Unsecured Line Of Credit Loan Agreement

Exhibit 10.20


UNSECURED LINE OF CREDIT LOAN AGREEMENT
dated as of January 24, 1997


By and Between


HEALTH SCIENCE PROPERTIES, INC.,
a Maryland Corporation
As Borrower


and


BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
As Bank


1. LINE OF CREDIT AMOUNT AND TERMS ............................ 1

1.1 Line of Credit Amount ............................... 1
1.2 Availability Period ................................. 1
1.3 Interest Rate ....................................... 1
1.4 Loan Documents ...................................... 1
2. FEES, EXPENSES ............................................. 2

2.1 Fees ................................................ 2
2.2 Expenses and Costs .................................. 2
3. DISBURSEMENTS, PAYMENTS AND COSTS .......................... 2

3.1 Requests for Credit ................................. 2
3.2 Disbursement and Payment Records .................... 3
3.3 Telephone and Telefax Authorization ................. 3
3.4 Direct Debit ........................................ 3
3.5 Banking Days ........................................ 4
4. CONDITIONS ................................................. 4

4.1 Authorizations ...................................... 4
4.2 Governing Documents; Good Standing Certificates ..... 4
4.3 Loan Documents ...................................... 4
4.4 Legal Opinion ....................................... 4
4.5 Payment of Fees ..................................... 4
4.6 Other Items ......................................... 4
5. REPRESENTATIONS AND WARRANTIES ............................. 5

5.1 Organization of Borrower; Good Standing ............. 5
5.2 Authorization; Enforceable Agreement ................ 5
5.3 Financial Information ............................... 5
5.4 Lawsuits ............................................ 6
5.5 Title to Assets ..................................... 6


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Table of Contents


5.6 Permits, Franchises ................................. 7
5.7 Income Tax Returns .................................. 7
5.8 ERISA Plans ......................................... 8
5.9 Other Obligations ................................... 8
5.10 Event of Default .................................... 8
5.11 Location of Borrower ................................ 8
6. COVENANTS .................................................. 8

6.1 Use of Proceeds ..................................... 9
6.2 Financial Information ............................... 9
6.3 Other Information ................................... 9
6.4 Financial Covenants ................................. 10
6.10 Keeping Guarantor Informed .......................... 12
6.11 Notices to Bank ..................................... 13
6.12 Audits; Books and Records ........................... 13
6.14 Compliance with Laws ................................ 13
6.15 Preservation of Rights .............................. 14
6.16 Insurance ........................................... 14
6.17 ERISA Plans ......................................... 14
6.18 Additional Negative Covenants ....................... 14
6.19 Cooperation ......................................... 15
7. COLLATERAL ................................................. 15
8. DEFAULT .................................................... 15

8.1 Failure to Pay ...................................... 15
8.2 False Information ................................... 15
8.3 Bankruptcy .......................................... 15
8.4 Receivers ........................................... 16
8.5 Change of Management ................................ 16
8.6 Judgments ........................................... 16


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Table of Contents


8.7 ERISA Plans ......................................... 16
8.8 Government Action ................................... 16
8.9 Material Adverse Change ............................. 17
8.10 Default under Related Documents ..................... 17
8.11 Other Breach Under This Agreement ................... 17
9. ENFORCING THIS AGREEMENT; MISCELLANEOUS .................... 17

9.1 Remedies ............................................ 17
9.2 California Law ...................................... 17
9.3 Arbitration ......................................... 17
9.4 Presentment, Demands and Notice ..................... 18
9.5 Indemnification ..................................... 18
9.6 Attorneys' Fees ..................................... 19
9.7 Notices ............................................. 19
9.8 Multiple Borrowers. Intentionally Deleted .......... 19
9.9 General Partners. Intentionally Deleted ............ 19
9.10 Successors and Assigns .............................. 19
9.11 No Third Parties Benefited .......................... 19
9.12 Integration; Relation to Any Loan Commitment;
Headings ............................................ 19
9.13 Interpretation ...................................... 20
9.14 Severability; Waivers; Amendments ................... 20
9.15 Confidentiality ..................................... 20
9.16 Counterparts ........................................ 20


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LINE OF CREDIT LOAN AGREEMENT
(Unsecured)


This line of credit loan agreement (the "Agreement") dated as of January 24, 1997, by and between Bank of America National Trust and Savings Association (the "Bank") and Health Science Properties Inc., a Maryland Corporation (the "Borrower").


Bank has agreed to provide this line of credit to Borrower on the terms and conditions set forth herein. This line of credit is revolving and is unsecured.


1. LINE OF CREDIT AMOUNT AND TERMS.


1.1 Line of Credit Amount.


(a) During the Availability Period described below, the Bank will provide a line of credit (also referred to as the "Loan") to the Borrower. The amount of the line of credit is Two Million Five Hundred Thousand Dollars ($2,500,000.00) (the "Commitment" or the "Maximum Loan Amount").


(b) This is a revolving line of credit. During the Availability Period, the Borrower may request advances for the amount of the available line of credit or less, may repay principal amounts, and may reborrow them.


(c) The Borrower agrees not to permit the outstanding principal balance of the line of credit to exceed the Commitment.


1.2 Availability Period.


The line of credit is available (the "Availability Period") between the date of this Agreement and December 31, 1997 (the "Expiration Date") unless there is an Event of Default. If there is an Event of Default, then in addition to the Bank's other remedies, the Bank may terminate the Availability Period and may require the Borrower to repay any amounts outstanding under the line of credit immediately.


1.3 Interest Rate.


Borrower is executing a promissory note (the "Note") in the amount of the Commitment evidencing the Loan and payable to the Bank. The Note sets forth the interest rate and certain other terms and conditions applicable to the Loan.


1.4 Loan Documents.


The "Loan Documents" are defined as the documents indicated below, each dated as of the date of this Agreement unless indicated otherwise. A capitalized term used in this Agreement but not defined herein has the meaning given in the other Loan Documents.


(a) This Agreement


(b) The Note


(c) Payment Guaranty ("Guaranty") executed by Health Science
Properties Holding Corporation as Guarantor.


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(d) Corporate Resolution to:


(i) borrow; and


(ii) execute Payment Guaranty, as to the Guaranty


certified by the Corporate Secretary of the corporation. The Corporate Resolution shall also contain a Certificate of Incumbency for the authorized signing officers, containing their specimen signatures and certified by the Corporate Secretary.


2. FEES, EXPENSES


2.1 Fees.


(a) Loan fee. The Borrower agrees to pay a fee of Twelve Thousand Five Hundred and 00/100 Dollars ($12,500.00) due on the date of delivery of the signed Loan Documents.


(b) Unused Commitment fee. From and after the date Bank is required to extend any credit to Borrower as more specifically described herein, Borrower shall pay a fee calculated at 0.25% per year on any difference between the Commitment and the amount of credit it actually uses, determined by the weighted average Loan balance maintained during the specified period, from the date hereof, until the next following April 1 and during each subsequent three month period commencing on the first calendar day of each July, October, and November thereafter, and on the Expiration Date.


2.2 Expenses and Costs.


(a) Borrower shall pay all reasonable costs and expenses incurred by Bank in connection with the making, disbursement and administration of the Loan, and in the exercise of any of Bank's rights or remedies under the Loan Documents. Such costs and expenses include reasonable legal fees and expenses of Bank's counsel and any other reasonable fees and costs for services, regardless of whether such services are furnished by Bank's employees or by independent contractors. Borrower acknowledges that the other fees payable to Bank do not include amounts payable by Borrower under this Section 2.2.


(b) The Borrower agrees to indemnify the Bank from and hold it harmless against any transfer or documentary taxes, assessments or charges imposed by any governmental authority by reason of the execution, delivery and performance of the Loan Documents. Borrower's obligations under this Section 2.2 shall survive payment of the Loan and assignment of any rights hereunder.


3. DISBURSEMENTS, PAYMENTS AND COSTS


3.1 Requests for Credit.


(a) Borrowing Notice. Each request for an advance shall be made upon the irrevocable written notice of Borrower in a manner reasonably acceptable to the Bank (including notice via facsimile confirmed by a mailed copy) in the form of a Borrowing Notice (attached hereto as Exhibit A).


(i) Each Borrowing Notice shall contain a certification from Jerry Sudarsky or Joel Marcus or another authorized officer of the


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Borrower that (A) no Event of Default, after giving effect to the requested borrowing, will exist, (B) the aggregate outstanding balance of the line of credit after giving effect to the requested borrowing will not exceed the Commitment and setting forth the basis for such calculation, and (C) the proceeds from the requested borrowing will be used only for purposes permitted under the Agreement.


(ii) Each Borrowing Notice shall be submitted to and received by Bank on the dates and at the times set forth in Exhibit A to the Note.


3.2 Disbursement and Payment Records.


Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank.


3.3 Telephone and Telefax Authorization.


(a) The Bank may honor telephone or telefax instructions for advances or repayments (or for the designation of any optional interest rates that may be permitted by the Note) given by any one of the individuals authorized to sign loan documents on behalf of the Borrower, or any other individual designated by any one of such authorized signers.


(b) Advances will be deposited in Borrowers account number _________, or such other of the Borrower's accounts with the Bank as designated in writing by the Borrower.


(c) The Borrower indemnifies and releases the Bank (including its officers, employees, and agents) from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions Bank reasonably believes are made by any individual authorized by the Borrower to give such instructions other than if such loss results from the gross negligence, willful misconduct or bad faith of the Bank or its officers or employees. This indemnity and release shall survive this Agreement's termination.


3.4 Direct Debit.


(a) Borrower agrees that payments due on the Note and any fees owed hereunder will be deducted automatically on the due date from account number ____________ maintained by Borrower at the Bank (the "Account"). If a due date does not fall on a Banking Day, Bank will debit the Account on the first Banking Day following the due date.


(b) Borrower will maintain sufficient funds in the Account on the dates Bank enters debits authorized by this Agreement. If there are insufficient funds in the Account on the date Bank enters any debit authorized by this Agreement, without limiting Bank's other remedies in such event, the debit will be reversed.


(c) Either Borrower or Bank may terminate this direct debit arrangement at any time by providing prior written notice to the other.


(d) Approximately five (5) days prior to each due date, the Bank will mail to the Borrower a statement of the amounts that will be due on that due date (the "Billed Amount"). The calculation will be made on the assumptions that no new extensions of credit or payments will be made between the date of the billing statement and the due date and that there will be no


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changes in the applicable interest rate. The Bank will debit the Account for the Billed Amount, regardless of the actual amount due on that date (the "Accrued Amount"). If the Billed Amount debited to the Account differs from the Accrued Amount, the discrepancy will be treated as follows:


(i) If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following due date will be increased by the amount of the discrepancy. The Borrower will not be in default by reason of such discrepancy.


(ii) If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following due date will be decreased by the amount of the discrepancy.


Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of principal outstanding without compounding. The Bank will not pay the Borrower interest on any overpayment.


3.5 Banking Days.


A Banking Day is defined in the Note. All payments and disbursements which would be due on a day which is not a Banking Day will be due on the next Banking Day. All payments received on a day which is not a Banking Day will be applied to the Loan on the next Banking Day.


4. CONDITIONS


The Bank must receive the following items, in form and content reasonably acceptable to the Bank, before it is first required to extend any credit to the Borrower under this Agreement:


4.1 Authorizations.


Evidence that the execution, delivery and performance by the Borrower of the Loan Documents have been duly authorized.


4.2 Governing Documents; Good Standing Certificates.


A copy of the Borrower's and of any Guarantor's charter. Certificate of good standing for the Borrower from the state where formed and from any other state in which the Borrower is required to qualify to conduct its business unless failure to qualify would not have a material adverse effect on Borrower.


4.3 Loan Documents.


Duly executed Loan Documents.


4.4 Legal Opinion.


A written opinion from the Borrower's legal counsel which is reasonably acceptable to the Bank.


4.5 Payment of Fees.


Payment of all accrued and unpaid expenses incurred by the Bank as provided for by the Loan Documents.


4.6 Other Items.


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Any other documents and other items Bank may reasonably require as conditions precedent to this Agreement.


5. REPRESENTATIONS AND WARRANTIES


When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes the following representations and warranties except as otherwise disclosed to the Bank in the disclosure schedule attached hereto (the "Disclosure Schedule"). Each request for an extension of credit constitutes a renewed representation and warranty subject to the Disclosure Schedule.


5.1 Organization of Borrower; Good Standing.


The Borrower is duly formed and existing under the laws of the state where organized. In each state in which the Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with any fictitious name statute unless failure to so comply would not have a material adverse effect on Borrower.


5.2 Authorization; Enforceable Agreement.


This Agreement and the other Loan Documents are within the Borrower's powers, have been duly authorized, and do not conflict with any of its organizational documents. To the best of Borrower's knowledge the Loan Documents do not conflict with any laws, agreements, or obligations by which the Borrower is bound. This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or document required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable.


5.3 Financial Information.


(a) The balance sheet of the Borrower as of November 30, 1996, and the related profit and loss statement for the period ended on that date, a copy of which have been previously delivered to Bank by the Borrower, and all other financial statements and data submitted in writing by the Borrower to the Bank in connection with the request for the Loan are true and correct in all material respects. Said balance sheet and profit and loss statement present fairly, in all material respects, the financial condition of the Borrower as at the date thereof and the results of the operations of the Borrower for the period covered thereby, and have been prepared in accordance with generally accepted accounting principles ("GAAP") on a basis consistently applied, subject to year-end adjustments consisting only of normal recurring accruals and the absence of notes required by GAAP. Except as to the "PaineWebber Acquisition" more specifically described in (i) herein below, the Borrower has no knowledge of any liabilities, contingent or otherwise, not reflected in said balance sheet other than liabilities that would be set forth in notes thereto prepared in accordance with GAAP. Borrower has not entered into any material commitments or material contracts which are not reflected in said balance sheet which may have a materially adverse effect upon its financial condition, operations or business as now conducted. Since said date there have been no changes in the assets or liabilities or financial condition of the Borrower other than changes in the ordinary course of business, and no changes have been materially adverse changes.


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(i) the PaineWebber Acquisition refers to contractual agreements with PaineWebber Incorporated and certain affiliates thereof (collectively, "PaineWebber") concerning the properties commonly known as 1550 Gude Drive, Rockville, Maryland, 1330 Piccard Drive, Rockville, Maryland and 14225 Newbrook Drive, Chantilly, Virginia, which properties must be purchased by Borrower upon the occurrence of certain events. Copies of said contractual agreements shall be furnished to Bank upon request.


(b) All financial and other information that has been or will be supplied to the Bank, including the financial statements of the Borrower and any Guarantor, is, to the best of Borrower's knowledge:


(i) sufficiently complete to give the Bank accurate knowledge of the subject's financial condition;


(ii) in form and content as required by the Bank;


(iii) in compliance with any government regulations that apply; and


(iv) does not fail to state any material facts necessary to make the information contained therein not misleading.


All such information was, to the best of Borrower's knowledge, and will be, prepared in accordance with GAAP unless otherwise noted.


5.4 Lawsuits.


There is no lawsuit, arbitration, claim or other dispute pending or to Borrower's knowledge, threatened against the Borrower which, if lost, would materially impair the Borrower's financial condition or ability to repay the Loan, except as has been previously disclosed in writing to the Bank.


5.5 Title to Assets.


The Borrower has good and clear title to its assets, and the same are not subject to any mortgages, deeds of trust, pledges, security interests or other encumbrances other than Permitted Liens. Permitted Liens shall mean:


a.) Mortgages and liens existing on the date hereof, or any mortgage or lien which replaces an existing mortgage or other lien;


b.) Carriers', warehousemen's, mechanics', landlords', materialmen's suppliers', and other like liens and charges arising by operation of law or in the ordinary course of business, so long as such obligations are not overdue or are the subject of a Permitted Protest. Permitted Protest is defined in Section 6.6 below.


c.) Liens for unpaid taxes, assessments and government charges that either (i) are not yet due and payable or (ii) are the subject of a Permitted Protest;


d.) Liens arising in connection with worker's compensation, unemployment insurance, appeal and release bonds and progress payments under government


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contracts, so long as such obligations are not overdue or are the subject of a Permitted Protest;


e.) The, (i) giving, simultaneously with or within (90) days after the acquisition or construction of real property or tangible personal property, of any purchase money lien on real property or tangible personal property hereafter acquired or constructed and not heretofore owned by Borrower, or (ii) the acquiring hereafter of real property or personal tangible property not heretofore owned by Borrower subject to any then existing lien (whether or not assumed) or (iii) any mortgage or lien which replaces such mortgage or lien;


f.) Judgment liens (in an aggregate amount not to exceed $500,000) in existence 60 days after the entry thereof or the payment of which is covered in full by insurance;


g.) Pledges or deposits in the ordinary course of business to secure lease or similar obligations;


h.) Liens to secure the performance of public statutory obligations that are not delinquent, performance bonds or other obligations of a like nature (other than for borrowed money);


i.) Easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar encumbrances;


j.) Interests or title of lessors or lessees under operating leases and subleases;


k.) Liens on the equipment and general assets (other than real property) of Borrower to secure Borrower's obligation with respect to indebtedness in a principal amount not to exceed $500,000 incurred in connection with the replacement of the heating, ventilation and air conditioning (HVAC) system located at the 10933 N. Torrey Pines Road property in San Diego, California or any refinancing of said indebtedness;


l.) With respect to any real property, easements, rights of way, zoning and similar covenants and restrictions, and similar encumbrances that do not materially interfere with or impair the use of or operation thereof by Borrower;


m.) Other liens not to exceed $100,000 in the aggregate at any time; provided that such liens could not reasonably be expected to have a material adverse effect on the business, operations or financial condition of Borrower.


5.6 Permits, Franchises.


The Borrower possesses all material permits, franchises, contracts and licenses required and all trademark rights, trade name rights, and fictitious name rights necessary to enable it to conduct the business in which it is now engaged.


5.7 Income Tax Returns.


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To the best of Borrower's knowledge, Borrower has filed all tax returns and reports required to be filed and, unless specifically included as a Permitted Lien or unless the same is the subject of a Permitted Protest, has paid all applicable federal, state and local franchise, income and property taxes which are due and payable. The Borrower has no knowledge of any pending assessments or adjustments of its income taxes or property taxes for any year, except as have been disclosed in writing to the Bank. Borrower is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code").


5.8 ERISA Plans.


(a) As used herein, (i) "Code" means the Internal Rev ...