,310,000
)

Cash flows from operating activities decreased in 2012 primarily due to the costs associated with the Listing, partially offset by the operating income from our 2011 acquisitions being fully reflected in our operations for 2012 and from our 2012 acquisitions. We anticipate cash flows from operating activities to increase as we purchase more properties.
For the six months ended June 30, 2012, cash flows used in investing activities related primarily to the acquisition of real estate properties in the amount of $213.9 million and capital expenditures of $12.3 million. For the six months ended June 30, 2011, cash flows used in investing activities related primarily to $29.7 million for the acquisitions of real estate properties, partially offset by proceeds of $14.5 million from the release of restricted cash. We anticipate cash flows used in investing activities to increase as we purchase more properties.
For the six months ended June 30, 2012, net cash flows from financing activities related primarily to borrowings on our unsecured term loan of $300.0 million, partially offset by distributions to our stockholders of $51.2 million, repurchase of common stock of $31.9 million, repayments on mortgage loans payable of $79.8 million, and debt financing costs of $4.9 million associated with the new credit facility. For the six months ended June 30, 2011, cash flows provided by financing activities related primarily to funds raised from the issuance of common stock of $211.6 million and borrowings on our secured term loan of $125.5 million, partially offset by principal repayments of $163.9 million on mortgage loans payable, distributions to our stockholders of $41.0 million, repurchase of common stock of $17.7 million and offering costs of $17.6 million.

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Distributions
In order to remain qualified as a REIT for federal income tax purposes, among other things, we must distribute at least 90.0% of our annual taxable income to our stockholders. The amount of distributions we pay to our stockholders is determined by our Board of Directors, at its sole discretion, and is dependent on a number of factors, including funds available for the payment of distributions, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our status as a REIT under the Code, as well as any liquidity alternative we may pursue. We have paid distributions monthly since February 2007 and if our investments produce sufficient cash flow, we expect to continue to pay distributions to our stockholders. Because our cash available for distribution in any year may be less than 90.0% of our taxable income for the year, we may obtain the necessary funds by borrowing, issuing new securities or selling assets to pay out enough of our taxable income to satisfy the distribution requirement. Our organizational documents do not establish a limit on the amount of any offering proceeds we may use to fund distributions.
On May 16, 2012, our Board of Directors determined that it was in the best interest of our stockholders to modify the payment of the monthly distributions to an annualized rate of $0.575 per share beginning June 1, 2012. After the payment of the June 2012 monthly distribution, we will declare the remaining 2012 distributions on a quarterly basis. It is our intent to continue to pay distributions. However, our Board of Directors may reduce our distribution rate and we cannot guarantee the timing and amount of distributions paid in the future, if any.
If distributions are in excess of our taxable income, such distributions will result in a return of capital to our stockholders. Our distribution of amounts in excess of our taxable income has historically resulted in a return of capital to our stockholders.
For the three months ended June 30, 2012, we paid distributions to our stockholders of $41.8 million ($29.0 million in cash and $12.8 million in shares of our common stock pursuant to the DRIP) and for the six months ended June 30, 2012, we paid distributions to our stockholders of $83.1 million ($51.2 million in cash and $31.9 million in shares of our common stock pursuant to the DRIP). The distributions paid in excess of our cash flow from operations for the quarter ended June 30, 2012 were paid using proceeds from our dividend reinvestment plan.
Financing
We anticipate that our aggregate borrowings, both secured and unsecured, will approximate between 30% and 40% of all of our properties’ and mortgage loans receivables' combined values, as determined at the end of each calendar year. For these purposes, the value of each asset will be equal to the purchase price paid for the asset or, if the asset was appraised subsequent to the date of purchase, then the value will be equal to the value reported in the most recent independent appraisal of the asset. Our policies do not limit the amount we may borrow with respect to any individual investment. As of June 30, 2012, our leverage ratio of total debt to total capitalization was 27.4%.
New Unsecured Credit Agreement
On March 29, 2012, we entered into our new unsecured revolving credit and term loan facility, consisting of a $575.0 million unsecured revolving credit facility and a $300.0 million unsecured term loan facility, which replaced our previous $575.0 million credit facility. The actual amount of credit available under our new unsecured revolving credit and term loan facility is a function of certain loan to cost, loan to value, and debt service coverage ratios set forth in the new credit agreement. The new credit facility can be increased by up to $175.0 million for an aggregate maximum principal amount of $1.05 billion, subject to certain conditions. Our new unsecured revolving credit and term loan facility has a four-year term which expires on March 2016 and includes a one-year extension option, subject to certain conditions. Borrowings under this new unsecured revolving credit facility accrue interest at a rate per annum equal to the Adjusted LIBOR plus a margin ranging from 1.10% to 1.75% based on our operating partnership's credit rating. Borrowings under this new unsecured term loan accrue interest at a rate per annum equal to the Adjusted LIBOR plus a margin ranging from 1.30% to 2.25% based on our operating partnership's credit ratings. Our operating partnership also pays a facility fee ranging from 0.20% to 0.50% on the aggregate commitments under the new unsecured revolving credit facility. As of June 30, 2012, $300.0 million had been drawn on the new unsecured term loan portion of the new credit agreement. See Note 8, Debt, Net to our accompanying interim condensed consolidated financial statements, for further information regarding our new unsecured revolving credit facility and term loan.
On March 29, 2012, we entered into an interest rate swap with Wells Fargo Bank, N.A. as counterparty for a notional amount of $200.0 million, with a maturity date of March 29, 2017. On May 21, 2012, we entered into a interest rate swap with a syndicate of JPMorgan Chase Bank, N.A., Fifth Third Bank and Regions Bank for a notional amount of $100.0 million with a maturity date of June 15, 2016. These swaps serve to fix our interest rate for the $300.0 million unsecured term loan at 2.95% per annum.

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New Unsecured Term Loan
On July 20, 2012, we entered into a new term loan, or the new term loan, with Wells Fargo Bank, N.A. as the administrative agent, and Capital One, N.A and PNC Bank, as the co-documentation agents, in the amount of $155.0 million. The new term loan was primarily used to fund the Tender Offer. Borrowings under the new term loan accrue interest at a rate per annum equal to LIBOR plus a margin ranging from 1.55% to 2.40% based on our operating partnership's credit rating. The new term loan matures in July 2019.
In anticipation of the new term loan we entered into an interest rate swap on June 14, 2012 with Wells Fargo, N.A. as counterparty for a notional amount of $50.0 million, with a maturity date of July 17, 2019. The interest rate swap fixes our LIBOR rate at 1.392% .
Fixed and Variable Rate Mortgages
As of June 30, 2012, we have $392.9 million of fixed rate mortgages outstanding and $38.4 million of variable rate mortgages outstanding. The interest rates on our fixed and variable rate mortgages range from 1.89% to 12.75% per annum with a weighted average interest rate of 5.58% per annum. During the last six months of the year $41.7 million of our fixed and variable rate debt matures, of which $17.7 million has a one-year extension option available
Secured Real Estate Term Loan
We have a senior secured real estate term loan in the amount of $125.5 million with Wells Fargo Bank, N.A. Interest is payable monthly at a rate of one-month LIBOR plus 2.35%, which, as of June 30, 2012 , equated to 2.60%. After giving effect to the impact of the interest rate swap discussed below, the weighted average rate associated with this term loan is 3.09% per annum. This term loan matures on December 31, 2013 and includes two 12-month extension options, subject to the satisfaction of certain conditions. The loan agreement for this term loan includes financial covenants that we believe are customary for loans of this type, including a maximum ratio of total indebtedness to total assets, a minimum ratio of EBITDA to fixed charges, and a minimum level of tangible net worth. In addition, the term loan agreement for this term loan includes events of default that we believe are customary for loans and transactions of this type. This term loan is secured by 25 buildings within 12 property portfolios in 13 states and has a two year period in which no prepayment is permitted, which expires on March 1, 2013. Our operating partnership has guaranteed 25% of the principal balance (or $31.4 million) and 100% of the interest under the term loan.
We have an interest rate swap with Wells Fargo Bank, N.A. as counterparty for a notional amount of $75.0 million. The interest rate swap is secured by the pool of assets collateralizing the secured term loan. The effective date of the swap is February 1, 2011, and it matures no later than December 31, 2013. This swap serves to fix the one-month LIBOR at 1.0725%, which when added to the spread of 2.35%, results in a total interest rate of approximately 3.42% per annum for $75.0 million of the term loan during the initial term.
REIT Requirements
We have entered into a Closing Agreement with the IRS pursuant to which (i) the IRS agreed not to challenge certain payments pursuant to our DRIP and payments of certain IRA custodial fees made from 2007 through 2010 as creating preferential dividends for our taxable years 2007, 2008, 2009 and 2010 as a result of the matters described above, and (ii) we paid a compliance fee in an immaterial amount to the IRS. In accordance with the terms of the Closing Agreement, any reimbursement to us for payment of this compliance fee will be considered gross income to us. As a result of the Closing Agreement, we continue to qualify as a REIT to satisfy our distribution requirements.
Critical Accounting Policies
The complete listing of our Critical Accounting Policies was previously disclosed in our 2011 Annual Report on Form 10-K, as filed with the SEC on March 27, 2012, and there have been no material changes to our Critical Accounting Policies as disclosed therein.

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Interim Unaudited Financial Data
Our accompanying interim condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying interim condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying interim condensed consolidated financial statements reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable. Our accompanying interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2011 Annual Report on Form 10-K, as filed with the SEC on March 27, 2012.
Recently Issued Accounting Pronouncements
See Note 2, Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements, to our accompanying interim condensed consolidated financial statements, for a discussion of recently issued accounting pronouncements.
Commitments and Contingencies
See Note 10, Commitments and Contingencies, to our accompanying interim condensed consolidated financial statements, for a further discussion of our commitments and contingencies.
Debt Service Requirements
One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. As of June 30, 2012, we had debt outstanding in the principal amount of $859.3 million, including a premium of $2.5 million. We are required by the terms of the applicable loan documents to meet certain financial covenants, such as minimum net worth and liquidity amount, and reporting requirements. As of June 30, 2012, we believe that we were in compliance with all such covenants and reporting requirements on our debt.
As June 30, 2012, the weighted average interest rate on our outstanding debt inclusive of the impact of our interest rate swaps was 4.37% per annum.
Off-Balance Sheet Arrangements
As of June 30, 2012, we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.
Inflation
We are exposed to inflation risk as income from future long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that protect us from the impact of inflation. These provisions include rent escalations, reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per square foot allowance. However, due to the long-term nature of the leases, among other factors, the leases may not re-set frequently enough to cover inflation.
Subsequent Events
See Note 15, Subsequent Events, to our accompanying interim condensed consolidated financial statements, for a further discussion of our subsequent events.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There were no material changes in the information regarding market risk that was provided in our 2011 Annual Report on Form 10-K, as filed with the SEC on March 27, 2012, other than the updates discussed within this item.
The table below presents, as of June 30, 2012, the principal amounts and weighted average interest rates excluding the impact of interest rate swaps by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes.
 

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Expected Maturity Date
 
 
2012
 
2013
 
2014
 
2015
 
2016
 
Thereafter
 
Total
Fixed rate debt - principal payments
 
$
3,338,000

 
$
31,518,000

 
$
13,393,000

 
$
72,625,000

 
$
104,696,000

 
$
167,336,000

 
$
392,906,000

Weighted average interest rate on fixed rate debt (per annum)
 
5.85
%
 
5.77
%
 
6.44
%
 
4.08
%
 
5.99
%
 
6.12
%
 
5.92
%
Variable rate debt - principal payments
 
$
38,377,000

 
$
125,500,000

 
$
—

 
$
—

 
$
300,000,000

 
$
—

 
$
463,877,000

Weighted average interest rate on variable rate debt (per annum) (based on rates in effect as of June 30, 2012)
 
2.25
%
 
2.78
%
 
—
%
—

—
%
 
3.66
%
 
—
%
 
3.18
%
Our total debt was was $856.8 million ($859.3 million, including premium) as of June 30, 2012. As of June 30, 2012, we had fixed and variable rate debt with interest rates ranging from 1.89% to 12.75% per annum and a weighted average interest rate of 3.92% per annum. We had $392.9 million ($395.4 million, including premium) of fixed rate debt, or 45.9% of total debt, at a weighted average interest rate of 5.92% per annum and $463.9 million of variable rate debt, or 54.1% of total debt, at a weighted average interest rate of 2.23% per annum as of June 30, 2012.
As of June 30, 2012, the fair value of our fixed rate debt was $450.0 million and the fair value of our variable interest rate debt was $465.6 million.
As of June 30, 2012, we had five fixed rate interest rate swaps on our variable rate debt including one entered into in June 2012 in anticipation of the new unsecured term loan that closed in July 2012.
In addition to changes in interest rates, the value of our future properties is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt if necessary.

Item 4. Controls and Procedures.
Our management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, who serve as our principal financial officer and principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
As of June 30, 2012, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective.
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2012, we were not involved in any such material legal proceedings.

Item 1A. Risk Factors.
There are no other material changes from the risk factors previously disclosed in our 2011 Annual Report on Form 10-K, as filed with the SEC on March 27, 2012, however, we have updated the following risk factors:

Our property investments are geographically concentrated in certain states and subject to economic fluctuations in those states.
As of June 30, 2012, we had (i) interests in 26 buildings located in Texas, which accounted for 14% of total annualized rental income, (ii) interests in 44 buildings in Arizona, which accounted for 11% of our total annualized rental income, (iii) interests in 22 buildings located in South Carolina, which accounted for 9% of our total annualized rental income, (iv) interests in four buildings in Pennsylvania, which accounted for 9% of our total annualized rental income, (v) interests in 20 buildings in Florida, which accounted for 8% of our total annualized rental income, (vi) interests in 44 buildings in Indiana, which accounted for 7% of our total annualized rental income, (vii) interests in eight buildings in New York, which accounted for 7% of our total annualized rental income, and (viii) interests in 13 buildings in Georgia, which accounted for 6% of our total annualized rental income. As a result, our business, financial condition, results of operations, and ability to make distributions to our stockholders could be disproportionately affected by an economic downturn or other events affecting the economies in these states.
Recently enacted comprehensive healthcare reform legislation could adversely affect our business, financial condition and results of operations and our ability to pay distributions to stockholders.
On March 23, 2010, the President signed into law the Patient Protection and Affordable Care Act of 2010, or the Patient Protection and Affordable Care Act, and on March 30, 2010, the President signed into law the Health Care and Education Reconciliation Act of 2010, or the Reconciliation Act, which in part modified the Patient Protection and Affordable Care Act. Together, the two laws serve as the primary vehicle for comprehensive healthcare reform in the United States and will become effective through a phased approach, which began in 2010 and will conclude in 2018. The laws are intended to reduce the number of individuals in the United States without health insurance and significantly change the means by which healthcare is organized, delivered and reimbursed. The Patient Protection and Affordable Care Act includes program integrity provisions that both create new authorities and expand existing authorities for federal and state governments to address fraud, waste and abuse in federal healthcare programs. In addition, the Patient Protection and Affordable Care Act expands reporting requirements and responsibilities related to facility ownership and management, patient safety and care quality. In the ordinary course of their businesses, our tenants may be regularly subjected to inquiries, investigations and audits by federal and state agencies that oversee these laws and regulations. If they do not comply with the additional reporting requirements and responsibilities, our tenants' ability to participate in federal healthcare programs may be adversely affected. Moreover, there may be other aspects of the comprehensive healthcare reform legislation for which regulations have not yet been adopted, which, depending on how they are implemented, could adversely affect our tenants and their ability to meet their lease obligations. On June 28, 2012, the U.S. Supreme Court ruled on the constitutionality of the two laws generally upholding the entirety of the Patient Protection and Affordable Care Act including holding that the “individual mandate”-the centerpiece of the legislation that requires all individuals to purchase some form of health insurance-is permissibly construed as a tax imposed on those who do not obtain health insurance. Notably, the portions of the health reform laws addressing fraud, waste and abuse remain intact. The only aspect of the laws held unconstitutional is the mandated Medicaid expansion that would have required states to cover nonelderly persons with incomes up to 133 percent of the poverty level. The Supreme Court held that Congress could not require states to implement such an expansion or risk losing all federal Medicaid funding. As a result of the Supreme Court's decision, states may opt to expand Medicaid coverage in accordance with the laws but are not required to do so. Despite the Supreme Court's decision, it remains difficult to predict the impact of these laws on us due to their complexity, lack of implementing regulations or interpretive guidance, and the gradual implementation of the laws over a multi-year period. In addition, there have been numerous Congressional attempts to amend and repeal the laws both prior to and subsequent to the Supreme Court's ruling; we cannot predict whether any of these attempts to repeal or amend the laws will be successful. Moreover, a number of states have indicated that they will not take steps to implement certain aspects of the laws notwithstanding the Court's ruling. Consequently, it remains difficult to foresee how individuals and business will respond to the choices afforded them by law. Because of the many variables involved, we are unable to predict how these laws may impact our tenants' operations or the net effect of these laws on us. Both our tenants and us may be adversely affected.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three months ended June 30, 2012, we did not issue any securities registered under the Securities Act of 1933, as amended.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Our share repurchase plan allows for share repurchases by us when certain criteria are met by our stockholders. Share repurchases will be made at the sole discretion of our board of directors.

During the three months ended June 30, 2012, we repurchased shares of our common stock as follows:
Period
 
Total Number of
Shares Purchased
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plan or Program(1)
 
Maximum
Approximate
Dollar Value
of Shares that May
Yet be Purchased
Under the
Plans or
Programs
April 1, 2012 to April 30, 2012
 
1,019,400

 
$
9.79

 
1,019,400

 
(2
)
May 1, 2012 to May 31, 2012
 
—

 
$
—

 
—

 
(2
)
June 1, 2012 to June 30, 2012
 
1,039,770

 
$
9.81

 
1,039,770

 
(2
)
_______________________________________
(1)
Our board of directors adopted a share repurchase plan effective September 20, 2006. Our board of directors adopted, and we publicly announced, an amended share repurchase plan effective August 25, 2008. On November 24, 2010, we amended and restated our share repurchase plan again, with an effective date of January 1, 2011. From inception through June 30, 2012, we had repurchased approximately 14,240,613 shares of our common stock pursuant to our share repurchase plan. Our share repurchase plan does not have an expiration date but may be suspended or terminated at our board of directors’ discretion. During the second quarter of 2012, we terminated the share repurchase program in connection with the Listing.
(2)
Repurchases under our share repurchase plan are subject to the discretion of our board of directors. The plan provides that repurchases are subject to funds being available and are limited in any calendar year to 5.0% of the weighted average number of shares of our common stock outstanding during the prior calendar year. The plan also provides that we will fund a maximum of $10 million of share repurchase requests per quarter, subject to available funding, and that funding for repurchases will come exclusively from and will be limited to proceeds we receive from the sale of shares under our DRIP during such quarter.
Item 3. Defaults Upon Senior Securities.
None.

Item 4. Mine Safety Disclosures.
Not applicable.

Item 5. Other Information.
None.

Item 6. Exhibits.
The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are included, or incorporated by reference, in this Quarterly Report on Form 10-Q.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
 
Healthcare Trust of America, Inc.
 
 
(Registrant)
 
 
 
August 9, 2012
 
By:
 
/ S / S COTT  D. P ETERS
Date
 
 
 
Scott D. Peters
Chief Executive Officer, President and Chairman
(Principal executive officer)
 
 
 
August 9, 2012
 
By:
 
/ S / K ELLIE  S. P RUITT
Date
 
 
 
Kellie S. Pruitt
Chief Financial Officer
(Principal financial officer and
Principal accounting officer)

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Table of Contents

EXHIBIT INDEX
Following the consummation of the merger of NNN Realty Advisors, Inc., which previously served as our sponsor, with and into a wholly owned subsidiary of Grubb & Ellis Company on December 7, 2007, NNN Healthcare/Office REIT, Inc., NNN Healthcare/Office REIT Holdings, L.P., NNN Healthcare/Office REIT Advisor, LLC and NNN Healthcare/Office Management, LLC changed their names to Grubb & Ellis Healthcare REIT, Inc., Grubb & Ellis Healthcare REIT Holdings, L.P., Grubb & Ellis Healthcare REIT Advisor, LLC, and Grubb & Ellis Healthcare Management, LLC, respectively.
Following the Registrant’s transition to self-management, on August 24, 2009, Grubb & Ellis Healthcare REIT, Inc. and Grubb & Ellis Healthcare REIT Holdings, L.P. changed their names to Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP, respectively.
The following Exhibit List refers to the entity names used prior to such name changes in order to accurately reflect the names of the parties on the documents listed.
Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the period ended June 30, 2012 (and are numbered in accordance with Item 601 of Regulation S-K).
 
3.1
Fourth Articles of Amendment and Restatement (included as Exhibit 3.1 to our Current Report on Form 8-K filed December 22, 2010 and incorporated herein by reference).
3.2
Bylaws of NNN Healthcare/Office REIT, Inc. (included as Exhibit 3.2 to our Registration Statement on Form S-11 (Commission File. No. 333-133652) filed on April 28, 2006 and incorporated herein by reference).
3.3
Amendment to the Bylaws of Grubb & Ellis Healthcare REIT, Inc., effective April 21, 2009 (included as Exhibit 3.4 to Post-Effective Amendment No. 11 to our Registration Statement on Form S-11 (File No. 333-133652) filed on April 21, 2009 and incorporated herein by reference).
3.4
Amendment to the Bylaws of Grubb & Ellis Healthcare REIT, Inc., effective January 1, 2011 (included as Exhibit 3.2 to our Current Report on Form 8-K filed August 27, 2009 and incorporated herein by reference).
4.1
Amended and Restated Distribution Reinvestment Plan (included as Exhibit 4.1 to the Company’s Post-Effective Amendment No. 5 to our Registration Statement on Form S-11 (File No. 333-158418) filed on Form S-3 on August 12, 2011 and incorporated herein by reference).
10.1
Amended and Restated Agreement of Limited Partnership of Healthcare Trust of America Holdings, LP (included as Exhibit 10.1 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.2
Form of LTIP Award Agreement (CEO Version) (included as Exhibit 10.2 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.3
Form of LTIP Award Agreement (Executive Version) (included as Exhibit 10.3 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.4
Form of LTIP Award Agreement (Director Version) (included as Exhibit 10.4 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.5
Amendment to Scott D. Peters Employment Agreement (included as Exhibit 10.5 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.6
Amendment to Kellie S. Pruitt Employment Agreement (included as Exhibit 10.6 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.7
Amendment to Mark D. Engstrom Employment Agreement (included as Exhibit 10.7 to our Current Report on Form 8-K filed on May 18, 2012 and incorporated herein by reference).
10.8
Credit Agreement by and among Healthcare Trust of America Holdings, LP, Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities, LLC, as lead arranger, and the lenders party thereto, dated July 20, 2012.
10.9
Guaranty dated July 20, 2012, by Healthcare Trust of America, Inc. in favor of Wells Fargo Bank, National Association, as administrative agent.


41
Table of Contents

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.
32.1**
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**
XBRL Instance Document
101.SCH**
XBRL Taxonomy Extension Schema Document
101.CAL**
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**
XBRL Taxonomy Extension Label Linkbase Document
101.PRE**
XBRL Taxonomy Extension Presentation Linkbase Document
_________________
*
Filed herewith.
**
Furnished herewith.


42


Execution Version
Loan No: 1007304













CREDIT AGREEMENT





Dated as of July 20, 2012


by and among

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
a Delaware limited partnership,
as Borrower,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and their assignees under Section 13.6 ,
as Lenders,

WELLS FARGO Bank, National Association,
as Administrative Agent,

and

Wells Fargo Securities, LLC
as Sole Lead Arranger and Sole Bookrunner,


















Table of Contents
Articles; Section                                          Page





SFI-733935v3
ARTICLE I.
DEFINITIONS                                  1
Section 1.1
Definitions                                  1
Section 1.2
General; References to Pacific Time                      25
ARTICLE II.
CREDIT FACILITY                              25
Section 2.1
Loans                                      25
Section 2.2
Rates and Payment of Interest on Loans                      26
Section 2.3
Number of Interest Periods                          26
Section 2.4
Repayment of Loans                              27
Section 2.5
Prepayments                                  27
Section 2.6
Continuation                                  27
Section 2.7
Conversion                                  28
Section 2.8      Notes                                      28
Section 2.9
Increase in Commitments                          28
Section 2.10
Funds Transfer Disbursements                          29
ARTICLE III.
Payments, Fees and Other General Provisions                  30
Section 3.1
Payments                                  30
Section 3.2
Pro Rata Treatment                              31
Section 3.3
Sharing of Payments, Etc                          31
Section 3.4
Several Obligations                              32
Section 3.5
Fees                                      32
Section 3.6
Computations                                  32
Section 3.7
Usury                                      32
Section 3.8
Statements of Account                              33
Section 3.9
Defaulting Lenders                              33
Section 3.10
Taxes; Foreign Lenders                              34
ARTICLE IV.
[Reserved]                                      36
ARTICLE V.
Yield Protection, Etc                              36
Section 5.1
Additional Costs; Capital Adequacy                      36
Section 5.2
Suspension of LIBOR Loans                          37
Section 5.3
Illegality                                  38
Section 5.4
Compensation                                  38
Section 5.5
Treatment of Affected Loans                          38
Section 5.6
Affected Lenders                              39
Section 5.7
Change of Lending Office                          39
Section 5.8
Assumptions Concerning Funding of LIBOR Loans              40
ARTICLE VI.
Conditions Precedent                              40
Section 6.1
Initial Conditions Precedent                          40
Section 6.2
Conditions Precedent to All Loans                      42
ARTICLE VII.
Representations and Warranties                          42




Section 7.1
Organization; Powers                              43
Section 7.2
Authorization; Enforceability                          43
Section 7.3
Governmental Approvals; No Conflicts                      43
Section 7.4
Financial Condition; No Material Adverse Change              43
Section 7.5
Properties                                  44
Section 7.6
Litigation and Environmental Matters                      44
Section 7.7
Compliance with Laws and Agreements                      44
Section 7.8
Investment and Holding Company Status                  44
Section 7.9
Taxes                                      45
Section 7.10
ERISA                                      45
Section 7.11
Disclosure                                  45
Section 7.12
Federal Regulations                              45
Section 7.13
Labor Matters                                  45
Section 7.14
Subsidiaries                                  46
Section 7.15
Use of Proceeds                                  46
Section 7.16
Solvency                                  46
Section 7.17
Status of the Company                              46
Section 7.18
Properties                                  46
Section 7.19
Survival of Representations and Warranties, Etc                  46
ARTICLE VIII.
Affirmative Covenants                              47
Section 8.1
Financial Statements; Ratings Change and Other Information          47
Section 8.2
Notices of Material Events                          49
Section 8.3
Existence; Conduct of Business; REIT Status                  49
Section 8.4
Payment of Obligations                              50
Section 8.5
Maintenance of Properties; Insurance                      50
Section 8.6
Books and Records; Inspection Rights                      50
Section 8.7
Compliance with Laws                              50
Section 8.8
Use of Proceeds                                  50
Section 8.9
Distributions in the Ordinary Course                      51
Section 8.10
Notices of Asset Sales, Encumbrances or Dispositions              51
Section 8.11
[Reserved]                                  51
Section 8.12
Release of Subsidiary Guarantors                      51
Section 8.13
Additional Guarantors                              52
ARTICLE IX.
Information                                      52
Section 9.1
Electronic Delivery of Certain Information                  52
Section 9.2
Public/Private Information                          52
Section 9.3
USA Patriot Act Notice; Compliance                      53
ARTICLE X.
Negative Covenants                                  53
Section 10.1
Indebtedness                                  53
Section 10.2
Liens                                      54
Section 10.3
Fundamental Changes                              54
Section 10.4
Investments, Loans, Advances, Guarantees and Acquisitions          55
Section 10.5
Swap Agreements                              56
Section 10.6
Restricted Payments; Share Repurchases                    56
Section 10.7
Transactions with Affiliates                          57
Section 10.8
Restrictive Agreements                              57
Section 10.9
Disposition of Property                              57
Section 10.10
Payments and Modifications of Subordinate Debt              58
Section 10.11
Sales and Leasebacks                              58
Section 10.12
Changes in Fiscal Periods                          58
Section 10.13
Financial Covenants                              58




Section 10.14
Modification of Governing Documents                      59
Section 10.15
Occupancy of Unencumbered Assets                      59
ARTICLE XI.
Default                                      60
Section 11.1
Events of Default                              60
Section 11.2
Remedies Upon Event of Default                      61
Section 11.3
[Reserved.]                                  62
Section 11.4
Marshaling; Payments Set Aside                          62
Section 11.5
Allocation of Proceeds                              63
Section 11.6
[Reserved]                                  63
Section 11.7
Rescission of Acceleration by Requisite Lenders                  63
Section 11.8
Performance by Administrative Agent                      63
Section 11.9
Rights Cumulative                              64
ARTICLE XII.
The Administrative Agent                              64
Section 12.1
Appointment and Authorization                          64
Section 12.2
Wells Fargo as Lender                              65
Section 12.3
[Reserved]                                  65
Section 12.4
[Reserved]                                  65
Section 12.5
Approvals of Lenders                              65
Section 12.6
Notice of Events of Default                          66
Section 12.7
Administrative Agent's Reliance                          66
Section 12.8
Indemnification of Administrative Agent                      66
Section 12.9
Lender Credit Decision, Etc                          67
Section 12.10
Successor Administrative Agent                          68
ARTICLE XIII.
Miscellaneous                                  68
Section 13.1
Notices                                      68
Section 13.2
Expenses                                  70
Section 13.3
Stamp, Intangible and Recording Taxes                      71
Section 13.4
Setoff                                      71
Section 13.5
Litigation; Jurisdiction; Other Matters; Waivers                  71
Section 13.6
Successors and Assigns                              72
Section 13.7
Amendments and Waivers                          75
Section 13.8
Non-Liability of Administrative Agent and Lenders              77
Section 13.9
Confidentiality                                  77
Section 13.10
Indemnification                                  78
Section 13.11
Termination; Survival                              80
Section 13.12
Severability of Provisions                          80
Section 13.13
GOVERNING LAW                              80
Section 13.14
Counterparts                                  80
Section 13.15
Obligations with Respect to Loan Parties                  81
Section 13.16
Independence of Covenants                          81
Section 13.17
Limitation of Liability                              81
Section 13.18
Entire Agreement                              81
Section 13.19
Construction                                  81
Section 13.20
Headings                                  81
Section 13.21
Time                                      82










SCHEDULES AND EXHIBITS



SCHEDULE EGL      Eligible Ground Leases
SCHEDULE EOCGL      Eligible On-Campus Ground Leases
SCHEDULE QS      Qualified Subsidiaries
SCHEDULE SG      Subsidiary Guarantors
SCHEDULE 1.1(a)      Commitments Amounts and Commitment Percentages
SCHEDULE 1.1(b)      Loan Parties
SCHEDULE 7.14      Subsidiaries
SCHEDULE 7.18(a)      Real Property
SCHEDULE 7.18(b)      Unencumbered Assets
SCHEDULE 10.1      Existing Indebtedness
SCHEDULE 10.2      Existing Liens
SCHEDULE 10.8      Existing Restrictions


EXHIBIT A          Form of Assignment and Assumption Agreement
EXHIBIT B          Form of Guaranty
EXHIBIT C          Form of Note
EXHIBIT D          Form of Notice of Borrowing
EXHIBIT E          Form of Notice of Continuation
EXHIBIT F          Form of Notice of Conversion
EXHIBIT G          Form of Transfer Authorizer Designation Form




































CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “ Agreement ”), dated as of July 20, 2012 by and among HEALTHCARE TRUST OF AMERICA HOLDINGS, LP, a Delaware limited partnership (the “ Borrower ”), each of the financial institutions initially a signatory hereto, together with their successors and assignees under Section 13.6 (the “ Lenders ”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “ Administrative Agent ”), and WELLS FARGO SECURITIES, LLC, as Lead Arranger (the “ Lead Arranger ”).
WHEREAS , the Administrative Agent and the Lenders desire to make available to the Borrower a non-revolving credit facility in an initial amount of up to $155,000,000, subject to the terms and conditions contained herein.
NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS

Section 1.1 Definitions.

In addition to terms defined elsewhere herein, the following terms shall have the following meanings:
“ Accession Agreement ” means an Accession Agreement substantially in the form of Annex I to the Guaranty.
“ Acquisition Property ” means any improved, income-producing Property owned by the Borrower or any of its Subsidiaries for fewer than four (4) complete fiscal quarters, unless the Borrower has made a one-time election to treat such Property as a Medical Office/Office Property or Other Property (and no longer treat such Property as an Acquisition Property).
“ Additional Costs ” has the meaning given such term in Section 5.1(b) .
“ Adjusted NOI ” means for any fiscal period, the NOI (or proportionate share of NOI from a Property owned by an Unconsolidated Affiliate) from a Property and adjusted to (a) remove the effect of recognizing rental income on a straight-line basis over the applicable lease term and (b) deduct Property Management Fees. As used herein, “ Property Management Fees ” means, with respect to each Property (other than a Property for which the Borrower or Subsidiary has a triple-net lease in effect) for any period, an amount equal to the greater of (a) actual management fees for such Property and (b) an assumed amount equal to three percent (3%) of the aggregate rent due and payable under leases with tenants at such Property.
“ Administrative Agent ” means Wells Fargo Bank, National Association as contractual representative of the Lenders under this Agreement, or any successor “Administrative Agent” appointed pursuant to Section 12.10 .
“ Administrative Questionnaire ” means the Administrative Questionnaire completed by each Lender and delivered to the Administrative Agent in a form supplied by the Administrative Agent to the Lenders from time to time.
“ Affected Lender ” has the meaning given such term in Section 5.6 .
“ Affiliate ” means, with respect to a specified 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. Notwithstanding the foregoing, in no event shall the Administrative Agent or any Lender be deemed to be an Affiliate of the Borrower.
“ Agreement ” has the meaning set forth in the introductory paragraph hereof.
“ Agreement Date ” means the date as of which this Agreement is dated.




“ Applicable Credit Rating ” means a rating assigned to the Company's Index Debt by a Rating Agency, or if the Company has not issued any Index Debt, the corporate credit or issuer rating assigned to the Company by a Rating Agency.
“ Applicable Law ” means all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“ Applicable Margin ” means the percentage rate set forth in the table below corresponding to the level (each a “ Level ”) into which the Applicable Credit Rating then falls. As of the Agreement Date, the Applicable Margin is determined based on Level 3. Any change in the Applicable Credit Rating which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following receipt by the Administrative Agent of written notice delivered by the Borrower in accordance with Section 8.2 that the Applicable Credit Rating has changed; provided , however , if the Borrower has not delivered the notice required by Section 8.2 , but the Administrative Agent becomes aware that the Applicable Credit Rating has changed, then the Administrative Agent may, in its sole discretion, adjust the Level effective as of the first day of the first calendar month following the date the Administrative Agent becomes aware that the Applicable Credit Rating has changed and promptly advise Borrower thereof in writing. During any period that the Borrower has received two (2) Applicable Credit Ratings that are not equivalent, the Applicable Margin shall be determined based on the Level corresponding to the higher of such two (2) Applicable Credit Ratings; p rovided , however , that if the ratings of S&P and Moody's are two (2) or more Levels apart, then the Applicable Margin shall be based on the rating level that falls one level below the higher of the two (2) Levels. During any period for which there exists only one Applicable Credit Rating from a Rating Agency, then the Applicable Margin shall be determined based on such Applicable Credit Rating so long as such Applicable Credit Rating is from either S&P or Moody's. During any period that the Company has (a) not received an Applicable Credit Rating from any Rating Agency or (b) received an Applicable Credit Rating from only one Rating Agency that is neither S&P or Moody's, the Applicable Margin shall be determined based on Level 4.

Level
Applicable Credit Rating (S&P/Moody's)
Applicable Margin
1
Baa1/BBB+ or higher
1.55%
2
Baa2/BBB
1.7%
3
Baa3/BBB-
2%
4
Below Baa3/BBB-
2.4%

“ 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 any entity that administers or manages a Lender.
“ Assignment and Assumption ” means an Assignment and Assumption Agreement among a Lender, an Eligible Assignee and the Administrative Agent, substantially in the form of Exhibit A .
“ Bankruptcy Code ” means the Bankruptcy Code of 1978, as amended.
“ Bankruptcy Event ” means with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided , further , that such ownership interest does not result in




or provide such Person 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 Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“ Base Rate ” means the LIBOR Market Index Rate; provided , that if for any reason the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum rate of interest equal to the Federal Funds Rate, plus one and one-half of one percent (1.50%).
“ Base Rate Loan ” means a Loan (or any portion thereof) bearing interest at a rate based on the Base Rate.
“ Benefit Arrangement ” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
“ Borrower ” means Healthcare Trust of America Holdings, LP, a Delaware limited partnership.
“ Borrowing ” means Loans of the same Type, made, Converted or Continued on the same date.
“ Business Day ” means (a) a day of the week (but not a Saturday, Sunday or holiday) on which the offices of the Administrative Agent in Los Angeles, California, and Minneapolis, Minnesota, are open to the public for carrying on substantially all of the Administrative Agent's business functions, and (b) if such day relates to a LIBOR Loan, any such day that is also a day on which dealings in Dollars are carried on in the London interbank market. Unless specifically referenced in this Agreement as a Business Day, all references to “days” shall be to calendar days.
“Capital Lease Obligation” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Capital Reserves ” means for any period and with respect to a Property, an amount equal to $1.25 per square foot per annum multiplied by a fraction, the numerator of which is the number of days in such period and the denominator of which is three hundred sixty-five (365). Any portion of a Property leased under a ground lease to a third party that owns the improvements on such portion of such Property shall not be included in determinations of Capital Reserves. If the term Capital Reserves is used without reference to any specific Property, then the amount shall be determined on an aggregate basis with respect to all Properties of the Company, the Borrower, and their Subsidiaries and a proportionate share of all Properties of all Unconsolidated Affiliates.
“ Capitalization Rate ” means seven and one half percent (7.50%) for Medical Office/Office Properties, and eight and one half percent (8.50%) for Other Properties.
“ Cash Equivalents ” means: (a) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (b) certificates of deposit with maturities of not more than one year from the date acquired issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organisation for Economic Cooperation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company has a short‑term commercial paper rating of at least A‑2 or the equivalent by S&P or at least P‑2 or the equivalent by Moody's; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into only with commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at least A‑2 or the equivalent




thereof by S&P or at least P‑2 or the equivalent thereof by Moody's, in each case with maturities of not more than one year from the date acquired; (e) investments in money market funds registered under the Investment Company Act of 1940, as amended, which have net assets of at least $500,000,000 and at least eighty-five percent (85.0%) of whose assets consist of securities and other obligations of the type described in clauses (a) through (d) above; and (f) such other investments agreed to by the Borrower and the Requisite Lenders in their reasonable discretion.
“ Change in Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity Interests representing more than thirty-five percent (35%) of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Company; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (i) nominated by the board of directors of the Company nor (ii) appointed by directors so nominated; (c) any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) acquires, directly or indirectly, by contract or otherwise, the power to exercise control over the Equity Interests of the Company representing more than thirty-five percent (35%) of the total voting power represented by the issued and outstanding Equity Interests of the Company; (d) the Company shall fail to be the sole general partner of the Borrower or shall fail to own, directly or indirectly, free of any liens, encumbrances or adverse claims, Equity Interests of the Borrower representing more than ninety percent (90%) of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; or (e) the Borrower or the Company shall fail to own, directly or indirectly, free of any liens, encumbrances or adverse claims, at least seventy-five percent (75%) of the Equity Interests of each Guarantor (other than the Company), control all major decisions of such Guarantor (including, without limitation, decisions to sell or encumber property) and otherwise possess the ordinary voting power to elect a majority of the board of directors, or other persons performing similar functions, of each such Guarantor; provided that the Borrower or the Company must directly or indirectly own, free of any liens, encumbrances or adverse claims, one hundred percent (100%) of each Guarantor that owns any Unencumbered Asset. For the avoidance of doubt, the sale of Equity Interests in the Company through a public offering or private offering shall not constitute a “Change in Control” unless such offering causes a violation of one or more of clauses (a) through (e) of this definition.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Commitment ” means, as to each Lender, such Lender's obligation to make Loans pursuant to Section 2.1 , in an amount up to, but not exceeding, the amount set forth for such Lender on Schedule 1.1(a) as such Lender's “Commitment Amount” or as set forth in any applicable Assignment and Assumption, or agreement executed by a Lender becoming a party hereto in accordance with Section 2.9 , as the same may be increased or reduced as appropriate to reflect any assignments to or by such Lender effected in accordance with Section 13.6 or increased as appropriate to reflect any increase effected in accordance with Section 2.9 .
“ Commitment Percentage ” means, as to each Lender with a Commitment, the ratio, expressed as a percentage, of (a) the amount of such Lender's Commitment to (b) the aggregate amount of the Commitments of all Lenders; provided , however , that if at the time of determination the Commitments have been terminated or been reduced to zero, the “Commitment Percentage” of each Lender with a Commitment shall be the “Commitment Percentage” of such Lender in effect immediately prior to such termination or reduction.
“ Company ” means Healthcare Trust of America, Inc., a Maryland corporation.
“ Continue ”, “ Continuation ” and “ Continued ” means to the continuation of a LIBOR Loan from one Interest Period to another Interest Period pursuant to Section 2.6 .
“ Construction-in-Process ” means cash expenditures for land and improvements (including indirect costs internally allocated and development costs) determined in accordance with GAAP on all Development Properties.
“ 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.
“ Convert ”, “ Conversion ” and “ Converted ” means to the conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.7 .
“ Credit Event ” means any of the following: (a) the making (or deemed making) of any Loan, (b) the Conversion of a Base Rate Loan into a LIBOR Loan, and (c) the Continuation of a LIBOR Loan.
“ Debtor Relief Laws ” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar Applicable Laws relating to the relief of debtors in the United States of America or other applicable jurisdictions from time to time in effect.
“ Default ” means any of the events specified in Section 11.1 .
“ Defaulting Lender ” means, subject to Section 3.9(f) , any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender's good faith 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 or any Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent, in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender's obligation to fund a Loan hereunder and states that such position is based on such Lender's good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (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 and/or (iii) has its (or such parent company's) A.M. Best Company financial rating, as applicable, withdrawn and/or is listed on the Federal Deposit Insurance Corporation's “watch list”, which shall be deemed conclusively proven in the event the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity is appointed as a receiver, conservator, trustee, or custodian for it (or such parent company, as applicable); 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 of America 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 clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 3.9(f) ) upon delivery of written notice of such determination to the Borrower and such Defaulting Lender.
“ Derivatives Support Document ” means (i) any Credit Support Annex comprising part of (and as defined in) any Specified Swap Contract, and (ii) any document or agreement, other than a Security Document, pursuant to which cash, deposit accounts, securities accounts or similar financial asset collateral are pledged to or made available for set-off by, a Specified Swap Provider, including any banker's lien or similar right, securing or supporting Specified Swap Obligation.
“ Development Property ” means any Property owned by the Borrower or any of its Subsidiaries on which




the construction of new buildings constituting a Medical Office/Office Property or Other Property has been commenced and is continuing (or has recently been completed, subject to the provisions below). Any such Property shall be treated as a Development Property until the earlier of twelve (12) months after the date of completion of construction or the achievement of an Occupancy Rate of eighty percent (80%) for such Property, unless the Borrower has made a one-time election to treat such Property as a Medical Office/Office Property or Other Property (and no longer treat such Property as a Development Property).
“ Disposition ” means any sale, lease, sale and leaseback, assignment, conveyance, transfer, or other disposition of any property. The terms “ Dispose ” and “ Disposed of ” shall have correlative meanings.
“ Dollars ” or “ $ ” means the lawful currency of the United States of America.
“ EBITDA ” means, for any fiscal period, net income (or loss) before interest, taxes, depreciation, and amortization, calculated for such period on a consolidated basis in conformity with GAAP, excluding gains and losses from extraordinary items, non-recurring items, non-cash items, write-offs of straight-line rent related to sold assets, asset sales or write-ups/write-downs and forgiveness of indebtedness.
“ Effective Date ” means the later of (a) the Agreement Date and (b) the date on which all of the conditions precedent set forth in Section 6.1 shall have been fulfilled or waived by all of the Lenders.
“ Eligible Assignee ” means any of (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; (d) a commercial bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (e) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with GAAP; (f) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “ OECD ”), and having total assets in excess of $1,000,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (g) the central bank of any country which is a member of the OECD; or (h) any other assignee having a net worth of at least $100,000,000 that, in the reasonable judgment of the Borrower, is a reputable institutional investor with substantial experience in lending and originating loans similar to the Loans, or in purchasing, investing in or otherwise holding such loans or (i) any other Person (other than an individual) approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, in no event shall an Eligible Assignee be a publicly traded or privately held healthcare REIT or the Borrower or any of the Borrower's Affiliates or Subsidiaries.
“ Eligible Ground Lease ” means a ground lease for a Property that (a) has a minimum remaining term of thirty (30) years, including tenant controlled renewal options or acceptable purchase options containing nominal or market based purchase prices, 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 non-disturbance agreement in favor of such leasehold permanent mortgagee from the owner of the landlord's fee interest, (c) does not have provisions that permit the lessor thereunder to increase the rent payable by the tenant thereunder other than usual and customary increases for inflation or fixed and scheduled rent increases, and (d) is otherwise eligible for non-recourse leasehold mortgage financing under customary prudent lending requirements. The initial Eligible Ground Leases as of the Agreement Date are listed on Schedule EGL , and the Borrower shall update Schedule EGL in accordance with Section 8.1(c) .
“ Eligible Off-Campus Ground Lease ” means any Eligible Ground Lease which is not an Eligible On-Campus Ground Lease.
“ Eligible On-Campus Ground Lease ” means any Eligible Ground Lease for a Property (a) which is located on or within approximately one-half (1/2) mile of the campus of a hospital or university medical center, (b) for which the hospital or university or its Affiliate is the lessor, and (c) for which the Borrower has provided to the Administrative Agent a certificate of a Financial Officer certifying that such ground lease qualifies as an Eligible On-Campus Ground Lease in advance of the inclusion of the applicable Property as Unencumbered Asset that is subject to an Eligible On-




Campus Ground Lease (and, at its option, the Administrative Agent may request that the Borrower provide such ground lease and a ground lease abstract to confirm such certification). The initial Eligible On-Campus Ground Leases as of the Agreement Date are listed on Schedule EOCGL , and the Borrower shall update Schedule EOCGL in accordance with Section 8.1(c) .
“ Environmental Laws ” means any Applicable Law relating to environmental protection or the manufacture, storage, remediation, disposal or clean‑up of Hazardous Materials including, without limitation, the following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental Protection Agency, any applicable rule of common law and any judicial interpretation thereof relating primarily to the environment or Hazardous Materials, and any analogous or comparable state or local laws, regulations or ordinances that concern Hazardous Materials or protection of the environment.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“ ERISA Group ” means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control, which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code.
“ Event of Default ” means any of the events specified in Section 11.1 .
“ Existing Revolving Credit Agreement ” means the Credit Agreement dated as of March 29, 2012, as amended, among the Borrower, the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as




administrative agent.
“ Fair Market Value ” means, (a) with respect to a security listed on a national securities exchange or the NASDAQ National Market, the price of such security as reported on such exchange or market by any widely recognized reporting method customarily relied upon by financial institutions and (b) with respect to any other property, the price which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction.
“ FACTA ” has the meaning given such term in Section 3.10(a) .
“ FASB ” means the Financial Accounting Standards Board.
“ FASB ASC ” means the Accounting Standards Codification of the FASB.
“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three (3) Federal Funds brokers of recognized standing selected by the Administrative Agent.
“ Fee Letter ” means that certain fee letter dated as of May 29, 2012, by and among the Borrower, Wells Fargo and Lead Arranger.
“ Fees ” means the fees and commissions provided for or referred to in Section 3.5 and any other fees payable by the Borrower hereunder, under any other Loan Document or under the Fee Letter.
“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“ Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“ Funds From Operations ” means, with respect to a Person and for a given period, (a) net income (loss) of such Person determined on a consolidated basis for such period, minus (or plus ) (b) gains (or losses) from debt restructuring and sales of property during such period, plus (c) depreciation with respect to such Person's real estate assets and amortization (other than amortization of deferred financing costs) of such Person for such period, all after adjustment for unconsolidated partnerships and joint ventures, plus (d) transaction costs of acquisitions not permitted to be capitalized pursuant to GAAP. Adjustments for unconsolidated entities will be calculated to reflect funds from operations on the same basis.
“ GAAP ” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (including Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification”) or in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States of America, which are applicable to the circumstances as of the date of determination.
“ Governing Document ” means as to any Person, such Person's charter, by-laws, partnership agreement,




operating agreement or other organizational documents, as applicable.
“ Governmental Approvals ” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.
“ Governmental Authority ” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi‑governmental, judicial, administrative, public or statutory instrumentality, authority, body, agency, bureau, commission, board, department or other entity (including, without limitation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.
“ Group Members ” means the Company, the Borrower and their respective Subsidiaries.
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“ Guarantors ” means the Company and the Subsidiary Guarantors.
“ Guaranty ” means, collectively, the Guaranty in substantially the form of Exhibit B hereto executed by the Guarantors and delivered to the Administrative Agent in accordance with this Agreement.
“ Hazardous Materials ” means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic substances” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; (d) asbestos in any form; (e) toxic mold or mold; and (f) electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million.
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances, (k) all Off-Balance Sheet Obligations of such Person, (l) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person, valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends,




(m) all obligations of such Person in respect of any purchase obligation, repurchase obligation, takeout commitment or forward equity commitment, in each case evidenced by a binding agreement (excluding any such obligation to the extent the obligation can be satisfied by the issuance of Equity Interests (other than Mandatorily Redeemable Stock) at the option of such Person), and (n) net obligations under any Swap Agreements not entered into as a hedge against existing Indebtedness and net obligations in respect of the Specified Swap Obligations, in an amount equal to the Swap Termination Value thereof. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person, by operation of the documentation evidencing such Indebtedness or by law, is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“ Indemnifiable Amounts ” has the meaning given such term in Section 12.8 .
“ Indemnified Costs ” has the meaning given such term in Section 13.10 .
“ Indemnified Party ” has the meaning given such term in Section 13.10 .
“ Indemnity Proceeding ” has the meaning given such term in Section 13.10 .
“ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of the Company that is not guaranteed by any other Person or subject to any other credit enhancement.
“ Interest Expense ” means for any fiscal period, an amount equal to the sum of the following with respect to Total Indebtedness: (i) total interest expense, accrued in accordance with GAAP plus (ii) all capitalized interest determined in accordance with GAAP, plus (iii) the amortization of deferred financing costs (including in the case of (i) through (iii), the Borrower's pro rata share thereof for Unconsolidated Affiliates) minus the expenses for the write-off of deferred financing costs associated with the Existing Revolving Credit Agreement.
“ Interest Period ” means, with respect to each LIBOR Loan, each period commencing on the date such LIBOR Loan is made, or in the case of the Continuation of a LIBOR Loan the last day of the preceding Interest Period for such Loan, and ending on the numerically corresponding day in the first, third or sixth calendar month thereafter, as the Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the case may be, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest Period for a LIBOR Loan would otherwise end after the Maturity Date, such Interest Period shall end on the Maturity Date; and (ii) each Interest Period that would otherwise end on a day which is not a Business Day shall end on the immediately following Business Day (or, if such immediately following Business Day falls in the next calendar month, on the immediately preceding Business Day).
“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended.
“ Investment ” means, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any binding commitment to make an Investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“ Lead Arranger ” has the meaning set forth in the introductory paragraph hereof.




“ Lender ” means each financial institution from time to time party hereto as a “Lender”, together with its respective successors and permitted assigns, and, as the context requires; provided , however , that the term “Lender”, except as otherwise expressly provided herein, shall exclude any Lender (or its Affiliates) in its capacity as a Specified Swap Provider.
“ Lending Office ” means, for each Lender and for each Type of Loan, the office of such Lender specified in such Lender's Administrative Questionnaire or in the applicable Assignment and Assumption, or such other office of such Lender as such Lender may notify the Administrative Agent in writing from time to time.
“ Level ” has the meaning given such term in the definition of the term “Applicable Margin.”
“ LIBOR ” means, for the Interest Period for any LIBOR Loan, the rate of interest, rounded up to the nearest whole multiple of one-hundredth of one percent (0.01%), obtained by dividing (i) the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (0.01%), referred to as the BBA (British Bankers' Association) LIBOR rate as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers' Association as an authorized information vendor for the purpose of displaying such rate for deposits in Dollars at approximately 9:00 a.m. Pacific time, two (2) Business Days prior to the date of commencement of such Interest Period for purposes of calculating effective rates of interest for loans or obligations making reference thereto, for an amount approximately equal to the applicable LIBOR Loan and for a period of time approximately equal to such Interest Period by (ii) a percentage equal to one minus the Reserve Percentage. Any change in such maximum rate shall result in a change in LIBOR on the date on which such change in such maximum rate becomes effective.
“ LIBOR Loan ” means a Loan (or any portion thereof) (other than a Base Rate Loan) bearing interest at a rate based on LIBOR.
“ LIBOR Market Index Rate ” means, for any day, LIBOR as of that day that would be applicable for a LIBOR Loan having a one-month Interest Period determined at approximately 9:00 a.m. Pacific time for such day (or if such day is not a Business Day, the immediately preceding Business Day). The LIBOR Market Index Rate shall be determined on a daily basis.
“ Lien ” as applied to the property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment of leases and rents, pledge, lien, hypothecation, assignment, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income, rents or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; and (c) the filing of any financing statement under the UCC or its equivalent in any jurisdiction, other than any precautionary filing not otherwise constituting or giving rise to a Lien, including a financing statement filed (i) in respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial Code or its equivalent as in effect in an applicable jurisdiction or (ii) in connection with a sale or other disposition of accounts or other assets not prohibited by this Agreement in a transaction not otherwise constituting or giving rise to a Lien.
“ Loan ” means a loan made by a Lender to the Borrower pursuant to Section 2.1 .
“ Loan Document ” means this Agreement, each Note, the Guaranty and each other document or instrument now or hereafter executed and delivered to the Administrative Agent or a Lender by a Loan Party in connection with, pursuant to or relating to this Agreement (other than the Fee Letter and any Specified Swap Contract).
“ Loan Parties ” means the Company, the Borrower and the Subsidiary Guarantors.
“ Mandatorily Redeemable Stock ” means, with respect to any Person, any Equity Interest of such Person which by the terms of such Equity Interest (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise (a) matures or is mandatorily redeemable,




pursuant to a sinking fund obligation or otherwise (other than an Equity Interest to the extent redeemable in exchange for common stock or other equivalent common Equity Interests), (b) is convertible into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in whole or in part (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests); in each case, on or prior to the Maturity Date.
“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, operations or financial condition of the Company, the Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower or any Guarantor to perform any of its obligations under this Agreement or the other Loan Documents or (c) the validity or enforceability of this Agreement or the Loan Documents or the rights of or benefits available to the Lenders under this Agreement or the other Loan Documents.
“ Material Contract ” means any contract (other than Loan Documents and Specified Swap Contracts) to which the Borrower, any Subsidiary or any other Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“ Material Indebtedness ” means Indebtedness (other than the Loans), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
“ Maturity Date ” means July 19, 2019.
“ Medical Office/Office Property ” means each Property which is fully developed and operational for use primarily as a medical office building or office building.
“ Moody's ” means Moody's Investors Service, Inc.
“ Mortgage ” means a mortgage, deed of trust, deed to secure debt or similar security instrument made by a Person owning an interest in real estate granting a Lien on such interest in real estate as security for the payment of Indebtedness.
“ Mortgage Receivable ” means a promissory note secured by a Mortgage of which the Borrower or a Subsidiary is the holder and retains the rights of collection of all payments thereunder.
“ Multiemployer Plan ” means at any time a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding six (6) plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such six-year period.
“ Negative Pledge ” means a provision of any document, instrument or agreement (including any Governing Document), other than this Agreement or any other Loan Document, that prohibits, restricts or limits, or purports to prohibit, restrict or limit, the creation or assumption of any Lien on any assets of a Person as security for the Indebtedness of such Person or any other Person, or entitles another Person to obtain or claim the benefit of a Lien on any assets of such Person; provided , however , that an agreement that conditions a Person's ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person's ability to encumber its assets but that do not generally prohibit the encumbrance of its assets, or the encumbrance of specific assets, shall not constitute a Negative Pledge.
“ Net Cash Proceeds ” means, in connection with any issuance or sale of Equity Interests, the cash proceeds received from such issuance or incurrence, net of attorneys' fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection




therewith.
“ Net Operating Income ” or “ NOI ” means for any fiscal period, and with respect to any Property, the total rental and other operating income from the operation of such Property after deducting all expenses and other proper charges incurred by the Borrower or a Subsidiary in connection with the operation of such Property during such fiscal period, including, without limitation, property operating expenses paid by the Borrower or a Subsidiary, real estate taxes and bad debt expenses paid by the Borrower or a Subsidiary, and ground lease rent paid by the Borrower or a Subsidiary, but before payment or provision for interest and other fixed charges, income taxes, and depreciation, amortization, and other non-cash expenses, all as determined in accordance with GAAP. In the case of Property owned by Affiliates which are not directly or indirectly wholly-owned by the Borrower, Net Operating Income shall be reduced by the amount of cash flow of such Affiliate allocated for distribution to the minority owners of such Affiliate that are not Affiliates of the Borrower.
“ Non-Defaulting Lender ” means, at any time, each Lender that is not a Defaulting Lender at such time.
“ Non-Guarantor(s)” means (a) any Subsidiary or Unconsolidated Affiliate of the Borrower that is not required to become a party to the Guaranty, and (b) any Preferred Stock Entity or non-Voting Stock Subsidiary and any Subsidiary or Unconsolidated Affiliate of any Preferred Stock Entity or non-Voting Stock Subsidiary.
“ Nonrecourse Indebtedness ” means, with respect to a Person, Indebtedness for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, violation of “special purpose entity” covenants, bankruptcy, insolvency, receivership or other similar events and other similar exceptions to recourse liability until a claim is made with respect thereto, and then such Indebtedness shall not constitute “ Nonrecourse Indebtedness ” only to the extent of the amount of such claim) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness; provided that any Indebtedness of the Borrower and its Subsidiaries that is secured by a Lien on an Unencumbered Asset (or the Equity Interests of the owner of an Unencumbered Asset) pursuant to Section 10.2(b) hereof shall not be considered Nonrecourse Indebtedness under this Agreement.
“ Normalized Adjusted FFO ” means for any fiscal period, “funds from operations” as defined in accordance with resolutions adopted by the Board of Governors of the National Association of Real Estate Investment Trusts as in effect from time to time; provided that Normalized Adjusted FFO shall (i) be based on net income after payment of distributions to holders of preferred partnership units in the Borrower and distributions necessary to pay holders of preferred stock of the Company, and (ii) at all times exclude (a) charges for impairment losses from property sales, (b) stock-based compensation, (c) write-offs or reserves of straight-line rent related to sold assets, (d) amortization of debt costs, and (e) non-recurring charges, including, without limitation acquisition expenses, non-cash charges related to the write-off of deferred equity and financing costs and one-time charges related to the transition to self‑management.
“ Note ” means a promissory note of the Borrower in the form of Exhibit C , payable to the order of a Lender in a principal amount equal to the amount of such Lender's Commitment.
“ Notice of Borrowing ” means a notice in the form of Exhibit D (or such other form reasonably acceptable to the Administrative Agent and the Borrower and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.1(b) evidencing the Borrower's request for a borrowing of a Loan.
“ Notice of Continuation ” means a notice in the form of Exhibit E (or such other form reasonably acceptable to the Administrative Agent and the Borrower and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.6 evidencing the Borrower's request for the Continuation of a LIBOR Loan.
“ Notice of Conversion ” means a notice in the form of Exhibit F (or such other form reasonably acceptable to the Administrative Agent and Borrower and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.7 evidencing the Borrower's request for the Conversion of a Loan from one Type to another Type.




“ Obligations ” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to the Administrative Agent or to any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.
“ Occupancy Rate ” means with respect to a Property at any time, the ratio, expressed as a percentage, of (a) the net rentable square footage of such Property actually occupied by tenants or subject to a master lease or Guarantee from Persons that are, in each case, not affiliated with the Borrower and paying rent (or subject to free rent periods ninety (90) days or less) at rates not materially less than rates generally prevailing at the time the applicable lease was entered into, pursuant to binding leases as to which no monetary default has occurred and has continued unremedied for thirty (30) or more days to (b) the aggregate net rentable square footage of such Property. For purposes of the definition of “Occupancy Rate”, a tenant shall be deemed to actually occupy a Property notwithstanding a temporary cessation of operations for renovation, repairs or other temporary reason, or for the purpose of completing tenant build-out or that is otherwise scheduled to be open for business within ninety (90) days of such date.
“ Off-Balance Sheet Obligations ” means liabilities and obligations of the Company, any Subsidiary or any other Person in respect of “off-balance sheet arrangements” (as defined in the SEC Off-Balance Sheet Rules) which the Company would be required to disclose in the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section of the Company's report on Form 10-Q or Form 10-K (or their equivalents) which the Company is required to file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor). As used in this definition, the term “SEC Off-Balance Sheet Rules” means the Disclosure in Management's Discussion and Analysis About Off Balance Sheet Arrangements, Securities Act Release No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR Parts 228, 229 and 249).
“ OFAC ” means the list of Specially Designated Nationals or Blocked Persons maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control.
“ Other Property ” means each Property which is fully developed and operational, other than a Medical Office/Office Property.
“ Ownership Share ” means, with respect to any Subsidiary of a Person (other than a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the greater of (a) such Person's relative nominal direct and indirect ownership interest (expressed as a percentage) in such Subsidiary or Unconsolidated Affiliate or (b) such Person's relative direct and indirect economic interest (calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Subsidiary or Unconsolidated Affiliate.
“ Participant ” has the meaning given such term in Section 13.6(d) .
“ PBGC ” means the Pension Benefit Guaranty Corporation and any successor agency.
“ Permitted Encumbrances ” means: (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 8.4 ; (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 thirty (30) days or are being contested in compliance with Section 8.4 ; (c) pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations,




surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) judgment liens in respect of judgments that do not constitute an Event of Default; (f) easements, zoning restrictions, rights-of-way, use restrictions, rights of first refusal, 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 the Borrower or any Subsidiary; (g) Liens on assets other than the Unencumbered Assets securing reimbursement obligations with respect to trade letters of credit issued in the ordinary course of business, provided that such Liens attach only to the assets being acquired with the proceeds of such letters of credit; and (h) Liens on assets other than the Unencumbered Assets securing Indebtedness of any Subsidiary owing to the Borrower; provided that, except as provided in clauses (g) and (h) above, the term “ Permitted Encumbrances ” shall not include any Lien securing Indebtedness; and provided further, that clauses (g) and (h) above shall not limit the Borrower's rights under Section 8.12 .
“ Permitted Investments ” means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within two hundred seventy (270) days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody's; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within one hundred eighty (180) days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of at least $5,000,000,000.
“ Person ” means any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, limited liability partnership, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, or any other nongovernmental entity, or any Governmental Authority.
“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Post-Default Rate ” means an interest rate per annum equal to the Base Rate as in effect from time to time, plus the Applicable Margin, plus two percent (2.0%).
“ Preferred Equity Interest ” means, with respect to any Person, Equity Interests in such Person which are entitled to preference or priority over any other Equity Interest in such Person in respect of the payment of dividends or distribution of assets upon liquidation or both.
“ Principal Office ” means the office of the Administrative Agent located at 608 Second Avenue S., 11 th Floor, Minneapolis, Minnesota 55402‑1916, or any other subsequent office that the Administrative Agent shall have specified as the Principal Office by written notice to the Borrower and the Lenders.
“ Property ” means any parcel of real property, and improvements thereon, which is owned, leased or operated by the Company, the Borrower, their Subsidiaries or any Unconsolidated Affiliate and which is located in the United States of America or the District of Columbia.
“ Qualified Plan ” means a Benefit Arrangement that is intended to be tax-qualified under Section 401(a) of




the Internal Revenue Code.
“ Qualified Subsidiary ” means a Subsidiary (w) that is not a Guarantor, (x) that is one hundred percent (100%) owned directly or indirectly by the Borrower and/or the Company, (y) that is not liable for any Indebtedness (whether secured or unsecured and including any Guarantees of Indebtedness of another Person) and (z) that is not the subject of a Bankruptcy Event. The initial Qualified Subsidiaries as of the Agreement Date are listed on Schedule QS , and such Schedule QS shall be updated in accordance with Section 8.1(c) .
“ Rating Agency ” means S&P or Moody's.
“ Recourse Indebtedness ” means, with respect to a Person, Indebtedness for borrowed money that is not Nonrecourse Indebtedness.
“ Register ” has the meaning given such term in Section 13.6(c) .
“ Regulatory Change ” means, with respect to any Lender, any change effective after the Agreement Date in Applicable Law (including, without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks, including such Lender, of or under any Applicable Law (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any Governmental Authority or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy. Notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (b) 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 “Regulatory Change”, regardless of the date enacted, adopted or issued.
“ REIT ” means a Person qualifying for treatment as a “real estate investment trust” under the Internal Revenue Code.
“ Related Parties ” means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person's Affiliates.
“ Requisite Lenders ” means, as of any date, (a) Lenders having at least fifty percent (50.0%) of the aggregate amount of all Commitments, or (b) if the Commitments have been terminated or reduced to zero, Lenders holding at least fifty percent (50.0%) of the principal amount of the aggregate outstanding Loans; provided that (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and (ii) at all times when two (2) or more Lenders (excluding Defaulting Lenders) are party to this Agreement, the term “Requisite Lenders” shall in no event mean less than two (2) Lenders.
“ Reserve Percentage ” means the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any applicable category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America).
“ Restricted Payments ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, 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 Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower, but excluding dividends payable solely in additional shares of common Equity Interests of the Borrower.




“ S&P ” means Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. and its successors.
“ Secured Indebtedness ” means Total Indebtedness which is secured in any manner by a Lien on real property, including a ground leasehold interest (including, for the avoidance of doubt, the pro-rata share of all such Indebtedness of Unconsolidated Affiliates).
“ Securities Act ” means the Securities Act of 1933, as amended from time to time, together with all rules and regulations issued thereunder.
“ Solvent ” when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature, given the likelihood of refinancings or sales. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
“ Specified Swap Contract ” means any Swap Agreement, together with any Derivatives Support Document relating thereto, that is made or entered into at any time, or in effect at any time now or hereafter, whether as a result of an assignment or transfer or otherwise, between the Borrower or any Subsidiary of the Borrower and any Specified Swap Provider.
“ Specified Swap Provider ” means any Lender, or any Affiliate of a Lender that is a party to a Derivatives Contract at the time the Derivatives Contract is entered into.
“ Specified Swap Obligation ” means the Swap Obligations of the Company, the Borrower or a Subsidiary in connection with any Swap Agreement relating to the Loans entered into between such Person and any Lender or its Affiliate at the time such Swap Agreement is entered into; provided that within fifteen (15) days of the later of the Agreement Date and the time that any transaction relating to such Swap Obligation is executed, the Lender party thereto (other than Wells Fargo) or the Borrower shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that the Lender (or Affiliate) party thereto and the Borrower has agreed that such transaction constitutes a Specified Swap Obligation. For the purposes hereof, the ISDA Master Agreement, dated March 26, 2012, entered into by the Company and the Borrower, on one hand, and Wells Fargo, on the other hand, together with the confirmation and schedules relating thereto and all modifications, extensions, renewals and replacements thereof, shall be a Specified Swap Obligation.
“ Subordinated Debt ” means Indebtedness for money borrowed of the Borrower or any of its Subsidiaries that is subordinated in right of payment and otherwise to the Loans, the other Obligations and the Specified Swap Obligations, if any, in a manner reasonably satisfactory to the Administrative Agent in its sole and absolute discretion.
“ Subsidiary ” means, with respect to the Company or the Borrower (either of the foregoing, the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled




or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary Guarantors ” means, individually and collectively, as the context may require, each Subsidiary that owns (or leases) an Unencumbered Asset but is not a Qualified Subsidiary and that provides a Guarantee of the Obligations pursuant to a Guaranty so that the Property owned (or leased) by such Subsidiary qualifies as an Unencumbered Asset. The initial Subsidiary Guarantors as of the Agreement Date are listed on Schedule SG , and such Schedule SG shall be updated in accordance with Section 8.1(c) .
“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Company, the Borrower or the Subsidiaries shall be a Swap Agreement.
“ Swap Obligations ” means, with respect to any Person, any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction, including the Swap Termination Value.
“ Swap Termination Value ” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements 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 Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include the Administrative Agent or any Lender).
“ Tangible Net Worth ” means as of a given date, (a) the stockholders' equity of the Company and its Subsidiaries determined on a consolidated basis plus (b) accumulated depreciation and amortization minus (c) the following (to the extent reflected in determining stockholders' equity of the Company and its Subsidiaries): (i) the amount of any write-up in the book value of any assets contained in any balance sheet resulting from revaluation thereof or any write-up in excess of the cost of such assets acquired, and (ii) all amounts appearing on the assets side of any such balance sheet for assets which would be classified as intangible assets under GAAP, all determined on a consolidated basis.
“ Taxes ” has the meaning given such term in Section 3.10 .
“ Total Asset Value ” means the sum of all of the following of the Company, the Borrower, and their Subsidiaries on a consolidated basis determined in accordance with GAAP applied on a consistent basis, without duplication: (a) unrestricted cash, cash equivalents and marketable securities in excess of $25,000,000, plus (b) with respect to each Medical Office/Office Property or Other Property (other than a Development Property or an Acquisition Property), the quotient of (i) Adjusted NOI minus Capital Reserves attributable to such Property for the prior four consecutive fiscal quarters, divided by (ii) the applicable Capitalization Rate, plus (c) the GAAP book value of notes receivable of the Company, the Borrower and their Subsidiaries which are not more than sixty (60) days past due or otherwise in default, plus (d) the GAAP book value (after any impairments) of all Construction-in-Process for Development Properties plus (e) the GAAP book value (after any impairments) of all Acquisition Properties. The Borrower's pro rata share of assets held by Unconsolidated Affiliates (excluding assets of the type described in the immediately preceding clause (a)) will be included in Total Asset Value calculations consistent with the above described treatment for wholly owned assets; provided that (A) not more than twenty percent (20%) of Total Asset Value may be attributable to Other Properties, (B) not more than twenty percent (20%) of Total Asset Value may be attributable to Unconsolidated Affiliates, (C) not more than ten percent (10%) of Total Asset Value may be attributable to notes receivable, (D) not




more than five percent (5%) of Total Asset Value may be attributable to Development Properties, and (E) not more than thirty-five percent (35%) of Total Asset Value, in the aggregate, may be attributable to clauses (B) through (D) above. For the avoidance of doubt the Borrower shall receive credit for the Total Asset Value up to and including the percentage limits referenced in (A) through (E) immediately above, and any amount in excess of such limitations shall be excluded from the calculation of Total Asset Value.
“ Total EBITDA ” means for any fiscal period, total EBITDA of the Company, the Borrower and their consolidated Subsidiaries and the pro rata share of EBITDA of Unconsolidated Affiliates.
“ Total Fixed Charges ” means for any fiscal period, an amount equal to the sum of (i) Interest Expense, plus (ii) regularly scheduled installments of principal payable with respect to Total Indebtedness (excluding balloon payments due at maturity), plus (iii) all dividend payments due to the holders of any preferred Equity Interests in the Company and all distributions due to the holders of any limited partnership interests in the Borrower other than limited partner distributions based on the per share dividend paid on the common shares of beneficial interest of the Company plus (iv) rent payable under all ground leases under which the Company, the Borrower or one of their Subsidiaries is the tenant, to the extent such rent is not deducted in the calculation of Total EBITDA (including in each case (i) through (iv), the Borrower's pro rata share thereof for Unconsolidated Affiliates).
“ Total Indebtedness ” means all Indebtedness of the Company, the Borrower and their consolidated Subsidiaries and the pro rata share of all Indebtedness of Unconsolidated Affiliates determined in accordance with GAAP. Notwithstanding the use of GAAP, the calculation of Total Indebtedness shall not include any fair value adjustments to the carrying value of liabilities to record such liabilities at fair value pursuant to electing the fair value option election under FASB 825-10-25 (formerly known as FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities) or other FASB standards allowing entities to elect fair value option for financial liabilities. Therefore, the amount of liabilities that is included in the calculation of Total Indebtedness shall be the historical cost basis, which generally is the contractual amount owed adjusted for amortization or accretion of any premium or discount (but without any fair value adjustments).
“ Total Leverage Ratio ” shall have the meaning given that term in Section 10.13(a) .
“ Transactions ” means the execution, delivery and performance by the Borrower and the other Loan Parties of this Agreement and the other Loan Documents and the borrowing of Loans.
“ Transfer Authorizer Designation Form ” means a form substantially in the form of Exhibit G to be delivered to the Administrative Agent pursuant to Section 6.1(a)(x) , as the same may be amended, restated or modified from time to time with the prior written approval of the Administrative Agent.
“ Type ” means, with respect to any Loan, whether such Loan or portion thereof is a LIBOR Loan or a Base Rate Loan.
“ UCC ” means the Uniform Commercial Code as in effect in any applicable jurisdiction.
“ Unconsolidated Affiliate ” means, in respect of any Person, any other Person (a) in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such first Person on the consolidated financial statements of such first Person, or (b) which is not a Subsidiary of such first Person.
“ Unencumbered Asset ” means a Property that meets each of the following criteria and is designated as an Unencumbered Asset by the Borrower: (1) the Property is either one hundred percent (100%) fee owned or ground leased under an Eligible Ground Lease by (a) the Borrower, (b) a Subsidiary Guarantor or (c) a Qualified Subsidiary; and (2) the Property is improved as a Medical Office/Office Property or Other Property with one or more completed buildings of a type generally consistent with the Borrower's business strategy, unless such Property is a Development Property; and (3) the Property (and the Equity Interest therein, if owned by a Subsidiary Guarantor or a Qualified




Subsidiary) is not directly or indirectly subject to any Lien (other than Permitted Encumbrances and other Liens permitted under Section 10.2(a) of this Agreement) or any Negative Pledge; and (4) the Property is free of any material Environmental Liabilities and is in material compliance with all Environmental Laws; and (5) the Property is free of any material defects; and (6) the Property is located in the United States; and (7) the Property, together with all other Unencumbered Assets, shall comply with the requirements of Section 10.15 ; and (8) if such Property is a Development Property and construction of improvements has commenced, there has been no interruption of construction for more than ninety (90) consecutive days (other than as a result of a force majeure event that has not continued for more than one hundred eighty (180) days).
“ Unencumbered Asset Value ” means with respect to Unencumbered Assets, the sum, without duplication, of (a) for each Unencumbered Asset that is a Medical Office/Office Property (other than a Development Property or an Acquisition Property), the Unencumbered NOI for such Medical Office/Office Property for the prior four consecutive fiscal quarters divided by the applicable Capitalization Rate, plus (b) for each Unencumbered Asset that is an Other Property (other than a Development Property or an Acquisition Property), the Unencumbered NOI for such Other Property for the prior four consecutive fiscal quarters divided by the applicable Capitalization Rate plus (c) the GAAP book value (after any impairments) of all Construction-in-Process for Development Properties that are Unencumbered Assets and that are at least seventy percent (70%) (by rentable area) pre-leased to one or more tenants which will occupy such space, until such Property no longer qualifies as a Development Property, plus (d) the GAAP book value (after any impairments) of all Acquisition Properties that are Unencumbered Assets plus (e) the GAAP book value (after any impairments) of unencumbered Mortgage Notes so long as (A) the real estate securing such Mortgage Note meets the criteria for an Unencumbered Asset which is not a Development Property (other than clauses (1) and (8) of the definition thereof), (B) the principal amount of such Mortgage Note does not exceed seventy-five percent (75%) of the GAAP book value of the real estate securing such Mortgage Note and (C) such Mortgage Note permits the holder thereof to pledge such Mortgage Note to the Administrative Agent without the further consent of the obligor thereunder or any other Person, provided that (A) not more than ten percent (10%) of Unencumbered Asset Value may be attributable to a single Person (and its subsidiaries and parent companies) as the tenant, (B) (i) not more than ten percent (10%) of Unencumbered Asset Value may be attributable to Unencumbered Assets that are subject to an Eligible Off-Campus Ground Lease and (ii) not more than forty percent (40%) of Unencumbered Asset Value may be attributable to Unencumbered Assets that are subject to an Eligible On-Campus Ground Lease, (C) not more than twenty-five percent (25%) of Unencumbered Asset Value may be attributable to Unencumbered Assets that are Other Properties, (D) not more than ten percent (10%) of Unencumbered Asset Value may be attributable to Unencumbered Assets that are Development Properties, and (E) not more than ten percent (10%) of Unencumbered Asset Value may be attributable to Mortgage Notes. For the avoidance of doubt the Borrower shall receive credit for the Unencumbered Asset Value up to and including the percentage limits referenced in (A) through (E) immediately above, and any amount in excess of such limitations shall be excluded from the calculation of Unencumbered Asset Value.
“ Unencumbered NOI ” means for any fiscal period, the sum of (a) the total Adjusted NOI attributable to all Unencumbered Assets (other than Development Properties and excluding, for the avoidance of doubt, Mortgage Notes) for such period minus Capital Reserves attributable to Unencumbered Assets for such period, plus (b) the net income attributable to any unencumbered Mortgage Notes that are included in the computation of Unencumbered Asset Value and are secured by a completed Medical Office/Office Property or Other Property; provided that not more than ten percent (10%) of Unencumbered NOI may be attributable to Mortgage Notes.
“ Unfunded Liabilities ” means, with respect to any Plan at any time, the amount (if any) by which (a) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.
“ Unsecured Liabilities ” means, as to any Person as of a given date, the sum of the following (without duplication): (a) all liabilities which would, in conformity with GAAP, be properly classified as a liability on the balance sheet of such Person as of such date; plus (b) all Indebtedness of such Person (to the extent not included in the preceding clause (a)); minus (c) all liabilities included in the preceding clauses (a) and (b) that are secured by a




Lien.
“ Unsecured Indebtedness ” means all of the Total Indebtedness which is not Secured Indebtedness (including, for the avoidance of doubt, (i) any Total Indebtedness that is secured by a Lien on Equity Interests and (ii) the pro rata share of all Indebtedness of Unconsolidated Affiliates which is not Secured Indebtedness).
“ Unsecured Interest Expense ” means for any fiscal period, an amount equal to Interest Expense with respect to all Unsecured Indebtedness for such period.
“ Wells Fargo ” means Wells Fargo Bank, National Association, and its successors and assigns.
“ Wholly Owned Subsidiary ” means any Subsidiary of a Person in respect of which all of the Equity Interests (other than, in the case of a corporation, directors' qualifying shares) are at the time directly or indirectly owned or controlled by such Person or one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person.
“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.2
General; References to Pacific Time

Unless otherwise indicated, all accounting terms, ratios and measurements shall be interpreted or determined in accordance with GAAP as in effect as of the Agreement Date, provided that, 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 Borrower or the Requisite Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Requisite Lenders); provided, further 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) upon Lender's written request of Borrower, the 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. Notwithstanding the preceding sentence, the calculation of liabilities shall not include any fair value adjustments to the carrying value of liabilities to record such liabilities at fair value pursuant to electing the fair value option election under FASB ASC 825-10-25 (formerly known as FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities) or other FASB standards allowing entities to elect fair value option for financial liabilities. Accordingly, the amount of liabilities shall be the historical cost basis, which generally is the contractual amount owed adjusted for amortization or accretion of any premium or discount. References in this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated. references in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, supplemented, restated or otherwise modified from time to time to the extent not otherwise stated herein or prohibited hereby and in effect at any given time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter. Unless explicitly set forth to the contrary, a reference to “Subsidiary” means a Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate of the Borrower. Titles and captions of Articles, Sections, subsections and clauses in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement. Unless otherwise indicated, all references to time are references to Pacific time.
ARTICLE II.
CREDIT FACILITY

Section 2.1 Loans.





a. Making of Loans . Subject to the terms and conditions hereof, on the Effective Date, each Lender severally and not jointly agrees to make a Loan to the Borrower in the aggregate principal amount equal to the amount of such Lender's Commitment. Each Base Rate Loan shall be in an aggregate minimum amount of $500,000 and integral multiples of $100,000. Each LIBOR Loan shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $250,000 in excess of that amount. Upon funding of the Loans, the Commitments shall terminate.

b. Requests for Loans . Not later than 9:00 a.m. Pacific time at least three (3) Business Days prior to the anticipated Effective Date, the Borrower shall give the Administrative Agent notice requesting that the Lenders make the Loans on the Effective Date and specifying the aggregate principal amount of Loans to be borrowed, the Type of the Loans, and if such Loans are to be LIBOR Loans, the initial Interest Period for the Loans. Such notice shall be irrevocable once given and binding on the Borrower. Upon receipt of such notice the Administrative Agent shall promptly notify each Lender.

c. Funding of Loans . Each Lender shall deposit an amount equal to the Loan to be made by such Lender to the Borrower with the Administrative Agent at the Principal Office, in immediately available funds, not later than 9:00 a.m. Pacific time on the Effective Date. Subject to fulfillment of all applicable conditions set forth herein, the Administrative Agent shall make available to the Borrower in the account specified by the Borrower in the Transfer Authorizer Designation Form, not later than 12:00 noon Pacific time on the Effective Date, the proceeds of such amounts received by the Administrative Agent. The Borrower may not re-borrow any portion of the Loans once repaid.

Section 2.2    Rates and Payment of Interest on Loans.

a. Rates . The Borrower promises to pay to the Administrative Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of the making of such Loan to, but excluding, the date such Loan shall be paid in full, at the following per annum rates:

1. during such periods as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time to time), plus the Applicable Margin; and

2. during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Period therefor, plus the Applicable Margin.

Notwithstanding the foregoing, while an Event of Default exists at the election of Requisite Lenders, the Borrower shall pay to the Administrative Agent for the account of each Lender, interest at the Post-Default Rate on the outstanding principal amount of any Loan made by such Lender and on any other amount payable by the Borrower hereunder or under the Notes held by such Lender to or for the account of such Lender (including, without limitation, accrued but unpaid interest to the extent permitted under Applicable Law).
b. Payment of Interest . All accrued and unpaid interest on the outstanding principal amount of each Loan shall be payable (i) with respect to Loans bearing interest at the LIBOR Rate, at the end of each Interest Period for each such Loan, provided that in the case of Interest Periods longer than three (3) months, at each three (3) month interval thereof, and (ii) with respect to Loans bearing interest at the Base Rate, monthly in arrears on the first day of each month, commencing with the first full calendar month occurring after the Effective Date and (ii) on any date on which the principal balance of such Loan is due and payable in full (whether at maturity, due to acceleration or otherwise). Interest payable at the Post-Default Rate shall be payable from time to time on demand. All determinations by the Administrative Agent of an interest rate hereunder shall be conclusive and binding on the Lenders and the Borrower for all purposes, absent manifest error.

Section 2.3    Number of Interest Periods.

There may be no more than five (5) different Interest Periods for LIBOR Loans outstanding at the same time. For the purposes hereof, Loans subject to Interest Periods of the same length, which are not co-terminus, shall be deemed different Interest Periods.




Section 2.4    Repayment of Loans.

The Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Loans on the Maturity Date.
Section 2.5    Prepayments.

a. The Loans may not be pre-paid in whole or in part on or before July 19, 2013 (the “ Lockout Period ”).

b. From and after July 20, 2013, the Loans may be pre-paid in whole or in part; provided , however , that Borrower shall pay to Administrative Agent, for the benefit of Lenders, any amounts required under Section 5.1 below and an exit fee (the “ Exit Fee ”) in an amount equal to the product of (i) the amount being prepaid and (ii) applicable “Prepayment Premium” set forth below.

Period
Prepayment Premium
On or before July 19, 2013
N/A
From July 20, 2013 until July 19, 2014
3%
From July 20, 2014 until July 19, 2015
2%
From July 20, 2015 until July 19, 2016
1%
After July 19, 2016
—%

c. Any amounts repaid hereunder may not be re-borrowed.

Section 2.6    Continuation.

So long as no Default or Event of Default exists, the Borrower may on any Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan. Each Continuation of a LIBOR Loan shall be in an aggregate minimum amount of $100,000 and integral multiples of $100,000 in excess of that amount, and each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period. Each selection of a new Interest Period shall be made by the Borrower giving to the Administrative Agent a Notice of Continuation not later than 9:00 a.m. Pacific time three (3) Business Day prior to the date of any such Continuation. Such notice by the Borrower of a Continuation shall be by telecopy, electronic mail or other similar form of communication in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and portions thereof subject to such Continuation and (c) the duration of the selected Interest Period, all of which shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder. Each Notice of Continuation shall be irrevocable by and binding on the Borrower once given. Promptly after receipt of a Notice of Continuation, the Administrative Agent shall notify each Lender of such proposed Continuation. If the Borrower shall fail to select in a timely manner a new Interest Period for any LIBOR Loan in accordance with this Section, such Loan will automatically, on the last day of the current Interest Period therefor, continue as a LIBOR Loan with an Interest Period of one month; provided , however that if a Default or Event of Default exists, such Loan will automatically, on the last day of the current Interest Period therefor, Convert into a Base Rate Loan notwithstanding the first sentence of Section 2.7 or the Borrower's failure to comply with any of the terms of Section 2.7 .
Section 2.7    Conversion.

The Borrower may on any Business Day, upon the Borrower's giving of a Notice of Conversion to the Administrative Agent by telecopy, electronic mail or other similar form of communication, Convert all or a portion of a Loan of one Type into a Loan of another Type; provided , however , a Base Rate Loan may not be Converted into a LIBOR Loan if a Default or Event of Default exists. Each Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $250,000 in excess of that amount and




upon Conversion of a Base Rate Loan into a LIBOR Loan, the Borrower shall pay accrued interest to the date of Conversion on the principal amount so Converted in accordance with Section 2.2 . Any Conversion of a LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of an Interest Period for such LIBOR Loan. Each such Notice of Conversion shall be given not later than 9:00 a.m. Pacific time three (3) Business Days prior to the date of any proposed Conversion. Promptly after receipt of a Notice of Conversion, the Administrative Agent shall notify each Lender of the proposed Conversion. Subject to the restrictions specified above, each Notice of Conversion shall be by telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan. Each Notice of Conversion shall be irrevocable by and binding on the Borrower once given.
Section 2.8    Notes.

a. Notes . The Loans made by each Lender shall, in addition to this Agreement, also be evidenced by a Note, payable to the order of such Lender in a principal amount equal to the amount of its Commitment as originally in effect and otherwise duly completed.

b. Records . The date, amount, interest rate, Type and duration of Interest Periods (if applicable) of each Loan made by each Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and such entries shall be binding on the Borrower absent manifest error; provided , however , that (i) the failure of a Lender to make any such record shall not affect the obligations of the Borrower under any of the Loan Documents and (ii) if there is a discrepancy between such records of a Lender and the statements of accounts maintained by the Administrative Agent pursuant to Section 3.8 , in the absence of manifest error, the statements of account maintained by the Administrative Agent pursuant to Section 3.8 shall be controlling.

c. Lost, Stolen, Destroyed or Mutilated Notes . Upon receipt by the Borrower of written notice from a Lender that a Note of such Lender has been lost, stolen, destroyed or mutilated, the Borrower shall at its own expense execute and deliver to such Lender a new Note dated the date of such lost, stolen, destroyed or mutilated Note.

Section 2.9    Increase in Commitments.

The Borrower shall have the right to request increases up to three (3) times in the aggregate amount of the Commitments by providing written notice to the Administrative Agent, which notice shall be irrevocable once given; provided , however , that after giving effect to any such increases the aggregate amount of the Commitments shall not exceed $200,000,000. Each such increase in the Commitments must be an aggregate minimum amount of $10,000,000 and integral multiples of $5,000,000 in excess thereof. The Administrative Agent, in consultation with the Borrower, shall manage all aspects of the syndication of such increase in the Commitments, including decisions as to the selection of the existing Lenders and/or other banks, financial institutions and other institutional lenders to be approached with respect to such increase and the allocations of the increase in the Commitments among such existing Lenders and/or other banks, financial institutions and other institutional lenders and the fees to be paid for such increased Commitments. No Lender shall be obligated in any way whatsoever to increase its Commitment or provide a new Commitment, and any new Lender becoming a party to this Agreement in connection with any such requested increase must be an Eligible Assignee. If a new Lender becomes a party to this Agreement, or if any existing Lender is increasing its Commitment, such Lender shall on the date it becomes a Lender hereunder (or in the case of an existing Lender, increases its Commitment) (and as a condition thereto) purchase from the other Lenders its Commitment Percentage (determined with respect to the Lenders' respective Commitments and after giving effect to the increase of Commitments) of any outstanding Loans, by making available to the Administrative Agent for the account of such other Lenders, in same day funds, an amount equal to the sum of (A) the portion of the outstanding principal amount of such Loans to be purchased by such Lender, plus (B) interest accrued and unpaid to and as of such date on such portion of the outstanding principal amount of such Loans. The Borrower shall pay to the Lenders amounts payable, if any, to such Lenders under Section 5.4 as a result of the prepayment of any such Loans. Effecting the increase of the Commitments under this Section 2.9 is subject to the following conditions precedent: (w) no Default or Event of Default shall be in existence




on the effective date of such increase, (x) the representations and warranties made or deemed made by the Borrower or any other Loan Party in any Loan Document to which such Loan Party is a party shall be true and correct in all material respects on the effective date of such increase except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder, (y) payment of any and all fees required in connection with such increased Commitments and (z)  the Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent: (i) if not previously delivered to the Administrative Agent, copies certified by the Secretary or Assistant Secretary of (A) all partnership or other necessary action taken by the Borrower to authorize such increase and (B) all corporate, partnership, member or other necessary action taken by each Guarantor authorizing the guaranty of such increase; and (ii) an opinion of counsel to the Borrower and the Guarantors, and addressed to the Administrative Agent and the Lenders covering such matters as reasonably requested by the Administrative Agent; and (iii) new Notes executed by the Borrower, payable to any new Lenders and replacement Notes executed by the Borrower, payable to any existing Lenders increasing their Commitments, in the amount of such Lender's Commitment at the time of the effectiveness of the applicable increase in the aggregate amount of the Commitments. In connection with any increase in the aggregate amount of the Commitments pursuant to this Section 2.9 any Lender becoming a party hereto shall execute such documents and agreements as the Administrative Agent may reasonably request.
Section 2.10    Funds Transfer Disbursements.

a. Generally . The Borrower hereby authorizes the Administrative Agent to disburse the proceeds of any Loan made by the Lenders or any of their Affiliates pursuant to the Loan Documents as requested by an authorized representative of the Borrower to any of the accounts designated in the Transfer Authorizer Designation Form. The Borrower agrees to be bound by any transfer request: (i) authorized or transmitted by the Borrower; or (ii) made in the Borrower's name and accepted by the Administrative Agent in good faith and in compliance with these transfer instructions, even if not properly authorized by the Borrower. The Borrower further agrees and acknowledges that the Administrative Agent may rely solely on any bank routing number or identifying bank account number or name provided by the Borrower to effect a wire or funds transfer even if the information provided by the Borrower identifies a different bank or account holder than named by the Borrower. The Administrative Agent is not obligated or required in any way to take any actions to detect errors in information provided by the Borrower. If the Administrative Agent takes any actions in an attempt to detect errors in the transmission or content of transfer requests or takes any actions in an attempt to detect unauthorized funds transfer requests, the Borrower agrees that no matter how many times the Administrative Agent takes these actions the Administrative Agent will not in any situation be liable for failing to take or correctly perform these actions in the future and such actions shall not become any part of the transfer disbursement procedures authorized under this provision, the Loan Documents, or any agreement between the Administrative Agent and the Borrower. The Borrower agrees to notify the Administrative Agent of any errors in the transfer of any funds or of any unauthorized or improperly authorized transfer requests within fourteen (14) days after the Administrative Agent's confirmation to the Borrower of such transfer.

b. Funds Transfer . The Administrative Agent will, in its sole discretion, determine the funds transfer system and the means by which each transfer will be made. The Administrative Agent may delay or refuse to accept a funds transfer request if the transfer would: (i) violate the terms of this authorization; (ii) require use of a bank unacceptable to the Administrative Agent or any Lender or prohibited by any Governmental Authority; (iii) cause the Administrative Agent or any Lender to violate any Federal Reserve or other regulatory risk control program or guideline; or (iv) otherwise cause the Administrative Agent or any Lender to violate any Applicable Law or regulation.

c. Limitation of Liability . None of the Administrative Agent or any Lender shall be liable to the Borrower or any other parties for (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which the Borrower's transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of the Administrative Agent or any Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond Administrative Agent's or any Lender's control, or (iii) any special, consequential, indirect or punitive damages, whether or not (x) any claim for these damages




is based on tort or contract or (y) the Administrative Agent, any Lender or the Borrower knew or should have known the likelihood of these damages in any situation. Neither the Administrative Agent nor any Lender makes any representations or warranties other than those expressly made in this Agreement.

ARTICLE III. Payments, Fees and Other General Provisions

Section 3.1    Payments.

(a) Payments by Borrower . Except to the extent otherwise provided herein, all payments of principal, interest, Fees and other amounts to be made by the Borrower under this Agreement, the Notes or any other Loan Document shall be made in Dollars, in immediately available funds, without setoff, deduction or counterclaim, to the Administrative Agent at the Principal Office, not later than 11:00 a.m. Pacific time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). Subject to Section 11.5 , the Borrower shall, at the time of making each payment under this Agreement or any other Loan Document, specify to the Administrative Agent the amounts payable by the Borrower hereunder to which such payment is to be applied. Each payment received by the Administrative Agent for the account of a Lender under this Agreement or any Note shall be paid to such Lender by wire transfer of immediately available funds in accordance with the wiring instructions provided by such Lender to the Administrative Agent from time to time, for the account of such Lender at the applicable Lending Office of such Lender. In the event the Administrative Agent fails to pay such amounts to such Lender within one Business Day of receipt of such amounts, the Administrative Agent shall pay interest on such amount until paid at a rate per annum equal to the Federal Funds Rate from time to time in effect. If the due date of any payment under this Agreement or any other Loan Document would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall continue to accrue at the rate, if any, applicable to such payment for the period of such extension.

(b) Presumptions Regarding Payments by Borrower . Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may (but shall not be obligated to), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent on demand that amount so distributed to such Lender 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 Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

Section 3.2    Pro Rata Treatment.

Except to the extent otherwise provided herein: (a) each borrowing from the Lenders under Section 2.1(a) shall be made from the Lenders pro rata according to the amounts of their respective Commitments and each payment of the fees under Section 3.5(a) , shall be made for the account of the Lenders, pro rata according to the amounts of their respective Commitments; (b) each payment or prepayment of principal of Loans shall be made for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them, provided that, subject to Section 3.9 , if immediately prior to giving effect to any such payment in respect of any Loans the outstanding principal amount of the Loans shall not be held by the Lenders pro rata in accordance with their respective Commitments in effect at the time such Loans were made, then such payment shall be applied to the Loans in such manner as shall result, as nearly as is practicable, in the outstanding principal amount of the Loans being held by the Lenders pro rata in accordance with their respective Commitments; (c) each payment or prepayment of principal of Loans shall be made for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; (d) each payment of interest on the Loans shall be made for the account of the Lenders pro rata in accordance with the amounts of interest on the Loans then due and payable to the respective Lender; and (e) the making, Conversion and Continuation of Loans of a particular Type (other than Conversions provided for by Sections 5.1(c) and 5.5 ) shall be made pro rata among the Lenders according to the amounts of their respective Loans




and the then-current Interest Period for each Lender's portion of each such Loan of such Type shall be coterminous.
Section 3.3    Sharing of Payments, Etc.

If a Lender shall obtain payment of any principal of, or interest on, any Loan made by it to the Borrower under this Agreement or shall obtain payment on any other Obligation owing by the Borrower or any other Loan Party through the exercise of any right of set-off, banker's lien, counterclaim or similar right or otherwise or through voluntary prepayments directly to a Lender or other payments made by or on behalf the Borrower or any other Loan Party to a Lender (other than any payment in respect of Specified Swap Obligations) not in accordance with the terms of this Agreement and such payment should be distributed to the Lenders in accordance with Section 3.2 or Section 11.5 , as applicable, such Lender shall promptly purchase from the other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans made by the other Lenders or other Obligations owed to such other Lenders in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such payment (net of any reasonable expenses which may actually be incurred by such Lender in obtaining or preserving such benefit) in accordance with the requirements of Section 3.2 or Section 11.5 , as applicable. To such end, all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. The Borrower agrees that any Lender so purchasing a participation (or direct interest) in the Loans or other Obligations owed to such other Lenders may exercise all rights of set-off, banker's lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans in the amount of such participation. Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of the Borrower.
Section 3.4    Several Obligations.

No Lender shall be responsible for the failure of any other Lender to make a Loan or to perform any other obligation to be made or performed by such other Lender hereunder, and the failure of any Lender to make a Loan or to perform any other obligation to be made or performed by it hereunder shall not relieve the obligation of any other Lender to make any Loan or to perform any other obligation to be made or performed by such other Lender.
Section 3.5    Fees.

a. Closing Fee . On the Effective Date, the Borrower agrees to pay to the Administrative Agent and each Lender all loan fees as have been agreed to in writing by the Borrower and the Administrative Agent.

b. Administrative and Other Fees . The Borrower agrees to pay the administrative and other fees of the Administrative Agent as provided in the Fee Letter and as may be otherwise agreed to in writing from time to time by the Borrower and the Administrative Agent.

Section 3.6    Computations.

Unless otherwise expressly set forth herein, any accrued interest on any Loan, any Fees or any other Obligations due hereunder shall be computed on the basis of a year of three hundred sixty (360) days and the actual number of days elapsed.
Section 3.7    Usury.

In no event shall the amount of interest due or payable on the Loans or other Obligations exceed the maximum rate of interest allowed by Applicable Law and, if any such payment is paid by the Borrower or any other Loan Party or received by any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the respective Lender in writing that the Borrower elects to have such excess sum returned to it forthwith. It is the express intent of the parties hereto that the Borrower not pay and the Lenders not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Borrower under Applicable Law.




The parties hereto hereby agree and stipulate that the only charge imposed upon the Borrower for the use of money in connection with this Agreement is and shall be the interest specifically described in Section 2.2(a) . Notwithstanding the foregoing, the parties hereto further agree and stipulate that all agency fees, syndication fees, facility fees, closing fees, letter of credit fees, underwriting fees, default charges, late charges, funding or “breakage” charges, increased cost charges, attorneys' fees and reimbursement for costs and expenses paid by the Administrative Agent or any Lender to third parties or for damages incurred by the Administrative Agent or any Lender, in each case, in connection with the transactions contemplated by this Agreement and the other Loan Documents, are charges made to compensate the Administrative Agent or any such Lender for underwriting or administrative services and costs or losses performed or incurred, and to be performed or incurred, by the Administrative Agent and the Lenders in connection with this Agreement and shall under no circumstances be deemed to be charges for the use of money. All charges other than charges for the use of money shall be fully earned and nonrefundable when due.
Section 3.8    Statements of Account.

The Administrative Agent will account to the Borrower monthly with a statement of Loans, accrued interest and Fees, charges and payments made pursuant to this Agreement and the other Loan Documents, and such account rendered by the Administrative Agent shall be deemed conclusive upon the Borrower absent manifest error. The failure of the Administrative Agent to deliver such a statement of accounts shall not relieve or discharge the Borrower from any of its obligations hereunder.
Section 3.9    Defaulting Lenders.

Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:
a. Waivers and Amendments . Such Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Requisite Lenders”.

b. Defaulting Lender Waterfall . Any payment of principal, interest, Fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article XI or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 3.3 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third , to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement to the extent otherwise payable by the Borrower under this Agreement; fourth , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and fifth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this subsection shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

c. [Reserved].

d. [Reserved].

e. [Reserved].

f. Defaulting Lender Cure . If the Borrower, the Administrative Agent, and the Lenders agree in writing




that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with their respective Commitment Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to Fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

g. Purchase of Defaulting Lender's Commitment . During any period that a Lender is a Defaulting Lender, the Borrower may, by giving written notice thereof to the Administrative Agent, such Defaulting Lender and the other Lenders, demand that such Defaulting Lender assign its Commitment to an Eligible Assignee subject to and in accordance with the provisions of Section 13.6(b) . No party hereto shall have any obligation whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. In addition, any Lender who is a Non-Defaulting Lender may, but shall not be obligated, in its sole discretion, to acquire the face amount of all or a portion of such Defaulting Lender's Commitment via an assignment subject to and in accordance with the provisions of Section 13.6(b) . In connection with any such assignment, such Defaulting Lender shall promptly execute all documents reasonably requested to effect such assignment, including an appropriate Assignment and Assumption and, in accordance with Section 13.6(b) , shall pay to the Administrative Agent an assignment fee in the amount of $7,500, provided that failure by a Defaulting Lender to execute any such Assignment and Assumption shall not invalidate any such assignment. No such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the Assignment and Assumption 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 Administrative Agent, the applicable Defaulting Lender's Commitment Percentage of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) such Defaulting Lender's full Commitment Percentage of all Loans. 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.

Section 3.10    Taxes; Foreign Lenders.

a. Taxes Generally . All payments by the Borrower of principal of, and interest on, the Loans and all other Obligations shall be made free and clear of and without deduction for any present or future excise, stamp or other taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes) that would not be imposed but for a connection between the Administrative Agent or a Lender and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the activities of the Administrative Agent or such Lender pursuant to or in respect of this Agreement or any other Loan Document), (iii)  any taxes imposed on or measured by any Lender's assets, net income, receipts or branch profits, (iv) any taxes arising after the Agreement Date solely as a result of or attributable to a Lender changing its designated Lending Office after the date such Lender becomes a party hereto, and (v) any taxes imposed by Sections 1471 through Section 1474 of the Internal Revenue Code (including any official interpretations thereof, collectively “ FATCA ”) on any “withholdable payment” payable to such recipient as a result of the failure of such recipient to satisfy the applicable requirements as set forth in FATCA after December 31, 2012 (such non‑excluded items being collectively called “ Taxes ”). If any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any Applicable Law, then the Borrower will:





1. timely pay directly to the relevant Governmental Authority the full amount required to be so withheld or deducted;

2. promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such Governmental Authority; and

3. promptly pay to the Administrative Agent for its account or the account of the applicable Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by the Administrative Agent or such Lender will equal the full amount that the Administrative Agent or such Lender would have received had no such withholding or deduction been required.

b. Tax Indemnification . Except in the case of a valid extension, if the Borrower fails to pay any Taxes when due to the appropriate Governmental Authority or fails to remit to the Administrative Agent, for its account or the account of the respective Lender, as the case may be, the required receipts or other required documentary evidence, the Borrower shall indemnify the Administrative Agent and the Lenders for any incremental Taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. For purposes of this Section 3.10(b) , a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

c. Tax Forms . Prior to the date that any Lender or Participant organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes becomes a party hereto, such Person shall deliver to the Borrower and the Administrative Agent such certificates, documents or other evidence, as required by the Internal Revenue Code or Treasury Regulations issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms), properly completed, currently effective and duly executed by such Lender or Participant establishing that payments to it hereunder and under the Notes are (i) not subject to United States Federal backup withholding tax and (ii) not subject to United States Federal withholding tax under the Internal Revenue Code. Each such Lender or Participant shall, to the extent it may lawfully do so, (x) deliver further copies of such forms or other appropriate certifications on or before the date that any such forms expire or become obsolete and after the occurrence of any event requiring a change in the most recent form delivered to the Borrower or the Administrative Agent and (y) obtain such extensions of the time for filing, and renew such forms and certifications thereof, as may be reasonably requested by the Borrower or the Administrative Agent. The Borrower shall not be required to pay any amount pursuant to the last sentence of Section 3.10(a) above to any Lender or Participant that is organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes or the Administrative Agent, if it is organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes, if such Lender, such Participant or the Administrative Agent, as applicable, fails to comply with the requirements of this subsection. If any such Lender or Participant, to the extent it may lawfully do so, fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from such payment to such Lender such amounts as are required by the Internal Revenue Code. If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including, without limitation, all fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Commitments, repayment of all Obligations and the resignation or replacement of the Administrative Agent.

d. USA Patriot Act Notice; Compliance . In order for the Administrative Agent to comply with the USA Patriot Act of 2001 (Public Law 107-56), prior to any Lender or Participant that is organized under the laws of a jurisdiction outside of the United States of America becoming a party hereto, the Administrative Agent may request, and such Lender or Participant shall provide to the Administrative Agent, its name, address, tax identification number and/or such other identification information as shall be necessary for the Administrative Agent to comply with federal law.




ARTICLE IV. [Reserved]

ARTICLE V. Yield Protection, Etc.

Section 5.1    Additional Costs; Capital Adequacy.

(a) Capital Adequacy . If any Lender or any Participant reasonably determines in good faith that compliance with any law or regulation or with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), including, without limitation, any Regulatory Change, affects or would affect the amount of capital required or expected to be maintained by such Lender or such Participant, or any corporation controlling such Lender or such Participant, as a direct consequence of, or with reference to, such Lender's Commitments or its making or maintaining Loans below the rate which such Lender or such Participant or such corporation controlling such Lender or such Participant could have achieved but for such compliance (taking into account the policies of such Lender or such Participant or such corporation with regard to capital), then the Borrower shall, from time to time, within thirty (30) days after written demand by such Lender or such Participant (together with any other information reasonably requested by the Borrower), pay to such Lender or such Participant additional amounts sufficient to compensate such Lender or such Participant or such corporation controlling such Lender or such Participant to the extent that such Lender or such Participant determines in good faith such increase in capital is directly allocable to such Lender's or such Participant's obligations hereunder.

(b) Additional Costs . In addition to, and not in limitation of the immediately preceding subsection, the Borrower shall promptly pay to the Administrative Agent for the account of a Lender from time to time such amounts as such Lender may reasonably determine in good faith to be necessary to compensate such Lender for any costs incurred by such Lender that it determines are directly attributable to its making or maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any reduction in any amount receivable by such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or such obligation or the maintenance by such Lender of capital in respect of its LIBOR Loans or its Commitments (such increases in costs and reductions in amounts receivable being herein called “ Additional Costs ”), resulting from any Regulatory Change that: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or its Commitments (other than taxes imposed on or measured by the overall net income of such Lender or of its Lending Office for any of such LIBOR Loans by the jurisdiction in which such Lender has its principal office or such Lending Office), or (ii) imposes or modifies any reserve, special deposit or similar requirements (other than Regulation D of the Board of Governors of the Federal Reserve System or other similar reserve requirement applicable to any other category of liabilities or category of extensions of credit or other assets by reference to which the interest rate on LIBOR Loans is determined to the extent utilized when determining LIBOR for such Loans) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, or other credit extended by, or any other acquisition of funds by such Lender (or its parent corporation), or any commitment of such Lender (including, without limitation, the Commitments of such Lender hereunder) or (iii) has or would have the effect of reducing the rate of return on capital of such Lender to a level below that which such Lender could have achieved but for such Regulatory Change (taking into consideration such Lender's policies with respect to capital adequacy).

(c) Lender's Suspension of LIBOR Loans and LIBOR Margin Loans . Without limiting the effect of the provisions of the immediately preceding Sections 5.1(a) and 5.1(b) , if by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender that includes deposits by reference to which the interest rate on LIBOR Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets that it may hold, then, if such Lender so elects by notice to the Borrower (with a copy to the Administrative Agent), the obligation of such Lender to make or Continue, or to Convert Base Rate Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory Change ceases to be in effect (in which case the provisions of Section 5.5 shall apply).





(d) [Reserved].

(e) Notification and Determination of Additional Costs . Each of the Administrative Agent, each Lender, and each Participant, as the case may be, agrees to notify the Borrower of any event occurring after the Agreement Date entitling the Administrative Agent, such Lender or such Participant to compensation under any of the preceding subsections of this Section as promptly as practicable; provided , however , that the failure of the Administrative Agent, any Lender or any Participant to give such notice shall not release the Borrower from any of its obligations hereunder (and in the case of a Lender, to the Administrative Agent). The Administrative Agent, each Lender and each Participant, as the case may be, agrees to furnish to the Borrower (and in the case of a Lender or a Participant to the Administrative Agent as well) a certificate setting forth the basis and amount of each request for compensation under this Section 5.1 . Determinations by the Administrative Agent, such Lender, or such Participant, as the case may be, of the effect of any Regulatory Change shall be conclusive and binding for all purposes, absent manifest error.

Section 5.2    Suspension of LIBOR Loans.

Anything herein to the contrary notwithstanding, if, on or prior to the determination of LIBOR for any Interest Period:
(a) the Administrative Agent reasonably determines (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of LIBOR are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein or is otherwise unable to determine LIBOR; or

(b) the Administrative Agent reasonably determines (which determination shall be conclusive) that the relevant rates of interest referred to in the definition of LIBOR upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined are not likely to adequately cover the cost to any Lender of making or maintaining LIBOR Loans for such Interest Period;

then the Administrative Agent shall give the Borrower and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of each current Interest Period for each outstanding LIBOR Loan, either prepay such Loan or Convert such Loan into a Base Rate Loan.
Section 5.3    Illegality.

Notwithstanding any other provision of this Agreement, (a) if any Lender shall determine (which determination shall be conclusive and binding) that it is unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify the Borrower thereof (with a copy of such notice to the Administrative Agent) and such Lender's obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be suspended until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 5.5 shall be applicable).
Section 5.4    Compensation.

The Borrower shall pay to the Administrative Agent for the account of each Lender, upon the request of the Administrative Agent, such amount or amounts as the Administrative Agent shall determine in its sole discretion shall be sufficient to compensate such Lender for any loss, cost or expense attributable to:
a. any payment or prepayment (whether mandatory or optional) of a LIBOR Loan or Conversion of a LIBOR Loan, made by such Lender for any reason (including, without limitation, acceleration) on a date other than the last day of the Interest Period for such Loan; or

b. any failure by the Borrower for any reason (including, without limitation, the failure of any




of the applicable conditions precedent specified in Section 6.2 to be satisfied) to borrow a LIBOR Loan from such Lender on the date for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on the requested date of such Conversion or Continuation.

Not in limitation of the foregoing, such compensation shall include, without limitation, in the case of a LIBOR Loan, an amount equal to the then present value of (i) the amount of interest that would have accrued on such LIBOR Loan for the remainder of the Interest Period at the rate applicable to such LIBOR Loan, less (ii) the amount of interest that would accrue on the same LIBOR Loan for the same period if LIBOR were set on the date on which such LIBOR Loan was repaid, prepaid or Converted or the date on which the Borrower failed to borrow, Convert or Continue such LIBOR Loan, as applicable, calculating present value by using as a discount rate LIBOR quoted on such date. Upon the Borrower's request, the Administrative Agent shall provide the Borrower with a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof. Any such statement shall be conclusive absent manifest error.
Section 5.5    Treatment of Affected Loans.

If the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.1(c) , Section 5.2 or Section 5.3 then such Lender's LIBOR Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion required by Section 5.1(c) , Section 5.2 , or Section 5.3 on such earlier date as such Lender may specify to the Borrower with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 5.1 , Section 5.2 or Section 5.3 that gave rise to such Conversion no longer exist:
(i) to the extent that such Lender's LIBOR Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's LIBOR Loans shall be applied instead to its Base Rate Loans; and

(ii) all Loans that would otherwise be made or Continued by such Lender as LIBOR Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be Converted into LIBOR Loans shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Administrative Agent) that the circumstances specified in Section 5.1(c) or 5.3 that gave rise to the Conversion of such Lender's LIBOR Loans pursuant to this Section no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders are outstanding, then such Lender's Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments.
Section 5.6    Affected Lenders.

If (a) a Lender requests compensation pursuant to Section 3.10 or 5.1 , and the Requisite Lenders are not also doing the same or (b) the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.1(b) or 5.3 but the obligation of the Requisite Lenders shall not have been suspended under such Sections, then, so long as there does not then exist any Default or Event of Default, the Borrower may demand that such Lender (the “ Affected Lender ”), and upon such demand the Affected Lender shall promptly, assign its Commitment to an Eligible Assignee subject to and in accordance with the provisions of Section 13.6(b) for a purchase price equal to (x) the aggregate principal balance of all Loans then owing to the Affected Lender, plus (y) any accrued but unpaid interest thereon and accrued but unpaid fees owing to the Affected Lender, or any other amount as may be mutually agreed upon by such Affected Lender and Eligible Assignee. Each of the Administrative Agent and the Affected Lender shall reasonably cooperate in effectuating the replacement of such Affected Lender under this Section, but at no time shall the Administrative Agent, such Affected Lender nor




any other Lender be obligated in any way whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. The exercise by the Borrower of its rights under this Section 5.6 shall be at the Borrower's sole cost and expense and at no cost or expense to the Administrative Agent, the Affected Lender or any of the other Lenders. The terms of this Section 5.6 shall not in any way limit the Borrower's obligation to pay to any Affected Lender compensation owing to such Affected Lender pursuant to this Agreement (including, without limitation, pursuant to Sections 3.10 , 5.1 or 5.4 ) with respect to any period up to the date of replacement.
Section 5.7    Change of Lending Office.

Each Lender agrees that it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate an alternate Lending Office with respect to any of its Loans affected by the matters or circumstances described in Sections 3.10 , 5.1 or 5.3 to reduce the liability of the Borrower or avoid the results provided thereunder, so long as such designation is not disadvantageous to such Lender as determined by such Lender in its sole discretion, except that such Lender shall have no obligation to designate a Lending Office located in the United States of America.
Section 5.8    Assumptions Concerning Funding of LIBOR Loans.

Calculation of all amounts payable to a Lender under this Article shall be made as though such Lender had actually funded LIBOR Loans through the purchase of deposits in the relevant market bearing interest at the rate applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a maturity comparable to the relevant Interest Period; provided , however , that each Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing assumption shall be used only for calculation of amounts payable under this Article.
ARTICLE VI.
Conditions Precedent

Section 6.1    Initial Conditions Precedent.

The obligation of the Lenders to effect or permit the occurrence of the first disbursement of Loan proceeds hereunder is subject to the satisfaction or waiver of the following conditions precedent:
(a) The Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent or as specified in the exhibits hereto:

(i) counterparts of this Agreement executed by each of the parties hereto;

(ii) Notes executed by the Borrower, payable to each Lender complying with the terms of
Section 2.8(a) ;

(iii) the Guaranty executed by each of the Guarantors initially to be a party thereto;

(iv) an opinion of O'Melveny & Myers LLP, counsel to the Borrower and the other Loan Parties, addressed to the Administrative Agent and the Lenders and covering the matters required by Administrative Agent;

(v) the certificate or articles of incorporation or formation, articles of organization, certificate of limited partnership, declaration of trust or other comparable organizational instrument (if any) of each Loan Party certified as of a recent date by the Secretary of State of the state of formation of such Loan Party;

(vi) a certificate of good standing (or certificate of similar meaning) with respect to each Loan Party issued as of a recent date by the Secretary of State of the state of formation of each such Loan Party issued within thirty (30) days of the date hereof and certificates of qualification to transact business or other comparable certificates issued as of a recent date by each Secretary of State (and any state department of




taxation, as applicable) of each state in which such Loan Party is required to be so qualified and where failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

(vii) a certificate of incumbency signed by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party with respect to each of the officers of such Loan Party authorized to execute and deliver the Loan Documents to which such Loan Party is a party, and in the case of the Borrower, authorized to execute and deliver on behalf of the Borrower Notices of Borrowing, Notices of Conversion and Notices of Continuation;

(viii) copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party of (A) the by-laws of such Loan Party, if a corporation, the operating agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity and (B) all corporate, partnership, member or other necessary action taken by such Loan Party to authorize the execution, delivery and performance of the Loan Documents to which it is a party;

(ix) a compliance certificate, in the form delivered to Administrative Agent prior to the date hereof on a pro forma basis for the Borrower's fiscal quarter ending March 31, 2012;

(x) a Transfer Authorizer Designation Form effective as of the Agreement Date;

(xi) intentionally omitted;

(xii) copies of all Material Contracts in existence on the Agreement Date;

(xiii) the Fee Letter;

(xiv) all other fees, expenses and reimbursement amounts due and payable to the Administrative Agent and any of the Lenders as required hereunder, including, without limitation, the reasonable and actually incurred fees and expenses of counsel to the Administrative Agent, have been paid;

(xv) UCC, tax, judgment and lien search reports with respect to each Loan Party in all necessary or appropriate jurisdictions indicating that there are no liens of record other than Permitted Encumbrances;

(xvi) a complete listing of all Subsidiaries which are Non-Guarantors;

(xvii) such other documents, agreements and instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably request of the Borrower in writing;

(xviii) projections through 2015 that the Lenders deem satisfactory; and

(xix) evidence of all material governmental and third party approvals necessary in connection with the continuing operations of the Group Members and the transactions contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the financing contemplated hereby.

(b) In the reasonable good faith judgment of the Administrative Agent:

(i) there shall not have occurred or become known to the Administrative Agent or any of the Lenders any event, condition, situation or status since December 31, 2011, that has had or could reasonably be expected to result in a Material Adverse Effect;





(ii) no litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding shall be pending or threatened which could reasonably be expected to (A) result in a Material Adverse Effect or (B) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect, the ability of the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party;

(iii) the Borrower and its Subsidiaries shall have received all material approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any Applicable Law or (B) any agreement, document or instrument to which any Loan Party is a party or by which any of them or their respective properties is bound;

(iv) the Borrower and each other Loan Party shall have provided all information requested by the Administrative Agent and each Lender in order to comply with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)); and

(v) there shall not have occurred or exist any other material disruption of financial or capital markets that could reasonably be expected to materially and adversely affect the transactions contemplated by the Loan Documents.

Sections 6.2    Conditions Precedent to All Loans.

The obligations of Lenders to make any Loans are each subject to the further conditions precedent that: (a) no Default or Event of Default shall exist as of the date of the making of such Loans or would exist immediately after giving effect thereto; (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them 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 date of the making of such Loan with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been 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 such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder; and (c)  the Administrative Agent shall have received a timely Notice of Borrowing. Each Credit Event shall constitute a certification by the Borrower to the effect set forth in the preceding sentence (both as of the date of the giving of notice relating to such Credit Event and, unless the Borrower otherwise notifies the Administrative Agent prior to the date of such Credit Event, as of the date of the occurrence of such Credit Event). In addition, except as the Borrower may otherwise advise the Administrative Agent and Lenders in writing referencing this Section 6.2 , the Borrower shall be deemed to have represented to the Administrative Agent and the Lenders at the time any Loan is made that all conditions to the making of such Loan contained in this Article VI have been satisfied. Unless set forth in writing to the contrary expressly and specifically referencing this Section, the making of its initial Loan by a Lender shall constitute a certification by such Lender to the Administrative Agent and the other Lenders that the conditions precedent for initial Loans set forth in Sections 6.1 and 6.2 that have not previously been waived by the Lenders in accordance with the terms of this Agreement have been satisfied.
ARTICLE VII.
Representations and Warranties

In order to induce the Administrative Agent and each Lender to enter into this Agreement and to make Loans, the Borrower represents and warrants to the Administrative Agent and each Lender as follows:
Section 7.1    Organization; Powers.

Each of the Group Members is duly organized, validly existing and in good standing under the laws of the




jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted, or hereafter proposed to be conducted, and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
Section 7.2    Authorization; Enforceability.

The Transactions are within each of the Loan Party's powers and have been duly authorized by all necessary action on the part of each Loan Party. This Agreement has been duly executed and delivered by each of the Company and the Borrower and constitutes a legal, valid and binding obligation of such Person, enforceable 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.
Section 7.3    Governmental Approvals; No Conflicts.

The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other Person, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, bylaws or other organizational documents of any Group Member or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Group Member or its assets, except to the extent such violation or default could not reasonably be expected to have a Material Adverse Effect, or give rise to a right thereunder to require any payment to be made by any Group Member, and (d) will not result in the creation or imposition of any Lien on any asset of any Group Member.
Section 7.4    Financial Condition; No Material Adverse Change.

(a) The Company, the Borrower, and their consolidated Subsidiaries have heretofore furnished to the Lenders their consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2011, reported on by Deloitte & Touche LLP, independent public accountants, certified as true and correct in all material respects by its chief financial officer (and subject to all footnotes therein). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company, the Borrower and their consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP. No Group Member has any material Guarantee obligations, material contingent liabilities and material liabilities for taxes, or any long-term space leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the most recent financial statements referred to in this paragraph.

(b) Since December 31, 2011, there has been no material adverse change in the business, assets, operations or condition, financial or otherwise, of the Company, the Borrower and their Subsidiaries, taken as a whole.

(c) The pro forma covenant compliance certificate described in Section 6.1(a)(ix) , a copy of which has heretofore been furnished to each Lender, has been prepared giving effect (as if such events had occurred on such date) to (i) the Loans to be made on the Agreement Date and the use of proceeds thereof and (ii)  the payment of fees and expenses in connection with the foregoing. Such certificate has been prepared based on the information then known to the Borrower as of the date of delivery thereof, and presents fairly on a pro forma basis the estimated financial covenant compliance of Borrower and its consolidated Subsidiaries as at the Agreement Date, assuming that the events specified in the preceding sentence had actually occurred at such date.

Section 7.5    Properties.

(a) Except for defects in title that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each of the Group Members has marketable title to, or valid leasehold interests in, all its real and personal property material to its business, free and clear of all Liens except for Liens permitted by




Section 10.2 . Each Group Member has obtained customary title insurance on its real property.

(b) Each of the Group Members owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property material to its business, and the use thereof by the Group Members 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.

Section 7.6    Litigation and Environmental Matters.

(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting any Group Member (i) as to which, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.

(b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Group Members (i) to Borrower's knowledge after due inquiry, has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

Section 7.7    Compliance with Laws and Agreements.

Each of the Group Members is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing hereunder and no Group Member is in default under or with respect to any contractual obligation that could, either individually or in the aggregate, result in a Material Adverse Effect.
Section 7.8    Investment and Holding Company Status.

None of the Group Members is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.
Section 7.9    Taxes.

Each of the Group Members has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Group Member, as applicable, has set aside on its books adequate reserves, or are subject to any valid extension of time for payment, or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
Section 7.10    ERISA.

No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of




the assets of all such underfunded Plans.
Section 7.11    Disclosure.

None of the reports, financial statements, certificates or other information furnished by the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information and forward-looking statements, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. To the best of the Borrower's actual knowledge, there are no facts regarding the Company, the Borrower and their Subsidiaries (other than matters of a general economic nature) which Borrower has not disclosed to Administrative Agent and the Lenders in writing (either in this Agreement or otherwise) which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
Section 7.12    Federal Regulations.

No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used (a) for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect for any purpose that violates the provisions of the Regulations of the Board or (b) for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.
Section 7.13    Labor Matters.

Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against any Group Member pending or, to the knowledge of the Company or the Borrower, threatened; (b) hours worked by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act or any other applicable laws, regulations and orders of any Governmental Authority dealing with such matters; and (c) all payments due from any Group Member on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the relevant Group Member.
Section 7.14    Subsidiaries.

Except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Agreement Date, (a)  Schedule 7.14 sets forth the name and jurisdiction of incorporation of each Subsidiary and, as to each such Subsidiary, the percentage of each class of Equity Interests owned by any other Group Member and (b) there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options or long-term incentive plan and other employee benefits in the nature thereof granted to employees or directors and directors' qualifying shares) of any nature relating to any Equity Interests of the Borrower or any Subsidiary.
Section 7.15    Use of Proceeds.

The proceeds of the Loans shall be used for general corporate purposes of the Borrower and its Subsidiaries, including the financing of working capital needs, the repayment of Indebtedness of the Borrower and its Subsidiaries and acquisitions permitted by this Agreement.
Section 7.16    Solvency.

Each Loan Party is, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith will be and will continue to be, Solvent.




Section 7.17    Status of the Company.

The Company (i) is taxed as a REIT within the meaning of Section 856(a) of the Code, (ii) has not revoked its election to be a REIT, and (iii) has not engaged in any “prohibited transactions” as defined in Section 856(b)(6)(iii) of the Code (or any successor provision thereto).
Section 7.18    Properties.

Schedule 7.18(a) sets forth a list of all real property of the Group Members and the owner (or ground-lessor) of such real property, and Schedule 7.18(b) sets forth a list of all Unencumbered Assets and the owner (or ground-lessor) of such Unencumbered Asset. All such Unencumbered Assets satisfy the requirements for an Unencumbered Asset set forth in the definition thereof.
Section 7.19    Survival of Representations and Warranties, Etc.

All statements contained in any certificate, financial statement or other instrument delivered by or on behalf of any Loan Party or any other Subsidiary to the Administrative Agent or any Lender pursuant to or in connection with this Agreement or any of the other Loan Documents (including, but not limited to, any such statement made in or in connection with any amendment thereto or any statement contained in any certificate, financial statement or other instrument delivered by or on behalf of any Loan Party prior to the Agreement Date and delivered to the Administrative Agent or any Lender in connection with the underwriting or closing the transactions contemplated hereby) shall constitute representations and warranties made by the Borrower under this Agreement. All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made at and as of the Agreement Date, the Effective Date and at and as of the date of the occurrence of each Credit Event, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been 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 such earlier date) and except for changes in factual circumstances expressly and specifically permitted hereunder. All such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the Loan Documents and the making of the Loans.
ARTICLE VIII.
Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, each of the Company and the Borrower covenants and agrees with the Lenders that:
section 8.1    Financial Statements; Ratings Change and Other Information.

The Borrower will furnish to the Administrative Agent and each Lender:
(a) within ninety (90) days after the end of each fiscal year of each of the Company, the Borrower, and their Subsidiaries, each of the Company's audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b) within forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of each of the Company, the Borrower, and their Subsidiaries, commencing with the fiscal quarter ended June 30, 2012, each of the Company's consolidated balance sheet and related statements of operations,




stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) (i) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower (A) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (B) setting forth reasonably detailed calculations demonstrating compliance with Section 10.6 , and Section 10.15 and (C) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 7.4 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (ii) together with such compliance certificate, the Borrower shall deliver the following, in form and detail satisfactory to the Administrative Agent, (A) a description of all Properties acquired during such calendar quarter, including the Net Operating Income of each such Property, acquisition costs and any related mortgage debt; (B) a description of all Properties sold during the calendar quarter then ended, including the Net Operating Income from such Properties and the sales price; (C) a statement of the Net Operating Income contribution by each Property for the preceding calendar quarter and summary occupancy reports for such Property; (D) a listing of summary information for all Unencumbered Assets including, without limitation, the Unencumbered Asset Value of each Property the Net Operating Income of each Property (not addressed in clause (ii) or (iii) above), occupancy rates, square footage, property type, and date acquired or built; (E) a summary of (1) all acquisitions, dispositions or other removals of Unencumbered Assets completed during such quarterly accounting period, calendar year, or other fiscal period were permitted under this Agreement, and (2) the acquisition cost or principal balance of any Unencumbered Assets, as applicable, acquired during such period and any other information that Administrative Agent may require to determine the Unencumbered Asset Value of such Unencumbered Asset, and the Unencumbered Asset Value of any Unencumbered Assets removed during such period; and (F) (1) concurrently with the delivery of financial statements under clause (b) above, any updates to Schedules EGL, EOCGL or 7.18(b) (which updates may be in the form of one or more master schedules that list the Unencumbered Assets and whether such Unencumbered Asset is subject to an Eligible Ground Lease or an Eligible On-Campus Ground Lease) and (2) concurrently with the delivery of financial statements under clause (a) above, any updates to Schedules QS, SG, 7.14 or 7.18(a) (which updates may be in the form of one or more master schedules that include such information);

(d) concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

(e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company, the Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Company or the Borrower to its stockholders generally, as the case may be;

(f) as soon as reasonably practicable, and in any event no later than ninety (90) days after the end of each fiscal year of each of the Company, the Borrower, and their Subsidiaries, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of each of the Company, the Borrower, and their Subsidiaries, as of the end of the following fiscal year, the related consolidated statements of projected cash flow, projected changes in financial position, projected income, projected compliance with Sections 10.13 and 10.15 and a description of the underlying assumptions applicable thereto) (collectively, the “ Projections ”), which Projections shall in each case be accompanied by a certificate of a Financial Officer




stating that such Projections are based on reasonable estimates, information and assumptions;

(g) within forty-five (45) days after the end of each fiscal quarter of each of the Company, the Borrower, and their Subsidiaries (or ninety (90) days in the case of the fourth quarter), a narrative discussion and analysis of the financial condition and results of operations of each of the Company, the Borrower, and their Subsidiaries, for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the comparable periods of the previous year; provided that delivery to the Administrative Agent and the Lenders of the Company's annual report to the SEC on Form 10-K and its quarterly report to the SEC on Form 10-Q containing such narrative discussion and analysis shall be deemed to be compliance with this Section 8.1(g) ;

(h) promptly after Moody's or S&P shall have announced a change in the rating established or deemed to have been established for the Index Debt, written notice of such rating change; and

(i) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

Delivery by the Company to the Administrative Agent and the Lenders of its annual report to the SEC on Form 10-K and its quarterly report to the SEC on Form 10-Q, in each case in accordance with SEC requirement for such reports, shall be deemed to be compliance by the Company with Section 8.1(a) and Section 8.1(b) , as applicable.
Section 8.2    Notices of Material Events.

The Borrower will furnish to the Administrative Agent and each Lender prompt written notice after learning of any of the following:
(a) the occurrence of any Default or Event of Default;

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Group Member thereof that relates to any Loan Document or that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c) 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 Borrower and its Subsidiaries in an aggregate amount exceeding $5,000,000;

(d) any change in the Applicable Credit Ratings; and

(e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 8.3    Existence; Conduct of Business; REIT Status.

Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 10.3 . The Company will do all things reasonably necessary to maintain its status as a REIT. To the extent required by applicable law, the Company will continue to file Form 10-Q and Form 10-K (or their equivalents) and make other public filings with the Securities and




Exchange Commission (or any Governmental Authority substituted therefor).
Section 8.4    Payment of Obligations.

Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company, the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
Section 8.5    Maintenance of Properties; Insurance.

Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations, and (c) obtain and provide insurance certificates confirming compliance with the above requirements promptly upon written request by the Administrative Agent.
Section 8.6    Books and Records; Inspection Rights.

Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are customarily made of all material dealings and transactions in relation to its business and activities in conformity in all material respects with GAAP. Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice to a Financial Officer, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided that the Borrower shall pay the documented and reasonable out-of-pocket expenses of any such inspection by the Administrative Agent and the Lenders if an Event of Default has occurred and is continuing.
Section 8.7    Compliance with Laws.

Each of the Company and the Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, including Environmental Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 8.8    Use of Proceeds.

The proceeds of the Loans will be used only for working capital needs and general corporate purposes, including the repayment of debt and permitted acquisitions, and for the buyback, redemption, retirement or to otherwise acquire directly or indirectly, shares of the Company's or Borrower's Equity Interests. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.
Section 8.9    Distributions in the Ordinary Course.

Each of the Company and the Borrower shall, in the ordinary course of business, cause all of its Subsidiaries to make transfers of net cash and cash equivalents upstream to the Borrower, and the Borrower shall continue to follow such ordinary course of business. The Company and the Borrower shall not make net transfers of cash and cash equivalents downstream to its Subsidiaries except in the ordinary course of business consistent with past practice or as otherwise permitted under this Agreement.




Section 8.10    Notices of Asset Sales, Encumbrances or Dispositions.

The Borrower shall deliver to the Administrative Agent and the Lenders written notice not less than five (5) Business Days prior to a sale, encumbrance with a Lien to secure Indebtedness or other Disposition of an Unencumbered Asset or other assets of the Loan Parties or their Subsidiaries, in each case, in a single transaction or series of related transactions, for consideration in excess of $75,000,000, which is permitted pursuant to Section 10.1(e) , Section 10.2(a)(iv) or Section 10.9 , as applicable. In addition, simultaneously with delivery of any such notice, the Borrower shall deliver to the Administrative Agent (A) a certificate of a Financial Officer certifying that no Default or Event of Default (including any non-compliance with the financial covenants set forth in Section 10.13 and Section 10.15 hereof) has occurred and is continuing or would occur on a pro forma basis after giving effect to the proposed sale, encumbrance or other Disposition, which certificate shall include calculations in reasonable detail demonstrating compliance with Section 6.13 hereof and the financial covenants on a pro-forma basis, including as to the calculation of Unencumbered Asset Value, and (B) an updated schedule of all Unencumbered Assets.
To the extent such proposed transaction would result in a Default or an Event of Default, the Borrower shall apply the proceeds of such transaction (together with such additional amounts as may be required), to prepay the Obligations in an amount, as determined by the Administrative Agent, equal to that which would be required to reduce the Obligations so that no Default or Event of Default would exist.
If such proposed transaction is permitted hereunder, the Administrative Agent shall, at the Borrower's expense, take all such action reasonably requested by the Borrower to release the guarantee obligations under the Guaranty of any Subsidiary Guarantor who shall cease to own any Unencumbered Assets upon the consummation of such transaction.
Section 8.11    [Reserved].

Section 8.12    Release of Subsidiary Guarantors.

So long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, following (i) the Disposition, removal or substitution of an Unencumbered Asset that results in a Subsidiary Guarantor ceasing to own any Unencumbered Assets or (ii) a Subsidiary Guarantor becoming a Qualified Subsidiary, and is therefore no longer required to be a Subsidiary Guarantor under the definition of “Unencumbered Asset”, at the request and expense of the Borrower and without the need for any consent or approval of the Lenders, the Administrative Agent shall execute and deliver a release of the Guaranty made by such Subsidiary Guarantor in a form acceptable to the Borrower and the Administrative Agent.
Section 8.13    Additional Guarantors.

If, after the Agreement Date, a Subsidiary that is not a Qualified Subsidiary elects to provide a Subsidiary Guaranty so that the Property owned by such Subsidiary shall qualify as an Unencumbered Asset, the Borrower shall deliver to the Administrative Agent each of the following items, each in form and substance satisfactory to the Administrative Agent: (i) a Guaranty executed by such Subsidiary and (ii) the items that would have been delivered under clauses (iv) through (viii) and (xv) of Section 6.1(a) if such Subsidiary had been a Subsidiary Guarantor on the Agreement Date.
ARTICLE IX.
Information

Section 9.1    Electronic Delivery of Certain Information.

(a) Documents required to be delivered pursuant to the Loan Documents shall be delivered by electronic communication and delivery, including, the Internet, e-mail or intranet websites to which the Administrative Agent and each Lender have access (including a commercial, third-party website such as www.sec.gov <http://www.sec.gov> or a website sponsored or hosted by the Administrative Agent or the Borrower) provided that the foregoing shall not apply to (i) notices to any Lender pursuant to Article II and (ii) any Lender that has notified the Administrative Agent




and the Borrower that it cannot or does not want to receive electronic communications. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic delivery pursuant to procedures approved by it for all or particular notices or communications. Documents or notices delivered electronically shall be deemed to have been delivered (i) twenty-four (24) hours after the date and time on which the Administrative Agent or the Borrower posts such documents or (ii) the documents become available on a commercial website and the Administrative Agent or Borrower notifies each Lender of said posting and provides a link thereto; provided if such notice or other communication is not sent or posted during the normal business hours of the recipient, said posting date and time shall be deemed to have commenced as of 9:00 a.m. Pacific time on the opening of business on the next business day for the recipient. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the certificate required by Section 8.1(c) to the Administrative Agent and shall deliver paper copies of any documents to the Administrative Agent or to any Lender that requests such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. Except for the certificates required by Section 8.1(c) , the Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents delivered electronically, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery. Each Lender shall be solely responsible for requesting delivery to it of paper copies and maintaining its paper or electronic documents.

(b) Documents required to be delivered pursuant to Article II may be delivered electronically to a website provided for such purpose by the Administrative Agent pursuant to the procedures provided to the Borrower by the Administrative Agent.

Section 9.2    Public/Private Information.

The Borrower shall reasonably cooperate with the Administrative Agent in connection with the publication of certain materials and/or information provided by or on behalf of the Borrower. Documents required to be delivered pursuant to the Loan Documents shall be delivered by or on behalf of the Borrower to the Administrative Agent and the Lenders (collectively, “ Information Materials ”) pursuant to this Article and the Borrower shall designate Information Materials (a) that are either available to the public or not material with respect to the Borrower and its Subsidiaries or any of their respective securities for purposes of United States federal and state securities laws, as “Public Information” and (b) that are not Public Information as “Private Information”.
Section 9.3    USA Patriot Act Notice; Compliance.

The USA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued with respect thereto require all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, a Lender (for itself and/or as Administrative Agent for all Lenders hereunder) may from time-to-time request, and the Borrower shall, and shall cause the other Loan Parties to, provide to such Lender, such Loan Party's name, address, tax identification number and/or such other identification information as shall be necessary for such Lender to comply with federal law. An “account” for this purpose may include, without limitation, a deposit account, cash management service, a transaction or asset account, a credit account, a loan or other extension of credit, and/or other financial services product.
ARTICLE X.
Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, each of the Company and the Borrower covenants and agrees with the Lenders that:
Section 10.1    Indebtedness.

Each of the Company and the Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:




(a) Indebtedness created hereunder;

(b) Indebtedness existing on the date hereof and set forth in Schedule 10.1 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;

(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;

(d) Guarantees by the Borrower of Indebtedness of any Subsidiary, by the Company of Indebtedness of the Borrower or any Subsidiary, and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided that the Borrower shall not permit any Subsidiary that owns (or leases) an Unencumbered Asset to provide a Guarantee of any Indebtedness of the Borrower or the Company unless such Subsidiary also is or simultaneously becomes a Subsidiary Guarantor hereunder; and

(e) additional Indebtedness of the Company, the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Company, the Borrower and all Subsidiaries) at any one time outstanding that would not cause a violation of Section 10.13 ; provided that the Borrower shall not permit any Subsidiary that owns (or leases) an Unencumbered Asset to create, incur, assume, become liable in respect of or suffer to exist any Indebtedness, including any Guarantees of Indebtedness unless such Subsidiary is or simultaneously becomes a Subsidiary Guarantor hereunder.

Section 10.2    Liens.

(a) Each of the Company and the Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(i) Permitted Encumbrances;

(ii) any Lien on any property or asset of the Company, the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 10.2 ; provided that (A) such Lien shall not apply to any other property or asset of the Company, the Borrower or any Subsidiary and (B) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(iii) any interest or title of a lessor under any lease entered into by the Borrower or any other Subsidiary in the ordinary course of its business and covering only the assets so leased; and

(iv) Liens (not affecting the Unencumbered Assets) securing Indebtedness constituting Indebtedness permitted by Section 10.1(e) , and Liens (not affecting Unencumbered Assets) incurred in connection with the cash collateralization of any Swap Agreement permitted by Section 10.5 ;

(b)      Notwithstanding the foregoing, the Borrower shall not, and shall not permit any of its Subsidiaries that owns an Unencumbered Asset to, grant a Lien on its Equity Interest as collateral for Indebtedness to any Person other than the Administrative Agent, except that if Liens are granted on Unencumbered Assets (or the Equity Interests in the owners of Unencumbered Assets) to secure the Obligations, then the Borrower and its Subsidiaries may also grant Liens on such Unencumbered Assets (or such Equity Interests) to secure the obligations under other unsecured credit facilities of the Borrower on a pari passu basis.
Section 10.3    Fundamental Changes.

(a) Each of the Company and the Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell,




transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Person may merge into the Company or the Borrower in a transaction in which the Company or the Borrower, as applicable, is the surviving corporation, (ii) any Person may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary; provided that if one of the parties to such merger is a Subsidiary Guarantor or a Qualified Subsidiary, the Subsidiary Guarantor or Qualified Subsidiary shall be the surviving entity, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets (A) to the Borrower or to another Subsidiary; provided that if one of the parties to such transaction is a Subsidiary Guarantor or a Qualified Subsidiary, either (1) the Subsidiary Guarantor or Qualified Subsidiary shall be the transferee or (2) the transaction is permitted by Section 10.9 or (B) in a transaction permitted by Section 10.9 , (iv) the Borrower may sell the Equity Interests in a Subsidiary in a transaction permitted by Section 10.9 , and (v) any Subsidiary which is not a Subsidiary Guarantor or a Qualified Subsidiary may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower.

(b) Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Company, the Borrower and their Subsidiaries, taken as a whole, on the date of execution of this Agreement and businesses reasonably related thereto.

Section 10.4    Investments, Loans, Advances, Guarantees and Acquisitions.

Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;

(b) direct or indirect investments by the Company and the Borrower in the Equity Interests of its Subsidiaries and Unconsolidated Affiliates;

(c) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary;

(d) Guarantees constituting Indebtedness permitted by Section 10.1 ;

(e) extensions of trade credit in the ordinary course of business;

(f) loans and advances to employees of any Group Member in the ordinary course of business (including for travel, entertainment and relocation expenses) in an aggregate amount for all Group Members not to exceed $1,000,000 at any one time outstanding;

(g) intercompany Investments by any Group Member in the Borrower or any Person that, prior to such investment, is a Subsidiary Guarantor or a Qualified Subsidiary;

(h) (i) Investments permitted by Section 10.3 and (ii) Investments consisting of (A) acquisitions of real property (or interests therein), (B) acquisitions of loans secured by real property or Equity Interests, (C) the making of loans secured by real property or Equity Interests, and (D) the purchase of Equity Interests, all consistent with the Borrower's business strategy, so long as no Default has occurred and is continuing, or would occur after giving effect thereto; provided that Investments by the Company, the Borrower and their Subsidiaries in Equity Interests




(other than Equity Interests (1) in their respective Subsidiaries, (2) in Unconsolidated Affiliates, (3) acquired in connection with transactions permitted by Section 10.3 that are consistent with the Borrower's business strategy, or (4) in other Persons in which the Company, the Borrower or one of their Subsidiaries is the general partner, the managing member or otherwise has rights of Control over such Person or has rights of specific Control over the use and/or disposition of its interest therein) shall not exceed ten percent (10%) of Total Asset Value; and

(i) deemed loans made to the limited partners of the Borrower in respect of withholding taxes paid by the Borrower on behalf of such limited partner in accordance with Section 10.5 of the Borrower's Agreement of Limited Partnership dated as of September 20, 2006, as amended to date.

Section 10.5    Swap Agreements.

Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Company, the Borrower or any Subsidiary has actual or potential exposure (other than those in respect of Equity Interests of the Company, the Borrower or any of its Subsidiaries) and not for speculative purposes, and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Company, the Borrower or any Subsidiary.
Section 10.6    Restricted Payments; Share Repurchases.

(a) The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (i) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common Equity Interests, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, and (iv) so long as no Default or Event of Default shall have occurred and be continuing, the Borrower may make Restricted Payments to the Company and to the limited partners of the Borrower, and the Company may make Restricted Payments of such amount to its shareholders; provided that (A) if a Default or an Event of Default has occurred and is continuing, the Borrower may only make Restricted Payments to the Company in the minimum amounts required to be made by the Company in order to maintain its status as a REIT; and (B) the Borrower may not make any Restricted Payments to the Company if the Obligations have been declared due and payable.

(b) Neither the Borrower nor the Company shall at any time buy back, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Equity Interests if and only if an Event of Default has occurred and is continuing or would occur after giving effect to such transaction; provided that, notwithstanding the foregoing provisions of this Section 10.6 , the Borrower and/or the Company may redeem the Equity Interests in the Partnership for Equity Interests in the Company (with any fractional shares payable in cash) pursuant to a request from a limited partner of the Borrower in accordance with Section 8.6 of the Borrower's Agreement of Limited Partnership dated as of September 20, 2006, as amended to date.

Section 10.7    Transactions with Affiliates.

Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Company, the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Company, the Borrower and its Subsidiaries not involving any other Affiliate and (c) any Restricted Payment permitted by Section 10.6 .




Section 10.8    Restrictive Agreements.

Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Company, the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets (including the Equity Interests owned by such Group Member), or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Company, the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law, by this Agreement or by any other agreements for unsecured Indebtedness of the Borrower (provided that such other agreements shall not impose any restrictions or conditions that are materially more restrictive than the terms of this Agreement), (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 10.8 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness (and, for the avoidance of doubt, if such restrictions do not apply to any Unencumbered Asset or to the Equity Interests of the Borrower, any Subsidiary Guarantor or any Qualified Subsidiary), and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.
Section 10.9    Disposition of Property.

Each of the Company and the Borrower will not, and will not permit any of its Subsidiaries to, Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's Equity Interests to any Person, except:
(a) the Disposition of surplus, obsolete or worn out property in the ordinary course of business;

(b) the sale of inventory, raw materials, supplies, or other non-fixed assets in the ordinary course of business;

(c) Dispositions permitted by Section 10.3 ;

(d) the sale or issuance of any Subsidiary's Equity Interests to the Borrower, any Subsidiary Guarantor or any Qualified Subsidiary;

(e) Dispositions of cash or Permitted Investments not prohibited hereunder; and

(f) the Disposition of other property so long as (i) no Default or Event of Default has occurred and is continuing, or would occur after giving effect thereto, (ii) the Borrower remains in compliance with Section 10.13 after giving effect thereto, and (iii) and the Borrower complies with Section 8.10 .

Section 10.10    Payments and Modifications of Subordinate Debt.

The Company and the Borrower will not, and will not permit any of its Subsidiaries to, make or offer to make any payment, prepayment, repurchase or redemption of or otherwise optionally or voluntarily defease or segregate funds (whether scheduled or voluntary) with respect to principal or interest on any Indebtedness which is subordinate to the Obligations if a Default has occurred and is continuing.
Section 10.11    Sales and Leasebacks.

The Company and the Borrower will not, and will not permit any of its Subsidiaries to, enter into any




arrangement with any Person providing for the leasing by any Group Member as lessee of real or personal property that has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.
Section 10.12    Changes in Fiscal Periods.

The Company and the Borrower will not permit the fiscal year of the Company or the Borrower to end on a day other than December 31 or change the Company's or the Borrower's method of determining fiscal quarters.
Section 10.13    Financial Covenants.

The Company and the Borrower shall not:
(a) Total Leverage Ratio . Permit the ratio of Total Indebtedness to Total Asset Value (the “ Total Leverage Ratio ”) as at the last day of any period of four consecutive fiscal quarters of the Company to exceed sixty percent (60%).

(b) Secured Leverage Ratio . Permit the ratio of Secured Indebtedness to Total Asset Value as at the last day of any period of four consecutive fiscal quarters of the Company to exceed (i) forty percent (40%) from the Agreement Date through the fiscal quarter ended December 31, 2013 and (ii) thirty percent (30%) for the fiscal quarters ended March 31, 2014 and thereafter.

(c) [Reserved].

(d) Fixed Charge Coverage Ratio . Permit the ratio of Total EBITDA to Total Fixed Charges for any period of four consecutive fiscal quarters of the Company to be less than 1.65 to 1.0 as of the last day of any fiscal quarter of the Company.

(e) Tangible Net Worth . Permit Tangible Net Worth to be less than the sum of (i) $1,167,787,200 plus (ii) fifty percent (50%) of Net Cash Proceeds from issuances of Equity Interests by the Borrower or the Company after December 31, 2011.

(f) Unencumbered Leverage Ratio . Permit the ratio of Unsecured Indebtedness to Unencumbered Asset Value as at the last day of any period of four consecutive fiscal quarters of the Company to exceed sixty percent (60%).
(g) Unencumbered Coverage Ratio . Permit the ratio of Unencumbered NOI for any period of four consecutive fiscal quarters of the Company to Unsecured Interest Expense for such period to be less than 1.75 to 1.0 as of the last day of any fiscal quarter of the Company.

(h) [Reserved].

(i) [Reserved].

(j) Pro Forma Calculations .
1. For purposes of the pro-forma calculations to be made pursuant to Section 10.13(a), (b), (d), (e), (f) and (g) (and the definitions used therein), such calculations shall be adjusted by (A) excluding from Unencumbered Asset Value the actual value of any assets sold by the Borrower or any of its Subsidiaries since the last day of the prior fiscal quarter and (B) adding to Total Asset Value and Unencumbered Asset Value the undepreciated GAAP book value (after any impairments) of any Acquisition Properties acquired (or to be acquired with any borrowing) by the Borrower or any of its Subsidiaries since the last day of the prior fiscal quarter.
2. For purposes of the pro-forma calculations to be made pursuant to Section 10.13 (and the definitions used therein), such calculations shall be adjusted by (A) excluding from Unencumbered NOI




the actual NOI for the relevant period of any assets sold by the Borrower or any of its Subsidiaries since the last day of the prior fiscal quarter, and (B) adding to Unencumbered NOI the projected NOI for the next four (4) quarters (based on the Borrower's projections made in good faith) for any assets acquired (or to be acquired with any Borrowing) by the Borrower or any of its Subsidiaries since the last day of the prior fiscal quarter.

Section 10.14 Modification of Governing Documents.

The Company and the Borrower will not, and will not permit any of its Subsidiaries to, amend or modify any provision of its charter, by-laws, partnership agreement, operating agreement or other organizational documents that would have a Material Adverse Effect without the Administrative Agent's prior written consent.
Section 10.15    Occupancy of Unencumbered Assets.

The Unencumbered Assets that are Medical Office/Office Properties and Other Properties (excluding those Unencumbered Assets which are Development Properties and Acquisition Properties) shall have an aggregate Occupancy Rate for the preceding calendar quarter of at least eighty-five percent (85%) of the aggregate rentable area within such Unencumbered Assets. In the event of a breach or violation of this Section 10.15 , such breach or violation shall not be an Event of Default so long as the Borrower immediately notifies the Administrative Agent thereof and, within thirty (30) days of receipt of such notice by the Administrative Agent (subject to extension for up to an additional thirty (30) days by the Administrative Agent in its sole and absolute discretion), the Borrower adds, substitutes or removes one or more Properties as an Unencumbered Asset as contemplated by Section 8.12 such that immediately following such addition, substitution or removal, the Occupancy Rate required by this Section 10.15 is satisfied.
ARTICLE XI.
Default

Section 11.1    Events of Default.

The occurrence of any of the following events shall constitute an event of default (“ Events of Default ”) hereunder:
(a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for payment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in Section 11.1(a) of this Article XI) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of ten (10) Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Borrower, the Company or any Subsidiary in or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect in any material respect on or as of the date made or deemed made (or, in the case of any representation or warranty qualified by “materiality”, “Material Adverse Effect” or any similar language, in any respect (after giving effect to such materiality qualifier));
(d) the Company or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Sections 8.2 , 8.3 (with respect to the Borrower's existence) or 8.8 or in Article X ;
(e) the Company or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of thirty (30) days after written notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender); provided that, with respect to any default other than a default under Sections 8.1, 8.5(b), 8.10, 8.12 or 8.13 , if (A) such default cannot be cured within such 30-day period, (B) such default is susceptible of cure and (C) the Borrower or the Company is proceeding with diligence and in good faith to cure such default, then such thirty-day cure period shall be extended to such date, not to exceed a total of ninety (90) days, as shall be necessary for the Borrower or the Company diligently to cure such default;
(f) the Company, the Borrower or any Subsidiary shall fail to make any payment (whether of




principal or interest and regardless of amount) in respect of any Material Indebtedness (other than Nonrecourse Indebtedness), when and as the same shall become due and payable, after giving effect to any applicable cure period;
(g) any event or condition occurs that results in any Material Indebtedness (other than Nonrecourse Indebtedness) becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) 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;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company, the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company, the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) the Company, the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company, the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j) the Company, the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 shall be rendered against the Company, the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company, the Borrower or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the Requisite Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding (i) $15,000,000 in any year or (ii) $25,000,000 for all periods;
(m) a Change in Control shall occur;
(n) the Borrower or any other Loan Party shall disavow, revoke or terminate (or attempt to terminate) any Loan Document to which it is a party or shall otherwise challenge or contest in any action, suit or proceeding in any court or before any Governmental Authority the validity or enforceability of this Agreement, the Guaranty or any other Loan Document; or this Agreement, the Guaranty or any other Loan Document shall cease to be in full force and effect (except as a result of the express terms thereof); or
(o) the occurrence or any Event of Default under the Existing Revolving Credit Agreement, as defined therein.

Section 11.2    Remedies Upon Event of Default.

Upon the occurrence of an Event of Default the following provisions shall apply:
(a) Acceleration; Termination of Facilities . In the event of any Event of Default (other than an event with respect to the Borrower described in clause (h) or (i) of Section 11.1 above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Requisite Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then




outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
(b) Loan Documents . The Requisite Lenders may direct the Administrative Agent to, and the Administrative Agent if so directed shall, exercise any and all of its rights under any and all of the other Loan Documents.
(c) Applicable Law . The Requisite Lenders may direct the Administrative Agent to, and the Administrative Agent if so directed shall, exercise all other rights and remedies it may have under any Applicable Law.
(d) Appointment of Receiver . To the extent permitted by Applicable Law, the Administrative Agent and the Lenders shall be entitled to the appointment of a receiver for the assets and properties of the Borrower and its Subsidiaries, without notice of any kind whatsoever and without regard to the adequacy of any security for the Obligations or the solvency of any party bound for its payment, to take possession of all or any portion of the property and/or the business operations of the Borrower and its Subsidiaries and to exercise such power as the court shall confer upon such receiver.

Section 11.3    [Reserved.]

Section 11.4    Marshaling; Payments Set Aside.

None of the Administrative Agent, any Lender or any Specified Swap Provider shall be under any obligation to marshal any assets in favor of any Loan Party or any other party or against or in payment of any or all of the Obligations or the Specified Swap Obligations. To the extent that any Loan Party makes a payment or payments to the Administrative Agent, any Lender or any Specified Swap Provider, or the Administrative Agent, any Lender or any Specified Swap Provider enforce their security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Obligations or Specified Swap Obligations, or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 11.5    Allocation of Proceeds.

If an Event of Default exists, all payments received by the Administrative Agent under any of the Loan Documents, in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrower hereunder or thereunder, shall be applied in the following order and priority:

a. amounts due to the Administrative Agent and the Lenders in respect of expenses due under Section 13.2 until paid in full, and then Fees;
b. payments of interest on all other Loans to be applied for the ratable benefit of the Lenders;
c. payments of principal of all other Loans and amounts due and payable under any Specified Swap Contracts, if any, to be applied for the ratable benefit of the Lenders and the applicable Specified Swap Providers, as the case may be, in such order and priority as the Lenders and such Specified Swap Providers, as the case may be, may determine in their sole discretion;
d. amounts due to the Administrative Agent and the Lenders pursuant to Sections 12.8 and  13.10 .;
e. payments of all other Obligations and other amounts due under any of the Loan Documents and Specified Swap Contracts, if any, to be applied for the ratable benefit of the Lenders and the applicable Specified Swap Providers; and




f. any amount remaining after application as provided above, shall be paid to the Borrower or whomever else may be legally entitled thereto.

Section 11.6    [Reserved]

Section 11.7    Rescission of Acceleration by Requisite Lenders.

If at any time after acceleration of the maturity of the Loans and the other Obligations, the Borrower shall pay all arrears of interest and all payments on account of principal of the Obligations which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by Applicable Law, on overdue interest, at the rates specified in this Agreement) and all Events of Default and Defaults (other than nonpayment of principal of and accrued interest on the Obligations due and payable solely by virtue of acceleration) shall become remedied or waived to the satisfaction of the Requisite Lenders, then by written notice to the Borrower, the Requisite Lenders may elect, in the sole discretion of such Requisite Lenders, to rescind and annul the acceleration and its consequences. The provisions of the preceding sentence are intended merely to bind all of the Lenders to a decision which may be made at the election of the Requisite Lenders, and are not intended to benefit the Borrower and do not give the Borrower the right to require the Lenders to rescind or annul any acceleration hereunder, even if the conditions set forth herein are satisfied.
Section 11.8    Performance by Administrative Agent.

If the Borrower or any other Loan Party shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents, the Administrative Agent may, after notice to the Borrower, perform or attempt to perform such covenant, duty or agreement on behalf of the Borrower or such other Loan Party after the expiration of any cure or grace periods set forth herein. In such event, the Borrower shall, at the request of the Administrative Agent, promptly pay any amount reasonably expended by the Administrative Agent in such performance or attempted performance to the Administrative Agent, together with interest thereon at the applicable Post-Default Rate from the date of such expenditure until paid. Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall have any liability or responsibility whatsoever for the performance of any obligation of the Borrower under this Agreement or any other Loan Document.
Section 11.9    Rights Cumulative.

The rights and remedies of the Administrative Agent, the Lenders and the Specified Swap Providers under this Agreement, each of the other Loan Documents, the Fee Letter and Specified Swap Contracts shall be cumulative and not exclusive of any rights or remedies which any of them may otherwise have under Applicable Law. In exercising their respective rights and remedies the Administrative Agent, the Lenders and the Specified Swap Providers may be selective and no failure or delay by the Administrative Agent, any of the Lenders or any of the Specified Swap Providers in exercising any right shall operate as a waiver of it, nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or right.
ARTICLE XII.
The Administrative Agent

Section 12.1    Appointment and Authorization.

Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to take such action as contractual representative on such Lender's behalf and to exercise such powers under this Agreement and the other Loan Documents as are specifically delegated to the Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Not in limitation of the foregoing, each Lender authorizes and directs the Administrative Agent to enter into the Loan Documents for the benefit of the Lenders. Each Lender hereby agrees that, except as otherwise set forth herein, any action taken by the Requisite Lenders in accordance with the provisions of this Agreement or the Loan Documents, and the exercise by the Requisite Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. Nothing herein shall be construed to deem the Administrative Agent a trustee or fiduciary for




any Lender or to impose on the Administrative Agent duties or obligations other than those expressly provided for herein. Without limiting the generality of the foregoing, the use of the terms “Agent”, “Administrative Agent”, “agent” and similar terms in the Loan Documents 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, use of such terms is merely a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. The Administrative Agent shall deliver to each Lender, promptly upon receipt thereof by the Administrative Agent, copies of each of the financial statements, certificates, notices and other documents delivered to the Administrative Agent pursuant to Articles VIII and IX that the Borrower is not otherwise required to deliver directly to the Lenders. The Administrative Agent will furnish to any Lender, upon the request of such Lender, a copy (or, where appropriate, an original) of any document, instrument, agreement, certificate or notice furnished to the Administrative Agent by the Borrower, any other Loan Party or any other Affiliate of the Borrower, pursuant to this Agreement or any other Loan Document not already delivered to such Lender pursuant to the terms of this Agreement or any such other Loan Document. As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of any of the Obligations), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Requisite Lenders (or all of the Lenders if explicitly required under any other provision of this Agreement), and such instructions shall be binding upon all Lenders and all holders of any of the Obligations; provided , however , that, notwithstanding anything in this Agreement to the contrary, the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or any other Loan Document or Applicable Law. Not in limitation of the foregoing, the Administrative Agent may exercise any right or remedy it or the Lenders may have under any Loan Document upon the occurrence of a Default or an Event of Default unless the Requisite Lenders have directed the Administrative Agent otherwise. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Requisite Lenders, or where applicable, all the Lenders.
Section 12.2    Wells Fargo as Lender.

Wells Fargo, as a Lender or as a Specified Swap Provider, as the case may be, shall have the same rights and powers under this Agreement and any other Loan Document and under any Specified Swap Contract, as the case may be, as any other Lender or Specified Swap Provider and may exercise the same as though it were not the Administrative Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Wells Fargo in each case in its individual capacity. Wells Fargo and its Affiliates may each accept deposits from, maintain deposits or credit balances for, invest in, lend money to, act as trustee under indentures of, serve as financial advisor to, and generally engage in any kind of business with the Borrower, any other Loan Party or any other Affiliate thereof as if it were any other bank and without any duty to account therefor to the other Lenders or any other Specified Swap Providers. Further, the Administrative Agent and any Affiliate may accept fees and other consideration from the Borrower for services in connection with this Agreement or any Specified Swap Contract, or otherwise without having to account for the same to the Lenders or any Specified Swap Providers. The Lenders acknowledge that, pursuant to such activities, Wells Fargo or its Affiliates may receive information regarding the Borrower, other Loan Parties, other Subsidiaries and other Affiliates (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them.
Section 12.3    [Reserved].

Section 12.4    [Reserved].

Section 12.5    Approvals of Lenders.

All communications from the Administrative Agent to any Lender requesting such Lender's determination, consent, approval or disapproval (a) shall be given in the form of a written notice to such Lender, (b) shall be




accompanied by a description of the matter or issue as to which such determination, approval, consent or disapproval is requested, or shall advise such Lender where information, if any, regarding such matter or issue may be inspected, or shall otherwise describe the matter or issue to be resolved, (c) shall include, if reasonably requested by such Lender and to the extent not previously provided to such Lender, written materials and, as appropriate, a brief summary of all oral information provided to the Administrative Agent by the Borrower in respect of the matter or issue to be resolved, and (d) shall include the Administrative Agent's recommended course of action or determination in respect thereof. Unless a Lender shall give written notice to the Administrative Agent that it specifically objects to the recommendation or determination of the Administrative Agent (together with a reasonable written explanation of the reasons behind such objection) within ten (10) Business Days (or such lesser or greater period as may be specifically required under the express terms of the Loan Documents) of receipt of such communication, such Lender shall be deemed to have conclusively approved of or consented to such recommendation or determination.
Section 12.6    Notice of Events of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing with reasonable specificity such Default or Event of Default and stating that such notice is a “notice of default.” If any Lender (excluding the Lender which is also serving as the Administrative Agent) becomes aware of any Default or Event of Default, it shall promptly send to the Administrative Agent such a “notice of default”. Further, if the Administrative Agent receives such a “notice of default,” the Administrative Agent shall give prompt notice thereof to the Lenders.
Section 12.7    Administrative Agent's Reliance.

Notwithstanding any other provisions of this Agreement or any other Loan Documents, neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel shall be liable for any action taken or not taken by it under or in connection with this Agreement or any other Loan Document, except for its or their own gross negligence or willful misconduct in connection with its duties expressly set forth herein or therein as determined by a court of competent jurisdiction in a final non-appealable judgment. Without limiting the generality of the foregoing, the Administrative Agent may consult with legal counsel (including its own counsel or counsel for the Borrower or any other Loan Party), independent public accountants and other experts selected by it and, to the extent permitted under Applicable Law, shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. Neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel: (a) makes any warranty or representation to any Lender or any other Person, or shall be responsible to any Lender or any other Person for any statement, warranty or representation made or deemed made by the Borrower, any other Loan Party or any other Person in or in connection with this Agreement or any other Loan Document; (b) shall have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Loan Document or the satisfaction of any conditions precedent under this Agreement or any Loan Document on the part of the Borrower or other Persons, or to inspect the property, books or records of the Borrower or any other Person; (c) shall be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document, any other instrument or document furnished pursuant thereto or any collateral covered thereby or the perfection or priority of any Lien in favor of the Administrative Agent on behalf of the Lenders and the Specified Swap Providers in any such collateral; (d) shall have any liability in respect of any recitals, statements, certifications, representations or warranties contained in any of the Loan Documents or any other document, instrument, agreement, certificate or statement delivered in connection therewith; and (e) shall incur any liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telephone, telecopy or electronic mail) believed by it to be genuine and signed, sent or given by the proper party or parties. The Administrative Agent may execute any of its duties under the Loan Documents by or through agents, employees or attorneys-in-fact and shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable judgment.
Section 12.8    Indemnification of Administrative Agent.





Each Lender agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) pro rata in accordance with such Lender's respective Commitment Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs and expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against the Administrative Agent (in its capacity as Administrative Agent but not as a Lender) in any way relating to or arising out of the Loan Documents, any transaction contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under the Loan Documents (collectively, “ Indemnifiable Amounts ”); provided , however , that no Lender shall be liable for any portion of such Indemnifiable Amounts to the extent resulting from the Administrative Agent's gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment; provided , however , that no action taken in accordance with the directions of the Requisite Lenders (or all of the Lenders, if expressly required hereunder) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limiting the generality of the foregoing, each Lender agrees to reimburse the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) promptly upon demand for its ratable share of any out‑of‑pocket expenses (including the reasonable fees and expenses of the counsel to the Administrative Agent) incurred by the Administrative Agent in connection with the preparation, negotiation, execution, administration, or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or legal advice with respect to the rights or responsibilities of the parties under, the Loan Documents, any suit or action brought by the Administrative Agent to enforce the terms of the Loan Documents and/or collect any Obligations, any “lender liability” suit or claim brought against the Administrative Agent and/or the Lenders, and any claim or suit brought against the Administrative Agent and/or the Lenders arising under any Environmental Laws. Such out‑of‑pocket expenses (including counsel fees) shall be advanced by the Lenders on the request of the Administrative Agent notwithstanding any claim or assertion that the Administrative Agent is not entitled to indemnification hereunder upon receipt of an undertaking by the Administrative Agent that the Administrative Agent will reimburse the Lenders if it is actually and finally determined by a court of competent jurisdiction that the Administrative Agent is not so entitled to indemnification. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder or under the other Loan Documents and the termination of this Agreement. If the Borrower shall reimburse the Administrative Agent for any Indemnifiable Amount following payment by any Lender to the Administrative Agent in respect of such Indemnifiable Amount pursuant to this Section, the Administrative Agent shall share such reimbursement on a ratable basis with each Lender making any such payment.
Section 12.9    Lender Credit Decision, Etc.

Each of the Lenders expressly acknowledges and agrees that neither the Administrative Agent nor any of its officers, directors, employees, agents, counsel, attorneys‑in‑fact or other Affiliates has made any representations or warranties to such Lender and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Borrower, any other Loan Party or any other Subsidiary or Affiliate, shall be deemed to constitute any such representation or warranty by the Administrative Agent to any Lender. Each of the Lenders acknowledges that it has made its own credit and legal analysis and decision to enter into this Agreement and the transactions contemplated hereby, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent, or any of their respective officers, directors, employees, agents or counsel, and based on the financial statements of the Borrower, the other Loan Parties, the other Subsidiaries and other Affiliates, and inquiries of such Persons, its independent due diligence of the business and affairs of the Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its review of the Loan Documents, the legal opinions required to be delivered to it hereunder, the advice of its own counsel and such other documents and information as it has deemed appropriate. Each of the Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent or any of their respective officers, directors, employees and agents, and based on such review, advice, documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under the Loan Documents. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Borrower or any other Loan Party of the Loan Documents or any other document referred to or provided for therein or to inspect the properties or books of, or make any other investigation of, the Borrower, any other Loan Party or any other Subsidiary. Except for notices,




reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent under this Agreement or any of the other Loan Documents, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Borrower, any other Loan Party or any other Affiliate thereof which may come into possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys‑in‑fact or other Affiliates. Each of the Lenders acknowledges that the Administrative Agent's legal counsel in connection with the transactions contemplated by this Agreement is only acting as counsel to the Administrative Agent and is not acting as counsel to any Lender.
Section 12.10    Successor Administrative Agent.

The Administrative Agent may resign at any time as Administrative Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Requisite Lenders shall have the right to appoint a successor Administrative Agent which appointment shall, provided no Default or Event of Default exists, be subject to the Borrower's approval, which approval shall not be unreasonably withheld or delayed (except that the Borrower shall, in all events, be deemed to have approved each Lender and any of its Affiliates as a successor Administrative Agent). If no successor Administrative Agent shall have been so appointed in accordance with the immediately preceding sentence, and shall have accepted such appointment, within thirty (30) days after the current Administrative Agent's giving of notice of resignation, then the current Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be an Eligible Assignee. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the current Administrative Agent, and the current Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After any Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article XII shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. Notwithstanding anything contained herein to the contrary, the Administrative Agent may assign its rights and duties under the Loan Documents to any of its Affiliates by giving the Borrower and each Lender prior written notice.
ARTICLE XIII.
Miscellaneous

Section 13.1    Notices.

Unless otherwise provided herein (including, without limitation, as provided in Section 9.1 ), communications provided for hereunder shall be in writing and shall be mailed by a nationally recognized carrier, telecopied, or hand-delivered as follows:
If to the Borrower:
Healthcare Trust of America, Inc.
16435 N. Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
Attn: Kellie S. Pruitt
Telecopy Number:      480-991-0755
Telephone Number:      480-998-3478





With a copy to:
O'Melveny & Myers LLP
Two Embarcadero Center, 28th Floor
San Francisco, California 94111
Attn: Peter T. Healy, Esq.
Telecopy Number:      415-984-8701
Telephone Number:      415-984-8833

If to the Administrative Agent:
Wells Fargo Bank, National Association
1800 Century Park East, 12th Floor
Los Angeles, California 90067
Attn: Derek Evans
Telecopier:      303-741-0867
Telephone:      310-789-8931
If to the Administrative Agent under Article II :
Wells Fargo Bank, National Association
Minneapolis Loan Center
MAC N9303-110
608 Second Avenue S., 11 th Floor
Minneapolis, Minnesota 55402-1916
Attn: Mark Nardi
Telecopier:      866-966-2736
Telephone:      612-316-0114
If to any other Lender:
To such Lender's address or telecopy number as set forth in the applicable Administrative Questionnaire
or, as to each party at such other address as shall be designated by such party in a written notice to the other parties delivered in compliance with this Section; provided , a Lender shall only be required to give notice of any such other address to the Administrative Agent and the Borrower. All such notices and other communications shall be effective (i) if mailed, upon the first to occur of receipt or the expiration of three (3) Business Days after the deposit in the United States Postal Service mail, postage prepaid and addressed to the address of the Borrower or the Administrative Agent and Lenders at the addresses specified; (ii) if telecopied, when transmitted; (iii) if hand delivered or sent by overnight courier, when delivered; or (iv) if delivered in accordance with Section 9.1 to the extent applicable; provided , however , that, in the case of the immediately preceding clauses (i), (ii) and (iii), non-receipt of any communication as of the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery




shall be deemed receipt of such communication. Notwithstanding the immediately preceding sentence, all notices or communications to the Administrative Agent or any Lender under Article II shall be effective only when actually received. None of the Administrative Agent or any Lender shall incur any liability to any Loan Party (nor shall the Administrative Agent incur any liability to the Lenders) for acting upon any telephonic notice referred to in this Agreement which the Administrative Agent or such Lender, as the case may be, believes in good faith to have been given by a Person authorized to deliver such notice or for otherwise acting in good faith hereunder. Failure of a Person designated to get a copy of a notice to receive such copy shall not affect the validity of notice properly given to another Person.
Section 13.2    Expenses.

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable and actually incurred costs and expenses incurred in connection with the preparation, negotiation and execution of, and any amendment, supplement or modification to, any of the Loan Documents (including, due diligence expense and reasonable travel expenses related to closing), and the consummation of the transactions contemplated hereby and thereby, including the reasonable and actually incurred fees and disbursements of counsel to the Administrative Agent and all reasonable and actually incurred costs and expenses of the Administrative Agent in connection with the use of IntraLinks, SyndTrak or other similar information transmission systems in connection with the Loan Documents and of the Administrative Agent in connection with the review of Properties for inclusion in calculations required hereunder, and the fees and disbursements of counsel to the Administrative Agent relating to all such activities, (b) to pay or reimburse the Administrative Agent and the Lenders for all their actually incurred costs and expenses incurred in connection with the enforcement or preservation of any rights under the Loan Documents and the Fee Letter, including the actually incurred fees and disbursements of their respective counsel and any payments in indemnification or otherwise payable by the Lenders to the Administrative Agent pursuant to the Loan Documents, (c) to pay, and indemnify and hold harmless the Administrative Agent and the Lenders from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure to pay or delay in paying, documentary, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of any of the Loan Documents, or consummation of any amendment, supplement or modification of, or any waiver or consent under or in respect of, any Loan Document and (d) to the extent not already covered by any of the preceding subsections, to pay or reimburse the actually incurred fees and disbursements of counsel to the Administrative Agent and any Lender incurred in connection with the representation of the Administrative Agent or such Lender in any matter relating to or arising out of any bankruptcy or other proceeding of the type described in Sections 11.1(h) or 11.1(i) , including, without limitation (i) any motion for relief from any stay or similar order, (ii) the negotiation, preparation, execution and delivery of any document relating to the Obligations and (iii) the negotiation and preparation of any debtor‑in‑possession financing or any plan of reorganization of the Borrower or any other Loan Party, whether proposed by the Borrower, such Loan Party, the Lenders or any other Person, and whether such fees and expenses are incurred prior to, during or after the commencement of such proceeding or the confirmation or conclusion of any such proceeding. If the Borrower shall fail to pay any amounts required to be paid by it pursuant to this Section, the Administrative Agent and/or the Lenders may pay such amounts on behalf of the Borrower and such amounts shall be deemed to be Obligations owing hereunder.
Section 13.3    Stamp, Intangible and Recording Taxes.

The Borrower will pay any and all stamp, excise, intangible, registration, recordation and similar taxes, fees or charges and shall indemnify the Administrative Agent and each Lender against any and all liabilities with respect to or resulting from any delay in the payment or omission to pay any such taxes, fees or charges, which may be payable or determined to be payable in connection with the execution, delivery, recording, performance or enforcement of this Agreement, the Notes and any of the other Loan Documents, the amendment, supplement, modification or waiver of or consent under this Agreement, the Notes or any of the other Loan Documents or the perfection of any rights or Liens under this Agreement, the Notes or any of the other Loan Documents.
Section 13.4    Setoff.

Subject to Section 3.3 and in addition to any rights now or hereafter granted under Applicable Law and not




by way of limitation of any such rights, the Borrower hereby authorizes the Administrative Agent, each Lender, each Affiliate of the Administrative Agent, or any Lender, and each Participant, at any time or from time to time while an Event of Default exists, without notice to the Borrower or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender, an Affiliate of or a Lender, or a Participant, subject to receipt of the prior written consent of the Requisite Lenders exercised in their sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender, any Affiliate of the Administrative Agent, or such Lender, or such Participant, to or for the credit or the account of the Borrower against and on account of any of the Obligations, irrespective of whether or not any or all of the Loans and all other Obligations have been declared to be, or have otherwise become, due and payable as permitted by Section 11.2 , and although such Obligations shall be contingent or unmatured.
Section 13.5    Litigation; Jurisdiction; Other Matters; Waivers.

(a)      EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE FEE LETTER OR IN CONNECTION WITH OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.
(b)      THE BORROWER 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 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, 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 MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c)      THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND




COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWER AT ITS ADDRESS FOR NOTICES PROVIDED FOR HEREIN. SHOULD THE BORROWER FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER THE MAILING THEREOF, THE BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.
(d)      THE PROVISIONS OF THIS SECTION 13.5 HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.
Section 13.6    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 the Borrower may not assign or otherwise transfer any of its rights or obligations, as applicable, hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of the immediately following subsection (b), (ii) by way of participation in accordance with the provisions of the immediately following subsection (d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of the immediately following subsection (f) (and, subject to the last sentence of the immediately following subsection (b), 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 the immediately following subsection (d) and, to the extent expressly contemplated hereby, the Related Parties of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders . Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts .
(A) in the case of an assignment of the entire remaining amount of an assigning Lender's Commitment and the Loans at the time owing to it, or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in the immediately preceding subsection (A), 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 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 of a Commitment, unless each of the Administrative Agent and, so long as no Default or Event of Default shall exist, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided , however , that if, after giving effect to such assignment, the amount of the Commitment held by such assigning Lender or the outstanding principal balance of the Loans of such assigning Lender, as applicable, would be less than $5,000,000, then such assigning Lender shall assign the entire amount of its Commitment and the Loans at the time owing to it.
(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 Loan or the Commitment assigned.
(iii) Required Consents . No consent shall be required for any assignment except to the extent




required by clause (i)(B) of this subsection (b) and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) a Default or Event of Default shall exist at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof; and
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of a Commitment if such assignment is to a Person that is not already a Lender with a Commitment, an Affiliate of such a Lender or an Approved Fund with respect to such a Lender.
(iv) Assignment and Assumption; Notes . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $4,500 ($7,500 if such Lender is a Defaulting Lender as such time) for each assignment, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. If requested by the transferor Lender or the Assignee, upon the consummation of any assignment, the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that new Notes are issued to the Assignee and such transferor Lender, as appropriate.
(v) No Assignment to Borrower . No such assignment shall be made to the Borrower or any of the Borrower's Affiliates, any other Loan Party or any of their respective Subsidiaries.
(vi) No Assignment to Natural Persons . No such assignment shall be made to a natural person.
(vii) Assignments by Specified Swap Provider . If the assigning Lender (or its Affiliate) is a Specified Swap Provider and if after giving effect to such assignment such Lender will hold no further Loans or Commitments under this Agreement, such Lender shall undertake such assignment only contemporaneously with an assignment by such Lender (or its Affiliate, as the case may be) of all of its Specified Swap Contracts to the Eligible Assignee or another Lender (or Affiliate thereof).
(viii) Amendments to Schedule 1.1(a) . The Administrative Agent may unilaterally amend Schedule 1.1(a) attached hereto to reflect any permitted assignment effected hereunder, subject to concurrent written notice to the Borrower.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to the immediately following Section 13.6(c) , 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 5.4 , 13.2 and 13.10 and the other provisions of this Agreement and the other Loan Documents as provided in Section 13.11 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph 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 13.6(d) below.
(c) Register . The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Principal Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may 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 the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations . Any Lender may at any time, without the consent of, but subject to notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower'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 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 Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to (w) increase such Lender's Commitment, (x) extend the date fixed for the payment of principal on the Loans or portions thereof owing to such Lender, (y) reduce the rate at which interest is payable thereon or (z) release any Guarantor from its Obligations under the Guaranty. Subject to the immediately following Section 13.6(e) , the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.10 , 5.1 , 5.4 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by Applicable Law, each Participant also shall be entitled to the benefits of Section 13.4 as though it were a Lender, provided such Participant agrees to be subject to Section 3.3 as though it were a Lender.
(e) Limitations upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Sections 3.10 and 5.1 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.10 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower and the Administrative Agent, to comply with Section 3.10(c) as though it were a Lender.
(f) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) No Registration . Each Lender agrees that, without the prior written consent of the Borrower and the Administrative Agent, it will not make any assignment hereunder in any manner or under any circumstances that would require registration or qualification of, or filings in respect of, any Loan or Note under the Securities Act or any other securities laws of the United States of America or of any other jurisdiction.

Section 13.7    Amendments and Waivers.

(a) Generally . Except as otherwise expressly provided in this Agreement, (i) any consent or approval required or permitted by this Agreement or any other Loan Document to be given by the Lenders may be given, (ii) any term of this Agreement or of any other Loan Document (other than any Fee Letter) may be amended, (iii) the performance or observance by the Borrower, any other Loan Party or any other Subsidiary of any terms of this Agreement or such other Loan Document (other than any Fee Letter) may be waived, and (iv) the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Requisite Lenders (or the Administrative Agent at the written direction of the Requisite Lenders), and, in the case of an amendment to any Loan Document, the written consent of each Loan Party which is party thereto.
(b) Certain Requisite Lender Consents . Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in writing, and signed by the Requisite Lenders (which must include the Lender then acting as Administrative Agent), do any of the following:
1. amend Section 10.1 , waive the Borrower's performance of observance of any of the covenants set forth in such Section, or waive any Default or Event of Default occurring under Section 11.1 resulting from a violation of such Section; or
2. modify the definitions of the terms “EBITDA”, “Total Fixed Charges”, “Total Asset Value”, “Indebtedness”, “Interest Expense”, “Total Indebtedness”, “Total Leverage Ratio”, “Unencumbered Asset Value”, or “Unencumbered NOI” (or the definitions used in any of the foregoing such definitions or the percentages or rates used in the calculation thereof).
(c) Consent of Lenders Directly Affected . In addition to the foregoing requirements, no amendment,




waiver or consent shall, unless in writing, and signed by each of the Lenders directly and adversely affected thereby (or the Administrative Agent at the written direction of such Lenders), do any of the following:
1. increase the Commitments of the Lenders (excluding any increase as a result of an assignment of Commitments permitted under Section 13.6 and any increases contemplated under Section 2.9 ) or subject the Lenders to any additional obligations except for increases contemplated under Section 2.9 ;
2. reduce the principal of, or interest that has accrued or the rates of interest that will be charged on the outstanding principal amount of, any Loans or other Obligations;
3. reduce the amount of any Fees payable to the Lenders hereunder, other than Fees payable under any Fee Letter;
4. modify the definition of “Maturity Date”, otherwise postpone any date fixed for any payment of principal of, or interest on, any Loans or for the payment of Fees or any other Obligations, beyond the Maturity Date;
5. modify the definitions of “Commitment Percentage” or amend or otherwise modify the provisions of Section 3.2 ;
6. amend this Section or amend the definitions of the terms used in this Agreement or the other Loan Documents insofar as such definitions affect the substance of this Section;
7. modify the definition of the term “Requisite Lenders” or modify in any other manner the number or percentage of the Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof;
8. release any Guarantor from its obligations under the Guaranty except as contemplated by Section 8.12 ; or
9. waive a Default or Event of Default under Section 11.1(a) , except as provided in Section 11.7 .
(d) Amendment of Administrative Agent's Duties, Etc . No amendment, waiver or consent unless in writing and signed by the Administrative Agent, in addition to the Lenders required hereinabove to take such action, shall affect the rights or duties of the Administrative Agent under this Agreement or any of the other Loan Documents. Any amendment, waiver or consent with respect to any Loan Document that (i) diminishes the rights of a Specified Swap Provider in a manner or to an extent dissimilar to that affecting the Lenders or (ii) increases the liabilities or obligations of a Specified Swap Provider shall, in addition to the Lenders required hereinabove to take such action, require the consent of the Lender that is (or having an Affiliate that is) such Specified Swap Provider. No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon and any amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose set forth therein. No course of dealing or delay or omission on the part of the Administrative Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. Any Event of Default occurring hereunder shall continue to exist until such time as such Event of Default is waived in writing in accordance with the terms of this Section, notwithstanding any attempted cure or other action by the Borrower, any other Loan Party or any other Person subsequent to the occurrence of such Event of Default. Except as otherwise explicitly provided for herein or in any other Loan Document, no notice to or demand upon the Borrower shall entitle the Borrower to other or further notice or demand in similar or other circumstances.

Section 13.8    Non-Liability of Administrative Agent and Lenders.

The relationship between the Borrower, on the one hand, and the Lenders and the Administrative Agent, on the other hand, shall be solely that of borrower and lender. None of the Administrative Agent or any Lender shall have any fiduciary responsibilities to the Borrower and no provision in this Agreement or in any of the other Loan Documents, and no course of dealing between or among any of the parties hereto, shall be deemed to create any fiduciary duty owing by the Administrative Agent or any Lender to any Lender, the Borrower, any Subsidiary or any other Loan Party. None of the Administrative Agent or any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower's business or operations.
Section 13.9    Confidentiality.

Except as otherwise provided by Applicable Law, the Administrative Agent and each Lender shall maintain the confidentiality of all Information (as defined below) in accordance with its customary procedure for handling




confidential information of this nature and in accordance with safe and sound banking practices but in any event may make disclosure: (a) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents, advisors and other representatives on a confidential basis (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 in accordance with this Section 13.9 ); (b) subject to an agreement containing provisions substantially the same as those of this Section 13.9 , to (i) any actual or proposed Assignee, Participant or other transferee in connection with a potential transfer of any Commitment or participation therein as permitted hereunder, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations; (c) as required or requested by any Governmental Authority or representative thereof or pursuant to legal process or in connection with any legal proceedings, or as otherwise required by Applicable Law; (d) to the Administrative Agent's or such Lender's independent auditors and other professional advisors (provided they shall be notified of the confidential nature of the information); (e) in connection with the exercise of any remedies under any Loan Document (or any Specified Swap Contract) or any action or proceeding relating to any Loan Document (or any such Specified Swap Contract) or the enforcement of rights hereunder or thereunder; (f) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 13.9 actually known by the Administrative Agent or such Lender to be a breach of this Section 13.9 or (ii) becomes available to the Administrative Agent, any Lender or any Affiliate of the Administrative Agent or any Lender on a non-confidential basis from a source other than the Borrower or any Affiliate of the Borrower; (g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulatory or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) having or purporting to have jurisdiction over it; (h) to bank trade publications, such information to consist of deal terms and other information customarily found in such publications; (i) to any other party hereto; and (j) with the consent of the Borrower. Notwithstanding the foregoing, the Administrative Agent and each Lender may disclose any such confidential information, without notice to the Borrower or any other Loan Party, to Governmental Authorities in connection with any regulatory examination of the Administrative Agent or such Lender or in accordance with the regulatory compliance policy of the Administrative Agent or such Lender. As used in this Section 13.9 , the term “Information” means all information received from the Borrower, any other Loan Party, any other Subsidiary or Affiliate relating to any Loan Party or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to disclosure by the Borrower, any other Loan Party, any other Subsidiary or any Affiliate, provided that, in the case of any such information received from the Borrower, any other Loan Party, any other Subsidiary or any Affiliate 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 13.9 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.
Section 13.10    Indemnification.

(a) The Borrower shall and hereby agrees to indemnify, defend and hold harmless the Administrative Agent, the Lenders, all of the Affiliates of each of the Administrative Agent or any of the Lenders, and their respective directors, officers, shareholders, agents and employees (each referred to herein as an “ Indemnified Party ”) from and against any and all of the following (collectively, the “ Indemnified Costs ”): losses, costs, claims, penalties, damages, liabilities, deficiencies, judgments or expenses of every kind and nature (including, without limitation, amounts paid in settlement, court costs and the actually incurred fees and disbursements of counsel incurred in connection with any litigation, investigation, claim or proceeding or any advice rendered in connection therewith, but excluding Indemnified Costs specifically covered by Section 3.10 or 5.1 or expressly excluded from the coverage of such Sections) incurred by an Indemnified Party in connection with, arising out of, or by reason of, any suit, cause of action, claim, arbitration, investigation or settlement, consent decree or other proceeding (the foregoing referred to herein as an “ Indemnity Proceeding ” ) which is in any way related directly or indirectly to: (i) this Agreement or any other Loan Document or the transactions contemplated thereby; (ii)  Loans hereunder; (iii) any actual or proposed use by the Borrower of the proceeds of the Loans; (iv) the Administrative Agent's or any Lender's entering into this Agreement; (v) the fact that the Administrative Agent and the Lenders have established the credit facility evidenced hereby in favor of the Borrower; (vi) the fact that the Administrative Agent and the Lenders are creditors of the Borrower and have or are alleged to have information regarding the financial condition, strategic plans or business operations of the Borrower and the




Subsidiaries; (vii) the fact that the Administrative Agent and the Lenders are material creditors of the Borrower and are alleged to influence directly or indirectly the business decisions or affairs of the Borrower and the Subsidiaries or their financial condition; (viii) the exercise of any right or remedy the Administrative Agent or the Lenders may have under this Agreement or the other Loan Documents; (ix) any civil penalty or fine assessed by the OFAC against, and all costs and expenses (including actually incurred counsel fees and disbursements) incurred in connection with defense thereof by, the Administrative Agent or any Lender as a result of conduct of the Borrower, any other Loan Party or any other Subsidiary that violates a sanction administered or enforced by the OFAC; or (x) any violation or non‑compliance by the Borrower or any Subsidiary of any Applicable Law (including any Environmental Law) including, but not limited to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state taxing authority or (B) any Governmental Authority or other Person under any Environmental Law, including any Indemnity Proceeding commenced by a Governmental Authority or other Person seeking remedial or other action to cause the Borrower or its Subsidiaries (or its respective properties) (or the Administrative Agent and/or the Lenders as successors to the Borrower) to be in compliance with such Environmental Laws; provided , however , that the Borrower shall not be obligated to indemnify any Indemnified Party for any acts or omissions of such Indemnified Party in connection with matters described in this Section 13.10(a) to the extent arising from the gross negligence or willful misconduct of such Indemnified Party, as determined by a court of competent jurisdiction in a final, non-appealable judgment.
(b) The Borrower's indemnification obligations under this Section 13.10 shall apply to all Indemnity Proceedings arising out of, or related to, the foregoing whether or not an Indemnified Party is a named party in such Indemnity Proceeding. In this connection, this indemnification shall cover all Indemnified Costs of any Indemnified Party in connection with any deposition of any Indemnified Party or compliance with any subpoena (including any subpoena requesting the production of documents). This indemnification shall, among other things, apply to any Indemnity Proceeding commenced by other creditors of the Borrower or any Subsidiary, any shareholder of the Borrower or any Subsidiary (whether such shareholder(s) are prosecuting such Indemnity Proceeding in their individual capacity or derivatively on behalf of the Borrower), any account debtor of the Borrower or any Subsidiary or by any Governmental Authority.
(c) This indemnification shall apply to any Indemnity Proceeding arising during the pendency of any bankruptcy proceeding filed by or against the Borrower and/or any Subsidiary.
(d) All reasonable and actually incurred fees and expenses of, and all amounts paid to third‑persons by, or on behalf of, an Indemnified Party shall be advanced by the Borrower upon the written request of such Indemnified Party notwithstanding any claim or assertion by the Borrower that such Indemnified Party is not entitled to indemnification hereunder upon receipt of an undertaking by such Indemnified Party that such Indemnified Party will reimburse the Borrower if it is actually and finally determined by a court of competent jurisdiction that such Indemnified Party is not so entitled to indemnification hereunder.
(e) An Indemnified Party may conduct its own investigation and defense of, and may formulate its own strategy with respect to, any Indemnity Proceeding covered by this Section and, as provided above, all Indemnified Costs incurred by such Indemnified Party shall be reimbursed by the Borrower. No action taken by legal counsel chosen by an Indemnified Party in investigating or defending against any such Indemnity Proceeding shall vitiate or in any way impair the obligations and duties of the Borrower hereunder to indemnify and hold harmless each such Indemnified Party; provided , however , that if (i) the Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has provided evidence reasonably satisfactory to such Indemnified Party that the Borrower has the financial wherewithal to reimburse such Indemnified Party for any amount paid by such Indemnified Party with respect to such Indemnity Proceeding, such Indemnified Party shall not settle or compromise any such Indemnity Proceeding without the prior written consent of the Borrower (which consent shall not be unreasonably withheld or delayed). Notwithstanding the foregoing, an Indemnified Party may settle or compromise any such Indemnity Proceeding without the prior written consent of the Borrower where (x) no monetary relief is sought against such Indemnified Party in such Indemnity Proceeding or (y) there is an allegation of a violation of law by such Indemnified Party.
(f) If and to the extent that the obligations of the Borrower under this Section 13.10 are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under Applicable Law.
(g) The Borrower's obligations under this Section shall survive any termination of this Agreement and the other Loan Documents and the payment in full in cash of the Obligations, and are in addition to, and not in substitution of, any of the other obligations set forth in this Agreement or any other Loan Document to which it is a




party.
References in this Section 13.10 to “Lender” or “Lenders” shall be deemed to include such Persons (and their Affiliates) in their capacity as Specified Swap Providers.
Section 13.11    Termination; Survival.

This Agreement shall terminate at such time as (a) all of the Commitments have been terminated, (b)  none of the Lenders is obligated any longer under this Agreement to make any Loans and (c) all Obligations (other than obligations which survive as provided in the following sentence) have been paid and satisfied in full. The indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of Sections 3.10 , 5.1 , 5.4 , 12.8 , 13.2 and 13.10 and any other provision of this Agreement and the other Loan Documents, and the provisions of Section 13.5 , shall continue in full force and effect and shall protect the Administrative Agent and the Lenders (i) notwithstanding any termination of this Agreement, or of the other Loan Documents, against events arising after such termination as well as before and (ii) at all times after any such party ceases to be a party to this Agreement with respect to all matters and events existing on or prior to the date such party ceased to be a party to this Agreement.
Section 13.12    Severability of Provisions.

If any provision of this Agreement or the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid or unenforceable, that provision shall be deemed severed from the Loan Documents, and the validity, legality and enforceability of the remaining provisions shall remain in full force as though the invalid, illegal, or unenforceable provision had never been part of the Loan Documents.
Section 13.13    GOVERNING LAW.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 13.14    Counterparts.

To facilitate execution, this Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts as may be convenient or required (which may be effectively delivered by facsimile, in portable document format (“ PDF ”) or other similar electronic means). It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single document. It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.
Section 13.15    Obligations with Respect to Loan Parties.

The obligations of the Borrower to direct or prohibit the taking of certain actions by the other Loan Parties as specified herein shall be absolute and not subject to any defense the Borrower may have that the Borrower does not control such Loan Parties.
Section 13.16    Independence of Covenants.

All covenants hereunder shall be given in any jurisdiction independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
Section 13.17    Limitation of Liability.





None of the Administrative Agent or any Lender, or any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any Lender shall have any liability with respect to, and, to the extent permissible under Applicable Law, the Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by the Borrower in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents or the Fee Letter, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. To the extent permissible under Applicable Law, the Borrower hereby waives, releases, and agrees not to sue the Administrative Agent or any Lender or any of the Administrative Agent's or any Lender's Affiliates, officers, directors, employees, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents, the Fee Letter, or any of the transactions contemplated by this Agreement or financed hereby.
Section 13.18    Entire Agreement.

This Agreement, the Notes, the other Loan Documents and the Fee Letter embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and thereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto.
Section 13.19    Construction.

The Administrative Agent, the Borrower and each Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by the Administrative Agent, the Borrower and each Lender.
Section 13.20    Headings.

The paragraph and section headings in this Agreement are provided for convenience of reference only and shall not affect its construction or interpretation.
Section 13.21    Time.

Time is of the essence with respect to each provision of this Agreement.

[Signatures on Following Pages]

























IN WITNESS WHEREOF , the parties hereto have caused this Credit Agreement to be executed by their authorized officers all as of the day and year first above written.


Healthcare Trust of America Holdings, LP,
a Delaware limited partnership

By:      Healthcare Trust of America, Inc.,
its General Partner


By:     
Name: Kellie S. Pruitt
Title: Chief Financial Officer























[Signatures Continued on Next Page]























Signature Page to Credit Agreement with Healthcare Trust of America Holdings, LP


Wells Fargo Bank, National Association, as Administrative Agent and as a Lender


By:     
Name: Dale Northup
Title: Vice President






[Signatures Continued on Next Page]
















































Signature Page to Credit Agreement with Healthcare Trust of America Holdings, LP


CAPITAL ONE, N.A.


By:     
Name: Ashish Tandon
Title: Vice President





[Signatures Continued on Next Page]

Signature Page to Credit Agreement with Healthcare Trust of America Holdings, LP


PNC BANK, NATIONAL ASSOCIATION


By:     
Name: Tyler Lowry
Title: Vice President






[Signatures Continued on Next Page]






























Signature Page to Credit Agreement with Healthcare Trust of America Holdings, LP


THE HUNTINGTON NATIONAL BANK,
a national banking association


By:     
Name: Michael L. Kauffman
Title: Senior Vice President




[Signatures Continued on Next Page]





G-1














































Error! Unknown document property name.
Signature Page to Credit Agreement with Healthcare Trust of America Holdings, LP


NATIONAL BANK OF ARIZONA,
a national banking association


By:     
Name: Robert Cooper
Title: Vice President





[End signatures.]





GUARANTY
THIS GUARANTY , dated as of July 20, 2012 (this “ Guaranty ”), executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “ Guarantor ” and collectively, the “ Guarantors ”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “ Administrative Agent ”) for the Lenders under that certain Credit Agreement dated as of July 20, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), by and among Healthcare Trust of America Holdings, LP, a Delaware limited partnership (the “ Borrower ”), the financial institutions party thereto and their assignees under Section 13.6 thereof (the “ Lenders ”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “ Guarantied Party ” and collectively, the “ Guarantied Parties ”).
WHEREAS , pursuant to the Credit Agreement, the Administrative Agent and the Lenders have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;
WHEREAS , each Guarantor is owned or controlled by the Borrower, or is otherwise an Affiliate of the Borrower;
WHEREAS , the Borrower, each Guarantor and the other Subsidiaries of the Borrower, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Administrative Agent and the Lenders, through their collective efforts;
WHEREAS , each Guarantor acknowledges that it will receive direct and indirect benefits from the Administrative Agent and, the Lenders making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, each Guarantor is willing to guarantee the Borrower's obligations to the Administrative Agent and the Lenders on the terms and conditions contained herein; and
WHEREAS , each Guarantor's execution and delivery of this Guaranty is a condition to the Administrative Agent and the other Guarantied Parties' making, and continuing to make, such financial accommodations to the Borrower.
NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor agrees as follows:
Section 1. Guaranty . Each Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (collectively referred to as the “ Guarantied Obligations ”): (a) all indebtedness and obligations owing by the Borrower or any other Loan Party to any Lender or the Administrative Agent under or in connection with the Credit Agreement and any other Loan Document to which the Borrower or such other Loan Party is a party, including, without limitation, the repayment of all principal of the Loans, and the payment of all interest, fees, charges, reasonable attorneys' fees and other amounts payable to any Lender or the Administrative Agent thereunder or in connection therewith; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all documented out-of-pocket expenses, including, without limitation, attorneys' fees and disbursements, that are actually incurred by the Administrative Agent or any other Guarantied Party in the enforcement of any of the foregoing or any obligation of such Guarantor hereunder and (d) all other Obligations.
Section 2. Guaranty of Payment and Not of Collection . This Guaranty is a guaranty of payment, and not of collection, and a debt of each Guarantor for its own account. Accordingly, the Guarantied Parties shall not be obligated or required before enforcing this Guaranty against any Guarantor: (a) to pursue any right or remedy the Guarantied Parties may have against the Borrower, any other Loan Party or any other Person or commence any suit or other proceeding against the Borrower, any other Loan Party or any other Person in any court or other tribunal; (b) to make




any claim in a liquidation or bankruptcy of the Borrower, any other Loan Party or any other Person; or (c) to make demand of the Borrower, any other Loan Party or any other Person or to enforce or seek to enforce or realize upon any collateral security held by the Guarantied Parties which may secure any of the Guarantied Obligations.
Section 3. Guaranty Absolute . Each Guarantor guarantees that the Guarantied Obligations will be paid strictly in accordance with the terms of the documents evidencing the same, regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Guarantied Parties with respect thereto. The liability of each Guarantor under this Guaranty shall be absolute, irrevocable and unconditional in accordance with its terms and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than in accordance with Section 20 hereof), including, without limitation, the following (whether or not such Guarantor consents thereto or has notice thereof):
(a)      (i) any change in the amount, interest rate or due date or other term of any of the Guarantied Obligations, (ii) any change in the time, place or manner of payment of all or any portion of the Guarantied Obligations, (iii) any amendment or waiver of, or consent to the departure from or other indulgence with respect to, the Credit Agreement, any other Loan Document, any Specified Swap Contract or any other document or instrument evidencing or relating to any Guarantied Obligations, or (iv) any waiver, renewal, extension, addition, or supplement to, or deletion from, or any other action or inaction under or in respect of, the Credit Agreement, any of the other Loan Documents, or any other documents, instruments or agreements relating to the Guarantied Obligations or any other instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;
(b)      any lack of validity or enforceability of the Credit Agreement or any of the other Loan Documents (collectively, the “ Credit Documents ”) or any other document, instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;
(c)      any furnishing to the Guarantied Parties of any security for the Guarantied Obligations, or any sale, exchange, release or surrender of, or realization on, any collateral securing any of the Guarantied Obligations;
(d)      any settlement or compromise of any of the Guarantied Obligations, any security therefor, or any liability of any other party with respect to the Guarantied Obligations, or any subordination of the payment of the Guarantied Obligations to the payment of any other liability of the Borrower or any other Loan Party;
(e)      any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Guarantor, the Borrower, any other Loan Party or any other Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding;
(f)      any act or failure to act by the Borrower, any other Loan Party or any other Person which may adversely affect such Guarantor's subrogation rights, if any, against the Borrower to recover payments made under this Guaranty;
(g)      any non-perfection or impairment of any security interest or other Lien on any collateral, if any, securing in any way any of the Guarantied Obligations;
(h)      any application of sums paid by the Borrower, any Guarantor or any other Person with respect to the liabilities of the Borrower to the Guarantied Parties, regardless of what liabilities of the Borrower remain unpaid;
(i)      any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the exercise thereof; or
(j)      any other circumstance which might otherwise constitute a defense available to, or a discharge of, a Guarantor hereunder (other than indefeasible payment in full (other than unasserted indemnification obligations)).
Section 4. Action with Respect to Guarantied Obligations . The Guaranteed Parties may, at any time and from time to time, without the consent of, or notice to, any Guarantor, and without discharging any Guarantor from its




obligations hereunder, take any and all actions described in Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of any of the Guarantied Obligations, including, but not limited to, extending or shortening the time of payment of any of the Guarantied Obligations or changing the interest rate that may accrue on any of the Guarantied Obligations; (b) amend, modify, alter or supplement the Credit Agreement or any other Credit Document; (c) sell, exchange, release or otherwise deal with all, or any part, of any collateral securing any of the Guarantied Obligations; (d) release any Loan Party or other Person liable in any manner for the payment or collection of the Guarantied Obligations; (e) exercise, or refrain from exercising, any rights against the Borrower, any other Loan Party or any other Person; and (f) apply any sum, by whomsoever paid or however realized, to the Guarantied Obligations in such order as the Guarantied Parties shall elect.
Section 5. Representations and Warranties . Each Guarantor hereby makes to the Administrative Agent and the other Guarantied Parties all of the representations and warranties made by the Borrower with respect to or in any way relating to such Guarantor in the Credit Agreement and the other Credit Documents, as if the same were set forth herein in full.
Section 6. Covenants . Each Guarantor will comply with all covenants with which the Borrower is to cause such Guarantor to comply under the terms of the Credit Agreement or any of the other Loan Documents.
Section 7. Waiver . Each Guarantor, to the fullest extent permitted by Applicable Law, hereby waives: (a) any defense based upon any legal disability or other defense of Borrower, any other guarantor or other person, or by reason of the cessation or limitation of the liability of Borrower from any cause other than full payment of all sums payable under the Notes or any of the other Loan Documents; (b) any defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of Borrower or any principal of Borrower or any defect in the formation of Borrower or any principal of Borrower; (c) any defense based upon the application by Borrower of the proceeds of the Loan for purposes other than the purposes represented by Borrower to Lenders or intended or understood by Lenders or Guarantor; (d) any and all rights and defenses arising out of an election of remedies by Lenders, such as non-judicial foreclosure with respect to security for a guaranteed obligation, even though that election of remedies has destroyed Guarantor's rights of subrogation and reimbursement against the principal by the operation of law; (e) any defense based upon Lenders' or Administrative Agent's failure to disclose to Guarantor any information concerning Borrower's financial condition or any other circumstances bearing on Borrower's ability to pay all sums payable under the Notes or any of the other Loan Documents; (f) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (g) any defense based upon Lenders' election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or any successor statute; (h) any defense based upon any borrowing or any grant of a security interest under Section 364 of the Federal Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy which Lenders may have against Borrower and any right to participate in, or benefit from, any security for the Notes or the other Loan Documents now or hereafter held by Lenders; and (j) notice of acceptance hereof or any presentment, demand, protest, or notice of any kind (except to the extent expressly required under the Credit Agreement or the other Loan Documents, as applicable), and any other act or thing, or omission or delay to do any other act or thing, which in any manner or to any extent might vary the risk of such Guarantor or which otherwise might operate to discharge such Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan . If the Guarantied Parties or any of them are prevented under Applicable Law or otherwise from demanding or accelerating payment of any of the Guarantied Obligations by reason of any automatic stay or otherwise, the Administrative Agent and/or the other Guarantied Parties shall be entitled to receive from each Guarantor, upon demand therefor, the sums which otherwise would have been due had such demand or acceleration occurred.
Section 9. Reinstatement of Guarantied Obligations . If claim is ever made on the Administrative Agent or any other Guarantied Party for repayment or recovery of any amount or amounts received in payment or on account of any of the Guarantied Obligations, and the Administrative Agent or such other Guarantied Party repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body of competent jurisdiction, or (b) any settlement or compromise of any such claim effected by the Administrative Agent or such other




Guarantied Party with any such claimant (including the Borrower or a trustee in bankruptcy for the Borrower), then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding on it, notwithstanding any revocation hereof or the cancellation of the Credit Agreement, any of the other Loan Documents, or any other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the Administrative Agent or such other Guarantied Party for the amounts so repaid or recovered to the same extent as if such amount had never originally been paid to the Administrative Agent or such other Guarantied Party; provided that the Administrative Agent or such other Guaranties Party shall consult in good faith with the Guarantors prior to entering into any settlement or compromise of any such claim with any such claimant.
Section 10. Subrogation . Upon the making by any Guarantor of any payment hereunder for the account of the Borrower, such Guarantor shall be subrogated to the rights of the payee against the Borrower; provided , however , that such Guarantor shall not enforce any right or receive any payment by way of subrogation or otherwise take any action in respect of any other claim or cause of action such Guarantor may have against the Borrower arising by reason of any payment or performance by such Guarantor pursuant to this Guaranty, unless and until all of the Guarantied Obligations have been indefeasibly paid and performed in full (other than unasserted indemnification obligations). If any amount shall be paid to such Guarantor on account of or in respect of such subrogation rights or other claims or causes of action, such Guarantor shall hold such amount in trust for the benefit of the Guarantied Parties and shall forthwith pay such amount to the Administrative Agent to be credited and applied against the Guarantied Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement or to be held by the Administrative Agent as collateral security for any Guarantied Obligations existing. Until the Guarantied Obligations have been repaid in full, each Guarantor hereby agrees to forebear from enforcing to the fullest extent possible any and all claims such Guarantor may have against any Loan Party arising out of any payment by such Guarantor to the Administrative Agent and the Lenders of any of the obligations pursuant to this Guaranty, including, but not limited to, all such claims of such Guarantor arising out of any right of subrogation, indemnity, reimbursement, contribution, exoneration, payment or any other claim, cause of action, right or remedy against the Borrower, whether such claim arises at law, in equity, or out of any written or oral agreement between or among such Guarantor, the Borrower or otherwise. The waivers set forth above are intended by each Guarantor, the Administrative Agent and the Lenders to be for the benefit of each Loan Party, and such waivers shall be enforceable by such Loan Party, or any of their successors or assigns, as an absolute defense to any action by such Guarantor against such Loan Party or the assets of such Loan Party, which action arises out of any payment by such Guarantor to the Administrative Agent or Lenders upon any of these obligations. The waivers set forth herein may not be revoked by any Guarantor without the prior written consent of the Administrative Agent and each Loan Party.
Section 11. Payments Free and Clear . All sums payable by each Guarantor hereunder, whether of principal, interest, fees, expenses, premiums or otherwise, shall be paid in full, without set-off or counterclaim or any deduction or withholding whatsoever (including any Taxes), and if such Guarantor is required by Applicable Law or by any Governmental Authority to make any such deduction or withholding such Guarantor shall pay to the Administrative Agent and the Lenders such additional amount as will result in the receipt by the Administrative Agent and the Lenders of the full amount payable hereunder had such deduction or withholding not occurred or been required.
Section 12. Set-off . In addition to any rights now or hereafter granted under any of the other Credit Documents or Applicable Law and not by way of limitation of any such rights, each Guarantor hereby authorizes each Guarantied Party and their respective affiliates and each Participant, at any time and from time to time while an Event of Default exists, without any notice to such Guarantor or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender, an affiliate of any of the foregoing, or a Participant, subject to receipt of the prior written consent of the Administrative Agent and Requisite Lenders, exercised in their sole discretion, to set-off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender, or such Participant or any affiliate of the Administrative Agent or such Lender to or for the credit or the account of the Borrower against and on account of any of the Guarantied Obligations, although such obligations shall be contingent or unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable Law, that any Participant may exercise rights of setoff or counterclaim and other rights with respect to its participation as fully as if such Participant were a direct creditor of such Guarantor in the amount of such participation.




Section 13. Subordination . Each Guarantor hereby expressly covenants and agrees for the benefit of the Guarantied Parties that all obligations and liabilities of the Borrower to such Guarantor of whatever description, including, without limitation, all intercompany receivables of such Guarantor from the Borrower (collectively, the “ Junior Claims ”) shall be subordinate and junior in right of payment to all Guarantied Obligations. If an Event of Default shall exist, then no Guarantor shall accept any direct or indirect payment (in cash, property or securities, by setoff or otherwise) from the Borrower on account of or in any manner in respect of any Junior Claim until all of the Guarantied Obligations have been indefeasibly paid in full (other than unasserted indemnification obligations).
Section 14. Avoidance Provisions . It is the intent of each Guarantor, the Administrative Agent and the other Guarantied Parties that in any Proceeding, such Guarantor's maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Guarantied Parties) to be avoidable or unenforceable against such Guarantor in such Proceeding as a result of Applicable Law, including, without limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the “ Bankruptcy Code ”) and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The Applicable Laws under which the possible avoidance or unenforceability of the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Guarantied Parties) shall be determined in any such Proceeding are referred to as the “ Avoidance Provisions ”. Accordingly, to the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Guarantied Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any of the Guarantied Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of any Guarantor hereunder (or any other obligations of such Guarantor to the Guarantied Parties), to be subject to avoidance under the Avoidance Provisions. This Section is intended solely to preserve the rights of the Administrative Agent and the other Guarantied Parties hereunder to the maximum extent that would not cause the obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and no Guarantor or any other Person shall have any right or claim under this Section as against the Guarantied Parties that would not otherwise be available to such Person under the Avoidance Provisions.
Section 15. Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower and the other Loan Parties, and of all other circumstances bearing upon the risk of nonpayment of any of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither of the Administrative Agent nor any other Guarantied Party shall have any duty whatsoever to advise any Guarantor of information regarding such circumstances or risks.
Section 16. Governing Law . THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
SECTION 17. WAIVER OF JURY TRIAL .
(a)      EACH GUARANTOR, AND EACH OF THE Administrative Agent AND THE OTHER GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN SUCH GUARANTOR, THE Administrative Agent OR ANY OF THE OTHER GUARANTIED PARTIES WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE GUARANTORS, THE Administrative Agent AND THE OTHER GUARANTIED PARTIES HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS GUARANTY.
(b)      EACH GUARANTOR, AND EACH OF THE Administrative Agent AND THE OTHER GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, HEREBY AGREES THAT ANY FEDERAL DISTRICT COURT LOCATED IN THE STATE OF NEW YORK OR ANY STATE COURT LOCATED IN SOUTHERN DISTRICT OF NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY




CLAIMS OR DISPUTES BETWEEN OR AMONG THE GUARANTORS, THE ADMINISTRATIVE AGENT OR ANY OF THE OTHER GUARANTIED PARTIES, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY. EACH GUARANTOR AND EACH OF THE GUARANTIED PARTIES EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. EACH GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH GUARANTOR AT ITS ADDRESS FOR NOTICES PROVIDED FOR HEREIN. SHOULD A GUARANTOR FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY DAYS AFTER THE MAILING THEREOF, SUCH GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c)      THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.
Section 18. Loan Accounts . The Administrative Agent and each Lender may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and payable with respect to the Guarantied Obligations arising under or in connection with the Credit Agreement, and in the case of any dispute relating to any of the outstanding amount, payment or receipt of any of the Guarantied Obligations or otherwise, the entries in such books and accounts shall constitute prima facie evidence of the outstanding amount of such Guarantied Obligations and the amounts paid and payable with respect thereto and the other matters set forth therein absent manifest error. The failure of the Administrative Agent or any Lender to maintain such books and accounts shall not in any way relieve or discharge any Guarantor of any of its obligations hereunder.
Section 19. Waiver of Remedies . No delay or failure on the part of the Administrative Agent or any other Guarantied Party in the exercise of any right or remedy it may have against any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent or any other Guarantied Party of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other such right or remedy.
Section 20. Termination . This Guaranty shall remain in full force and effect with respect to each Guarantor until indefeasible payment in full of the Guarantied Obligations (other than unasserted indemnification obligations) and the termination or cancellation of the Credit Agreement and all Specified Swap Contracts in accordance with their respective terms. At the request and sole expense of the Borrower, if any Guarantor is a Subsidiary, it shall be released from its obligations hereunder (i) in accordance with Section 8.12 of the Credit Agreement and (ii) in the event that all the Borrower's Ownership Share of such Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement.
Section 21. Successors and Assigns . Each reference herein to the Administrative Agent or any other Guarantied Party shall be deemed to include such Person's respective successors and assigns (including, but not limited to, any holder of the Guarantied Obligations) in whose favor the provisions of this Guaranty also shall inure, and each reference herein to each Guarantor shall be deemed to include such Guarantor's successors and assigns, upon whom this Guaranty




also shall be binding. The Guarantied Parties may, in accordance with the applicable provisions of the Credit Agreement and Specified Swap Contracts, assign, transfer or sell any Guarantied Obligation, or grant or sell participations in any Guarantied Obligations, to any Person without the consent of, or notice to, any Guarantor and without releasing, discharging or modifying any Guarantor's obligations hereunder. Each Guarantor hereby consents to the delivery by the Administrative Agent and any other Guarantied Party to any Eligible Assignee or Participant (or any prospective Eligible Assignee or Participant) of any financial or other information regarding the Borrower or any Guarantor. No Guarantor may assign or transfer its obligations hereunder to any Person without the prior written consent of all Lenders and any such assignment or other transfer to which all of the Lenders have not so consented shall be null and void.
Section 22. JOINT AND SEVERAL OBLIGATIONS . THE OBLIGATIONS OF THE GUARANTORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.
Section 23. Amendments . This Guaranty may not be amended except in writing signed by the Administrative Agent and each Guarantor, subject to Section 13.7 of the Credit Agreement.
Section 24. Payments . All payments to be made by any Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Administrative Agent at its Principal Office, not later than 11:00 a.m. Pacific time, on the date one Business Day after demand therefor.
Section 25. Notices . All notices, requests and other communications hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given (a) to each Guarantor at its address set forth below its signature hereto, (b) to the Administrative Agent or any other Guarantied Party at its address for notices provided for in the Credit Agreement or Specified Swap Contract, as applicable, or (c) as to each such party at such other address as such party shall designate in a written notice to the other parties. Each such notice, request or other communication shall be effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand delivered, when delivered; provided , however , that any notice of a change of address for notices shall not be effective until received.
Section 26. Severability . In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 27. Headings . Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.
Section 28. Limitation of Liability .      Neither the Administrative Agent nor any other Guarantied Party, nor any affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any other Guarantied Party, shall have any liability with respect to, and each Guarantor hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by a Guarantor in connection with, arising out of, or in any way related to, this Guaranty or any of the other Credit Documents, the Fee Letter, or any of the transactions contemplated by this Guaranty, the Credit Agreement or any of the other Loan Documents. Each Guarantor hereby waives, releases, and agrees not to sue the Administrative Agent or any other Guarantied Party or any of the Administrative Agent's or any other Guarantied Party's affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Guaranty, the Credit Agreement or any of the other Credit Documents, the Fee Letter, or any of the transactions contemplated by thereby.
Section 29. Electronic Delivery of Certain Information . Each Guarantor acknowledges and agrees that information regarding the Guarantor may be delivered electronically pursuant to Section 9.5 of the Credit Agreement.
Section 30. Time . Time is of the essence with respect to each and every provision of this Guaranty.
Section 31. Definitions . (a) For the purposes of this Guaranty:




“ Proceeding ” means any of the following: (i) a voluntary or involuntary case concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property of any Guarantor; (iii) any other proceeding under any Applicable Law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by any Guarantor for the purpose of effecting any of the foregoing.
(b)      Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.
Section 32. Unsecured . As of the date hereof the Loans are unsecured, and references in this Guaranty to “collateral” or to statutes which are applicable in a secured loan context are included simply in case the Loans become secured at any time in the future, though converting the Loans to secured loans is not an option contemplated by the parties at this time.

[Signatures on Following Page]






















IN WITNESS WHEREOF , each Guarantor has duly executed and delivered this Guaranty as of the date and year first written above.
HEALTHCARE TRUST OF AMERICA, INC.

By:     
Name: Kellie S. Pruitt
Title: Chief Financial Officer

Address for Notices for all Guarantors:

c/o Healthcare Trust of America, Inc.
16435 N. Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
Attn: Kellie S. Pruitt
Telecopy Number:      480-991-0755
Telephone Number:      480-998-3478
With a copy to:
O'Melveny & Myers LLP
Two Embarcadero Center, 28th Floor
San Francisco, California 94111
Attn: Peter T. Healy, Esq.
Telecopy Number:      415-984-8701
Telephone Number:      415-984-8833
SFI-737986v2





Exhibit 31.1
CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Scott D. Peters, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Healthcare Trust of America, 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.

 
By
/s/ Scott D. Peters  
 
 
 
Scott D. Peters 
 
 
 
Chief Executive Officer, President and Chairman

 

Date: August 9, 2012





Exhibit 31.2
CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kellie S. Pruitt, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Healthcare Trust of America, 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.

 
By
/s/ Kellie S. Pruitt
 
 
 
Kellie S. Pruitt

 
 
 
Chief Financial Officer

 

Date: August 9, 2012





Exhibit 32.1
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Healthcare Trust of America, Inc., or the Company, for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Scott D. Peters, Chief Executive Officer, President and Chairman of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i) The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
By
/s/ Scott D. Peters  
 
 
 
Scott D. Peters
 
 
 
Chief Executive Officer, President and Chairman
 
Date: August 9, 2012






Exhibit 32.2
CERTIFICATION
Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Healthcare Trust of America, Inc., or the Company, for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Kellie S. Pruitt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i) The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
By
/s/ Kellie S. Pruitt
 
 
 
Kellie S. Pruitt

 
 
 
Chief Financial Officer
 
Date: August 9, 2012