Exhibit 10.1

 

November 13, 2018

 

To:                             Corporate Office Properties Trust

6711 Columbia Gateway Drive, Suite 300

Columbia, MD 21046

 

From:               Barclays Bank PLC

5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile: +44 (20) 777 36461

Telephone: +44 (20) 777 36810

 

c/o Barclays Capital Inc.

as agent for Barclays Bank PLC

745 Seventh Avenue New York, NY 10019

Telephone: +1 212 412 4000

 

Dear Sirs,

 

The purpose of this letter agreement (this “Master Forward Confirmation”) is to
confirm the terms and conditions of certain transactions to be entered into from
time to time between Party A, through its agent Barclays Capital Inc., and Party
B in accordance with the terms of the Sales Agreement, dated as of November 13,
2018, among Party B, Corporate Office Properties, L.P., Barclays Capital Inc.,
as Agent, Party A, as Forward Purchaser, and Barclays Capital Inc., as Forward
Seller (the “Sales Agreement”), on one or more Trade Dates specified herein
(collectively, the “Transactions” and each, a “Transaction”).  This letter
agreement constitutes a “Master Forward Confirmation” as referred to in the
Sales Agreement.  Each Transaction will be evidenced by a supplemental
confirmation (each, a “Supplemental Confirmation,” and each such Supplemental
Confirmation, together with this Master Forward Confirmation, a “Confirmation”
for purposes of the Agreement specified below) substantially in the form of
Exhibit A hereto.  Party A is not a member of the Securities Investor Protection
Corporation.  Party A is authorized by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation
Authority.

 

1.                                      The definitions and provisions contained
in the 2000 ISDA Definitions (the “2000 Definitions”) and the 2002 ISDA Equity
Derivatives Definitions (the “2002 Definitions” and, together with the 2000
Definitions, the “Definitions”), each as published by the International Swaps
and Derivatives Association, Inc., are incorporated into each Confirmation.  In
the event of any inconsistency among the Agreement, this Master Forward
Confirmation, any Supplemental Confirmation, the 2000 Definitions and the 2002
Definitions, the following will prevail in the order of precedence indicated:
(i) such Supplemental Confirmation; (ii) this Master Forward Confirmation;
(iii) the 2002 Definitions; (iv) the 2000 Definitions; and (v) the Agreement.

 

Each Confirmation together with the Agreement shall evidence a complete and
binding agreement between Party A and Party B as to the subject matter and terms
of the Transaction to which this Master Forward Confirmation and the related
Supplemental Confirmation relate, and shall supersede all prior or
contemporaneous written or oral communications with respect thereto. Each
Confirmation shall supplement, form a part of, and be subject to an agreement in
the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Party A and
Party B had executed the Agreement in such form on the date hereof (but without
any Schedule except for the election of the laws of the State of New York as the
governing law). The parties hereby agree that no Transaction other than the
Transactions to which this Master Forward

 

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Confirmation together with each Supplemental Confirmation hereunder relate shall
be governed by the Agreement.  For purposes of the 2002 Definitions, each
Transaction shall be a Share Forward Transaction.

 

Party A and Party B each represents to the other with respect to each
Transaction hereunder that it has entered into such Transaction in reliance upon
such tax, accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other.

 

2.                                      The terms of each Transaction to which
this Master Forward Confirmation relates are as follows:

 

General Terms:

 

Party A:

 

Barclays Bank PLC

 

 

 

Party B:

 

Corporate Office Properties Trust

 

 

 

Trade Date:

 

For each Transaction, as specified in the Supplemental Confirmation for such
Transaction, to be, subject to the provisions under the heading “Acceleration
Events” in Section 3 of this Master Forward Confirmation and the provisions
under the heading “Forward Placement Notices” in Section 3 of this Master
Forward Confirmation, the last Trading Day (as defined in the Sales Agreement)
of the Forward Hedge Selling Period (as defined in the Sales Agreement) for such
Transaction.

 

 

 

Effective Date:

 

For each Transaction, as specified in the Supplemental Confirmation for such
Transaction, to be the date that is one Settlement Cycle following the Trade
Date for such Transaction, or such later date on which the conditions set forth
under “Conditions to Effectiveness” in Section 3 of this Master Forward
Confirmation shall have been satisfied, subject to the provisions under the
heading “Forward Placement Notices” in Section 3 of this Master Forward
Confirmation.

 

 

 

Base Amount:

 

For each Transaction, initially, as specified in the Supplemental Confirmation
for such Transaction, to be the number of Shares equal to the Actual Sold
Forward Amount (as defined in the Sales Agreement) for the Forward Hedge Selling
Period for such Transaction. For each Transaction, on each Settlement Date for
such Transaction, the Base Amount for such Transaction shall be reduced by the
relevant number of Settlement Shares for such Settlement Date.

 

 

 

Maturity Date:

 

For each Transaction, as specified in the Supplemental Confirmation for such
Transaction, to be the date that follows the Trade Date for such Transaction by
the number of months or years set forth in the Forward Placement Notice (as
defined in the Sales Agreement) for such Transaction, which number of days or
months shall in no event be less than 3 months nor more than 2 years (or, if
such date is not a Scheduled Trading Day, the next following Scheduled Trading
Day).

 

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Forward Price:

 

For each Transaction, on the Effective Date for such Transaction, the Initial
Forward Price for such Transaction, and on any other day, the Forward Price for
such Transaction as of the immediately preceding calendar day multiplied by the
sum of (i) 1 and (ii) the Daily Rate for such Transaction for such day; provided
that on each Forward Price Reduction Date, the Forward Price in effect on such
date shall be the Forward Price otherwise in effect on such date, minus the
Forward Price Reduction Amount for such Forward Price Reduction Date.

 

 

 

Initial Forward Price:

 

For each Transaction, as specified in the Supplemental Confirmation for such
Transaction, to be the product of (i) an amount equal to 1 minus the Forward
Hedge Selling Commission Rate (as defined in the Sales Agreement) applicable to
such Transaction; and (ii) the Volume-Weighted Hedge Price, subject to
adjustment as set forth herein.

 

 

 

Volume-Weighted Hedge Price:

 

For each Transaction, as specified in the Supplemental Confirmation for such
Transaction, to be the volume-weighted average of the Sales Prices (as defined
in the Sales Agreement) per share of Forward Hedge Shares (as defined in the
Sales Agreement) sold on each Trading Day of the Forward Hedge Selling Period
for such Transaction, as determined by the Calculation Agent; provided that, for
the purposes of calculating the Initial Forward Price, each such Sales Price
(other than the Sales Price for the last day of the relevant Forward Hedge
Selling Period) shall be subject to adjustment by the Calculation Agent in the
same manner as the Forward Price pursuant to the definition thereof during the
period from, and including, the date one Settlement Cycle immediately following
the first Trading Day of the relevant Forward Hedge Selling Period during which
the Forward Hedge Shares in respect of such Transaction are sold to, and
including, the Effective Date of such Transaction.

 

 

 

Daily Rate:

 

For each Transaction and for any day, (i)(A) the Overnight Bank Rate for such
day, minus (B) the Spread for such Transaction, divided by (ii) 365.

 

 

 

Overnight Bank Rate:

 

For any day, the rate set forth for such day opposite the caption “Overnight
bank funding rate”, as such rate is displayed on Bloomberg Screen “OBFR01
<Index> <GO>“, or any successor page; provided that, if no rate appears for a
particular day on such page, the rate for the immediately preceding day for
which a rate does so appear shall be used for such day.

 

 

 

Spread:

 

For each Transaction, as set forth in the Supplemental Confirmation for such
Transaction.

 

 

 

Forward Price Reduction Dates:

 

For each Transaction, as specified in Schedule I to the Supplemental
Confirmation for such Transaction, to be each date set forth under the heading
“Forward Price Reduction Dates” in the Forward Placement Notice for such
Transaction.

 

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Forward Price Reduction Amount:

 

For any Transaction, for each Forward Price Reduction Date for such Transaction,
the Forward Price Reduction Amount set forth opposite such date in Schedule I to
the Supplemental Confirmation for such Transaction.

 

 

 

Shares:

 

Common shares of beneficial interest, USD 0.01 par value per share, of Party B
(also referred to herein as the “Issuer”) (Exchange identifier: “OFC”).

 

 

 

Exchange:

 

The New York Stock Exchange.

 

 

 

Related Exchange(s):

 

All Exchanges.

 

 

 

Clearance System:

 

DTC.

 

 

 

Calculation Agent:

 

Party A; provided that following the occurrence and during the continuation of
an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect
to which Party A is the Defaulting Party, (i) Party A may designate a nationally
or internationally recognized third-party dealer with expertise in
over-the-counter corporate equity derivatives (an “Equity Derivatives Dealer”)
that is not an Affiliate of Party A and with respect to which no event of the
type described in Section 5(a)(vii) of the Agreement is ongoing to replace Party
A as Calculation Agent, and (ii) if Party A does not so designate any
replacement Calculation Agent by the 10th Exchange Business Day following the
date on which a calculation or determination is required to be made hereunder by
the Calculation Agent, Party B shall have the right to designate an independent
Equity Derivatives Dealer to replace Party A as Calculation Agent and, in each
case, the parties shall work in good faith to execute any appropriate
documentation required by such replacement Calculation Agent. Any determination
or calculation by the Calculation Agent in such capacity shall be made in good
faith and in a commercially reasonable manner.

 

 

 

Hedging Party:

 

Party A.

 

 

 

Settlement Terms:

 

 

 

 

 

Settlement Date:

 

With respect to any Transaction, any Scheduled Trading Day following the
Effective Date for such Transaction and up to and including the Maturity Date
for such Transaction, as designated by (a) Party A pursuant to “Termination
Settlement” below or (b) Party B in a written notice (a “Settlement Notice”)
that satisfies the Settlement Notice Requirements and is delivered to Party A at
least (i) three Scheduled Trading Days prior to such Settlement Date, which may
be the Maturity Date for such Transaction, if Physical Settlement applies, and
(ii) a number of Scheduled Trading Days equal to the Specified Number prior to
such Settlement Date, which may be the Maturity Date for such Transaction, if

 

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Cash Settlement or Net Share Settlement applies; provided that (i) the Maturity
Date for such Transaction shall be a Settlement Date for such Transaction if on
such date the Base Amount for such Transaction is greater than zero, (ii) if
Physical Settlement or Net Share Settlement applies and such Settlement Date
specified above (including a Settlement Date occurring on such Maturity Date) is
not a Clearance System Business Day, such Settlement Date shall be the next
following Clearance System Business Day, and (iii) if Cash Settlement or Net
Share Settlement applies and Party A shall have fully unwound its hedge in
respect of such Transaction (or portion thereof, as applicable) during an Unwind
Period (as defined below) for such Transaction by a date that is more than three
Scheduled Trading Days prior to such Settlement Date specified above, Party A
may, by written notice to Party B, specify any Scheduled Trading Day prior to
such originally specified Settlement Date for such Transaction as the Settlement
Date for such Transaction.  The “Specified Number” for any Settlement Date for
any Transaction hereunder means the product of 30 and a fraction, the numerator
of which is the product of the number of Settlement Shares for such Settlement
Date and the initial Forward Price for such Transaction and the denominator of
which is USD 250,000,000 (such product rounded up to the nearest whole number);
provided that in no event shall the Specified Number be less than three or
greater than 30.

 

 

 

Settlement Shares:

 

In respect of any Transaction and with respect to any Settlement Date for such
Transaction, a number of Shares, not to exceed the Base Amount for such
Transaction, designated as such by Party B in the related Settlement Notice or
by Party A pursuant to “Termination Settlement” below; provided that on the
Maturity Date for such Transaction the number of Settlement Shares shall be
equal to the Base Amount for such Transaction on such date.

 

 

 

Settlement:

 

In respect of any Transaction, Physical Settlement, Cash Settlement or Net Share
Settlement, at the election of Party B as set forth in a Settlement Notice
delivered on or after the Effective Date for such Transaction that satisfies the
Settlement Notice Requirements; provided that Physical Settlement shall apply
(i) if no Settlement Method is validly selected, (ii) with respect to any
Settlement Shares in respect of which Party A is unable, in its commercially
reasonable judgment, to unwind its hedge in respect of such Transaction (or
portion thereof, as applicable) by the end of the Unwind Period for such
Transaction in a manner that, in the reasonable judgment of Party A, is
consistent with the requirements for qualifying for the safe harbor provided by
Rule 10b-18 under the Exchange Act or due to the lack of sufficient liquidity in
the Shares on any Exchange Business Day during such Unwind Period or (iii) to
any Termination Settlement Date (as defined below under “Termination
Settlement”).

 

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For greater clarity, with respect to any Settlement Date for any Transaction
(x) in respect of which Cash Settlement applies, Party A shall be deemed to have
completed unwinding its hedge in respect of the portion of such Transaction to
be settled on such Settlement Date when it has purchased (or, to the extent
applicable, unwound derivative positions (including, but not limited to, swaps
or options related to the Shares) resulting in Party A’s synthetic purchase of)
an aggregate number of Shares equal to the number of Settlement Shares for such
Settlement Date and (y) in respect of which Net Share Settlement applies, Party
A shall be deemed to have completed unwinding its hedge in respect of the
portion of the relevant Transaction to be settled on such Settlement Date when
it has purchased (or, to the extent applicable, unwound derivative positions
(including, but not limited to, swaps or options related to the Shares)
resulting in Party A’s synthetic purchase of) an aggregate number of Shares
having an aggregate purchase price equal to the Net Share Settlement Purchase
Price for such Settlement Date.

 

 

 

Settlement Notice Requirements:

 

Notwithstanding any other provision hereof, a Settlement Notice delivered in
respect of any Transaction by Party B that specifies Cash Settlement or Net
Share Settlement will not be effective to establish a Settlement Date for such
Transaction or require Cash Settlement or Net Share Settlement unless Party B
delivers to Party A with such Settlement Notice a representation signed by Party
B substantially in the following form: “As of the date of this Settlement
Notice, Party B is not aware of any material nonpublic information concerning
itself or the Shares, and is designating the date contained herein as a
Settlement Date and is electing Cash Settlement or Net Share Settlement, as the
case may be, in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws.”

 

 

 

Unwind Period:

 

For any Transaction, each Exchange Business Day that is not a Suspension Day
during the period from and including the first Exchange Business Day following
the date Party B validly elects Cash Settlement or Net Share Settlement in
respect of a Settlement Date for such Transaction through the third Scheduled
Trading Day preceding such Settlement Date (or the immediately preceding
Exchange Business Day if such Scheduled Trading Day is not an Exchange Business
Day); subject to “Termination Settlement” below. If any Exchange Business Day
during an Unwind Period for any Transaction is a Disrupted Day, the Calculation
Agent shall make commercially reasonable adjustments to the terms of such
Transaction (including, without limitation, the Cash Settlement Amount, the
number of Net Share Settlement Shares and the 10b-18 VWAP) to account for the
occurrence of such Disrupted Day.

 

 

 

Suspension Day:

 

Any Exchange Business Day on which Party A reasonably determines based on the
advice of counsel that Cash

 

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Settlement or Net Share Settlement may violate applicable securities laws. Party
A shall notify Party B if it receives such advice from its counsel.

 

 

 

Market Disruption Event:

 

Section 6.3(a)(ii) of the 2002 Definitions is hereby amended by replacing clause
(ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting
immediately following clause (iii) the phrase “; in each case that the
Calculation Agent determines is material.”

 

 

 

Exchange Act:

 

The Securities Exchange Act of 1934, as amended from time to time.

 

 

 

Physical Settlement:

 

In respect of any Transaction, on any Settlement Date for such Transaction in
respect of which Physical Settlement applies, Party B shall deliver to Party A
through the Clearance System the Settlement Shares for such Transaction for such
Settlement Date, and Party A shall deliver to Party B, by wire transfer of
immediately available funds to an account designated by Party B, an amount in
cash equal to the Physical Settlement Amount for such Transaction for such
Settlement Date, on a delivery versus payment basis. If, on any Settlement Date
for any Transaction, the Shares to be delivered by Party B to Party A hereunder
are not so delivered (the “Deferred Shares”), and a Forward Price Reduction Date
with respect to such Transaction occurs during the period from, but excluding,
such Settlement Date to, and including, the date such Shares are actually
delivered to Party A, then the portion of the Physical Settlement Amount for
such Transaction payable by Party A to Party B in respect of the Deferred Shares
shall be reduced by an amount equal to the Forward Price Reduction Amount for
such Forward Price Reduction Date, multiplied by the number of Deferred Shares.

 

 

 

Physical Settlement Amount:

 

In respect of any Transaction and for any Settlement Date for such Transaction
in respect of which Physical Settlement applies, an amount in cash equal to the
product of (i) the Forward Price for such Transaction on such Settlement Date
and (ii) the number of Settlement Shares for such Transaction for such
Settlement Date.

 

 

 

Cash Settlement:

 

In respect of any Transaction, on any Settlement Date for such Transaction in
respect of which Cash Settlement applies, if the Cash Settlement Amount for such
Transaction for such Settlement Date is a positive number, Party A will pay such
Cash Settlement Amount to Party B. If the Cash Settlement Amount for such
Transaction is a negative number, Party B will pay the absolute value of such
Cash Settlement Amount to Party A. Such amounts shall be paid on the relevant
Settlement Date.

 

 

 

Cash Settlement Amount:

 

In respect of any Transaction and for any Settlement Date for such Transaction
in respect of which Cash Settlement applies, an amount determined by the
Calculation Agent equal to the difference between (1) the product of (i) (A) the
average

 

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Forward Price for such Transaction over the applicable Unwind Period for such
Transaction (calculated assuming no reduction to such Forward Price for any
Forward Price Reduction Date that occurs during such Unwind Period, except as
set forth in clause (2) below), minus USD 0.02, minus (B) the average of the
10b-18 VWAP prices per Share on each Exchange Business Day during such Unwind
Period, and (ii) the number of Settlement Shares for such Transaction for such
Settlement Date, and (2) the product of (i) the Forward Price Reduction Amount
for any Forward Price Reduction Date that occurs during such Unwind Period and
(ii) the number of Settlement Shares for such Transaction with respect to which
Party A has not unwound its hedge as of such Forward Price Reduction Date.

 

 

 

Net Share Settlement:

 

In respect of any Transaction, on any Settlement Date for such Transaction in
respect of which Net Share Settlement applies, if the number of Net Share
Settlement Shares for such Transaction is a (i) negative number, Party A shall
deliver a number of Shares to Party B equal to the absolute value of such Net
Share Settlement Shares, or (ii) positive number, Party B shall deliver to Party
A such Net Share Settlement Shares; provided that if Party A determines in its
good faith, commercially reasonable judgment that it would be required to
deliver Net Share Settlement Shares to Party B, Party A may elect to deliver a
portion of such Net Share Settlement Shares on one or more dates prior to the
applicable Settlement Date.

 

 

 

Net Share Settlement Shares:

 

In respect of any Transaction and for any Settlement Date for such Transaction
in respect of which Net Share Settlement applies, a number of Shares equal to
(a) the number of Settlement Shares for such Settlement Date, minus (b) the
number of Shares Party A actually purchases during the Unwind Period for such
Transaction for a total purchase price (the “Net Share Settlement Purchase
Price”) equal to the difference between (1) the product of (i) the average
Forward Price for such Transaction over such Unwind Period (calculated assuming
no reduction to such Forward Price for any Forward Price Reduction Date that
occurs during such Unwind Period, except as set forth in clause (2) below),
minus USD 0.02, multiplied by (ii) the number of Settlement Shares for such
Transaction for such Settlement Date, minus (2) the product of (i) the Forward
Price Reduction Amount for any Forward Price Reduction Date that occurs during
such Unwind Period, multiplied by (ii) the number of Shares with respect to
which Party A has not unwound its hedge as of such Forward Price Reduction Date.

 

 

 

10b-18 VWAP:

 

For any Exchange Business Day during an Unwind Period which is not a Suspension
Day, the volume-weighted average price at which the Shares trade as reported in
the composite transactions for the Exchange on such Exchange Business Day,
excluding (i) trades that do not settle regular way, (ii) opening (regular way)
reported trades on the Exchange on such Exchange Business Day, (iii) trades that
occur in the last ten

 

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minutes before the scheduled close of trading on the Exchange on such Exchange
Business Day and ten minutes before the scheduled close of the primary trading
session in the market where the trade is effected, and (iv) trades on such
Exchange Business Day that do not satisfy the requirements of Rule 10b-18(b)(3),
as determined in good faith by the Calculation Agent. Party B acknowledges that
Party A may refer to the Bloomberg Page “OFC <Equity> AQR SEC” (or any successor
thereto), in its discretion, for such Exchange Business Day to determine the
10b-18 VWAP.

 

 

 

Settlement Currency:

 

USD.

 

 

 

Failure to Deliver:

 

Inapplicable.

 

 

 

Adjustments:

 

 

 

 

 

Potential Adjustment Event:

 

Section 11.2(e) of the 2002 Definitions is hereby amended by deleting clause
(iii) thereof.

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment; notwithstanding anything in the 2002 Definitions
to the contrary, for any Transaction, the Calculation Agent may make an
adjustment pursuant to Calculation Agent Adjustment to any one or more of the
Base Amount for such Transaction, the Forward Price for such Transaction and any
other variable relevant to the settlement or payment terms of such Transaction.

 

 

 

Additional Adjustment:

 

If with respect to any Transaction, in Party A’s commercially reasonable
judgment, the actual cost to Party A, over any two month period, of borrowing a
number of Shares equal to the Base Amount for such Transaction to hedge its
exposure to such Transaction exceeds a weighted average rate equal to the
Specified Borrow Rate for such Transaction, the Calculation Agent shall reduce
the Forward Price for such Transaction in order to compensate Party A for the
amount by which such cost exceeded a weighted average rate equal to such
Specified Borrow Rate during such period. The Calculation Agent shall notify
Party B prior to making any such adjustment to such Forward Price and, upon the
request of Party B, Party A shall provide an itemized list of its stock loan
costs for the applicable two month period. The “Specified Borrow Rate” for any
Transaction shall be the per annum rate set forth in the Supplemental
Confirmation for such Transaction.

 

 

 

Account Details:

 

 

 

 

 

Payments to Party A:

 

Bank: Barclays Bank plc NY

 

 

ABA# 026 00 2574

 

 

BIC: BARCUS33

 

 

Acct: 50038524

 

 

Beneficiary: BARCGB33

 

 

 

Payments to Party B:

 

To be advised under separate cover or telephone confirmed prior to each
Settlement Date.

 

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Delivery of Shares to Party A:

 

DTC Securities: 229

 

 

 

Delivery of Shares to Party B:

 

To be advised.

 

Offices:

 

 

 

 

 

The Office of Party A for each Transaction is:

 

Inapplicable, Party A is not a Multibranch Party.

 

 

 

The Office of Party B for each Transaction is:

 

Inapplicable, Party B is not a Multibranch Party.

 

3.                                      Other Provisions:

 

Opinion:

 

For each Transaction, Party B shall deliver to Party A an opinion of counsel,
dated as of the Trade Date for such Transaction, with respect to the matters set
forth in Section 3(a) of the Agreement and clauses (m) and (n) under the heading
“Additional Representations, Warranties and Agreements” set forth below in this
Master Forward Confirmation.  Delivery of such opinion to Party A shall be a
condition precedent for the purpose of Section 2(a)(iii) of the Agreement with
respect to each obligation of Party A under Section 2(a)(i) of the Agreement.

 

Conditions to Effectiveness:

 

The effectiveness of each Supplemental Confirmation and the related Transaction
on the Effective Date for such Transaction shall be subject to (i) the condition
that the representations and warranties of Party B contained in the Sales
Agreement and any certificate delivered pursuant thereto by Party B are true and
correct or, as provided in the Sales Agreement or such certificate, true and
correct in all material respects on such Effective Date as if made as of such
Effective Date, (ii) the condition that Party B has performed all of the
obligations required to be performed by it under the Sales Agreement on or prior
to such Effective Date, (iii) the condition that Party B shall have delivered to
Party A an opinion of counsel as required pursuant to the provision under the
heading “Opinion” above, (iv) the satisfaction of all of the conditions set
forth in Section 5 of the Sales Agreement, (v) the condition that the Sales
Agreement shall not have been terminated pursuant to Section 7 thereof and
(vi) the condition that neither of the following has occurred: (A) Party A (or
its Affiliate) is unable to borrow and deliver for sale a number of Shares equal
to the Base Amount for such Transaction or (B) in Party A’s commercially
reasonable judgment Party A (or its Affiliate) would incur a cost to borrow a
number of Shares equal to the Base Amount for such Transaction of more than a
rate equal to the Specified Borrow Rate for such Transaction to do so (in which
event such Supplemental Confirmation and the related Transaction shall be
effective but the Base Amount for such Transaction shall be the number of Shares
Party A (or an Affiliate thereof) is required to deliver in accordance with
Section 2 of the Sales Agreement).

 

Representations and Agreements of Party B:

 

Party B (i) has such knowledge and experience in financial and business affairs
as to be capable of evaluating the merits and risks of entering into any
Transaction hereunder; (ii) has consulted with its own legal, financial,
accounting and tax advisors in connection with each Transaction hereunder; and
(iii) is entering into each Transaction hereunder for a bona fide business
purpose.

 

Party B is not and has not been the subject of any civil proceeding of a
judicial or administrative body of competent jurisdiction that could reasonably
be expected to impair materially Party B’s ability to perform its obligations
hereunder.

 

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Party B will by the next succeeding New York Business Day notify Party A upon
obtaining knowledge of the occurrence of any event that would constitute an
Event of Default or a Potential Adjustment Event.

 

Additional Representations, Warranties and Agreements of Party B:  Party B
hereby represents and warrants to, and agrees with, Party A as of the date
hereof, on each “Forward Date” (as defined in the Sales Agreement) for any
Transaction hereunder, on each “Forward Hedge Settlement Date” (as defined in
the Sales Agreement) for any Transaction hereunder and on each Trade Date for
any Transaction hereunder that:

 

(a)         Any Shares, when issued and delivered in accordance with the terms
of any Transaction hereunder, will be duly authorized and validly issued, fully
paid and nonassessable, and the issuance thereof will not be subject to any
preemptive or similar rights.

 

(b)         Party B has reserved and will keep available at all times, free from
preemptive rights, out of its authorized but unissued Shares, solely for the
purpose of issuance upon settlement of any Transaction hereunder as herein
provided, the full number of Shares as shall be issuable at such time upon
settlement of such Transaction.  All Shares so issuable shall, upon such
issuance, be accepted for listing or quotation on the Exchange. Party B shall
have submitted an application for the listing of the Forward Shares (as defined
below) for each Transaction hereunder on the Exchange, and such application and
listing shall have been approved by the Exchange, subject only to official
notice of issuance, in each case, on or prior to the Effective Date for such
Transaction.  Party B agrees and acknowledges that such submission and approval
shall be a condition precedent for the purpose of Section 2(a)(iii) of the
Agreement with respect to each obligation of Party A under Section 2(a)(i) of
the Agreement in respect of the relevant Transaction.

 

(c)          Party B agrees to provide Party A at least five Exchange Business
Days’ written notice (an “Issuer Repurchase Notice”) prior to executing any
repurchase of Shares by Party B or any of its subsidiaries (or entering into any
contract that would require, or give the option to, Party B or any of its
subsidiaries, to purchase or repurchase Shares), whether out of profits or
capital or whether the consideration for such repurchase is cash, securities or
otherwise (an “Issuer Repurchase”), that alone or in the aggregate would result
in the Base Amount Percentage (as defined below) for all Transactions hereunder
being greater by 0.5% or more than the Base Amount Percentage at the time of the
immediately preceding Issuer Repurchase Notice (or in the case of the first such
Issuer Repurchase Notice, greater than the Base Amount Percentage as of the
later of the date hereof or the immediately preceding Settlement Date for a
Transaction hereunder, if any).  The “Base Amount Percentage” as of any day is
the fraction (1) the numerator of which is the Base Amount for all Transactions
hereunder and (2) the denominator of which is the number of Shares outstanding
on such day.

 

(d)         No filing with, or approval, authorization, consent, license,
registration, qualification, order or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
execution, delivery and performance by Party B of this Master Forward
Confirmation or any Supplemental Confirmation and the consummation of the
relevant Transaction (including, without limitation, the issuance and delivery
of Shares on any Settlement Date for a Transaction hereunder) except (i) such as
have been obtained under the Securities Act of 1933, as amended (the “Securities
Act”), (ii) as may be required to be obtained under state securities laws, and
(iii) as required by the rules and regulations of the Exchange.

 

(e)          Party B agrees not to make any Issuer Repurchase if, immediately
following such Issuer Repurchase, the Base Amount Percentage for all
Transactions hereunder would be equal to or greater than 9.5%.

 

11

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(f)           Party B is not insolvent, nor will Party B be rendered insolvent
as a result of any Transaction hereunder.

 

(g)          Neither Party B nor any of its Affiliates shall take or refrain
from taking any action (including, without limitation, any direct purchases by
Party B or any of its Affiliates or any purchases by a party to a derivative
transaction with Party B or any of its Affiliates), either under this Master
Forward Confirmation, under any Supplemental Confirmation, under an agreement
with another party or otherwise, that might cause any purchases of Shares by
Party A or any of its Affiliates in connection with any Cash Settlement or Net
Share Settlement of any Transaction hereunder not to meet the requirements of
the safe harbor provided by Rule 10b-18 under the Exchange Act if such purchases
were made by Party B and Rule 10b-18 were applicable to such purchases.

 

(h)         Party B will not engage in any “distribution” (as defined in
Regulation M under the Exchange Act (“Regulation M”)) that would cause a
“restricted period” (as defined in Regulation M) to occur during any Unwind
Period for any Transaction hereunder.

 

(i)             Party B is an “eligible contract participant” (as such term is
defined in Section 1a(18) of the Commodity Exchange Act, as amended).

 

(j)            In addition to any other requirements set forth herein, Party B
agrees not to elect Cash Settlement or Net Share Settlement in respect of any
Transaction if, in the reasonable judgment of either Party A or Party B, such
settlement or Party A’s related market activity would result in a violation of
the U.S. federal securities laws or any other federal or state law or regulation
applicable to Party B.

 

(k)         Party B (i) is capable of evaluating investment risks independently,
both in general and with regard to each Transaction hereunder; (ii) will
exercise independent judgment in evaluating the recommendations of any
broker-dealer or its associated persons, unless it has otherwise notified the
broker-dealer in writing; and (iii) has total assets of at least USD 50 million
as of the date hereof, the Forward Date for each Transaction hereunder and the
Trade Date for each Transaction hereunder.

 

(l)             Party B agrees it will not treat ownership positions held by
Party A or any of its Affiliates solely in its (or their) capacity as a nominee
or fiduciary for unrelated persons as constituting Beneficial Ownership or
Constructive Ownership (as such terms are defined in Party B’s Amended and
Restated Declaration of Trust, as amended from time to time (the “Charter”)) by
Party A.

 

(m)     Party B has all necessary corporate or similar power and authority to
execute and deliver, and shall execute and deliver on the Forward Date for each
Transaction hereunder, a letter agreement among Party B, Party A and Barclays
Capital Inc., as forward seller, entitled “Letter Agreement In Respect Of
Ownership Limitation Calculation,” substantially in the form of Exhibit B hereto
(the “Letter Agreement”), and perform its obligations in respect of the Letter
Agreement; such execution, delivery and performance have been duly authorized by
all necessary corporate or similar action on Party B’s part; and on such Forward
Date such Letter Agreement shall have been duly and validly executed and
delivered by Party B and constitute its valid and binding obligation,
enforceable against Party B in accordance with its terms.

 

(n)         Neither the execution and delivery of any Letter Agreement nor the
incurrence or performance of obligations of Party B thereunder will (1) conflict
with or result in a breach of the Charter or bylaws (or any equivalent
documents) of Party B, (2) conflict with or result in a breach of any applicable
law or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or (3) conflict with, result in a breach of or
default under, or result in the creation of any lien under, any agreement or
instrument to which Party B or any of its subsidiaries is a party or by which
Party B or any of its subsidiaries is bound or to which Party B or any of its
subsidiaries is subject, in each case, that is filed as an exhibit to Party B’s
Annual

 

12

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Report on Form 10-K for the year ending December 31 of the immediately preceding
calendar year, as updated by any subsequent filings.

 

(o)         Party B acknowledges and agrees that:

 

(i)             during the term of each Transaction, Party A and its Affiliates
may buy or sell Shares or other securities or buy or sell options or futures
contracts or enter into swaps or other derivative securities in order to
establish, adjust or unwind its hedge position with respect to such Transaction;

 

(ii)          Party A and its Affiliates may also be active in the market for
the Shares and Share-linked transactions other than in connection with hedging
activities in relation to each Transaction;

 

(iii)       Party A shall make its own determination as to whether, when or in
what manner any hedging or market activities in Party B’s securities shall be
conducted and shall do so in a manner that it deems appropriate to hedge its
price and market risk with respect to the Forward Price for each Transaction and
the 10b-18 VWAP for each Transaction;

 

(iv)      any market activities of Party A and its Affiliates with respect to
the Shares may affect the market price and volatility of the Shares, as well as
the Forward Price for each Transaction and 10b-18 VWAP for each Transaction,
each in a manner that may be adverse to Party B; and

 

(v)         each Transaction is a derivatives transaction in which it has
granted Party A the right, under certain circumstances, to receive cash or
Shares, as the case may be; Party A may purchase Shares for its own account at
an average price that may be greater than, or less than, the effective price
paid by Party B under the terms of such Transaction.

 

Covenant of Party B:

 

Subject to the provisions of “Private Placement Procedures” below, the parties
acknowledge and agree that any Shares delivered by Party B to Party A on any
Settlement Date for a Transaction hereunder will be newly issued Shares and when
delivered by Party A (or an Affiliate of Party A) to securities lenders from
whom Party A (or an Affiliate of Party A) borrowed Shares in connection with
hedging its exposure to such Transaction will be freely saleable without further
registration or other restrictions under the Securities Act, in the hands of
those securities lenders, irrespective of whether such stock loan is effected by
Party A or an Affiliate of Party A.  Accordingly, subject to the provisions of
“Private Placement Procedures” below, Party B agrees that the Shares that it
delivers to Party A on each Settlement Date for a Transaction hereunder will not
bear a restrictive legend and that such Shares will be deposited in, and the
delivery thereof shall be effected through the facilities of, the Clearance
System.

 

Covenants of Party A:

 

(a)         Unless the provisions set forth below under “Private Placement
Procedures” shall be applicable, Party A shall use any Shares delivered by Party
B to Party A on any Settlement Date for a Transaction hereunder to return to
securities lenders to close out open Share loans created by Party A or an
Affiliate of Party A in the course of Party A’s or such Affiliate’s hedging
activities related to Party A’s exposure under this Master Forward Confirmation
and the relevant Supplemental Confirmation.

 

(b)         In connection with bids and purchases of Shares in connection with
any Cash Settlement or Net Share Settlement of any Transaction, Party A shall
use its commercially reasonable efforts to conduct its activities, or cause its
Affiliates to conduct their activities, in a manner

 

13

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consistent with the requirements of the safe harbor provided by Rule 10b-18
under the Exchange Act, as if such provisions were applicable to such purchases.

 

Insolvency Filing:

 

Notwithstanding anything to the contrary herein, in any Supplemental
Confirmation, in the Agreement or in the Definitions, upon any Insolvency Filing
in respect of the Issuer, each Transaction hereunder shall automatically
terminate on the date thereof without further liability of either party to this
Master Forward Confirmation or any related Supplemental Confirmation to the
other party (except for any liability in respect of any breach of representation
or covenant by a party under this Master Forward Confirmation or any
Supplemental Confirmation prior to the date of such Insolvency Filing).

 

The parties hereto agree and acknowledge that (1) at any point prior to any
Insolvency Filing in respect of the Issuer, Party B shall have the unilateral
right to elect Physical Settlement of each Transaction hereunder pursuant to the
provisions set forth above under the heading “Settlement Terms”; and (2) each
Transaction hereunder shall automatically terminate on the date of any
Insolvency Filing pursuant to the provisions set forth in the immediately
preceding paragraph solely to the extent that Party B failed to elect Physical
Settlement of such Transaction pursuant to the provisions set forth above under
the heading “Settlement Terms” prior to the relevant Insolvency Filing.

 

Extraordinary Dividends:

 

If an ex-dividend date for an Extraordinary Dividend occurs on or after the
Trade Date for any Transaction and on or prior to the Maturity Date for such
Transaction (or, if later, the last date on which Shares are delivered by Party
B to Party A in settlement of such Transaction), Party B shall pay an amount, as
determined by the Calculation Agent, in cash equal to the product of such
Extraordinary Dividend and the Base Amount for such Transaction to Party A on
the earlier of (i) the date on which such Extraordinary Dividend is paid by the
Issuer to holders of record of the Shares or (ii) the Maturity Date for such
Transaction.  “Extraordinary Dividend” means the per Share amount of any cash
dividend or distribution, or a portion thereof, declared by the Issuer with
respect to the Shares that is specified by the board of trustees of the Issuer
as an “extraordinary” dividend.

 

Acceleration Events:

 

The following events shall each constitute an “Acceleration Event” with respect
to any Transaction:

 

(a)         Stock Borrow Events.  In the commercially reasonable judgment of
Party A (i) Party A (or its Affiliate) is unable to hedge Party A’s exposure to
such Transaction because of the lack of sufficient Shares being made available
for Share borrowing by lenders, or (ii) Party A (or its Affiliate) would incur
an actual cost to borrow a number of Shares equal to the Base Amount for such
Transaction of more than a rate equal to the Maximum Specified Borrow Rate for
such Transaction (each, a “Stock Borrow Event”);

 

(b)         Dividends and Other Distributions.  On any day occurring after the
Trade Date for such Transaction, Party B declares a distribution, issue or
dividend to existing holders of the Shares of (i) any cash dividend (other than
an Extraordinary Dividend) to the extent all cash dividends having an
ex-dividend date during the period from and including any Forward Price
Reduction Date for such Transaction (with the Trade Date for such Transaction
being a Forward Price Reduction Date for purposes of this clause (b) only) to
but excluding the next subsequent Forward Price Reduction Date exceeds, on a per
Share basis, the Forward Price Reduction Amount set forth opposite the first
date of any such period on Schedule I to the relevant Supplemental Confirmation
or (ii) share capital or securities of another issuer

 

14

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acquired or owned (directly or indirectly) by Party B as a result of a spin-off
or other similar transaction or (iii) any other type of securities (other than
Shares), rights or warrants or other assets, for payment (cash or other
consideration) at less than the prevailing market price as reasonably determined
by Party A;

 

(c)          ISDA Early Termination Date.  Party A has the right to designate an
Early Termination Date pursuant to Section 6 of the Agreement;

 

(d)         Other ISDA Events.  The announcement of any event that if
consummated, would result in an Extraordinary Event or the occurrence of any
Change in Law (other than as specified in clause (Y) of the definition thereof)
or a Delisting; provided that in case of a Delisting, in addition to the
provisions of Section 12.6(a)(iii) of the 2002 Definitions, it will also
constitute a Delisting if the Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any of the New
York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market
(or their respective successors); and provided further that the definition of
“Change in Law” provided in Section 12.9(a)(ii) of the 2002 Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”, (ii) replacing the parenthetical beginning after the
word “regulation” in the second line thereof with the words “(including, for the
avoidance of doubt and without limitation, (x) any tax law or (y) adoption,
effectiveness or promulgation of new regulations authorized or mandated by
existing statute)” and (iii) immediately following the word “Transaction” in
clause (X) thereof, adding the phrase “in the manner contemplated by Party A on
the Forward Date for such Transaction”; or

 

(e)          Ownership Event.  In the reasonable judgment of Party A, on any
day, the Share Amount for such day exceeds the Post-Effective Limit for such day
(if any applies).

 

The “Maximum Specified Borrow Rate” for any Transaction shall be the per annum
rate set forth in the Supplemental Confirmation for such Transaction.

 

The “Share Amount” as of any day is the number of Shares that Party A and any
person whose ownership position would be aggregated with that of Party A (Party
A or any such person, a “Party A Person”) under any law, rule, regulation,
regulatory order or organizational documents or contracts of Party B that are,
in each case, applicable to ownership of Shares (“Applicable Restrictions”),
owns, beneficially owns, constructively owns, controls, holds the power to vote
or otherwise meets a relevant definition of ownership of under any Applicable
Restriction, as determined by Party A in its reasonable discretion. The
“Post-Effective Limit” means a number of Shares equal to (x) the minimum number
of Shares that could reasonably be expected to give rise to reporting or
registration obligations (other than any filing under Section 13 or Section 16
of the Exchange Act and the rules and regulations thereunder, in each case, as
in effect on the date hereof) or other requirements (including obtaining prior
approval from any person or entity) of a Party A Person, or could reasonably be
expected to result in an adverse effect on a Party A Person, under any
Applicable Restriction, as determined by Party A in its reasonable discretion
(it being understood that reporting obligations under Section 13 or Section 16
of the Exchange Act and the rules and regulations thereunder, in each case, as
in effect on the date hereof, will not be deemed to have such an adverse
effect), minus (y) 1% of the number of Shares outstanding.

 

Materially Increased Costs

 

Upon the occurrence of any Change in Law specified in clause (Y) of the
definition thereof, Party A and Party B agree to negotiate in good faith for at
least five Exchange Business Days (or until such earlier date as an agreement is
reached) (any such period of negotiation, the “Amendment Period”) to amend this
Master Forward Confirmation and/or any Supplemental Confirmation to take account
of the resulting “materially increased cost” as such phrase is used in clause
(Y) of the

 

15

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definition of “Change in Law.”  Such amendment may, if agreed by Party A and
Party B, result in a Change in Law to which an Acceleration Event applies.  If,
after negotiating in good faith during the Amendment Period to so amend this
Master Forward Confirmation and/or the relevant Supplemental Confirmation, Party
A and Party B are unable to agree upon such an amendment, the relevant Change in
Law specified in clause (Y) of the definition thereof shall constitute an
Acceleration Event, notwithstanding any language in clause (d) under the heading
“Acceleration Events” above to the contrary.  The Calculation Agent may, in
connection with the designation of a Termination Settlement Date following such
Acceleration Event, reduce the Forward Price for the relevant Transaction to
compensate Party A for any “materially increased costs” incurred during the
relevant Amendment Period.  Any Change in Law that results in an actual cost to
Party A of borrowing a number of Shares equal to the Base Amount for the
relevant Transaction to hedge its exposure to such Transaction that is equal to
or less than a rate equal to the Maximum Specified Borrow Rate for such
Transaction shall not constitute a “materially increased cost” for purposes of
clause (Y) of the definition of “Change in Law” as a result of such cost.

 

Termination Settlement:

 

Upon the occurrence of any Acceleration Event in respect of any Transaction,
Party A shall have the right to designate, upon at least one Scheduled Trading
Day’s notice, any Scheduled Trading Day following such occurrence to be a
Settlement Date under such Transaction (a “Termination Settlement Date”) to
which Physical Settlement shall apply, and to select the number of Settlement
Shares relating to such Termination Settlement Date; provided that (i) in the
case of an Acceleration Event arising out of an Ownership Event, the number of
Settlement Shares for the relevant Transaction so designated by Party A shall
not exceed the number of Shares necessary to reduce the Share Amount to the
Post-Effective Limit and (ii) in the case of an Acceleration Event arising out
of a Stock Borrow Event the number of Settlement Shares for the relevant
Transaction so designated by Party A shall not exceed the number of Shares as to
which such Stock Borrow Event exists.  If, upon designation of a Termination
Settlement Date by Party A pursuant to the preceding sentence, Party B fails to
deliver the Settlement Shares relating to such Termination Settlement Date when
due or otherwise fails to perform obligations within its control in respect of
the relevant Transaction, it shall be an Event of Default with respect to Party
B and Section 6 of the Agreement shall apply.  If an Acceleration Event occurs
during an Unwind Period for any Transaction relating to a number of Settlement
Shares for the relevant Transaction to which Cash Settlement or Net Share
Settlement applies, then on the Termination Settlement Date relating to such
Acceleration Event, notwithstanding any election to the contrary by Party B,
Cash Settlement or Net Share Settlement shall apply to the portion of such
Settlement Shares relating to such Unwind Period as to which Party A has unwound
its hedge and Physical Settlement shall apply in respect of (x) the remainder
(if any) of such Settlement Shares and (y) the Settlement Shares designated by
Party A in respect of such Termination Settlement Date.

 

Under no circumstances will Party A be entitled to an adjustment to the terms of
any Transaction for the effects of an Extraordinary Dividend (other than as set
forth above under the heading “Extraordinary Dividends”) or a change in expected
dividends.

 

Private Placement Procedures:

 

If Party B is unable to comply with the provisions of “Covenant of Party B”
above because of a change in law or a change in the policy of the Securities and
Exchange Commission or its staff, or Party A otherwise determines that in its
reasonable opinion any Settlement Shares to be delivered to Party A by Party B
may not be freely returned by Party A or its Affiliates to securities lenders as
described under “Covenant of Party B” above, then delivery of any such
Settlement Shares (the “Restricted Shares”) shall be effected pursuant to Annex
A hereto, unless waived by Party A; provided that Party A may not otherwise
determine that the Settlement Shares are Restricted Shares based solely upon
Party A (or its Affiliate) not having borrowed a number of Shares equal to the
Base Amount for the relevant Transaction on or before the Effective Date for
such

 

16

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Transaction if there has been no change in law or change in the policy of the
Securities and Exchange Commission or its staff.

 

Rule 10b5-1:

 

It is the intent of Party A and Party B that following any election of Cash
Settlement or Net Share Settlement by Party B, the purchase of Shares by Party A
during any Unwind Period comply with the requirements of
Rule 10b5-1(c)(1)(i)(B) of the Exchange Act and that this Master Forward
Confirmation and each Supplemental Confirmation shall be interpreted to comply
with the requirements of Rule 10b5-1(c).

 

Party B acknowledges that (i) during any Unwind Period Party B does not have,
and shall not attempt to exercise, any influence over how, when or whether to
effect purchases of Shares by Party A (or its agent or Affiliate) in connection
with this Master Forward Confirmation or any Supplemental Confirmation and
(ii) Party B is entering into the Agreement, this Master Forward Confirmation
and each Supplemental Confirmation in good faith and not as part of a plan or
scheme to evade compliance with federal securities laws including, without
limitation, Rule 10b-5 promulgated under the Exchange Act.

 

Party B hereby agrees with Party A that during any Unwind Period Party B shall
not communicate, directly or indirectly, any Material Non-Public Information (as
defined herein) to any EDG Personnel (as defined below).  For purposes of each
Transaction, “Material Non-Public Information” means information relating to
Party B or the Shares that (a) has not been widely disseminated by wire service,
in one or more newspapers of general circulation, by communication from Party B
to its shareholders or in a press release, or contained in a public filing made
by Party B with the Securities and Exchange Commission, or otherwise
disseminated in a manner constituting “public disclosure” within the meaning of
Regulation FD under the Exchange Act and (b) a reasonable investor might
consider to be of importance in making an investment decision to buy, sell or
hold Shares.  For the avoidance of doubt and solely by way of illustration,
information should be presumed “material” if it relates to such matters as
dividend increases or decreases, earnings estimates, changes in previously
released earnings estimates, significant expansion or curtailment of operations,
a significant increase or decline of orders, significant merger or acquisition
proposals or agreements, significant new products or discoveries, extraordinary
borrowing, major litigation, liquidity problems, extraordinary management
developments, purchase or sale of substantial assets, or other similar
information For purposes of each Transaction, “EDG Personnel” means any employee
on the trading side of the Equity Derivatives Group of Party A and does not
include any of Party A’s “private side” equity or equity-linked personnel
(including, without limitation, any Party A equity or equity-linked legal
personnel) (or any other person or persons designated from time to time in
writing to Party B by Party A).

 

Maximum Share Delivery:

 

Notwithstanding any other provision of this Master Forward Confirmation or any
Supplemental Confirmation, in no event will Party B be required to deliver on
any Settlement Date for any Transaction hereunder, whether pursuant to Physical
Settlement, Net Share Settlement, Termination Settlement or any Private
Placement Settlement, more than a number of Shares equal to the Forward Shares
for such Transaction to Party A.  In connection with any partial settlement of a
Transaction hereunder (other than a settlement to which the “Private Placement”
procedures in Annex A to this Master Forward Confirmation apply), the number of
Forward Shares shall be subject to reduction by an amount equal to the product
of 1.5 and the number of Settlement Shares for such partial settlement.  The
“Forward Shares” for any Transaction shall be as set forth in the Supplemental
Confirmation for such Transaction.

 

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Transfer and Assignment:

 

The provisions of Section 7 of the Agreement shall apply to each Transaction.
Notwithstanding the immediately preceding sentence, Party A may, without the
prior written consent of Party B, assign or transfer any of its rights or
delegate any of its duties hereunder and under each Supplemental Confirmation to
any Affiliate of Party A (i) whose obligations hereunder, under such
Supplemental Confirmation and under the Agreement are guaranteed by Party A or
(ii) that has a rating for its long-term, unsecured and unsubordinated
indebtedness or a long-term issuer rating that is equal to or better than the
rating for Party A’s long-term, unsecured and unsubordinated indebtedness or
Party A’s long-term issuer rating, as the case may be, at the time of such
assignment or transfer so long as, in each case, at the time of such assignment
or transfer, (a) such assignee or transferee is organized under the laws of the
United States or any State thereof; (b) Party B will not, as a result of such
assignment or transfer, be required to pay to such assignee or transferee an
amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the
Agreement greater than the amount in respect of which Party B would have been
required to pay Party A in the absence of such assignment or transfer; (c) Party
B will not, as a result of such assignment or transfer, receive a payment from
which an amount has been withheld or deducted on account of a Tax under
Section 2(d)(i) of the Agreement in excess of that which Party A would have been
required to so withhold or deduct in the absence of such assignment or transfer;
and (d) no Event of Default, Potential Event of Default or Termination Event
will occur as a result of such assignment or transfer. Notwithstanding any other
provision in this Master Forward Confirmation or any Supplemental Confirmation
to the contrary requiring or allowing Party A to purchase, sell, receive or
deliver any Shares or other securities to or from Party B, Party A may designate
any of its Affiliates (each, a “Designee”) to purchase, sell, receive or deliver
such Shares or other securities and otherwise to perform Party A’s obligations
in respect of any Transaction and any such Designee may assume such
obligations.  Party A shall be discharged of its obligations to Party B only to
the extent of performance by a Designee; Party A shall otherwise remain fully
liable to Party B for all of its obligations under this Master Forward
Confirmation and each Supplemental Confirmation.

 

Indemnity:

 

Party B agrees to indemnify Party A and its Affiliates and their respective
directors, officers, agents and controlling parties (Party A and each such
Affiliate or person being an “Indemnified Party”) from and against any and all
losses, claims, damages and liabilities, joint and several, incurred by or
asserted against such Indemnified Party arising out of, in connection with, or
relating to, any breach of any covenant or representation made by Party B in
this Master Forward Confirmation, any Supplemental Confirmation or the Agreement
and will reimburse any Indemnified Party for all reasonable expenses (including
reasonable legal fees and expenses) as they are incurred in connection with the
investigation of, preparation for, or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party thereto, but only to the extent that the relevant loss, claim,
damage, liability or expense is found in a final and nonappealable judgment by a
court of competent jurisdiction to have resulted from such breach. Party B will
not be liable under this Indemnity paragraph to the extent that any loss, claim,
damage, liability or expense is found in a final and nonappealable judgment by a
court to have resulted from Party A’s negligence or willful misconduct.

 

Notice:

 

Non-Reliance:

Applicable

 

 

Additional Acknowledgments:

Applicable

 

18

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Agreements and Acknowledgments

 

Regarding Hedging Activities:

Applicable

 

4.                                      The Agreement is further supplemented by
the following provisions:

 

No Collateral or Setoff:

 

Notwithstanding Section 6(f) or any other provision of the Agreement or any
other agreement between the parties to the contrary, the obligations of Party B
under the Transactions are not secured by any collateral.  Obligations under the
Transactions shall not be set off against any other obligations of the parties,
whether arising under the Agreement, under this Master Forward Confirmation,
under any Supplemental Confirmation, under any other agreement between the
parties hereto, by operation of law or otherwise, and no other obligations of
the parties shall be set off against obligations under any Transaction, whether
arising under the Agreement, under this Master Forward Confirmation, under any
Supplemental Confirmation under any other agreement between the parties hereto,
by operation of law or otherwise, and each party hereby waives any such right of
setoff.  In calculating any amounts under Section 6(e) of the Agreement with
respect to any Transaction, notwithstanding anything to the contrary in the
Agreement, (a) separate amounts shall be calculated as set forth in such
Section 6(e) with respect to (i) such Transaction and (ii) all other
Transactions, and (b) such separate amounts shall be payable pursuant to
Section 6(d)(ii) of the Agreement.

 

Status of Claims in Bankruptcy:

 

Party A acknowledges and agrees that neither this Master Forward Confirmation
nor any Supplemental Confirmation is intended to convey to Party A rights with
respect to the Transactions contemplated hereby that are senior to the claims of
common stockholders in any U.S. bankruptcy proceedings of Party B; provided,
however, that nothing herein shall limit or shall be deemed to limit Party A’s
right to pursue remedies in the event of a breach by Party B of its obligations
and agreements with respect to this Master Forward Confirmation, any
Supplemental Confirmation and the Agreement; and provided further, that nothing
herein shall limit or shall be deemed to limit Party A’s rights in respect of
any transaction other than the Transactions.

 

Limit on Beneficial Ownership:

 

Notwithstanding any other provisions hereof, Party A shall not have the “right
to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares hereunder and
Party A shall not be entitled to take delivery of any Shares deliverable
hereunder in respect of any Transaction (in each case, whether in connection
with the purchase of Shares on any Settlement Date or any Termination Settlement
Date, any Private Placement Settlement or otherwise) to the extent (but only to
the extent) that, after such receipt of any Shares hereunder, (i) the Share
Amount would exceed the Post-Effective Limit for such Transaction, (ii) the
Section 16 Percentage would exceed 9.5% or (iii) Party A and each person subject
to aggregation of Shares with Party A under Section 13 or Section 16 of the
Exchange Act and rules promulgated thereunder (the “Party A Group”) would
directly or indirectly beneficially own (as such term is defined for purposes of
Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder)
in excess of the Threshold Number of Shares for such Transaction.  Any purported
delivery hereunder in respect of any Transaction shall be void and have no
effect to the extent (but only to the extent) that, after such delivery, (i) the
Share Amount would exceed the Post-Effective Limit for such Transaction,
(ii) the Section 16 Percentage would exceed 9.5% or (iii) Party A Group would
directly or indirectly so beneficially own in excess of the Threshold Number of
Shares for such Transaction.  If any delivery owed to Party A hereunder in
respect of any Transaction is not made, in whole or in part, as a result of this
provision, Party B’s obligation to make such delivery shall not be extinguished
and Party B shall make such delivery as promptly as practicable after, but in no
event later than one Exchange Business Day after, Party A gives notice to Party
B that, after such delivery, (i) the Share Amount

 

19

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would not exceed the Post-Effective Limit for such Transaction, (ii) the
Section 16 Percentage would not exceed 9.5% and (iii) Party A Group would not
directly or indirectly so beneficially own in excess of the Threshold Number of
Shares for such Transaction.  The “Threshold Number of Shares” for any
Transaction means a number of Shares equal to 4.9% of the outstanding Shares on
the Trade Date for such Transaction. The “Section 16 Percentage” as of any day
is the fraction, expressed as a percentage, (A) the numerator of which is the
number of Shares that Party A and any of its Affiliates or any other person
subject to aggregation with Party A for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act, or any “group” (within the meaning of
Section 13 of the Exchange Act) of which Party A is or may be deemed to be a
part beneficially owns (within the meaning of Section 13 of the Exchange Act),
without duplication, on such day (or, to the extent that for any reason the
equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) and
(B) the denominator of which is the number of Shares outstanding on such day.

 

In addition, notwithstanding anything herein to the contrary, if any delivery
owed to Party A hereunder is not made, in whole or in part, as a result of the
immediately preceding paragraph, Party A shall be permitted to make any payment
due in respect of such Shares to Party B in two or more tranches that correspond
in amount to the number of Shares delivered by Party B to Party A pursuant to
the immediately preceding paragraph.

 

Other Forward Transactions:

 

Party B agrees that (x) it shall not cause to occur, or permit to exist, any
Forward Hedge Selling Period at any time there is (1) a “Forward Hedge Selling
Period” (or equivalent concept) relating to any other issuer forward sale or
similar transaction (including, without limitation, any “Transaction” under (as
and defined under) any substantially identical master forward confirmation) with
any financial institution other than Party A (an “Other Forward Transaction”),
(2) any “Unwind Period” (or equivalent concept) hereunder or under any Other
Forward Transaction or (3) any other period in which Party B directly or
indirectly issues and sells Shares pursuant to an underwriting agreement (or
similar agreement including, without limitation, any equity distribution
agreement) (such period, a “Selling Period”) that Party B enters into with any
financial institution other than Party A, and (y) Party B shall not cause to
occur, or permit to exist, an Unwind Period at any time there is an “Unwind
Period” (or equivalent concept) under any Other Forward Transaction that is not
an Other ATM Forward Transaction (as defined below), a “Forward Hedge Selling
Period” (or equivalent concept) relating to any Transaction or any Other Forward
Transaction or any Selling Period.  Party A acknowledges, however, that,
pursuant to the Sales Agreement, Party B may enter into one or more forward
transactions (each, an “Other ATM Forward Transaction” and collectively, the
“Other ATM Forward Transactions”) with another Forward Purchaser (as defined in
the Sales Agreement) (an “Other Dealer”). Party A and Party B agree that if
Party B designates a “Settlement Date” (or equivalent concept) with respect to
one or more Other ATM Forward Transactions for which “Cash Settlement” (or
equivalent concept) or “Net Share Settlement” (or equivalent concept) is
applicable, and the resulting “Unwind Period” (or equivalent concept) for such
Other Forward Transaction coincides for any period of time with an Unwind Period
for a Transaction (the “Overlap Unwind Period”), Party B shall notify Party A at
least one Scheduled Trading Day prior to the commencement of such Overlap Unwind
Period of the first Scheduled Trading Day and length of such Overlap Unwind
Period, and Party A shall be permitted to purchase Shares to unwind its hedge in
respect of such Transaction only on alternating Scheduled Trading Days during
such Overlap Unwind Period, commencing on the first, second, third or later
Scheduled Trading Day of such Overlap Unwind Period, as notified to Party A by
Party B at least one Scheduled Trading Day prior to such Overlap Unwind Period
(which alternating Scheduled Trading Days, for the avoidance of doubt, would be
every other Scheduled Trading Day if there is only one Other Dealer in such
Overlap Unwind Period, every third Scheduled Trading Day if there are two Other
Dealers, etc.).

 

20

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New York General Obligations Law:

 

Party B and Party A agree and acknowledge that: (A) the Transactions
contemplated by this Master Forward Confirmation will be entered into in
reliance on the fact that this Master Forward Confirmation and each Supplemental
Confirmation hereto form a single agreement between Party B and Party A, and
Party A would not otherwise enter into such Transactions; (B) this Master
Forward Confirmation, together with each Supplemental Confirmation hereto, is a
“qualified financial contract”, as such term is defined in
Section 5-701(b)(2) of the New York General Obligations Law; (C) each
Supplemental Confirmation hereto, regardless of whether transmitted
electronically or otherwise, constitutes a “confirmation in writing sufficient
to indicate that a contract has been made between the parties” hereto, as set
forth in Section 5-701(b)(3)(b) of the New York General Obligations Law; and
(D) this Master Forward Confirmation and each Supplemental Confirmation hereto
constitute a prior “written contract”, as set forth in Section 5-701(b)(1)(b) of
the New York General Obligations Law, and each party hereto intends and agrees
to be bound by this Master Forward Confirmation and such Supplemental
Confirmation.

 

Forward Placement Notices:

 

Party B and Party A agree that, upon the effectiveness of any accepted Forward
Placement Notice relating to a Forward (as such term is defined in the Sales
Agreement), in respect of the Transaction to which such accepted Forward
Placement Notice relates, each of the representations, warranties, covenants,
agreements and other provisions of this Master Forward Confirmation and the
Supplemental Confirmation for such Transaction (including, without limitation,
the provisions above in Section 3 of this Master Forward Confirmation under the
heading “Extraordinary Dividends,” Party A’s right to designate a Termination
Settlement Date in respect of such Transaction and the termination of such
Transaction following an Insolvency Filing) shall govern, and be applicable to,
such Transaction as of the first Trading Day of the Forward Hedge Selling Period
for such Transaction as if the Trade Date for such Transaction were such first
Trading Day.  Notwithstanding anything to the contrary in this Master Forward
Confirmation, any Supplemental Confirmation, the Agreement, the 2002 Definitions
or the 2000 Definitions, if Party A designates a Termination Settlement Date
with respect to a Transaction (1) following the occurrence of an Event of
Default or Termination Event, other than an Insolvency Filing, and such
Termination Settlement Date is to occur before the date that is one Settlement
Cycle after the last day of the Forward Hedge Selling Period for such
Transaction or (2) prior to Party B’s execution of the Supplemental Confirmation
relating to such Transaction, then, for purposes of such Termination Settlement
Date, a Supplemental Confirmation relating to such Transaction reasonably
completed by Party A (as if the Trade Date for such Transaction were the last
day of the Forward Hedge Selling Period on which the Forward Seller sold Forward
Hedge Shares for such Transaction) shall, notwithstanding the provisions under
“Conditions to Effectiveness” above, be deemed to be immediately effective.

 

Delivery of Cash:

 

For the avoidance of doubt, nothing in this Master Forward Confirmation or any
Supplemental Confirmation shall be interpreted as requiring Party B to deliver
cash in respect of the settlement of any Transaction, except (i) as set forth
above under “Extraordinary Dividends,” (ii) in circumstances where cash
settlement is within Party B’s control (including, without limitation, where
Party B elects to deliver or receive cash or where Party B has made a Private
Placement Settlement in accordance with Annex A unavailable due to the
occurrence of events within its control) or (iii) in those circumstances in
which holders of Shares would also receive cash.  For the avoidance of doubt,
the preceding sentence shall not be construed as limiting any damages that may
be payable by Party B as a result of breach of this Master Forward Confirmation
or any Supplemental Confirmation.

 

21

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Wall Street Transparency and Accountability Act:

 

In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither
the enactment of the WSTAA or any regulation under the WSTAA, nor any
requirement under the WSTAA or an amendment made by the WSTAA, shall limit or
otherwise impair either party’s otherwise applicable rights to terminate,
renegotiate, modify, amend or supplement this Master Forward Confirmation, any
Supplemental Confirmation or the Agreement, as applicable, arising from a
termination event, force majeure, illegality, increased costs, regulatory change
or similar event under this Master Forward Confirmation, any Supplemental
Confirmation, the 2002 Definitions incorporated herein, or the Agreement
(including, but not limited to, rights arising from any Acceleration Event or
Illegality (as defined in the Agreement)).

 

Miscellaneous:

 

(a)         Addresses for Notices.  For the purpose of Section 12(a) of the
Agreement:

 

Address for notices or communications to Party A:

 

Barclays Bank PLC

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

Attn:                                            Paul Robinson

Telephone:           (+1) 212-526-0111

Facsimile:                 (+1) 917-522-0458

Email:                                    paul.robinson1@barclays.com

 

Address for notices or communications to Party B:

 

Address:                                                                        
Corporate Office Properties Trust

6711 Columbia Gateway Drive, Suite 300

Columbia, MD 21046

Attention:                                                                
General Counsel

Telephone No.:                                     (443) 285-5400

Email:                                                                                   
david.finch@copt.com

 

(b)         Waiver of Right to Trial by Jury.  Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding relating to this Master Forward
Confirmation and/or any Supplemental Confirmation.  Each party (i) certifies
that no representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit action or proceeding, seek to enforce the foregoing waiver and
(ii) acknowledges that it and the other party have been induced to enter into
this Master Forward Confirmation and each Supplemental Confirmation by, among
other things, the mutual waivers and certifications herein.

 

Acknowledgements:

 

The parties hereto intend for:

 

(a)         each Transaction to be a “securities contract” as defined in
Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”),
qualifying for the protections under Section 555 of the Bankruptcy Code;

 

(b)         a party’s right to liquidate each Transaction and to exercise any
other remedies upon the occurrence of any Event of Default under the Agreement
with respect to the other party to constitute a “contractual right” as defined
in the Bankruptcy Code;

 

22

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(c)          Party A to be a “financial institution” within the meaning of
Section 101(22) of the Bankruptcy Code; and

 

(d)         all payments for, under or in connection with each Transaction, all
payments for the Shares and the transfer of such Shares to constitute
“settlement payments” as defined in the Bankruptcy Code.

 

If Party A is a bank regulated by the Federal Deposit Insurance Corporation,
(i) Party A recognizes and intends that each Transaction is, and shall
constitute, a “qualified financial contract” as that term is defined in 12
U.S.C. §1821(e)(8)(d)(i), as the same may be amended, modified, or supplemented
from time to time; and (ii) Party A represents and warrants that it is
authorized by appropriate corporate action under applicable law to enter into
each Transaction as evidenced by the execution of this Master Forward
Confirmation and the related Supplemental Confirmation by an officer of Party A
at the level of vice president or higher.

 

Severability:

 

If any term, provision, covenant or condition of this Master Forward
Confirmation or any Supplemental Confirmation, or the application thereof to any
party or circumstance, shall be held to be invalid or unenforceable in whole or
in part for any reason, the remaining terms, provisions, covenants, and
conditions hereof shall continue in full force and effect as if this Master
Forward Confirmation and the related Supplemental Confirmation had been executed
with the invalid or unenforceable provision eliminated, so long as this Master
Forward Confirmation and such related Supplemental Confirmation as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Master Forward Confirmation and such
Supplemental Confirmation and the deletion of such portion of the Master Forward
Confirmation and/or such Supplemental Confirmation will not substantially impair
the respective benefits or expectations of parties to this Master Forward
Confirmation and such Supplemental Confirmation; provided, however, that this
severability provision shall not be applicable if any provision of Section 2, 5,
6 or 13 of the Agreement (or any definition or provision in Section 14 to the
extent that it relates to, or is used in or in connection with any such Section)
shall be so held to be invalid or unenforceable.

 

Tax Matters:

 

(a)         Payer Tax Representations. For the purpose of Section 3(e) of the
Agreement, Party A and Party B make the following representation:

 

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of the Agreement) to be made by it to
the other party under the Agreement. In making this representation, it may rely
on (i) the accuracy of any representations made by the other party pursuant to
Sections 3(f) and 3(g) of the Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of the Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of the Agreement, except
that it will not be a breach of this representation where reliance is placed on
clause (ii) above and the other party does not deliver a form or document under
Section 4(a)(iii) of the Agreement by reason of material prejudice to its legal
or commercial position.

 

(b)         Payee Tax Representations. For the purpose of Section 3(f) of the
Agreement, Party A and Party B make the following representations:

 

23

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(i)             The following representations will apply to Party A:

 

A.                                    Each payment received or to be received by
it in connection with the Agreement is effectively connected with its conduct of
a trade or business within the United States; and

 

B.                                    Party A is a “foreign person” (as that
term is used in Section 1.6041-4(a)(4) of the United States Treasury
Regulations) for United States federal income tax purposes.

 

(ii)          The following representations will apply to Party B:

 

A.                                    Party B is a corporation for U.S. federal
income tax purposes.

 

B.                                    Party B is a “U.S. person” (as that term
is used in section 7701(a)(30) of the U.S. Internal Revenue Code of 1986, as
amended (the “Code”), and section 1.1441-4(a)(3)(ii) of United States Treasury
Regulations) for U.S. federal income tax purposes and a real estate investment
trust that is an exempt recipient under U.S. Treasury Regulation
Section 1.6049-4(c)(1)(ii)(J).

 

(c)          Agreements to Deliver Documents. For the purpose of
Section 4(a)(i) of the Agreement, Party A and Party B each agrees to deliver, as
applicable, (i) in the case of Party A, a completed and accurate U.S. Internal
Revenue Service Form W-8ECI (or successor thereto) and (ii) in the case of Party
B, a complete and accurate U.S. Internal Revenue Service Form W-9 (or successor
thereto), in each case (x) promptly upon execution of this Master Forward
Confirmation and each Supplemental Confirmation, (y) promptly upon reasonable
demand by the other party and (z) promptly upon learning that any form
previously provided has become obsolete or incorrect.

 

(d)         Change of Account. Section 2(b) of the Agreement is hereby amended
by the addition of the following after the word “delivery” in the first line
thereof: “to another account in the same legal and tax jurisdiction”.

 

(e)          “Tax” as used in this “Tax Matters” section and “Indemnifiable Tax”
as defined in Section 14 of the Agreement shall not include (i) any tax imposed
or collected pursuant to Sections 1471 through 1474 of the Code, any current or
future regulations or official interpretations thereof, any agreement entered
into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such Sections of
the Code (a “FATCA Withholding Tax”) and (ii) any tax imposed or collected
pursuant to Section 871(m) of the Code or any current or future regulations or
official interpretation thereof (a “Section 871(m) Withholding Tax”). For the
avoidance of doubt, each of a FATCA Withholding Tax and a
Section 871(m) Withholding Tax is a Tax the deduction or withholding of which is
required by applicable law for purposes of Section 2(d) of the Agreement.

 

(f)           Deduction or Withholding for Tax. Sections 2(d)(i), 2(d)(i)(4) and
2(d)(ii)(1) of the Agreement and the definition of “Tax” are hereby amended by
replacing the words “pay”, “paid”, “payment” or “payments” with the words “pay
or deliver”, “paid or delivered”, “payment or delivery” or “payments or
deliveries”, respectively.

 

(g)          In connection with entering into this Master Forward Confirmation
and each Supplemental Confirmation, neither Party B nor any Affiliate thereof
will acquire any long position (either directly or indirectly, including through
a derivative transaction) with respect to the Shares.

 

24

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Role of Agent:

 

Each of Party A and Party B acknowledges to and agrees with the other party
hereto and to and with Barclays Capital Inc. (for purposes of this paragraph and
the provisions under the captions “Regulatory Provisions” and “Method of
Delivery” below, the “Agent”) that (i) the Agent is acting as agent for Party A
under each Transaction pursuant to instructions from such party, (ii) the Agent
is not a principal or party to any Transaction, and may transfer its rights and
obligations with respect to any Transaction, (iii) the Agent shall have no
responsibility, obligation or liability, by way of issuance, guaranty,
endorsement or otherwise in any manner with respect to the performance of either
party under any Transaction, (iv) Party A and the Agent have not given, and
Party B is not relying (for purposes of making any investment decision or
otherwise) upon, any statements, opinions or representations (whether written or
oral) of Party A or the Agent, other than the representations expressly set
forth in this Master Forward Confirmation, each Supplemental Confirmation or the
Agreement, and (v) each party agrees to proceed solely against the other party,
and not the Agent, to collect or recover any money or securities owed to it in
connection with each Transaction.  Each party hereto acknowledges and agrees
that the Agent is an intended third party beneficiary hereunder.  Party B
acknowledges that the Agent is an affiliate of Party A. Party A will be acting
for its own account in respect of this Master Forward Confirmation and the
Transactions contemplated hereunder.

 

Regulatory Provisions:

 

The time of dealing for each Transaction will be confirmed by Party A upon
written request by Party B. The Agent will furnish to Party B upon written
request a statement as to the source and amount of any remuneration received or
to be received by the Agent in connection with each Transaction.

 

Method of Delivery:

 

Whenever delivery of funds or other assets is required hereunder by or to Party
B, such delivery shall be effected through the Agent.  In addition, all notices,
demands and communications of any kind relating to the Transactions between
Party A and Party B shall be transmitted exclusively through the Agent.

 

2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol:

 

The parties agree that the terms of the 2013 EMIR Portfolio Reconciliation,
Dispute Resolution and Disclosure Protocol published by ISDA on July 19, 2013
(“Protocol”) apply to the Agreement as if the parties had adhered to the
Protocol without amendment.  In respect of the Attachment to the Protocol,
(i) the definition of “Adherence Letter” shall be deemed to be deleted and
references to “Adherence Letter” shall be deemed to be to this section (and
references to “such party’s Adherence Letter” and “its Adherence Letter” shall
be read accordingly), (ii) references to “adheres to the Protocol” shall be
deemed to be “enters into the Agreement”, (iii) references to “Protocol Covered
Agreement” shall be deemed to be references to the Agreement (and each “Protocol
Covered Agreement” shall be read accordingly), and (iv) references to
“Implementation Date” shall be deemed to be references to the date of this
Master Forward Confirmation.  For the purposes of this section:

 

(a)         Party A is a Portfolio Data Sending Entity and Party B is a
Portfolio Data Receiving Entity;

 

(b)         Party A and Party B may use a Third Party Service Provider, and each
of Party A and Party B consents to such use including the communication of the
relevant data in relation to Party A

 

25

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and Party B to such Third Party Service Provider for the purposes of the
reconciliation services provided by such entity.

 

(c)          The Local Business Days for such purposes in relation to Party A
and Party B is New York, New York, USA.

 

(d)         The following are the applicable email addresses.

 

Portfolio Data:

Party A: MarginServicesPortRec@barclays.com

 

 

 

Party B: david.finch@copt.com

 

 

Notice of discrepancy:

Party A: PortRecDiscrepancy@barclays.com

 

 

 

Party B: david.finch@copt.com

 

 

Dispute Notice:

Party A: EMIRdisputenotices@barclays.com

 

 

 

Party B: david.finch@copt.com

 

 

NFC Representation Protocol:

 

The parties agree that the provisions set out in the Attachment to the ISDA 2013
EMIR NFC Representation Protocol published by ISDA on March 8, 2013 (the “NFC
Representation Protocol”) shall apply to the Agreement as if each party were an
Adhering Party under the terms of the NFC Representation Protocol.  In respect
of the Attachment to the NFC Representation Protocol, (i) the definition of
“Adherence Letter” shall be deemed to be deleted and references to “Adherence
Letter” shall be deemed to be to this section (and references to “the relevant
Adherence Letter” and “its Adherence Letter” shall be read accordingly),
(ii) references to “adheres to the Protocol” shall be deemed to be “enters into
the Agreement”, (iii) references to “Covered Master Agreement” shall be deemed
to be references to the Agreement (and each “Covered Master Agreement” shall be
read accordingly), and (iv) references to “Implementation Date” shall be deemed
to be references to the date of this Master Forward Confirmation.  Party B
confirms that it enters into this Master Forward Confirmation and each
Supplemental Confirmation as a party making the NFC Representation (as such term
is defined in the NFC Representation Protocol).  Party B shall promptly notify
Party A of any change to its status as a party making the NFC Representation.

 

Acknowledgment regarding certain UK Resolution Authority Powers:

 

(a)         Party A is authorized by the Prudential Regulation Authority (“PRA”)
and regulated by the Financial Conduct Authority and the PRA, and is subject to
the Bank of England’s resolution authority powers, as contained in the EU Bank
Recovery and Resolution Directive, and transposed in the UK by the Banking Act
2009. The powers include the ability to (i) suspend temporarily the termination
and security enforcement rights of parties to a qualifying contract, and/or
(ii) bail-in certain liabilities owed by Party A including the writing-down of
the value of certain liabilities and/or the conversion of such liabilities into
equity holdings (as described in further detail below). Pursuant to PRA
requirements, Party A is required to ensure that counterparties to certain
agreements it enters into which are governed by non-EEA law contractually
recognize the validity and applicability of the above-mentioned resolution
powers, in order to ensure their effectiveness in cross border scenarios.

 

(b)         The terms of this section apply only to the Transactions and
constitute our entire agreement in relation to the matters contained in this
section, and do not extend or amend the resolution authority powers of the Bank
of England or any replacement authority. The terms of this section may not be
amended by any other agreements, arrangements or understandings

 

26

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between Party A and Party B. By signing the Transactions, Party B acknowledges
and agrees that, notwithstanding the governing law of the Transactions, the
Transactions are subject to, and Party B will be bound by the effect of an
application of, the Bank of England’s (or replacement resolution authority’s)
powers to (i) stay termination and/or security enforcement rights, and
(ii) bail-in liabilities.

 

[Remainder of page intentionally left blank]

 

27

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Master Forward Confirmation and returning
it to Dealer.

 

Very truly yours,

 

 

 

BARCLAYS BANK PLC

 

 

 

 

 

By:

/s/ Paul Robinson

 

Name: Paul Robinson

 

Title: Managing Director

 

 

 

Accepted and confirmed as

 

of the date first above written:

 

 

 

CORPORATE OFFICE PROPERTIES TRUST

 

 

 

 

 

By:

/s/ Stephen E. Budorick

 

Name: Stephen E. Budorick

 

Title: President and Chief Executive Officer

 

 

[Signature Page to Master Forward Confirmation]

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FORM OF SUPPLEMENTAL CONFIRMATION

 

To:

 

Corporate Office Properties Trust (“Party B”)

 

 

6711 Columbia Gateway Drive, Suite 300

 

 

Columbia, MD 21046

 

 

 

From:

 

Barclays Bank PLC (“Party A”)

 

 

5 The North Colonnade

 

 

Canary Wharf, London E14 4BB

 

 

Facsimile: +44(20)77736461

 

 

Telephone: +44 (20) 777 36810

 

 

 

 

 

c/o Barclays Capital Inc.

 

 

as Agent for Barclays Bank PLC

 

 

745 Seventh Avenue

 

 

New York, NY 10019

 

 

Telephone: +1 212 412 4000

 

 

 

Date:

 

[         ], 20[  ]

 

Dear Sir(s):

 

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Party A, through its agent
Barclays Capital Inc., and Party B (together, the “Contracting Parties”) on the
Trade Date specified below.  This Supplemental Confirmation is a binding
contract between Party A and Party B as of the relevant Trade Date for the
Transaction referenced below.

 

1.                                      This Supplemental Confirmation
supplements, forms part of, and is subject to the Master Forward Confirmation
dated as of November 13, 2018 (the “Master Forward Confirmation”) between the
Contracting Parties, as amended and supplemented from time to time.  All
provisions contained in the Master Forward Confirmation govern this Supplemental
Confirmation except as expressly modified below.

 

2.                                      The terms of the Transaction to which
this Supplemental Confirmation relates are as follows:

 

Trade Date:

[       ], 20[  ]

 

 

Effective Date:

[       ], 20[  ]

 

 

Maturity Date:

[       ], 20[  ]

 

 

Base Amount:

[        ]

 

 

Initial Forward Price:

USD [    ]

 

 

Spread:

[ .  ]%

 

 

Volume-Weighted Hedge Price:

USD [    ]

 

 

Specified Rate:

[   ] basis points per annum

 

I-1

--------------------------------------------------------------------------------

 

Maximum Specified Borrow Rate:

[   ] basis points per annum

 

 

Forward Shares:

[       ](1) Shares

 

--------------------------------------------------------------------------------

(1)  To be 1.5 times the Base Amount.

 

2

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Supplemental Confirmation and returning it
to Dealer.

 

Very truly yours,

 

 

 

BARCLAYS BANK PLC

 

 

 

 

 

By:

 

 

Name:

 

Title: Authorised Signatory

 

 

 

Accepted and confirmed as

 

of the Trade Date:

 

 

 

CORPORATE OFFICE PROPERTIES TRUST

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

[Signature Page to Forward Supplemental Confirmation]

 

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Schedule I

 

 

Forward Price Reduction Date

 

Forward Price Reduction Amount

 

 

 

 

 

Trade Date

 

USD 0.00

 

[         ], 20[  ]

 

USD [    ]

 

[         ], 20[  ]

 

USD [    ]

 

[         ], 20[  ]

 

USD [    ]

 

……

 

……

 

[         ], 20[  ]

 

USD [    ]

 

 

2

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ANNEX A

 

PRIVATE PLACEMENT PROCEDURES

 

(i)                                     If Party B delivers the Restricted
Shares pursuant to this clause (i) (a “Private Placement Settlement”), then
delivery of Restricted Shares by Party B shall be effected in customary private
placement procedures with respect to such Restricted Shares reasonably
acceptable to Party A; provided that if, on or before the date that a Private
Placement Settlement would occur, Party B has taken, or caused to be taken, any
action that would make unavailable either the exemption pursuant to
Section 4(a)(2) of the Securities Act for the sale by Party B to Party A (or any
Affiliate designated by Party A) of the Restricted Shares or the exemption
pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales
of the Restricted Shares by Party A (or any such Affiliate of Party A) or Party
B fails to deliver the Restricted Shares when due or otherwise fails to perform
obligations within its control in respect of a Private Placement Settlement, it
shall be an Event of Default with respect to Party B and Section 6 of the
Agreement shall apply.  The Private Placement Settlement of such Restricted
Shares shall include customary representations, covenants, blue sky and other
governmental filings and/or registrations, indemnities to Party A, due diligence
rights (for Party A or any designated buyer of the Restricted Shares by Party
A), opinions and certificates, and such other documentation as is customary for
private placement agreements, all reasonably acceptable to Party A.  In the case
of a Private Placement Settlement, Party A shall, in its good faith discretion,
adjust the number of Restricted Shares to be delivered to Party A hereunder
and/or the Forward Price for the relevant Transaction in a commercially
reasonable manner to reflect the fact that such Restricted Shares may not be
freely returned to securities lenders by Party A and may only be saleable by
Party A at a discount to reflect the lack of liquidity in Restricted Shares. 
Notwithstanding the Agreement, this Confirmation or any Supplemental
Confirmation, the date of delivery of such Restricted Shares shall be the
Clearance System Business Day following notice by Party A to Party B of the
number of Restricted Shares to be delivered pursuant to this clause (i).  For
the avoidance of doubt, delivery of Restricted Shares shall be due as set forth
in the previous sentence and not be due on the Settlement Date for the relevant
Transaction or Termination Settlement Date for the relevant Transaction that
would otherwise be applicable.

 

(ii)                                  If Party B delivers any Restricted Shares
in respect of any Transaction, unless it is advised in writing by outside
counsel that any of the following actions would violate applicable securities
laws because of a change in law or a change in the policy of the Securities and
Exchange Commission or its staff occurring after the date hereof, Party B agrees
that (i) such Shares may be transferred by and among Party A and its Affiliates
and (ii) after the minimum “holding period” within the meaning of
Rule 144(d) under the Securities Act has elapsed after the applicable Settlement
Date, Party B shall promptly remove, or cause the transfer agent for the Shares
to remove, any legends referring to any transfer restrictions from such Shares
upon delivery by Party A (or such Affiliate of Party A) to Party B or such
transfer agent of seller’s and broker’s representation letters customarily
delivered by Party A or its Affiliates in connection with resales of restricted
securities pursuant to Rule 144 under the Securities Act, each without any
further requirement for the delivery of any certificate, consent, agreement,
opinion of counsel, notice or any other document, any transfer tax stamps or
payment of any other amount or any other action by Party A (or such Affiliate of
Party A).

 

A-1

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EXHIBIT B

 

FORM OF LETTER AGREEMENT

 

[Date]

 

Corporate Office Properties Trust

6711 Columbia Gateway Drive, Suite 300

Columbia, MD 21046

 

Barclays Bank PLC

5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile: +44(20)77736461

Telephone: +44 (20) 777 36810

 

Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

Telephone: +1 212 412 4000

 

RE:                           Letter Agreement In Respect Of Ownership
Limitation Calculation

 

Reference is made to the Amended and Restated Declaration of Trust, as amended
from time to time (the “Declaration”), of Corporate Office Properties Trust (the
“Company”), and to certain limitations contained in Section 7.2.1 of the
Declaration with respect to ownership of Common Shares (the “Common Share
Ownership Limit”), and with respect to ownership of Equity Shares (the
“Aggregate Share Ownership Limit” and, together with the Common Share Ownership
Limit, the “Ownership Limits”). The Common Share Ownership Limit and the
Aggregate Share Ownership Limit are designed to facilitate the Company’s
qualification as a Real Estate Investment Trust (“REIT”) for U.S. federal income
tax purposes and generally limit ownership of the Company’s Common Shares by a
Person to not more than 9.8% (in value or in number of shares, whichever is more
restrictive) of the aggregate of the outstanding Common Shares, and ownership of
the Company’s Equity Shares by a Person to not more than 9.8% of the value of
the outstanding Equity Shares, respectively.  Except as otherwise indicated,
terms used herein have the meanings provided in the Declaration.

 

The Company has entered into a Master Forward Confirmation, dated as of
November 13, 2018, with Barclays Bank PLC (the “Forward Purchaser”) relating to
certain share forward transactions (the “Master Forward Confirmation”).  The
Company and the Forward Purchaser also intend to enter into a Supplemental
Confirmation, to be dated on or about the last Trading Day (as defined in the
Sales Agreement (as defined below)) of the Forward Hedge Selling Period (as
defined in the Sales Agreement) relating to the Forward Sale (as defined below),
regarding the sale (the “Forward Sale”) of the Company’s common shares of
beneficial interest, par value $0.01 per share (“Common Shares”), by the Company
to the Forward Purchaser (such Supplemental Confirmation, together with the
Master Forward Confirmation, the “Forward Sale Agreement”).  Further, in
connection with the Forward Sale Agreement, and as set forth in the Sales
Agreement (the “Sales Agreement”) dated November 13, 2018, among the Company,
Corporate Office Properties, L.P., Barclays Capital Inc., as Agent, the Forward
Purchaser and Barclays Capital Inc., as Forward Seller (the “Forward Seller”),
the Forward Purchaser or its affiliate proposes to borrow and sell through the
Forward Seller Common Shares. The Forward Purchaser and the Forward Seller are
herein referred to collectively as the “Dealer Parties.”

 

The Company hereby covenants and agrees that it does not, and will not, treat
any Forward Sale Agreement, by its terms, as constituting or giving rise to
Beneficial Ownership or Constructive Ownership by any Dealer Party of the Common
Shares underlying such Forward Sale Agreement for purposes of the Ownership
Limits. Accordingly, this letter agreement shall serve as confirmation and
agreement by the Company that the Dealer Parties are not

 

B-1

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required to seek or obtain an Excepted Holder Limit from the Company’s Board of
Trustees under Article VII of the Declaration in respect of any Common Shares
underlying the Forward Sale Agreements prior to delivery of such Common Shares
to any Dealer Party upon “Physical Settlement” or “Net Share Settlement” of any
Forward Sale Agreement. Nothing herein shall be construed as a waiver of the
Ownership Limits set forth in the Declaration, and any Equity Shares that are
Beneficially Owned by the Dealer Parties shall remain subject to the Ownership
Limits.

 

The Dealer Parties shall cooperate with the Company’s reasonable requests for
information regarding the number of Equity Shares owned by the Dealer Parties,
subject to applicable law.

 

This letter agreement shall be governed by and construed in accordance with the
laws of the State of Maryland.

 

Please indicate your acceptance of and agreement with the foregoing by executing
this letter in the space provided below.

 

[Remainder of this page intentionally blank.]

 

B-2

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Corporate Office Properties Trust

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Barclays Bank PLC,

 

as Forward Purchaser

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

Authorised Signatory

 

 

 

 

 

Barclays Capital Inc.,

 

as Forward Seller

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

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