<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
----- THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
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 1-12993
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 95-4502084
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
135 North Los Robles Avenue, Suite 250, Pasadena, California 91101
(Address of principal executive offices)
(626) 578-0777
(Registrant's telephone number, including area code)
N/A
------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-------- -------
As of November 13, 1998, 12,578,631 shares of common stock, par value
$.01 per share, were outstanding.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets of Alexandria Real Estate
Equities, Inc. and Subsidiaries as of September 30, 1998 and
December 31, 1997
Condensed Consolidated Statements of Operations of Alexandria Real
Estate Equities, Inc. and Subsidiaries for the three months ended
September 30, 1998 and 1997 and the nine months ended September 30,
1998 and 1997
Condensed Consolidated Statement of Stockholders' Equity of Alexandria
Real Estate Equities, Inc. and Subsidiaries for the nine months ended
September 30, 1998
Condensed Consolidated Statements of Cash Flows of Alexandria Real
Estate Equities, Inc. and Subsidiaries for the nine months ended
September 30, 1998 and 1997
Notes to Condensed Consolidated Financial Statements
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Item 3. DEFAULTS UPON SENIOR SECURITIES
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
2
<PAGE>
Alexandria Real Estate Equities, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
----------------------------------------------------
<S> <C> <C>
ASSETS
Rental properties, net $ 425,786 $ 225,551
Property under development 15,921 4,419
Cash and cash equivalents 1,247 2,060
Tenant security deposits and other restricted cash 8,769 6,799
Secured note receivable 6,000 -
Tenant receivables and deferred rent 7,102 3,630
Other assets 11,376 5,995
----------------------------------------------------
Total assets $ 476,201 $ 248,454
----------------------------------------------------
----------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured notes payable $ 96,056 $ 47,817
Unsecured line of credit 162,800 23,000
Accounts payable, accrued expenses and tenant security
deposits 11,874 6,158
Dividends payable 5,031 4,562
----------------------------------------------------
Total liabilities 275,761 81,537
Stockholders' equity:
Common stock, $0.01 par value per share, 100,000,000
shares authorized; 12,578,631 and 11,404,631 shares
issued and outstanding at September 30,1998 and
December 31, 1997, respectively
126 114
Additional paid-in capital 200,314 173,735
Retained earnings (accumulated deficit) - (6,932)
----------------------------------------------------
Total stockholders' equity 200,440 166,917
Total liabilities and stockholders' equity $ 476,201 $ 248,454
----------------------------------------------------
----------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
Alexandria Real Estate Equities, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Rental $ 12,540 $ 7,062 $ 33,583 $ 17,963
Tenant recoveries 2,903 2,297 8,215 6,001
Interest and other income 368 318 869 618
---------------------------------------------------------------------
15,811 9,677 42,667 24,582
Expenses:
Rental operations 3,337 2,383 9,461 6,216
General and administrative 957 629 2,590 1,805
Stock compensation - - - 4,239
Post retirement benefit - - - 632
Special bonus - - - 353
Interest 3,627 1,214 9,190 5,789
Acquisition LLC financing costs - - - 6,973
Write-off of unamortized loan costs - - - 2,147
Depreciation and amortization 2,773 1,325 6,949 3,434
---------------------------------------------------------------------
10,694 5,551 28,190 31,588
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income (loss) $ 5,117 $ 4,126 $ 14,477 $ (7,006)
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income allocated to preferred
stockholders $ - $ - $ - $ 3,038
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income (loss) allocated to common
stockholders $ 5,117 $ 4,126 $ 14,477 $ (10,044)
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income (loss) per share of common
stock (pro forma for the nine months
ended September 30, 1997):
-Basic $ 0.41 $ 0.36 $ 1.21 $ (0.99)
---------------------------------------------------------------------
---------------------------------------------------------------------
-Diluted $ 0.40 $ 0.36 $ 1.19 $ (0.99)
---------------------------------------------------------------------
---------------------------------------------------------------------
Weighted average shares of common stock
outstanding (pro forma for the nine
months ended September 30, 1997):
-Basic 12,568,407 11,404,631 11,935,830 7,048,381
---------------------------------------------------------------------
---------------------------------------------------------------------
-Diluted 12,763,525 11,534,714 12,161,468 7,048,381
---------------------------------------------------------------------
---------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
Alexandria Real Estate Equities, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders' Equity
Nine months ended September 30, 1998
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
RETAINED
NUMBER OF ADDITIONAL EARNINGS
COMMON COMMON PAID-IN (ACCUMULATED
SHARES STOCK CAPITAL DEFICIT) TOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 11,404,631 $114 $173,735 $(6,932) $166,917
Issuance of common stock 1,174,000 12 33,649 - 33,661
Dividends declared on common stock
- - (7,070) (7,545) (14,615)
Net income - - - 14,477 14,477
---------------------------------------------------------------------------------
Balance at September 30, 1998 12,578,631 $126 $200,314 $ - $200,440
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
Alexandria Real Estate Equities, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
--------------------------------
<S> <C> <C>
Net cash provided by operating activities $ 16,020 $ 3,710
INVESTING ACTIVITIES
Purchase of rental properties (190,714) (68,555)
Additions to rental properties (16,171) (2,635)
Additions to property under development (11,502) -
Note receivable (6,000) -
--------------------------------
Net cash used in investing activities (224,387) (71,190)
FINANCING ACTIVITIES
Proceeds from secured notes payable 49,132 15,360
Net borrowings on unsecured line of credit 139,800 -
Proceeds from issuance of common stock 33,661 138,919
Redemption of Series T preferred stock - (1)
Decrease in due to Health Science Properties Holding Corporation
- (2,525)
Principal reductions of secured notes payable (893) (73,816)
Common dividends paid (14,146) (4,237)
Preferred dividends paid - (1,127)
--------------------------------
Net cash provided by financing activities 207,554 72,573
Net (decrease) increase in cash and cash equivalents (813) 5,093
Cash and cash equivalents at beginning of period 2,060 1,696
--------------------------------
--------------------------------
Cash and cash equivalents at end of period $ 1,247 $ 6,789
--------------------------------
--------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
6
<PAGE>
Alexandria Real Estate Equities, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. BACKGROUND AND BASIS OF PRESENTATION
BACKGROUND
Alexandria Real Estate Equities, Inc., a Maryland corporation (the "Company"),
was formed in October 1994 to acquire, manage, and selectively develop
properties for lease principally to the life science industry ("Life Science
Facilities"). As of September 30, 1998 and December 31, 1997, the Company owned
49 and 22 Life Science Facilities, respectively.
The accompanying interim financial statements have been prepared by the
Company's management in accordance with generally accepted accounting principles
and in conformity with the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the interim financial statements
presented herein reflect all adjustments of a normal and recurring nature that
are necessary to fairly state the interim financial statements. The results of
operations for the interim period are not necessarily indicative of the results
that may be expected for the year ended December 31, 1998. These financial
statements should be read in conjunction with the financial statements included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1997.
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries, which own, directly
or indirectly, Life Science Facilities. All significant intercompany balances
and transactions have been eliminated.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current
period presentation.
7
<PAGE>
2. RENTAL PROPERTIES
Rental properties consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Land $ 69,241 $ 41,970
Buildings and improvements 357,025 189,518
Tenant and other improvements 14,974 2,867
-------------------------
441,240 234,355
Less accumulated depreciation (15,454) (8,804)
-------------------------
-------------------------
$425,786 $225,551
-------------------------
-------------------------
</TABLE>
During the nine months ended September 30, 1998, the Company acquired 27 Life
Science Facilities containing approximately 1,718,000 rentable square feet
from various unrelated third parties for an aggregate purchase price
(including closing and transaction costs) of $190.7 million.
3. SECURED NOTE RECEIVABLE
In connection with the acquisition of a Life Science Facility in San Diego,
California in March 1998, the Company made a $6,000,000 loan to the sole tenant
of the property, fully secured by a first deed of trust on certain improvements
at the property. The loan bears interest at a rate of 11% per year, payable
monthly, and matures in March 2002. The loan is cross-defaulted to the lease
with the sole tenant. Under certain circumstances, the Company may obtain title
to the improvements that secure the loan, and, in such event, the Company may
also require the sole tenant at the property to lease such improvements back
from the Company for an additional rental amount.
4. UNSECURED LINE OF CREDIT
In August 1998, the Company amended its unsecured line of credit to, among other
things, provide for borrowings of up to $250 million. Prior to the amendment,
borrowings under the line of credit were limited to $150 million. Borrowings
under the line of credit bear interest at a floating rate based on the Company's
election of either a LIBOR based rate or the higher of the bank's reference rate
and the Federal Funds rate plus 0.5%. For each LIBOR based advance, the Company
must elect to fix the rate for a period of one, two, three or six months.
8
<PAGE>
4. UNSECURED LINE OF CREDIT (CONTINUED)
The line of credit contains financial covenants, including, among other things,
maintenance of minimum market net worth, a total liabilities to gross asset
value ratio, and a fixed charge coverage ratio. In addition, the terms of the
line of credit restrict, among other things, certain investments, indebtedness,
distributions and mergers. Borrowings under the line of credit are limited to an
amount based on a pool of unencumbered assets. Accordingly, as the Company
acquires additional unencumbered properties, borrowings available under the line
of credit will increase, but may not exceed $250 million. As of September 30,
1998, borrowings under the line of credit were limited to approximately
$207,000,000, and carried a weighted average interest rate of 6.91%.
The line of credit expires May 31, 2000 and provides for annual extensions
(provided there is no default) for two additional one-year periods upon notice
by the Company and consent of the participating banks.
Effective September 2, 1998, the Company entered into an interest rate swap
agreement with BankBoston, N.A. to hedge the Company's exposure to variable
interest rates. An interest rate swap agreement is a contractual arrangement
between the Company and a third party to exchange fixed and floating interest
payments without the exchange of the underlying principal amount (the
"notional amount"). The agreement entered into between the Company and
BankBoston, N.A. calls for the Company to be credited interest at one month
LIBOR and for interest to be incurred by the Company at a fixed interest rate
of 5.43% through May 31, 2000 on a notional amount of $50 million. The net
difference between the interest received and the interest paid is reflected
as an adjustment to interest expense.
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, Accounting for Derivative Instruments and Hedging Activities (the
"Statement"), which is required to be adopted in fiscal years beginning after
June 15, 1999. When adopted, the Statement will require the Company to
recognize all derivatives on the balance sheet at fair value. Based on the
definitions provided in the Statement, the Company's interest rate swap
agreement will be classified as a cash flow hedge with changes in the fair
value recorded as an adjustment to comprehensive income, a separate component
of stockholders' equity.
9
<PAGE>
5. SECURED NOTES PAYABLE
As of September 30, 1998, the Company had five notes payable to certain banks
and an insurance company, secured by first deeds of trust on eight of its Life
Science Facilities. The notes bear interest at fixed rates ranging from 7.17% to
9.00% and are due at various dates through 2016.
6. STOCKHOLDERS EQUITY
On September 25, 1998, the Company declared a cash dividend on its common stock
of $5,031,000 ($ 0.40 per share) for the calendar quarter ended September 30,
1998. The dividend was paid on October 16, 1998.
7. COMMITMENTS
The Company is committed to complete the construction of a building and certain
improvements thereto in San Diego, California at a remaining cost of
approximately $4.7 million under the terms of two leases. In addition, the
Company is committed to complete the construction of a building and certain
improvements thereto in Gaithersburg, Maryland at a remaining cost of between
$8.9 million and $17.9 million (depending on the level of improvements to the
facility elected by the tenant) under the terms of a lease. Under the terms of
the lease, the tenant's rental rate will be adjusted depending on the ultimate
cost of the improvements.
The Company is also committed under the terms of various leases to construct
improvements for certain tenants totaling approximately $13.1 million. Of this
amount, approximately $4.5 million has been set aside in restricted cash
accounts to complete the conversion of existing space into higher rent generic
laboratory space (as well as certain related improvements) at 1102/1124 Columbia
Street and 3000/3018 Western Avenue.
10
<PAGE>
8. NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of net income (loss) per share of
common stock outstanding.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1998 1997
----------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Net income $ 5,117 $ 4,126
----------------------------------------------
----------------------------------------------
Weighted average shares of common stock
- basic 12,568,407 11,404,631
Add: dilutive effect of stock options 195,118 130,083
----------------------------------------------
Weighted average shares of common stock
- diluted 12,763,525 11,534,714
----------------------------------------------
----------------------------------------------
Net income per share - basic $ 0.41 $ 0.36
----------------------------------------------
----------------------------------------------
Net income per share - diluted $ 0.40 $ 0.36
----------------------------------------------
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1998 1997
----------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Net income (loss) $ 14,477 $ (7,006)
----------------------------------------------
----------------------------------------------
Weighted average shares of common stock
(pro forma for 1997) - basic 11,935,830 3,642,131
Add: dilutive effect of stock options 225,638 3,406,250
----------------------------------------------
Weighted average shares of common stock
(pro forma for 1997) - diluted 12,161,468 7,048,381
----------------------------------------------
----------------------------------------------
Net income (loss) per share - basic $ 1.21 $ (0.99)
----------------------------------------------
----------------------------------------------
Net income (loss) per share - diluted $ 1.19 $ (0.99)
----------------------------------------------
----------------------------------------------
</TABLE>
Historical per share data has not been presented for the nine months ended
September 30, 1997 because it is not meaningful due to the various changes in
the Company's capital structure in connection with the Company's initial public
offering on June 2, 1997 (the "Offering").
11
<PAGE>
8. NET INCOME (LOSS) PER SHARE (CONTINUED)
Pro forma shares of common stock outstanding for the nine months ended
September 30, 1997 include all shares of common stock outstanding after
giving effect to a 1,765.923 to 1 stock split, the issuance of certain stock
grants, the issuance and exercise of substitute stock options and conversions
of preferred stock, each of which occurred in connection with the Offering.
In addition, shares issued to the public in connection with the Offering have
been weighted for the period of time they were outstanding.
12
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain information and statements included in this Quarterly Report on Form
10-Q, including, without limitation, statements containing the words
"believes," "anticipates," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and involve known and unknown risks and
uncertainties that could result in actual results of the Company differing
materially from expected results expressed or implied by such forward-looking
information and statements. In the context of forward-looking information and
statements provided in this Form 10-Q and in other reports, please refer to
the discussion of risk factors detailed in, as well as the other information
contained in, the Company's filings with the Securities and Exchange
Commission, including but not limited to, those risk factors set forth under
the caption "Risk Factors" in the Company's Registration Statement on Form
S-3 (File No. 333-56451) filed with the Securities and Exchange Commission on
June 9, 1998.
The following discussion should be read in conjunction with the financial
statements and notes appearing elsewhere in this report.
OVERVIEW
Since its formation in October 1994, the Company has devoted substantially all
of its resources to the acquisition and management of high quality,
strategically located Life Science Facilities leased principally to tenants in
the life science industry in its target markets.
The Company's primary source of income is rental revenue and related tenant
recoveries from its properties (the "Properties"). The Company has acquired
its current portfolio since the beginning of 1994, with four of the
Properties acquired in calendar year 1994, eight acquired in 1996, three
acquired in 1997 in connection with the Offering, seven acquired in 1997
after the Offering (together, the "1997 Acquired Properties") and 27 acquired
in 1998 (the "1998 Acquired Properties"). As a result of the Company's
acquisition activities in 1997 and 1998, the financial data shows significant
increases in total revenue and expenses for the 1998 periods compared to the
1997 periods.
13
<PAGE>
RESULTS OF OPERATIONS
Comparison of Three Months Ended September 30, 1998 ("Third Quarter 1998") to
Three Months Ended September 30, 1997 ("Third Quarter 1997")
Rental revenue increased by $5.4 million, or 76%, to $12.5 million for Third
Quarter 1998 compared to $7.1 million for Third Quarter 1997. The increase
resulted primarily from rental revenue from the 1997 Acquired Properties
purchased after July 1, 1997 and from the 1998 Acquired Properties. Rental
revenue from the Properties acquired before July 1, 1997 (the "Third Quarter
Same Properties") increased by $77,000, or 1%, generally due to increases in
occupancy.
Tenant recoveries increased by $606,000, or 26%, to $2.9 million for Third
Quarter 1998 compared to $2.3 million for Third Quarter 1997. The increase
resulted primarily from the 1997 Acquired Properties purchased after July 1,
1997 and the 1998 Acquired Properties. Tenant recoveries from the Third
Quarter Same Properties increased by $74,000, or 4%, primarily due to an
increase in the improved identification and recovery of costs at certain
properties.
Interest and other income increased by $50,000, or 16%, to $368,000 for Third
Quarter 1998 compared to $318,000 for Third Quarter 1997, resulting primarily
from $166,000 of interest income from the secured note receivable during
Third Quarter 1998. This increase was partially offset by a decrease in
interest income resulting from a lower level of cash equivalents in 1998
compared to 1997 due to the acquisition of Properties.
Rental operating expenses increased by $954,000, or 40%, to $3.3 million for
Third Quarter 1998 compared to $2.4 million for Third Quarter 1997. The
increase resulted primarily from the 1997 Acquired Properties purchased after
July 1, 1997 and the 1998 Acquired Properties. Operating expenses for the
Third Quarter Same Properties decreased by approximately $11,000, or 0.6%,
primarily due to lower premiums on the Company's blanket property and
liability insurance policies.
General and administrative expenses increased by $328,000, or 52%, to
$957,000 for Third Quarter 1998 compared to $629,000 for Third Quarter 1997,
due to the Company's larger scope of operations in 1998.
Interest expense increased by $2.4 million, or 200%, to $3.6 million for
Third Quarter 1998 compared to $1.2 million for Third Quarter 1997. The
increase resulted primarily from the indebtedness incurred to acquire the
1997 Acquired Properties purchased after July 1, 1997 and the 1998 Acquired
Properties.
14
<PAGE>
Depreciation and amortization increased by $1.5 million, or 115%, to $2.8
million for Third Quarter 1998 compared to $1.3 million for Third Quarter
1997. The increase resulted primarily from depreciation associated with the
1997 Acquired Properties purchased after July 1, 1997, and the addition of
the 1998 Acquired Properties.
As a result of the foregoing, net income was $5.1 million for Third Quarter
1998 compared to $4.1 million for Third Quarter 1997.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 ("NINE MONTHS 1998") TO NINE
MONTHS ENDED SEPTEMBER 30, 1997 ("NINE MONTHS 1997")
Rental revenue increased by $15.6 million, or 87%, to $33.6 million for Nine
Months 1998 compared to $18.0 million for Nine Months 1997. The increase
resulted primarily from the 1997 Acquired Properties and the 1998 Acquired
Properties. A portion of the increase was due to $277,000 in rental
termination payments received in 1998 associated with leases at two of the
Properties. Rental revenue from the Properties acquired before January 1,
1997 (the "Same Properties") increased by $242,000, or 2%, generally due to
increases in occupancy.
Tenant recoveries increased by $2.2 million, or 37%, to $8.2 million for Nine
Months 1998 compared to $6.0 million for Nine Months 1997. The increase
resulted primarily from the 1997 Acquired Properties and the 1998 Acquired
Properties. Tenant recoveries for the Same Properties increased by $362,000,
or 8.8%, generally due to an increase in rental operating expenses and the
improved identification and recovery of costs at certain properties.
Interest and other income increased by $251,000, or 41%, to $869,000 for Nine
Months 1998 compared to $618,000 for Nine Months 1997, resulting primarily
from $344,000 of interest income from the secured note receivable during Nine
Months 1998. This increase was partially offset by a decrease in interest
income resulting from a lower level of cash equivalents in 1998 compared to
1997 due to the acquisition of Properties.
Rental operating expenses increased by $3.3 million, or 53%, to $9.5 million
for Nine Months 1998 compared to $6.2 million for Nine Months 1997. The
increases resulted primarily from the 1997 Acquired Properties and the 1998
Acquired Properties. Operating expenses for the Same Properties increased by
$94,000, or 2.1%, primarily due to an increase in utility expenses (due to
greater usage) that are passed through to the tenants.
15
<PAGE>
Following is a comparison of property operating data computed under generally
accepted accounting principles ("GAAP Basis") and under generally accepted
accounting principles, adjsuted to exclude the effect of straight line rent
adjustments ("Cash Basis") for the Same Properties (in thousands, except
percentage data):
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1998 1997 Change
--------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C>
GAAP Basis:
Revenue $ 16,605 $ 15,944 4.1%
Rental operating expenses 4,520 4,426 2.1%
--------------------------------------------------
Net operating income $ 12,085 $ 11,518 4.9%
--------------------------------------------------
--------------------------------------------------
Cash Basis (1):
Revenue $ 17,749 $ 16,762 5.9%
Rental operating expenses 4,520 4,426 2.1%
--------------------------------------------------
Net operating income $ 13,229 $ 12,336 7.2%
--------------------------------------------------
--------------------------------------------------
</TABLE>
(1) Revenue and operating expenses are computed in accordance with GAAP, except
that revenue excludes the effect of straight line rent adjustments.
General and administrative expenses increased by $785,000, or 43%, to $2.6
million for Nine Months 1998 compared to $1.8 million for Nine Months 1997
due to the Company's larger scope of operations and increased costs incurred
as a result of being a public company in 1998.
The special bonus of $353,000 in Nine Months 1997 was awarded to an officer
of the Company in connection with the Offering and accrued for the period
ended March 31, 1997. Post-retirement benefit expense of $632,000 in Nine
Months 1997 reflects an adjustment for the non-cash accrual associated with a
one-time post retirement benefit for an officer of the Company. Stock
compensation expense of $4.2 million in Nine Months 1997 reflects the
non-recurring, non-cash expense related to the issuance of stock grants and
options to officers, directors and certain employees of the Company,
principally in connection with the Offering.
Interest expense increased by $3.4 million, or 59%, to $9.2 million for Nine
Months 1998 compared to $5.8 million for Nine Months 1997. The increase
resulted primarily from indebtedness incurred to acquire the 1997 Acquired
Properties and the 1998 Acquired Properties.
Acquisition LLC financing costs of $6,973,000 in Nine Months 1997 represents
the portion of the purchase price of ARE Acquisitions, LLC ("the Acquisition
LLC") in excess of the cost incurred by it to acquire its three Life Science
Facilities.
16
<PAGE>
Write-off of unamortized loan costs of $2,147,000 in Nine Months 1997
represents the write-off of loan costs associated with $72,698,000 of secured
notes repaid with proceeds of the Offering.
Depreciation and amortization increased by $3.6 million, or 106%, to $7.0
million for Nine Months 1998 compared to $3.4 million for Nine Months 1997.
The increase resulted primarily from depreciation associated with the 1997
Acquired Properties and the 1998 Acquired Properties.
As a result of the foregoing, there was net income of $14.5 million for Nine
Months 1998 compared to a net loss of $7.0 million for Nine Months 1997.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Net cash provided by operating activities increased by $12.3 million to $16.0
million for Nine Months 1998 compared to net cash provided by operating
activities of $3.7 million for Nine Months 1997. The increase resulted
primarily from operating cash flows from the 1997 Acquired Properties and the
1998 Acquired Properties.
Net cash used in investing activities increased by $153.2 million to $224.4
million for Nine Months 1998 compared to net cash used in investing
activities of $71.2 million for Nine Months 1997. The increase resulted
primarily from the costs associated with the acquisition of the 1998 Acquired
Properties, the additions to properties under development and the addition of
a note receivable made in connection with the acquisition of a Life Science
Facility.
Net cash provided by financing activities increased by $135.0 million to
$207.6 million for Nine Months 1998 compared to net cash provided by
financing activities of $72.6 million for Nine Months 1997. The increase
resulted primarily from $48.2 million in net proceeds from secured debt,
$139.8 million in net borrowings under the unsecured line of credit and $33.7
million in net proceeds from the issuance of common stock, partially offset
by payments of $14.1 million in dividends payable on common stock.
CAPITAL COMMITMENTS
The Company is committed to complete the construction of a building and
certain improvements thereto in San Diego, California at a remaining cost of
approximately $4.7 million under the terms of two leases. In addition, the
Company is committed to complete the construction of a building and certain
improvements thereto in Gaithersburg, Maryland at a remaining cost of between
$8.9 million and $17.9 million (depending on the level of improvements to the
facility elected by the tenant) under the terms of a lease. Under the terms
of the lease, the tenant's rental rate will be adjusted depending on the
ultimate cost of the improvements.
17
<PAGE>
The Company is also committed under the terms of various leases to construct
improvements for certain tenants totaling approximately $13.1 million. Of
this amount, approximately $4.5 million has been set aside in restricted cash
accounts to complete the conversion of existing space into higher rent
generic laboratory space (as well as certain related improvements) at
1102/1124 Columbia Street and 3000/3018 Western Avenue.
RESTRICTED CASH
As of September 30, 1998, the Company had $10.0 million in cash and cash
equivalents, including $8.8 million in restricted cash accounts. Of the $8.8
million in restricted cash accounts, approximately $4.5 million has been set
aside to complete the conversions described above under "- Capital
Commitments," approximately $2.2 million is held in trust as additional
security required under the terms of the Company's secured notes payable,
approximately $1.1 million is held in security deposit reserve accounts based
on the terms of certain lease agreements, and approximately $1.0 million is
held in escrow deposits.
SECURED DEBT
As of September 30, 1998, the Company's secured debt is as follows (in
thousands):
<TABLE>
<CAPTION>
PRINCIPAL
BALANCE AT
MATURITY SEPTEMBER 30, INTEREST
COLLATERAL DATE 1998 RATE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3535/3565 General Atomics
Court, San Diego, CA December 2014 $ 17,700 9.00%
1431 Harbor Bay Parkway
Alameda, CA January 2014 8,500 7.17%
1102/1124 Columbia Street
Seattle, WA May 2016 20,868 7.75%
100/800/801 Capitola Drive,
Durham, NC December 2006 12,582 8.68%
14225 Newbrook Drive, Chantilly, VA
and 3000/3018 Western Avenue,
Seattle, WA May 2008 36,406 7.22%
- ----------------------------------------------------------------------------------------------
Total/Average $ 96,056 7.85%
-------------------------------------
-------------------------------------
</TABLE>
18
<PAGE>
Following is a summary of scheduled principal payments for the Company's secured
debt as of September 30, 1998 (in thousands):
Year Amount
----------------------------------------------
1998 $ 367
1999 2,893
2000 2,788
2001 3,016
2002 3,253
Thereafter 83,739
--------------------
Total $ 96,056
--------------------
--------------------
UNSECURED LINE OF CREDIT
In August 1998, the Company amended its unsecured line of credit to, among
other things, provide for borrowings of up to $250 million. Prior to the
amendment, borrowings under the line of credit were limited to $150 million.
Borrowings under the line of credit bear interest at a floating rate based on
the Company's election of either a LIBOR based rate or the higher of the
bank's reference rate and the Federal Funds rate plus 0.5%. For each LIBOR
based advance, the Company must elect to fix the rate for a period of one,
two, three or six months.
The line of credit contains financial covenants, including, among other
things, maintenance of minimum market net worth, a total liabilities to gross
asset value ratio, and a fixed charge coverage ratio. In addition, the terms
of the line of credit restrict, among other things, certain investments,
indebtedness, distributions and mergers. Borrowings under the line of credit
are limited to an amount based on a pool of unencumbered assets. Accordingly,
as the Company acquires additional unencumbered properties, borrowings
available under the line of credit will increase, but may not exceed $250
million. As of September 30, 1998, borrowings under the line of credit were
limited to approximately $207,000,000, and carried a weighted average
interest rate of 6.91%.
The line of credit expires May 31, 2000 and provides for annual extensions
(provided there is no default) for two additional one-year periods upon
notice by the Company and consent of the participating banks.
Effective September 2, 1998, the Company entered into an interest rate swap
agreement with BankBoston, N.A. to hedge the Company's exposure to variable
interest rates. An interesting rate swap is a contractual arrangement between
the Company and a third party to exchange fixed and floating interest
payments without the exchange of the underlying principal amount (the
"notional amount"). The agreement entered into between the Company and
BankBoston, N.A. calls for the Company to be credited interest at one month
LIBOR and for interest to be incurred by the Company at a fixed interest rate
of 5.43% through May 31, 2000 on a notional amount of $50 million. The net
difference between the interest received and the interest paid is reflected
as an adjustment to interest expense.
19
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company expects to continue meeting its short-term liquidity and capital
requirements generally through its working capital and net cash provided by
operating activities. The Company believes that the net cash provided by
operating activities will continue to be sufficient to make distributions
necessary to enable the Company to continue qualifying as a real estate
investment trust. The Company also believes that net cash provided by
operations will be sufficient to fund its recurring non-revenue enhancing
capital expenditures, tenant improvements and leasing commissions.
The Company expects to meet certain long-term liquidity requirements, such as
property acquisitions, property development activities, scheduled debt
maturities, renovations, expansions and other non-recurring capital
improvements, through long-term secured and unsecured indebtedness, including
borrowings under the unsecured line of credit, and the issuance of additional
debt and/or equity securities.
EXPOSURE TO ENVIRONMENTAL LIABILITIES
In connection with the acquisition of all of the Properties, the Company has
obtained Phase I environmental assessments to ascertain the existence of any
environmental liabilities or other issues. The Phase I environmental
assessments of the properties have not revealed any environmental liabilities
that the Company believes would have a material adverse effect on the
Company's financial condition or results of operations taken as a whole, nor
is the Company aware of any such material environmental liabilities.
INFLATION
More than 70% of the Company's leases (on a square footage basis) are triple
net leases, requiring tenants to pay substantially all real estate taxes and
insurance, common area and other operating expenses (including increases
thereto). In addition, a majority of the Company's leases (on a square
footage basis) contain effective annual rent escalations that are either
fixed (ranging from 2.5% to 4.0%) or indexed based on a CPI or other index.
Accordingly, the Company does not believe that its earnings or cash flow are
subject to any significant risk of inflation. An increase in inflation,
however, could result in an increase in the Company's variable rate borrowing
cost, including borrowings under the unsecured line of credit.
IMPACT OF YEAR 2000
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. Any of the
Company's computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send tenant invoices, or engage in similar normal business activities.
20
<PAGE>
The Company relies on computer technologies to operate its business. In October
1998, the Company formed an internal task force to identify, assess and evaluate
its mission critical systems to determine which Year 2000 related problems may
cause system errors or failures. The Company has identified three major areas
as "mission critical systems": (i) internal accounting systems, (ii) systems of
significant tenants, vendors and financial institutions; and (iii) internal
building systems at the Company's properties. The task force will engage a
nationally recognized accounting firm to assist in this process.
The following discussion of the implications of the Year 2000 problem for the
Company contains numerous forward-looking statements based on inherently
uncertain information. The cost of the task force's evaluation and the date
on which the Company plans to complete its internal evaluation and related
remediation projects are based on the Company's best estimates, which were
derived using a number of assumptions of future events, including the
continued availability of internal and external resources, third-party
modifications and other factors. However, there can be no guarantee that
these estimates will be achieved, and actual results may be materially
different from those anticipated. Moreover, although the Company believes
that it will be operating in a Year 2000 compliant manner prior to December
31, 1999, there can be no assurance that any failure to modify a mission
critical system would not have a material adverse effect on the Company.
READINESS
The Company's Year 2000 project is designed to ensure that all mission critical
systems have been evaluated and will be suitable for continued use into and
beyond the Year 2000. The Company expects that the task force will have
completed its evaluation of mission critical systems by February of 1999, and
will have implemented substantially all of the necessary remedial actions by
mid-1999.
The Company has completed its review of its internal accounting systems and has
determined that they are Year 2000 compliant. The systems have been tested and
are currently working without Year 2000 or systems-related problems.
The Company places a high degree of reliance on computer systems of third
parties, such as tenants, vendors and financial institutions. Although the
Company is assessing the readiness of these third parties, there can be no
guarantee that the failure of these third parties to modify their systems in
advance of December 31, 1999 would not have a material adverse effect on the
Company. The Company has surveyed its most significant third-party vendors
and financial institutions, and all surveyed are currently Year 2000
compliant. The Company is currently in the process of surveying its remaining
major vendors and suppliers for their Year 2000 readiness. In addition, the
Company is in the process of surveying its significant tenants for their Year
2000 readiness and expects to complete such tenant assessments by early 1999.
The Company is continually participating in such surveys with new tenants,
vendors and other third-party suppliers or tenants. If future risk
assessments of third-party suppliers indicate significant exposure from a
supplier's Year 2000 problem, such supplier or tenant will be asked to
demonstrate how such problems will be addressed. The Company believes that
it has viable alternatives for each of its major vendors.
The final mission critical system the task force is evaluating consists of
internal areas that may have embedded microprocessors with potential Year 2000
problems, mainly building systems, including heating, ventilation and air
conditioning systems, elevators and security systems. The task force will
identify the areas and systems that use embedded microprocessors and will
determine whether any modification or replacement is necessary. The Company
anticipates using the services of outside experts to assist the task force with
this phase of the Year 2000 project. The evaluation of these areas is expected
to be complete by early 1999, and any required modifications are expected to be
made by mid-1999.
21
<PAGE>
COST
The Company does not expect its Year 2000 project costs, including the costs
of any remedial activities, to be material to the Company. The costs of
purchasing conversion packages for the accounting systems and the surveys of
tenants, vendors and financial institutions are expected to be minimal. In
addition, any costs incurred to replace or upgrade building systems will
constitute property maintenance costs, and are therefore generally
recoverable from the tenants pursuant to the terms of their existing leases.
RISKS
The principal risks associated with the Year 2000 problem include the risk of
disruption of Company operations due to operational failures of third parties,
including tenants, vendors and financial institutions, and the risk of business
interruption due to building system failures. The Company does not believe that
the risk of disruptions due to operational failures of vendors or financial
institutions is significant, because the Company's major vendors and financial
institutions are currently Year 2000 compliant, and the Company has viable
alternatives for such suppliers. If any of the Company's major tenants do not
become Year 2000 compliant on schedule, such tenant's operations and financial
condition could be adversely affected, which may impact the tenant's ability to
meet its rent obligations. Similarly, if the Company's building systems failed
due to Year 2000 problems, services to the Company's properties and tenants,
such as mechanical and security services, could be interrupted, resulting in
potential rent disputes with the tenants. The Company believes, however, that
its early involvement in identifying, assessing and evaluating its mission
critical systems should minimize the risk of Year 2000 problems to the Company's
operations.
CONTINGENCY PLANS
Based on its evaluations and knowledge to date, the Company does not believe
that contingency plans for potential Year 2000 problems are necessary, and
none have been implemented. Because the Company anticipates being
substantially Year 2000 compliant in early to mid-1999, it believes that
adequate time exists to ensure alternatives can be developed, assessed and
implemented prior to a Year 2000 problem having a material adverse effect on
the Company. There can be no assurance however, that any failure to develop
such alternative would not have a material adverse effect on the Company
FUNDS FROM OPERATIONS
Management believes that funds from operations (FFO) is helpful to investors
as a measure of the performance of an equity REIT because, along with cash
flows from operating activities, financing activities and investing
activities, it provides investors with an understanding of the ability of the
Company to incur and service debt, to make capital expenditures and to make
distributions. The Company computes FFO in accordance with standards
established by the Board of Governors of NAREIT in its March 1995 White Paper
(the "White Paper"), which may differ from the methodology for calculating
FFO utilized by other equity REITs, and, accordingly, may not be comparable
to such other REITs. Further, 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.
The White Paper defines FFO as net income (loss) (computed in accordance with
generally accepted accounting principles ("GAAP")), excluding gains (or
losses) from debt restructuring, sales of property and unusual items, plus
real estate related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. FFO should not be considered
as an alternative to net income (determined in accordance with GAAP) as an
indication of the Company's financial performance or to cash flows from
operating activities (determined in accordance with GAAP) as a measure of the
Company's liquidity, nor is it indicative of funds available to fund the
Company's cash needs, including its ability to make distributions.
22
<PAGE>
The following tables present the Company's FFO on a historical basis
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended September 30,
1998 1997
---------------------------------
(Unaudited)
<S> <C> <C>
Net income $5,117 $4,126
Add:
Depreciation and amortization 2,773 1,325
---------------------------------
FFO $7,890 $5,451
---------------------------------
---------------------------------
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
--------------------------------
(Unaudited)
<S> <C> <C>
Net income (loss) $14,477 $(7,006)
Add:
Stock compensation - 4,239
Post retirement benefit - 632
Special bonus - 353
Acquisition LLC financing costs - 6,973
Write off of unamortized loan fees - 2,147
Depreciation and amortization 6,949 3,434
---------------------------------
FFO $21,426 $10,772
---------------------------------
---------------------------------
</TABLE>
23
<PAGE>
PROPERTY AND LEASE INFORMATION
The following table is a summary of the Company's properties as of September 30,
1998:
<TABLE>
<CAPTION>
NUMBER OF RENTABLE SQUARE ANNUALIZED OCCUPANCY
PROPERTIES FEET BASE RENT PERCENTAGE
-------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
REGION:
Suburban Washington DC 17 1,540,254 19,938 95.2% (1)
California - San Diego 9 461,335 11,525 98.4%
California - San Francisco 6 355,398 5,471 91.5% (1)
Southeast 4 255,977 3,628 98.4% (1)
New Jersey/Suburban Philadelphia 4 230,448 3,115 100.0%
Eastern Massachusetts 4 182,427 3,789 100.0%
Washington - Seattle 2 118,393 3,347 100.0%
-------------------------------------------------------------------
Sub-total 46 3,144,232 50,813 96.3%
Renovation/Repositioning
Properties
3 319,051 3,942 49.0%
-------------------------------------------------------------------
Total 49 3,463,283 54,755 92.0%
-------------------------------------------------------------------
-------------------------------------------------------------------
</TABLE>
(1) All, or substantially all, of the vacant space is office or warehouse space.
The following table sets forth certain information with respect to lease
expirations for the Company's properties as of September 30, 1998:
<TABLE>
<CAPTION>
SQUARE PERCENTAGE OF ANNUALIZED BASE
YEAR OF NUMBER OF FOOTAGE OF AGGREGATE RENT OF EXPIRING
EXPIRATION EXPIRING EXPIRING PORTFOLIO LEASE LEASES (PER
LEASE LEASES LEASES SQUARE FOOT SQUARE FOOT)
----------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
1998 (1) 19 147,325 4.6% $10.50
1999 39 422,783 13.3% $16.87
2000 24 375,867 11.8% $16.89
2001 20 391,929 12.3% $16.37
Thereafter 54 2,125,379 58.0% $15.67
</TABLE>
(1) Represents leases expiring between October 1, 1998 to December 31, 1998.
24
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Beginning in 1997, the Company and its former President, Alan D. Gold,
engaged in discussions regarding Mr. Gold's potential resignation of
full-time employment and his entering into a consulting arrangement with the
Company. On July 16, 1998, Mr. Gold gave the Company written notice that he
intended to terminate his employment agreement, allegedly for "good reason,"
on or before August 16, 1998. Mr. Gold's employment with the Company ended on
that day and other executives of the Company have assumed Mr. Gold's
responsibilities. The Company disputes Mr. Gold's contentions that he had
"good reason" to terminate his employment agreement and that he consequently
is entitled to certain severance benefits. The Company has submitted the
disputes between the parties to binding arbitration pursuant to the terms of
Mr. Gold's employment agreement. Mr. Gold has asserted certain claims against
the Company that also will be considered in the arbitration. No date has yet
been scheduled for the arbitration.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
25
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.21 First Amended and Restated Revolving Loan Agreement, dated as of August
4, 1998, by and among the Registrant, Alexandria Real Estate Equities,
L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the Other Borrowers Party
Thereto, the Bankers Therein Named, the Other Banks which may become
Parties Thereto and BankBoston, N.A., as Managing Agent.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
On September 25, 1998, the Company filed a Current Report on Form 8-K, dated
September 25, 1998, to report the acquisition of ten Life Science Facilities.
26
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on November 13, 1998.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
/s/ JOEL S. MARCUS
------------------------------------------------
Joel S. Marcus
Chief Executive Officer
(Principal Executive Officer)
/s/ PETER J. NELSON
------------------------------------------------
Peter J. Nelson
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
27
<PAGE>
FIRST AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
Dated as of August 4, 1998
among
ALEXANDRIA REAL ESTATE EQUITIES, INC.
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
ARE - QRS CORP.
ARE ACQUISITIONS, LLC
THE OTHER BORROWERS
NOW OR HEREAFTER A PARTY HERETO
THE BANKS HEREIN NAMED
THE OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
BANKBOSTON, N.A., as Managing Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article 1 DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . 2
1.1 DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 USE OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . .27
1.3 ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . .27
1.4 ROUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
1.5 EXHIBITS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . .28
1.6 REFERENCES TO "BORROWERS AND THEIR SUBSIDIARIES" . . . . . . . . . .28
1.7 MISCELLANEOUS TERMS. . . . . . . . . . . . . . . . . . . . . . . . .28
Article 2 LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
2.1 COMMITTED LOANS-GENERAL. . . . . . . . . . . . . . . . . . . . . . .29
2.2 ALTERNATE BASE RATE LOANS. . . . . . . . . . . . . . . . . . . . . .30
2.3 LIBOR RATE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . .30
2.4 COMPETITIVE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . .31
2.5 VOLUNTARY REDUCTION OF COMMITMENTS . . . . . . . . . . . . . . . . .34
2.6 [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . . .34
2.7 OPTIONAL TERMINATION OF COMMITMENTS. . . . . . . . . . . . . . . . .34
2.8 MANAGING AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR ADVANCES. . . .35
2.9 EXTENSION OF REVOLVER TERMINATION DATE . . . . . . . . . . . . . . .35
2.10 [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . .36
2.11 UNENCUMBERED ASSET POOL . . . . . . . . . . . . . . . . . . . . . .37
2.12 REPRESENTATIVE OF BORROWERS . . . . . . . . . . . . . . . . . . . .37
Article 3 PAYMENTS AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . .38
3.1 PRINCIPAL AND INTEREST . . . . . . . . . . . . . . . . . . . . . . .38
3.2 CLOSING FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
3.3 [INTENTIONALLY OMITTED.] . . . . . . . . . . . . . . . . . . . . . .40
3.4 COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . . . . . . .40
3.5 AGENCY FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
3.6 EXTENSION FEES . . . . . . . . . . . . . . . . . . . . . . . . . . .41
3.7 INCREASED COMMITMENT COSTS . . . . . . . . . . . . . . . . . . . . .41
3.8 LIBOR COSTS AND RELATED MATTERS. . . . . . . . . . . . . . . . . . .42
3.9 LATE PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
3.10 COMPUTATION OF INTEREST AND FEES. . . . . . . . . . . . . . . . . .46
3.11 NON-BANKING DAYS. . . . . . . . . . . . . . . . . . . . . . . . . .46
3.12 MANNER AND TREATMENT OF PAYMENTS. . . . . . . . . . . . . . . . . .46
3.13 FUNDING SOURCES . . . . . . . . . . . . . . . . . . . . . . . . . .47
3.14 FAILURE TO CHARGE NOT SUBSEQUENT WAIVER . . . . . . . . . . . . . .48
3.15 MANAGING AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY
BORROWERS . . . . . . . . . . . . . . . . . . . . . . . . . . .48
3.16 FEE DETERMINATION DETAIL. . . . . . . . . . . . . . . . . . . . . .48
<PAGE>
3.17 SURVIVABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Article 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . .49
4.1 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS . . . . . .49
4.2 AUTHORITY; COMPLIANCE WITH OTHER AGREEMENTS AND INSTRUMENTS AND
GOVERNMENT REGULATIONS. . . . . . . . . . . . . . . . . . . . .49
4.3 NO GOVERNMENTAL APPROVALS REQUIRED . . . . . . . . . . . . . . . . .50
4.4 SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.5 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . .50
4.6 NO OTHER LIABILITIES; NO MATERIAL ADVERSE CHANGES. . . . . . . . . .50
4.7 TITLE TO PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . .51
4.8 INTANGIBLE ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .51
4.9 PUBLIC UTILITY HOLDING COMPANY ACT . . . . . . . . . . . . . . . . .51
4.10 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
4.11 BINDING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . .51
4.12 NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
4.14 REGULATIONS T, U AND X; INVESTMENT COMPANY ACT. . . . . . . . . . .52
4.15 DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
4.16 TAX LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . .52
4.17 HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . .53
4.18 INITIAL POOL PROPERTIES . . . . . . . . . . . . . . . . . . . . . .53
4.19 PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
4.20 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
4.21 OTHER DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
4.22 SOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
4.23 NO FRAUDULENT INTENT. . . . . . . . . . . . . . . . . . . . . . . .54
4.24 TRANSACTION IN BEST INTERESTS OF BORROWERS; CONSIDERATION . . . . .54
4.25 NO BANKRUPTCY FILING. . . . . . . . . . . . . . . . . . . . . . . .55
Article 5 AFFIRMATIVE COVENANTS(OTHER THAN INFORMATION ANDREPORTING
REQUIREMENTS) . . . . . . . . . . . . . . . . . . . . . . . . .56
5.1 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS . . . . . . . . . . . . .56
5.2 PRESERVATION OF EXISTENCE. . . . . . . . . . . . . . . . . . . . . .56
5.3 MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . . . . . . . .56
5.4 MAINTENANCE OF INSURANCE . . . . . . . . . . . . . . . . . . . . . .56
5.5 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . .56
5.6 INSPECTION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . .57
5.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. . . . . . . . . . . . . . .57
5.8 COMPLIANCE WITH AGREEMENTS . . . . . . . . . . . . . . . . . . . . .57
5.9 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . .57
5.10 HAZARDOUS MATERIALS LAWS . . . . . . . . . . . . . . . . . . . . . .57
5.11 UNENCUMBERED ASSET POOL. . . . . . . . . . . . . . . . . . . . . . .57
ii
<PAGE>
5.12 REIT STATUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
5.13 ADDITIONAL BORROWERS . . . . . . . . . . . . . . . . . . . . . . . .58
5.14 INSPECTION OF PROPERTIES AND BOOKS . . . . . . . . . . . . . . . . .58
5.15 MORE RESTRICTIVE AGREEMENTS. . . . . . . . . . . . . . . . . . . . .58
5.16 DISTRIBUTIONS OF INCOME TO THE BORROWERS . . . . . . . . . . . . . .59
5.17 UNENCUMBERED ASSET POOL. . . . . . . . . . . . . . . . . . . . . . .59
5.18 YEAR 2000 COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . .60
Article 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . .61
6.1 MERGERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
6.2 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
6.3 CHANGE IN NATURE OF BUSINESS . . . . . . . . . . . . . . . . . . . .61
6.4 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . .61
6.5 LEVERAGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . .61
6.6 DEBT SERVICE COVERAGE. . . . . . . . . . . . . . . . . . . . . . . .61
6.7 FIXED CHARGE COVERAGE. . . . . . . . . . . . . . . . . . . . . . . .62
6.8 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .62
6.9 STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . .62
6.10 DEVELOPMENT INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . .62
6.11 SECURED DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
6.12 RECOURSE DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . .62
6.13 INVESTMENTS IN CERTAIN PERSONS . . . . . . . . . . . . . . . . . . .63
6.14 NEGATIVE PLEDGES . . . . . . . . . . . . . . . . . . . . . . . . . .63
6.15 UNDEVELOPED REAL ESTATE ASSETS . . . . . . . . . . . . . . . . . . .63
6.16 LIMITING AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . .63
6.17 RESTRICTION ON PREPAYMENT OF INDEBTEDNESS. . . . . . . . . . . . . .63
6.18 RESTRICTIONS ON TRANSFER . . . . . . . . . . . . . . . . . . . . . .63
Article 7 INFORMATION AND REPORTING REQUIREMENTS . . . . . . . . . . . . . . .65
7.1 FINANCIAL AND BUSINESS INFORMATION . . . . . . . . . . . . . . . . .65
7.2 COMPLIANCE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . .68
Article 8 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
8.1 INITIAL ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . .69
8.2 ANY ADVANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT . . . . . . . .72
9.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .72
9.2 REMEDIES UPON EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . .74
Article 10 THE MANAGING AGENT. . . . . . . . . . . . . . . . . . . . . . . . .77
10.1 APPOINTMENT AND AUTHORIZATION . . . . . . . . . . . . . . . . . . .77
10.2 MANAGING AGENT AND AFFILIATES . . . . . . . . . . . . . . . . . . .77
iii
<PAGE>
10.3 PROPORTIONATE INTEREST IN ANY COLLATERAL. . . . . . . . . . . . . .77
10.4 BANKS' CREDIT DECISIONS . . . . . . . . . . . . . . . . . . . . . .77
10.5 ACTION BY MANAGING AGENT. . . . . . . . . . . . . . . . . . . . . .78
10.6 LIABILITY OF MANAGING AGENT . . . . . . . . . . . . . . . . . . . .79
10.7 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . .80
10.8 SUCCESSOR MANAGING AGENT. . . . . . . . . . . . . . . . . . . . . .80
10.9 NO OBLIGATIONS OF BORROWERS . . . . . . . . . . . . . . . . . . . .81
Article 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . .82
11.1 CUMULATIVE REMEDIES; NO WAIVER. . . . . . . . . . . . . . . . . . .82
11.2 AMENDMENTS; CONSENTS. . . . . . . . . . . . . . . . . . . . . . . .82
11.3 COSTS, EXPENSES AND TAXES . . . . . . . . . . . . . . . . . . . . .83
11.4 NATURE OF BANKS' OBLIGATIONS. . . . . . . . . . . . . . . . . . . .84
11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . .84
11.6 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
11.7 EXECUTION OF LOAN DOCUMENTS . . . . . . . . . . . . . . . . . . . .85
11.8 BINDING EFFECT; ASSIGNMENT. . . . . . . . . . . . . . . . . . . . .85
11.9 RIGHT OF SETOFF . . . . . . . . . . . . . . . . . . . . . . . . . .88
11.10 SHARING OF SETOFFS . . . . . . . . . . . . . . . . . . . . . . . .88
11.11 INDEMNITY BY BORROWERS . . . . . . . . . . . . . . . . . . . . . .88
11.12 NONLIABILITY OF THE BANKS. . . . . . . . . . . . . . . . . . . . .89
11.13 NO THIRD PARTIES BENEFITED . . . . . . . . . . . . . . . . . . . .90
11.14 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . .90
11.15 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . .91
11.16 INTEGRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .91
11.17 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . .91
11.18 SEVERABILITY OF PROVISIONS . . . . . . . . . . . . . . . . . . . .92
11.19 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92
11.20 TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . . . . . .92
11.21 FOREIGN BANKS AND PARTICIPANTS . . . . . . . . . . . . . . . . . .92
11.22 HAZARDOUS MATERIAL INDEMNITY . . . . . . . . . . . . . . . . . . .93
11.23 JOINT AND SEVERAL. . . . . . . . . . . . . . . . . . . . . . . . .93
11.24 REMOVAL OF A BANK. . . . . . . . . . . . . . . . . . . . . . . . .94
11.25 WAIVER OF RIGHT TO TRIAL BY JURY . . . . . . . . . . . . . . . . .94
11.26 PURPORTED ORAL AMENDMENTS. . . . . . . . . . . . . . . . . . . . .94
11.27 REPLACEMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . .94
</TABLE>
iv
<PAGE>
EXHIBITS
A - Commitments Assignment and Acceptance
B - Competitive Advance Note
C - Competitive Bid
D - Competitive Bid Request
E - Compliance Certificate
F - Joinder Agreement
G - Line Note
H - Reserved
I-1 - Opinion of Counsel
I-2 - Opinion of Counsel
J - Pricing Certificate
K - Request for Loan
L - Joint Borrower Provisions
SCHEDULES
1.1 Bank Commitments
1.2 Test Debt Service Coverage Amount Calculation
4.4 Subsidiaries
4.7 Existing Liens, Negative Pledges and Rights of Others
4.10 Material Litigation
4.17 Hazardous Materials Matters
4.18 Initial Pool Properties
4.19 Real Property
4.21 Indebtedness
v
<PAGE>
FIRST AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
Dated as of August 4, 1998
This FIRST AMENDED AND RESTATED REVOLVING LOAN AGREEMENT ("Agreement")
is entered into by and among Alexandria Real Estate Equities, Inc., a Maryland
corporation ("Parent"), Alexandria Real Estate Equities, L.P., a Delaware
limited partnership ("Operating Partnership"), ARE-QRS Corp., a Maryland
corporation ("QRS"), ARE Acquisitions, LLC, a Delaware limited liability company
("ARE"), the other borrowers whose names are set forth on the signature pages of
this Agreement, each other Wholly-Owned Subsidiary of Parent which may hereafter
become a party to this Agreement as a borrower pursuant to Section 5.13
(collectively, with Parent, Operating Partnership, QRS and ARE, the "Borrowers",
all on a joint and several basis), each bank whose name is set forth on the
signature pages of this Agreement and each lender which may hereafter become a
party to this Agreement pursuant to Section 11.8 (collectively, the "Banks" and
individually, a "Bank"), BankBoston, N.A., as Managing Agent, Societe Generale
Southwest Agency, as Syndication Agent, KeyBank National Association, as
Documentation Agent, and Dresdner Bank AG, as Co-Agent.
RECITALS
WHEREAS, Parent, QRS, ARE, Bank of America National Trust and Savings
Association, individually and as managing agent, and certain other banks have
entered into that certain Revolving Loan Agreement dated as of June 2, 1997 (the
"Original Credit Agreement"); and
WHEREAS, Bank of America National Trust and Savings Association has
assigned its position as managing agent to the Managing Agent; and
WHEREAS, Borrowers have requested that the Banks increase the Commitments
and amend certain other provisions of the Original Credit Agreement; and
WHEREAS, Managing Agent, Borrowers and the Banks desire to amend and
restate the Original Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby amend and restate the
Original Credit Agreement in its entirety as follows:
<PAGE>
Article 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ADJUSTED EBITDA" means with respect to any fiscal period, an amount
equal to the sum of (a) EBITDA of Parent and its Subsidiaries for such
period consolidated in accordance with Generally Accepted Accounting
Principles MINUS (b) the Capital Improvement Reserve for the Real Property
of Parent and its Subsidiaries.
"ADJUSTED NOI" means, with respect to any Revenue-Producing Property
and for any fiscal period, (a) NOI of that Revenue-Producing Property MINUS
(b) the Capital Improvements Reserve for such Revenue Producing Property.
"ADJUSTED TANGIBLE ASSETS" means, as of any date of determination,
without duplication, the SUM OF (a) Total Assets of Parent and its
Subsidiaries as of that date, MINUS (b) Intangible Assets of Parent and its
Subsidiaries as of that date MINUS (c) any "minority interest" included
within Total Assets as of that date, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
"ADVANCE" means any advance made or to be made by any Bank to
Borrowers as provided in ARTICLE 2, and INCLUDES each Alternate Base Rate
Advance and LIBOR Rate Advance.
"AFFILIATE" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); PROVIDED that, in any event, any Person that owns, directly or
indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation, or 10%
or more of the partnership or other ownership interests of any other
Person, will be deemed to be an Affiliate of such corporation, partnership
or other Person.
"AGREEMENT" means this First Amended and Restated Revolving Loan
Agreement, either as originally executed or as it may from time to time be
supplemented, modified, amended, restated or extended.
"AGREEMENT REGARDING FEES" means the Agreement Regarding Fees dated of
even date herewith among the Borrowers and Managing Agent.
2
<PAGE>
"ALTERNATE BASE RATE" means, as of any date of determination, the rate
per annum equal to the HIGHER OF (a) the Reference Rate in effect on such
date and (b) the Federal Funds Rate in effect on such date plus 1/2 of 1%
(50 basis points) (rounded upwards, if necessary, to the next 1/100 of 1%).
"ALTERNATE BASE RATE ADVANCE" means an Advance made hereunder and
specified to be an Alternate Base Rate Advance in accordance with
ARTICLE 2.
"ALTERNATE BASE RATE LOAN" means a Loan made hereunder and specified
to be an Alternate Base Rate Loan in accordance with ARTICLE 2.
"APPLICABLE ALTERNATE BASE RATE MARGIN" means, for each Pricing
Period, the interest rate margin set forth below (expressed in basis points
per annum) opposite the Applicable Pricing Level for that Pricing Period:
<TABLE>
<CAPTION>
Applicable
Pricing Level Margin
------------- ------
<S> <C>
I 0
II 0
III 0
IV 0
V 0
VI 25
</TABLE>
"APPLICABLE LIBOR RATE MARGIN" means, for each Pricing Period, the
interest rate margin set forth below (expressed in basis points per annum)
opposite the Applicable Pricing Level for that Pricing Period:
<TABLE>
<CAPTION>
Applicable
Pricing Level Margin
------------- ------
<S> <C>
I 90.00
II 100.00
III 110.00
IV 115.00
V 125.00
VI 135.00
</TABLE>
3
<PAGE>
"APPLICABLE PRICING LEVEL" means (a) for any date on which Parent
holds a Credit Rating of BBB+ (or its equivalent) or better, Pricing Level
I, (b) for any date on which Parent holds a Credit Rating of BBB (or its
equivalent), Pricing Level II, (c) for any date on which Parent holds a
Credit Rating of BBB- (or its equivalent), Pricing Level III and (d) for
any date during a Pricing Period on which Parent does not hold a Credit
Rating of BBB- (or its equivalent) or better, the pricing level set forth
below opposite the Leverage Ratio as of the last day of the Fiscal Quarter
most recently ended prior to the commencement of that Pricing Period:
<TABLE>
<CAPTION>
Pricing Level Leverage Ratio
------------- --------------
<S> <C>
IV Less than .35 to 1.00
V Equal to or greater than .35 to 1.00
but less than .45 to 1.00
VI Equal to or greater than .45 to 1.00;
</TABLE>
PROVIDED that (a) the Applicable Pricing Level for the initial Pricing
Period shall (UNLESS Pricing Level I, Pricing Level II or Pricing Level III
is then in effect) be PRICING LEVEL V, (b) in the event that Borrowers do
not deliver a Pricing Certificate with respect to any Pricing Period prior
to the commencement of such Pricing Period, then until (but only until)
such Pricing Certificate is delivered the Applicable Pricing Level for that
Pricing Period shall be Pricing Level VI and (c) if any Pricing Certificate
is subsequently determined to be in error, then the resulting change in the
Applicable Pricing Level shall be made retroactively to the beginning of
the relevant Pricing Period.
"ASSET VALUE" means with respect to any improved Real Property owned
by a Person that is not under development for the purposes of Section 6.10,
an amount equal to (a) the Adjusted NOI of such Person from such Real
Property for the period covered by the previous four consecutive Fiscal
Quarters divided by (b) the Capitalization Rate. Prior to such time as a
Borrower or any of its Subsidiaries has owned and operated any Real
Property for four full Fiscal Quarters, the Adjusted NOI with respect to
such Real Property for the number of full Fiscal Quarters which the
Borrower or any of its Subsidiaries has owned and operated such parcel of
Real Property shall be adjusted to an annual Adjusted NOI in such manner as
the Managing Agent shall approve, such approval not to be unreasonably
withheld.
"BANK" means each bank whose name is set forth in the signature pages
of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8.
"BANKING DAY" means any Monday, Tuesday, Wednesday, Thursday or
Friday, OTHER THAN a day on which banks are authorized or required to be
closed in Massachusetts, New York or California.
4
<PAGE>
"BORROWING BASE" means, as of any date of determination, the LESSER OF
(a) the maximum amount which, when added to the total outstanding balance
of all unsecured Indebtedness of Parent and its Subsidiaries (including the
Loans), would not exceed fifty percent (50%) of the aggregate Asset Value
of the Unencumbered Asset Pool, and (b) the maximum amount which would not
cause the Test Debt Service Coverage Amount for the Unencumbered Asset Pool
to be less than two (2).
"BORROWERS" means, collectively, (a) Parent, (b) Operating
Partnership, (c) QRS, (d) ARE, (e) the other borrowers whose names are set
forth on the signature pages of this Agreement and (f) any other
Wholly-Owned Subsidiary of Parent that hereafter executes a Joinder
Agreement pursuant to Section 5.13. Borrowers are jointly and severally
obligated with respect to the Obligations.
"CAPITAL IMPROVEMENT RESERVE" means with respect to any Real Property
now or hereafter owned by the Borrowers or their Subsidiaries, a capital
replacement reserve for the year in the amount of thirty cents ($.30)
multiplied by the Net Rentable Area contained therein.
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of a Person
under any leasing or similar arrangement which, in accordance with
Generally Accepted Accounting Principles, is classified as a capital lease.
"CAPITALIZATION RATE" means initially ten percent (10%), as such rate
may be changed from time to time as provided in this definition. The
Borrowers may request that the Banks modify the prevailing Capitalization
Rate based upon information provided to the Borrowers and the Banks by an
independent expert mutually acceptable to Parent and the Managing Agent
concerning the prevailing capitalization rate used by sophisticated real
estate industry professionals to value properties comparable to those in
the Unencumbered Asset Pool for comparable purposes, provided that any
change to the Capitalization Rate shall be subject to the prior written
approval of the Requisite Banks.
"CASH" means, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"CASH INTEREST EXPENSE" means Interest Expense that is paid or
currently payable in Cash.
"CERTIFICATE" means a certificate signed by a Senior Officer or
Responsible Official (as applicable) of the Person providing the
certificate.
5
<PAGE>
"CHANGE IN CONTROL" means (a) any transaction or series of related
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of
Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 40% or more of the outstanding Common Stock,
(b) Parent consolidates with or merges into another Person or conveys,
transfers or leases its properties and assets substantially as an entirety
to any Person or any Person consolidates with or merges into Parent, in
either event pursuant to a transaction in which the outstanding Common
Stock is changed into or exchanged for cash, securities or other property,
with the effect that any Unrelated Person becomes the beneficial owner,
directly or indirectly, of 40% or more of Common Stock or that the Persons
who were the holders of Common Stock immediately prior to the transaction
hold less than 60% of the common stock of the surviving corporation after
the transaction, (c) during any period of 24 consecutive months,
individuals who at the beginning of such period constituted the board of
directors of Parent (together with any new or replacement directors whose
election by the board of directors, or whose nomination for election, was
approved by a vote of at least a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for reelection was previously so approved) cease for
any reason to constitute a majority of the directors then in office or
(d) a "change in control" as defined in any document governing Indebtedness
of Parent in excess of $25,000,000 which gives the holders of such
Indebtedness the right to accelerate or otherwise require payment of such
Indebtedness prior to the maturity date thereof. For purposes of the
foregoing, the term "UNRELATED PERSON" means any Person OTHER THAN (i) a
Subsidiary of Parent, (ii) an employee stock ownership plan or other
employee benefit plan covering the employees of Parent and its Subsidiaries
or (iii) any Person that held Common Stock on the day prior to the
effective date of Parent's registration statement under the Securities Act
of 1933 covering the initial public offering of Common Stock.
"CLOSING DATE" means the time and Banking Day on which the conditions
set forth in Section 8.1 are satisfied or waived. The Managing Agent shall
notify Borrowers and the Banks of the date that is the Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended or replaced
and as in effect from time to time.
"COMMITMENTS" means the Line Commitment.
"COMMITMENTS ASSIGNMENT AND ACCEPTANCE" means a commitment assignment
and acceptance substantially in the form of EXHIBIT A.
"COMMITTED ADVANCE" means an Advance made to Borrowers by any Bank in
accordance with its Pro Rata Share of the Commitments pursuant to
Section 2.1.
"COMMITTED LOANS" means Loans that are comprised of Committed
Advances.
6
<PAGE>
"COMMON STOCK" means the common stock of Parent or its successor.
"COMPETITIVE ADVANCE" means an Advance made to Borrowers by any Bank
not determined by that Bank's Pro Rata Share of the Commitments pursuant to
Section 2.4.
"COMPETITIVE ADVANCE NOTE" means the promissory note made by Borrowers
in favor of a Bank to evidence the Competitive Advances made by that Bank,
substantially in the form of EXHIBIT B, either as originally executed or as
the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.
"COMPETITIVE BID" means a written bid to provide a Competitive Advance
substantially in the form of EXHIBIT C, signed by a Responsible Official of
a Bank and properly completed to provide all information required to be
included therein.
"COMPETITIVE BID REQUEST" means a written request submitted by
Borrowers to the Managing Agent to provide a Competitive Bid, substantially
in the form of EXHIBIT D, signed by a Responsible Official of Borrowers and
properly completed to provide all information required to be included
therein.
"COMPLIANCE CERTIFICATE" means a certificate in the form of EXHIBIT E,
properly completed and signed by a Senior Officer of Borrowers.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or
any of its Property is bound.
"CONTROLLED ENTITY" means a Person (a) that is a Subsidiary of Parent,
(b) that is a general partnership or a limited partnership in which a
Wholly-Owned Subsidiary is the sole managing general partner and such
managing general partner has the sole power to (i) sell all or
substantially all of the assets of such Person, (ii) incur Indebtedness in
the name of such Person, (iii) grant a Lien on all or any portion of the
assets of such Person and (iv) otherwise generally manage the business and
assets of such Person or (c) that is a limited liability company for which
a Wholly-Owned Subsidiary is the sole manager and such manager has the sole
power to do the acts described in subclauses (i) through (iv) of clause (b)
above.
7
<PAGE>
"CREDIT RATING" means, as of any date of determination, the higher of
the credit ratings (or their equivalents) then assigned to Parent's
long-term senior unsecured debt by either of the Rating Agencies; PROVIDED
that any credit rating so assigned by a Rating Agency shall be deemed for
this purpose to include all lower credit ratings of such Rating Agency. For
purposes of the foregoing, "RATING AGENCIES" means (a) Standard & Poor's
Rating Group (a division of McGraw Hill, Inc.) ("S&P") and its successors,
and (b) Moody's Investor Services, Inc. ("Moody's) and its successors. A
credit rating of BBB- from S&P is equivalent to a credit rating of Baa3
from Moody's and vice versa. A credit rating of BBB from S&P is equivalent
to a credit rating of Baa2 from Moody's and vice versa. It is the
intention of the parties that if Parent shall only obtain a credit rating
from one of the Rating Agencies without seeking a credit rating from the
other of the Rating Agencies, the Borrowers shall be entitled to the
benefit of the Pricing Level for such credit rating. If Parent shall have
obtained a credit rating from both of the Rating Agencies, the higher of
the two ratings shall control, provided that the lower rating is only one
level below that of the higher rating. If the lower rating is more than
one level below that of the higher credit rating, the lower credit rating
shall control. In the event that Parent shall have obtained a credit
rating from both of the Rating Agencies and shall thereafter lose such
rating from one of the Rating Agencies, the Parent shall be deemed for the
purposes hereof not to have a credit rating. If at any time either of the
Rating Agencies shall no longer perform the functions of a securities
rating agency, then the Borrowers and the Agent shall promptly negotiate in
good faith to agree upon a substitute rating agency or agencies (and to
correlate the system of ratings of each substitute rating agency with that
of the rating agency being replaced), and pending such amendment, the
Credit Rating of the other of the Rating Agencies, if one has been
provided, shall continue to apply.
"DEBT OFFERING" means the issuance and sale by any Borrower of any
debt securities of such Borrower.
"DEBT SERVICE" means for any period, the sum of all Interest Charges
and mandatory or scheduled principal payments due and payable during such
period excluding any balloon payments due upon maturity of any
indebtedness. Debt Service shall include the portion of rent payable by a
Person during such period under Capital Lease Obligations that should be
treated as principal in accordance with Generally Accepted Accounting
Principles.
"DEBT SERVICE COVERAGE" means, as of the last day of each Fiscal
Quarter, the RATIO OF (a) Adjusted EBITDA for the fiscal period consisting
of that Fiscal Quarter and the three immediately preceding Fiscal Quarters
TO (b) Debt Service of the Parent and its Subsidiaries for that fiscal
period.
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"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States of
America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"DEFAULT" means any event that, with the giving of any applicable
notice or passage of time specified in Section 9.1, or both, would be an
Event of Default.
"DEFAULT RATE" means the interest rate prescribed in Section 3.9.
"DESIGNATED DEPOSIT ACCOUNT" means a deposit account to be maintained
by Borrowers with BankBoston, N.A. or one of its Affiliates, as from time
to time designated by Borrowers by written notification to the Managing
Agent.
"DEVELOPMENT INVESTMENTS" shall have the meaning contained in
Section 6.10.
"DISQUALIFIED STOCK" means any capital stock, warrants, options or
other rights to acquire capital stock (but excluding any debt security
which is convertible, or exchangeable, for capital stock), which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the Maturity Date.
"DISTRIBUTION" means, with respect to any shares of capital stock or
any warrant or option to purchase an equity security or other equity
security or interest issued by a Person, (i) the retirement, redemption,
purchase or other acquisition for Cash or for Property by such Person of
any such security or interest, (ii) the declaration or (without
duplication) payment by such Person of any dividend in Cash or in Property
on or with respect to any such security or interest, (iii) any Investment
by such Person in the holder of 5% or more of any such security or interest
if a purpose of such Investment is to avoid characterization of the
transaction as a Distribution and (iv) any other payment in Cash or
Property by such Person constituting a distribution under applicable Laws
with respect to such security or interest.
"DOLLARS" or "$" means United States dollars.
"DOMESTIC REFERENCE BANK" means BankBoston, N.A. or such other Bank as
may be appointed by the Managing Agent with the approval of Parent (which
shall not be unreasonably withheld).
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"EBITDA" means, with respect to any Person (or any asset of a Person)
for any fiscal period, the SUM OF (a) the Net Income of such Person (or
attributable to such asset) for that period, PLUS (b) any non-operating
non-recurring loss reflected in such Net Income, MINUS (c) any
non-operating non-recurring gain reflected in such Net Income, PLUS
(d) Interest Expense of such Person for that period, PLUS (e) the aggregate
amount of federal and state taxes on or measured by income of such Person
for that period (whether or not payable during that period), PLUS
(f) depreciation, amortization and all other non-cash expenses (INCLUDING
non-cash officer compensation) of such Person for that period, in each case
as determined in accordance with Generally Accepted Accounting Principles.
"ELIGIBLE ASSIGNEE" means (a) another Bank, (b) with respect to any
Bank, any Affiliate of that Bank, (c) any commercial bank having a combined
capital and surplus of $100,000,000 or more, (d) any (i) savings bank,
savings and loan association or similar financial institution or
(ii) insurance company engaged in the business of writing insurance which,
in either case (A) has a net worth of $200,000,000 or more, (B) is engaged
in the business of lending money and extending credit under credit
facilities substantially similar to those extended under this Agreement and
(C) is operationally and procedurally able to meet the obligations of a
Bank hereunder to the same degree as a commercial bank and (e) any other
financial institution (INCLUDING a mutual fund or other fund) having total
assets of $250,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (d) above; PROVIDED that each Eligible
Assignee must either (a) be organized under the Laws of the United States
of America, any State thereof or the District of Columbia or (b) be
organized under the Laws of the Cayman Islands or any country which is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of such a country, and (i) act hereunder through a
branch, agency or funding office located in the United States of America
and (ii) be exempt from withholding of tax on interest and deliver the
documents related thereto pursuant to Section 11.21.
"EMPLOYEE PLAN" means any (a) employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) any plan
(as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code, (c) any entity the underlying assets of which
include plan assets (as defined in 29 C.F.R. Section 2510.3-101 or
otherwise under ERISA) by reason of a plan's investment in such entity
(INCLUDING an insurance company general account), or (d) a governmental
plan (as defined in Section 3(32) of ERISA or Section 414(d) of the Code)
organized in a jurisdiction within the United States of America having
prohibitions on transactions with such governmental plan substantially
similar to those contained in Section 406 of ERISA or Section 4975 of the
Code.
"EQUITY OFFERING" means the issuance and sale by any Borrower of any
equity securities of such Borrower.
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"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA AFFILIATE" means each Person (whether or not incorporated)
which is required to be aggregated with Parent pursuant to Section 414 of
the Code.
"EVENT OF DEFAULT" shall have the meaning provided in Section 9.1.
"FEDERAL FUNDS RATE" means, as of any date of determination, the rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Banking Day, for the next preceding Banking Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is
a Banking Day, the average of the quotations for such day on such
transactions received by the Managing Agent from three (3) Federal funds
brokers of recognized standing selected by the Managing Agent. For
purposes of this Agreement, any change in the Alternate Base Rate due to a
change in the Federal Funds Rate shall be effective as of the opening of
business on the effective date of such change.
"FISCAL QUARTER" means the fiscal quarter of Borrowers ending on each
March 31, June 30, September 30 and December 31.
"FISCAL YEAR" means the fiscal year of Borrowers ending on each
December 31.
"FIXED CHARGE COVERAGE" means, as of the last day of each Fiscal
Quarter, the RATIO of (a) Adjusted EBITDA for the fiscal period consisting
of that Fiscal Quarter and the three immediately preceding Fiscal Quarters
TO (b) the SUM of (i) Debt Service of the Parent and its Subsidiaries for
such fiscal period PLUS (ii) all Preferred Distributions of Parent and its
Subsidiaries made during such fiscal period.
"FIXED RATE LOAN" means any Competitive Advance bearing interest on
the basis of a fixed rate specified by the Bank making such Competitive
Advance in response to a request for an Absolute Rate Bid.
"FUNDS AVAILABLE FOR DISTRIBUTION" means with respect to any fiscal
period, an amount equal to Funds from Operations, MINUS Net Capital
Expenditures of Parent and its Subsidiaries incurred during such fiscal
period.
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"FUNDS FROM OPERATIONS" means, with respect to any fiscal period,
(a) the Net Income of Parent for that period, PLUS (b) any loss resulting
from the restructuring of Indebtedness, sale of Property or other
non-operating non-recurring cause during that period, MINUS (c) any gain
resulting from the restructuring of Indebtedness, sale of Property or other
non-operating non-recurring cause during that period, PLUS (d) depreciation
and amortization of Revenue-Producing Properties (including with respect to
trade fixtures and tenant improvements which are a part thereof and
capitalized leasing expenses, such as leasing commissions and tenant
improvement allowances), and ADJUSTED to take into account (i) the results
of operations of any unconsolidated Related Ventures calculated on the same
basis and (ii) any unusual and non-recurring expense which otherwise would
materially distort a comparative evaluation of Funds From Operation for
different fiscal periods. Funds From Operations shall be determined in
accordance with the March 1995 White Paper on Funds From Operations
approved by the Board of Governors of the National Association of Real
Estate Investment Trusts, as in effect on the Closing Date.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, as of any date of
determination, accounting principles (a) set forth as generally accepted in
then currently effective Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "CONSISTENTLY
APPLIED," as used in connection therewith, means that the accounting
principles applied are consistent in all material respects with those
applied at prior dates or for prior periods.
"GOVERNMENTAL AGENCY" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body or (c) any
court or administrative tribunal of competent jurisdiction.
"GUARANTY OBLIGATION" means, as to any Person, any (a) guarantee by
that Person of Indebtedness of, or other obligation performable by, any
other Person or (b) assurance given by that Person to an obligee of any
other Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, INCLUDING any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet
item of such other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or holding harmless such
obligee against loss with respect to any obligation of such other Person;
PROVIDED, HOWEVER, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of
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any Guaranty Obligation in respect of Indebtedness shall be deemed to be
an amount equal to the stated or determinable amount of the related
Indebtedness (unless the Guaranty Obligation is limited by its terms to
a lesser amount, in which case to the extent of such amount) or, if not
stated or determinable, the reasonably anticipated liability in respect
thereof as determined by the Person in good faith pursuant to Generally
Accepted Accounting Principles.
"HAZARDOUS MATERIALS" means substances defined as "hazardous
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., or
as "hazardous", "toxic" or "pollutant" substances or as "solid waste"
pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or as "friable asbestos" pursuant to the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq. or any other
applicable Hazardous Materials Law, in each case as such Laws are amended
from time to time.
"HAZARDOUS MATERIALS LAWS" means all Laws governing the treatment,
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"INDEBTEDNESS" means, as to any Person (without duplication),
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of Property (EXCLUDING trade and other accounts payable in
the ordinary course of business in accordance with ordinary trade terms),
INCLUDING any Guaranty Obligation, (b) indebtedness of such Person of the
nature described in clause (a) that is non-recourse to the credit of such
Person but is secured by assets of such Person, to the extent of the fair
market value of such assets as determined in good faith by such Person,
(c) Capital Lease Obligations of such Person, (d) indebtedness of such
Person arising under bankers' acceptance facilities or under facilities for
the discount of accounts receivable of such Person, (e) the undrawn face
amount of any letters of credit issued for the account of such Person, (f)
any net obligations of such Person under Swap Agreements, (g) all
liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been
assumed, and (h) without duplication, a Person's pro rata share of any of
the above-described obligations of its unconsolidated Affiliates.
Indebtedness shall include all obligations, contingent and otherwise, that
in accordance with Generally Accepted Accounting Principles should be
classified upon the obligor's balance sheet as liabilities, including all
of the foregoing whether or not so classified.
"INITIAL POOL PROPERTIES" means the Revenue-Producing Properties
described in SCHEDULE 4.18.
"INTANGIBLE ASSETS" means assets that are considered intangible assets
under Generally Accepted Accounting Principles, INCLUDING customer lists,
goodwill, copyrights, trade names, trademarks and patents.
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"INTEREST CHARGES" means, as of the last day of any fiscal period, the
SUM OF (a) Cash Interest Expense of a Person PLUS (b) all interest
currently payable by a Person in Cash incurred during that fiscal period
which is capitalized under Generally Accepted Accounting Principles PLUS
(c) a Person's Proportional Share of the Cash Interest Expense and
capitalized interest payable in Cash of Related Ventures during that fiscal
period.
"INTEREST EXPENSE" means, with respect to any Person and as of the
last day of any fiscal period, the SUM OF (a) all interest, fees, charges
and related expenses paid or payable (without duplication) for that fiscal
period by that Person to a lender in connection with borrowed money
(INCLUDING any obligations for fees, charges and related expenses payable
to the issuer of any letter of credit) or the deferred purchase price of
assets that are considered "interest expense" under Generally Accepted
Accounting Principles PLUS (b) the portion of rent paid or payable (without
duplication) for that fiscal period by that Person under Capital Lease
Obligations that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
"INTEREST PERIOD" means, with respect to any LIBOR Rate Loan, the
related LIBOR Period.
"INVESTMENT" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of
a loan, advance creating a debt, capital contribution, guaranty or other
debt or equity participation or interest in any other Person, INCLUDING any
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested (MINUS any return of
capital with respect to such Investment which has actually been received in
Cash or has been converted into Cash), without adjustment for subsequent
increases or decreases in the value of such Investment.
"JOINDER AGREEMENT" means the joinder agreement with respect to this
Agreement to be executed and delivered pursuant to Section 5.13 by any
additional Borrower in the form of EXHIBIT F, either as originally executed
or as it may from time to time be supplemented, modified, amended, extended
or supplanted.
"LAWS" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"LEVERAGE RATIO" means, as of the last day of each Fiscal Quarter, the
RATIO OF (a) Total Liabilities of Parent and its Subsidiaries as of that
date TO (b) Adjusted Tangible Assets as of that date.
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"LIBOR BANKING DAY" means any Banking Day on which dealings in Dollar
deposits are conducted by and among banks in the London interbank market.
"LIBOR LENDING OFFICE" means, as to each Bank, its office or branch so
designated by written notice to Borrowers and the Managing Agent as its
LIBOR Lending Office. If no LIBOR Lending Office is designated by a Bank,
its LIBOR Lending Office shall be its office at its address for purposes of
notices hereunder.
"LIBOR OBLIGATIONS" means eurocurrency liabilities, as defined in
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Bank.
"LIBOR PERIOD" means, as to each LIBOR Rate Loan, the period
commencing on the date specified by Borrowers pursuant to Section 2.1(c)
and ending 1, 2, 3 or 6 months (or, with the written consent of all of the
Banks, any other period) thereafter, as specified by Borrowers in the
applicable Request for Loan; PROVIDED that:
(a) The first day of any LIBOR Period shall be a LIBOR Banking
Day;
(b) Any LIBOR Period that would otherwise end on a day that is
not a LIBOR Banking Day shall be extended to the next succeeding LIBOR
Banking Day unless such LIBOR Banking Day falls in another calendar
month, in which case such LIBOR Period shall end on the next preceding
LIBOR Banking Day; and
(c) No LIBOR Period shall extend beyond the Maturity Date.
"LIBOR RATE" means, with respect to any LIBOR Rate Loan, the interest
rate per annum as determined by the LIBOR Reference Bank (rounded upward,
if necessary, to the next 1/100 of 1%) at which deposits in Dollars are
offered to prime banks by such banks in the London interbank market (based
on Telerate quotes, page 3750, or such other page as containing the same
information as presently on page 3750, or if such information is not
available, in such other manner as the LIBOR Reference Bank shall
determine) at or about 11:00 a.m. local time in the London interbank
market, two (2) LIBOR Banking Days before the first day of the applicable
LIBOR Period for delivery on the first day of such LIBOR Period in an
aggregate amount approximately equal to the amount of the Advance with
respect to such LIBOR Rate Loan and for a period of time comparable to the
number of days in the applicable LIBOR Period.
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"LIBOR RATE ADVANCE" means an Advance made hereunder and specified to
be a LIBOR Rate Advance in accordance with ARTICLE 2.
"LIBOR RATE LOAN" means a Loan made hereunder and specified to be a
LIBOR Rate Loan in accordance with ARTICLE 2.
"LIBOR REFERENCE BANK" means BankBoston, N.A. or such other Bank as
may be appointed by the Managing Agent with the approval of Parent (which
shall not be unreasonably withheld).
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, INCLUDING any conditional sale or other
title retention agreement, any lease in the nature of a security interest,
and/or the filing of any financing statement (OTHER THAN a precautionary
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or comparable Law of
any jurisdiction with respect to any Property.
"LINE COMMITMENT" means, subject to Section 2.5, $250,000,000. The
respective Pro Rata Shares of the Banks with respect to the Line Commitment
are set forth in SCHEDULE 1.1.
"LINE NOTE" means any of the promissory notes made by Borrowers to a
Bank evidencing Advances under that Bank's Pro Rata Share of the Line
Commitment, substantially in the form of EXHIBIT G, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"LINE LOAN" means any Loan made under the Line Commitment.
"LOAN" means the aggregate of the Advances made at any one time by the
Banks pursuant to Section 2.1.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, each
Joinder Agreement and any other agreements of any type or nature hereafter
executed and delivered by Borrowers to the Managing Agent or to any Bank in
any way relating to or in furtherance of this Agreement, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
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"MAJORITY BANKS" means (a) as of any date of determination if the
Commitments are then in effect, Banks having in the aggregate more than 50%
of the Commitments then in effect and (b) as of any date of determination
if the Commitments have then been suspended or terminated and there is then
any Indebtedness evidenced by the Notes, Banks holding Notes evidencing in
the aggregate more then 50% of the aggregate Indebtedness then evidenced by
the Notes.
"MANAGING AGENT" means BankBoston, N.A., when acting in its capacity
as the Managing Agent under any of the Loan Documents, or any successor
Managing Agent.
"MANAGING AGENT'S OFFICE" means the Managing Agent's address at 100
Federal Street, Boston, Massachusetts 02110, or such other address as the
Managing Agent hereafter may designate by written notice to Borrowers and
the Banks. With respect to notices to be sent to BankBoston, N.A. as
Managing Agent with respect to Requests for Loans and pursuant to Section
2.14, such notices shall be sent to the office of Managing Agent located in
Atlanta, Georgia as specified in this Agreement, or at such other office as
Managing Agent may designate by written notice to the Banks and the
Borrowers.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X.
"MATERIAL ADVERSE EFFECT" means any set of circumstances or events
which (a) has had or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of any Loan
Document (OTHER THAN as a result of any action or inaction of the Managing
Agent or any Bank), (b) has been or could reasonably be expected to be
material and adverse to the business or condition (financial or otherwise)
of Borrowers or (c) has materially impaired or could reasonably be expected
to materially impair the ability of Borrowers to perform the Obligations.
"MATURITY DATE" means (a) May 31, 2000, or (b) if the Revolver
Termination Date has then been extended pursuant to Section 2.9, such
extended Revolver Termination Date.
"MAXIMUM COMPETITIVE ADVANCE" means, with respect to any Competitive
Bid made by a Bank, the amount set forth therein as the maximum Competitive
Advance which that Bank is willing to make in response to the related
Competitive Bid Request.
"MONTHLY PAYMENT DATE" means the first day of each calendar month.
"MORTGAGEABLE GROUND LEASE" means any lease (a) which is a direct
lease granted by the fee owner of real property, (b) which has a remaining
term (calculated from the date of acquisition of such interest) of not less
than thirty (30) years, including extension options, (c) under which no
material default has occurred and is continuing, and (d) with respect to
which a security interest may be granted without the consent of the lessor.
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"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA to which Borrowers or any of their
ERISA Affiliates contribute or are obligated to contribute.
"NEGATIVE PLEDGE" means a Contractual Obligation that contains a
covenant binding on Borrowers that prohibits Liens on any of their
Property, OTHER THAN (a) any such covenant contained in a Contractual
Obligation granting or relating to a particular Lien which affects only the
Property that is the subject of such Lien and (b) any such covenant that
does not apply to Liens which may secure the Obligations now or in the
future.
"NET CAPITAL EXPENDITURES" means with respect to any Person for any
fiscal period, an amount equal to the sum of the amount of capital
expenditures paid in cash by such Person in order to maintain the general
condition and operation of its Real Property during such fiscal period,
excluding any non-recurring capital expenditures made to update or enhance
building infrastructure or building systems on such Real Property, PLUS the
amount of leasing costs (including leasing commissions and standard tenant
improvements) paid in cash by such Person with respect to its Real Property
during such fiscal period.
"NET INCOME" means, with respect to any Person and with respect to any
fiscal period, the net income of that Person for that period, determined in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"NON-RECOURSE DEBT" means Indebtedness of Parent or any of its
Subsidiaries for which the liability of Parent or such Subsidiary (EXCEPT
with respect to fraud, Hazardous Materials Laws liability and other
customary exceptions) either is contractually limited to collateral
securing such Indebtedness or is so limited by operation of Law.
"NET RENTABLE AREA" means with respect to any Real Property, the floor
area of any buildings, structures or improvements available for leasing to
tenants (excluding storage lockers and parking spaces) determined in
accordance with the Rent Roll for such Real Property, the manner of such
determination to be consistent for all Real Property unless otherwise
approved by the Managing Agent.
"NOI" means, with respect to any Revenue-Producing Property and with
respect to any fiscal period, the SUM OF (a) the net income of that
Revenue-Producing Property for that period, PLUS (b) Interest Expense of
that Revenue-Producing Property for that period, PLUS (c) the aggregate
amount of federal and state taxes on or measured by income of that
Revenue-Producing Property for that period (whether or not payable during
that period), PLUS (d) depreciation, amortization and all other non-cash
expenses of that Revenue-Producing Property for that period, in each case
as determined in accordance with Generally Accepted Accounting Principles.
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"NOTES" means the Line Notes and the Competitive Advance Notes.
"OBLIGATIONS" means all present and future obligations of every kind
or nature of Borrowers at any time and from time to time owed to the
Managing Agent or the Banks or any one or more of them, under any one or
more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent,
INCLUDING obligations of performance as well as obligations of payment, and
INCLUDING interest that accrues after the commencement of any proceeding
under any Debtor Relief Law by or against Borrowers.
"OPINIONS OF COUNSEL" means the favorable written legal opinions of
(a) Ballard Spahr Andrews & Ingersoll, LLP, special Maryland counsel to
Borrowers and (b) Skadden, Arps, Slate, Meagher & Flom, LLP, special
counsel to Borrowers, substantially in the form of EXHIBITS I-1 AND I-2 ,
respectively, together with copies of all factual certificates and legal
opinions delivered to such counsel in connection with such opinion upon
which such counsel has relied.
"PARENT'S PROPORTIONAL SHARE" means, with respect to any Related
Venture, the percentage of the direct and indirect equity ownership
interest of Parent in the Related Venture.
"PARTY" means any Person other than the Managing Agent and the Banks,
which now or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereof established under ERISA.
"PENSION PLAN" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), OTHER THAN a Multiemployer Plan,
which is subject to Title IV of ERISA and is maintained by Borrowers or to
which Borrowers contribute or have an obligation to contribute.
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"PERMITTED ENCUMBRANCES" means:
(a) Inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of
Property now or hereafter filed of record for which adequate reserves
have been set aside (or deposits made pursuant to applicable Law) and
which are being contested in good faith by appropriate proceedings and
have not proceeded to judgment, PROVIDED that, by reason of nonpayment
of the obligations secured by such Liens, no such Property is subject
to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not
yet past due; or Liens for taxes and assessments on Property for which
adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
PROVIDED that, by reason of nonpayment of the obligations secured by
such Liens, no such Property is subject to a material impending risk
of loss or forfeiture;
(c) defects and irregularities in title to any Property which in
the aggregate do not materially impair the fair market value or use of
the Property for the purposes for which it is or may reasonably be
expected to be held;
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines,
power lines and substations, streets, trails, walkways, drainage,
irrigation, water, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like purposes
affecting Property which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes
for which it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property
which in the aggregate do not materially burden or impair the fair
market value or use of such Property for the purposes for which it is
or may reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, any right, power, franchise, grant, license,
or permit;
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(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of
Property which in the aggregate do not materially burden or impair
the fair market value or use of such Property for the purposes for
which it is or may reasonably be expected to be held;
(i) statutory Liens, other than those described in clauses (a)
or (b) above, arising in the ordinary course of business (but not in
connection with the incurrence of any Indebtedness) with respect to
obligations which are not delinquent or are being contested in good
faith, PROVIDED that, if delinquent, adequate reserves have been set
aside with respect thereto and, by reason of nonpayment, no Property
is subject to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which may not give rise to any Lien against such Property and
which in the aggregate do not materially impair the fair market value
or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
(k) rights of tenants as tenants only under leases and rental
agreements covering Property entered into in the ordinary course of
business of the Person owning such Property;
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(m) Liens consisting of pledges or deposits of Property to
secure performance in connection with operating leases made in the
ordinary course of business, PROVIDED the aggregate value of all such
pledges and deposits in connection with any such lease does not at any
time exceed 20% of the annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (OTHER THAN contracts
creating or evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrowers;
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(q) Liens created by or resulting from any litigation or legal
proceeding in the ordinary course of business which is currently being
contested in good faith by appropriate proceedings, PROVIDED that,
adequate reserves have been set aside and no material Property is
subject to a material impending risk of loss or forfeiture; and
(r) other non-consensual Liens incurred in the ordinary course
of business but not in connection with the incurrence of any
Indebtedness, which do not individually involve amounts in excess of
$100,000.00 or in the aggregate involve amounts in excess of
$250,000.00.
"PERMITTED RIGHT OF OTHERS" means a Right of Others consisting of
(a) an interest (OTHER THAN a legal or equitable co-ownership interest, an
option or right to acquire a legal or equitable co-ownership interest and
any interest of a ground lessor under a ground lease), that does not
materially impair the fair market value or use of Property for the purposes
for which it is or may reasonably be expected to be held, (b) an option or
right to acquire a Lien that would be a Permitted Encumbrance, (c) the
subordination of a lease or sublease in favor of a financing entity and
(d) a license, or similar right, of or to Intangible Assets granted in the
ordinary course of business.
"PERSON" means any individual or entity, INCLUDING a trustee,
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"PREFERRED DISTRIBUTIONS" means for any period, the amount of any and
all Distributions due and payable to the holders of any form of preferred
stock (whether perpetual, convertible or otherwise) or other ownership or
beneficial interest in Parent or any of its Subsidiaries that entitles the
holders thereof to preferential payment or distribution priority with
respect to dividends, assets or other payments over the holders of any
other stock or other ownership or beneficial interest in such Person.
"PRICING CERTIFICATE" means a certificate in the form of EXHIBIT J,
properly completed and signed by a Senior Officer of Borrowers.
"PRICING PERIOD" means (a) the period commencing on the Closing Date
and ending on September 1, 1998, (b) the period commencing on each
September 2, and ending on the next following December 1, (c) the period
commencing on each December 2 and ending on the next following March 1,
(d) the period commencing on each March 2 and ending on the next following
June 1, and (e) the period commencing on each June 2 and ending on the next
following September 1.
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"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PRO RATA SHARE" means, with respect to each Bank, the percentage of
the Commitments set forth opposite the name of that Bank on SCHEDULE 1.1,
as such percentage may be increased or decreased pursuant to a Commitments
Assignment and Acceptance executed in accordance with Section 11.8.
"QUALIFIED UNENCUMBERED ASSET POOL PROPERTY" means a Revenue-Producing
Property that (a) is wholly owned in fee simple absolute or a leasehold
interest pursuant to a Mortgageable Ground Lease by Parent or any other
Borrower that is a Wholly-Owned Subsidiary, (b) is occupied or available
for occupancy, (c) to the best of Borrowers' knowledge and belief, does not
have any title, survey, environmental or other defects that would give rise
to a materially adverse effect as to the value, use of or ability to sell
or refinance such property, (d) is Unencumbered, and (e) would not cause
the Borrowers to be in violation of the covenant set forth in Section 5.17.
"QUARTERLY PAYMENT DATE" means each July 1, October 1, January 1 and
April 1.
"REAL PROPERTY" means, as of any date of determination, all real
property then or theretofore owned, leased or occupied by any of Borrowers.
"REFERENCE RATE" means the rate of interest announced from time to
time by the Domestic Reference Bank in Boston, Massachusetts (or other
headquarters city of the Domestic Reference Bank), as its "base rate." It
is a rate set by the Domestic Reference Bank based upon various factors
including the Domestic Reference Bank's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the Reference Rate announced by the Domestic Reference
Bank shall take effect at the opening of business on the day on which such
change in the base rate becomes effective.
"REGULATION D" means Regulation D, as at any time amended, of the
Board of Governors of the Federal Reserve System, or any other regulation
in substance substituted therefor.
"REGULATIONS T, U AND X" means Regulations T, U and X, as at any time
amended, of the Board of Governors of the Federal Reserve System, or any
other regulations in substance substituted therefor.
"RELATED VENTURE" means a corporation, limited liability company,
partnership or other Person that owns one or more Revenue-Producing
Properties and which is not a Wholly-Owned Subsidiary.
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"RENT ROLL" means a report prepared by a Borrower showing for the Real
Property owned by it, its occupancy, lease expiration dates, lease rent and
other information in substantially the form presented to the Managing Agent
prior to the date hereof or in such other form as may have been approved by
the Managing Agent.
"REQUEST FOR LOAN" means a written request for a Loan substantially in
the form of EXHIBIT K, signed by a Responsible Official of any of
Borrowers, on behalf of Borrowers, and properly completed to provide all
information required to be included therein.
"REQUIREMENT OF LAW" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"REQUISITE BANKS" means (a) as of any date of determination if the
Commitments are then in effect, Banks having in the aggregate 60% or more
of the Commitments then in effect and (b) as of any date of determination
if the Commitments have then been suspended or terminated and there is then
any Indebtedness evidenced by the Notes, Banks holding Notes evidencing in
the aggregate 60% or more of the aggregate Indebtedness then evidenced by
the Notes.
"RESPONSIBLE OFFICIAL" means (a) when used with reference to a Person
other than an individual, any corporate officer of such Person, general
partner or managing member of such Person, corporate officer of a corporate
general partner or managing member of such Person, or corporate officer of
a corporate general partner of a partnership that is a general partner of
such Person or corporate managing member of a limited liability company
that is a managing member of such Person, or any other responsible official
thereof duly acting on behalf thereof, and (b) when used with reference to
a Person who is an individual, such Person. The Banks shall be entitled to
conclusively rely upon any document or certificate that is signed or
executed by a Responsible Official of Parent or any of its Subsidiaries as
having been authorized by all necessary corporate, partnership and/or other
action on the part of Parent or such Subsidiary.
"REVENUE-PRODUCING PROPERTY" means an identifiable improved real
estate property that is utilized principally for office purposes, or with
respect to the life science industry only, office/laboratory, research or
manufacturing/warehouse purposes (INCLUDING the underlying real property
and all appurtenant real property rights) or for such other purposes as the
Requisite Banks may approve which produces revenue to a Borrower or its
Subsidiary.
"REVOLVER TERMINATION DATE" means (a) May 31, 2000 or (b) if the
Revolver Termination Date has then been extended pursuant to Section 2.9,
such extended Revolver Termination Date.
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"RIGHT OF OTHERS" means, as to any Property in which a Person has an
interest, any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in that Property, and any option or right
held by any other Person to acquire any such right, title or other interest
in that Property, INCLUDING any option or right to acquire a Lien;
PROVIDED, however, that (a) no covenant restricting the use or disposition
of Property of such Person contained in any Contractual Obligation of such
Person and (b) no provision contained in a contract creating a right of
payment or performance in favor of a Person that conditions, limits,
restricts, diminishes, transfers or terminates such right shall be deemed
to constitute a Right of Others.
"SECURED DEBT" means Indebtedness of Parent or any of its Subsidiaries
(INCLUDING Indebtedness of a Related Venture which is the subject of a
Guaranty Obligation of Parent or a Subsidiary of Parent or, if such Person
is a partnership, of which Parent or a Subsidiary of Parent is a general
partner, Parent's or such Subsidiaries' pro rata share of any such
Indebtedness of unconsolidated Persons) that is secured by a Lien or is
subject to a Negative Pledge.
"SENIOR OFFICER" means (a) the chief executive officer, (b) the
chairman or (c) the chief financial officer, in each case of any of the
Borrowers or of any of their corporate general partners or managing
members, as applicable.
"SPECIAL LIBOR CIRCUMSTANCE" means the application or adoption after
the Closing Date of any Law or interpretation, or any change therein or
thereof, or any change in the interpretation or administration thereof by
any Governmental Agency, central bank or comparable authority charged with
the interpretation or administration thereof, or compliance by any Bank or
its LIBOR Lending Office with any request or directive (whether or not
having the force of Law) of any such Governmental Agency, central bank or
comparable authority.
"STOCKHOLDERS' EQUITY" means, as of any date of determination, the
Adjusted Tangible Assets of the Parent and its Subsidiaries as of that date
MINUS Total Liabilities of Parent and its Subsidiaries as of such date.
"SUBSIDIARY" means, as of any date of determination and with respect
to any Person, (a) any corporation, limited liability company, partnership
or other Person (whether or not, in any case, characterized as such or as a
"joint venture"), whether now existing or hereafter organized or acquired:
(i) in the case of a corporation or limited liability company, of which a
majority of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power
only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (ii) in the case of a partnership, of which a majority of the
partnership or other ownership interests are at the time beneficially owned
by such Person and/or one or more of its Subsidiaries; and
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(b) any other Person the accounts of which are consolidated with the
accounts of the designated parent.
"SWAP AGREEMENT" means a written agreement between Borrowers and one
or more financial institutions providing for "swap", "cap", "collar" or
other interest rate protection with respect to any Indebtedness.
"TEST DEBT SERVICE COVERAGE AMOUNT" means at any time determined under
this Agreement, an amount obtained by dividing an amount equal to (a) the
sum of the aggregate Adjusted NOI from the Unencumbered Asset Pool for the
preceding four (4) Fiscal Quarters, by (b) the annual amount of principal
and interest that would be payable on the total outstanding balance of all
unsecured Indebtedness of the Borrowers and their Subsidiaries (including
the Loans and any requested Loans) when bearing interest at a rate per
annum equal to the then-current annual yield on ten (10) year obligations
issued by the United States Treasury most recently prior to the date of
determination plus two percent (2.0%) and payable based on a twenty-five
year mortgage style amortization schedule (expressed as a mortgage constant
percentage). The Test Debt Service Coverage Amount shall be determined by
the Borrower and shall be satisfactory to the Managing Agent, provided that
in the event that as of any date under this Agreement that the Test Debt
Service Coverage Amount is required to be determined hereunder and such
determination shall have not been made as provided above, then such amount
shall be determined by the Managing Agent. An example of the calculation
of the Test Debt Service Coverage Amount is set forth in SCHEDULE 1.2
attached hereto. In the event that a Borrower shall have owned a property
within the Unencumbered Asset Pool for less than four (4) consecutive
Fiscal Quarters, then for the purposes of performing such calculation, the
Adjusted NOI with respect to such property shall be annualized in such
manner as the Managing Agent shall reasonably determine.
"TOTAL ASSETS" means all assets of a Person and its Subsidiaries
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles; provided that all Real Property owned by a Person
that is improved and is not under development for the purposes of Section
6.10 shall be valued based on its Asset Value. In the event that a Person
has an ownership or other equity interest in any other Person, which
investment is not consolidated in accordance with Generally Accepted
Accounting Principles (that is, such interest is a "minority interest"),
then the assets of a Person and its Subsidiaries shall include such
Person's or its Subsidiaries' allocable share of all assets of such Person
in which a minority interest is owned based on such Person's respective
ownership interest in such other Person.
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"TOTAL LIABILITIES" means all liabilities of a Person and its
Subsidiaries determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles and all Indebtedness and Guaranty
Obligations of such Person and its Subsidiaries, whether or not so
classified. In the event that a Person has an ownership or other equity
interest in any other Person, which investment is not consolidated in
accordance with Generally Accepted Accounting Principles (that is, such
interest is a "minority interest"), then the liabilities of a Person and
its Subsidiaries shall include such Person's or its Subsidiaries' allocable
share of all indebtedness of such Person in which a minority interest is
owned based on such Person's respective ownership interest in such other
Person.
"TO THE BEST KNOWLEDGE OF" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person other
than a natural Person, known by a Responsible Official of that Person)
making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance
with the standard of what a reasonable Person in similar circumstances
would have done) would have been known by the Person (or, in the case of a
Person other than a natural Person, would have been known by a Responsible
Official of that Person).
"TYPE", when used with respect to any Loan or Advance, means the
designation of whether such Loan or Advance is an Alternate Base Rate Loan
or Advance, or a LIBOR Rate Loan or Advance.
"UNENCUMBERED" means, with respect to any Revenue-Producing Property,
that such Revenue-Producing Property (a) is not subject to any Lien OTHER
THAN Permitted Encumbrances, (b) is not subject to any Negative Pledge and
(c) is not held by a Person any of whose equity interests are subject to a
Lien or Negative Pledge in favor of any creditor of Parent or any of its
Subsidiaries.
"UNENCUMBERED ASSET POOL" means, as of any date of determination,
(a) the Initial Pool Properties, PLUS (b) each other Qualified Unencumbered
Asset Pool Property which has been added to the Unencumbered Asset Pool
pursuant to Section 2.11 as of such date, MINUS (c) any Revenue-Producing
Property which has been removed from the Unencumbered Asset Pool pursuant
to Section 2.11 as of such date.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of Parent, 100% of the
capital stock or other equity interest of which is owned, directly or
indirectly, by Parent, EXCEPT for director's qualifying shares required by
applicable Laws.
1.2 USE OF DEFINED TERMS. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
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1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a consistent basis, EXCEPT
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the covenants contained in Sections 6.5 through 6.15, inclusive, would then
be calculated in a different manner or with different components, (a) Borrowers
and the Banks agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrowers' financial
condition to substantially the same criteria as were effective prior to such
change in Generally Accepted Accounting Principles and (b) Borrowers shall be
deemed to be in compliance with the covenants contained in the aforesaid
Sections if and to the extent that Borrowers would have been in compliance
therewith under Generally Accepted Accounting Principles as in effect
immediately prior to such change, but shall have the obligation to deliver each
of the materials described in ARTICLE 7 to the Managing Agent and the Banks, on
the dates therein specified, with financial data presented in a manner which
conforms with Generally Accepted Accounting Principles as in effect immediately
prior to such change.
1.4 ROUNDING. Any financial ratios required to be maintained by
Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 REFERENCES TO "BORROWERS AND THEIR SUBSIDIARIES". Any reference
herein to "Borrowers and their Subsidiaries" or the like shall refer solely to
Borrowers during such times, if any, as Borrowers shall have no Subsidiaries.
1.7 MISCELLANEOUS TERMS. The term "or" is disjunctive; the term
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.
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Article 2
LOANS
2.1 COMMITTED LOANS-GENERAL.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Revolver Termination Date, each Bank shall, pro rata according to that
Bank's Pro Rata Share of the then applicable Line Commitment, make Advances
to Borrowers under the Line Commitment in such amounts as Borrowers may
request that do not result in (i) the aggregate principal amount
outstanding under the Line Notes to exceed the Line Commitment or (ii) the
aggregate principal amount outstanding under the Notes to exceed the LESSER
OF (a) the Line Commitment or (B) the Borrowing Base; provided that in all
events no Default or Event of Default shall have occurred and be
continuing. Subject to the limitations set forth herein, Borrowers may
borrow, repay and reborrow under the Line Commitment without premium or
penalty.
(b) [Intentionally omitted.]
(c) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, (ii) type of Loan, (iii) amount of such Loan, and (iv) in the
case of a LIBOR Rate Loan, the Interest Period for such Loan. Unless the
Managing Agent has notified, in its sole and absolute discretion, Borrowers
to the contrary, a Loan may be requested by telephone by a Responsible
Official of Borrowers, in which case Borrowers shall confirm such request
by promptly delivering a Request for Loan in person or by telecopier
conforming to the preceding sentence to the Managing Agent. Managing Agent
shall incur no liability whatsoever hereunder in acting upon any telephonic
request for Loan purportedly made by a Responsible Official of Borrowers,
and Borrowers hereby agree to indemnify the Managing Agent from any loss,
cost, expense or liability as a result of so acting.
(d) Promptly following receipt of a Request for Loan, the
Managing Agent shall notify each Bank by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier) of the date and type of the
Loan, the applicable Interest Period, and that Bank's Pro Rata Share of the
Loan. Not later than 2:00 p.m., Massachusetts time, on the date specified
for any Loan (which must be a Banking Day), each Bank shall make its Pro
Rata Share of the Loan in immediately available funds available to the
Managing Agent at the Managing Agent's Office. Upon satisfaction or waiver
of the applicable conditions set forth in ARTICLE 8, all Advances shall be
credited on that date in immediately available funds to the Designated
Deposit Account.
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(e) Unless the Requisite Banks otherwise consent, each Alternate
Base Rate Loan shall be not less than $1,000,000, each LIBOR Rate Loan
shall be not less than $2,000,000 and all Loans shall be in an integral
multiple of $100,000.
(f) The Advances made by each Bank under the Line Commitment
shall be evidenced by that Bank's Line Note.
(g) A Request for Loan shall be irrevocable upon the Managing
Agent's first notification thereof.
(h) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(c), if applicable) has
been made within the requisite notice periods set forth in Section 2.2 or
2.3 prior to the end of the Interest Period for any LIBOR Rate Loan, then
on the last day of such Interest Period, such LIBOR Rate Loan shall be
automatically converted into an Alternate Base Rate Loan in the same
amount.
2.2 ALTERNATE BASE RATE LOANS. Each request by Borrowers for an
Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(c), if applicable) received by the Managing Agent, at the Managing
Agent's Office, not later than 2:00 p.m. Massachusetts time, on the date (which
must be a Banking Day) prior to the date of the requested Alternate Base Rate
Loan. All Loans shall constitute Alternate Base Rate Loans unless properly
designated as a LIBOR Rate Loan pursuant to Section 2.3.
2.3 LIBOR RATE LOANS.
(a) Each request by Borrowers for a LIBOR Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(c), if applicable)
received by the Managing Agent, at the Managing Agent's Office, not later
than 2:00 p.m., Massachusetts time, at least three (3) LIBOR Banking Days
before the first day of the applicable LIBOR Period.
(b) On the date which is two (2) LIBOR Banking Days before the
first day of the applicable LIBOR Period, the Managing Agent shall confirm
its determination of the applicable LIBOR Rate (which determination shall
be conclusive in the absence of manifest error) and promptly shall give
notice of the same to Borrowers and the Banks by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier).
(c) Unless the Managing Agent and the Requisite Banks otherwise
consent, no more than fifteen (15) LIBOR Rate Loans shall be outstanding at
any one time.
(d) No LIBOR Rate Loan may be requested or continued during the
continuation of a Default or Event of Default.
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(e) Nothing contained herein shall require any Bank to fund any
LIBOR Rate Advance in the London interbank market.
2.4 COMPETITIVE ADVANCES.
(a) Subject to the terms and conditions hereof, at any time and
from time to time from the Closing Date through the Revolver Termination
Date, each Bank may in its sole and absolute discretion make Competitive
Advances to Borrowers in such principal amounts as Borrowers may request
pursuant to a Competitive Bid Request that do not result in (i) the
aggregate principal amount outstanding under the Competitive Advance Notes
being in excess of the LESSER OF (A) $50,000,000 or (B) an amount equal to
33-1/3% of the Line Commitment or (ii) the aggregate principal amount
outstanding under the Notes to exceed the LESSER OF (A) the Line Commitment
or (B) the available Borrowing Base. A Bank lending to the Borrowers
pursuant to this Section 2.4 shall remain obligated to make Committed Loans
in accordance with its Pro Rata Share as provided in Section 2.1.
(b) Borrowers shall request Competitive Advances by submitting a
duly completed Competitive Bid Request to the Managing Agent, which
Competitive Bid Request shall specify the relevant date, amount and
maturity for the proposed Competitive Advance and shall state whether a
Competitive Bid is requested on the basis of a fixed interest rate (an
"Absolute Rate Bid") or on the basis of a margin over the LIBOR Rate (a
"LIBOR Margin Bid") and which shall be accompanied by payment of a
nonrefundable $2500 competitive bid request fee for the account of the
Managing Agent. If a LIBOR Margin Bid is requested, the maturity date
shall be one of the periods permitted for a LIBOR Period for LIBOR Rate
Loans, and any such advance shall be a LIBOR Rate Loan. The proposed
funding date shall be a Banking Day in the case of an Absolute Rate Bid or
a LIBOR Banking Day in the case of a LIBOR Margin Bid. The Managing Agent
shall incur no liability whatsoever hereunder in acting upon any
Competitive Bid Request purportedly made by a Responsible Official of
Borrowers, which hereby agrees to indemnify the Managing Agent from any
loss, cost, expense or liability as a result of so acting. The Competitive
Bid Request must be received by the Managing Agent not later than 12:00
noon Massachusetts time on a Banking Day that is at least five (5) Banking
Days prior to the date of the proposed Competitive Advance.
(c) Unless the Managing Agent otherwise agrees, in its sole and
absolute discretion, no Competitive Bid Request shall be made by Borrowers
if Borrowers have within the current calendar month submitted five (5) or
more Competitive Bid Requests.
(d) Each Competitive Bid Request must be made for a Competitive
Advance of at least $10,000,000 and shall be in an integral multiple of
$1,000,000.
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(e) No Competitive Bid Request shall be made for a Competitive
Advance with a maturity of less than 7 days or more than 180 days, or with
a maturity date subsequent to the Maturity Date.
(f) The Managing Agent shall, promptly after receipt of a
Competitive Bid Request, provide the Banks a copy thereof by telecopier.
Any Bank may, by written notice to the Managing Agent, advise the Managing
Agent that it elects not to be so notified of Competitive Bid Requests, in
which case the Managing Agent shall not notify such Bank of the Competitive
Bid Request.
(g) Each Bank receiving a Competitive Bid Request may, in its
sole and absolute discretion, make or not make a Competitive Bid responsive
to the Competitive Bid Request. Each Competitive Bid shall be submitted so
as to be received by the Managing Agent not later than 12:00 noon (or, in
the case of the Domestic Reference Bank, not later than 11:45 a.m.)
Massachusetts time on the date which is four (4) Banking Days prior to the
requested Competitive Advance. Any Competitive Bid received by the
Managing Agent after 12:00 noon (or 11:45 a.m. in the case of the Domestic
Reference Bank) on such date shall be disregarded for purposes of this
Agreement. The Managing Agent shall incur no liability whatsoever
hereunder in acting upon any Competitive Bid purportedly made by a
Responsible Official of a Bank, each of which hereby agrees to indemnify
the Managing Agent from any loss, cost, expense or liability as a result of
so acting with respect to that Bank.
(h) Each Competitive Bid shall specify the fixed interest rate
or the margin over the LIBOR Rate, as applicable, for the offered Maximum
Competitive Advance set forth in the Competitive Bid. The Maximum
Competitive Advance offered by a Bank in a Competitive Bid shall not exceed
the Competitive Advance requested and may be less than the Competitive
Advance requested by Borrowers in the Competitive Bid Request, but shall be
an integral multiple of $1,000,000. Any Competitive Bid which offers an
interest rate OTHER THAN a fixed interest rate or a margin over the LIBOR
Rate, is in a form other than set forth in EXHIBIT C or which otherwise
contains any term, condition, qualification or provision not contained in
the Competitive Bid Request (including without limitation a requirement of
a minimum advance) or is received after the time set forth in Section
2.4(g) shall be disregarded for purposes of this Agreement. A Competitive
Bid once submitted to the Managing Agent shall, subject to the terms of
Sections 3.8(c), 3.8(d) and Section 8.2, be irrevocable until 12:00 noon
Massachusetts time on the date which is three (3) Banking Days prior to the
requested Competitive Advance set forth in the related Competitive Bid
Request, and shall expire by its terms at such time unless accepted by
Borrowers prior thereto.
(i) Promptly after 12:00 noon Massachusetts time on the date
which is four (4) Banking Days prior to the date of the proposed
Competitive Advance, the Managing Agent shall notify Borrowers of the names
of the Banks providing Competitive Bids to the Managing Agent at or before
12:00 noon on that date (or 11:45 a.m. in the
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case of the Domestic Reference Bank) and satisfying the conditions of
this Section 2.4 and the Maximum Competitive Advance and fixed interest
rate or margin over the LIBOR Rate set forth by each such Bank in its
Competitive Bid.
(j) Borrowers may, in their sole and absolute discretion,
reject any or all of the Competitive Bids. If Borrowers accept any
Competitive Bid, the following shall apply: (i) Borrowers must accept
all Absolute Rate Bids at all lower fixed interest rates before
accepting any portion of an Absolute Rate Bid at a higher fixed interest
rate, (ii) Borrowers must accept all LIBOR Margin Bids at all lower
margins over the LIBOR Rate before accepting any portion of a LIBOR
Margin Bid at a higher margin over the LIBOR Rate, (iii) if two or more
Banks have submitted a Competitive Bid at the same fixed interest rate
or margin, then Borrowers must accept either all of such Competitive
Bids or accept such Competitive Bids in the same proportion as the
Maximum Competitive Advance of each Bank bears to the aggregate Maximum
Competitive Advances of all such Banks, (iv) Borrowers may not accept
Competitive Bids for an aggregate amount in excess of the requested
Competitive Advance set forth in the Competitive Bid Request, and (v)
the principal amount of the Competitive Bids accepted must be at least
$10,000,000 and shall be in an integral multiple of $1,000,000.
Acceptance by Borrowers of a LIBOR Margin Rate Bid or Absolute Rate Bid
must be made prior to 12:00 noon Massachusetts time on the date which is
three (3) Banking Days prior to the requested Competitive Advance.
Acceptance of a Competitive Bid by Borrowers shall be accomplished by
written notification thereof to the Managing Agent and shall be
irrevocable upon such notification. The Managing Agent shall promptly
notify each of the Banks whose Competitive Bid has been accepted by
Borrowers by telephone, which notification shall promptly be confirmed
in writing delivered in person or by telecopier to such Banks. Any
Competitive Bid not accepted or rejected by Borrowers by 12:00 noon
Massachusetts time, on the date which is three (3) Banking Days prior to
the proposed Competitive Advance, shall be deemed rejected.
(k) In the case of a LIBOR Margin Bid, the Managing Agent shall
determine the LIBOR Rate on the date which is two (2) LIBOR Banking Days
prior to the date of the proposed Competitive Advance, and shall promptly
thereafter notify Borrowers and the Banks whose LIBOR Margin Bids were
accepted by Borrowers of such LIBOR Rate.
(l) A Bank whose Competitive Bid has been accepted by Borrowers
shall make the Competitive Advance in accordance with the Competitive Bid
Request and with its Competitive Bid, subject to the applicable conditions
set forth in this Agreement, by making funds immediately available to the
Managing Agent at the Managing Agent's Office in the amount of such
Competitive Advance not later than 1:00 p.m., Massachusetts time, on the
date set forth in the Competitive Bid Request. The Managing Agent shall
then promptly make available to the Borrowers the aggregate amount of the
Competitive Advances made available to the Managing Agent by crediting such
amount in immediately available funds to the Designated Deposit Account.
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(m) The Managing Agent shall notify Borrowers and the Banks
promptly after any Competitive Advance is made of the amounts and maturity
of such Competitive Advances and the identity of the Banks making such
Competitive Advances.
(n) The Competitive Advances made by a Bank shall be evidenced
by that Bank's Competitive Advance Note.
(o) No Competitive Advance may be prepaid without the prior
written consent of the affected Bank.
(p) Notwithstanding anything in this Section 2.4 or this
Agreement to the contrary, the provisions of this Section 2.4 shall not be
effective and the Borrowers shall not be entitled to obtain Competitive
Advances until Parent shall have delivered to Managing Agent evidence
satisfactory to Managing Agent that Parent has subsequent to the Closing
Date raised not less than $100,000,000.00 in gross proceeds from one or
more Equity Offerings of Parent.
2.5 VOLUNTARY REDUCTION OF COMMITMENTS. Borrowers shall have the
right, at any time and from time to time, without penalty or charge, upon at
least three (3) Banking Days' prior written notice by a Responsible Official of
Borrowers to the Managing Agent, voluntarily to reduce, permanently and
irrevocably, in aggregate principal amounts in an integral multiple of
$1,000,000 but not less than $5,000,000, or to terminate, all or a portion of
the then undisbursed portion of the Commitments; provided that in no event shall
the Commitments be reduced (as opposed to terminated) to an amount less than
$125,000,000. The Managing Agent shall promptly notify the Banks of any
reduction or termination of the Commitments under this Section. Any reduction
of the Commitments shall be allocated PRO RATA among the Banks.
2.6 [INTENTIONALLY OMITTED.]
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2.7 OPTIONAL TERMINATION OF COMMITMENTS. Following the occurrence of
a Change in Control, the Requisite Banks may in their sole and absolute
discretion elect, during the thirty (30) day period immediately subsequent to
the LATER OF (a) such occurrence or (b) the EARLIER of (i) receipt of Borrowers'
written notice to the Managing Agent of such occurrence or (ii) if no such
notice has been received by the Managing Agent, the date upon which the Managing
Agent has actual knowledge thereof, to terminate the Commitments, in which case
the Commitments shall be terminated effective on the date which is thirty (30)
days subsequent to written notice from the Managing Agent to Borrowers thereof.
2.8 MANAGING AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR ADVANCES.
Unless the Managing Agent shall have been notified by any Bank no later than
10:00 a.m. Massachusetts time on the Banking Day of the proposed funding by the
Managing Agent of any Loan that such Bank does not intend to make available to
the Managing Agent such Bank's portion of the total amount of such Loan, the
Managing Agent may assume that such Bank has made such amount available to the
Managing Agent on the date of the Loan and the Managing Agent may, in reliance
upon such assumption, make available to Borrowers a corresponding amount. If
the Managing Agent has made funds available to Borrowers based on such
assumption and such corresponding amount is not in fact made available to the
Managing Agent by such Bank, the Managing Agent shall be entitled to recover
such corresponding amount on demand from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Managing Agent's demand therefor,
the Managing Agent promptly shall notify Borrowers and Borrowers shall pay such
corresponding amount to the Managing Agent. The Managing Agent also shall be
entitled to recover from such Bank interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Managing Agent to Borrowers to the date such corresponding amount is
recovered by the Managing Agent, at a rate per annum equal to the daily Federal
Funds Rate. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its share of the Commitments or to prejudice any rights
which the Managing Agent or Borrowers may have against any Bank as a result of
any default by such Bank hereunder.
2.9 EXTENSION OF REVOLVER TERMINATION DATE.
(a) The Revolver Termination Date may be extended for a one-year
period at the request of Borrowers and with the written consent of all of
the Banks (which may be withheld in the sole and absolute discretion of
each Bank) pursuant to this Section. Not later than March 31, 2000, or by
March 31 in the subsequent year as provided in Section 2.9(d), and provided
that Borrowers are then in compliance with Section 7.1, Borrowers may
deliver to the Managing Agent and the Banks a written request for a
one year extension of the Revolver Termination Date together with a
Certificate of a Responsible Official signed by a Senior Officer on behalf
of Borrowers stating that the representations and warranties contained in
ARTICLE 4 (OTHER THAN (i) representations and warranties which expressly
speak as of a particular date or are no longer true and correct as a result
of a change which is not a violation of this Agreement and (ii) as
otherwise disclosed by Borrowers and approved in writing by the Requisite
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<PAGE>
Banks are true and correct on and as of the date of such Certificate).
Each Bank shall, on or prior to the date that is thirty (30) days after
receipt of such written request, notify in writing the Managing Agent
whether (in its sole and absolute discretion) it consents to such request
and the Managing Agent shall, after receiving the notifications from all of
the Banks or the expiration of such period, whichever is earlier, notify
Borrowers and the Banks of the results thereof. If all of the Banks have
consented, then the Revolver Termination Date shall be automatically
extended for one year upon payment by Borrowers to the Managing Agent of
the extension fee pursuant to Section 3.6.
(b) If Banks holding 80% or more of the Commitments (the
"Approving Banks") consent to the request for extension, but one or more
Banks (the "Disapproving Banks") notifies the Managing Agent that it will
not consent to the request for extension (or fails to notify the Managing
Agent in writing of its consent to the extension by the date that is
thirty (30) days after receipt of such written request), Borrowers may at
their option reduce the Commitments at the then scheduled Maturity Date by
an amount equal to the amount thereof held by the Disapproving Banks (each
of which shall be paid the aggregate outstanding principal amount under
their respective Note), adjust the Pro-Rata Shares (but not the amount) of
the reduced Commitments of the Approving Banks to correspond with the
reduced Commitments and, subject to the further written consent of all the
Approving Banks, the Revolver Termination Date shall automatically be
extended for one year upon payment by Borrowers to the Managing Agent of
the extension fee pursuant to Section 3.6. The Borrowers shall notify the
Managing Agent of their intention to exercise their option pursuant to this
Section 2.9(b) by delivery of written notice to the Managing Agent of their
exercise of such option not less than fifteen (15) days prior to the then
scheduled Maturity Date.
(c) If Banks holding 80% or more of the Commitments do not
consent to the request for extension, Borrowers may, within the thirty (30)
day period following expiration of the aforesaid thirty (30) day period
(but in any event prior to the then scheduled Maturity Date), cause the
Disapproving Banks to assign their Pro Rata Shares of the Commitments to an
Eligible Assignee acceptable to Borrowers and the Managing Agent pursuant
to Section 11.25. The Managing Agent shall reserve the right to approve
the allocation of Commitments; it being acknowledged that the Managing
Agent shall not be required to approve an assignment which results in a
Bank having a greater Pro Rata Share of the Commitments than that of the
Managing Agent. Upon completion of such assignments, the request for
extension shall be renewed and, subject to the written consent of all of
the Banks (INCLUDING the new Banks), the Revolver Termination Date shall
automatically be extended for one year upon payment by Borrowers to the
Managing Agent of the extension fee pursuant to Section 3.6.
(d) If a request for extension is approved as provided in this
Section 2.9, the Borrowers shall retain the right to request one (1)
additional one (1) year extension in the manner provided in this Section
2.9.
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2.10 [INTENTIONALLY OMITTED.]
2.11 UNENCUMBERED ASSET POOL. Borrowers may at any time add a
Qualified Unencumbered Asset Pool Property to the Unencumbered Asset Pool
pursuant to this Section 2.11, which process shall be initiated by delivery by
Borrowers to the Managing Agent (which the Managing Agent shall promptly
distribute to the Banks) of a complete description of the Qualified Unencumbered
Asset Pool Property, the most recent year operating income statement related
thereto (to the extent available), cash flow projections for such property for
at least the next twelve (12) months, a description of all tenants and leases
with respect thereto, a certification of a Senior Officer of the Borrowers that
Parent has obtained a current written report prepared by a qualified independent
expert with respect to Hazardous Materials related thereto which discloses that
such property would not be in violation of the representations and covenants of
this Agreement and other written materials reasonably requested by any Bank.
Borrowers may remove a Revenue-Producing Property from the Unencumbered Asset
Pool by delivery to the Managing Agent (for distribution to the Banks) of a
written notice to that effect, accompanied by a Certificate of a Senior Officer
of Borrowers setting forth the revised Borrowing Base as of the most
recently-ended Fiscal Quarter resulting from such removal, which removal shall
be effective on the tenth (10th) day after the date of such notice.
2.12 REPRESENTATIVE OF BORROWERS. Each of Borrowers hereby appoints
Parent as its agent, attorney-in-fact and representative for the purpose of
making Requests for Loans, Competitive Bid Requests, acceptance of Competitive
Bids, payment and prepayment of Loans and Competitive Advances, the giving and
receipt of notices by and to Borrowers under this Agreement and all other
purposes incidental to any of the foregoing. Each of Borrowers agrees that any
action taken by Parent as the agent, attorney-in-fact and representative of such
Borrower shall be binding on such Borrowers to the same extent as if directly
taken by such Borrower.
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Article 3
PAYMENTS AND FEES
3.1 PRINCIPAL AND INTEREST.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate Loan shall be
due and payable on each Monthly Payment Date. EXCEPT as otherwise provided
in Section 3.9, the unpaid principal amount of any Alternate Base Rate Loan
shall bear interest at a fluctuating rate per annum equal to the Alternate
Base Rate PLUS the Applicable Alternate Base Rate Margin. Each change in
the interest rate under this Section 3.1(b) due to a change in the
Alternate Base Rate shall take effect simultaneously with the corresponding
change in the Alternate Base Rate.
(c) Interest accrued on each LIBOR Rate Loan shall be due and
payable on each Monthly Payment Date. EXCEPT as otherwise provided in
Section 3.9, the unpaid principal amount of any LIBOR Rate Loan shall bear
interest at a rate per annum equal to the LIBOR Rate for that LIBOR Rate
Loan PLUS the Applicable LIBOR Rate Margin.
(d) Interest accrued on each Fixed Rate Loan shall be due and
payable on each Monthly Payment Date. EXCEPT as otherwise provided in
Section 3.9, the unpaid principal amount of any Fixed Rate Loan shall bear
interest at the rate per annum quoted by the Bank making such Loan in
accordance with Section 2.4.
(e) In the event that any additional interest becomes due and
payable for any period with respect to a Loan as a result of the Pricing
Level being determined based on the Leverage Ratio or any change in the
Leverage Ratio, and the interest for such period has previously been paid
by the Borrowers, the Borrowers shall pay to the Managing Agent for the
account of the Banks the amount of such increase within ten (10) days of
demand.
(f) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the amount, if any, by which the principal Indebtedness
evidenced by the Line Notes at any time exceeds the then applicable
Line Commitment shall be payable immediately;
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(ii) the amount, if any, by which the principal Indebtedness
evidenced by the Notes at any time exceeds the Line Commitment shall
be payable immediately;
(iii) the amount, if any, by which the principal
Indebtedness evidenced by the Notes at any time exceeds the Borrowing
Base shall be payable immediately;
(iv) the principal Indebtedness evidenced by each
Competitive Advance Note shall be payable on the maturity date of each
Competitive Advance in the amount of such Competitive Advance; and
(v) the principal Indebtedness evidenced by the Notes shall
in any event be payable on the Maturity Date.
(g) Except as otherwise provided in Section 2.4(o), the Notes
may, at any time and from time to time, voluntarily be paid or prepaid in
whole or in part without premium or penalty, EXCEPT that with respect to
any voluntary prepayment under this Section, (i) any partial prepayment
shall be not less than $2,000,000, (ii) the Managing Agent shall have
received written notice of any prepayment by 12:00 noon Massachusetts time
on the date of prepayment (which must be a Banking Day) in the case of an
Alternate Base Rate Loan, and, in the case of a LIBOR Rate Loan, three (3)
Banking Days before the date of prepayment, which notice shall identify the
date and amount of the prepayment and the Loan(s) being prepaid, (iii) each
prepayment of principal on any Loan shall be accompanied by payment of
interest accrued to the date of payment on the amount of principal paid,
(iv) any payment or prepayment of all or any part of any LIBOR Rate Loan on
a day other than the last day of the applicable Interest Period shall be
subject to Section 3.8(e) and (v) upon any partial prepayment of a LIBOR
Rate Loan that reduces it below $5,000,000, the remaining portion thereof
shall automatically convert to an Alternate Base Rate Loan.
(h) All of the Borrowers' interest in the gross proceeds of each
and every sale or refinancing of real estate assets of the Borrowers and
their respective Subsidiaries (whether held directly or indirectly) or of a
sale of a Borrower as permitted by Section 6.18, less all reasonable costs,
expenses and commissions paid to unrelated parties and less any
Indebtedness (other than the Obligations) secured by such asset to be
satisfied as a part of such sale or refinance, shall be promptly paid by
the Borrowers to the Managing Agent for the account of the Banks as a
prepayment of the Loans to the extent of the outstanding balance of the
Loans (provided that such amounts may be deposited with Managing Agent as
security for the Obligations and applied against the Obligations upon the
expiration of the next succeeding LIBOR Periods, if applicable, following
the occurrence of such event requiring such prepayment, to minimize the
payment of costs pursuant to Section 3.8(e)). The Borrowers shall upon the
request of the
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Managing Agent enter into such further instruments (including financing
statements) to further evidence or perfect such security interest. In
the event any amounts are deposited pursuant to this paragraph, the
Borrowers may upon the approval of the Requisite Banks obtain a release
of amounts from such collateral account for such purposes as proceeds of
the Loans may be used hereunder provided that the Borrowers would
otherwise be entitled to an Advance under this Agreement. The Banks may
elect at any time to apply any such deposited amounts as a prepayment of
the Loan, provided that in connection with such application no costs
pursuant to Section 3.8(e) shall be charged to Borrowers.
(i) Unless otherwise approved by the Requisite Banks, the
Borrowers shall cause all gross proceeds of each and every Debt Offering
and Equity Offering, less all reasonable costs, fees, expenses,
underwriting commissions, fees and discounts incurred in connection
therewith, to be paid by the Borrowers to the Managing Agent for the
account of the Banks as a prepayment of the Loans within ten (10) days of
the date of such offering to the extent of the outstanding balance of the
Loans (provided that such amounts may be deposited with Managing Agent as
security for the Obligations and applied against the Obligations upon the
expiration of the next succeeding LIBOR Periods, if applicable, following
the occurrence of such event requiring such prepayment, to minimize the
payment of costs pursuant to Section 3.8(e)). The Borrowers shall upon the
request of the Managing Agent enter into such further instruments
(including financing statements) to further evidence or perfect such
security interest. In the event any amounts are deposited pursuant to this
paragraph, the Borrowers may upon the approval of the Requisite Banks
obtain a release of amounts from such collateral account for such purposes
as proceeds of the Loans may be used hereunder provided that the Borrowers
would otherwise be entitled to an Advance under this Agreement. The Banks
may elect at any time to apply any such deposited amounts as a prepayment
of the Loan, provided that in connection with such application no costs
pursuant to Section 3.8(e) shall be charged to Borrowers.
3.2 CLOSING FEE. On the Closing Date, Borrowers shall pay to the
Managing Agent the balance of the closing fee as heretofore agreed upon pursuant
to the Agreement Regarding Fees between Borrowers and the Managing Agent. The
closing fee paid to the Managing Agent is solely for its own account and is
nonrefundable. Managing Agent shall pay to the other Banks on the Closing Date
an closing fee in accordance with their separate written agreement.
3.3 [INTENTIONALLY OMITTED.]
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3.4 COMMITMENT FEE. From the Closing Date through the Revolver
Termination Date, Borrowers shall pay to the Managing Agent, for the ratable
accounts of the Banks pro rata according to their Pro Rata Share of the
Commitments, a commitment fee equal to the rate set forth below on the average
daily amount by which the Line Commitment exceeds the aggregate daily principal
Indebtedness evidenced by the Line Notes. The commitment fee shall be payable
quarterly in arrears on each Quarterly Payment Date, on any earlier date on
which the Line Commitment shall be reduced or shall terminate as provided in
Section 2.5, and on the Revolver Termination Date.
The commitment fee shall be calculated based on the ratio (expressed
as a percentage) of (a) the average daily amount of the outstanding principal
amount of the Indebtedness evidenced by the Line Notes during such quarter to
(b) the Line Commitment as follows:
<TABLE>
<CAPTION>
Ratio of Outstanding Principal
Balance to Line Commitment Rate
-------------------------- ----
<S> <C>
50% or less 0.25%
Greater than 50% 0.15%
</TABLE>
Notwithstanding the foregoing, in the event that and for so long as Pricing
Level I, II or III is in effect, the rate utilized above for the ratio of the
outstanding principal amount of the Indebtedness evidenced by the Line Notes to
the Line Commitment being 50% or less shall be reduced to 0.20%.
3.5 AGENCY FEE. Borrowers shall pay to the Managing Agent an agency
fee in such amounts and at such times as heretofore agreed pursuant to the
Agreement Regarding Fees between Borrowers and the Managing Agent. The agency
fee paid to the Managing Agent is solely for its own account and is
nonrefundable.
3.6 EXTENSION FEES. Borrowers shall pay to the Managing Agent an
extension fee as provided in the Agreement Regarding Fees, concurrently with
each extension of the Revolver Termination Date pursuant to Section 2.9. The
Managing Agent shall pay to the Banks an extension fee in accordance with their
separate agreement.
3.7 INCREASED COMMITMENT COSTS. If any Bank shall determine in good
faith that the introduction after the Closing Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Governmental Agency charged with the interpretation or administration
thereof, or compliance by such Bank (or its LIBOR Lending Office) or any
corporation controlling such Bank, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of Law) of any such
central bank or other authority not imposed as a result of such Bank's or such
corporation's failure to comply with any other Laws, affects or would affect the
amount of capital required or expected to be maintained by
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such Bank or any corporation controlling such Bank and (taking into
consideration such Bank's or such corporation's policies with respect to
capital adequacy and such Bank's desired return on capital) determines in
good faith that the amount of such capital is increased, or the rate of
return on capital is reduced, as a consequence of its obligations under this
Agreement, then, within ten (10) Banking Days after demand of such Bank,
Borrowers shall pay to such Bank, from time to time as specified in good
faith by such Bank, additional amounts sufficient to compensate such Bank in
light of such circumstances, to the extent reasonably allocable to such
obligations under this Agreement, PROVIDED that Borrowers shall not be
obligated to pay any such amount which arose prior to the date which is
ninety (90) days preceding the date of such demand or is attributable to
periods prior to the date which is ninety (90) days preceding the date of
such demand. Each Bank's determination of such amounts shall be conclusive
in the absence of manifest error.
3.8 LIBOR COSTS AND RELATED MATTERS.
(a) In the event that any Governmental Agency imposes on any
Bank any reserve or comparable requirement (INCLUDING any emergency,
supplemental or other reserve) with respect to the LIBOR Obligations of
that Bank, Borrowers shall pay that Bank within five (5) Banking Days after
demand all amounts necessary to compensate such Bank (determined as though
such Bank's LIBOR Lending Office had funded 100% of its LIBOR Rate Advance
in the London interbank market) in respect of the imposition of such
reserve requirements (PROVIDED, that Borrowers shall not be obligated to
pay any such amount which arose prior to the date which is ninety (90) days
preceding the date of such demand or is attributable to periods prior to
the date which is ninety (90) days preceding the date of such demand). The
Bank's determination of such amount shall be conclusive in the absence of
manifest error.
(b) If, after the date hereof, the existence or occurrence of
any Special LIBOR Circumstance:
(1) shall subject any Bank or its LIBOR Lending Office to
any tax, duty or other charge or cost with respect to any LIBOR Rate
Advance, any of its Notes evidencing LIBOR Rate Loans or its
obligation to make LIBOR Rate Advances, or shall change the basis of
taxation of payments to any Bank attributable to the principal of or
interest on any LIBOR Rate Advance or any other amounts due under this
Agreement in respect of any LIBOR Rate Advance, any of its Notes
evidencing LIBOR Rate Loans or its obligation to make LIBOR Rate
Advances (PROVIDED, that Borrowers shall not be obligated to pay any
such amount which arose prior to the date which is ninety (90) days
preceding the date of such demand or is attributable to periods prior
to the date which is ninety (90) days preceding the date of such
demand), EXCLUDING (i) taxes imposed on or measured in whole or in
part by its overall net income by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its
principal office or LIBOR Lending Office or (B) any jurisdiction (or
political subdivision
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<PAGE>
thereof) in which it is "doing business" and (ii) any withholding
taxes or other taxes based on gross income imposed by the United
States of America for any period with respect to which it has
failed to provide Borrowers with the appropriate form or forms
required by Section 11.21, to the extent such forms are then
required by applicable Laws;
(2) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (INCLUDING any
reserve imposed by the Board of Governors of the Federal Reserve
System, special deposit, capital or similar requirements against
assets of, deposits with or for the account of, or credit extended by,
any Bank or its LIBOR Lending Office); or
(3) shall impose on any Bank or its LIBOR Lending Office or
the London interbank market any other condition affecting any LIBOR
Rate Advance, any of its Notes evidencing LIBOR Rate Loans, its
obligation to make LIBOR Rate Advances or this Agreement, or shall
otherwise affect any of the same;
and the result of any of the foregoing, as determined in good faith by such
Bank, increases the cost to such Bank or its LIBOR Lending Office of making
or maintaining any LIBOR Rate Advance or in respect of any LIBOR Rate
Advance, any of its Notes evidencing LIBOR Rate Loans or its obligation to
make LIBOR Rate Advances or reduces the amount of any sum received or
receivable by such Bank or its LIBOR Lending Office with respect to any
LIBOR Rate Advance, any of its Notes evidencing LIBOR Rate Loans or its
obligation to make LIBOR Rate Advances (assuming such Bank's LIBOR Lending
Office had funded 100% of its LIBOR Rate Advance in the London interbank
market), then, within five (5) Banking Days after demand by such Bank (with
a copy to the Managing Agent), Borrowers shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction (determined as though such Bank's LIBOR Lending
Office had funded 100% of its LIBOR Rate Advance in the London interbank
market). A statement of any Bank claiming compensation under this
subsection shall be conclusive in the absence of manifest error.
(c) If, after the date hereof, the existence or occurrence of
any Special LIBOR Circumstance shall, in the good faith opinion of any
Bank, make it unlawful or impossible for such Bank or its LIBOR Lending
Office to make, maintain or fund its portion of any LIBOR Rate Loan, or
materially restrict the authority of such Bank to purchase or sell, or to
take deposits of, Dollars in the London interbank market, or to determine
or charge interest rates based upon the LIBOR Rate, and such Bank shall so
notify the Managing Agent, then such Bank's obligation to make LIBOR Rate
Advances shall be suspended for the duration of such illegality or
impossibility and the Managing Agent forthwith shall give notice thereof to
the other Banks and Borrowers. Upon receipt of such notice, the
outstanding principal amount of such Bank's LIBOR Rate Advances,
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together with accrued interest thereon, automatically shall be converted
to Alternate Base Rate Advances on either (1) the last day of the LIBOR
Period(s) applicable to such LIBOR Rate Advances if such Bank may
lawfully continue to maintain and fund such LIBOR Rate Advances to such
day(s) or (2) immediately if such Bank may not lawfully continue to fund
and maintain such LIBOR Rate Advances to such day(s), PROVIDED that in
such event the conversion shall not be subject to payment of a
prepayment fee under Section 3.8(e). Each Bank agrees to endeavor
promptly to notify Borrowers of any event of which it has actual
knowledge, occurring after the Closing Date, which will cause that Bank
to notify the Managing Agent under this Section, and agrees to designate
a different LIBOR Lending Office if such designation will avoid the need
for such notice and will not, in the good faith judgment of such Bank,
otherwise be materially disadvantageous to such Bank. In the event that
any Bank is unable, for the reasons set forth above, to make, maintain
or fund its portion of any LIBOR Rate Loan, such Bank shall fund such
amount as an Alternate Base Rate Advance for the same period of time,
and such amount shall be treated in all respects as an Alternate Base
Rate Advance. Any Bank whose obligation to make LIBOR Rate Advances has
been suspended under this Section shall promptly notify the Managing
Agent and Borrowers of the cessation of the Special LIBOR Circumstance
which gave rise to such suspension.
(d) If, with respect to any proposed LIBOR Rate Loan:
(1) the Managing Agent reasonably determines that, by
reason of circumstances affecting the London interbank market
generally that are beyond the reasonable control of the Banks,
deposits in Dollars (in the applicable amounts) are not being offered
to any Bank in the London interbank market for the applicable LIBOR
Period; or
(2) the Requisite Banks advise the Managing Agent that the
LIBOR Rate as determined by the Managing Agent (i) does not represent
the effective pricing to such Banks for deposits in Dollars in the
London interbank market in the relevant amount for the applicable
LIBOR Period, or (ii) will not adequately and fairly reflect the cost
to such Banks of making the applicable LIBOR Rate Advances;
then the Managing Agent forthwith shall give notice thereof to Borrowers
and the Banks, whereupon until the Managing Agent notifies Borrowers that
the circumstances giving rise to such suspension no longer exist, the
obligation of the Banks to make any future LIBOR Rate Advances shall be
suspended.
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(e) Upon payment or prepayment of any LIBOR Rate Advance (OTHER
THAN as the result of a conversion required under Section 3.8(c)) or a
Fixed Rate Loan on a day other than the last day in the applicable LIBOR
Period or the maturity of such Fixed Rate Loan, as applicable, (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or
upon the failure of Borrowers (for a reason other than the breach by a Bank
of its obligation pursuant to Section 2.1(a) to make an Advance) to borrow
on the date or in the amount specified for a LIBOR Rate Loan in any Request
for Loan or for a Fixed Rate Loan, Borrowers shall pay to the appropriate
Bank within ten (10) Banking Days after demand a prepayment fee or failure
to borrow fee, as the case may be (determined with respect to LIBOR Rate
Loans as though 100% of the LIBOR Rate Advance had been funded in the
London interbank market) equal to the SUM of:
(1) $250; PLUS
(2) with respect to LIBOR Rate Loans, the amount, if any,
by which (i) the additional interest that would have accrued on the
amount prepaid or not borrowed at the LIBOR Rate PLUS the Applicable
LIBOR Rate Margin if that amount had remained or been outstanding
through the last day of the applicable Interest Period EXCEEDS
(ii) the interest that the Bank could recover by placing such amount
on deposit in the London interbank market for a period beginning on
the date of the prepayment or failure to borrow and ending on the last
day of the applicable Interest Period (or, if no deposit rate
quotation is available for such period, for the most comparable period
for which a deposit rate quotation may be obtained); PLUS
(3) with respect to Fixed Rate Loans, the amount, if any,
by which (i) the additional interest that would have accrued on the
amount prepaid or not borrowed at the rate applicable to such Fixed
Rate Loan if that amount had remained or been outstanding through the
last day of the applicable Advance EXCEEDS (ii) the yield that the
Bank could recover by purchasing a debt security customarily issued by
the Treasury of the United States of America having a maturity date
ending on the last day of the term of such Fixed Rate Loan (or, if no
such security is available for such period, for the most comparable
period for which such security may be obtained); PLUS
(4) all out-of-pocket expenses incurred by the Bank
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Bank's determination of the amount of any prepayment fee payable under
this Section shall be conclusive in the absence of manifest error.
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(f) Each Bank agrees to endeavor promptly to notify Borrowers of
any event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Bank to compensation pursuant to clause (a)
or clause (b) of this Section 3.8, and agrees to designate a different
LIBOR Lending Office if such designation will avoid the need for or reduce
the amount of such compensation and will not, in the good faith judgment of
such Bank, otherwise be materially disadvantageous to such Bank. Any
request for compensation by a Bank under this Section 3.8 shall set forth
the basis upon which it has been determined that such an amount is due from
Borrowers, a calculation of the amount due, and a certification that the
corresponding costs have been incurred by the Bank.
3.9 LATE PAYMENTS. If any installment of principal or interest or
any fee or cost or other amount payable under any Loan Document to the Managing
Agent or any Bank is not paid when due, it shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the SUM OF the
Alternate Base Rate PLUS the Applicable Alternate Base Rate Margin PLUS 2%, to
the fullest extent permitted by applicable Laws. Accrued and unpaid interest on
past due amounts (INCLUDING, without limitation, interest on past due interest)
shall be compounded monthly, on the last day of each calendar month, to the
fullest extent permitted by applicable Laws.
3.10 COMPUTATION OF INTEREST AND FEES. Computation of interest and
fees under this Agreement shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed. Interest shall accrue on each Loan for
the day on which the Loan is made; interest shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid. Any
Loan that is repaid on the same day on which it is made shall bear interest for
one day. Notwithstanding anything in this Agreement to the contrary, interest
in excess of the maximum amount permitted by applicable Laws shall not accrue or
be payable hereunder or under the Notes, and any amount paid as interest
hereunder or under the Notes which would otherwise be in excess of such maximum
permitted amount shall instead be treated as a payment of principal.
3.11 NON-BANKING DAYS. If any payment to be made by Borrowers or any
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest and fees.
3.12 MANNER AND TREATMENT OF PAYMENTS.
(a) Each payment hereunder (EXCEPT payments pursuant to
Sections 3.7, 3.8, 11.3, 11.11 and 11.22) or on the Notes or under any
other Loan Document shall be made to the Managing Agent at the Managing
Agent's Office for the account of each of the Banks or the Managing Agent,
as the case may be, in immediately available funds not later than 1:00 p.m.
Massachusetts time, on the day of payment (which must be a Banking Day).
All payments received after such time, on any Banking
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Day, shall be deemed received on the next succeeding Banking Day. The
amount of all payments received by the Managing Agent for the account of
each Bank shall be immediately paid by the Managing Agent to the applicable
Bank in immediately available funds and, if such payment was received by
the Managing Agent by 1:00 p.m., Massachusetts time, on a Banking Day and
not so made available to the account of a Bank on that Banking Day, the
Managing Agent shall reimburse that Bank for the cost to such Bank of
funding the amount of such payment at the Federal Funds Rate. All payments
shall be made in lawful money of the United States of America.
(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Bank
comprising such Loan.
(c) Each Bank shall use its best efforts to keep a record (in
writing or by an electronic data entry system) of Advances made by it and
payments received by it with respect to each of its Notes and, subject to
Section 10.6(g), such record shall, as against Borrowers, be presumptive
evidence of the amounts owing. Notwithstanding the foregoing sentence, the
failure by any Bank to keep such a record shall not affect Borrowers'
obligation to pay the Obligations.
(d) Each payment of any amount payable by Borrowers or any other
Party under this Agreement or any other Loan Document shall be made without
setoff or counterclaim and free and clear of, and without reduction by
reason of, any taxes, assessments or other charges imposed by any
Governmental Agency, central bank or comparable authority, EXCLUDING
(i) taxes imposed on or measured in whole or in part by its overall net
income by (A) any jurisdiction (or political subdivision thereof) in which
it is organized or maintains its principal office or LIBOR Lending Office
or (B) any jurisdiction (or political subdivision thereof) in which it is
"doing business" and (ii) any withholding taxes or other taxes based on
gross income imposed by the United States of America for any period with
respect to which it has failed to provide Borrowers with the appropriate
form or forms required by Section 11.21, to the extent such forms are then
required by applicable Laws (all such non-excluded taxes, assessments or
other charges being hereinafter referred to as "Taxes"). To the extent
that Borrowers are obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to any Bank under
this Agreement, Borrowers shall (i) make such deduction or withholding and
pay the same to the relevant Governmental Agency and (ii) pay such
additional amount to that Bank as is necessary to result in that Bank's
receiving a net after-Tax amount equal to the amount to which that Bank
would have been entitled under this Agreement absent such deduction or
withholding. If and when receipt of such payment results in an excess
payment or credit to that Bank on account of such Taxes, that Bank shall
promptly refund such excess to Borrowers.
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3.13 FUNDING SOURCES. Nothing in this Agreement shall be deemed to
obligate any Bank to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Bank
that it has obtained or will obtain the funds for any Loan or Advance in
any particular place or manner.
3.14 FAILURE TO CHARGE NOT SUBSEQUENT WAIVER. Any decision by the
Managing Agent or any Bank not to require payment of any interest (INCLUDING
interest arising under Section 3.9), fee, cost or other amount payable under any
Loan Document, or to calculate any amount payable by a particular method, on any
occasion shall in no way limit or be deemed a waiver of the Managing Agent's or
such Bank's right to require full payment of any interest (INCLUDING interest
arising under Section 3.9), fee, cost or other amount payable under any Loan
Document, or to calculate an amount payable by another method that is not
inconsistent with this Agreement, on any other or subsequent occasion.
3.15 MANAGING AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY
BORROWERS. Unless the Managing Agent shall have been notified by Borrowers
prior to the date on which any payment to be made by Borrowers hereunder is due
that Borrowers do not intend to remit such payment, the Managing Agent may, in
its discretion, assume that Borrowers have remitted such payment when so due and
the Managing Agent may, in its discretion and in reliance upon such assumption,
make available to each Bank on such payment date an amount equal to such Bank's
share of such assumed payment. If Borrowers have not in fact remitted such
payment to the Managing Agent, each Bank shall forthwith on demand repay to the
Managing Agent the amount of such assumed payment made available to such Bank,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Managing Agent to such Bank to the
date such amount is repaid to the Managing Agent at the Federal Funds Rate.
3.16 FEE DETERMINATION DETAIL. The Managing Agent, and any Bank,
shall provide reasonable detail to Borrowers regarding the manner in which the
amount of any payment to the Managing Agent and the Banks, or that Bank, under
ARTICLE 3 has been determined, concurrently with demand for such payment.
3.17 SURVIVABILITY. All of Borrowers' obligations under Sections 3.7
and 3.8 shall survive for the ninety (90) day period following the date on which
the Commitments are terminated and all Loans hereunder are fully paid, and
Borrowers shall remain obligated thereunder for all claims under such Sections
made by any Bank to Borrowers prior to the expiration of such period.
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Article 4
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to the Banks that:
4.1 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS. Parent
is a corporation duly formed, validly existing and in good standing under the
Laws of Maryland and each other Borrower is a corporation, limited partnership
or limited liability company duly formed, validly existing and in good standing
under the Laws of its state of formation. Each of Borrowers is duly qualified
or registered to transact business and is in good standing in each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Properties makes such qualification or registration necessary, EXCEPT where
the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. Each of Borrowers has all requisite power
and authority to conduct its business, to own and lease its Properties and to
execute and deliver each Loan Document to which it is a Party and to perform its
Obligations. All outstanding shares of capital stock of Parent are duly
authorized, validly issued, fully paid and non-assessable, and no holder thereof
has any enforceable right of rescission under any applicable state or federal
securities Laws. Each of Borrowers is in compliance with all Laws and other
legal requirements applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished all
filings, registrations and qualifications with, or obtained exemptions from any
of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, EXCEPT where the failure so to comply, obtain
authorizations, etc., file, register, qualify or obtain exemptions does not
constitute a Material Adverse Effect. Parent is a "real estate investment
trust" within the meaning of Section 856 of the Code, and is subject to federal
income taxation as a real estate investment trust pursuant to Sections 856-860
of the Code.
4.2 AUTHORITY; COMPLIANCE WITH OTHER AGREEMENTS AND INSTRUMENTS AND
GOVERNMENT REGULATIONS. The execution, delivery and performance by each of
Borrowers of the Loan Documents to which it is a Party have been duly authorized
by all necessary corporate, partnership or limited liability company action, as
applicable, and do not and will not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder, security holder or creditor of
Borrowers;
(b) Violate or conflict with any provision of Borrowers'
charter, articles of incorporation, bylaws or other organizational
agreements, as applicable;
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(c) Result in or require the creation or imposition of any Lien
or Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by Borrowers;
(d) Violate any Requirement of Law applicable to Borrowers;
(e) Result in a breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed under, any
indenture or loan or credit agreement or any other Contractual Obligation
to which Borrowers are a party or by which Borrowers or any of their
Property is bound or affected;
and none of Borrowers is in violation of, or default under, any Requirement of
Law or Contractual Obligation, or any indenture, loan or credit agreement
described in Section 4.2(e), in any respect that constitutes a Material Adverse
Effect.
4.3 NO GOVERNMENTAL APPROVALS REQUIRED. EXCEPT as previously
obtained or made, no authorization, consent, approval, order, license or permit
from, or filing, registration or qualification with, any Governmental Agency is
or will be required to authorize or permit under applicable Laws the execution,
delivery and performance by any of Borrowers of the Loan Documents to which it
is a Party.
4.4 SUBSIDIARIES. SCHEDULE 4.4 hereto correctly sets forth the
names, form of legal entity, number of shares of capital stock (or other
applicable unit of equity interest) issued and outstanding, and the record owner
thereof and jurisdictions of organization of all Subsidiaries of Parent. Unless
otherwise indicated in SCHEDULE 4.4, all of the outstanding shares of capital
stock, or all of the units of equity interest, as the case may be, of each such
Subsidiary are owned of record and beneficially by Parent, there are no
outstanding options, warrants or other rights to purchase capital stock of any
such Subsidiary, and all such shares or equity interests so owned are duly
authorized, validly issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal securities and other Laws, and
are free and clear of all Liens and Rights of Others, EXCEPT for Permitted
Encumbrances and Permitted Rights of Others.
4.5 FINANCIAL STATEMENTS. Borrowers have furnished to the Banks the
audited consolidated financial statements of Parent and its Subsidiaries for the
Fiscal Year ended December 31, 1997. The financial statements described above
fairly present in all material respects the financial condition, results of
operations and changes in financial position as of such date and for such period
in conformity with Generally Accepted Accounting Principles consistently
applied.
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4.6 NO OTHER LIABILITIES; NO MATERIAL ADVERSE CHANGES. Borrowers do
not have any material liability or material contingent liability required under
Generally Accepted Accounting Principles to be reflected or disclosed, and not
reflected or disclosed, in the balance sheet described in Section 4.5, OTHER
THAN liabilities and contingent liabilities arising in the ordinary course of
business since the date of such financial statements. As of the Closing Date,
no circumstance or event has occurred that constitutes a Material Adverse Effect
since March 31, 1998. As of any date subsequent to the Closing Date, no
circumstance or event has occurred that constitutes a Material Adverse Effect
since the Closing Date.
4.7 TITLE TO PROPERTY. Borrowers have valid title to the Property
(OTHER THAN assets which are the subject of a Capital Lease Obligation)
reflected in the balance sheet described in Section 4.5, OTHER THAN items of
Property or exceptions to title which are in each case immaterial to Borrowers
and Property subsequently sold or disposed of in the ordinary course of
business. Such Property is free and clear of all Liens and Rights of Others,
OTHER THAN Liens or Rights of Others described in SCHEDULE 4.7 and Permitted
Encumbrances and Permitted Rights of Others.
4.8 INTANGIBLE ASSETS. Borrowers own, or possess the right to use to
the extent necessary in their respective businesses, all material trademarks,
trade names, copyrights, patents, patent rights, computer software, licenses and
other Intangible Assets that are used in the conduct of their businesses as now
operated, and no such Intangible Asset, to the best knowledge of Borrowers,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect.
4.9 PUBLIC UTILITY HOLDING COMPANY ACT. None of Borrowers is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.10 LITIGATION. EXCEPT for (a) any matter fully covered as to
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Parent or any of its Subsidiaries of
less than $1,000,000, (c) matters of an administrative nature not involving a
claim or charge against Parent or any of its Subsidiaries and (d) matters set
forth in SCHEDULE 4.10, there are no actions, suits, proceedings or
investigations pending as to which Parent or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrowers,
threatened against or affecting Parent or any of its Subsidiaries or any
Property of any of them before any Governmental Agency, mediator or arbitrator.
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4.11 BINDING OBLIGATIONS. Each of the Loan Documents to which
Borrowers are a Party will, when executed and delivered by Borrowers, constitute
the legal, valid and binding obligation of Borrowers, enforceable against
Borrowers in accordance with its terms, EXCEPT as enforcement may be limited by
Debtor Relief Laws or equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial discretion.
4.12 NO DEFAULT. No event has occurred and is continuing that is a
Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws to the extent that
noncompliance could reasonably be expected to have a Material Adverse
Effect;
(ii) such Pension Plan has not incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA)
that could reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043
of ERISA, but EXCLUDING such events as to which the PBGC has by
regulation waived the requirement therein contained that it be
notified within thirty days of the occurrence of such event) has
occurred that could reasonably be expected to have a Material Adverse
Effect; and
(iv) none of Parent nor any of its Subsidiaries has engaged
in any non-exempt "prohibited transaction" (as defined in Section 4975
of the Code) that could reasonably be expected to have a Material
Adverse Effect.
(b) None of Parent nor any of its Subsidiaries has incurred or
expects to incur any withdrawal liability to any Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.
4.14 REGULATIONS T, U AND X; INVESTMENT COMPANY ACT. No part of the
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulations T, U and X. Neither Parent nor any of its Subsidiaries
is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
4.15 DISCLOSURE. No written statement made by a Senior Officer to
the Managing Agent or any Bank in connection with this Agreement, or in
connection with any Loan, as of the date thereof contained any untrue statement
of a material fact or omitted a material fact necessary
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to make the statement made not misleading in light of all the circumstances
existing at the date the statement was made.
4.16 TAX LIABILITY. Parent and its Subsidiaries have filed all tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received by Parent or any
of its Subsidiaries, EXCEPT (a) such taxes, if any, as are being contested in
good faith by appropriate proceedings and as to which adequate reserves have
been established and maintained and (b) immaterial taxes so long as no material
Property of Parent or any of its Subsidiaries is at impending risk of being
seized, levied upon or forfeited.
4.17 HAZARDOUS MATERIALS. Except as described in SCHEDULE 4.17, as
of the Closing Date (a) none of Borrowers, nor to the best knowledge of
Borrowers, any other Person at any time has disposed of, discharged, released or
threatened the release of any Hazardous Materials on, from or under the Real
Property in violation of any Hazardous Materials Law that would individually or
in the aggregate constitute a Material Adverse Effect, (b) to the best knowledge
of Borrowers, no condition exists that violates any Hazardous Material Law
affecting any Real Property except for such violations that would not
individually or in the aggregate constitute a Material Adverse Effect, (c) no
Real Property or any portion thereof is or has been utilized by Borrowers nor,
to the best knowledge of Borrowers, any other Person as a site for the
manufacture of any Hazardous Materials, (d) to the extent that any Hazardous
Materials are used, generated or stored by Borrowers or any other Person on any
Real Property, or transported to or from such Real Property by Borrowers or any
other Person, such use, generation, storage and transportation by Borrowers and,
to the best knowledge of Borrowers, by any other Person are in compliance with
all Hazardous Materials Laws except for such non-compliance that would not
constitute a Material Adverse Effect or be materially adverse to the interests
of the Banks, and (e) no Real Property is subject to any remediation, removal,
containment or similar action conducted by or on behalf of any Borrower or any
other Person, or with respect to any such Real Property listed on SCHEDULE 4.17
which is subject to any such action, the estimated costs for completing such
action are as set forth on SCHEDULE 4.17.
4.18 INITIAL POOL PROPERTIES. The Initial Pool Properties described
on SCHEDULE 4.18 are, as of the Closing Date, Qualified Unencumbered Asset Pool
Properties and comprise the initial Unencumbered Asset Pool.
4.19 PROPERTY. All of the Borrowers' and their respective
Subsidiaries' properties are in good repair and condition, subject to ordinary
wear and tear, other than with respect to deferred maintenance existing as of
the date of acquisition of such property as permitted in this Section 4.19 and
except for such defects relating to properties other than properties in the
Unencumbered Asset Pool which would not have a Material Adverse Effect. The
Borrowers further have completed or caused to be completed an appropriate
investigation of the environmental condition of each such property as of the
later of (a) the date of the Borrowers' or such Subsidiaries' purchase thereof
or (b) the date upon which such property was last security for Indebtedness of
such Borrower or such Subsidiary if such financing was not closed on or
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about the date of the acquisition of such property), including preparation of
a "Phase I" report and, if appropriate, a "Phase II" report, in each case
prepared by a recognized environmental consultant in accordance with
customary standards which discloses that such property is not in violation of
the representations and covenants set forth in this Agreement, unless such
violation as to properties in the Unencumbered Asset Pool has been disclosed
in writing to the Managing Agent and satisfactory remediation actions are
being taken. There are no unpaid or outstanding real estate or other taxes
or assessments on or against any property of any Borrower or any of their
respective Subsidiaries which are payable by such Person (except only real
estate or other taxes or assessments, that are not yet due and payable).
There are no pending eminent domain proceedings against any property included
within the Unencumbered Asset Pool, and, to the knowledge of the Borrowers,
no such proceedings are presently threatened or contemplated by any taking
authority which may individually or in the aggregate have a Material Adverse
Effect. None of the property of Borrowers or their respective Subsidiaries
is now damaged or injured as a result of any fire, explosion, accident, flood
or other casualty in any manner which individually or in the aggregate would
have a Material Adverse Effect. The Real Property owned by Parent, each of
the other Borrowers and their respective Subsidiaries as of the date hereof
is set forth on SCHEDULE 4.19 hereto.
4.20 BROKERS. None of the Borrowers nor any of their respective
Subsidiaries has engaged or otherwise dealt with any broker, finder or similar
entity in connection with this Agreement or the Loans contemplated hereunder.
4.21 OTHER DEBT. None of the Borrowers or any of their respective
Subsidiaries is in default (after expiration of all applicable grace and cure
periods) in the payment of any other Indebtedness or under any mortgage, deed of
trust, security agreement, financing agreement or indenture involving
Indebtedness of $5,000,000.00 or more or under any other material agreement or
lease to which any of them is a party. None of the Borrowers is a party to or
bound by any agreement, instrument or indenture that may require the
subordination in right or time of payment of any of the Obligations to any other
indebtedness or obligation of such Borrower. The Borrowers have provided to the
Managing Agent copies of all material agreements, mortgages, deeds of trust or
financing agreements binding upon Borrowers or their respective properties and
entered into by such Person as of the date of this Agreement with respect to any
Indebtedness of such Person. SCHEDULE 4.21 hereto sets forth all of the
Indebtedness of the type described in Sections 6.11 and 6.12 of the Borrowers
and their respective Subsidiaries as of the date hereof.
4.22 SOLVENCY. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement and the other Loan Documents,
including all of the Loans made or to be made hereunder, none of the Borrowers
is insolvent on a balance sheet basis such that the sum of such Person's assets
exceeds the sum of such Person's liabilities, each Borrower is able to pay its
debts as they become due, and each Borrower has sufficient capital to carry on
its business.
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4.23 NO FRAUDULENT INTENT. Neither the execution and delivery of
this Agreement or any of the other Loan Documents nor the performance of any
actions required hereunder or thereunder is being undertaken by any Borrower
with or as a result of any actual intent by any of such Persons to hinder, delay
or defraud any entity to which any of such Persons is now or will hereafter
become indebted.
4.24 TRANSACTION IN BEST INTERESTS OF BORROWERS; CONSIDERATION.
The transaction evidenced by this Agreement and the other Loan Documents is
in the best interests of the Borrowers. The direct and indirect benefits to
inure to the Borrowers pursuant to this Agreement and the other Loan
Documents constitute substantially more than "reasonably equivalent value"
(as such term is used in Section 548 of the Bankruptcy Code) and "valuable
consideration," "fair value," and "fair consideration" (as such terms are
used in any applicable state fraudulent conveyance law), in exchange for the
benefits to be provided by the Borrowers pursuant to this Agreement and the
other Loan Documents, and but for the willingness of the Borrowers to be
jointly and severally liable as co-borrowers for the Loan, Borrowers would be
unable to obtain the financing contemplated hereunder which financing will
enable the Borrowers and their respective Subsidiaries to have available
financing to conduct and expand their business.
4.25 NO BANKRUPTCY FILING. None of the Borrowers nor any of their
respective Subsidiaries is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
its assets or property, and none of the Borrowers has any knowledge of any
Person contemplating the filing of any such petition against it or any of such
other Persons.
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Article 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitments remains in force, Borrowers shall,
unless the Managing Agent (with the written approval of the Requisite Banks)
otherwise consents:
5.1 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, and all claims for labor,
materials or supplies that if unpaid might by law become a lien or charge upon
any of their respective Property, EXCEPT that Borrowers shall not be required to
pay or cause to be paid (a) any tax, assessment, charge, levy or claim that is
not yet past due, or is being contested in good faith by appropriate proceedings
so long as the relevant entity has established and maintains adequate reserves
for the payment of the same or (b) any immaterial tax or claim so long as no
material Property of Borrowers is at impending risk of being seized, levied upon
or forfeited.
5.2 PRESERVATION OF EXISTENCE. Preserve and maintain their
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the ownership
or leasing of their respective Properties EXCEPT (a) as otherwise permitted by
this Agreement and (b) where the failure to so qualify or remain qualified would
not constitute a Material Adverse Effect.
5.3 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect all of
their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business, and not permit any waste of their
respective Properties, EXCEPT that the failure to maintain, preserve and protect
a particular item of Property that is at the end of its useful life or that is
not of significant value, either intrinsically or to the operations of
Borrowers, shall not constitute a violation of this covenant.
5.4 MAINTENANCE OF INSURANCE. Maintain liability, casualty and other
insurance (subject to customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as is carried by
responsible companies engaged in similar businesses and owning similar assets in
the general areas in which Borrowers operate.
5.5 COMPLIANCE WITH LAWS. Comply with all Requirements of Law
noncompliance with which constitutes a Material Adverse Effect, EXCEPT that
Borrowers need not
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comply with a Requirement of Law then being contested by any of them in good
faith by appropriate proceedings.
5.6 INSPECTION RIGHTS. Upon reasonable notice, at any time during
regular business hours and as often as reasonably requested (but not so as to
materially interfere with the business of Parent or any of its Subsidiaries)
permit the Managing Agent or any Bank, or any authorized employee, agent or
representative thereof, to examine, audit and make copies and abstracts from the
records and books of account of, and to visit and inspect the Properties
(subject to the rights of any tenants) of, Parent and its Subsidiaries and to
discuss the affairs, finances and accounts of Parent and its Subsidiaries with
any of their officers, key employees or accountants.
5.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate records
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrowers.
5.8 COMPLIANCE WITH AGREEMENTS. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, EXCEPT for
any such Contractual Obligations (a) the performance of which would cause a
Default or (b) then being contested by any of them in good faith by appropriate
proceedings or if the failure to comply with such agreements, indentures, leases
or instruments does not constitute a Material Adverse Effect.
5.9 USE OF PROCEEDS. Use the proceeds of all Loans for working
capital and general corporate purposes of Borrowers, INCLUDING the acquisition
and/or improvement of Revenue-Producing Properties and land.
5.10 HAZARDOUS MATERIALS LAWS. Keep and maintain all Real Property
and each portion thereof in compliance in all material respects with all
applicable Hazardous Materials Laws and promptly notify the Managing Agent in
writing (attaching a copy of any pertinent written material) of (a) any and all
material enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing by a Governmental Agency
pursuant to any applicable Hazardous Materials Laws, (b) any and all material
claims made or threatened in writing by any Person against Borrowers relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
any Hazardous Materials and (c) discovery by any Senior Officer of any of
Borrowers of any material occurrence or condition on any Real Property or on any
real property adjoining or in the vicinity of such Real Property that could
reasonably be expected to cause such Real Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such Real Property under any applicable Hazardous Materials Laws.
5.11 UNENCUMBERED ASSET POOL. Cause each Revenue-Producing Property
in the Unencumbered Asset Pool to remain a Qualified Unencumbered Asset Pool
Property so long
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as it is in the Unencumbered Asset Pool; PROVIDED that nothing herein shall
preclude the removal of any Revenue-Producing Property from the Unencumbered
Asset Pool pursuant to Section 2.11.
5.12 REIT STATUS. Maintain the status of Parent as a "real estate
investment trust" under Section 856 of the Code and comply with the dividend
and other requirements applicable under Section 857(a) of the Code.
5.13 ADDITIONAL BORROWERS. Cause each Wholly-Owned Subsidiary of
Parent which is not then a Borrower and which holds a Revenue-Producing Property
that is or will become part of the Unencumbered Asset Pool to execute and
deliver the Joinder Agreement concurrently with the addition of such
Revenue-Producing Property to the Unencumbered Asset Pool.
5.14 INSPECTION OF PROPERTIES AND BOOKS. Permit the Banks,
through the Managing Agent or any representative designated by the Managing
Agent, at the Borrowers' expense, to visit and inspect any of the properties of
the Borrowers or any of their respective Subsidiaries, to examine the books of
account of the Borrowers and their respective Subsidiaries (and to make copies
thereof and extracts therefrom) and to discuss the affairs, finances and
accounts of the Borrowers and their respective Subsidiaries with, and to be
advised as to the same by, its Senior Officers, all at such reasonable times
(typically during normal business hours) and intervals as the Managing Agent or
any Bank may reasonably request upon not less than four (4) days notice. The
Banks shall use good faith efforts to coordinate such visits and inspections so
as to minimize the interference with and disruption to the Borrowers' normal
business operations. At least once annually, the Borrowers shall attend a
meeting with the Banks and the Managing Agent to discuss the financial condition
and affairs of the Borrowers and their respective Subsidiaries.
5.15 MORE RESTRICTIVE AGREEMENTS. Promptly notify the Managing
Agent should any Borrower enter into or modify any agreements or documents
pertaining to any existing or future Indebtedness, Debt Offering or Equity
Offering, which agreements or documents include covenants, whether affirmative
or negative, which are individually or in the aggregate more restrictive against
any Borrower or their respective Subsidiaries than those set forth in Sections
5.17, 6.5 through 6.13, inclusive, or 6.15 (or any other provision which may
have the same practical effect as any of the foregoing) or which provide for a
guaranty of the obligations thereunder by a Person that is not liable for the
Obligations. If requested by the Requisite Banks, the Borrowers, the Managing
Agent, and the Requisite Banks shall promptly amend this Agreement and the other
Loan Documents to include some or all of such more restrictive provisions or
provide for a guaranty of the Obligations by such Person as determined by the
Requisite Banks in their sole discretion. Notwithstanding the foregoing, this
Section 5.15 shall not apply to covenants contained in any agreements or
documents that relate only to specific Real Property that is collateral for any
existing or future Indebtedness of any of the Borrowers that is permitted by the
terms of this Agreement.
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5.16 DISTRIBUTIONS OF INCOME TO THE BORROWERS. Cause all of
their respective Subsidiaries to promptly transfer to such Borrower (but not
less frequently than once each fiscal quarter of such Borrower), whether in the
form of dividends, distributions or otherwise, all profits, proceeds or other
income relating to or arising from its Subsidiaries' use, operation, financing,
refinancing, sale or other disposition of their respective assets and properties
after (a) the payment by each Subsidiary of its Debt Service and operating
expenses for such quarter and (b) the establishment of reasonable reserves for
the payment of operating expenses not paid on at least a quarterly basis and
capital improvements to be made to such Subsidiary's assets and properties
approved by such Subsidiary in the ordinary course of business consistent with
its past practices.
5.17 UNENCUMBERED ASSET POOL.
(a) Cause each of the Revenue-Producing Properties in the
Unencumbered Asset Pool to satisfy all of the following conditions:
(i) the Revenue-Producing Properties shall be owned by a
Borrower or leased by a Borrower pursuant to a Mortgageable Ground Lease
(subject to the terms of this Agreement);
(ii) no more than fifteen percent (15%) of the Asset Value
of the Revenue-Producing Properties in the Unencumbered Asset Pool may be
owned by a Borrower pursuant to a Mortgageable Ground Lease;
(iii) the Revenue-Producing Properties in the
Unencumbered Asset Pool shall consist solely of Revenue-Producing
Properties which have an aggregate occupancy level (on a portfolio basis)
of at least eighty-five percent (85%) for the previous four (4) fiscal
quarters of the Borrowers based on bona fide arms-length tenant leases
which are in full force and effect requiring current rental payments and
which are in good standing; and
(iv) no more than thirty percent (30%) of the Asset Value
of the Revenue-Producing Properties in the Unencumbered Asset Pool may be
located in any one city or metropolitan area; provided that no more than
fifty-five percent (55%) of the Asset Value of the Revenue-Producing
Properties in the Unencumbered Asset Pool may be located in suburban
Washington, D.C.
(b) Provide to the Managing Agent as of the Closing Date and
concurrently with the delivery of the financial statements described in Section
7.1(c) as part of the Compliance Certificate required pursuant to Section 7.2
(i) a list of the Revenue-Producing Properties in the Unencumbered Asset Pool,
(ii) the certification of a Senior Officer of the Borrowers of the Asset Values
of such properties and that such properties are in compliance with Section
5.17(a), (iii) operating statements setting forth the NOI and Net Capital
Expenditures for each of the Revenue-Producing Properties in the Unencumbered
Asset Pool for the previous four
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(4) fiscal quarters (or such shorter period as the Revenue-Producing Property
has been held by the Borrowers if such statements are not available to
Borrowers) certified as true and correct by a Senior Officer of the
Borrowers, and (iv) a certificate that the Revenue-Producing Properties in
the Unencumbered Asset Pool comply with the terms of Sections 4.17 and 4.19.
In the event that all or any material portion of a Revenue-Producing Property
within the Unencumbered Asset Pool shall be damaged or taken by condemnation,
then such property shall no longer be a part of the Unencumbered Asset Pool
unless and until any damage to such Revenue-Producing Property is repaired or
restored, such Revenue-Producing Property becomes fully operational and the
Managing Agent shall receive evidence satisfactory to the Managing Agent of
the value and NOI of such Revenue-Producing Property following such repair or
restoration.
5.18 YEAR 2000 COMPLIANCE. Take all action necessary to ensure
that the Borrowers become "Year 2000 compliant" (as defined below) in a timely
manner so that their business is not materially interrupted. The Borrowers
shall make all reasonable inquiries of their key vendors, suppliers and
customers in regard to their plans and progress to become Year 2000 compliant,
and the Borrowers shall take all action necessary to ensure that the failure of
such persons to become Year 2000 compliant in a timely manner shall not
materially interrupt the Borrowers' business operations. "Year 2000 compliant"
means that material date-affected technology, including, without limitation,
computers, hardware, imbedded microchips and software, used in the Borrowers'
business operations or in the business operations of the Borrowers' key vendors,
suppliers and customers, as the case may be, are able to correctly and
effectively store, process and otherwise deal with date data from, into, between
and otherwise concerning the twentieth and twenty-first centuries, and otherwise
continue to function properly and unimpaired with respect to all calendar dates
falling on or after January 1, 2000.
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Article 6
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitments remains in force, Borrowers shall not,
unless the Managing Agent (with the written approval of the Requisite Banks or,
if required by Section 11.2, of all of the Banks) otherwise consents:
6.1 MERGERS. Merge or consolidate with or into any Person, EXCEPT a
merger or consolidation of one or more Borrowers with and into another Borrower
or a merger or consolidation where Parent is the surviving corporation that does
not result in a Change in Control.
6.2 ERISA. (a) At any time, permit any Pension Plan to: (i) engage
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code) which could reasonably be expected to result in a Material Adverse Effect,
(ii) fail to comply with ERISA which could reasonably be expected to result in a
Material Adverse Effect, (iii) incur any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA) which could reasonably be
expected to result in a Material Adverse Effect or (iv) terminate in any manner
which could reasonably be expected to result in a Material Adverse Effect, or
(b) withdraw, completely or partially, from any Multiemployer Plan if to do so
could reasonably be expected to result in a Material Adverse Effect.
6.3 CHANGE IN NATURE OF BUSINESS. Make any material change in the
principal nature of the business of Borrowers, such business being the
acquisition, ownership and development of buildings for use as office or, with
respect to the life science industry only, office/laboratory, research or
manufacturing/warehouse properties.
6.4 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any
kind with any Affiliate of Borrowers OTHER THAN (a) salary, bonus, employee
stock option, relocation assistance and other compensation arrangements with
directors or officers in the ordinary course of business, (b) transactions that
are fully disclosed to the board of directors of Parent and expressly authorized
by a resolution of the board of directors of Parent which is approved by a
majority of the directors not having an interest in the transaction,
(c) transactions expressly permitted by this Agreement, (d) transactions between
one Borrower and another Borrower and (e) transactions on overall terms at least
as favorable to Borrowers as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
6.5 LEVERAGE RATIO. Permit the Leverage Ratio, as of the last day of
any Fiscal Quarter, to be greater than .55 to 1.00.
6.6 DEBT SERVICE COVERAGE. Permit Debt Service Coverage, as of the
last day of any Fiscal Quarter, to be less than 2.25 to 1.00.
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6.7 FIXED CHARGE COVERAGE. Permit Fixed Charge Coverage, as of the
last day of any Fiscal Quarter, to be less than 2.00 to 1.00.
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6.8 DISTRIBUTIONS. Make any Distribution (a) with respect to any
Fiscal Quarter or Fiscal Year in excess of (i) an amount equal to 90% of Funds
From Operations of Parent and its Subsidiaries for that Fiscal Quarter or Fiscal
Year or (ii) an amount equal to 100% of Funds Available for Distribution of
Parent and its Subsidiaries for the four (4) consecutive Fiscal Quarters ending
prior to the Fiscal Quarter in which such Distribution is paid (provided that
Parent shall be permitted to pay the minimum Distribution required under the
Code to maintain and preserve Parent's status as a real estate investment trust
under the Code, as evidenced by a certification of a Senior Officer of Parent
containing calculations in reasonable detail satisfactory in form and substance
to the Managing Agent, if such Distribution is greater than the amount set forth
in clause (a) (i) and (ii) above), or (b) during the continuance of an Event of
Default, in excess of the minimum amount necessary to comply with Section
857(a) of the Code.
6.9 STOCKHOLDERS' EQUITY. Permit Stockholders' Equity, as of the
last day of any Fiscal Quarter, to be less than the sum of (a) $215,000,000 PLUS
(b) ninety percent of the net proceeds from any Equity Offering of any Borrower
made after June 30, 1998.
6.10 DEVELOPMENT INVESTMENTS. Permit any Borrower or any Subsidiary
or Affiliate thereof to engage, directly or indirectly, in the development of
Real Property, except that a Borrower or a Subsidiary or Affiliate thereof may
develop for its own account properties to be used principally for office
purposes or, with respect to the life science industry only, office/laboratory,
research or manufacturing/warehouse purposes, provided that such development
shall be limited to such number of projects with respect to which the aggregate
cost as of the date of computation of acquiring Real Property and developing,
constructing, renovating, rehabilitating and leasing the improvements thereon
(assuming the full cost of completion thereof) does not exceed twenty percent
(20%) of Adjusted Tangible Assets (such projects are hereinafter referred to
collectively as the "Development Investments"). A project shall be considered
to be a Development Investment from the issuance of permits for construction
until final certificates of occupancy or their equivalent have been issued for
the entire project. For purposes of this Section 6.10, the term "development"
shall include new construction or the substantial renovation of improvements to
real property.
6.11 SECURED DEBT. Permit Secured Debt of Parent and its Subsidiaries
to exceed an amount equal to 30% of Adjusted Tangible Assets as of the most
recently-ended Fiscal Quarter.
6.12 RECOURSE DEBT. Permit recourse Indebtedness (whether secured or
unsecured) of Parent and its Subsidiaries (excluding the Obligations) to exceed
an amount equal to 20% of Adjusted Tangible Assets as of the most recently-ended
Fiscal Quarter.
6.13 INVESTMENTS IN CERTAIN PERSONS. Make Investments in (a) any
Person that is not a Wholly-Owned Subsidiary of Parent existing as of the date
hereof or new Wholly-Owned Subsidiaries of Parent created after the date of this
Agreement which become Borrowers except as permitted in Section 6.13(b), or (b)
any Person which is a Controlled Entity (other than Investments by a Subsidiary
of Parent in Parent), if the aggregate value of the Investments
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pursuant to this Section 6.13(b) shall exceed ten percent (10%) of the
Adjusted Tangible Assets as of the most recently-ended Fiscal Quarter.
6.14 NEGATIVE PLEDGES. Grant to any Person a Negative Pledge on any
Property of Parent and its Subsidiaries that, as of the LATER OF the "Closing
Date" of the Original Credit Agreement or the date of its acquisition, is not
subject to a Lien (OTHER THAN Permitted Encumbrances).
6.15 UNDEVELOPED REAL ESTATE ASSETS. Permit the ratio of the book
value of the direct and indirect interests of the Parent and its Subsidiaries in
non-income producing land assets to the Adjusted Tangible Assets to exceed 0.05
to 1.
6.16 LIMITING AGREEMENTS. Enter into any agreement, instrument or
transaction which has or may have the effect of prohibiting or limiting such
Borrower's ability to pledge to Managing Agent the Revenue-Producing Property
within the Unencumbered Asset Pool. Borrowers shall take, and shall cause the
their respective Subsidiaries to take, such actions as are necessary to preserve
the right and ability of Borrowers to pledge those Revenue-Producing Properties
without any such pledge after the date hereof causing or permitting the
acceleration (after the giving of notice or the passage of time, or otherwise)
of any other Indebtedness of Borrowers or any of their respective Subsidiaries.
Borrowers shall, upon demand, provide to the Managing Agent such evidence as the
Managing Agent may reasonably require to evidence compliance with this Section
6.16, which evidence shall include, without limitation, copies of any agreements
or instruments which would in any way restrict or limit a Borrower's ability to
pledge assets as security for Indebtedness, or which provide for the occurrence
of a default (after the giving of notice or the passage of time, or otherwise)
if assets are pledged in the future as security for Indebtedness of such
Borrower or any of its Subsidiaries.
6.17 RESTRICTION ON PREPAYMENT OF INDEBTEDNESS. Prepay the principal
amount, in whole or in part, of any Indebtedness other than the Obligations
after the occurrence of any Event of Default of a monetary nature or consisting
of a failure to comply with the covenants contained in Sections 6.5 and 6.6;
provided, however, that this Section 6.17 shall not prohibit the prepayment of
Indebtedness which is financed solely from the proceeds of a new loan which
would otherwise be permitted by the terms of this Agreement.
6.18 RESTRICTIONS ON TRANSFER. Parent will not, directly or
indirectly, make or permit to be made, by voluntary or involuntary means, any
sale, assignment, transfer, disposition, mortgage, pledge, hypothecation or
encumbrance of its direct or indirect interest in Operating Partnership, ARE,
QRS or any other Borrower (provided that the foregoing shall not prohibit
transfers of Parent's interest in Operating Partnership, ARE, QRS or any other
Borrower provided such Borrower remains a Wholly-Owned Subsidiary of Parent), or
any dilution of its direct or indirect interest in Operating Partnership, ARE,
QRS or any other Borrower. Parent shall not in any manner transfer, assign,
diminish or otherwise restrict its direct or indirect right to vote or other
rights with respect to Operating Partnership, ARE, QRS or any other Borrower.
Notwithstanding the foregoing, Parent may sell, assign, transfer or dispose of
its interest in
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another Borrower (other than Operating Partnership) that is a wholly-owned
Subsidiary of Parent, provided that on or before the closing of such sale the
Borrower shall have delivered to the Agent a certification, together with
such other evidence as Agent may require, that the Borrowers will be in
compliance with all covenants in this Agreement after giving effect to such
sale, assignment, transfer or other disposition, and provided further that
from and after any such sale, the assets of such Borrower shall no longer be
included within the Unencumbered Asset Pool. In the event that the Borrower
shall comply with the foregoing provisions, such Borrower shall be released
from liability under this Agreement.
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Article 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 FINANCIAL AND BUSINESS INFORMATION. So long as any Advance
remains unpaid, or any other Obligation remains unpaid, or any portion of the
Commitments remains in force, Borrowers shall, unless the Managing Agent
(with the written approval of the Requisite Banks) otherwise consents, at
Borrowers' sole expense, deliver to the Managing Agent for distribution by it
to the Banks, a sufficient number of copies for all of the Banks of the
following:
(a) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter (OTHER THAN the fourth Fiscal Quarter
in any Fiscal Year), the consolidated balance sheet of Parent and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statements of operations and cash flows for such Fiscal Quarter, and the
portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail. Such financial statements shall be certified by a
Senior Officer of Parent as fairly presenting the financial condition,
results of operations and cash flows of Parent and its Subsidiaries in
accordance with Generally Accepted Accounting Principles (other than
footnote disclosures), consistently applied, as at such date and for such
periods, subject only to normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter, a Pricing Certificate setting forth a
calculation of the Leverage Ratio as of the last day of such Fiscal
Quarter, and providing reasonable detail as to the calculation thereof,
which calculations in the case of the fourth Fiscal Quarter in any Fiscal
Year shall be based on the preliminary unaudited financial statements of
Parent and its Subsidiaries for such Fiscal Quarter, and as soon as
practicable thereafter, in the event of any material variance in the actual
calculation of the Leverage Ratio from such preliminary calculation, a
revised Pricing Certificate setting forth the actual calculation thereof;
(c) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter, statements of operating income for
such Fiscal Quarter and Fiscal Year to date for each of the
Revenue-Producing Properties in the Unencumbered Asset Pool and a summary
Rent Roll for each of the Revenue-Producing Properties in the Unencumbered
Asset Pool, each in reasonable detail;
(d) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter, supplemental disclosure information
setting forth the effect on Net Income reflected in the financial
statements for such Fiscal Quarter and Fiscal Year to date of any
difference between the rents payable by tenants during the periods covered
by such financial statements and the "straight line" rents payable over the
terms of their respective leases, in reasonable detail;
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(e) As soon as practicable, and in any event within 120 days
after the end of each Fiscal Year, the consolidated balance sheet of Parent
and its Subsidiaries as at the end of such Fiscal Year and the consolidated
statements of operations, stockholders' equity and cash flows, in each case
of Parent and its Subsidiaries for such Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, consistently applied, and shall
be accompanied by a report of Ernst & Young LLP or other independent public
accountants of recognized standing selected by Parent and reasonably
satisfactory to the Requisite Banks, which report shall be prepared in
accordance with generally accepted auditing standards as at such date, and
shall not be subject to any qualifications or exceptions as to the scope of
the audit nor to any other qualification or exception determined by the
Requisite Banks in their good faith business judgment to be adverse to the
interests of the Banks;
(f) As soon as practicable, and in any event before the
commencement of each Fiscal Year, a budget and projection by Fiscal Quarter
for that Fiscal Year and by Fiscal Year for the next two succeeding Fiscal
Years, INCLUDING for the first such Fiscal Year, projected consolidated
balance sheets, statements of operations and statements of cash flow and,
for the second and third such Fiscal Years, projected consolidated
condensed balance sheets and statements of operations and cash flows, of
Parent and its Subsidiaries, all in reasonable detail;
(g) Promptly after request by the Managing Agent or any Bank,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of Parent by independent accountants in connection with the
accounts or books of Parent or any of its Subsidiaries, or any audit of any
of them;
(h) Promptly after the same are available, and in any event
within five (5) Banking Days after filing with the Securities and Exchange
Commission, copies of each annual report, proxy or financial statement or
other report or communication sent to the stockholders of Parent, and
copies of all annual, regular, periodic and special reports and
registration statements which Parent may file or be required to file with
the Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not otherwise required to
be delivered to the Banks pursuant to other provisions of this Section 8.1;
(i) Promptly after request by the Managing Agent or any Bank,
copies of any other report or other document that was filed by Borrowers
with any Governmental Agency;
(j) Promptly upon a Senior Officer becoming aware, and in any
event within five (5) Banking Days after becoming aware, of the occurrence
of any (i) "reportable event" (as such term is defined in Section 4043 of
ERISA, but EXCLUDING such events
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as to which the PBGC has by regulation waived the requirement therein
contained that it be notified within thirty days of the occurrence of
such event) or (ii) non-exempt "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Pension Plan or any trust created thereunder, telephonic notice
specifying the nature thereof, and, no more than two (2) Banking Days
after such telephonic notice, written notice again specifying the
nature thereof and specifying what action Borrowers are taking or
propose to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto;
(k) As soon as practicable, and in any event within two (2)
Banking Days after a Senior Officer becomes aware of the existence
of any condition or event which constitutes a Default or Event of Default,
telephonic notice specifying the nature and period of existence thereof,
and, no more than two (2) Banking Days after such telephonic notice,
written notice again specifying the nature and period of existence thereof
and specifying what action Borrowers are taking or propose to take with
respect thereto;
(l) Promptly upon a Senior Officer becoming aware that (i) any
Person has commenced a legal proceeding with respect to a claim against
Borrowers that is $1,000,000 or more in excess of the amount thereof that
is fully covered by insurance, (ii) any creditor under a credit agreement
involving Indebtedness of $1,000,000 or more or any lessor under a lease
involving aggregate rent of $1,000,000 or more has asserted a default
thereunder on the part of Borrowers or, (iii) any Person has commenced a
legal proceeding with respect to a claim against Borrowers under a contract
that is not a credit agreement or material lease in excess of $1,000,000 or
which otherwise may reasonably be expected to result in a Material Adverse
Effect, a written notice describing the pertinent facts relating thereto
and what action Borrowers are taking or propose to take with respect
thereto;
(m) Promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of each of the Borrowers;
(n) Not later than sixty (60) days after the end of each
fiscal quarter of the Borrowers (including the fourth fiscal quarter in
each year), a list (which may be included in the Compliance Certificates)
setting forth the following information with respect to each new Subsidiary
or Controlled Entity of any of the Borrowers: (i) the name, structure and
ownership of the Subsidiary or Controlled Entity, (ii) a description of the
property owned by such Subsidiary or Controlled Entity, and (iii) such
other information as the Managing Agent may reasonably request;
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(o) Simultaneously with the delivery of the financial statement
referred to in Section 7.1(e) above (if such information is not otherwise
included in the financial statement or other information presented to the
Banks pursuant to this Section 7.1), a statement (which may be included in
the Compliance Certificates) listing (i) the Real Property owned by Parent
and its Subsidiaries (or in which Parent or its Subsidiaries owns an
interest) and stating the location thereof, the date acquired and the
acquisition cost, (ii) the Indebtedness of Parent and its Subsidiaries,
which statement shall include, without limitation, a statement of the
original principal amount of such Indebtedness and the current amount
outstanding, the holder thereof, the maturity date and any extension
options, the interest rate, the collateral provided for such Indebtedness
and whether such Indebtedness is recourse or non-recourse, and (iii) the
properties of Parent and its respective Subsidiaries which are under
"development" (as used in Section 6.10) and providing a brief summary of
the status of such development;
(p) Contemporaneously with the release thereof, copies of all
press releases or other public announcements;
(q) Promptly upon a Senior Officer becoming aware of a change in
the credit rating given by a Rating Agency to Parent's long-term senior
unsecured debt or any announcement that any rating is "under review" or
that such rating has been placed on a watch list or that any similar action
has been taken by a Rating Agency, written notice of such change,
announcement or action; and
(r) Such other data and information, including, without
limitation, information regarding the Borrowers' efforts to address the
"Year 2000 Problem", as from time to time may be reasonably requested by
the Managing Agent, any Bank (through the Managing Agent) or the Requisite
Banks.
7.2 COMPLIANCE CERTIFICATES. So long as any Advance remains unpaid,
or any other Obligation remains unpaid or unperformed, or any portion of the
Commitments remains outstanding, Borrowers shall, at Borrowers' sole expense,
deliver to the Managing Agent for distribution by it to the Banks concurrently
with the financial statements required pursuant to Sections 7.1(a), 7.1(c)
and 7.1(e), Compliance Certificates signed by a Senior Officer.
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Article 8
CONDITIONS
8.1 INITIAL ADVANCES. The obligation of each Bank to make the
initial Advance to be made by it is subject to the following conditions
precedent, each of which shall be satisfied prior to the making of the initial
Advances (unless all of the Banks, in their sole and absolute discretion, shall
agree otherwise):
(a) The Managing Agent shall have received all of the following,
each of which shall be originals unless otherwise specified, each properly
executed by a Responsible Official of each party thereto, each dated as of
the Closing Date and each in form and substance satisfactory to the
Managing Agent and its legal counsel (unless otherwise specified or, in the
case of the date of any of the following, unless the Managing Agent
otherwise agrees or directs):
(1) at least one (1) executed counterpart of this
Agreement, together with arrangements satisfactory to the Managing
Agent for additional executed counterparts, sufficient in number for
distribution to the Banks and Borrowers;
(2) Line Notes executed by Borrowers in favor of each Bank,
each in a principal amount equal to that Bank's Pro Rata Share of the
Line Commitment;
(3) Competitive Advance Notes executed by Borrowers in
favor of each Bank, each in the principal amount of $50,000,000;
(4) with respect to each of Borrowers, such documentation
as the Managing Agent may require to establish the due organization,
valid existence and good standing of each of Borrowers, its
qualification to engage in business in each material jurisdiction in
which it is engaged in business or required to be so qualified, its
authority to execute, deliver and perform the Loan Documents to which
it is a Party, the identity, authority and capacity of each
Responsible Official thereof authorized to act on its behalf,
INCLUDING certified copies of articles of incorporation and amendments
thereto, bylaws and amendments thereto, certificates of good standing
and/or qualification to engage in business, tax clearance
certificates, certificates of corporate resolutions, incumbency
certificates, Certificates of Responsible Officials, and the like;
(5) the Opinions of Counsel;
(6) such other assurances, certificates, documents,
consents or opinions as the Managing Agent or the Requisite Banks
reasonably may require.
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(b) The closing fee payable pursuant to Section 3.2 shall have
been paid.
(c) Any agency fees payable on the Closing Date pursuant to
Section 3.5 shall have been paid.
(d) The reasonable costs and expenses of the Managing Agent in
connection with the preparation of the Loan Documents payable pursuant to
Section 11.3, and invoiced to Borrowers prior to the Closing Date, shall
have been paid.
(e) The representations and warranties of Borrowers contained in
ARTICLE 4 shall be true and correct in all material respects.
(f) Borrowers and any other Parties shall be in compliance with
all the terms and provisions of the Loan Documents, and giving effect to
the initial Advance no Default or Event of Default shall have occurred and
be continuing.
(g) All legal matters relating to the Loan Documents shall be
satisfactory to Long Aldridge & Norman, LLP, special counsel to the
Managing Agent.
(h) The Closing Date shall have occurred on or before August 4,
1998.
(i) The Managing Agent shall have received a Compliance
Certificate dated as of the date of the Closing Date demonstrating
compliance with each of the covenants calculated therein as of the most
recent Fiscal Quarter end for which the Borrowers have provided financial
statements under Section 7.1 adjusted in the best good faith estimate of
the Borrowers dated as of the date of the Closing Date.
(j) The Managing Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as
the Managing Agent or the Managing Agent's special counsel may reasonably
have requested.
8.2 ANY ADVANCE. The obligation of each Bank to make any Advance is
subject to the following conditions precedent (unless the Requisite Banks, in
their sole and absolute discretion, shall agree otherwise):
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(a) EXCEPT (i) for representations and warranties which
expressly speak as of a particular date or are no longer true and correct
as a result of a change which is permitted by this Agreement or (ii) as
disclosed by Borrowers and approved in writing by the Requisite Banks, the
representations and warranties contained in ARTICLE 4 (OTHER THAN
Sections 4.4, 4.6 (first sentence), 4.10 and 4.18 to the extent such
representations relate expressly to an earlier date) shall be true and
correct in all material respects on and as of the date of the Advance as
though made on that date;
(b) other than matters described in SCHEDULE 4.10 or not
required as of the Closing Date to be therein described, there shall not be
then pending or threatened any action, suit, proceeding or investigation
against or affecting Parent or any of its Subsidiaries or any Property of
any of them before any Governmental Agency that constitutes a Material
Adverse Effect;
(c) the Managing Agent shall have timely received a Request for
Loan in compliance with ARTICLE 2 (or telephonic or other request for Loan
referred to in the second sentence of Section 2.1(c), if applicable), in
compliance with ARTICLE 2;
(d) no Default or Event of Default shall have occurred and be
continuing;
(e) the Managing Agent shall have received a current calculation
of the Borrowing Base with such supporting information as the Managing
Agent may require adjusted in the best good faith estimate of the Borrowers
to the date of such certification; and
(f) the Managing Agent shall have received, in form and
substance satisfactory to the Managing Agent, such other assurances,
certificates, documents or consents related to the foregoing as the
Managing Agent or Requisite Banks reasonably may require.
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Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
9.1 EVENTS OF DEFAULT. The existence or occurrence of any one or
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrowers fail to pay any principal on any of the Notes, or
any portion thereof, on the date when due; or
(b) Borrowers fail to pay any interest on any of the Notes, or
any fees under Sections 3.4 or 3.5, or any portion thereof, within five (5)
Banking Days after the date when due; or fail to pay any other fee or
amount payable to the Banks or the Managing Agent under any Loan Document,
or any portion thereof, within five (5) Banking Days after demand therefor;
or
(c) Borrowers fail to comply with any of the covenants contained
in ARTICLE 6; or
(d) Borrowers fail to comply with Section 7.1(k) in any respect
that is materially adverse to the interests of the Banks; or
(e) Any Borrower or any other Party fails to perform or observe
any other covenant or agreement (not specified in clause (a), (b), (c) or
(d) above) contained in any Loan Document on its part to be performed or
observed within thirty (30) Banking Days after the giving of notice by the
Managing Agent on behalf of the Requisite Banks of such Default or, if such
Default is not reasonably susceptible of cure within such period, within
such longer period as is reasonably necessary to effect a cure so long as
such Borrower or such Party continues to diligently pursue cure of such
Default but not in any event in excess of sixty (60) Banking Days; or
(f) Any representation or warranty of Borrowers made in any Loan
Document, or in any certificate or other writing delivered by Borrowers
pursuant to any Loan Document, proves to have been incorrect when made or
reaffirmed in any respect that is materially adverse to the interests of
the Banks; or
(g) Borrowers (i) fail to pay the principal, or any principal
installment, of any present or future Indebtedness (OTHER THAN Non-Recourse
Debt) of $5,000,000 or more, or any guaranty of present or future
Indebtedness (OTHER THAN Non-Recourse Debt) of $5,000,000 or more, on its
part to be paid, when due (or within any stated grace period), whether at
the stated maturity, upon acceleration, by reason of required prepayment or
otherwise or (ii) fails to perform or observe any other term, covenant or
agreement on its part to be performed or observed, or suffers any event of
default to
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occur, in connection with any present or future Indebtedness (OTHER THAN
Non-Recourse Debt) of $5,000,000 or more, or of any guaranty of present
or future Indebtedness (OTHER THAN Non-Recourse Debt) of $5,000,000
or more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such Indebtedness due before the date on which it otherwise would
become due or the right to require Borrowers to redeem or purchase, or
offer to redeem or purchase, all or any portion of such Indebtedness
(PROVIDED, that for the purpose of this clause (g), the principal amount of
Indebtedness consisting of a Swap Agreement shall be the amount which is
then payable by the counterparty to close out the Swap Agreement); or
(h) Any Loan Document, at any time after its execution and
delivery and for any reason OTHER THAN the agreement or action (or omission
to act) of the Managing Agent or the Banks or satisfaction in full of all
the Obligations ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which is materially adverse to the interests
of the Banks; or any Party thereto denies in writing that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or
(i) A final judgment against any of Borrowers is entered for the
payment of money in excess of $1,000,000 (not covered by insurance or for
which an insurer has reserved its rights) and, absent procurement of a stay
of execution, such judgment remains unsatisfied for thirty (30) calendar
days after the date of entry of judgment, or in any event later than five
(5) days prior to the date of any proposed sale thereunder; or any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the Property of any such Person and is
not released, vacated or fully bonded within thirty (30) calendar days
after its issue or levy; or
(j) Any of Borrowers institutes or consents to the institution
of any proceeding under a Debtor Relief Law relating to it or to all or any
material part of its Property, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its Property; or
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that
Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under a Debtor Relief Law relating to
any such Person or to all or any part of its Property is instituted without
the consent of that Person and continues undismissed or unstayed for sixty
(60) calendar days or such Person consents thereto or acquiesces therein,
or a decree or order for relief is entered in respect of any such Person in
such proceeding; or
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(k) The occurrence of an Event of Default (as such term is or
may hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(l) Any Pension Plan maintained by Borrowers is determined to
have a material "accumulated funding deficiency" as that term is defined in
Section 302 of ERISA in excess of an amount equal to 5% of the combined
total assets of Borrowers as of the most-recently ended Fiscal Quarter; or
(m) During any twelve (12) consecutive month period, Joel S.
Marcus shall cease to be the Chief Executive Officer of Parent, and
either of the following two (2) persons (or any successor who was
previously approved as provided herein) shall cease to occupy the
following positions: Peter Nelson shall cease to be the Chief Financial
Officer of Parent, and Jerry M. Sudarsky shall cease to be the Chairman
of the Parent; provided that the foregoing shall not constitute an Event
of Default if a competent and experienced successor for such Person
shall be approved by the Requisite Banks within six (6) months of such
event, such approval not to be unreasonably withheld.
9.2 REMEDIES UPON EVENT OF DEFAULT. Without limiting any other
rights or remedies of the Managing Agent or the Banks provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law, or in equity,
or otherwise:
(a) Upon the occurrence, and during the continuance, of any
Event of Default OTHER THAN an Event of Default described in
Section 9.1(j):
(1) the Commitments to make Advances and all other
obligations of the Managing Agent or the Banks and all rights of
Borrowers and any other Parties under the Loan Documents shall be
suspended without notice to or demand upon Borrowers, which are
expressly waived by Borrowers, EXCEPT that all of the Banks or the
Requisite Banks (as the case may be, in accordance with Section 11.2)
may waive an Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to the Banks or Requisite Banks, as
the case may be, to reinstate the Commitments and such other
obligations and rights and make further Advances, which waiver or
determination shall apply equally to, and shall be binding upon, all
the Banks; and
(2) the Requisite Banks may request the Managing Agent to,
and the Managing Agent thereupon shall, terminate the Commitments
and/or declare all or any part of the unpaid principal of all Notes,
all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents to be forthwith due and payable, whereupon
the same shall become and be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further notice of
any kind, all of which are expressly waived by Borrowers.
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(b) Upon the occurrence of any Event of Default described in
Section 9.1(j):
(1) the Commitments to make Advances and all other
obligations of the Managing Agent or the Banks and all rights of
Borrowers and any other Parties under the Loan Documents shall
terminate without notice to or demand upon Borrowers, which are
expressly waived by Borrowers, EXCEPT that all of the Banks or the
Requisite Banks (as the case may be, in accordance with Section 11.2)
may waive the Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to all the Banks, to reinstate the
Commitments and such other obligations and rights and make further
Advances, which determination shall apply equally to, and shall be
binding upon, all the Banks; and
(2) the unpaid principal of all Notes, all interest accrued
and unpaid thereon and all other amounts payable under the Loan
Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrowers.
(c) Upon the occurrence of any Event of Default, the Banks and
the Managing Agent, or any of them through the Managing Agent, without
notice to (EXCEPT as expressly provided for in any Loan Document) or demand
upon Borrowers, which are expressly waived by Borrowers (EXCEPT as to
notices expressly provided for in any Loan Document), may proceed (but only
with the consent of the Requisite Banks) to protect, exercise and enforce
their rights and remedies under the Loan Documents against Borrowers and
any other Party and such other rights and remedies as are provided by Law
or equity.
(d) The order and manner in which the Banks' rights and remedies
are to be exercised shall be determined by the Requisite Banks in their
sole discretion, and all payments received by the Managing Agent and the
Banks, or any of them, shall be applied first to the costs and expenses
(including reasonable attorneys' fees and disbursements and the reasonably
allocated costs of attorneys employed by the Managing Agent or by any Bank)
of the Managing Agent and of the Banks, and thereafter paid pro rata to the
Banks in the same proportions that the aggregate Obligations owed to each
Bank under the Loan Documents bear to the aggregate Obligations owed under
the Loan Documents to all the Banks, without priority or preference among
the Banks. Regardless of how each Bank may treat payments for the purpose
of its own accounting, for the purpose of computing Borrowers' Obligations
hereunder and under the Notes, payments shall be applied FIRST, to the
costs and expenses of the Managing Agent and the Banks, as set forth above,
SECOND, to the payment of accrued and unpaid interest due under any Loan
Documents to and including the date of such application (ratably, and
without duplication, according to the accrued and unpaid interest due under
each of the Loan Documents), and THIRD, to the payment of all other amounts
(including principal and fees)
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then owing to the Managing Agent or the Banks under the Loan Documents.
No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the
Loan Documents, or prevent the exercise, or continued exercise, of
rights or remedies of the Banks hereunder or thereunder or at Law or in
equity.
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Article 10
THE MANAGING AGENT
10.1 APPOINTMENT AND AUTHORIZATION. Subject to Section 10.8, each
Bank hereby irrevocably appoints and authorizes the Managing Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Managing Agent by the terms thereof or are
reasonably incidental, as determined by the Managing Agent, thereto. This
appointment and authorization is intended solely for the purpose of facilitating
the servicing of the Loans and does not constitute appointment of the Managing
Agent as trustee for any Bank or as representative of any Bank for any other
purpose and, the Managing Agent shall take such action and exercise such powers
only in an administrative and ministerial capacity.
10.2 MANAGING AGENT AND AFFILIATES. BankBoston, N.A. (and each
successor Managing Agent) has the same rights and powers under the Loan
Documents as any other Bank and may exercise the same as though it were not the
Managing Agent, and the term "Bank" or "Banks" includes BankBoston, N.A. in its
individual capacity. BankBoston, N.A. (and each successor Managing Agent) and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of banking, trust or other business with Borrowers, any Subsidiary
thereof, or any Affiliate of Borrowers or any Subsidiary thereof, as if it were
not the Managing Agent and without any duty to account therefor to the Banks.
BankBoston, N.A. (and each successor Managing Agent) need not account to any
other Bank for any monies received by it for reimbursement of its costs and
expenses as Managing Agent hereunder, or for any monies received by it in its
capacity as a Bank hereunder. The Managing Agent shall not be deemed to hold a
fiduciary or agency relationship with any Bank and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Managing Agent.
10.3 PROPORTIONATE INTEREST IN ANY COLLATERAL. The Managing Agent,
on behalf of all the Banks, shall hold in accordance with the Loan Documents all
items of any collateral or interests therein received or held by the Managing
Agent. Subject to the Managing Agent's and the Banks' rights to reimbursement
for their costs and expenses hereunder (INCLUDING reasonable attorneys' fees and
disbursements and other professional services and the reasonably allocated costs
of attorneys employed by the Managing Agent or a Bank) and subject to the
application of payments in accordance with Section 9.2(d), each Bank shall have
an interest in the Managing Agent's interest in such collateral or interests
therein in the same proportions that the aggregate Obligations owed such Bank
under the Loan Documents bear to the aggregate Obligations owed under the Loan
Documents to all the Banks, without priority or preference among the Banks.
10.4 BANKS' CREDIT DECISIONS. Each Bank agrees that it has,
independently and without reliance upon the Managing Agent, any other Bank or
the directors, officers, agents, employees or attorneys of the Managing Agent or
of any other Bank, and instead in reliance upon information supplied to it by or
on behalf of Borrowers and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
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this Agreement. Each Bank also agrees that it shall, independently and without
reliance upon the Managing Agent, any other Bank or the directors, officers,
agents, employees or attorneys of the Managing Agent or of any other Bank,
continue to make its own independent credit analyses and decisions in acting or
not acting under the Loan Documents.
10.5 ACTION BY MANAGING AGENT.
(a) Absent actual knowledge of the Managing Agent of the
existence of a Default, the Managing Agent may assume that no Default has
occurred and is continuing, unless the Managing Agent (or the Bank that is
then the Managing Agent) has received notice from Borrowers stating the
nature of the Default or has received notice from a Bank stating the nature
of the Default and that such Bank considers the Default to have occurred
and to be continuing.
(b) The Managing Agent has only those obligations under the Loan
Documents as are expressly set forth therein.
(c) EXCEPT for any obligation expressly set forth in the Loan
Documents and as long as the Managing Agent may assume that no Event of
Default has occurred and is continuing, the Managing Agent may, but shall
not be required to, exercise its discretion to act or not act, EXCEPT that
the Managing Agent shall be required to act or not act upon the
instructions of the Requisite Banks (or of all the Banks, to the extent
required by Section 11.2) and those instructions shall be binding upon the
Managing Agent and all the Banks, PROVIDED that the Managing Agent shall
not be required to act or not act if to do so would be contrary to any Loan
Document or to applicable Law or would result, in the reasonable judgment
of the Managing Agent, in substantial risk of liability to the Managing
Agent.
(d) If the Managing Agent has received a notice specified in
clause (a), the Managing Agent shall immediately give notice thereof to the
Banks and shall act or not act upon the instructions of the Requisite Banks
(or of all the Banks, to the extent required by Section 11.2), PROVIDED
that the Managing Agent shall not be required to act or not act if to do so
would be contrary to any Loan Document or to applicable Law or would
result, in the reasonable judgment of the Managing Agent, in substantial
risk of liability to the Managing Agent, and EXCEPT that if the Requisite
Banks (or all the Banks, if required under Section 11.2) fail, for five (5)
Banking Days after the receipt of notice from the Managing Agent, to
instruct the Managing Agent, then the Managing Agent, in its sole
discretion, may act or not act as it deems advisable for the protection of
the interests of the Banks.
(e) The Managing Agent shall have no liability to any Bank for
acting, or not acting, as instructed by the Requisite Banks (or all the
Banks, if required under Section 11.2), notwithstanding any other provision
hereof.
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10.6 LIABILITY OF MANAGING AGENT. Neither the Managing Agent nor any
of its directors, officers, agents, employees or attorneys shall be liable for
any action taken or not taken by them under or in connection with the Loan
Documents, EXCEPT for their own gross negligence or willful misconduct. Without
limitation on the foregoing, the Managing Agent and its directors, officers,
agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof until
the Managing Agent receives notice of the assignment or transfer thereof,
in form satisfactory to the Managing Agent, signed by the payee, and may
treat each Bank as the owner of that Bank's interest in the Obligations for
all purposes of this Agreement until the Managing Agent receives notice of
the assignment or transfer thereof, in form satisfactory to the Managing
Agent, signed by that Bank;
(b) May consult with legal counsel (INCLUDING in-house legal
counsel), accountants (INCLUDING in-house accountants) and other
professionals or experts selected by it, or with legal counsel, accountants
or other professionals or experts for Borrowers and/or their Subsidiaries
or the Banks, and shall not be liable for any action taken or not taken by
it in good faith in accordance with any advice of such legal counsel,
accountants or other professionals or experts;
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents;
(d) Shall have no duty to ask or inquire as to the performance
or observance by Borrowers or its Subsidiaries of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
collateral or any Property, books or records of Borrowers or their
Subsidiaries;
(e) Will not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any collateral;
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties;
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrowers or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from any
Bank under any Loan Document, INCLUDING, without limitation, principal,
interest, commitment fees, Advances and other
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amounts; PROVIDED that, promptly upon discovery of such an error in
computation, the Managing Agent, the Banks and (to the extent
applicable) Borrowers and/or their Subsidiaries or Affiliates shall make
such adjustments as are necessary to correct such error and to restore
the parties to the position that they would have occupied had the error
not occurred; and
(h) Have not made nor do they now make any representations or
warranties, express or implied, nor does it assume any liability to the
Banks, with respect to the creditworthiness or financial condition of the
Borrowers, their respective partners or members or any of their respective
Subsidiaries, the value of their respective assets or the collectability of
the Loans.
10.7 INDEMNIFICATION. Each Bank shall, ratably in accordance with
its Pro Rata Share of the Commitments (if the Commitments are then in effect) or
in accordance with its proportion of the aggregate Indebtedness then evidenced
by the Notes (if the Commitments have then been terminated), indemnify and hold
the Managing Agent and its directors, officers, agents, employees and attorneys
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (INCLUDING reasonable attorneys' fees and
disbursements and allocated costs of attorneys employed by the Managing Agent)
that may be imposed on, incurred by or asserted against it or them in any way
relating to or arising out of the Loan Documents (other than losses incurred by
reason of the failure of Borrowers to pay the Indebtedness represented by the
Notes) or any action taken or not taken by it as Managing Agent thereunder,
EXCEPT such as result from its own gross negligence or willful misconduct.
Without limitation on the foregoing, each Bank shall reimburse the Managing
Agent upon demand for that Bank's Pro Rata Share of any out-of-pocket cost or
expense incurred by the Managing Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (INCLUDING a bankruptcy reorganization), enforcement or attempted
enforcement of the Loan Documents, to the extent that any Borrower or any other
Party is required by Section 11.3 to pay that cost or expense but fails to do so
upon demand. Nothing in this Section 10.7 shall entitle the Managing Agent or
any indemnitee referred to above to recover any amount from the Banks if and to
the extent that such amount has theretofore been recovered from Borrowers or any
of their Subsidiaries. To the extent that the Managing Agent or any indemnitee
referred to above is later reimbursed such amount by Borrowers or any of its
Subsidiaries, it shall return the amounts paid to it by the Banks in respect of
such amount.
10.8 SUCCESSOR MANAGING AGENT. The Managing Agent may, and at the
request of the Requisite Banks shall, resign as Managing Agent upon
reasonable notice to the Banks and Borrowers effective upon acceptance of
appointment by a successor Managing Agent. If the Managing Agent shall
resign as Managing Agent under this Agreement, the Requisite Banks shall
appoint from among the Banks a successor Managing Agent for the Banks, which
successor Managing Agent shall be approved by Borrowers so long as no Default
or Event of Default has occurred and is continuing (and such approval shall
not be unreasonably withheld or delayed). If no successor Managing Agent is
appointed prior to the effective date of the resignation of the
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Managing Agent, the Managing Agent may appoint, after consulting with the
Banks and, so long as no Default or Event of Default has occurred and is
continuing the Borrowers, a successor Managing Agent from among the Banks.
Upon the acceptance of its appointment as successor Managing Agent hereunder,
such successor Managing Agent shall succeed to all the rights, powers and
duties of the retiring Managing Agent and the term "Managing Agent" shall
mean such successor Managing Agent and the retiring Managing Agent's
appointment, powers and duties as Managing Agent shall be terminated. After
any retiring Managing Agent's resignation hereunder as Managing Agent, the
provisions of this ARTICLE 10, and Sections 11.3, 11.11 and 11.22, shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Managing Agent under this Agreement. Notwithstanding the
foregoing, if (a) the Managing Agent has not been paid its agency fees under
Section 3.5 or has not been reimbursed for any expense reimbursable to it
under Section 11.3, in either case for a period of at least one (1) year and
(b) no successor Managing Agent has accepted appointment as Managing Agent by
the date which is thirty (30) days following a retiring Managing Agent's
notice of resignation, the retiring Managing Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of
the duties of the Managing Agent hereunder until such time, if any, as the
Requisite Banks appoint a successor Managing Agent as provided for above.
10.9 NO OBLIGATIONS OF BORROWERS. Nothing contained in this
Article 10 shall be deemed to impose upon Borrowers any obligation in respect of
the due and punctual performance by the Managing Agent of its obligations to the
Banks under any provision of this Agreement, and Borrowers shall have no
liability to the Managing Agent or any of the Banks in respect of any failure by
the Managing Agent or any Bank to perform any of its obligations to the Managing
Agent or the Banks under this Agreement. Without limiting the generality of the
foregoing, where any provision of this Agreement relating to the payment of any
amounts due and owing under the Loan Documents provides that such payments shall
be made by Borrowers to the Managing Agent for the account of the Banks,
Borrowers' obligations to the Banks in respect of such payments shall be deemed
to be satisfied upon the making of such payments to the Managing Agent in the
manner provided by this Agreement.
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Article 11
MISCELLANEOUS
11.1 CUMULATIVE REMEDIES; NO WAIVER. The rights, powers, privileges
and remedies of the Managing Agent and the Banks provided herein or in any Note
or other Loan Document are cumulative and not exclusive of any right, power,
privilege or remedy provided by Law or equity. No failure or delay on the part
of the Managing Agent or any Bank in exercising any right, power, privilege or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or
partial exercise of any right, power, privilege or remedy preclude any other or
further exercise of the same or any other right, power, privilege or remedy.
The terms and conditions of ARTICLE 8 hereof are inserted for the sole benefit
of the Managing Agent and the Banks; the same may be waived in whole or in part,
with or without terms or conditions, in respect of any Loan without prejudicing
the Managing Agent's or the Banks' rights to assert them in whole or in part in
respect of any other Loan.
11.2 AMENDMENTS; CONSENTS. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrowers or any other Party therefrom, may in any event be
effective unless in writing signed by the Requisite Banks (and, in the case of
any amendment, modification or supplement of or to any Loan Document to which
any of Borrowers is a Party, signed by each such Party, and, in the case of any
amendment, modification or supplement to Section 3.5 or ARTICLE 10, signed by
the Managing Agent), and then only in the specific instance and for the specific
purpose given; and, without the approval in writing of all the Banks, no
amendment, modification, supplement, termination, waiver or consent may be
effective:
(a) To amend, modify, forgive, reduce or waive the principal of,
or the amount of principal, principal prepayments or the rate of interest
payable on, any Note, or the amount of the Commitments or the Pro Rata
Share of any Bank or the amount of any commitment fee payable to any Bank,
or any other fee or amount payable to any Bank under the Loan Documents or
to waive an Event of Default consisting of the failure of Borrowers to pay
when due principal, interest or any fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of or any installment of interest on, any Note or
any installment of any fee, or to extend the term of the Commitments;
(c) To amend the provisions of the definition of "REQUISITE
BANKS" or "MATURITY DATE"; or
(d) To amend or waive ARTICLE 8 or this Section 11.2; or
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(e) To amend any provision of this Agreement that expressly
requires the consent or approval of the Requisite Banks or all of the
Banks; or
(f) To release any Borrower except as provided in Section 6.18;
or
(g) To change the manner of distribution of any payments to the
Banks or the Managing Agent; or
(h) To require a Bank to fund more than its Pro Rata Share of a
Request for an Advance.
Notwithstanding anything herein to the contrary, the Managing Agent may with the
approval of the Majority Banks temporarily waive compliance by Borrowers with
any condition, obligation or covenant contained in this Agreement or the Loan
Documents (other than a failure to make a payment of any principal, interest or
fee when due) for a period not to exceed ninety (90) days, provided, however,
that any such condition, obligation or covenant so waived may not be
consecutively waived after the expiration of such ninety (90) day period. There
shall be no amendment, modification or waiver of any provisions in the Loan
Documents with respect to Competitive Advances without the consent of any Bank
then holding a Competitive Advance. Any amendment, modification, supplement,
termination, waiver or consent pursuant to this Section 11.2 shall apply equally
to, and shall be binding upon, all the Banks and the Managing Agent.
11.3 COSTS, EXPENSES AND TAXES. Borrowers shall pay within five (5)
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Managing Agent in connection with the negotiation,
preparation, syndication, execution, delivery and interpretation of the Loan
Documents (subject to the ceiling contained in a letter agreement between Parent
and the Managing Agent as to expenses in connection with the initial closing and
syndication) and any amendment thereto or waiver thereof. Borrowers shall also
pay on demand, accompanied by an invoice therefor, the reasonable costs and
expenses of the Managing Agent and the Banks in connection with the refinancing,
restructuring, reorganization (INCLUDING a bankruptcy reorganization) and
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include filing fees,
recording fees, title insurance fees, appraisal fees, search fees, and other
out-of-pocket expenses and the reasonable fees and out-of-pocket expenses of any
legal counsel (INCLUDING reasonably allocated costs of legal counsel employed by
the Managing Agent or any Bank), independent public accountants and other
outside experts retained by the Managing Agent or any Bank, whether or not such
costs and expenses are incurred or suffered by the Managing Agent or any Bank in
connection with or during the course of any bankruptcy or insolvency proceedings
of any of Borrowers or any Subsidiary thereof. Borrowers shall pay any and all
documentary and other taxes, EXCLUDING (i) taxes imposed on or measured in whole
or in part by its overall net income imposed on it by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or maintains its
principal office or LIBOR Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business" or (ii) any withholding
taxes or other
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taxes based on gross income imposed by the United States of America for any
period with respect to which it has failed to provide Borrowers with the
appropriate form or forms required by Section 11.21, to the extent such forms
are then required by applicable Laws, and all costs, expenses, fees and
charges payable or determined to be payable in connection with the filing or
recording of this Agreement, any other Loan Document or any other instrument
or writing to be delivered hereunder or thereunder, or in connection with any
transaction pursuant hereto or thereto, and shall reimburse, hold harmless
and indemnify on the terms set forth in 11.11 the Managing Agent and the
Banks from and against any and all loss, liability or legal or other expense
with respect to or resulting from any delay in paying or failure to pay any
such tax, cost, expense, fee or charge or that any of them may suffer or
incur by reason of the failure of any Party to perform any of its
Obligations. Any amount payable to the Managing Agent or any Bank under this
Section 11.3 shall bear interest from the fifth Banking Day following the
date of demand for payment at the Default Rate.
11.4 NATURE OF BANKS' OBLIGATIONS. The obligations of the Banks
hereunder are several and not joint or joint and several. Nothing contained
in this Agreement or any other Loan Document and no action taken by the
Managing Agent or the Banks or any of them pursuant hereto or thereto may, or
may be deemed to, make the Banks a partnership, an association, a joint
venture or other entity, either among themselves or with the Borrowers or any
Affiliate of any of Borrowers. A default by any Bank will not increase the
Pro Rata Share of the Commitments attributable to any other Bank. Any Bank
not in default may, if it desires, assume in such proportion as the
nondefaulting Banks agree the obligations of any Bank in default, but is not
obligated to do so. The Managing Agent agrees that it will use reasonable
best efforts either to induce the other Banks to assume the obligations of a
Bank in default or to obtain another Bank, reasonably satisfactory to
Borrowers, to replace such a Bank in default.
11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or in any other Loan
Document, or in any certificate or other writing delivered by or on behalf of
any one or more of the Parties to any Loan Document, will survive the making
of the Loans hereunder and the execution and delivery of the Notes, and have
been or will be relied upon by the Managing Agent and each Bank,
notwithstanding any investigation made by the Managing Agent or any Bank or
on their behalf.
11.6 NOTICES. EXCEPT as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a written
notice sent to all other parties to such Loan Document in accordance with this
Section. EXCEPT as otherwise expressly provided in any Loan Document, if any
notice, request, demand, direction or other communication required or permitted
by any Loan Document is given by mail it will be effective on the earlier of
receipt or the fourth Banking Day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telegraph or cable, when
delivered to the
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telegraph company with charges prepaid; if given by telecopier, when sent; if
dispatched by commercial courier, on the scheduled delivery date; or if given
by personal delivery, when delivered.
11.7 EXECUTION OF LOAN DOCUMENTS. Unless the Managing Agent
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all of which
counterparts of this Agreement or any other Loan Document, as the case may
be, when taken together will be deemed to be but one and the same instrument
and (b) execution of any such counterpart may be evidenced by a telecopier
transmission of the signature of such party. The execution of this Agreement
or any other Loan Document by any party hereto or thereto will not become
effective until counterparts hereof or thereof, as the case may be, have been
executed by all the parties hereto or thereto.
11.8 BINDING EFFECT; ASSIGNMENT.
(a) This Agreement and the other Loan Documents to which
Borrowers are a Party will be binding upon and inure to the benefit of
Borrowers, the Managing Agent, each of the Banks, and their respective
successors and assigns, EXCEPT that Borrowers may not assign their rights
hereunder or thereunder or any interest herein or therein without the prior
written consent of all the Banks. Each Bank represents that it is not
acquiring its Note with a view to the distribution thereof within the
meaning of the Securities Act of 1933, as amended (subject to any
requirement that disposition of such Note must be within the control of
such Bank). Any Bank may at any time pledge its Note or any other
instrument evidencing its rights as a Bank under this Agreement to a
Federal Reserve Bank, but no such pledge shall release that Bank from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Bank hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Bank may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share of the Commitments; PROVIDED that (i) such Eligible Assignee, if not
then a Bank or an Affiliate of the assigning Bank, shall be approved by the
Managing Agent and (if no Event of Default then exists) Borrowers (neither
of which approvals shall be unreasonably withheld or delayed), (ii) such
assignment shall be evidenced by a Commitments Assignment and Acceptance, a
copy of which together with any Notes subject to such assignment shall be
furnished to the Managing Agent as hereinbelow provided, (iii) EXCEPT in
the case of an assignment to an Affiliate of the assigning Bank, to another
Bank or of the entire remaining Commitments of the assigning Bank, the
assignment shall not assign a Pro Rata Share of the Commitments that is
equivalent to less than $10,000,000, (iv) the assignment shall be of a
constant, and not a varying, percentage of the Assignor's rights and
obligations under this Agreement, and (v) the effective date of any such
assignment shall be as specified in the Commitments Assignment and
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Acceptance, but not earlier than the date which is five (5) Banking Days
after the date the Managing Agent has received the Commitments Assignment
and Acceptance unless otherwise agreed by the Managing Agent. In
connection with such assignment, the assignor may assign all or any portion
of its Competitive Advance Note and the Competitive Advances at the time
owing to it, which, if so assigned, shall be assigned in such proportion as
the assignor and assignee agree, but in no event shall the assignee acquire
an interest in the Competitive Advances of the assignor of less than
$5,000,000.00. Upon the effective date of such Commitments Assignment and
Acceptance, the Eligible Assignee named therein shall be a Bank for all
purposes of this Agreement, with the Pro Rata Share of the Commitments
therein set forth and, to the extent of such Pro Rata Share, the assigning
Bank shall be released from its further obligations under this Agreement.
Borrowers agree that they shall execute and deliver (against delivery by
the assigning Bank to Borrowers of its Note) to such assignee Bank, Notes
evidencing that assignee Bank's Pro Rata Share of the Commitments, and to
the assigning Bank, Notes evidencing the remaining balance Pro Rata Share
retained by the assigning Bank. In the event that no portion of a
Competitive Advance is assigned to such assignee, the Borrowers shall upon
the request of such assignee execute and deliver to such assignee a
Competitive Advance Note, dated the effective date of such assignment and
which shall otherwise be in substantially the form of the Competitive
Advance Notes.
(c) By executing and delivering a Commitments Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees that:
(i) other than the representation and warranty of the assigning Bank that
it is the legal and beneficial owner of the Pro Rata Share of the
Commitments being assigned thereby free and clear of any adverse claim,
neither the assigning Bank nor the Managing Agent has made any
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document;
(ii) neither the assigning Bank nor the Managing Agent has made any
representation or warranty and assumes no responsibility with respect to
the financial condition of Borrowers or the performance by Borrowers of the
Obligations; (iii) it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to
Section 7.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Commitments Assignment and Acceptance; (iv) it will, independently and
without reliance upon the Managing Agent or any Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) it appoints and authorizes the Managing Agent to
take such action and to exercise such powers under this Agreement as are
delegated to the Managing Agent by this Agreement; and (vi) it will perform
in accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Bank.
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(d) The Managing Agent shall maintain at the Managing Agent's
Office a copy of each Commitments Assignment and Acceptance delivered to it
and a register (the "Register") of the names and address of each of the
Banks and the Pro Rata Share of the Commitments held by each Bank, giving
effect to each Commitments Assignment and Acceptance. The Register shall
be available during normal business hours for inspection by Borrowers or
any Bank upon reasonable prior notice to the Managing Agent. After receipt
of a completed Commitments Assignment and Acceptance executed by any Bank
and an Eligible Assignee and the Notes subject to such assignment, and
receipt of an assignment fee of $2,500 from such Bank or Eligible Assignee,
the Managing Agent shall, promptly following the effective date thereof,
provide to Borrowers and the Banks a revised SCHEDULE 1.1 giving effect
thereto. Borrowers, the Managing Agent and the Banks shall deem and treat
the Persons listed as Banks in the Register as the holders and owners of
the Pro Rata Share of the Commitments listed therein for all purposes
hereof, and no assignment or transfer of any such Pro Rata Share of the
Commitments shall be effective, in each case unless and until a Commitments
Assignment and Acceptance effecting the assignment or transfer thereof
shall have been accepted by the Managing Agent and recorded in the Register
as provided above. Prior to such recordation, all amounts owed with
respect to the applicable Pro Rata Share of the Commitments shall be owed
to the Bank listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as a Bank
shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Pro Rata Share of the Commitments.
(e) Each Bank may from time to time grant participations to one
or more banks or other financial institutions (INCLUDING another Bank but
EXCLUDING an Employee Plan) in a portion of its Pro Rata Share of the
Commitments; PROVIDED, HOWEVER, that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other financial institutions
shall not be a Bank hereunder for any purpose EXCEPT, if the participation
agreement so provides, for the purposes of Sections 3.7, 3.8, 11.11 and
11.22 but only to the extent that the cost of such benefits to Borrowers
does not exceed the cost which Borrowers would have incurred in respect of
such Bank absent the participation, (iv) Borrowers, the Managing Agent and
the other Banks shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement,
(v) the participation interest shall be expressed as a percentage of the
granting Bank's Pro Rata Share of the Commitments as it then exists and
shall not afford such participant any rights or privileges under the Loan
Documents except as provided in clause (iii) above.
11.9 RIGHT OF SETOFF. If an Event of Default has occurred and is
continuing, the Managing Agent or any Bank (but in each case only with the
consent of the Requisite Banks) may exercise its rights under Article 9 of the
Uniform Commercial Code and other applicable Laws and, to the extent permitted
by applicable Laws, apply any funds in any deposit account
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maintained with it by Borrowers and/or any Property of Borrowers in its
possession against the Obligations.
11.10 SHARING OF SETOFFS. Each Bank severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrowers, or otherwise, receives payment of the Obligations held by
it that is ratably more than any other Bank, through any means, receives in
payment of the Obligations held by that Bank, then, subject to applicable
Laws: (a) the Bank exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from each of the other Banks a
participation in the Obligations held by the other Banks and shall pay to the
other Banks a purchase price in an amount so that the share of the
Obligations held by each Bank after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment; and (b) such other
adjustments and purchases of participations shall be made from time to time
as shall be equitable to ensure that all of the Banks share any payment
obtained in respect of the Obligations ratably in accordance with each Bank's
share of the Obligations immediately prior to, and without taking into
account, the payment; PROVIDED that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Bank by Borrowers or any Person claiming through or succeeding
to the rights of Borrowers, the purchase of a participation shall be
rescinded and the purchase price thereof shall be restored to the extent of
the recovery, but without interest. Each Bank that purchases a participation
in the Obligations pursuant to this Section 11.10 shall from and after the
purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of
the Obligations purchased to the same extent as though the purchasing Bank
were the original owner of the Obligations purchased. Borrowers expressly
consent to the foregoing arrangements and agree that any Bank holding a
participation in an Obligation so purchased pursuant to this Section 11.10
may exercise any and all rights of setoff, banker's lien or counterclaim with
respect to the participation as fully as if the Bank were the original owner
of the Obligation purchased.
11.11 INDEMNITY BY BORROWERS. Borrowers agree to indemnify, save and
hold harmless the Managing Agent and each Bank and their respective directors,
officers, agents, attorneys and employees (collectively the "INDEMNITEES") from
and against: (a) any and all claims, demands, actions or causes of action
(EXCEPT a claim, demand, action, or cause of action for any amount excluded from
the definition of "Taxes" in Section 3.12(d)) if the claim, demand, action or
cause of action arises out of or relates to any act or omission (or alleged act
or omission) of Borrowers, their Affiliates or any of their officers, directors
or stockholders relating to the Commitments, the use or contemplated use of
proceeds of any Loan, or the relationship of Borrowers and the Banks under this
Agreement; (b) any administrative or investigative proceeding by any
Governmental Agency arising out of or related to a claim, demand, action or
cause of action described in clause (a) above; and (c) any and all liabilities,
losses, costs or expenses (INCLUDING reasonable attorneys' fees and the
reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional
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services) that any Indemnitee suffers or incurs as a result of the assertion
of any foregoing claim, demand, action or cause of action; PROVIDED that no
Indemnitee shall be entitled to indemnification for any loss caused by its
own gross negligence or willful misconduct or for any loss asserted against
it by another Indemnitee. If any claim, demand, action or cause of action is
asserted against any Indemnitee, such Indemnitee shall promptly notify
Borrowers, but the failure to so promptly notify Borrowers shall not affect
Borrowers' obligations under this Section unless such failure materially
prejudices Borrowers' right to participate in the contest of such claim,
demand, action or cause of action, as hereinafter provided. Such Indemnitee
may (and shall, if requested by Borrowers in writing) contest the validity,
applicability and amount of such claim, demand, action or cause of action and
shall permit Borrowers to participate in such contest. Any Indemnitee that
proposes to settle or compromise any claim or proceeding for which Borrowers
may be liable for payment of indemnity hereunder shall give Borrowers written
notice of the terms of such proposed settlement or compromise reasonably in
advance of settling or compromising such claim or proceeding and shall obtain
Borrowers' prior consent (which shall not be unreasonably withheld or
delayed). In connection with any claim, demand, action or cause of action
covered by this Section 11.11 against more than one Indemnitee, all such
Indemnitees shall be represented by the same legal counsel (which may be a
law firm engaged by the Indemnitees or attorneys employed by an Indemnitee or
a combination of the foregoing) selected by the Indemnitees and reasonably
acceptable to Borrowers; PROVIDED, that if such legal counsel determines in
good faith that representing all such Indemnitees would or could result in a
conflict of interest under Laws or ethical principles applicable to such
legal counsel or that a defense or counterclaim is available to an Indemnitee
that is not available to all such Indemnitees, then to the extent reasonably
necessary to avoid such a conflict of interest or to permit unqualified
assertion of such a defense or counterclaim, each affected Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrowers, with all such legal
counsel using reasonable efforts to avoid unnecessary duplication of effort
by counsel for all Indemnitees; and FURTHER PROVIDED that the Managing Agent
(as an Indemnitee) shall at all times be entitled to representation by
separate legal counsel (which may be a law firm or attorneys employed by the
Managing Agent or a combination of the foregoing). Any obligation or
liability of Borrowers to any Indemnitee under this Section 11.11 shall
survive the expiration or termination of this Agreement and the repayment of
all Loans and the payment and performance of all other Obligations owed to
the Banks.
11.12 NONLIABILITY OF THE BANKS. Borrowers acknowledge and agree
that:
(a) Any inspections of any Property of Borrowers made by or
through the Managing Agent or the Banks are for purposes of administration
of the Loan only and Borrowers are not entitled to rely upon the same
(whether or not such inspections are at the expense of Borrowers);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Managing Agent or the Banks pursuant
to the Loan Documents, neither the Managing Agent nor the Banks shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the
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same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by the Managing Agent or
the Banks;
(c) The relationship between Borrowers and the Managing Agent
and the Banks is, and shall at all times remain, solely that of borrowers
and lenders; neither the Managing Agent nor the Banks shall under any
circumstance be construed to be partners or joint venturers of Borrowers or
their Affiliates; neither the Managing Agent nor the Banks shall under any
circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrowers or their Affiliates, or to owe any
fiduciary duty to Borrowers or their Affiliates; neither the Managing Agent
nor the Banks undertake or assume any responsibility or duty to Borrowers
or their Affiliates to select, review, inspect, supervise, pass judgment
upon or inform Borrowers or their Affiliates of any matter in connection
with their Property or the operations of Borrowers or their Affiliates;
Borrowers and their Affiliates shall rely entirely upon their own judgment
with respect to such matters; and any review, inspection, supervision,
exercise of judgment or supply of information undertaken or assumed by the
Managing Agent or the Banks in connection with such matters is solely for
the protection of the Managing Agent and the Banks and neither Borrowers
nor any other Person is entitled to rely thereon; and
(d) The Managing Agent and the Banks shall not be responsible or
liable to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to Property caused by the
actions, inaction or negligence of Borrowers and/or its Affiliates and
Borrowers hereby indemnify and hold the Managing Agent and the Banks
harmless on the terms set forth in Section 11.11 from any such loss,
damage, liability or claim.
11.13 NO THIRD PARTIES BENEFITED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrowers, the Managing Agent and the Banks in connection with the Loans, and is
made for the sole benefit of Borrowers, the Managing Agent and the Banks, and
the Managing Agent's and the Banks' successors and assigns. EXCEPT as provided
in Sections 11.8 and 11.11, no other Person shall have any rights of any nature
hereunder or by reason hereof.
11.14 CONFIDENTIALITY. Each Bank agrees to hold any confidential
information that it may receive from Borrowers pursuant to this Agreement in
confidence, EXCEPT for disclosure: (a) to other Banks; (b) to legal counsel and
accountants for Borrowers or any Bank; (c) to other professional advisors to
Borrowers or any Bank, provided that the recipient has accepted such information
subject to a confidentiality agreement substantially similar to this
Section 11.14; (d) to regulatory officials having jurisdiction over that Bank;
(e) as required by Law or legal process, provided that each Bank agrees to
notify Borrowers of any such disclosures unless prohibited by applicable Laws,
or in connection with any legal proceeding to which that Bank and any of
Borrowers are adverse parties; and (f) to another financial institution in
connection with a disposition or proposed disposition to that financial
institution of all or part of
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that Bank's interests hereunder or a participation interest in its Notes,
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14. For
purposes of the foregoing, "confidential information" shall mean any
information respecting Parent or its Subsidiaries that when delivered to the
Managing Agent or the Banks is clearly marked by Borrowers to be
confidential, OTHER THAN (i) information previously filed with any
Governmental Agency and available to the public, (ii) information previously
published in any public medium from a source other than, directly or
indirectly, that Bank, and (iii) information previously disclosed by
Borrowers to any Person not associated with Borrowers which does not owe a
professional duty of confidentiality to Borrowers or which has not executed
an appropriate confidentiality agreement with Borrowers. Nothing in this
Section shall be construed to create or give rise to any fiduciary duty on
the part of the Managing Agent or the Banks to Borrowers.
11.15 FURTHER ASSURANCES. Borrowers shall, at their expense and
without expense to the Banks or the Managing Agent, do, execute and deliver
such further acts and documents as the Requisite Banks or the Managing Agent
from time to time reasonably require for the assuring and confirming unto the
Banks or the Managing Agent of the rights hereby created or intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
11.16 INTEGRATION. This Agreement, together with the other Loan
Documents and the letter agreement referred to in Section 11.3, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and supersedes all prior agreements, written or oral, on the subject matter
hereof. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; PROVIDED that the inclusion of
supplemental rights or remedies in favor of the Managing Agent or the Banks
in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of
the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.
11.17 GOVERNING LAW. EXCEPT to the extent otherwise provided
therein, each Loan Document shall be governed by, and construed and enforced
in accordance with, the Laws of California applicable to contracts made and
performed in California.
11.18 SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining
provisions or the operation, enforceability or validity of that provision as
to any other party or in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
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11.19 HEADINGS. Article and Section headings in this Agreement
and the other Loan Documents are included for convenience of reference only
and are not part of this Agreement or the other Loan Documents for any other
purpose.
11.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
11.21 FOREIGN BANKS AND PARTICIPANTS. Each Bank that is
incorporated or otherwise organized under the Laws of a jurisdiction other
than the United States of America or any State thereof or the District of
Columbia shall deliver to Borrowers (with a copy to the Managing Agent), on
or before the Closing Date (or on or before accepting an assignment or
receiving a participation interest herein pursuant to Section 11.8, if
applicable) two duly completed copies, signed by a Responsible Official, of
either Form 1001 (relating to such Bank and entitling it to a complete
exemption from withholding on all payments to be made to such Bank by
Borrowers pursuant to this Agreement) or Form 4224 (relating to all payments
to be made to such Bank by the Borrowers pursuant to this Agreement) of the
United States Internal Revenue Service or such other evidence (INCLUDING, if
reasonably necessary, Form W-9) satisfactory to Borrowers and the Managing
Agent that no withholding under the federal income tax laws is required with
respect to such Bank. Thereafter and from time to time, each such Bank shall
(a) promptly submit to Borrowers (with a copy to the Managing Agent), such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to
Borrowers and the Managing Agent of any available exemption from, United
States withholding taxes in respect of all payments to be made to such Bank
by Borrowers pursuant to this Agreement and (b) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Bank,
and as may be reasonably necessary (including the re-designation of its LIBOR
Lending Office, if any) to avoid any requirement of applicable Laws that
Borrowers make any deduction or withholding for taxes from amounts payable to
such Bank. In the event that Borrowers or the Managing Agent become aware
that a participation has been granted pursuant to Section 11.8(e) to a
financial institution that is incorporated or otherwise organized under the
Laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia, then, upon request made by Borrowers or
the Managing Agent to the Bank which granted such participation, such Bank
shall cause such participant financial institution to deliver the same
documents and information to Borrowers and the Managing Agent as would be
required under this Section if such financial institution were a Bank.
11.22 HAZARDOUS MATERIAL INDEMNITY. Each of Borrowers hereby agrees
to indemnify, hold harmless and defend (by counsel reasonably satisfactory to
the Managing Agent) the Managing Agent and each of the Banks and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including but not limited to reasonable
attorneys' fees and the reasonably
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allocated costs of attorneys employed by the Managing Agent or any Bank, and
expenses to the extent that the defense of any such action has not been
assumed by Borrowers), arising directly or indirectly out of (i) the presence
on, in, under or about any Real Property of any Hazardous Materials, or any
releases or discharges of any Hazardous Materials on, under or from any Real
Property and (ii) any activity carried on or undertaken on or off any Real
Property by Borrowers or any of its predecessors in title, whether prior to
or during the term of this Agreement, and whether by Borrowers or any
predecessor in title or any employees, agents, contractors or subcontractors
of Borrowers or any predecessor in title, or any third persons at any time
occupying or present on any Real Property, in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or disposal
of any Hazardous Materials at any time located or present on, in, under or
about any Real Property. The foregoing indemnity shall further apply to any
residual contamination on, in, under or about any Real Property, or affecting
any natural resources, and to any contamination of any Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on any Real Property, the presence of which is caused by the
Managing Agent or the Banks. Borrowers hereby acknowledge and agree that,
notwithstanding any other provision of this Agreement or any of the other
Loan Documents to the contrary, the obligations of Borrowers under this
Section (and under Sections 4.17 and 5.10) shall be unlimited corporate
obligations of Borrowers and shall NOT be secured by any Lien on any Real
Property. Any obligation or liability of Borrowers to any Indemnitee under
this Section 11.22 shall survive the expiration or termination of this
Agreement and the repayment of all Loans and the payment and performance of
all other Obligations owed to the Banks.
11.23 JOINT AND SEVERAL. Each of Borrowers shall be obligated for
all of the Obligations on a joint and several basis, notwithstanding which of
Borrowers may have directly received the proceeds of any particular Loan.
Each of Borrowers acknowledges and agrees that, for purposes of the Loan
Documents, Borrowers constitute a single integrated financial enterprise and
that each receives a benefit from the availability of credit under this
Agreement to all of Borrowers. Each of Borrowers waive all defenses arising
under the Laws of suretyship, to the extent such Laws are applicable, in
connection with its joint and several obligations under this Agreement.
Without limiting the foregoing, each of Borrowers agrees to the Joint
Borrower Provisions set forth in EXHIBIT L, incorporated by this reference.
11.24 REMOVAL OF A BANK. As provided in Sections 2.9, 3.7 and
3.8, Borrowers shall have the right to remove a Bank as a party to this
Agreement if such Bank refuses (under certain circumstances) to consent to an
extension of the Revolver Termination Date made pursuant to Section 2.9 or if
such Bank is paid a material amount by Borrowers pursuant to Section 3.7 or
Section 3.8. Upon notice from Borrowers, such Bank shall execute and deliver
a Commitment Assignment and Acceptance covering that Bank's Pro Rata Share of
the Commitments in favor of such Eligible Assignee as Borrowers may designate
with the approval of the Managing Agent, subject to payment in full by such
Eligible Assignee of all principal, interest and fees owing to such Bank
through the date of assignment. In addition (but only if
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Borrowers' right to remove the Bank arises under Section 2.9(b)), Borrowers
may reduce as permitted by Section 2.9(b) the Commitments pursuant to Section
2.7 (and, for this purpose, the numerical requirements of such Section shall
not apply) by an amount equal to that Bank's Pro Rata Share of the
Commitments, pay to such Bank all principal, interest and fees owing to such
Bank and release such Bank from its Pro Rata Share of the Commitments.
11.25 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.26 PURPORTED ORAL AMENDMENTS. BORROWERS EXPRESSLY ACKNOWLEDGE
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWERS AGREE THAT
THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL
OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE MANAGING AGENT OR ANY BANK
THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION,
WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
11.27 REPLACEMENT OF NOTES. Upon receipt of evidence reasonably
satisfactory to the Borrowers of the loss, theft, destruction or mutilation
of any Note, and in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory to the Borrowers
or, in the case of any such mutilation, upon surrender and cancellation of
the applicable Note, the Borrowers will execute and deliver, in lieu thereof,
a replacement Note, identical in form and substance to the applicable Note
and dated as of the date of the applicable Note and upon such execution and
delivery all references in the Loan Documents to such Note shall be deemed to
refer to such replacement Note.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By: /s/ Joel S. Marcus
------------------
Its:
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By: /s/ Joel S. Marcus
------------------
Its:
ARE-QRS CORP.
By: /s/ Joel S. Marcus
------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By: /s/ Joel S. Marcus
------------------
Its:
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ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities, L.P.,
their sole member
By: ARE-QRS Corp., its general partner
By: /s/ Joel S. Marcus
------------------
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing
member
By: ARE-GP Holdings QRS Corp., its
general partner
By: /s/ Joel S. Marcus
------------------
Its:
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ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general
partner
By: ARE-GP Holdings QRS Corp., its
general partner
By: /s/ Joel S. Marcus
------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities, Inc.,
their sole member
By: /s/ Joel S. Marcus
------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
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BANKBOSTON, N.A., individually and as
Managing Agent
By: /s/ Daniel P. Stegemoeller
--------------------------
Its: Vice President
Address:
BANKBOSTON, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
WITH A COPY TO:
BANKBOSTON, N.A.
115 Perimeter Center Place, N.E., Suite 500
Atlanta, Georgia 30346
Attn: Dan Stegemoeller
Telecopier: (770) 390-8434
Telephone: (770) 390-6547
99
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SOCIETE GENERALE SOUTHWEST AGENCY,
individually and as Syndication Agent
By: /s/ Scott Gosslee VP
--------------------
Its: Vice President
Societe Generale Southwest Agency
2001 Ross Avenue
Suite 4900
Dallas, TX 75201
Attn: Mr. Scott Gosslee
Phone: 214-979-2779
Facsimile: 214-979-2727
100
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KEYBANK NATIONAL ASSOCIATION,
individually and as Documentation Agent
By: /s/ Mary Ellen Fowler
---------------------
Its: Vice President
KeyBank National Association
127 Public Square
MCOH-01-27-0603
Cleveland, OH 44114
Attn: Ms. Mary Ellen Fowler
Phone: 216-689-4975
Facsimile: 216-689-4497
101
<PAGE>
DRESDNER BANK AG, New York Branch and Grand
Cayman Branch, individually and as Co-Agent
By: /s/ John W Sweeney &
---------------------
/s/ Christopher E. Sarisky
--------------------------
Its: Assistant Vice President,
Assistant Vice President
Dresdner Bank, AG
333 South Grand Avenue
Los Angeles, CA 90071
Attn: Mr. Vitol Wiacek
Phone: 213-473-5422
Facsimile: 213-473-5450
102
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THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
Los Angeles Agency
By: /s/ Brian H. Kelley
-------------------
Its: Deputy General Manager
The Long Term Credit Bank of Japan, Ltd.
350 South Grand Avenue
Suite 3000
Los Angeles, CA 90071
Attn: Mr. Bob Taplett
Phone: 213-689-6362
Facsimile: 213-687-3921
103
<PAGE>
CRESTAR BANK
By: /s/ Gregory T.Horstman
----------------------
Its: Vice President
Crestar Bank
8245 Boone Boulevard
Suite 820
Vienna, VA 22182
Attn: Mr. Gregory Horstman
Phone: 703-902-9247
Facsimile: 703-902-9190
104
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RIGGS BANK, N.A.
By: /s/ Louanne Baily
-----------------
Its: VP
Riggs Bank, N.A.
Commercial Banking
808 17th Street, N.W.
7th Floor
Washington, D.C. 20074
Attn: Ms. Louanne Bailey
Phone: 202-835-5037
Facsimile: 202-835-5982
105
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SUMMIT BANK
By: /s/ Amy L. Brown
----------------
Its: Regional VP
Summit Bank
Commerce Center
1800 Chapel Avenue West
Cherry Hill, NJ 08002
Attn: Mr. Bob Gaylord
Phone: 609-486-3678
Facsimile: 609-486-3717
106
<PAGE>
FIRST AMERICAN BANK TEXAS, S.S.B.
By: /s/ Jeffrey C. Schultz
----------------------
Its: Vice President
First American Bank Texas, S.S.B.
14651 Dallas Parkway, Suite 400
Dallas, Texas 75240
Attn: Mr. Jeff Schultz
Phone: 972-419-3414
Facsimile: 972-419-3589
107
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SOVEREIGN BANK
By: /s/ Elizabeth A. Donovan
------------------------
Its: Vice President
Sovereign Bank
50 Rowes Wharf
Suite 430
Boston, MA 02110
Attn: Mr. Thomas W. Nadeau
Phone: 617-478-6706
Facsimile: 617-478-6799
108
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
LOS ANGELES AGENCY
By: /s/ Takeshi Kubo
----------------
Its: Vice President
The Industrial Bank of Japan, Limited,
Los Angeles Agency
350 South Grand Avenue
Suite 1500
Los Angeles, CA 90071
Attn: Mr. Takeshi Kubo
Phone: 213-893-6447
Facsimile: 213-488-9840
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EXHIBIT A
COMMITMENTS ASSIGNMENT AND ACCEPTANCE
THIS COMMITMENTS ASSIGNMENT AND ACCEPTANCE ("Agreement") dated as of
___________, 19___ is made with reference to that certain First Amended and
Restated Revolving Loan Agreement dated as of August 4, 1998 (as amended,
extended, renewed, supplemented or otherwise modified from time to time, the
"Loan Agreement") by and among Alexandria Real Estate Equities, Inc., a
Maryland corporation ("Parent"), Alexandria Real Estate Equities, L.P., a
Delaware limited partnership ("Operating Partnership"), ARE-QRS Corp., a
Maryland corporation ("QRS"), ARE Acquisitions, LLC, a Delaware limited
liability company ("ARE"), the other borrowers whose names are set forth on
the signature pages of the Loan Agreement, each other Wholly-Owned Subsidiary
of Parent which may hereafter become a party to the Loan Agreement as a
borrower (collectively, with Parent, Operating Partnership, QRS and ARE, the
"Borrowers," all on a joint and several basis), each bank whose name is set
forth on the signature pages of the Loan Agreement and each lender which
thereafter may have become a party to the Loan Agreement (collectively, the
"Banks" and individually, a "Bank"), and BankBoston, N.A., as Managing Agent,
and is entered into between the "Assignor" described below, in its capacity
as a Bank under the Loan Agreement, and the "Assignee" described below.
Assignor and Assignee hereby represent, warrant and agree as follows:
12. DEFINITIONS. Capitalized terms defined in the Loan Agreement are used
herein with the meanings set forth for such terms in the Loan Agreement.
As used in this Agreement, the following capitalized terms shall have the
meanings set forth below:
"ASSIGNEE" means _____________________________________________.
"ASSIGNED PRO RATA SHARE" means ______% of the Commitments of the Banks
under the Loan Agreement which equals $__________.
"ASSIGNOR" means _____________________________________________.
"EFFECTIVE DATE" means ________, 19__, the effective date of this Agreement
determined in accordance with Section 11.8 of the Loan Agreement.
13. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR. The Assignor represents
and warrants to the Assignee as follows:
1. As of the date hereof, the Pro Rata Share of the Assignor is ____%
of the Commitments (without giving effect to assignments thereof
which have not yet become effective). The Assignor is the legal
and beneficial owner of the Assigned Pro Rata Share and the
Assigned Pro Rata Share is free and clear of any adverse claim.
<PAGE>
2. As of the date hereof, the outstanding principal balance of
Advances made by the Assignor under the Assignor's Line Note is
$____________ and the Assignor's Competitive Advance Note is
$___________________. Unless otherwise agreed among Assignor and
Assignee, amounts outstanding under Assignor's Competitive Advance
Notes, if any, shall not be assigned.
3. The Assignor has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and any and all
other documents required or permitted to be executed or delivered
by it in connection with this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated
by, this Agreement, and no governmental authorizations or other
authorizations are required in connection therewith; and
4. This Agreement constitutes the legal, valid and binding obligation of
the Assignor.
Neither the Assignor nor the Managing Agent makes any representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance by Borrowers of the Obligations, and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, or sufficiency of the Loan Agreement or
any Loan Document other than as expressly set forth above.
14. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE. The Assignee hereby
represents and warrants to the Assignor as follows:
1. The Assignee has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement, and
any and all other documents required or permitted to be
executed or delivered by it in connection with this Agreement
and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no
governmental authorizations or other authorizations are
required in connection therewith;
2. This Agreement constitutes the legal, valid and binding
obligation of the Assignee;
3. The Assignee has independently and without reliance upon the
Managing Agent or Assignor and based on such documents and
information as the Assignee has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
The Assignee will, independently and without reliance upon
the Managing Agent or any Bank, and based upon such documents
and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under the Loan Agreement;
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4. The Assignee has received copies of such of the Loan Documents
delivered pursuant to Section 8.1 of the Loan Agreement as it
has requested, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 of the
Loan Agreement;
5. The Assignee will perform in accordance with their respective
terms all of the obligations which by the terms of the Loan
Agreement are required to be performed by it as a Bank;
6. The Assignee is an Eligible Assignee; and
7. The Assignee restates each and every warranty of Assignee set
forth in Section 11.8 of the Loan Agreement.
15. ASSIGNMENT. On the terms set forth herein, the Assignor, as of the
Effective Date, hereby irrevocably sells, assigns and transfers to the
Assignee all of the rights and obligations of the Assignor under the
Loan Agreement, the other Loan Documents and the Assignor's Line Notes
to the extent of the Assigned Pro Rata Share and amounts outstanding
under Assignor's Competitive Advance Note to the extent of
$_____________, and the Assignee irrevocably accepts such assignment of
rights and assumes such obligations from the Assignor on such terms and
effective as of the Effective Date. As of the Effective Date, the
Assignee shall have the rights and obligations of a "Bank" under the
Loan Documents, except to the extent of any arrangements with respect to
payments referred to in Section 5 hereof. Assignee hereby appoints and
authorizes the Managing Agent, to take such action and to exercise such
powers under the Loan Agreement as are delegated to the Managing Agent
by the Loan Agreement.
16. PAYMENT. On the Effective Date, the Assignee shall pay to the Assignor,
in immediately available funds, an amount equal to the purchase price of
the Assigned Pro Rata Share and amounts acquired under the Assignor's
Competitive Advance Note, if applicable, as agreed between the Assignor
and the Assignee pursuant to a letter agreement of even date herewith.
Assignee shall also pay to the Managing Agent, as a condition to the
effectiveness of this Agreement, an assignment fee of $2,500 in
accordance with Section 11.8 of the Loan Agreement.
17. PRINCIPAL, INTEREST, FEES, ETC. From and after the Effective Date all
payments in respect of the interests assigned hereunder accruing after
the Effective Date (including payments of principal, interest, fees and
other amounts) shall be payable to Assignee. All outstanding LIBOR Rate
Loans shall continue in effect for the remainder of their applicable
Interest Periods and Assignee shall accept the currently effective
interest rates on its assigned interest of each LIBOR Rate Loan. The
Assignor and the Assignee hereby agree that if either receives any
payment of interest, principal, fees or any other amount under the Loan
Agreement, their respective Notes or any other Loan Documents which is
for the
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<PAGE>
account of the other, it shall hold the same in trust for such party to
the extent of such party's interest therein and shall promptly pay the
same to such party.
18. NOTES. The Assignor and the Assignee shall make appropriate
arrangements with the Borrowers concurrently with the execution and
delivery hereof so that replacement Notes are issued to the Assignor and
new Notes, are issued to the Assignee in principal amounts reflecting
their Pro Rata Shares of the Commitments and their outstanding Advances
(as adjusted pursuant to this Agreement).
19. FURTHER ASSURANCES. Concurrently with the execution of this Agreement
the Assignor shall execute two counterpart original Requests for
Registration, in the form of EXHIBIT A to this Agreement, to be
forwarded to the Managing Agent. The Assignor and the Assignee further
agree to execute and deliver such other instruments, and take such other
action, as either party may reasonably request in connection with the
transactions contemplated by this Agreement, and the Assignor
specifically agrees to cause the delivery of (i) two original
counterparts of this Agreement and (ii) the Request for Registration, to
the Managing Agent for the purpose of registration of the Assignee as a
"Bank" pursuant to Section 11.8 of the Loan Agreement.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
21. NOTICES. All communications among the parties or notices in connection
herewith shall be in writing, hand delivered or sent by U.S. registered
mail, postage prepaid, or by telecopy, addressed to the appropriate
party at its address set forth on the signature pages hereof. All such
communications and notices shall be effective upon receipt.
22. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns;
provided, however, that the Assignee shall not assign its rights or
obligations without the prior written consent of the Assignor and any
purported assignment, absent such consent, shall be void.
23. INTERPRETATION. The headings of the various sections hereof are for
convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
113
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officials, officers or agents hereunto duly
authorized as of the date first above written.
"Assignor"
By:
------------------------------------
Printed Name and Title
Address:
-------------------------------
Telephone
-----------------------------
Telecopier
----------------------------
"Assignee"
By:
------------------------------------
Printed Name and Title
Address:
-------------------------------
Telephone
-----------------------------
Telecopier
----------------------------
114
<PAGE>
EXHIBIT A TO COMMITMENTS ASSIGNMENT AND ACCEPTANCE
REQUEST FOR REGISTRATION
To: BankBoston, N.A., as Managing Agent,
and the Borrowers (described below).
THIS REQUEST FOR REGISTRATION OF ASSIGNEE is made as of the date of
the enclosed Commitments Assignment and Acceptance with reference to that
certain First Amended and Restated Revolving Loan Agreement, dated as of
August 4, 1998 (as amended as of the date hereof, the "Loan Agreement") by
and among Alexandria Real Estate Equities, Inc., a Maryland corporation
("Parent"), Alexandria Real Estate Equities, L.P., a Delaware limited
partnership ("Operating Partnership"), ARE-QRS Corp., a Maryland corporation
("QRS"), ARE Acquisitions, LLC, a Delaware limited liability company ("ARE"),
the other borrowers whose names are set forth on the signature pages of the
Loan Agreement, each other Wholly-Owned Subsidiary of Parent which may
hereafter become a party to the Loan Agreement as a borrower (collectively,
with Parent, QRS and ARE, the "Borrowers," all on a joint and several basis),
each bank whose name is set forth on the signature pages of the Loan
Agreement and each lender which may have become a party to the Loan Agreement
(collectively, the "Banks" and individually, a "Bank"), and BankBoston, N.A.,
as Managing Agent.
The Assignor and Assignee described below hereby request that
Managing Agent register the Assignee as a Bank pursuant to Section 11.8 of
the Loan Agreement effective as of the Effective Date described in the
Commitments Assignment and Acceptance. Assignee hereby confirms the
representations and warranties made in Section 3 of the Commitments
Assignment and Acceptance for the benefit of Managing Agent and the
Borrowers. Concurrently herewith, a similar portion of the interests of
Assignor under the other Loan Documents is being assigned to Assignee.
Enclosed with this Request are two counterpart originals of the
Commitments Assignment and Acceptance as well as the original Line Note of
Borrowers in favor of the Assignor in the principal amount of $ .
The Assignor and Assignee hereby jointly request that Managing Agent cause
Borrowers to issue a replacement Line Note, dated as of the Effective Date,
pursuant to Section 11.8 of the Loan Agreement in favor of Assignor in the
principal amount of the remainder of its Pro Rata Share of the Commitments
and a Line Note in favor of the Assignee in the amount of the Assigned Pro
Rata Share. The Assignor and the Assignee further request that the Managing
Agent cause Borrowers to issue a Note, dated as of the Effective Date, in
favor of the Assignee substantially in the form of Exhibit B to the Loan
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Request for Registration by their duly authorized officers as of this ____
day of ___________, 19 .
"Assignor" "Assignee"
By: By:
----------------------- ------------------------
Printed Name and Title Printed Name and Title
2
<PAGE>
CONSENT OF MANAGING AGENT AND BORROWERS
[WHEN REQUIRED PURSUANT TO FIRST AMENDED AND RESTATED REVOLVING LOAN AGREEMENT]
TO: The Assignor and Assignee referred to in the Request for Registration to
which this Consent is attached
When countersigned by Managing Agent and (when applicable) Borrowers
below, this document shall certify that:
/ / [CHECK HERE IF BORROWERS' SIGNATURE IS REQUIRED PURSUANT TO SECTION
11.8(b)(i) OF THE FIRST AMENDED AND RESTATED REVOLVING LOAN AGREEMENT:]
1. Borrowers have consented, pursuant to the terms of the Loan Documents,
to the assignment by the Assignor to the Assignee of the Assigned Pro
Rata Share.
2. Managing Agent has registered the Assignee as a Bank under the Loan
Agreement, effective as of the Effective Date described above, with a
Pro Rata Share of the Commitments corresponding to the Assigned Pro
Rata Share and has adjusted the registered Pro Rata Share of the
Commitments of the Assignor to reflect the assignment of the Assigned
Pro Rata Share and has adjusted its records concerning the assignment
of any portion of the Competitive Advances.
Approved:
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
------------------------------
Its:
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:
------------------------------
Its:
<PAGE>
ARE-QRS CORP.
By:
------------------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:
---------------------------
Its:
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities, L.P., their
sole member
By: ARE-QRS Corp., its general partner
By:
----------------------------
Its:
2
<PAGE>
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing member
By: ARE-GP Holdings QRS Corp., its general
partner
By:
--------------------------------
Its:
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general partner
By: ARE-GP Holdings QRS Corp., its general
partner
By:
--------------------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities, Inc., their sole
member
By:
--------------------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
3
<PAGE>
BANKBOSTON, N.A., individually and as Managing Agent
By:
--------------------------------
Its:
Address:
BANKBOSTON, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
WITH A COPY TO:
BANKBOSTON, N.A.
115 Perimeter Center Place, N.E., Suite 500
Atlanta, Georgia 30346
Attn: Dan Stegemoeller
Telecopier: (770) 390-8434
Telephone: (770) 390-6547
4
<PAGE>
EXHIBIT B
COMPETITIVE ADVANCE NOTE
$_______________ as of August 4, 1998
Los Angeles, California
FOR VALUE RECEIVED, the undersigned jointly and severally promise to pay
to the order of _________ (the "Bank"), the principal amount of
___________________________ DOLLARS ($____________) or such lesser aggregate
amounts as may be made as Competitive Advances hereunder pursuant to the Loan
Agreement referred to below, payable as hereinafter set forth. The
undersigned jointly and severally promise to pay interest on the principal
amount hereof remaining unpaid from time to time from the date hereon until
the date of payment in full, payable as hereinafter set forth.
Reference is made to the First Amended and Restated Revolving Loan
Agreement dated as of August 4, 1998 (the "Loan Agreement"), by and among
Alexandria Real Estate Equities, Inc., a Maryland corporation ("Parent"),
Alexandria Real Estate Equities, L.P., a Delaware limited partnership
("Operating Partnership"), ARE-QRS Corp., a Maryland corporation ("QRS"), ARE
Acquisitions, LLC, a Delaware limited liability company ("ARE"), the other
borrowers whose names are set forth on the signature pages of the Loan
Agreement, each other Wholly-Owned Subsidiary of Parent which may hereafter
become a party to the Loan Agreement as a borrower (collectively, with
Parent, Operating Partnership, QRS and ARE, the "Borrowers", all on a joint
and several basis), each lender whose name is set forth on the signature
pages of the Loan Agreement and each lender which may have become a party to
the Loan Agreement (collectively, the "Banks" and individually, a "Bank"),
and BankBoston, N.A., as Managing Agent. Terms defined in the Loan Agreement
and not otherwise defined herein are used herein with the meanings given
those terms in the Loan Agreement. This is one of the Competitive Advance
Notes referred to in the Loan Agreement, and any holder hereof is entitled to
all of the rights, remedies, benefits and privileges provided for in the Loan
Agreement as originally executed or as it may from time to time be
supplemented, modified or amended. The Loan Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events upon the terms and conditions therein
specified.
The principal indebtedness of each Competitive Advance evidenced by this
Competitive Advance Note shall be payable on the maturity date specified in
the Competitive Bid relating to such Competitive Advance and in any event on
the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of each Competitive Advance hereunder from the date thereof until
payment in full and shall accrue and be payable at the rates and on the dates
set forth in the Competitive Bid relating to such Competitive Advance and as
provided in the Loan Agreement, both before and after default and before and
after maturity and judgment, with interest on overdue principal and interest
to bear interest at the rate set forth in Section 3.9 of the Loan Agreement,
to the fullest extent permitted by applicable Law.
<PAGE>
The amount of each payment hereunder shall be made to the Managing Agent
at the Managing Agent's Office for the account of the Bank or the Managing
Agent, as the case may be, in immediately available funds not later than 1:00
p.m. (Boston, Massachusetts time) on the day of payment (which must be a
Banking Day). All payments received after such time on any Banking Day shall
be deemed received on the next succeeding Banking Day. All payments shall be
made in lawful money of the United States of America. The Bank shall use its
best efforts to keep a record of Competitive Advances made by it and payments
of principal received by it with respect to this Competitive Advance Note,
and such record shall be presumptive evidence of the amounts owing under this
Competitive Advance Note. Notwithstanding the foregoing, the failure by the
Bank to keep such a record shall not affect the undersigned's obligation to
pay the indebtedness evidenced hereby.
The undersigned hereby promise to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigneds' obligations
hereunder or in enforcing or attempting to enforce any of such holder's
rights hereunder, including reasonable attorneys' fees and disbursements
(including reasonably allocated costs of legal counsel employed by the
Managing Agent or the holder), whether or not an action is filed in
connection therewith.
The undersigned hereby waive presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
The undersigned agree that their liability hereunder is joint and
several, absolute and unconditional without regard to the liability of any
other party. All provisions of this Competitive Advance Note shall apply to
each of the undersigned.
THIS COMPETITIVE ADVANCE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
------------------------------------
Its:
2
<PAGE>
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:
--------------------------------
Its:
ARE-QRS CORP.
By:
-------------------------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:
--------------------------------
Its:
3
<PAGE>
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities, L.P., their
sole member
By: ARE-QRS Corp., its general partner
By:
--------------------------------
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing member
By: ARE-GP Holdings QRS Corp., its general
partner
By:
--------------------------------
Its:
4
<PAGE>
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general partner
By: ARE-GP Holdings QRS Corp., its general
partner
By:
--------------------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities, Inc., their sole
member
By:
--------------------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
5
<PAGE>
SCHEDULE OF COMPETITIVE ADVANCES AND
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Date Amount Interest Amount of Unpaid Notation
of Period Principal Principal Made by
Advance Paid Balance
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT C
FORM OF COMPETITIVE BID
BankBoston, N.A., as Managing Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Dan Stegemoeller
Re: Competitive Bid Rate Loan Quote for Alexandria Real Estate
Equities, Inc., Alexandria Real Estate Equities, L.P., ARE-QRS Corp.,
ARE Acquisitions, LLC and the other Borrowers
Dear Ladies and Gentlemen:
Reference is made to the First Amended and Restated Revolving Loan
Agreement dated August 4, 1998, as from time to time in effect (the "Loan
Agreement"), by and among Alexandria Real Estate Equities, Inc., Alexandria
Real Estate Equities, L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other
borrowers whose names are set forth on the signature pages of the Loan
Agreement and the other Persons which may become borrowers under the Loan
Agreement (collectively, the "Borrowers", all on a joint and several basis),
BankBoston, N.A., for itself and as Managing Agent and the other Banks from
time to time party thereto. Terms defined in the Loan Agreement and not
otherwise defined herein are used herein as defined in the Loan Agreement.
In response to the Competitive Bid Request from Borrowers dated
______________, ____, we hereby make the following Competitive Bid on the
following terms:
1. Quoting Bank:
----------------------------------------------------------------------
2. Person to contact at Quoting Bank and telephone number:
Name:
-----------------------------------------------------------------
Telephone Number:
-----------------------------------------------------
3. Borrowing date of proposed Competitive Advance:
----------------------------------------------------------------------
- -----------------------------
(1) As specified in the related Competitive Bid Request.
<PAGE>
4. We hereby offer to make Competitive Advances in the following principal
amounts, for the following durations and at the following rates [insert
only one applicable rate on each line below]:
<TABLE>
<CAPTION>
Duration of LIBOR Margin
Principal Amount(2) Competitive Advance(3) Absolute Rate Bid(4) Bid(5)
- ---------------- ------------------- ----------------- ---
<S> <C> <C> <C>
$ % %
-------------- ------------------- ---------------- ------------
$ % %
-------------- ------------------- ---------------- ------------
$ % %
-------------- ------------------- ---------------- ------------
</TABLE>
PROVIDED that the aggregate Maximum Competitive Advance for which this offer may
be accepted shall not exceed $____________________.(5)
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Loan
Agreement, irrevocably obligate(s) us to make the Competitive Advance(s) for
which any offer(s) is (are) accepted, in whole or in part.
Very truly yours,
-----------------------------------------------
[Name of Bank]
Date: By
---------------------- --------------------------------------------
Name:
------------------------------------------
Title:
----------------------------------------
- ------------------------------
(2) Offers must be integral multiples of $1,000,000.
(3) As specified in the related Competitive Bid Request.
(4) As defined in the Loan Agreement.
(5) As defined in the Loan Agreement.
(6) Specify aggregate limitation if the sum of the individual offers exceeds
the aggregate amount the Quoting Bank is willing to lend.
2
<PAGE>
EXHIBIT D
FORM OF COMPETITIVE BID REQUEST
BankBoston, N.A., as Managing Agent
115 Perimeter Center Place, N.E.
BankBoston, N.A., as Agent
115 Perimeter Center Place,N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert
Ladies and Gentlemen:
Reference is made to the Fourth Amended and Restated Revolving Credit
Agreement dated September __, 1998, as from time to time in effect (the
"Credit Agreement"), by and among Meridian Industrial Trust, Inc. (the
"Borrower"), BankBoston, N.A., for itself and as Agent, and the other Banks
from time to time party thereto. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as defined in the Credit
Agreement.
The undersigned officers of the Borrowers hereby give notice pursuant to
Section 2.1A(b) of the Credit Agreement that they request Competitive Bids
pursuant to Section 2.1A(b) of the Credit Agreement for the following
proposed Competitive Advances:
Proposed date of Competitive Advance: _____________________
<TABLE>
<CAPTION>
Duration of Basis for Interest
Principal Amount(1) Competitive Advance(2) Rate Calculation(3)
<S> <C> <C>
$
-------------- ---------------------- --------------------
$
-------------- ---------------------- --------------------
$
-------------- ---------------------- --------------------
</TABLE>
In connection with the request, the undersigned Authorized Officer of the
Borrower certifies that:
- ----------------------------
(1) Each amount must be $10,000,000.00 or larger integral multiple
of $1,000,000.00.
(2) Duration must be a period of not less than 7 nor more than 180 days. No
Requested Competitive Advance shall have a maturity date which exceeds
the Maturity Date or is on a date other than a Business Day.
(3) Specify whether interest rate bids are to be quoted as "Absolute Rate Bid"
or "LIBOR Margin Bid."
<PAGE>
1. USE OF PROCEEDS. Such Competitive Advance shall be used for the
following purposes permitted by Section 7.11 of the Credit Agreement:
[Describe]
2. NO DEFAULT. The undersigned Authorized Officer of Borrower
certifies that Borrower is and will be in compliance with all covenants under
the Loan Documents after giving effect to the making of the Competitive
Advance requested hereby. Attached hereto is a current calculation of the
Borrowing Base adjusted in the best good faith estimate of the Borrower to
the date hereof.
3. REPRESENTATIONS TRUE. In connection with the request, the Borrower
certifies: As to any Advance, now and as of the date of the requested
Advance, EXCEPT (i) for representations and warranties which expressly speak
as of a particular date or which are no longer true and correct as a result
of a change permitted by the Agreement or (ii) as disclosed by Borrowers and
approved in writing by the Majority Banks, each representation and warranty
made by Borrowers in Article 6 of the Agreement will be true and correct,
both immediately before and after giving effect to such Advance, as though
such representations and warranties were made on and as of that date.
4. MAXIMUM AMOUNT. After giving effect to the requested Competitive
Advance, (a) the aggregate principal amount outstanding under the Competitive
Advance Notes will not exceed the LESSER OF (i) $50,000,000.00 or (ii) an
amount equal to 50% of the Total Commitment or (b) the aggregate principal
amount outstanding under the Notes will not exceed the lesser of (A) the
Total Commitment or (B) the available Borrowing Base.
This Competitive Bid Request is executed on _____________, ____ by an
Authorized Officer of Borrower. The undersigned, in such capacity, hereby
certify each and every matter contained herein to be true and correct.
2
<PAGE>
IN WITNESS WHEREOF, we have hereunto set our hands this _____ day of
______, 199____.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
--------------------------------
Its:
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:
-----------------------------
Its:
ARE-QRS CORP.
By:
--------------------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:
--------------------------------
Its:
3
<PAGE>
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities, L.P., their
sole member
By: ARE-QRS Corp., its general partner
By:
--------------------------------
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing member
By: ARE-GP Holdings QRS Corp., its general
partner
By:
------------------------------
Its:
4
<PAGE>
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general partner
By: ARE-GP Holdings QRS Corp., its general
partner
By:
--------------------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities, Inc., their
sole member
By:
--------------------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
5
<PAGE>
EXHIBIT E
FORM OF
COMPLIANCE CERTIFICATE
BankBoston, N.A.,
for itself and as Managing Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Dan Stegemoeller
[INSERT NAMES AND ADDRESSES
OF OTHER BANKS]
Ladies and Gentlemen:
Reference is made to the First Amended and Restated Revolving Loan
Agreement dated August 4, 1998 as from time to time in effect (the "Loan
Agreement") by and among Alexandria Real Estate Equities, Inc., Alexandria
Real Estate Equities, L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other
borrowers whose names are set forth on the signature pages of the Loan
Agreement and the other Persons which may become borrowers under the Loan
Agreement (collectively, the "Borrowers", all on a joint and several basis),
BankBoston, N.A., for itself and as Managing Agent, and the other Banks from
time to time party thereto. Terms defined in the Loan Agreement and not
otherwise defined herein are used herein as defined in the Loan Agreement.
Pursuant to the Loan Agreement, the Borrowers are furnishing to you
herewith (or have most recently furnished to you) the financial statements of
the Borrowers and their respective Subsidiaries for the fiscal period ended
_______________ (the "Balance Sheet Date"). Such financial statements have
been prepared in accordance with Generally Accepted Accounting Principles and
present fairly the financial position of Borrowers and the Subsidiaries
covered thereby at the date thereof and the results of their operations for
the periods covered thereby, subject in the case of interim statements only
to normal year-end audit adjustments.
This certificate is submitted in compliance with requirements of Section
7.2 and Section 8.1(i) of the Loan Agreement. If this certificate is
provided under a provision other than Section 7.2, the calculations provided
below are made using the financial statements of the Borrowers and their
respective Subsidiaries as of the most recent Fiscal Quarter end adjusted in
the best good-faith estimate of the Borrowers to give effect to the making of
a Loan, extension of the Maturity Date, acquisition or disposition of
property or other event that occasions the preparation of this certificate;
and the nature of such event and the Borrowers' estimate of its effects are
set forth in reasonable detail in an attachment hereto. The undersigned
officers are the chief financial or chief accounting officers of the Borrowers
<PAGE>
The undersigned officers have caused the provisions of the Loan Agreement
to be reviewed and have no knowledge of any Default or Event of Default. (Note:
If the signers do have knowledge of any Default or Event of Default, the form of
certificate should be revised to specify the Default or Event of Default, the
nature thereof and the actions taken, being taken or proposed to be taken by the
Borrowers with respect thereto.)
The Borrowers are providing the information set forth in SCHEDULE I
attached hereto to demonstrate compliance as of the date hereof with the
covenants described therein.
Pursuant to Section 5.17(b) of the Loan Agreement, the Borrowers are hereby
delivering to the Managing Agent and the Banks a list of the Revenue-Producing
Properties in the Unencumbered Asset Pool and a statement of the Asset Values of
such Revenue-Producing Properties as shown on SCHEDULE II attached hereto. The
undersigned hereby certifies that (i) the Revenue-Producing Properties in the
Unencumbered Asset Pool are in compliance with Section 5.17(a) of the Loan
Agreement; (ii) the statement of Asset Values is true and correct; and (iii) the
Revenue-Producing Properties in the Unencumbered Asset Pool comply with the
terms of Sections 4.17 and 4.19 of the Loan Agreement.
Pursuant to Section 7.1(n) of the Loan Agreement, the Borrowers are hereby
delivering to the Managing Agent and the Banks information regarding new
Subsidiaries and/or Controlled Entities of the Borrowers as set forth on
SCHEDULE III attached hereto.
Pursuant to Section 7.1(o) of the Loan Agreement, the Borrowers are hereby
delivering to the Managing Agent and the Banks the information required thereby
as set forth on SCHEDULE IV attached hereto.
The undersigned officers have caused the provisions of Section 5.10 of the
Loan Agreement regarding Hazardous Materials Laws to be reviewed and have no
knowledge of any events described therein. (Note: If the signers do have
knowledge of any such events, the form of certificate should be revised to
specify such event and any pertinent written material should be attached, all as
required by Section 5.10.
2
<PAGE>
IN WITNESS WHEREOF, we have hereunto set our hands this ___ day of
________________, 199__.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
----------------------------
Its:
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:
--------------------------
Its:
ARE-QRS CORP.
By:
--------------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:
--------------------------
Its:
3
<PAGE>
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities,
L.P., their sole member
By: ARE-QRS Corp., its general
partner
By:
---------------------------
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing
member
By: ARE-GP Holdings QRS Corp., its
general partner
By:
------------------------
Its:
4
<PAGE>
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general
partner
By: ARE-GP Holdings QRS Corp., its
general partner
By:
----------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities,
Inc., their sole member
By:
------------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
5
<PAGE>
SCHEDULE I
(TO EXHIBIT E)
COVENANT COMPLIANCE CALCULATIONS
<PAGE>
SCHEDULE II
(TO EXHIBIT E)
INFORMATION REGARDING REVENUE PRODUCING PROPERTIES
REQUIRED BY SECTION 5.17(B) OF LOAN AGREEMENT
<PAGE>
SCHEDULE III
(TO EXHIBIT E)
INFORMATION REGARDING NEW SUBSIDIARIES AND/OR CONTROLLED
ENTITIES REQUIRED BY SECTION 7.1(N) OF LOAN AGREEMENT
<PAGE>
SCHEDULE IV
(TO EXHIBIT E)
INFORMATION REQUIRED BY SECTION 7.1(O) OF LOAN AGREEMENT
<PAGE>
SCHEDULE V
(TO EXHIBIT E)
BORROWING BASE CALCULATION
<PAGE>
EXHIBIT F
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT ("Joinder Agreement") is executed as of
_______________, 199_, by _______________, a __________ corporation ("Joining
Party"), and delivered to BankBoston, N.A., as Managing Agent, pursuant to
Section 5.13 of the First Amended and Restated Revolving Loan Agreement dated
August 4, 1998, as from time to time in effect (the "Loan Agreement"), by and
among Alexandria Real Estate Equities, Inc., Alexandria Real Estate Equities,
L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other borrowers whose names are
set forth on the signature pages of the Loan Agreement, and the other Persons
which may become borrowers under the Loan Agreement (collectively, the
"Borrowers", all on a joint and several basis), BankBoston, N.A., for itself and
as Managing Agent, and the other Banks from time to time party thereto. Terms
used but not defined in this Joinder Agreement shall have the meanings defined
for those terms in the Loan Agreement.
RECITALS
A. Joining Party is required, pursuant to Section 5.13 of the Loan
Agreement, to become an additional Borrower under the Loan Agreement and a party
to all the other Loan Documents to which the existing Borrowers are a party.
B. Joining Party expects to realize direct and indirect benefits as
a result of the availability to Borrowers of the credit facilities under the
Loan Agreement.
NOW, THEREFORE, Joining Party agrees as follows:
AGREEMENT
1. JOINDER. By this Joinder Agreement, Joining Party hereby becomes
a "Borrower" under the Loan Agreement with respect to all the Obligations of a
Borrower now or hereafter incurred under the Loan Agreement and the other Loan
Documents. Joining Party agrees that Joining Party is and shall be bound by,
and hereby assumes, all representations, warranties, covenants, terms,
conditions, duties and waivers applicable to a Borrower under the Loan Agreement
and the other Loan Documents.
2. REPRESENTATIONS AND WARRANTIES OF JOINING PARTY. Joining Party
represents and warrants to Managing Agent that, as of the Effective Date, except
as disclosed in writing by Joining Party to Managing Agent on or prior to the
date hereof (which disclosures shall be deemed to amend the Schedules and other
disclosures delivered as contemplated in Article 4 of the Loan Agreement), the
representations and warranties contained in Article 4 of the Loan Agreement
(other than representations and warranties which expressly speak as of a
particular date or are no longer true and correct as a result of a change which
is permitted by the Loan Agreement) are true and correct in all respects as
applied to Joining Party as a Borrower on and as of the Effective Date as
<PAGE>
though made on that date. All covenants and agreements in the Loan Documents
of the Borrowers and their Subsidiaries are true and correct with respect to
Joining Party and no Default or Event of Default shall exist or might exist
upon the Effective Date in the event that Joining Party becomes a Borrower.
3. PROMISSORY NOTES. Joining Party hereby agrees that, as of the
Effective Date, each Note heretofore delivered to the Banks shall be a joint and
several obligation of Joining Party to the same extent as if executed and
delivered by Joining Party, and upon request by any Bank, will promptly endorse
such Bank's Notes to confirm such obligation.
4. FURTHER ASSURANCES. Joining Party agrees to execute and deliver
such other instruments and documents and take such other action, as the Managing
Agent may reasonably request, in connection with the transactions contemplated
by this Joinder Agreement.
5. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACTUAL OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS EXECUTED AND PERFORMED IN THE STATE OF CALIFORNIA.
6. The effective date (the "Effective Date") of this Joinder
Agreement is __________, 19__.
"Joining Party"
______________________________,
a ______________ corporation
By:
-----------------------------
Its:
-----------------------------
[Printed Name and Title]
[CORPORATE SEAL]
ACKNOWLEDGED:
BANKBOSTON, N.A., as Managing Agent
By:
-----------------------------
Its:
-----------------------------
[Printed Name and Title]
2
<PAGE>
EXHIBIT G
LINE NOTE
$___________ as of August 4, 1998
Los Angeles, California
FOR VALUE RECEIVED, the undersigned jointly and severally promise to pay to
the order of ____________________________________________ (the "Bank"), the
principal amount of ____________________________ DOLLARS ($___________) or such
lesser aggregate amounts as may be made as Advances under the Line Commitment
pursuant to the Loan Agreement referred to below, payable as hereinafter set
forth. The undersigned jointly and severally promise to pay interest on the
principal amount hereof remaining unpaid from time to time from the date hereon
until the date of payment in full, payable as hereinafter set forth.
Reference is made to the First Amended and Restated Revolving Loan
Agreement dated as of July __, 1998 (the "Loan Agreement"), by and among
Alexandria Real Estate Equities, Inc., a Maryland corporation ("Parent"),
Alexandria Real Estate Equities, L.P., a Delaware limited partnership
("Operating Partnership"), ARE-QRS Corp., a Maryland corporation ("QRS"), ARE
Acquisitions, LLC, a Delaware limited liability company ("ARE"), the other
borrowers whose names are set forth on the signature pages of the Loan
Agreement, each other Wholly-Owned Subsidiary of Parent which may hereafter
become a party to the Loan Agreement as a borrower (collectively, with Parent,
Operating Partnership, QRS and ARE, the "Borrowers", all on a joint and several
basis), each bank whose name is set forth on the signature pages of the Loan
Agreement and each lender which may have become a party to the Loan Agreement
(collectively, the "Banks" and individually, a "Bank"), and BankBoston, N.A., as
Managing Agent. Terms defined in the Loan Agreement and not otherwise defined
herein are used herein with the meanings given those terms in the Loan
Agreement. This is one of the Line Notes referred to in the Loan Agreement, and
any holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Line Note shall be payable as
provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal amount
of each Advance hereunder from the date thereof until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Loan
Agreement, both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.9 of the Loan Agreement, to the fullest extent
permitted by applicable Law.
<PAGE>
The amount of each payment hereunder shall be made to the Managing Agent at
the Managing Agent's Office for the account of the Bank in immediately available
funds not later than 2:00 p.m. (Boston, Massachusetts time) on the day of
payment (which must be a Banking Day). All payments received after 2:00 p.m.
(Boston, Massachusetts time) on any particular Banking Day shall be deemed
received on the next succeeding Banking Day. All payments shall be made in
lawful money of the United States of America.
The Bank shall use its best efforts to keep a record of Advances made by it
and payments of principal received by it with respect to this Line Note, and
such record shall be presumptive evidence of the amounts owing under this Line
Note. Notwithstanding the foregoing, the failure by the Bank to keep such a
record shall not affect the undersigned's obligation to pay the indebtedness
evidenced hereby.
The undersigned hereby promise to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigneds' obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements (including
reasonably allocated costs of legal counsel employed by the Managing Agent or
the holder), whether or not an action is filed in connection therewith.
The undersigned hereby waive presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
The undersigned agree that their liability hereunder is joint and several,
absolute and unconditional without regard to the liability of any other party.
All provisions of this Line Note shall apply to each of the undersigned.
THIS LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THE STATE OF CALIFORNIA.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
----------------------------
Its:
2
<PAGE>
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:
---------------------------
Its:
ARE-QRS CORP.
By:
--------------------------
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:
--------------------------
Its:
3
<PAGE>
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities,
L.P., their sole member
By: ARE-QRS Corp., its general
partner
By:
---------------------------
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing
member
By: ARE-GP Holdings QRS Corp., its
general partner
By:
------------------------
Its:
4
<PAGE>
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general
partner
By: ARE-GP Holdings QRS Corp., its
general partner
By:
----------------------
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities,
Inc., their sole member
By:
------------------------
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
5
<PAGE>
EXHIBIT J
PRICING CERTIFICATE
ALEXANDRIA REAL ESTATE EQUITIES, INC.
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
ARE-QRS CORP.
ARE ACQUISITIONS, LLC
AND OTHER BORROWERS
TO: BANKBOSTON, N.A., AS MANAGING AGENT
Reference is made to the First Amended and Restated Revolving Loan
Agreement dated as of August 4, 1998 (the "Loan Agreement"), by and among
Alexandria Real Estate Equities, Inc., a Maryland corporation ("Parent"),
Alexandria Real Estate Equities, L.P., a Delaware limited partnership
("Operating Partnership"), ARE-QRS Corp., a Maryland corporation ("QRS"), ARE
Acquisitions, LLC, a Delaware limited liability company ("ARE"), the other
borrowers whose names are set forth on the signature pages of the Loan
Agreement, each other Wholly-Owned Subsidiary of Parent which may hereafter
become a party to the Loan Agreement as a borrower (collectively, with Parent,
Operating Partnership, QRS and ARE, the "Borrowers", all on a joint and several
basis), each bank whose name is set forth on the signature pages of the Loan
Agreement and each lender which may have become a party to the Loan Agreement
(collectively, the "Banks" and individually, a "Bank"), and BankBoston, N.A., as
Managing Agent.
I, _________________, hereby certify that I am the _______________ of
Parent, the _______________ of Operating Partnership, the __________________ of
QRS, and the _____________ of ARE, and the ________ of the other Borrowers and
that:
I. APPLICABLE PRICING LEVEL. As of the Pricing Period commencing on
____________, the Applicable Pricing Level was level ________.(1)
The Applicable Pricing Level set forth above was determined on the basis of
the following:
PARENT'S CREDIT RATING. The Credit Rating of Parent was: _______________
- ---------------
(1) Insert Level I, II, III, IV, V or VI in accordance with the terms of the
Loan Agreement based upon determination of the Parent's Credit Rating or
Leverage Date.
<PAGE>
LEVERAGE RATIO. For any date during a Pricing Period on which Parent does
not hold a credit rating of BBB - (or its equivalent) or better (subject to the
terms of the Loan Agreement), the pricing level is determined using the Leverage
Ratio as of the last day of the Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period. As of the last day of the Fiscal Quarter
most recently ended prior to the Pricing Period referred to above (the
"Determination Date"), the RATIO OF Total Liabilities as of that date TO
Adjusted Tangible Assets as of that date was _________:1.00.
The schedule attached hereto is provided to demonstrate the calculation of
the Leverage Ratio as of the last day of the Fiscal Quarter most recently ended.
II. I further certify that the calculations made and the information contained
herein are derived from the books and records of Borrowers and their
Subsidiaries, as applicable, and that each and every matter correctly reflects
those books and records.
IN WITNESS WHEREOF, I have signed this Certificate on this ___ day of
__________, 199__.
-------------------------------
-------------------------------
2
<PAGE>
EXHIBIT K
FORM OF REQUEST FOR LOAN
BankBoston, N.A., as Managing Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Dan Stegemoeller
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.1 of the First Amended and Restated
Revolving Loan Agreement dated August 4, 1998, as from time to time in effect
(the "Loan Agreement"), among Alexandria Real Estate Equities, Inc., Alexandria
Real Estate Equities, L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other
borrowers whose names are set forth on the signature pages of the Loan Agreement
and the other Persons which may hereafter become borrowers under the Loan
Agreement (collectively, the "Borrowers", all on a joint and several basis),
BankBoston, N.A., for itself and as Managing Agent, and the other Banks from
time to time party thereto, the Borrowers hereby request and certify as follows:
1. LOAN. The Borrowers hereby request a Committed Loan under Section 2.1
of the Loan Agreement:
Principal Amount: $
LIBOR Rate or Alternate Base Rate:
Drawdown Date: , 19
Interest Period:
by credit to the general account of the Borrowers with the Managing Agent at the
Managing Agent's Office.
2. USE OF PROCEEDS. Such Committed Loan shall be used for the following
purposes permitted by Section 5.9 of the Loan Agreement:
[Describe]
3. NO DEFAULT. The undersigned chief financial or chief accounting
officer of each Borrower certifies that Borrowers are and will be in compliance
with all covenants under the Loan Documents after giving effect to the making of
the Committed Loan requested hereby.
<PAGE>
4. REPRESENTATIONS TRUE. In connection with the request, the Borrowers
certify:
a. As to any Advance, now and as of the date of the requested
Advance, EXCEPT (i) for representations and warranties which expressly speak as
of a particular date or which are no longer true and correct as a result of a
change permitted by the Agreement or (ii) as disclosed by Borrowers and approved
in writing by the Requisite Banks, each representation and warranty made by
Borrowers in ARTICLE 4 of the Agreement (OTHER THAN SECTIONS 4.4, 4.6 (first
sentence), 4.10 and 4.18 to the extent such representations relate expressly to
an earlier date) will be true and correct, both immediately before and after
giving effect to such Advance, as though such representations and warranties
were made on and as of that date; and
b. As to any Advance, OTHER THAN matters described in SCHEDULE 4.10
to the Loan Agreement or required as of the Closing Date to be therein
described, there is no action, suit, proceeding or investigation pending or
threatened against or affecting Parent or any of its Subsidiaries or any
Property of any of them before any Governmental Agency that constitutes a
Material Adverse Effect.
5. BORROWING BASE. Attached hereto is a current calculation of the
Borrowing Base adjusted in the best good faith estimate of the Borrower to the
date hereof.
6. OTHER CONDITIONS. All other conditions to the making of the Committed
Loan requested hereby set forth in Article 8 of the Loan Agreement have been
satisfied.
7. DATE COMMITTED LOAN IS MADE. Except to the extent, if any, specified
by notice actually received by the Managing Agent prior to the date the
Committed Loan is made, the foregoing representations and warranties shall be
deemed to have been made by the Borrowers on and as of such date.
8. DEFINITIONS. Terms defined in the Loan Agreement are used herein with
the meanings so defined.
IN WITNESS WHEREOF, we have hereunto set our hands this _____ day of
_______________, 199___.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
----------------------------
Its:
2
<PAGE>
ALEXANDRIA REAL ESTATE EQUITIES, L.P.
By: ARE-QRS Corp., its general partner
By:___________________________
Its:
ARE-QRS CORP.
By:___________________________
Its:
ARE ACQUISITIONS, LLC
ARE-708 QUINCE ORCHARD, LLC
ARE-940 CLOPPER ROAD, LLC
ARE-1201 HARBOR BAY, LLC
ARE-1401 RESEARCH BOULEVARD, LLC
ARE-1500 EAST GUDE, LLC
By: ARE-QRS Corp., their managing member
By:___________________________
Its:
3
<PAGE>
ARE-4757 NEXUS CENTRE, LLC
ARE-215 COLLEGE ROAD, LLC
ARE-819/863 MITTEN ROAD, LLC
ARE-6166 NANCY RIDGE, LLC
ARE-150/154 TECHNOLOGY PARKWAY, LLC
ARE-8000/9000/10000 VIRGINIA MANOR, LLC
ARE-19 FIRSTFIELD ROAD, LLC
ARE-10150 OLD COLUMBIA, LLC
ARE-11025 ROSELLE STREET, LLC
ARE-100/800/801 CAPITOLA, LLC
ARE-170 WILLIAMS DRIVE, LLC
ARE-3005 FIRST AVENUE, LLC
ARE-15020 SHADY GROVE, LLC
By: Alexandria Real Estate Equities, L.P., their sole
member
By: ARE-QRS Corp., its general partner
By:____________________________
Its:
ARE-79/96 CHARLESTOWN NAVY YARD, LLC
ARE-280 POND STREET, LLC
By: AREE-Holdings, L.P., their managing member
By: ARE-GP Holdings QRS Corp., its general
partner
By:_________________________
Its:
4
<PAGE>
ARE-5100/5110 CAMPUS DRIVE, L.P.
ARE-702 ELECTRONIC DRIVE
By: AREE-Holdings, L.P., their general partner
By: ARE-GP Holdings QRS Corp., its general
partner
By:_______________________
Its:
ARE-10933 NORTH TORREY PINES, LLC
ARE-11099 NORTH TORREY PINES, LLC
By: Alexandria Real Estate Equities, Inc., their sole
member
By:_________________________
Its:
Address for all the foregoing:
Alexandria Real Estate Equities, Inc.
135 N. Los Robles Avenue, Suite 250
Pasadena, California 91101
Attn: Joel S. Marcus
Chief Executive Officer
Telecopier: (626) 578-0770
Telephone: (626) 578-0777
5
<PAGE>
EXHIBIT L
JOINT BORROWER PROVISIONS
1. ATTORNEY-IN-FACT. For the purpose of implementing the joint borrower
provisions of the Loan Documents, Borrowers hereby irrevocably appoint each
other as their agent and attorney-in-fact for all purposes of the Loan
Documents, INCLUDING the giving and receiving of notices and other
communications.
2. ACCOMMODATION. It is understood and agreed that the handling of this
credit facility on a joint borrowing basis as set forth in this Agreement is
solely as an accommodation to the Borrowers and at their request. Accordingly,
the Managing Agent and the Banks are entitled to rely, and shall be exonerated
from any liability for relying upon, any Loan Request or Competitive Bid Request
made by a purported officer of any Borrower without the need for any consent or
other authorization of any other Borrower and upon any information or
certificate provided on behalf of any Borrower by a purported officer of such
Borrower.
3. RIGHTS OF MANAGING AGENT AND THE BANKS. Each Borrower acknowledges
that, except to the extent of the borrowings made by it and the proceeds
received by it, the Obligations undertaken by it under the Loan Documents will
or may guarantee obligations of other Borrowers (the "Guaranteed Obligations")
and, in full recognition of that fact, each Borrower consents and agrees that
the Managing Agent for the benefit of the Banks may, at any time and from time
to time, agree with any one Borrower to, without notice or demand to the other
Borrowers, and without affecting the enforceability of the Guaranteed
Obligations under any Loan Document:
a. supplement, modify, amend, extend, renew, or otherwise change the
time for payment or the terms of the Guaranteed Obligations or any part thereof,
including any increase or decrease of the rate(s) of interest thereon;
b. supplement, modify, amend or waive, or enter into or give any
agreement, approval or consent with respect to, the Guaranteed Obligations or
any part thereof or any of the Loan Documents or any security or guaranties, or
any condition, covenant, default, remedy, right, representation or term thereof
or thereunder;
c. accept new or additional instruments, documents or agreements
relative to any of the Loan Documents or the Guaranteed Obligations or any part
thereof;
d. accept partial payments on the Guaranteed Obligations;
e. receive and hold additional security or guaranties for the
Guaranteed Obligations or any part thereof;
f. release, reconvey, terminate, waive, abandon, subordinate,
exchange, substitute, transfer and enforce any security or guaranties for the
Guaranteed Obligations, and apply any
<PAGE>
security and direct the order or manner of sale thereof as the Managing
Agent, on behalf of the Banks, in its sole and absolute discretion may
determine;
g. release any Person or any guarantor from any personal liability
with respect to the Guaranteed Obligations or any part thereof;
h. settle, release on terms satisfactory to the Managing Agent and
the Banks or by operation of applicable laws or otherwise liquidate or enforce
any Guaranteed Obligations and any security or guaranty therefor in any manner,
consent to the transfer of any security and bid and purchase at any sale; and
i. consent to the merger, change or any other restructuring or
termination of the existence of any Borrower or any other Person, and
correspondingly restructure the Guaranteed Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of the other
Borrowers or the continuing existence of any Lien securing the Guaranteed
Obligations under any Loan Document to which such Borrowers are party or the
enforceability hereof or thereof with respect to all or any part of the
Guaranteed Obligations.
Upon the occurrence of and during the continuance of any Event of
Default, the Managing Agent and the Banks may enforce each Loan Document
independently as to each Borrower and independently of any other remedy or
security the Managing Agent and the Banks at any time may have or hold in
connection with the Guaranteed Obligations, and it shall not be necessary for
the Managing Agent and the Banks to marshal assets in favor of any of the
Borrowers or any other Person or to proceed upon or against and/or exhaust any
other security or remedy before proceeding to enforce such Loan Document. Each
of the Borrowers expressly waives the benefit of all appraisement, valuation,
stay, extension, homestead, exemption or redemption laws which such Person may
claim or seek to take advantage of in order to prevent or hinder the enforcement
of any of the Loan Documents or the exercise by the Banks or the Managing Agent
of any of their respective remedies under the Loan Documents, and the Borrowers
further expressly waive any right to require the Managing Agent or any Bank to
marshal assets in favor of any Borrower or any other Person or to proceed
against any other Person or any collateral provided by any other Person, and
agrees that the Managing Agent and the Banks may proceed against any Persons
and/or collateral in such order as they shall determine in their sole and
absolute discretion. The Managing Agent and the Banks may file a separate
action or actions against any Borrower, whether action is brought or prosecuted
with respect to any other security or against any other Person, or whether any
other Person is joined in any such action or actions. Each of the Borrowers
expressly waives the benefit of any statute(s) of limitations affecting its
liability under the Loan Documents or the enforcement of the Guaranteed
Obligations or any Liens created or granted by any Loan Document. The rights of
the Managing Agent and the Banks hereunder and under the Loan Documents shall be
reinstated and revived, and the enforceability of this Agreement shall continue,
with respect to any amount at any time paid on account of the Obligations which
thereafter shall be required to be restored or returned by the Managing Agent or
any Bank upon the bankruptcy, insolvency or reorganization of any Borrower or
any other Person, or otherwise, all as though such amount had not been paid.
2
<PAGE>
The enforceability of the Loan Documents at all times shall remain effective as
to each Borrower as to the Guaranteed Obligations of such Borrower even though
such Guaranteed Obligations, INCLUDING any part thereof may be or hereafter may
become invalid or otherwise unenforceable as against any other Borrowers or any
other Person and whether or not any of the other Borrowers or any other Person
shall have any personal liability with respect thereto. Each of the Borrowers
expressly waives in respect of the Guaranteed Obligations any and all defenses
now or hereafter arising or asserted by reason of (a) any disability or other
defense of any of the other Borrowers or any other Person with respect to the
Guaranteed Obligations, (b) the unenforceability or invalidity of any security
or guaranty for the Guaranteed Obligations or the lack of perfection or
continuing perfection or failure of priority of any security for the Guaranteed
Obligations, (c) the cessation for any cause whatsoever of the liability of any
other Borrower or any other Person (OTHER THAN by reason of the full payment and
performance of all Obligations), (d) any failure of the Managing Agent or any
Bank to marshal assets in favor of any of the other Borrowers or any other
Person, (e) except as otherwise required by law or as provided in any Loan
Document, any failure of the Managing Agent or any Bank to give notice of sale
or other disposition of collateral to any of the other Borrowers or any other
Person or any defect in any notice that may be given in connection with any sale
or disposition of collateral, (f) except as otherwise required by law or as
provided in any Loan Document, any failure of the Managing Agent or any Bank to
comply with applicable laws in connection with the sale or other disposition of
any collateral or other security for any Obligation, including without
limitation, any failure of Managing Agent or any Bank to conduct a commercially
reasonable sale or other disposition of any collateral or other security for any
Guaranteed Obligation, (g) any incapacity, lack of authority, death or
disability of the other Borrowers or any other Person, (h) any failure of the
Banks or Managing Agent to give notice of the existence, creation or incurring
of any new or additional indebtedness or other obligation or of any action or
nonaction on the part of any other Person in connection with the Loan Documents,
including the waiver of any conditions to the making of any advance of proceeds
of any Loan, (i) any failure on the part of the Banks or Managing Agent to
ascertain the extent or nature of any assets of any Person or any insurance or
other rights with respect thereto, or the liability of any party liable for the
Loan Documents or the obligations evidenced or secured thereby, (j) except as
specifically required in the Loan Documents, any notice of intention to
accelerate any of the Obligations or any notice of acceleration of the
Obligations, (k) any lack of acceptance or notice of acceptance of this
Agreement by Banks or Managing Agent, (l) any lack of presentment, demand,
protest, or notice of dishonor, demand, protest or nonpayment with respect to
any indebtedness or obligations under any of the Loan Documents, (m) except as
specifically required in the Loan Documents, any lack of other notices to which
the Borrowers, or any of them, might otherwise be entitled, (n) any invalidity
or irregularity, in whole or in part, of any one or more of the Loan Documents,
(o) the inaccuracy of any representation or other provision contained in any
Loan Document, (p) any sale or assignment of the Loan Documents, in whole or in
part, (q) any sale or assignment by any of the Borrowers of any assets of such
Person, or any portion thereof, whether or not consented to by the Banks or
Managing Agent, (r) the dissolution or termination of existence of any Borrower
or any other Person, (s) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of any Borrower, (t) any
failure or delay of Managing Agent or the Banks to commence an action against
Borrowers, to assert or enforce any
3
<PAGE>
remedies against Borrowers under the Notes or the Loan Documents, or to
realize upon any security, (u) the compromise, settlement, release or
termination of any or all of the obligations of a Borrower under the Notes or
the Loan Documents, (v) any act or omission of the Managing Agent or any
Bank or others that directly or indirectly results in or aids the discharge
or release of any other Borrower or any other Person or any other security or
guaranty for the Guaranteed Obligations by operation of law or otherwise, (w)
any law which provides that the obligation of a surety or guarantor must
neither be larger in amount nor in other respects more burdensome than that
of the principal or which reduces a surety's or guarantor's obligation in
proportion to the principal obligation, (x) any failure of the Managing Agent
or any Bank to file or enforce a claim in any bankruptcy or other proceeding
with respect to any Person, (y) the election by the Managing Agent or any
Bank, in any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States Bankruptcy Code,
(z) any extension of credit or the grant of any lien under Section 364 of the
United States Bankruptcy Code, (aa) any use of cash collateral under Section
363 of the United States Bankruptcy Code, (bb) any agreement or stipulation
with respect to the provision of adequate protection in any bankruptcy
proceeding of any Person, (cc) the avoidance of any Lien in favor of the
Managing Agent or the Banks for any reason, (dd) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any Person, including any discharge of, or
bar or stay against collecting, all or any of the Guaranteed Obligations (or
any interest thereon) in or as a result of any such proceeding, (ee) to the
extent permitted, the benefits of any form of one-action rule, or (ff) to the
fullest extent permitted by law, any other legal, equitable or surety
defenses whatsoever to which a Borrower might otherwise be entitled with
respect to the Guaranteed Obligations.
4. FINANCIAL INFORMATION. Each of the Borrowers represents and warrants
to the Managing Agent and the Banks that such Borrower has established adequate
means of obtaining from the other Borrowers, on a continuing basis, financial
and other information pertaining to the businesses, operations and condition
(financial and otherwise) of the other Borrowers and their respective assets,
and each of the Borrowers now is and hereafter will be completely familiar with
the businesses, operations and condition (financial and otherwise) of the other
Borrowers and their respective assets. Each of the Borrowers hereby expressly
waives and relinquishes any duty on the part of the Managing Agent and the Banks
to disclose to such Borrower any matter, fact or thing related to the
businesses, operations or condition (financial or otherwise) of any other
Borrower or such other Borrower's assets, whether now known or hereafter known
by the Managing Agent and the Banks during the life of this Agreement, whether
such matter, fact or thing materially increases the risks to such Borrower or
not.
5. WAIVERS CONCERNING LIENS. In the event that all or any part of the
Guaranteed Obligations at any time are secured by any one or more deeds of
trust, security deeds or mortgages creating or granting Liens on any interests
in Real Property, each of the Borrowers authorizes the Managing Agent and the
Banks, upon the occurrence of and during the continuance of any Event of
Default, at their sole option, without notice or demand and without affecting
any Obligations, the enforceability of the Guaranteed Obligations under this
Agreement, or the validity or enforceability of any Liens of the Managing Agent
and the Banks
4
<PAGE>
on any collateral securing the Guaranteed Obligations, to foreclose any or
all of such deeds of trust, security deeds or mortgages by judicial or
nonjudicial sale. Insofar as the Liens created by the Loan Documents secure
the Guaranteed Obligations of other Persons (a) each of the Borrowers
expressly waives any defenses to the enforcement of this Agreement or the
other Loan Documents or any Liens created or granted hereby or by the other
Loan Documents or to the recovery by the Managing Agent and the Banks against
any other Borrower or any other Person liable therefor of any deficiency
after a judicial or nonjudicial foreclosure or sale, even though such a
foreclosure or sale may impair the subrogation rights of such Borrower and
may preclude any of them from obtaining reimbursement or contribution from
any other Person and (b) each of the Borrowers expressly waives any defenses
or benefits that may be derived from California Code of Civil Procedure
Sections 580a, 580b, 580d or 726, or comparable provisions of the laws of any
other jurisdiction and all other suretyship defenses it otherwise might or
would have under California law or other applicable law.
6. CONTRIBUTION. Notwithstanding anything to the contrary elsewhere
contained herein or in any other Loan Document to which any Borrower is a party,
each of the Borrowers hereby waives with respect to each other Borrower and its
respective successors and assigns (including any surety) and any other party any
and all rights at or in equity, to subrogation, to reimbursement, to
exoneration, to contribution, to indemnity, to setoff or to any other rights
that could accrue to a surety against a principal, to a guarantor against a
maker or obligor, to an accommodation party against the party accommodated, or
to a holder or transferee against a maker and which each of the Borrowers may
have or hereafter acquire against any other Borrower or any other party in
connection with or as a result of any Borrower's execution, delivery and/or
performance of this Agreement or any other Loan Document to which any such
Borrower is a party. In connection with the foregoing, each of the Borrowers
expressly waives any and all rights of subrogation to the Banks or Managing
Agent against the other of the Borrowers, and each of the Borrowers hereby
waives any rights to enforce any remedy which the Banks or Managing Agent may
have against the other of the Borrowers and any rights to participate in any
collateral or any other assets of the other Borrowers. Each of the Borrowers
agrees that it shall not have or assert any such rights against any other
Borrower or any such Borrower's successors and assigns or any other Person
(INCLUDING any surety, Managing Agent or any Bank), either directly or as an
attempted setoff to any action commenced against such Borrower by the other such
Borrower (as borrower or in any other capacity) or any other Person. Each of
the Borrowers hereby acknowledges and agrees that this waiver is intended to
benefit the Managing Agent and the Banks and shall not limit or otherwise affect
any of the Borrowers' liability hereunder, under any other Loan Document to
which any Borrower is a party, or the enforceability hereof or thereof. Without
limiting the generality of the foregoing and to the extent otherwise applicable,
each of the Borrowers hereby waives discharge by waiving all defenses based on
suretyship or impairment of collateral securing the Guaranteed Obligations.
7. RELIANCE BY BANKS AND MANAGING AGENT. Each of the Borrowers warrants
and agrees that each of the waivers and consents set forth herein is made with
full knowledge of its significance and consequences, with the understanding that
events giving rise to any defense waived may diminish, destroy or otherwise
adversely affect rights which each of the Borrowers
5
<PAGE>
otherwise may have against the other Borrowers, the Managing Agent, the
Banks, or others, or against any collateral securing the Guaranteed
Obligations. If any of the waivers or consents herein are determined to be
contrary to any applicable law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
8. APPLICABILITY. For purposes of this Agreement, the provisions of
Paragraphs 5 and 6 above shall apply and be effective only to the extent that
any court, tribunal or other governmental agency shall have deemed Borrowers to
be sureties of one another rather than co-borrowers.
9. WAIVER OF AUTOMATIC OR SUPPLEMENTAL STAY. Each of the Borrowers
represents, warrants and covenants to the Banks and Managing Agent that in the
event of the filing of any voluntary or involuntary petition in bankruptcy by or
against any Borrower at any time following the execution and delivery of this
Agreement, none of the other Borrowers shall seek a supplemental stay or any
other relief, whether injunctive or otherwise, pursuant to Section 105 of the
United States Bankruptcy Code or any other provision of the United States
Bankruptcy Code, to stay, interdict, condition, reduce or inhibit the ability of
the Banks or Managing Agent to enforce any rights it has by virtue of this
Agreement, the Loan Documents, or at law or in equity, or any other rights the
Banks or Managing Agent has, whether now or hereafter acquired, against any
other Borrower or against any property owned by any other Borrower.
10. SUBORDINATION. In addition to and without in any way limiting the
foregoing, each of the Borrowers hereby subordinates any and all indebtedness it
may now or hereafter owe to such other Borrower to all indebtedness of the
Borrowers to the Banks and Managing Agent, and agrees with the Banks and
Managing Agent that neither of the Borrowers shall claim any offset or other
reduction of such Borrower's obligations hereunder because of any such
indebtedness and shall not take any action to obtain any collateral or any other
assets of the other Borrower.
6
<PAGE>
SCHEDULE 1.1
BANKS AND COMMITMENTS
<TABLE>
<CAPTION>
Name and Address Commitment Pro Rata Share
- ---------------- ---------- --------------
<S> <C> <C>
BankBoston, N.A $67,000,000.00 26.80%
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
LIBOR Lending Office
same as above
Societe Generale, Southwest Agency $35,000,000.00 14.0%
2001 Ross Avenue
Suite 4900
Dallas, Texas 75201
Attn: Mr. Scott Goslee
LIBOR Lending Office
same as above
KeyBank National Association $35,000,000.00 14.0%
127 Public Square
MCOH-01-27-0603
Cleveland, Ohio 44114
Attn: Ms. Mary Ellen Fowler
LIBOR Lending Office
Same as above
Dresdner Bank AG $25,000,000.00 10.0%
333 South Grand Avenue
Los Angeles, CA 90071
Attn: Mr. Vitol Wiacek
LIBOR Lending Office
same as above
Sovereign Bank $10,000,000.00 4.0%
50 Rowes Wharf
Suite 430
Boston, MA 02110
Attn: Mr. Thomas W. Nadeau
LIBOR Lending Office
same as above
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Riggs Bank, N.A $20,000,000.00 8.0%
Commercial Banking
808 17th Street, N.W., 7th Floor
Washington, D.C 20074
Attn: Ms. LuAnn Bailey
LIBOR Lending Office
same as above
First American Bank Texas, S.S.B $20,000,000.00 8.0%
14651 Dallas Parkway
Suite 400
Dallas, Texas 75240
Attn: Mr. Jeff Schultz
LIBOR Lending Office
same as above
The Long-Term Credit Bank of Japan, Ltd. $10,000,000.00 4.0%
350 South Grand Avenue
Suite 3000
Los Angeles, California 90071
Attn: Mr. Naoki Oshima
LIBOR Lending Office
The Long-Term Credit Bank of Japan, Ltd.
New York Branch
165 Broadway, 48th Floor
New York, New York 10006
Attn: Mr. Robert Pacifici
Crestar Bank $10,000,000.00 4.0%
8245 Boone Boulevard
Suite 820
Vienna, VA 22182
Attn: Mr. Gregory Horstman
LIBOR Lending Office
same as above
Summit Bank $10,000,000.00 4.0%
Commerce Center
1800 Chapel Avenue West
Cherry Hills, NJ 08002
Attn: Ms. Mari Anne Herbst
LIBOR Lending Office
same as above
2
<PAGE>
The Industrial Bank of Japan, Limited, $8,000,000.00 3.2%
Los Angeles Agency
350 South Grand Avenue
Suite 1500
Los Angeles, CA 90071
Attn: Mr. Takeshi Kubo
LIBOR Lending Office
same as above
--------------- -------
$250,000,000.00 100.0%
</TABLE>
Percentages may not equal 100% due to rounding.
3
<PAGE>
SCHEDULE 1.2
EXAMPLE ONLY
<TABLE>
<S> <C>
Adjusted NOI from Unencumbered Asset Pool: $ 30,441,122
Test Debt Service Calculation
Total Unsecured Borrowings $100,000,000
10 Treasury Rate + 2% 7.50%
Pro forma Debt Service Payment * $ 8,867,894
Coverage to Test Debt Service Coverage Amount 3.4x
</TABLE>
* Pro forma Principal and Interest payment based upon the Treasury rate + 2% on
a 25 year amortization schedule.
<PAGE>
Schedule 4.4 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
SUBSIDIARIES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ENTITY NAME PROPERTY OWNED STATE OF DATE FORMED STATE(S) OWNERS/INTERESTS
FORMATION QUALIFIED
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alexandria Real Estate Equities, 1102 & 1124 Columbia MD 10/27/94 CA publicly traded NYSE
Inc. St., Seattle, WA WA
3535 & 3565 General
Atomics Ct., San
Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
Alexandria Real Estate Equities, none DE 12/10/97 1% GP: ARE-QRS Corp.
L.P. 1% LP ARE-QRS Corp.
98% LP: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE Acquisitions, LLC 1330 Piccard Dr., DE 12/20/96 MD 1% managing: ARE-QRS
Formerly PW Acquisitions I, LLC Rockville, MD VA 99% nonmanaging: AREE
1550 E. Gude Dr.,
Rockville, MD
- ---------------------------------------------------------------------------------------------------------------------------------
AREE-HOLDINGS, L.P. none DE 12/23/97 1% GP: ARE-GP
99% LP: ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
AREE-HOLDINGS II, L.P. none DE 5/8/98 1% GP: ARE-GP/II
99% LP: ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-GP HOLDINGS QRS none DE 12/19/97 100% AREE
CORP.
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-GP/II HOLDINGS QRS none DE 5/8/98 100% AREE
CORP.
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-QRS Corp. 25,35 & 45 W. Watkins MD 9/9/96 CA 100% AREE
Mill Rd., WA
Gaithersburg, MD
300 & 401 Professional
Dr., Gaithersburg, MD
1311&1401 Harbor Bay
Parkway, Alameda, CA
1413 Research Blvd.,
Rockville, MD
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ENTITY NAME PROPERTY OWNED STATE OF DATE FORMED STATE(S) OWNERS/INTERESTS
FORMATION QUALIFIED
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARE-John Hopkins Court, LLC 3530 & 3550 John DE 7/2/97 CA 1% managing: ARE-QRS
Hopkins Court, San 99% nonmanaging: AREE
Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-Metropolitan Grove I, LLC DE 12/19/97 MD 100% ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-Nexus Centre II, LLC vacant parcel DE 3/17/98 CA 100% ARE, LP
adjoining 4757 Nexus
Centre Dr., San Diego
CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-Western Newbrook, LLC 3000 & 3018 Western, DE name WA 1% managing: HOLDINGS
Seattle, WA changed VA II
(formerly known as ARE-3000/3018 14225 Newbrook Dr., 5/11/98 99% nonmanaging: ARE,
Western, LLC) Chantilly, VA LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-19 Firstfield Road, LLC 19 Firstfield Road DE 4/20/98 MD 100% ARE, LP
Gaithersburg, MD
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-79/96 Charlestown Navy Yard, Building 79 DE 12/31/97 MA 1% managing: HOLDINGS,
LLC Building 96 LP
Charlestown Navy Yard, 99% nonmanaging: ARE,
Charlestown, MA LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-100/800/801 Capitola, LLC 100, 800 & 801 DE 12/16/97 NC 100% ARE, LP
Capitola Drive,
Durham, NC
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-150/154 Technology Parkway, LLC 150 & 154 Technology DE 4/15/98 GA 100% ARE, LP
Parkway, Norcross, GA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-170 Williams Drive, LLC 170 Williams Drive DE 5/18/98 NJ 100% ARE, LP
Ramsey, NJ
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-215 College Road, LLC 215 College Road, DE 12/19/97 NJ 100% ARE, LP
Paramus, NJ
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-280 Pond Street, LLC 280 Pond Street DE 4/13/98 MA 1% managing: HOLDINGS
Randolph, MA 99% nonmanaging: ARE,
LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-702 Electronic Drive, L.P. 702 Electronic Drive DE 3/24/98 PA 1% general partner:
Horsham, PA HOLDINGS
99% limited partner:
ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ENTITY NAME PROPERTY OWNED STATE OF DATE FORMED STATE(S) OWNERS/INTERESTS
FORMATION QUALIFIED
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARE-708 Quince Orchard, LLC 708 Quince Orchard DE 8/14/97 MD 1% managing: ARE-QRS
Road, Gaithersburg, MD 99% nonmanaging: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-819/863 Mitten Road, LLC 819-863 Mitten Road, DE 12/19/97 CA 100% ARE, LP
Burlingame, CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-940 Clopper Road, LLC 940 Clopper Road, DE 8/20/97 MD 1% managing: ARE-QRS
Gaithersburg, MD 99% nonmanaging: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-1201 Harbor Bay, LLC 1201 Harbor Bay DE 11/17/97 CA 1% managing: ARE-QRS
Parkway, Alameda, CA 99% nonmanaging: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-1401 Research Boulevard, LLC 1401 Research Blvd., DE 8/28/97 MD 1% managing: ARE-QRS
Gaithersburg, MD 99% nonmanaging: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-1431 Harbor Bay, LLC 1431 Harbor Bay DE 5/20/97 CA 1% managing: ARE-QRS
Parkway, Alameda, CA 99% nonmanaging: AREE
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-1500 East Gude, LLC 1500 East Gude Dr., DE 11/5/97 MD 1% managing: ARE-QRS
3 Taft Ct., & 3 1/2Taft 99% nonmanaging: AREE
Ct., Rockville, MD
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-2001 Aliceanna Street, LLC DE 6/30/98 MD 100% ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-3005 First Avenue, LLC 3005 1st Avenue, DE 5/8/98 WA 100% ARE, LP
Seattle, WA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-3535/3565 General Atomics none DE 12/19/97 CA 100% AREE
Court, LLC
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-4757 Nexus Centre, LLC 4757 Nexus Centre Dr., DE 3/13/98 CA 100% ARE, LP
San Diego CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-5100/5110 Campus Drive, L.P. 5100 & 5110 Campus DE 3/24/98 [PA] 1% general partner:
Dr., Philadelphia, PA HOLDINGS
99% limited partner:
ARE, LP
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-6166 Nancy Ridge, LLC 6166 Nancy Ridge Dr., DE 3/20/98 CA 100% ARE, LP
San Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ENTITY NAME PROPERTY OWNED STATE OF DATE FORMED STATE(S) OWNERS/INTERESTS
FORMATION QUALIFIED
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARE-8000/9000/10000 Virginia 8000, 9000, 10000 DE 12/31/97 MD 100% ARE, LP
Manor, LLC Virginia Manor Road,
Beltsville, MD
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-10150 Old Columbia, LLC 10150 Old Columbia DE 12/19/97 MD 100% ARE, LP
Road, Columbia,
Maryland
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-10933 North Torrey Pines, LLC 10933 N. Torrey Pines DE 12/19/97 CA 100% AREE
Rd., San Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-11025 Roselle Street, LLC 11025 Roselle Street, DE 12/2/97 CA 100% ARE, LP
San Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-11099 North Torrey Pines, LLC 11099 N. Torrey Pines DE 12/19/97 CA 100% AREE
Rd., San Diego, CA
- ---------------------------------------------------------------------------------------------------------------------------------
ARE-15020 Shady Grove, LLC 15020 Shady Grove, DE 6/5/98 MD 100% ARE, LP
Rockville, MD
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule 4.7 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
EXISITING LIENS, NEGATIVE PLEDGES AND RIGHTS OF OTHERS
As of the Closing Date, the Borrowers will have outstanding mortgage
indebtedness as follows:
<TABLE>
<CAPTION>
Name of Property Maturity Date of Loan
- ------------------------------------------------ ---------------------
<S> <C>
3535/3565 General Atomics Court
San Diego, CA December 2014
1102/1124 Columbia Street
Seattle, WA May 2016
100/800/801 Capitola Drive
Durham, NC December 2006
As of the Closing Date, the following properties are on ground leases:
<CAPTION>
Name of Property Term of Lease
- ------------------------------------------------ ---------------------
<S> <C>
Buildings 79 and 96 Charlestown Navy Yard
Charlestown, Massachusetts September 2053/May 2055
8000/9000/10000 Virginia Manor Road
Beltsville, Maryland July 2047
</TABLE>
<PAGE>
Schedule 4.10 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
MATERIAL LITIGATION
-------------------
None.
<PAGE>
Schedule 4.18 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
INITIAL POOL PROPERTIES
The properties at the addresses set forth below are the Qualified Unencumbered
Asset Pool Properties comprising the initial Unencumbered Asset Pool:
<TABLE>
<S> <C>
1 10933 North Torrey Pines Road San Diego, California
2 11099 North Torrey Pines Road San Diego, California
3 11025 Roselle Street San Diego, California
4 4757 Nexus Center Drive San Diego, California
5 6166 Nancy Ridge Drive San Diego, California
6 1201 Harbor Bay Parkway Alameda, California
7 1311 Harbor Bay Parkway Alameda, California
8 1401 Harbor Bay Parkway Alameda, California
9 819-849 Mitten Road Burlingame, California
10 863 Mitten Road/866 Malcolm Road Burlingame, California
11 150/154 Technology Parkway Norcross, Georgia
12 8000/9000/10000 Virginia Manor Road Beltsville, Maryland
13 10150 Old Columbia Road Gaithersburg, Maryland
14 300 Professional Drive Gaithersburg, Maryland
15 401 Professional Drive Gaithersburg, Maryland
16 25/35/45 West Watkins Mill Road Gaithersburg, Maryland
17 708 Quince Orchard Road Gaithersburg, Maryland
18 940 Clopper Road Gaithersburg, Maryland
19 19 Firstfield Road Gaithersburg, Maryland
20 15020 Shady Grove Road Gaithersburg, Maryland
21 1330 Piccard Drive Rockville, Maryland
22 1401 Research Boulevard Rockville, Maryland
23 1413 Research Boulevard Rockville, Maryland
24 1500 East Gude Drive Rockville, Maryland
25 1550 East Gude Drive Rockville, Maryland
26 3 & 3 1/2 Taft Court Rockville, Maryland
27 Buildings 79 and 96 Charlestown Navy Yard Charlestown, Massachusetts
28 280 Pond Street Randolph, Massachusetts
29 215 College Road Paramus, New Jersey
30 170 Williams Drive Ramsey, New Jersey
31 5100/5110 Campus Drive Plymouth Meeting, New Jersey
32 702 Electronic Drive Horsham, Pennsylvania
33 3005 First Avenue Seattle, Washington
</TABLE>
<PAGE>
Schedule 4.19 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
REAL PROPERTY
After the Closing Date, the properties owned by the Borrowers and their
Subsidiaries are as follows:
<TABLE>
<S> <C>
1 10933 North Torrey Pines Road San Diego, California
2 11099 North Torrey Pines Road San Diego, California
3 3535 General Atomics Court San Diego, California
4 3565 General Atomics Court San Diego, California
5 11025 Roselle Street San Diego, California
6 4757 Nexus Center Drive San Diego, California
7 6166 Nancy Ridge Drive San Diego, California
8 1201 Harbor Bay Parkway Alameda, California
9 1311 Harbor Bay Parkway Alameda, California
10 1401 Harbor Bay Parkway Alameda, California
11 1431 Harbor Bay Parkway Alameda, California
12 819-849 Mitten Road Burlingame, California
13 863 Mitten Road/866 Malcolm Road Burlingame, California
14 150/154 Technology Parkway Norcross, Georgia
15 8000/9000/10000 Virginia Manor Road Beltsville, Maryland
16 10150 Old Columbia Road Gaithersburg, Maryland
17 300 Professional Drive Gaithersburg, Maryland
18 401 Professional Drive Gaithersburg, Maryland
19 25/35/45 West Watkins Mill Road Gaithersburg, Maryland
20 708 Quince Orchard Road Gaithersburg, Maryland
21 940 Clopper Road Gaithersburg, Maryland
22 19 Firstfield Road Gaithersburg, Maryland
23 15020 Shady Grove Road Gaithersburg, Maryland
24 1330 Piccard Drive Rockville, Maryland
25 1401 Research Boulevard Rockville, Maryland
26 1413 Research Boulevard Rockville, Maryland
27 1500 East Gude Drive Rockville, Maryland
28 1550 East Gude Drive Rockville, Maryland
29 3 & 3 1/2 Taft Court Rockville, Maryland
30 Buildings 79 and 96 Charlestown Navy Yard Charlestown, Massachusetts
31 280 Pond Street Randolph, Massachusetts
32 215 College Road Paramus, New Jersey
33 170 Williams Drive Ramsey, New Jersey
34 5100/5110 Campus Drive Plymouth Meeting, New Jersey
35 100 Capitola Drive Durham, North Carolina
36 800/801 Capitola Drive Durham, North Carolina
37 702 Electronic Drive Horsham, Pennsylvania
38 14225 Newbrook Drive Chantilly, Virginia
39 1102/1124 Columbia Street Seattle, Washington
40 3000/3018 Western Avenue Seattle, Washington
41 3005 First Avenue Seattle, Washington
</TABLE>
<PAGE>
Schedule 4.21 to
First Amended and Restated Revolving Loan Agreement
---------------------------------------------------
INDEBTEDNESS
After the Closing Date, the Borrowers and their Subsidiaries will have
outstanding indebtedness as described in Sections 6.11 and 6.12 as follows:
<TABLE>
<CAPTION>
Amount Outstanding
Lender Property Secured as of June 30, 1998
- ------------------------------------ ---------------------------------------- ---------------------
<S> <C> <C>
Aid Association for Lutherans 3535/3565 General Atomics Court $17,819,000
Aid Association for Lutherans 1102/1124 Columbia Street $21,003,000
United States Trust Company 1431 Harbor Bay Parkway $ 8,500,000
of New York
LaSalle National Bank 100/800/801 Capitola Drive $12,608,000
Credit Suisse First Boston 14225 Newbrook Drive &
Mortgage Capital LLC 3000/3018 Western Avenue $36,479,000
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS FOUND ON PAGES 3 AND 4 OF THE COMPANY'S FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,016
<SECURITIES> 0
<RECEIVABLES> 13,102
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 457,161
<DEPRECIATION> 15,454
<TOTAL-ASSETS> 476,201
<CURRENT-LIABILITIES> 16,905
<BONDS> 258,856
0
0
<COMMON> 126
<OTHER-SE> 200,314
<TOTAL-LIABILITY-AND-EQUITY> 476,201
<SALES> 0
<TOTAL-REVENUES> 15,811
<CGS> 0
<TOTAL-COSTS> 3,337
<OTHER-EXPENSES> 3,730
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,627
<INCOME-PRETAX> 5,117
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,117
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,117
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.40
</TABLE>
