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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
Alexandria Real Estate Equities, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
015271 10 9
------------------------------------------------------
(CUSIP Number)
J. Grant Monahon, Esq.
AEW Partners II, L.P.
225 Franklin Street, Suite 2500
Boston, Massachusetts 02110
(617) 261-9000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 28, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages) (Page 1 of 22 Pages)
- -------------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 2 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW PARTNERS II, L.P. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [X] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | 402,200 Shares of Common Stock |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,257,039 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | 402,200 Shares of Common Stock |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,257,039 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [X] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 3 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW HEALTH SCIENCE PROPERTIES CO-INVESTMENT, L.P. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [X] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | None |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 402,200 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | None |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 402,200 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 402,200 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [X] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 4 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW II, L.P. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [ ] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | 402,200 Shares of Common Stock |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,257,039 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | 402,200 Shares of Common Stock |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,257,039 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 5 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | PARTNERS II HOLDINGS, L.P. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [ ] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | None |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,659,239 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | None |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 6 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW II CORPORATION |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [ ] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Massachusetts |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | None |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,659,239 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | None |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 7 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW CAPITAL MANAGEMENT, L.P. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [ ] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | None |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,659,239 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | None |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- ---------------------------
|CUSIP NO. 015271 10 9 | | Page 8 of 22 Pages |
| ----------- | | --- --- |
- ------------------------- ---------------------------
|--------|---------------------------------------------------------------------|
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | AEW CAPITAL MANAGEMENT, INC. |
|--------|---------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] |
| | (b) [ ] |
|--------|---------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|--------|---------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | PF |
|--------|---------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |
| | PURSUANT TO ITEMS 2(d) OR 2(e) [ ] |
|--------|---------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Massachusetts |
|--------|-----------------|--------|------------------------------------------|
| | 7 | SHARED VOTING POWER |
| | | None |
| NUMBER OF |--------| -----------------------------------------|
| SHARES | 8 | SOLE VOTING POWER |
| BENEFICIALLY | | 1,659,239 Shares of Common Stock |
| OWNED BY ----------------------------------------------------|
| EACH | 9 | SHARED DISPOSITIVE POWER |
| REPORTING | | None |
| PERSON ----------------------------------------------------|
| WITH | 10 | SOLE DISPOSITIVE POWER |
| | | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,659,239 Shares of Common Stock |
|--------|---------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] |
| | SHARES* |
| | |
|--------|---------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 16% |
|--------|---------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. Security and Issuer.
- ------- -------------------
The class of equity securities to which this statement relates is the
common stock (the "Common Stock" or the "Securities") of Alexandria Real Estate
Equities, Inc. (the "Issuer" or the "Company"), whose principal executive
offices are located at 251 South Lake Avenue, Suite 700, Pasadena, California
91101.
Item 2. Identity and Background.
- ------- ------------------------
(a), (b), (c) and (f) AEW Partners II, L.P., a Delaware limited
partnership ("Partners II") and AEW Health Science Properties Co-Investment,
L.P., a Delaware limited partnership ("AEW HSP") are each the direct holder of
certain of the Securities that are the subject of this Schedule 13D. Partners II
and AEW HSP were formed for the purpose of acquiring, holding, disposing of,
managing, selling, exchanging and otherwise dealing in interests in operating
companies (including real estate operating companies) and real estate and other
assets. This statement is being filed by the Reporting Persons (as such term is
defined below) relating to the Securities.
In addition to holding certain of the Securities directly, Partners II
is a general partner of AEW HSP. AEW II, L.P., a Delaware limited partnership
("AEW II LP"), is the general partner of Partners II and was formed for, among
other things, such purpose. Partners II Holdings, L.P., a Delaware limited
partnership ("Partners II Holdings"), is the general partner of AEW II LP and a
general partner of AEW HSP and was formed for, among other things, such
purposes. AEW II Corporation, a Massachusetts corporation ("AEW II Corp"), is
the general partner of Partners II Holdings and was formed for, among other
things, such purpose. AEW Capital Management, L.P., a Delaware limited
partnership ("AEW CMLP"), is a registered investment advisor and is an
investment advisor to Partners II as well as the controlling shareholder of AEW
II Corp and the general partner of Partners II Employee Holdings, L.P., a
Delaware limited partnership, which is the limited partner of Partners II
Holdings, and was formed for, among other things, such purposes. AEW Capital
Management, Inc., a Massachusetts corporation ("AEW CMI"), is the general
partner of AEW CMLP and was formed for, among other things, such purpose.
Partners II, AEW HSP, AEW II LP, Partners II Holdings, AEW II Corp, AEW CMLP and
AEW CMI are referred to herein as the "Reporting Persons."
The principal office and principal business address of each of the
Reporting Persons is c/o AEW Capital Management, 225 Franklin Street, Boston, MA
02110.
The name, citizenship, address and principal occupation of each
director and executive officer of AEW II Corp and AEW CMI are set forth on
Schedule A hereto.
(d) and (e) To the Reporting Persons' knowledge, none of the Reporting
Persons nor any of the persons listed on Schedule A to this Schedule 13D, has,
during the last five years, been
Page 9 of 22
<PAGE>
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
- ------- --------------------------------------------------
Prior to May 28, 1997, Partners II held 20,834 shares of Series V
Preferred Stock of the Issuer and AEW HSP held 6,666 shares of Series V
Preferred Stock of the Issuer. Of the 27,500 aggregate shares of Series V
Preferred Stock, 16,000 shares were acquired by Partners II on September 9, 1996
for cash in the amount of $16,000,0000, 6,000 shares were acquired by Partners
II on October 16, 1996 for cash in the amount of $6,000,000 and 5,500 were
acquired by Partners II on December 10, 1996 for cash in the amount of
$5,500,000. On February 26, 1997, Partners II sold and transferred 6,666 shares
of the Issuer's Series V Preferred Stock to AEW HSP for cash consideration in
the amount of $6,700,982.38. Partners II and AEW HSP each used funds invested by
their respective limited partners in order to purchase the Series V Preferred
Stock and did not borrow any funds in connection with their respective
acquisitions.
On May 28, 1997 (in connection with the initial public offering of the
Issuer's Common Stock), the 27,500 shares of the Issuer's Series V Preferred
Stock held by Partners II and AEW HSP were converted into 1,659,239 shares of
the Issuer's Common Stock, of which 1,257,039 shares are owned by Partners II
and 402,200 are owned by AEW HSP.
No additional consideration was required in connection with the
conversion of the Series V Preferred Stock of the Issuer into Common Stock of
the Issuer.
Item 4. Purpose of Transaction.
- ------- -----------------------
Partners II's and AEW HSP's purpose in purchasing the Series V
Preferred Stock and converting the Series V Preferred Stock into Common Stock
was to acquire an equity interest in the Company in pursuit of the investment
objectives of Partners II and AEW HSP. Partners II and AEW HSP hold the
Securities for investment purposes.
Partners II and AEW HSP, respectively, intend to review continuously
the equity position of Partners II and AEW HSP in the Company. Depending upon
future evaluations of the business prospects of the Company and upon other
developments, including, but not limited to, general economic and business
conditions and money market and stock market conditions, either Partners II or
AEW HSP may determine to increase or decrease the equity interest in the Company
by acquiring additional shares of Common Stock, or by disposing of all or a
portion of the shares of Common Stock.
Page 10 of 22
<PAGE>
Except as described in this Schedule 13D, none of the Reporting Persons
has any present plan or proposal which relates to or would result in:
(a) the acquisition of additional securities of the Company, or the
disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries;
(d) any change in the present board of directors or management of the
Company, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Company;
(f) any other material change in the Company's business or corporate
structure;
(g) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
(h) a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be
quoted in the inter-dealer quotation system of a registered
national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
- ------- -------------------------------------
(a) As of the date hereof, Partners II owns an aggregate of 1,257,039
shares of the Issuer's Common Stock and AEW HSP owns an aggregate of 402,200
shares of the Issuer's Common Stock, representing, respectively, approximately
12% and 4% (or an aggregate of approximately 16%) of the 10,392,131 shares of
the Issuer's Common Stock believed to be outstanding.
Page 11 of 22
<PAGE>
To the best knowledge of the Reporting Persons, as of the date hereof,
none of the Reporting Persons, nor any officer or director of AEW II Corp or AEW
CMI beneficially owned any other shares of Common Stock of the Issuer.
Partners II has an agreement with its limited partners whereby, subject
to certain limitations, such limited partners are offered the opportunity to
invest, through a co-investment vehicle, in any entity in which an investment is
made by Partners II. In the case of the securities of the Issuer, such
co-investment by the limited partners of Partners II was made through AEW HSP.
Partners II may be deemed to be in a group with AEW HSP, but disclaims
beneficial ownership of the securities owned by AEW HSP (other than any
securities beneficially owned by Partners II in its capacity as a general
partner of AEW HSP) for purposes of Section 13 of the Exchange Act, Section 16
of the Exchange Act or for any other purpose.
Pursuant to a Stockholders Agreement dated as of September 9, 1996 (the
"Stockholders Agreement") by and among the Issuer, Health Science Properties
Holding Corporation, a Maryland corporation ("HSP Holding") and Partners II, HSP
Holding has agreed to vote its shares of the Issuer's Common Stock to elect
directors of the Issuer nominated by Partners II. The Stockholders Agreement is
described more fully in Item 6. Partners II may be deemed to be in a group with
HSP Holding, but disclaims beneficial ownership of the securities owned by HSP
Holding for purposes of Section 13 of the Exchange Act, Section 16 of the
Exchange Act or for any other purpose.
(b) (i) AEW HSP has the sole power to direct the voting and disposition
of the 402,200 shares of Common Stock held by it.
(ii) As general partners of AEW HSP, Partners II and Partners II
Holding are deemed to have shared power to direct the voting and disposition of
the 402,200 shares of Common Stock held by AEW HSP. In addition, Partners II has
the sole power to direct the voting and disposition of the 1,257,039 shares of
Common Stock held by it.
(iii) As general partner of Partners II, AEW II LP is deemed to
have the sole power to direct the voting and disposition of the 1,257,039 shares
of Common Stock held by Partners II and shared power to direct the voting and
disposition of the 402,200 shares of Common Stock held by AEW HSP.
(iv) As general partner of AEW II LP, Partners II Holding is deemed
to have the sole power to direct the voting and disposition of the 1,257,039
shares of Common Stock held by Partners II and the sole power to direct the
voting and disposition of the 402,200 shares of Common Stock held by AEW HSP.
Page 12 of 22
<PAGE>
(v) As general partner of Partners II Holding, AEW II Corp is
deemed to have the sole power to direct the voting and disposition of the
1,257,039 shares of Common Stock held by Partners II and the sole power to
direct the voting and disposition of the 402,200 shares of Common Stock held by
AEW HSP.
(vi) As controlling stockholder of AEW II Corp, AEW CMLP is deemed
to have the sole power to direct the voting and disposition of the 1,257,039
shares of Common Stock held by Partners II and the sole power to direct the
voting and disposition of the 402,200 shares of Common Stock held by AEW HSP.
(vii) As general partner of AEW CMLP, AEW CMI is deemed to have the
sole power to direct the voting and disposition of the 1,257,039 shares of
Common Stock held by Partners II and the sole power to direct the voting and
disposition of the 402,200 shares of Common Stock held by AEW HSP.
(c) To the best knowledge of the Reporting Persons, none of the
Reporting Persons nor any officer or director of AEW II Corp or AEW CMI has
effected any transactions in the Series V Preferred Stock of the Issuer or the
Common Stock during the past 60 days, with the exception of the conversion of
the shares of Issuer's Series V Preferred Stock into shares of the Issuer's
Common Stock in accordance with the terms of the conversion as set forth in the
charter of the Issuer and as described in Item 3 above.
(d) Not applicable.
(e) Not applicable.
Page 13 of 22
<PAGE>
Item 6. Contracts, Arrangements, Understanding or Relationships With Respect to
- ------- -----------------------------------------------------------------------
Securities of the Issuer.
-------------------------
On May 27, 1997, Partners II and AEW HSP each executed a lock up
agreement with Paine Webber Incorporated and certain other representatives of
the Issuer's underwriters whereby Partners II and AEW HSP each agreed not to
sell any Common Stock held by Partners II and AEW HSP, respectively, for a
period of 360 days from the effective date of the Issuer's registration
statement relating to its initial public offering of its Common Stock.
The Issuer is a real estate investment trust and the amount of its
shares that can be owned by a person are limited to 9.8% of the outstanding
shares of the Issuer's Common Stock subject to adjustment and certain
exceptions. The Board of Directors approved an exception for Partners II and AEW
HSP and has permitted Partners II and AEW HSP to own, in the aggregate, up to
16% of the outstanding shares of the Issuer's Common Stock, subject to certain
adjustments. Accordingly, if either Partners II or AEW HSP desired to acquire
any additional stock of the Issuer, such entity would need to obtain the
approval of the Issuer's Board of Directors.
Pursuant to the Stockholders Agreement, Partners II has the right (i)
to include two nominees on the ballot for the election of directors of the
Issuer, and one nominee on the ballot for the election of directors of ARE-QRS
Corp., a Maryland corporation, a wholly owned subsidiary of the Issuer
("Subsidiary"), so long as Partners II and AEW HSP owns, in the aggregate,
Common Stock representing more than 15% of the voting securities of the Issuer
and (ii) to include one nominee on the ballot for the election of directors of
the Issuer so long as Partners II and AEW HSP owns Common Stock, in the
aggregate, representing more than 7% of the voting securities of the Issuer. HSP
Holding, the holder of approximately 17% of the issued and outstanding shares of
Common Stock of the Issuer, has agreed pursuant to the Stockholders Agreement,
to vote its shares of the Issuer's Common Stock for such nominees included on
the ballot for the election of directors of the Issuer and the Issuer has agreed
to take all actions necessary to cause the election of the nominee at
Subsidiary. The Stockholders Agreement is attached hereto as an Exhibit.
No directors designated by Partners II currently serve on the Board of
Directors of the Issuer or Subsidiary pursuant to the arrangement described
above, although Partners II may, at its discretion, exercise its right to
include nominees on the ballots in the future. If, at any time, Partner II's and
AEW HSP's ownership of the Issuer's Common Stock, in the aggregate, represents
less than 15% of the voting securities of the Company, within 10 days of such
decrease in ownership, Partners II has agreed to cause one director elected or
nominated by it to resign from the Issuer's Board of Directors and all
committees thereof and from the board of directors of Subsidiary and all
committees thereof. Upon Partner II's and AEW HSP's ownership of the Issuer's
Common Stock decreasing to less than 7% of the outstanding voting securities of
the Issuer, within 10 days of such decrease in ownership, Partners II shall
cause all directors
Page 14 of 22
<PAGE>
nominated by it pursuant to this arrangement to resign from the Issuer's Board
of Directors and all committees thereof.
In addition, in connection with the transfer of shares of the Series V
Preferred Stock of the Issuer by Partners II to AEW HSP on February 26, 1997,
Partners II and AEW HSP agreed so long as Partners II is permitted to include
two nominees on the ballot for the election of directors of the Issuer pursuant
to the Stockholders Agreement, Partners II shall nominate one person nominated
by AEW HSP. In the event Partners II is permitted to include only one nominee on
the ballot for the election of the directors of the Issuer, such nominee shall
be the nominee of Partners II. The agreement between Partners II and AEW HSP is
attached as an Exhibit.
Item 7. Material to be Filed as Exhibits.
- ------- ---------------------------------
7(a) Stockholders Agreement dated as of September 9, 1996 by and among
the Issuer, HSP Holding and Partners II.
7(b) Agreement Regarding Stock Transfer and Exercise of Rights dated
February 26, 1997 by and between Partners II and AEW HSP.
7(c) Joint Filing Agreement
Page 15 of 22
<PAGE>
SIGNATURE
After due inquiry, to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
Dated: June 5, 1997
AEW PARTNERS II, L.P.
By: AEW II, L.P.,
its general partner
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
----------------------------
AEW HEALTH SCIENCE PROPERTIES CO-INVESTMENT, L.P.
By: AEW PARTNERS II, L.P.,
a general partner
By: AEW II, L.P.,
its general partner
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
----------------------
Page 16 of 22
<PAGE>
(SIGNATURES CONTINUED)
AEW II, L.P.
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
-------------------------
PARTNERS II HOLDINGS, L.P.,
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
-------------------------------
AEW II CORPORATION
By: /s/ J. Grant Monahon
------------------------------
Page 17 of 22
<PAGE>
(SIGNATURES CONTINUED)
AEW CAPITAL MANAGEMENT, L.P.
By: AEW CAPITAL MANAGEMENT, INC.,
its general partner
By: /s/ James J. Finnegan
----------------------------
AEW CAPITAL MANAGEMENT, INC.
By: /s/ James J. Finnegan
----------------------------
Page 18 of 22
<PAGE>
Schedule A
----------
The following is a list of all persons who serve as an officer or
director of AEW II Corporation ("AEW II Corp") or AEW Capital Management, Inc.
("AEW CMI") Each of such persons is a U.S. citizen.
<TABLE>
<CAPTION>
Name Occupation Business Address
- ---- ---------- ----------------
<S> <C> <C>
Joseph F. Azrack, Investment advisor 225 Franklin Street
Director and President, Boston, Massachusetts 02110
AEW CMI
Joseph W. O'Connor, Investment advisor 225 Franklin Street
Director, AEW CMI Boston, Massachusetts 02110
Peter S. Voss, Investment manager 225 Franklin Street
Director, AEW CMI Boston, Massachusetts 02110
David D. Puyear, Accountant 225 Franklin Street
Treasurer, AEW CMI Boston, Massachusetts 02110
J. Grant Monahon, Attorney 225 Franklin Street
Director, AEW II Corp Boston, Massachusetts 02110
Vice President and Secretary,
AEW CMI and AEW II Corp
Robert G. Gifford, Portfolio manager 225 Franklin Street
Director and President, Boston, Massachusetts 02110
AEW II Corp
Thomas K. Albert, Asset Manager 225 Franklin Street
Director and Vice President, Boston, Massachusetts 02110
AEW II Corp
Karen J. Lagerlund, Accountant 225 Franklin Street
Treasurer, AEW II Corp Boston, Massachusetts 02110
Page 19 of 22
</TABLE>
Exhibit 7(a)
EXECUTION VERSION
================================================================================
STOCKHOLDERS AGREEMENT
DATED AS OF
SEPTEMBER 9, 1996
BY AND AMONG
HEALTH SCIENCE PROPERTIES, INC.
HEALTH SCIENCE PROPERTIES HOLDING CORPORATION
AND
AEW PARTNERS II, L.P.
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
BACKGROUND.................................................................................... 1
1. Sales By Stockholder........................................................ 1
1.1 Tag-Along Rights................................................... 1
1.2 Investor's Exercise of Tag-Along Rights. ......................... 2
1.3 Consummation of Sale by Investor................................... 2
1.4 Subsequent Offerings............................................... 3
1.5 Exclusions to Tag-Along Rights..................................... 3
1.6 Non-Exercise of Tag-Along Rights................................... 3
2. Rights Upon Non-Conforming Transfers........................................ 3
2.1 Non-Conforming Transfers........................................... 3
3. Bring-Along Rights.......................................................... 4
3.1 Exercise of Rights................................................. 4
3.2 Price and Terms of Sale............................................ 4
3.3 No Encumbrances.................................................... 5
4. Election of Directors....................................................... 5
4.1 Directors of the Company........................................... 5
4.2 Directors of Subsidiary............................................ 5
4.3 Further Assurances................................................. 5
4.4 Resignation........................................................ 5
5. Legended Certificates....................................................... 6
5.1 Legend............................................................. 6
5.2 Removal of Legend.................................................. 6
5.3 Notation in Stock Transfer Records................................. 6
5.4 Transferees' Execution of Stockholders Agreement................... 7
6. Representations and Warranties.............................................. 7
6.1 Representations and Warranties of Stockholder...................... 7
6.2 Representations and Warranties of the Company...................... 7
6.3 Representations and Warranties of Investor......................... 8
7. Miscellaneous............................................................... 9
7.1 Termination........................................................ 9
7.2 Notices............................................................ 10
7.3 Costs of Enforcement............................................... 10
7.4 Successors and Assigns............................................. 10
7.5 Governing Law...................................................... 11
7.6 Execution in Counterparts.......................................... 11
7.7 Incorporation of Exhibits and Schedules by Reference............... 11
7.8 Entire Agreement; Amendment........................................ 11
7.9 Binding Effect..................................................... 11
7.10 Further Assurances................................................. 11
</TABLE>
-i-
<PAGE>
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (the "Agreement") is entered into as of
this 9th day of September, 1996 by and among HEALTH SCIENCE PROPERTIES, INC., a
Maryland corporation (the "Company"), HEALTH SCIENCE PROPERTIES HOLDING
CORPORATION, a Maryland corporation, the undersigned holder of Common Stock, par
value $.01 per share, of the Company ("Common Stock") ("Parent" or
"Stockholder") and AEW PARTNERS II, L.P., a Delaware limited partnership
("Investor"). All capitalized terms not otherwise defined herein shall have the
meaning given such term in the Series V Convertible Preferred Stock Purchase
Agreement, dated September 9, 1996, between the Company and the Investor (the
"Investor Stock Purchase Agreement").
BACKGROUND
A. Concurrently herewith, the Investor is acquiring from the Company
shares of Series V Convertible Preferred Stock of the Company (the "Series V
Preferred Stock") on the terms and conditions set forth in the Investor Stock
Purchase Agreement.
B. The Investor has required as a condition to the purchase of the
Series V Preferred Stock that the Company and the Parent enter into this
Agreement.
C. The Company and the Stockholder wish to induce the Investor to
purchase the Series V Preferred Stock by offering the Investor the opportunity
to participate, upon the terms and conditions set forth in this Agreement, in
certain sales of the Common Stock made by the Stockholder and the opportunity to
effect a sale of the Company upon the occurrence of certain conditions.
ACCORDINGLY, THE COMPANY, THE INVESTOR AND
STOCKHOLDER HEREBY AGREE AS FOLLOWS:
1. Sales By Stockholder.
---------------------
1.1 Tag-Along Rights. Prior to the effective date of a registration
statement filed by the Company under the Securities Act of 1933, as amended (the
"Act"), Stockholder will not transfer any shares of any class of the Common
Stock now owned or hereafter acquired by such Stockholder, except as
specifically provided in this Agreement. Should Stockholder receive one or more
written bona fide offers (each, a "Purchase Offer") to purchase or acquire any
of the shares of the Common Stock of the Company of which such Stockholder is
then the owner, and should such Stockholder accept or determine to accept such
Purchase Offer, then such Stockholder promptly (but not later than five Business
Days after receiving such offer) shall give written notice (the "Purchase
Notice") to the Company and the Investor of the material terms and conditions of
such Purchase Offer,
-1-
<PAGE>
including the proposed date of consummation of sale, which shall be no earlier
than 20 Business Days after receipt by the Company and the Investor of the
Purchase Notice.
1.2 Investor's Exercise of Tag-Along Rights. If the Investor, within
five Business Days after receipt of the Purchase Notice, delivers written notice
(the "Acceptance Notice") to the Stockholder and the Company of the Investor's
election to participate in such Stockholder's sale of Common Stock pursuant to
the specified terms and conditions of such Purchase Offer, then the Stockholder
shall reduce the number of shares of Common Stock which such Stockholder may
sell pursuant to such Purchase Offer by the number determined pursuant to
paragraph (i) below and shall make any arrangements necessary to include such
number of shares owned by the Investor in the purchase or acquisition referred
to in the Purchase Notice. The right of participation of the Investor shall be
subject to the following terms and conditions:
(i) The Stockholder shall include in its sale pursuant to the
Purchase Notice that number of shares owned by the Investor that is equal to the
product obtained by multiplying (a) the aggregate number of shares of Common
Stock covered by the Purchase Offer by (b) a fraction, the numerator of which is
the number of shares of Common Stock into which the shares of Series V Preferred
Stock owned by the Investor would be converted pursuant to the Company's
Charter, including any adjustments under the terms of the Charter (an "As
Converted Basis"), and the denominator of which is the sum of shares of Common
Stock (a) that are or could be owned on an As Converted Basis at the time by the
Investor, (b) that are then owned by such selling Stockholder and (c) that are
then owned by all others exercising rights of co-sale in connection with such
Purchase Offer.
(ii) Before consummation of the sale, the Investor shall deliver
to such selling Stockholder one or more certificates free and clear of all liens
and encumbrances, properly endorsed for transfer, which represent (a) the number
of shares of Common Stock which the Investor elects to sell pursuant to this
Section 1.2 or (b) the number of shares of Series V Preferred Stock which is at
such time convertible into the number of shares of Common Stock which the
Investor elects to sell pursuant to this Section 1.2; provided, however, that if
the purchase offeror objects to the delivery of Series V Preferred Stock in lieu
of Common Stock, the Investor may, in accordance with the Charter, convert into
Common Stock up to that number of shares of Series V Preferred Stock which is at
such time convertible into the number of shares of Common Stock which Investor
elects to sell pursuant to this Section 1.2, which exercise will be deemed to
occur simultaneously with, and only upon, the closing of such sale to the
purchase offeror in accordance with Section 1.3 below. Should the Investor elect
such contingent exercise, the Company will use its reasonable best efforts to
provide representative Common Stock share certificates representing such shares
at such closing.
1.3 Consummation of Sale by Investor. The delivery of the stock
certificate by such Stockholder to the purchase offeror in consummation of the
sale of the Common Stock pursuant to the terms and conditions specified in the
Purchase Notice to the
-2-
<PAGE>
Investor, and the payment by the purchase offeror to the Investor and such
Stockholder of that portion of the consideration to which the Investor and such
Stockholder are respectively entitled by reason of their participation in such
sale shall occur simultaneously at a closing at the principal office of the
Company, or such place as the selling and purchasing parties may agree, at a
time and at a date mutually agreeable to all of the selling and purchasing
parties.
1.4 Subsequent Offerings. The exercise or nonexercise of the rights
of the Investor hereunder to participate in one or more sales of Common Stock
made by any Stockholder shall not affect adversely the rights of the Investor to
participate in subsequent Common Stock sales by such Stockholder or any other
stockholder.
1.5 Exclusions to Tag-Along Rights. The participation rights of the
Investor shall not pertain or apply to (i) any sale pursuant to a registration
statement under the Act, (ii) any subsequent transfer by transferees acquiring
shares in a transaction in connection with which the Investor had co-sale rights
hereunder, (iii) any sales or transfers of Common Stock or securities
convertible into Common Stock to an affiliate (as defined in Rule 12b under the
Securities Exchange Act of 1934) of any Stockholder, or (iv) any sales or
transfers by a Stockholder who is a natural person to (x) such Stockholder's
Immediate Family, or (y) a trust for the benefit of a Stockholder's Immediate
Family; provided that in the case of a sale or transfer pursuant to clause (iii)
or (iv) above, such pledgee or transferee shall furnish the Investor with a
written agreement to be bound by and to comply with all provisions of this
Agreement applicable to such Stockholder. For purposes of this Agreement
"Immediate Family" shall mean a stockholder's siblings, spouse, ancestors and
descendants.
1.6 Non-Exercise of Tag-Along Rights. If the Investor does not
deliver the Acceptance Notice or does not otherwise exercise its rights as
contemplated by Section 1.2, then the Stockholder shall be free, for period of
90 days, to sell up to the number of shares specified in the Purchase Notice at
a price no greater than the price set forth in the Purchase Notice and on terms
not materially more favorable to such Stockholder than those set forth herein.
2. Rights Upon Non-Conforming Transfers.
-------------------------------------
2.1 Non-Conforming Transfers. In the event any Stockholder should
sell any Common Stock in contravention of the participation rights of the
Investor under this Agreement (a "Non-Conforming Transfer"), the Investor shall
have the option to sell to such Stockholder a number of shares of Common Stock
(or shares of Series V Preferred Stock convertible into such Common Stock) equal
to the number of shares the Investor should have been able to sell in connection
with the sale by such Stockholder on the following terms and conditions:
-3-
<PAGE>
(i) The price per share which the shares of Common Stock are to
be sold to such Stockholder shall be equal to the price per share paid to such
Stockholder by the third-party purchasers of such Stockholder's Common Stock;
(ii) The Investor shall deliver to such Stockholder, within
sixty days after receiving notice from such Stockholder or otherwise becoming
aware of the NonConforming Transfer, the certificate or certificates free and
clear of all liens and encumbrances representing shares to be sold, each
certificate being properly endorsed for transfer;
(iii) Such Stockholder, upon receipt of the share certificates
delivered pursuant to Section 2.1(ii) above, promptly shall pay in cash
(regardless of the form of consideration paid to such Stockholder by the
third-party purchaser), the aggregate Section 2.1 purchase price therefor, and
shall reimburse the Investor for any out-of-pocket additional expenses,
including reasonable legal fees and expenses, reasonably incurred in effecting
such purchase and resale.
3. Bring-Along Rights.
-------------------
3.1 Exercise of Rights. If the Company has insufficient cash (and
insufficient access to funds) to fully redeem all shares owned by Investor and
required to be redeemed following a "Trigger Event" (as defined in the Company's
Charter) and at least $1,000,000 is owed but unpaid by the Company to Investor
in connection with such required redemption, then, in connection with any
transaction or series of transactions, other than a transfer to an Affiliate of
Investor, involving the sale or other transfer of beneficial ownership of 80% or
more of the number of shares of Common Stock or Series V Preferred Stock held by
Investor ("Investor Shares"), upon giving 30-days written notice thereof to the
other Stockholders (the "Noninitiating Stockholders"), each Noninitiating
Stockholder shall tender for transfer that number of shares owned by such
Noninitiating Stockholder which is determined by multiplying the total number of
shares owned by such Noninitiating Stockholder by a fraction, the numerator of
which is the aggregate number of Investors Shares actually to be transferred in
the proposed transaction and the denominator of which is the aggregate number of
Investor Shares (as calculated immediately prior to such Proposed Transaction).
3.2 Price and Terms of Sale. Any such participation by the
Noninitiating Stockholder shall be at the same price per share (in form and
amount) applicable to the sale of Investor Shares and otherwise shall be on the
same terms and conditions (including any with respect to deferral of payment in
whole or in part and any option as to the form and amount of consideration to be
received) as are applicable to Investor; provided, that the Noninitiating
Stockholders shall not be required to (a) make any representation or warranty to
any person in connection with such transaction other than as to (i) good title
and the absence of liens and encumbrances with respect to such Noninitiating
Stockholder's shares, (ii) the corporate or other existence of such
Noninitiating Stockholder and (iii) the authority
-4-
<PAGE>
for and the validity and binding effect of, and the absence of any conflicts
under the charter documents and material agreements of such Noninitiating
Stockholder as to, any agreements entered into by such Noninitiating Stockholder
in connection with such sale or (b) provide any indemnities in connection with
such transaction except for a breach of the above representations and
warranties.
3.3 No Encumbrances. Stockholder shall deliver certificates
representing such Stockholder's Shares free and clear of all liens or
encumbrances (other than this Agreement) in connection with disposition pursuant
to Section 3.1.
4. Election of Directors.
----------------------
4.1 Directors of the Company. The parties acknowledge that the
holders of Series V Preferred Stock have a right to elect directors as set forth
in the Company's charter and desire to provide rights to the Investor in the
event all Series V Preferred Stock is converted to Common Stock. Accordingly, as
long as the Investor owns Common Stock representing more than 15% of the
outstanding Voting Securities the Investor shall be entitled to include two
nominees on the Company management slate of directors, and as long as the
Investor owns Common Stock representing more than 7% of the Voting Securities,
the Investor shall be entitled to include one nominee on the Company management
slate of directors. At all meetings of stockholders of the Company at which
directors are to be elected and in all actions by written consent to elect such
directors, the Stockholders and the Investor will vote their Common Stock, or
give their proxy to vote their Common Stock, for the nominees on the management
slate of directors recommended to the stockholders. This is intended to be a
power coupled with an interest and to constitute an irrevocable proxy.
4.2 Directors of Subsidiary. As long as the Investor owns Series V
Preferred Stock or Common Stock issued upon conversion thereof representing more
than 15% of the outstanding Voting Securities the Investor shall be entitled to
include one nominee on the Board of Directors of Subsidiary. The Company, as the
sole stockholder of Subsidiary, shall take all actions necessary to cause the
election of such nominee.
4.3 Further Assurances. The parties agree to take appropriate
action, if necessary, to comply with the requirements of the Maryland General
Corporation Law to make the provisions set forth at Sections 4.1 and 4.2 valid
and enforceable, including without limitation, to enter into a voting trust
agreement. For purposes of this Agreement, "Voting Securities" shall mean: (1)
the outstanding shares of Common Stock and (ii) securities of the Company
convertible into or exchangeable for such securities, in all cases determined on
an As Converted Basis.
4.4 Resignation. No later than 10 days following the date on which
the Investor owns Common Stock issued or issuable upon conversion of Series V
Preferred Stock representing less than 15% of the outstanding Voting Securities,
the Investor shall cause one director elected or nominated by it to resign from
the Company's board of directors and all
-5-
<PAGE>
committees thereof and from the Subsidiary's board of directors and all
committees thereof, and such vacancies shall be filled in accordance with the
bylaws of the Company and the Subsidiary, as the case may be. No later than 10
days following the date on which the Investor owns Common Stock issued or
issuable upon conversion of Series V Preferred Stock representing less than 7%
of the outstanding Voting Securities, the Investor shall cause all directors
elected or nominated by it to resign from the Company's board of directors and
all committees thereof and for the Subsidiary's board of directors and all
committees thereof, and such vacancies shall be filled in accordance with the
bylaws of the Company and the Subsidiary, as the case may be.
5. Legended Certificates.
----------------------
5.1 Legend. Each certificate representing shares of the Common Stock
or Preferred Stock of the Company now or hereafter owned by Stockholder shall be
endorsed with substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
VOTING AGREEMENT, A TAG-ALONG RIGHT AND A BRING-ALONG RIGHT
WHICH MAY REQUIRE DISPOSITION OF THE SECURITIES UNDER
CIRCUMSTANCES AND ON THE TERMS AND CONDITIONS SET FORTH IN A
STOCKHOLDERS AGREEMENT DATED SEPTEMBER 9, 1996 BY AND AMONG THE
HOLDER HEREOF, THE OTHER STOCKHOLDERS NAMED THEREIN, THE
CORPORATION AND AEW PARTNERS II, L.P., A COPY OF WHICH IS ON FILE
WITH THE OFFICE OF THE SECRETARY OF THE COMPANY. NO TRANSFER OF
THE CORPORATION'S COMMON STOCK WILL BE MADE ON THE CORPORATION'S
BOOKS UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS
OF SUCH STOCKHOLDERS AGREEMENT, A COPY OF WHICH AGREEMENT MAY BE
OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY OF
THE CORPORATION.
5.2 Removal of Legend. The legend described in Section 5.1 above
shall be removed upon termination of this Agreement in accordance with the
provisions of Section 7.1.
5.3 Notation in Stock Transfer Records. The Company shall make
appropriate notation in its stock transfer records of the restriction on
transfer provided for in this Agreement.
-6-
<PAGE>
5.4 Transferees' Execution of Stockholders Agreement. As a condition
to any transfer of shares of Common Stock, securities convertible into Common
Stock or options exercisable for Common Stock by Stockholder (other than a
transfer described in Section 1.5(i) or (ii)), the Company and Stockholder shall
cause the transferee of such securities to enter into a counterpart of this
Agreement (and if such transferee is a natural person, shall cause such
transferee's spouse, if any, to (x) become a party hereto or (y) consent in
writing to this Agreement and acknowledge in writing that such spouse has no
community property interest in such securities), and any certificates
representing such shares of Common Stock or the shares of Common Stock issuable
upon the conversion of such convertible securities or the exercise of such
options, shall be endorsed with the legend provided for in Section 5.1.
6. Representations and Warranties.
-------------------------------
6.1 Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to the Company and Investor that:
6.1.1 No Conflicts. The execution, delivery and performance of
this Agreement by such Stockholder will not result in the violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (i) any provision of the Stockholder's Charter or
Bylaws; (ii) any provision of any judgment, decree or order to which the
Stockholder is a party or by which it is bound, (iii) any material contract,
obligation or commitment to which such Stockholder is a party or by which it is
bound; or (iv) to the Stockholder's knowledge, any statute, rule or governmental
regulation applicable to the Stockholder.
6.1.2 Enforceability. Assuming the execution and delivery by the
Company and the Investor, this Agreement constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, subject as to enforcement (i) to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other laws of general
applicability relating to or affecting creditors' rights and (ii) to general
principles of equity, whether such enforcement is considered in a proceeding in
equity or at law.
6.1.3 Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration, or filing with, any
federal, state or local governmental authority in the United States or any other
person or entity (which has not been obtained) on the part of such Stockholder
is required in connection with such Stockholder's valid execution and delivery
of this Agreement other than those which have been or will be obtained prior to
such execution and delivery and those required under federal and state
securities laws.
6.2 Representations and Warranties of the Company. The Company
hereby represents and warrants to the Stockholder and Investor that:
-7-
<PAGE>
6.2.1 No Conflicts With Other Instruments. The execution,
delivery and performance of this Agreement will not result in any violation of,
be in conflict with, or constitute a default under, with or without the passage
of time or the giving of notice: (i) any provision of the Company's Charter or
Bylaws; (ii) any provision of any judgment, decree or order to which the Company
is a party or by which it is bound; (iii) any material contract, obligation or
commitment to which the Company is a party or which it is bound; or (iv) to the
Company's knowledge, any statute, rule or governmental regulation applicable to
the Company.
6.2.2 Enforceability. Assuming due execution and delivery by the
Stockholder and Investor, this Agreement constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject, as to enforcement, (i) to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws of general applicability
relating to or affecting creditors' rights, and (ii) to general principles of
equity, whether such enforcement is considered in a proceeding an equity or a
law.
6.2.3 Authorization. All corporate action on the part of the
Company, necessary for the authorization, execution, delivery and performance of
all obligations under this Agreement has been taken.
6.2.4 Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration, or filing with any
federal, state or local governmental authority in the United States, or any
other person or entity (which has not been obtained) on the part of the Company
as required in connection with the Company's valid execution and delivery of
this Agreement other than those which have been or will be obtained prior to
such execution and delivery and those required under federal and state
securities laws.
6.2.5 Ownership of Outstanding Securities. The Stockholder owns
substantially all of the outstanding equity securities issued by the Company,
including all securities (other than stock options granted to employees and
non-employee directors of the Company and Series U Preferred Stock and Series T
Preferred Stock) convertible into equity securities other than the Series V
Preferred Stock.
6.3 Representations and Warranties of Investor. Investor hereby
represents and warrants to the Stockholders and the Company that:
6.3.1 No Conflicts. The execution, delivery and performance of
the Agreement by Investor will not result in the violation or be in conflict or
constitute default under with or without the passage of time or the giving of
notice, (i) any provision of the Investor's Limited Partnership Agreement, (ii)
any provision of any judgment, decree or order to which Investor is a party or
by which it is bound, (iii) any material contract,
-8-
<PAGE>
obligation or commitment to which Investor is a party or by which it is bound,
or (iv) to Investor's knowledge, any statute, rule or governmental regulation
applicable to the Investor.
6.3.2 Enforceability. Assuming due execution and delivery by the
Stockholder and the Company, this Agreement constitutes a legal, valid and
binding obligation of the Investor, enforceable against the Investor in
accordance with its terms, subject, as to enforcement, (i) to bankruptcy,
insolvency, reorganization, arrangement, moratorium or other laws of general
applicability relating to or affecting creditors' rights and (ii) to general
principles of equity, whether such enforcement is considered in a proceeding in
equity or at law.
6.3.3 Authorization. All action on the part of the Investor, its
general partner and its officers necessary for the authorization, execution,
delivery and performance of all obligations under this Agreement have been
taken.
6.3.4 Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority in the United States, or of any
other person or entity (which has not been obtained) on the part of the Investor
is required in connection with the Investor's valid execution and delivery of
this Agreement.
7. Miscellaneous.
--------------
7.1 Termination. The provisions of Sections 1, 2 and 3 of this
Agreement shall terminate upon the earliest of (a) such time as AEW shall no
longer be the owner of shares of Series V Preferred Stock (or shares of Common
Stock received upon conversion of such shares) that represent at least 15% of
the total outstanding Voting Securities of the Company, (b) September 9, 2006
and (c) the consummation of an underwritten public offering of the Company's
Common Stock registered under the Act. The provisions of Sections 4 and 5 of
this Agreement shall terminate at such time as AEW shall no longer be the owner
of shares of Common Stock that represent at least 7% of the outstanding Voting
Securities of the Company. Unless sooner terminated in accordance with the
preceding sentence, this Agreement shall terminate immediately prior to the
earliest of any one of the following events: (a) any transaction or the first in
a series of related transactions (including, without limitation, any
reorganization, merger or consolidation) that will result in the Company's
stockholders immediately after such transaction not holding (by virtue of such
shares or securities issued solely with respect thereto) at least fifty percent
(50%) of the voting power of the surviving or continuing entity; or (b) a sale
of all or substantially all of the assets of the Company, unless the Company's
stockholders immediately prior to such sale will, as a result of such sale, hold
(by virtue of securities issued as consideration for the Company's sale) at
least fifty percent (50%) of the voting power of the purchasing entity. For the
purposes hereof, "Voting Securities" shall mean: (i) Common Stock and any other
issued and outstanding securities of the Company generally entitled to vote for
the election of directors of the Company and other matters for which the
shareholders of the Common Stock
-9-
<PAGE>
are entitled to vote; (ii) securities of the Company convertible into or
exchangeable for such securities; and (iii) options, rights and warrants issued
by the Company to acquire such securities.
7.2 Notices. In order to be effective, any notice or other
communication required or permitted hereunder shall, unless otherwise stated
herein, be in writing and shall be transmitted by messenger, delivery service,
mail, or telecopy to the Company and Parent at their principal executive offices
and if to the Investor:
Aldrich, Eastman & Waltch, L.P.
225 Franklin Street
Boston, Massachusetts 02110
Telecopier: (617) 261-955
Attention: Thomas H. Nolan, Jr.
with copies to:
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104
Telecopier: (415) 772-6268
Attention: Brian Smith
or at such other address as a party shall designate in a written notice to the
other parties hereto given in accordance with this Section. All notices and
other communications shall be effective (i) if sent by messenger or delivery
service, when delivered, (ii) if sent by mail, two days after having been sent
by certified mail, with return receipt requested or (iii) if sent by telecopier,
when sent. In order to be effective, any notice transmitted to an address
outside the United States of America by any means other than telecopier shall at
the time of transmittal be duplicated by counterpart telecopier notice.
7.3 Costs of Enforcement. If any party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings or otherwise, the
non-prevailing party shall pay all reasonable costs and expenses incurred by the
prevailing party, including, without limitation, all reasonable attorneys' fees.
7.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that none of the Company, Investor or any Stockholder may assign
or transfer their respective rights hereunder or any interest herein or delegate
their duties hereunder without the prior written consent of the other parties
hereto.
-10-
<PAGE>
7.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland applicable to contracts
entered into and to be performed wholly within Maryland by Maryland residents.
7.6 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which, when so executed, shall be deemed to be an original and all of
which, when taken together, shall constitute but one and the same agreement.
7.7 Incorporation of Exhibits and Schedules by Reference. All
Exhibits and Schedules to this Agreement are incorporated herein by this
reference.
7.8 Entire Agreement; Amendment. This Agreement (including the
Exhibits and Schedules) constitutes the entire agreement between the Company,
Investor and the Stockholders with respect to the subject matter hereof,
superseding all prior or contemporaneous negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be modified or amended or any provision hereof may be waived only
with the written consent of the Company, the Investor and the Stockholders
holding a majority of each outstanding class of Common and Preferred Stock.
7.9 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the executors, administrators, legal representatives,
heirs, successors and assigns of the parties to this Agreement, unless expressly
provided otherwise in this Agreement.
7.10 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
[TEXT CONTINUED ON NEXT PAGE]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, this
Agreement to become effective as of the date first above written.
HEALTH SCIENCE PROPERTIES, INC.,
A Maryland Corporation
By: /s/ Joel S. Marcus
- --------------------------------
Name:
Title:
HEALTH SCIENCE PROPERTIES HOLDING CORPORATION,
a Maryland Corporation
By: /s/ Joel S. Marcus
- --------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
-12-
<PAGE>
[SIGNATURES CONTINUED]
AEW PARTNERS II, L.P.,
a Delaware limited partnership
By: AEW II, L.P.,
Its General Partner
By: PARTNERS II HOLDINGS, L.P.,
Its General Partner
By: AEW II CORPORATION,
a Massachusetts corporation
Its General Partner
By: /s/ Patrick J. Sullivan
-----------------------------
Patrick J. Sullivan
Its: Vice President
-13-
Exhibit 7(b)
03337.78538 505 162661.d4
1/31/97 11:55 am
AGREEMENT REGARDING STOCK TRANSFER
AND EXERCISE OF RIGHTS
THIS AGREEMENT REGARDING STOCK TRANSFER AND EXERCISE RIGHTS (the
"Agreement") is made as of February 26, 1997, between AEW PARTNERS II, L.P., a
Delaware limited partnership (the "Seller") and AEW HEALTH SCIENCE PROPERTIES
CO-INVESTMENT, L.P., a Delaware limited partnership (the "Buyer").
Background
----------
A. Pursuant to a Series V Convertible Preferred Stock Purchase Agreement (the
"Original Purchase Agreement") dated September 9, 1996 among Seller, Health
Science Properties, Inc. (the "Company") and Health Science Properties Holding
Corporation (the "Parent"), Seller has acquired 27,500 shares (the "Acquired
Shares") of Series V Preferred Stock of the Company, and has an option to
acquire an additional 22,500 shares of Series V Preferred Stock of the Company
(the "Option Shares," and together with the Acquired Shares, the "Committed
Shares").
B. In connection with the Original Purchase Agreement, the Seller, the Company
and the parent entered into a Stockholders Agreement dated September 9, 1996
(the "Stockholders Agreement").
C. The Seller desires to sell to the Buyer 6,600 shares of the Acquired Shares
and contribute to the Buyer an additional 66 shares of the Acquired Shares on
the terms set forth herein.
THE PARTIES AGREE AS FOLLOWS:
1. Definitions. Capitalized terms used herein without definition shall have the
meaning given to them in the Original Purchase Agreement.
2. Purchase and Sale of Stock. The Seller hereby agrees to sell to the Buyer,
and the Buyer hereby agrees to purchase from the Seller, 6,600 of the Acquired
Shares for an aggregate purchase price of $6,700,982.38 (the "Purchase Price").
The Acquired Shares shall be allocated as follows: 3,840 shares shall be
transferred from the tranche of Acquired Shares acquired by the Seller from the
Company on September 9, 1996; 1,400 shares shall be transferred from the tranche
of Acquired Shares acquired by the Seller from the Company on October 16, 1996;
and 1,320 shares shall be transferred from the tranche of Acquired Shares
acquired by the Seller from the Company on December 10, 1996.
3. Contribution of Stock. The Seller hereby agrees to contribute to the Buyer an
additional 66 shares to be allocated as follows: 39 shares shall be transferred
from the tranche of Acquired Shares acquired by the Seller from the Company on
September 9, 1996; 14 shares
<PAGE>
03337.78538 505 162661.d4
1/31/97 11:55 am
shall be transferred from the tranche of Acquired Shares acquired by the Seller
from the Company on October 16, 1996; and 13 shares shall be transferred from
the tranche of Acquired Shares acquired by the Seller from the Company on
December 10, 1996.
4. Closing. The purchase and sale of the Acquired Shares, as well as the
contribution of such shares, shall take place on January __, 1997, or on such
other date as the Seller and the Buyer mutually agree (the "Closing"), at which
time the Buyer shall deliver the Purchase Price to the Seller and the Seller
shall deliver to the Buyer certificates representing the Acquired Shares and the
stock assignments transferring the Acquired Shares to the Buyer effective as of
the Closing.
5. Assignment of Rights. The Seller hereby assigns to the Buyer all rights of
the Seller under the Original Purchase Agreement (including, without limitation,
Section 8 thereof and its proportionate share of any action arising out of
breach of representations, warranties or covenants under the Original Purchase
Agreement) and the Stockholders Agreement with respect to the Acquired Shares
transferred hereunder. In addition, Buyer hereby agrees to purchase directly
from the Company 24% of all Option Shares offered to the Seller under the
Original Purchase Agreement, and the Seller hereby assigns to the Buyer all
rights of the Seller under the Original Purchase Agreement (including, without
limitation, Section 8 thereof) and the Stockholders Agreement with respect to
such shares.
6. Board Representation. Section 5.11 of the Original Purchase Agreement,
Section 4.1 of the Stockholders Agreement and Article V, Section F(11) of the
Articles of Amendment provide the Seller and any other AEW Affiliate that is a
transferee of such rights, the right to elect a specified number of directors of
the Company, subject to the limitations set forth therein. Seller and Buyer
hereby agree that: (a) so long as they are entitled to elect two directors of
the Company in accordance with the provisions referenced in the preceding
sentence, each party shall vote all of the shares of Series V Preferred Stock of
the Company (and Common Stock issuable upon conversion thereof) it holds in
favor of electing to the Board of Directors of the Company one nominee of Buyer
and one nominee of Seller; (b) at any time they are only entitled to elect one
director of the Company, each party shall vote all of the shares of Series V
Preferred Stock of the Company (and Common Stock issuable upon conversion
thereof) it holds in favor of electing to the Board of Directors of the Company
one nominee of the shareholder that is designated by the Seller to nominate such
director; and (c) if at any time they are entitled to elect three or more
directors of the Company, each party shall vote all of the shares of Series V
Preferred Stock of the Company (and Common Stock issuable upon conversion
thereof) it holds in favor of electing to the Board of Directors of the Company
a pro rata number of nominees of Buyer and Seller in accordance with the share
holdings of Buyer and Seller (but in any event both Buyer and Seller shall each
be entitled to nominate at least one director).
7. Conversion of Redemption of Series V Preferred Stock. Both Buyer and Seller
agree that they shall not voluntarily convert shares of Series V Preferred Stock
of the Company to
2
<PAGE>
03337.78538 505 162661.d4
1/31/97 11:55 am
Common Stock or voluntarily redeem shares of Series V Preferred Stock of the
Company unless such action is approved by holders of a majority of the
outstanding shares of Series V Preferred Stock, in which case Buyer and Seller
hereby agree that each will voluntarily convert or redeem, as the case may be,
all shares of Series V Preferred Stock it then holds.
8. Sales by Buyer of Seller.
8.1 Tag-Along Rights. Buyer and Seller hereby agree that they will not
transfer any shares of Series V Preferred Stock or Common Stock issuable upon
conversion thereof, in each case now owned or hereafter acquired, except as
specifically provided in this Section 8. Should either Buyer or Seller (in
either case, the "Selling Stockholder") propose to sell, exchange or otherwise
dispose of any shares of capital stock it holds in the Company, it shall give 15
days prior written notice to the other party and shall include in its sale,
exchange or disposition that number of shares owned by the other party that is
equal to the product obtained by multiplying (a) the aggregate number of shares
of capital stock being sold by (b) a fraction, the numerator of which is the
number of shares of capital stock held by the other party on an as-converted
basis and the denominator of which is the sum of the shares of capital stock
held by the Selling Stockholder and the other party, each on an as converted
basis. Any such participation by the non-initiating Stockholder shall be at the
same price per share (in form and amount) applicable to the sale of the Selling
Stockholder's shares and otherwise shall be on the same terms and conditions
(including any with respect to deferral of payment in whole or in part and any
option as to the form and amount of consideration to be received) as are
applicable to the Seller Stockholder; provided, that the non-initiating
Stockholder shall not be required to (a) make any representation or warranty to
any person in connection with such transaction other than as to (i) good title
and the absence of liens or encumbrances with respect to such non-initiating
Stockholder's shares, (ii) the corporate or other existence of such non-
initiating Stockholder and (iii) the authority for and the validity and binding
effect of, and the absence of any conflicts under the charter documents and
material agreements of such non- initiating Stockholder as to, any agreements
entered into by such non-initiating Stockholder in connection with such sale or
(b) provide any indemnities in connection with any such transaction except for a
breach of the above representations and warranties. The participation rights of
Section 8.1 shall not pertain or apply to (i) any sale pursuant to which the
non-selling party has already been offered the right to participate by the
acquiror or (ii) any transfers to a general or limited partner of a party.
8.2 Drag Along Rights. Buyer and Seller hereby agree that if holders of
a majority of the Series V Preferred Stock or Common Stock issuable upon
conversion thereof (the "Majority Holders") agree to sell 100% of such shares to
a third party, or to vote in favor of a transaction which will have the effect
of selling all of the Company to a third party, then the parties hereto shall
sell all of their shares to such third party for the same consideration per
share and otherwise on the same terms and conditions as the Majority Holders, or
to vote in favor of such transaction, if so requested by the Majority Holders.
3
<PAGE>
03337.78538 505 162661.d4
1/31/97 11:55 am
9. Future Investments In the event that the Company subsequently offers to
Seller and/or Buyer the right to purchase additional shares of Series V
Preferred Stock ("Additional Shares") in excess of the Committed Shares, Buyer
shall inform Seller of the percentage (if any) of its allocable portion (24%) of
the Additional Shares which Buyer is committed to purchase pursuant to the
provisions of Section 4.3 of Buyer's partnership agreement ("Section 4.3"). In
the event that Buyer elects to purchase less than all of its allocable portion
of the Additional Shares, Buyer agrees to assign to Seller, to the extent
assignable, its right to purchase any or all of the Additional Shares declined
by Buyer, provided that (a) in no event shall Seller be obligated to purchase
such shares, and (b) Seller may not purchase any Additional Shares on terms
which vary in any material respect from the terms offered to the Buyer (or its
Limited Partners) pursuant to Section 4.3. Seller shall not make any investment
in the Parent, the Company or their subsidiaries except for (i) the Committed
Shares and (ii) additional shares of Class V Preferred Stock; provided that in
the case of clause (ii), the Buyer has an opportunity to purchase its pro rata
share in accordance with this Section 9 and Section 4.3.
10. Entire Agreement; Successors and Assigns. Except as is specifically
referenced, this Agreement constitutes the entire contract between the Seller
and the Buyer relative to the subject matter hereof. Any unreferenced previous
agreement between the Seller and the Buyer is superseded by this Agreement.
Subject to the exceptions specifically set forth in this Agreement, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland applicable to contracts
entered into and wholly to be performed within the State of Maryland by Maryland
residents.
12. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SIGNATURE PAGE ATTACHED
4
<PAGE>
03337.78538 505 162661.d4
1/31/97 11:55 am
The Seller: AEW PARTNERS II, L.P.,
a Delaware limited partnership
By: AEW II, L.P., its General Partner
By: PARTNERS II HOLDINGS,
L.P., its General Partner
By: AEW II CORPORATION
its General Partner
By: /s/ Marc L. Davidson
------------------------------
Name: Marc L. Davidson
Title: Vice President
The Buyer: AEW HEALTH SCIENCE PROPERTIES
CO-INVESTMENT, L.P.
By: AEW PARTNERS II, L.P., its
General Partner
By: AEW II, L.P., its General Partner
By: PARTNERS II HOLDINGS,
L.P., its General Partner
By: AEW II CORPORATION
its General Partner
By: /s/ Marc L. Davidson
--------------------------
Name: Marc L. Davidson
Title: Vice President
5
EXHIBIT 7(c)
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the undersigned agree to the joint filing on behalf of each of
them of a statement on Schedule 13D (including amendments thereto) with respect
to the Common Stock of Alexandria Real Estate Equities, Inc. and further agree
that this agreement be included as an exhibit to such filing. Each party to the
agreement expressly authorizes each other party to file on its behalf any and
all amendments to such statement. Each party to this agreement agrees that this
joint filing agreement may be signed in counterparts.
In evidence whereof, the undersigned have caused this Agreement to be
executed on their behalf this 5th day of June, 1997.
AEW PARTNERS II, L.P.
By: AEW II, L.P.,
its general partner
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
------------------------
(SIGNATURES CONTINUED)
<PAGE>
(SIGNATURES CONTINUED)
AEW HEALTH SCIENCE PROPERTIES CO-INVESTMENT, L.P.
By: AEW PARTNERS II, L.P.,
its general partner
By: AEW II, L.P.,
its general partner
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
-------------------------
AEW II, L.P.
By: PARTNERS II HOLDINGS, L.P.,
its general partner
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
----------------------------
(SIGNATURES CONTINUED)
<PAGE>
(SIGNATURES CONTINUED)
PARTNERS II HOLDINGS, L.P.
By: AEW II CORPORATION,
its general partner
By: /s/ J. Grant Monahon
-----------------------
AEW II CORPORATION
By: /s/ J. Grant Monahon
--------------------------
AEW CAPITAL MANAGEMENT, L.P.
By: AEW CAPITAL MANAGEMENT, INC.,
its general partner
By: /s/ James J. Finnegan
--------------------------
AEW CAPITAL MANAGEMENT, INC.
By: /s/ James J. Finnegan
---------------------------
