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Sectors: Real Estate
Governing Law: California , View California State Laws
Effective Date: October 17, 2001
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EXHIBIT 10.21


TERM LOAN AGREEMENT


Dated as of October 17, 2001


among


ALEXANDRIA REAL ESTATE EQUITIES, INC.

ALEXANDRIA REAL ESTATE EQUITIES, L.P.

ARE - QRS CORP.

ARE ACQUISITIONS, LLC

THE OTHER BORROWERS

NOW OR HEREAFTER A PARTY HERETO

THE BANKS HEREIN NAMED

THE OTHER BANKS WHICH MAY BECOME

PARTIES TO THIS AGREEMENT

FLEET NATIONAL BANK, as Managing Agent

and

FLEET SECURITIES, INC., as Arranger


TABLE OF CONTENTS


Page

ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

1

1.1

Defined Terms

1

1.2

Use of Defined Terms

24

1.3

Accounting Terms

24

1.4

Rounding

24

1.5

Exhibits and Schedules

24

1.6

References to "Borrowers and their Subsidiaries"

25

1.7

Miscellaneous Terms

25

ARTICLE 2

LOANS

25

2.1

Committed Loans-General

25

2.2

Conversion Options

25

2.3

[Intentionally Omitted]

26

2.4

[Intentionally Omitted]

26

2.5

[Intentionally Omitted]

26

2.6

[Intentionally Omitted]

26

2.7

[Intentionally Omitted]

26

2.8

[Intentionally Omitted]

26

2.9

[Intentionally Omitted]

27

2.10

Extension of Maturity Date

27

2.11

Unencumbered Asset Pool

28

2.12

Representative of Borrowers

28

ARTICLE 3

PAYMENTS AND FEES

29

3.1

Principal and Interest

29

3.2

Closing Fee

31

3.3

[Intentionally Omitted]

31

3.4

[Intentionally Omitted]

31

3.5

Agency Fee

31

3.6

Extension Fees

31

3.7

Increased Commitment Costs

31

3.8

LIBOR Costs and Related Matters

32

3.9

Late Payments

35

3.10

Computation of Interest and Fees

35

3.11

Non-Banking Days

35

3.12

Manner and Treatment of Payments

35

3.13

Funding Sources

36

3.14

Failure to Charge Not Subsequent Waiver

37

3.15

Managing Agent's Right to Assume Payments Will be Made by Borrowers

37

3.16

Fee Determination Detail

37

3.17

Survivability

37

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

37

4.1

Existence and Qualification; Power; Compliance With Laws

37

4.2

Authority; Compliance With Other Agreements and Instruments and Government Regulations

38

4.3

No Governmental Approvals Required

38

4.4

Subsidiaries

38

4.5

Financial Statements

39

4.6

No Other Liabilities; No Material Adverse Changes

39

4.7

Title to Property

39

4.8

Intangible Assets

39

4.9

Public Utility Holding Company Act

39

4.10

Litigation

39

4.11

Binding Obligations

40

4.12

No Default

40

4.13

ERISA

40

4.14

Regulations T, U and X; Investment Company Act

40

4.15

Disclosure

41

4.16

Tax Liability

41

4.17

Hazardous Materials

41

4.18

Initial Pool Properties

41

4.19

Property

41

4.20

Brokers

42

4.21

Other Debt

42

4.22

Solvency

42

4.23

No Fraudulent Intent

42

4.24

Transaction in Best Interests of Borrowers; Consideration

43

4.25

No Bankruptcy Filing

43

4.26

[Intentionally Omitted]

43

ARTICLE 5

AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

43

5.1

Payment of Taxes and Other Potential Liens

43

5.2

Preservation of Existence

43

5.3

Maintenance of Properties

44

5.4

Maintenance of Insurance

44

5.5

Compliance With Laws

44

5.6

Inspection Rights

44

5.7

Keeping of Records and Books of Account

44

5.8

Compliance With Agreements

44

5.9

Use of Proceeds

44

5.10

Hazardous Materials Laws

44

5.11

Unencumbered Asset Pool

45

5.12

REIT Status

45

5.13

Additional Borrowers

45

5.14

Inspection of Properties and Books

45

5.15

More Restrictive Agreements

45

5.16

Distributions of Income to the Borrowers

46

5.17

Unencumbered Asset Pool

46

ARTICLE 6

NEGATIVE COVENANTS

47

6.1

Mergers

47

6.2

ERISA

47

6.3

Change in Nature of Business

47

6.4

Transactions with Affiliates

47

6.5

Leverage Ratio

48

6.6

Debt Service Coverage

48

6.7

Fixed Charge Coverage

48

6.8

Distributions

48

6.9

Stockholders' Equity

48

6.10

Development Investments

48

6.11

Secured Debt

49

6.12

Recourse Debt

49

6.13

Investments in Certain Persons

49

6.14

Negative Pledges

49

6.15

[Intentionally Omitted]

49

6.16

Limiting Agreements

49

6.17

Restriction on Prepayment of Indebtedness

49

6.18

Restrictions on Transfer

50

ARTICLE 7

INFORMATION AND REPORTING REQUIREMENTS

50

7.1

Financial and Business Information

50

7.2

Compliance Certificates

54

ARTICLE 8

CONDITIONS

54

8.1

Initial Advances

54

8.2

[Intentionally Omitted]

55

ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

55

9.1

Events of Default

55

9.2

Remedies Upon Event of Default

58

ARTICLE 10

THE MANAGING AGENT

59

10.1

Appointment and Authorization

59

10.2

Managing Agent and Affiliates

59

10.3

Proportionate Interest in any Collateral

60

10.4

Banks' Credit Decisions

60

10.5

Action by Managing Agent

60

10.6

Liability of Managing Agent

61

10.7

Indemnification

62

10.8

Successor Managing Agent

63

10.9

No Obligations of Borrowers

63

ARTICLE 11

MISCELLANEOUS

64

11.1

Cumulative Remedies; No Waiver

64

11.2

[Intentionally Omitted]

64

11.3

Costs, Expenses and Taxes

64

11.4

Nature of Banks' Obligations

65

11.5

Survival of Representations and Warranties

65

11.6

Notices

65

11.7

Execution of Loan Documents

65

11.8

Binding Effect; Assignment

66

11.9

Right of Setoff

68

11.10

Sharing of Setoffs

68

11.11

Indemnity by Borrowers

69

11.12

Nonliability of the Banks

70

11.13

No Third Parties Benefited

70

11.14

Confidentiality

71

11.15

Further Assurances

71

11.16

Integration

71

11.17

Governing Law

71

11.18

Severability of Provisions

72

11.19

Headings

72

11.20

Time of the Essence

72

11.21

Foreign Banks and Participants

72

11.22

Hazardous Material Indemnity

72

11.23

Joint and Several

73

11.24

Removal of a Bank

73

11.25

Waiver of Right to Trial by Jury

74

11.26

Purported Oral Amendments

74

11.27

Replacement of Notes

74

ARTICLE 12

AMENDMENTS; CONSENTS

74

12.1

Amendments; Consents

74


Exhibits

A

-

Commitment Assignment and Acceptance

B

-

[ Intentionally Omitted ].

C

-

[ Intentionally Omitted ].

D

-

[ Intentionally Omitted ].

E

-

Compliance Certificate

F

-

Joinder Agreement

G

-

Note

H

-

Reserved

I-1

-

Opinion of Counsel

I-2

-

Opinion of Counsel

J

-

Pricing Certificate

K

-

[ Intentionally Omitted ].

L

-

Joint Borrower Provisions

M

-

[ Intentionally Omitted ].

N

-

[ Intentionally Omitted ].

Schedules

1.1

Bank Commitment

1.2

Test Debt Service Coverage Amount Calculation

4.4

Subsidiaries

4.7

Existing Liens, Negative Pledges and Rights of Others

4.10

Material Litigation

4.17

Hazardous Materials Matters

4.18

Initial Pool Properties

4.19

Real Property

4.21

Indebtedness

TERM LOAN AGREEMENT

Dated as of October 17, 2001

This TERM LOAN AGREEMENT ("Agreement") is entered into by and among Alexandria Real Estate Equities, Inc., a Maryland corporation ("Parent"), Alexandria Real Estate Equities, L.P., a Delaware limited partnership ("Operating Partnership"), ARE-QRS Corp., a Maryland corporation ("QRS"), ARE Acquisitions, LLC, a Delaware limited liability company ("ARE"), the other borrowers whose names are set forth on the signature pages of this Agreement, each other Wholly-Owned Subsidiary of Parent which may hereafter become a party to this Agreement as a borrower pursuant to Section 5.13 (collectively, with Parent, Operating Partnership, QRS and ARE, the "Borrowers", all on a joint and several basis); each bank whose name is set forth on the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8 (collectively, the "Banks" and individually, a "Bank"); Fleet National Bank, as Managing Agent and Fleet Securities, Inc., as Arranger.

RECITALS

WHEREAS, Borrowers have requested that the Banks provide a loan to the Borrowers; and

WHEREAS, the Managing Agent and the Banks are willing to provide such loan to the Borrowers on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the recitals herein and the mutual covenants contained herein, the parties hereto hereby covenant and agree as follows:


DEFINITIONS AND ACCOUNTING TERMS Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

" Adjusted EBITDA " means with respect to any fiscal period, an amount equal to the sum of (a) EBITDA of Parent and its Subsidiaries for such period consolidated in accordance with Generally Accepted Accounting Principles minus (b) the Capital Improvement Reserve for the Real Property of Parent and its Subsidiaries.

" Adjusted NOI " means, with respect to any Revenue-Producing Property and for any fiscal period, (a) NOI of that Revenue-Producing Property minus (b) the Capital Improvements Reserve for such Revenue-Producing Property.

" Adjusted Tangible Assets " means, as of any date of determination, without duplication, the sum of (a) Total Assets of Parent and its Subsidiaries as of that date, minus (b) Intangible Assets of Parent and its Subsidiaries as of that date minus (c) any "minority interest" held by third parties and included within Total Assets as of that date, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles.

" Affiliate " means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, "control" (and the correlative terms, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns, directly or indirectly, 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation, or 10% or more of the partnership or other ownership interests of any other Person, will be deemed to be an Affiliate of such corporation, partnership or other Person.

" Agreement " means this Term Loan Agreement, either as originally executed or as it may from time to time be supplemented, modified, amended, restated or extended.

" Agreement Regarding Fees " means the Agreement Regarding Fees dated of even date herewith among the Borrowers and Managing Agent.

" Alternate Base Rate " means, the greater of (a) the Reference Rate, or (b) one-half of one percent (0.5%) above the Federal Funds Rate (rounded upwards, if necessary, to the next one-one hundredth of one percent). The Alternate Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. Any change in the rate of interest payable hereunder resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate becomes effective, without notice or demand of any kind.

" Alternate Base Rate Loan " means a Loan made hereunder and specified to be an Alternate Base Rate Loan in accordance with Article 2 .

" Applicable Alternate Base Rate Margin " means, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:


Applicable

Pricing Level

Margin

I

0

II

0

III

0

IV

0

V

25

VI

25

" Applicable LIBOR Rate Margin " means, for each Pricing Period, the interest rate margin set forth below (expressed in basis points per annum) opposite the Applicable Pricing Level for that Pricing Period:


Applicable

Pricing Level

Margin

I

100.00

II

120.00

III

130.00

IV

150.00

V

162.50

VI

187.50

" Applicable Pricing Level " means (a) for any Pricing Period during which Parent holds a Credit Rating of BBB+/Baa1 (or its equivalent) or better, Pricing Level I, (b) for any Pricing Period during which Parent holds a Credit Rating of BBB/Baa2 (or its equivalent), Pricing Level II, (c) for any Pricing Period during which Parent holds a Credit Rating of BBB-/Baa3 (or its equivalent), Pricing Level III and (d) for any Pricing Period during which Parent does not hold a Credit Rating of BBB-/Baa3 (or its equivalent) or better, the pricing level set forth below opposite the Leverage Ratio as of the last day of the Fiscal Quarter most recently ended prior to the commencement of that Pricing Period:


Pricing Level

Leverage Ratio

IV

Less than .35 to 1.00

V

Equal to or greater than .35 to 1.00 but less than .50 to 1.00

VI

Equal to or greater than .50 to 1.00 but less than or equal to .55 to 1.00;

provided that (a) the Applicable Pricing Level for the initial Pricing Period shall ( unless Pricing Level I, Pricing Level II or Pricing Level III is then in effect) be Pricing Level V , (b) in the event that Borrowers do not deliver a Pricing Certificate with respect to any Pricing Period prior to the commencement of such Pricing Period, then until (but only until) such Pricing Certificate is delivered the Applicable Pricing Level for that Pricing Period shall be Pricing Level VI and (c) if any Pricing Certificate is subsequently determined to be in error, then the resulting change in the Applicable Pricing Level shall be made retroactively to the beginning of the relevant Pricing Period.

" Asset Value " means, as of any date of determination and with respect to any improved Real Property owned by a Person that is not under development for the purposes of Section 6.10 , an amount equal to (a) the Adjusted NOI of such Person from such Real Property for the period covered by the previous four full consecutive Fiscal Quarters divided by (b) the Capitalization Rate. Prior to such time as a Borrower or any of its Subsidiaries has owned and operated any Real Property for four full Fiscal Quarters, the Adjusted NOI with respect to such Real Property for the number of full Fiscal Quarters which the Borrower or any of its Subsidiaries has owned and operated such parcel of Real Property shall be adjusted by the applicable Borrower to an annual Adjusted NOI in a manner reasonably acceptable to the Managing Agent.

" Bank " means each bank whose name is set forth in the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8 .

" Banking Day " means any Monday, Tuesday, Wednesday, Thursday or Friday, other than a day on which banks are authorized or required to be closed in Massachusetts, New York or California.

" Borrowing Base " means, as of any date of determination, the lesser of (a) the maximum amount which, when added to the total outstanding balance of all unsecured Indebtedness of Parent and its Subsidiaries (including the Loans), would not exceed fifty-five percent (55%) of the aggregate Asset Value of the Unencumbered Asset Pool as of such date, and (b) the maximum amount which, when added to the total outstanding balance of all unsecured Indebtedness of Parent and its Subsidiaries (including the Loans), would not cause the "Test Debt Service Coverage Amount" (as hereinafter defined) for the Unencumbered Asset Pool to be less than two (2). " Test Debt Service Coverage Amount " means at any time determined under this Agreement, an amount obtained by dividing (a) the sum of the aggregate Adjusted NOI from the Unencumbered Asset Pool for the preceding four (4) full Fiscal Quarters, by (b) the annual amount of principal and interest that would be payable on the total outstanding balance of all unsecured Indebtedness of the Parent and its Subsidiaries (including the Loans and any requested Loans) when bearing interest at a rate per annum equal to the then-current annual yield on ten (10) year obligations issued by the United States Treasury most recently prior to the date of determination plus two percent (2.0%) and payable based on a twenty-five year mortgage style amortization schedule (expressed as a mortgage constant percentage). The Test Debt Service Coverage Amount shall be determined by the Borrowers and shall be satisfactory to the Managing Agent, provided that in the event that, as of any date under this Agreement, the Test Debt Service Coverage Amount is required to be determined hereunder and such determination shall have not been made as provided above, then such amount shall be determined by the Managing Agent. An example of the calculation of the Test Debt Service Coverage Amount is set forth in Schedule 1.2 attached hereto. In the event that a Bor rower shall have owned a property within the Unencumbered Asset Pool for less than four (4) full consecutive Fiscal Quarters, then for the purposes of performing such calculation, the Adjusted NOI with respect to such property shall be annualized by the applicable Borrower in a manner reasonably acceptable to the Managing Agent.

" Borrowers " means, collectively, (a) Parent, (b) Operating Partnership, (c) QRS, (d) ARE, (e) the other borrowers whose names are set forth on the signature pages of this Agreement and (f) any other Wholly-Owned Subsidiary of Parent that hereafter executes a Joinder Agreement pursuant to Section 5.13 . Borrowers are jointly and severally obligated with respect to the Obligations.

" Capital Improvement Reserve " means with respect to any Real Property now or hereafter owned by the Borrowers or their Subsidiaries, an annual capital replacement reserve in the amount of thirty cents ($.30) multiplied by the Net Rentable Area contained therein.

" Capital Lease Obligations " means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with Generally Accepted Accounting Principles, is classified as a capital lease.

" Capitalization Rate " means initially ten percent (10%), as such rate may be changed from time to time as provided in this definition. The Borrowers may request that the Banks modify the prevailing Capitalization Rate based upon information provided to the Borrowers and the Banks by an independent expert mutually acceptable to Parent and the Managing Agent concerning the prevailing capitalization rate used by sophisticated real estate industry professionals to value properties comparable to those in the Unencumbered Asset Pool for comparable purposes, provided that any change to the Capitalization Rate shall be subject to the prior written approval of the Requisite Banks.

" Cash " means, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with Generally Accepted Accounting Principles, consistently applied.

" Cash Interest Expense " means Interest Expense that is paid or currently payable in Cash.

" Certificate " means a certificate signed by a Senior Officer or Responsible Official (as applicable) of the Person providing the certificate.

" Change in Control " means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 40% or more of the outstanding Common Stock, (b) Parent consolidates with or merges into another Person or conveys, transfers or leases its properties and assets substantially as an entirety to any Person or any Person consolidates with or merges into Parent, in either event pursuant to a transaction in which the outstanding Common Stock is changed into or exchanged for cash, securities or other property, with the effect that any Unrelated Person becomes the beneficial owner, directly or indirectly, of 40% or more of Common Stock or that the Persons who were the holders of Common Stock immediately prior to the transaction hold less than 60% of the common stock of the surviving corporation after the transaction, (c) during any period of 24 consecutive months, individuals who at the beginning of such period constituted the board of directors of Parent (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office, or (d) a "change in control" as defined in any document governing Indebtedness of Parent in excess of $25,000,000 which gives the holders of such Indebtedness the right to accelerate or otherwise require payment of such Indebtedness prior to the maturity date thereof. For purposes of the foregoing, the term " Unrelated Person " means any Person other than (i) a Subsidiary of Parent, (ii)& nbsp;an employee stock ownership plan or other employee benefit plan covering the employees of Parent and its Subsidiaries or (iii) any Person that held Common Stock on the day prior to the effective date of Parent's registration statement under the Securities Act of 1933 covering the initial public offering of Common Stock.

" Closing Date " means the time and Banking Day on which the conditions set forth in Section 8.1 are satisfied or waived. The Managing Agent shall notify Borrowers and the Banks of the date that is the Closing Date.

" Code " means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time.

" Commitment " means $50,000,000.00. The respective Pro Rata Shares of the Banks with respect to the Commitment are set forth in Schedule 1.1 .

" Commitment Assignment and Acceptance " means a commitment assignment and acceptance substantially in the form of Exhibit A .

" Common Stock " means the common stock of Parent or its successor.

" Compliance Certificate " means a certificate in the form of Exhibit E , properly completed and signed by a Senior Officer of Borrowers.

" Contractual Obligation " means, as to any Person, any provision of any outstanding security issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound.

" Controlled Entity " means a Person (a) that is a Subsidiary of Parent, (b) that is a general partnership or a limited partnership in which a Wholly-Owned Subsidiary is the sole managing general partner and such managing general partner has the sole power to (i) sell all or substantially all of the assets of such Person, (ii) incur Indebtedness in the name of such Person, (iii) grant a Lien on all or any portion of the assets of such Person and (iv) otherwise generally manage the business and assets of such Person or (c) that is a limited liability company for which a Wholly-Owned Subsidiary is the sole manager and such manager has the sole power to do the acts described in subclauses (i) through (iv) of clause (b) above.

" Conversion Request " means a notice given by the Borrowers to the Managing Agent of their elections to convert or continue a Loan in accordance with Section2.2.

" Credit Rating " means, as of any date of determination, the higher of the credit ratings (or their equivalents) then assigned to Parent's long-term senior unsecured debt by either of the Rating Agencies; provided that any credit rating so assigned by a Rating Agency shall be deemed for this purpose to include all lower credit ratings of such Rating Agency. For purposes of the foregoing, " Rating Agencies " means (a) Standard & Poor's Rating Group (a division of McGraw Hill, Inc.) ("S&P") and its successors,
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