Exhibit 10.5


 




 





CONSTRUCTION LOAN AGREEMENT


 


Dated as of May 2, 2008


 


by and among


 


CORPORATE OFFICE PROPERTIES, L.P.,


as
Borrower


 


CORPORATE OFFICE PROPERTIES TRUST,


as
Parent,


 


KEYBANC
CAPITAL MARKETS


as
Arranger,


 


KEYBANK
NATIONAL ASSOCIATION,


as Administrative Agent,


 


BANK
OF AMERICA, N.A.,


as
Syndication Agent,


 


MANUFACTURERS
AND TRADERS TRUST COMPANY,


as
Documentation Agent,


 


and


 


THE FINANCIAL INSTITUTIONS INITIALLY SIGNATORY HERETO


AND THEIR ASSIGNEES PURSUANT TO SECTION 12.5.,


as
Lenders




 





 

















 


TABLE OF CONTENTS


 


	
  Article I.
  Definitions

  	
  1

  
	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
  Section 1.2.

  	
  General;
  References to Times

  	
  17

  
	
   

  	
   

  	
   

  
	
  Article II.
  Credit Facility

  	
  18

  
	
   

  	
   

  
	
  Section 2.1.

  	
  Loans

  	
  18

  
	
  Section 2.2.

  	
  Rates and
  Payment of Interest on Loans

  	
  21

  
	
  Section 2.3.

  	
  Number of
  Interest Periods

  	
  22

  
	
  Section 2.4.

  	
  Repayment
  of Loans

  	
  22

  
	
  Section 2.5.

  	
  Prepayments

  	
  22

  
	
  Section 2.6.

  	
  Continuation

  	
  23

  
	
  Section 2.7.

  	
  Conversion

  	
  23

  
	
  Section 2.8.

  	
  Notes

  	
  24

  
	
  Section 2.9.

  	
  Extension
  of Termination Date

  	
  24

  
	
  Section 2.10.

  	
  Amount
  Limitations

  	
  25

  
	
  Section 2.11.

  	
  Increase
  of Commitments

  	
  25

  
	
   

  	
   

  	
   

  
	
  Article III.
  Payments, Fees and Other General Provisions

  	
  26

  
	
   

  	
   

  
	
  Section 3.1.

  	
  Payments

  	
  26

  
	
  Section 3.2.

  	
  Pro Rata
  Treatment

  	
  26

  
	
  Section 3.3.

  	
  Sharing
  of Payments, Etc.

  	
  26

  
	
  Section 3.4.

  	
  Several
  Obligations

  	
  27

  
	
  Section 3.5.

  	
  Minimum
  Amounts

  	
  27

  
	
  Section 3.6.

  	
  Fees

  	
  27

  
	
  Section 3.7.

  	
  Computations

  	
  28

  
	
  Section 3.8.

  	
  Usury

  	
  28

  
	
  Section 3.9.

  	
  Agreement
  Regarding Interest and Charges

  	
  28

  
	
  Section 3.10.

  	
  Statements
  of Account

  	
  29

  
	
  Section 3.11.

  	
  Defaulting
  Lenders

  	
  29

  
	
  Section 3.12.

  	
  Taxes

  	
  30

  
	
   

  	
   

  	
   

  
	
  Article IV.
  Yield Protection, Etc.

  	
  32

  
	
   

  	
   

  
	
  Section 4.1.

  	
  Additional
  Costs; Capital Adequacy

  	
  32

  
	
  Section 4.2.

  	
  Suspension
  of LIBOR Loans

  	
  33

  
	
  Section 4.3.

  	
  Illegality

  	
  33

  
	
  Section 4.4.

  	
  Compensation

  	
  33

  
	
  Section 4.5.

  	
  Treatment
  of Affected Loans

  	
  34

  
	
  Section 4.6.

  	
  Change of
  Lending Office

  	
  35

  
	
  Section 4.7.

  	
  Assumptions
  Concerning Funding of LIBOR Loans

  	
  35

  
	
   

  	
   

  	
   

  
	
  Article V.
  Borrowing Base Properties

  	
  35

  
	
   

  	
   

  
	
  Section 5.1.

  	
  Eligibility
  of Properties

  	
  35

  
	
  Section 5.2.

  	
  Release
  of Properties

  	
  39

  
	
  Section 5.3.

  	
  Frequency
  of Calculations of Borrowing Base

  	
  39

  



 


i

















 


	
  Article VI.
  Conditions Precedent

  	
  40

  
	
   

  	
   

  
	
  Section 6.1.

  	
  Conditions
  Precedent to Effectiveness of Agreement

  	
  40

  
	
  Section 6.2.

  	
  Additional
  Conditions Precedent To All Loans

  	
  42

  
	
  Section 6.3.

  	
  Initial
  Construction Requirements to Making of Loans Under a Borrowing Base Property
  Sub-Facility

  	
  43

  
	
  Section 6.4.

  	
  Deliveries
  for Subsequent Loans for Borrowing Base Properties

  	
  43

  
	
  Section 6.5.

  	
  Deliveries
  for Final Disbursements

  	
  44

  
	
  Section 6.6.

  	
  Conditions
  as Covenants

  	
  44

  
	
   

  	
   

  	
   

  
	
  Article VII.
  Representations and Warranties

  	
  44

  
	
   

  	
   

  
	
  Section 7.1.

  	
  Representations
  and Warranties

  	
  44

  
	
  Section 7.2.

  	
  Survival
  of Representations and Warranties, Etc.

  	
  49

  
	
   

  	
   

  	
   

  
	
  Article VIII.
  Affirmative Covenants

  	
  49

  
	
   

  	
   

  
	
  Section 8.1.

  	
  Use of
  Proceeds

  	
  49

  
	
  Section 8.2.

  	
  Further
  Assurances

  	
  50

  
	
  Section 8.3.

  	
  Certain
  Covenants of Existing Credit Agreement

  	
  50

  
	
  Section 8.4.

  	
  Foreign
  Assets Control

  	
  50

  
	
  Section 8.5.

  	
  Construction
  Related Covenants

  	
  50

  
	
   

  	
   

  	
   

  
	
  Article IX.
  Information

  	
  54

  
	
   

  	
   

  
	
  Section 9.1.

  	
  Compliance
  Certificate

  	
  54

  
	
  Section 9.2.

  	
  Other
  Information

  	
  54

  
	
   

  	
   

  	
   

  
	
  Article X.
  Default

  	
  55

  
	
   

  	
   

  
	
  Section 10.1.

  	
  Events of
  Default

  	
  55

  
	
  Section 10.2.

  	
  Remedies
  Upon Event of Default

  	
  57

  
	
  Section 10.3.

  	
  Remedies
  Upon Default

  	
  58

  
	
  Section 10.4.

  	
  Allocation
  of Proceeds

  	
  58

  
	
  Section 10.5.

  	
  Performance
  by Agent

  	
  59

  
	
  Section 10.6.

  	
  Rights
  Cumulative

  	
  59

  
	
   

  	
   

  	
   

  
	
  Article XI.
  The Agent

  	
  59

  
	
   

  	
   

  
	
  Section 11.1.

  	
  Authorization
  and Action

  	
  59

  
	
  Section 11.2.

  	
  Agent’s
  Reliance, Etc.

  	
  60

  
	
  Section 11.3.

  	
  Notice of
  Defaults

  	
  61

  
	
  Section 11.4.

  	
  KeyBank
  as Lender

  	
  61

  
	
  Section 11.5.

  	
  Approvals
  of Lenders

  	
  61

  
	
  Section 11.6.

  	
  Lender
  Credit Decision, Etc.

  	
  62

  
	
  Section 11.7.

  	
  Collateral
  Matters

  	
  62

  
	
  Section 11.8.

  	
  Indemnification
  of Agent

  	
  63

  
	
  Section 11.9.

  	
  Successor
  Agent

  	
  64

  
	
  Section 11.10.

  	
  Titled
  Agent

  	
  65

  
	
   

  	
   

  	
   

  
	
  Article XII.
  Miscellaneous

  	
  65

  
	
   

  	
   

  
	
  Section 12.1.

  	
  Notices

  	
  65

  



 


ii

















 


	
  Section 12.2.

  	
  Expenses

  	
  66

  
	
  Section 12.3.

  	
  Setoff

  	
  67

  
	
  Section 12.4.

  	
  Litigation;
  Jurisdiction; Other Matters; Waivers

  	
  67

  
	
  Section 12.5.

  	
  Successors
  and Assigns

  	
  68

  
	
  Section 12.6.

  	
  Amendments

  	
  72

  
	
  Section 12.7.

  	
  Nonliability
  of Agent and Lenders

  	
  73

  
	
  Section 12.8.

  	
  Confidentiality

  	
  73

  
	
  Section 12.9.

  	
  Indemnification

  	
  74

  
	
  Section 12.10.

  	
  Termination;
  Survival

  	
  76

  
	
  Section 12.11.

  	
  Severability
  of Provisions

  	
  77

  
	
  Section 12.12.

  	
  GOVERNING
  LAW

  	
  77

  
	
  Section 12.13.

  	
  Counterparts

  	
  77

  
	
  Section 12.14.

  	
  Obligations
  With Respect to Loan Parties

  	
  77

  
	
  Section 12.15.

  	
  Limitation
  of Liability

  	
  77

  
	
  Section 12.16.

  	
  Entire
  Agreement

  	
  77

  
	
  Section 12.17.

  	
  Construction

  	
  78

  
	
  Section 12.18.

  	
  Patriot
  Act

  	
  78

  
	
  Section 12.19.

  	
  Existing
  Credit Agreement Provisions

  	
  78

  
	
   

  	
   

  
	
  SCHEDULE I

  	
  Commitments

  	
   

  
	
  SCHEDULE 5.1.

  	
  Borrowing
  Base Properties

  	
   

  
	
  SCHEDULE 7.1.(b)

  	
  Ownership
  of Property Owners

  	
   

  
	
  SCHEDULE
  8.5(f)

  	
  Insurance
  Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Form of
  Assignment and Acceptance Agreement

  	
   

  
	
  EXHIBIT
  B

  	
  Form of
  Borrowing Base Certificate

  	
   

  
	
  EXHIBIT
  C

  	
  Form of
  Draw Request

  	
   

  
	
  EXHIBIT
  D

  	
  Form of
  Guaranty

  	
   

  
	
  EXHIBIT
  E

  	
  Form of
  Notice of Continuation

  	
   

  
	
  EXHIBIT
  F

  	
  Form of
  Notice of Conversion

  	
   

  
	
  EXHIBIT
  G

  	
  Form of
  Pledge Agreement

  	
   

  
	
  EXHIBIT
  H

  	
  Form of
  Note

  	
   

  
	
  EXHIBIT
  I

  	
  Form of
  Opinion of Counsel

  	
   

  
	
  EXHIBIT
  J

  	
  Form of
  Compliance Certificate

  	
   

  
	
  EXHIBIT
  K

  	
  Patriot
  Act and OFAC Form

  	
   

  
				



 


iii

















 


THIS
CONSTRUCTION LOAN AGREEMENT (this “Agreement”)
dated as of May 2, 2008 by and among CORPORATE OFFICE PROPERTIES, L.P., a
limited partnership formed under the laws of the State of Delaware (the “Borrower”), CORPORATE OFFICE PROPERTIES TRUST, a real estate
investment trust formed under the laws of the State of Maryland (the “Parent”), each of the financial institutions initially a
signatory hereto together with their assignees pursuant to Section 12.5.,
KEYBANC CAPITAL MARKETS, INC., as Arranger (the “Arranger”),
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, BANK OF AMERICA, N.A.,
as Syndication Agent (the “Syndication Agent”),
and MANUFACTURERS AND TRADERS TRUST COMPANY, as Documentation Agent (the “Documentation Agent”).


 


WHEREAS,
the Lenders desire to make to the Borrower a construction credit facility in an
aggregate principal amount of $225,000,000 on the terms and conditions
contained herein and the other Loan Documents.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties hereto agree
as follows:


 


ARTICLE I.  DEFINITIONS


 


Section 1.1.           Definitions.


 


In
addition to terms defined elsewhere herein, the following terms shall have the
following meanings for the purposes of this Agreement:


 


“Additional Costs” has the meaning given that term in Section 4.1.


 


“Adjusted LIBOR” means, with respect to
each Interest Period for any LIBOR Loan, the rate obtained by dividing (a) LIBOR
for such Interest Period by (b) a percentage equal to 1 minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”) as specified in Regulation D of the Board of Governors of
the Federal Reserve System (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Loans is
determined or any applicable category of extensions of credit or other assets
which includes loans by an office of any Lender outside of the United States of
America to residents of the United States of America). Any change in such
maximum rate shall result in a change in Adjusted LIBOR on the date on which
such change in such maximum rate becomes effective.


 


“Administrative Questionnaire” means an Administrative
Questionnaire in a form supplied by the Agent to the Lenders from time to time.


 


“Affiliate” means any Person (other than the Agent or any
Lender): (a) directly or indirectly controlling, controlled by, or under
common control with, the Parent; (b) directly or indirectly owning or
holding five percent (5.0%) or more of any Equity Interest in the Parent; or (c) five
percent (5.0%) or more of whose voting stock or other Equity Interest is
directly or indirectly owned or held by the Parent.  For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling”, “controlled by”
and “under common control 


 

















 


with”)
means the possession directly or indirectly of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or otherwise.  The Affiliates of a Person shall include any
officer or director of such Person.  In
no event shall the Agent or any Lender be deemed to be an Affiliate of the
Borrower or the Parent.


 


“Agent” means KeyBank National Association, as contractual
representative for the Lenders under the terms of this Agreement, and any of
its successors.


 


“Agreement Date” means the date as of which this Agreement is
dated.


 


“Applicable Law” means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all governmental
bodies and all orders and decrees of all courts, tribunals and arbitrators.


 


“Applicable Margin” means the percentage set forth below
corresponding to the ratio of Total Indebtedness to Total Asset Value as
determined in accordance with Section 9.1. of the Existing Credit
Agreement:


 


	
  Level

  	
   

  	
  Total Indebtedness to Total Asset Value

  	
   

  	
  Applicable Margin for

  LIBOR Loans

  	
   

  	
  Applicable Margin for

  Base Rate Loans

  	
   

  
	
  1

  	
   

  	
  Less than 0.50 to 1.00

  	
   

  	
  1.60

  	
  %

  	
  0.0

  	
  %

  
	
  2

  	
   

  	
  Greater than or equal to
  0.50 to 1.00 and less than 0.55 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  0.0

  	
  %

  
	
  3

  	
   

  	
  Greater than or equal to
  0.55 to 1.00 and less than 0.60 to 1.00

  	
   

  	
  1.85

  	
  %

  	
  0.0

  	
  %

  
	
  4

  	
   

  	
  Greater than or equal to
  0.60 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  0.0

  	
  %

  



 


The
Applicable Margin shall be determined by the Agent from time to time, based on
the ratio of Total Indebtedness to Total Asset Value as set forth in the
Compliance Certificate most recently delivered by the Borrower pursuant to Section 9.1.  Any adjustment to the Applicable Margin shall
be effective (a) in the case of a Compliance Certificate delivered in
connection with quarterly financial statements of the Parent delivered pursuant
to Section 8.1. of the Existing Credit Agreement, as of the date
fifty-five (55) days following the end of the last day of the applicable fiscal
quarter covered by such Compliance Certificate, (b) in the case of a
Compliance Certificate delivered in connection with annual financial statements
of the Parent delivered pursuant to Section 8.2 of the Existing Credit
Agreement, as of the date one hundred (100) days following the end of the last
day of the applicable fiscal year covered by such Compliance Certificate, and (c) in
the case of any other Compliance Certificate, as of the date five (5) Business
Days following the Agent’s request for such Compliance Certificate.  If the Borrower fails to deliver a Compliance
Certificate pursuant to Section 9.1., the Applicable Margin shall equal
the percentages corresponding to Level 4 until the date of the delivery of the
required Compliance Certificate. 
Notwithstanding the foregoing, for the period from the Effective Date
through but excluding the date on which the Agent first determines the
Applicable Margin as set forth above, the Applicable Margin shall equal the
percentages corresponding to Level 1. 
The provisions of this definition are subject to Section 2.2.(c).


 


2

















 


“Applicable Period” has the meaning set forth in Section 2.2.(c).


 


“Appraisal” means an MAI certified appraisal of an applicable
Borrowing Base Property performed in accordance with FIRREA and the Agent’s
appraisal requirements by an appraiser selected and retained by the Agent.


 


“Arranger” means KeyBanc Capital Markets,
together with its successors and permitted assigns.


 


“Assignment and Acceptance Agreement” means an Assignment and
Acceptance Agreement among a Lender, an Eligible Assignee and the Agent,
substantially in the form of Exhibit A.


 


“Available Funding Capacity” shall mean for a particular
Borrowing Base Property the aggregate of (a) the Commitments, less (b) the
aggregate amount of the Borrowing Base Values for each outstanding Borrowing
Base Property Sub-Facility (other than the subject Borrowing Base Property for
which such Available Funding Capacity is being determined), less (c) the
aggregate principal amount of any outstanding Loans under the subject Borrowing
Base Property.


 


“Base Rate” means the per annum rate of interest equal to the
greater of (a) the Prime Rate or (b) the Federal Funds Rate plus
one-half of one percent (0.5%).  Any
change in the Base Rate resulting from a change in the Prime Rate or the
Federal Funds Rate shall become effective as of 12:01 a.m. on the Business
Day on which each such change occurs. 
The Base Rate is a reference rate used by the Lender acting as the Agent
in determining interest rates on certain loans and is not intended to be the
lowest rate of interest charged by the Lender acting as the Agent or any other
Lender on any extension of credit to any debtor.


 


“Base Rate Loan” means a Loan bearing interest at a rate
based on the Base Rate.


 


“Borrower” has the meaning set forth in the introductory
paragraph hereof and shall include the Borrower’s successors and permitted
assigns.


 


“Borrowing Base” means an amount equal to the sum of the
Borrowing Base Values of the Borrowing Base Properties as determined and
adjusted from time to time in accordance with Section 5.3.  A Borrowing Base Property shall be excluded
from calculations of the Borrowing Base if at any time (a) the Agent shall
cease to have a perfected, first-priority security interest in all of the
outstanding Equity Interests of (i) the Property Owner that owns such Borrowing
Base Property or (ii) any Subsidiary of the Borrower or the Parent (other
than the Borrower) that owns, directly or indirectly, any Equity Interests in
such Property Owner or (b) such Property ceases to be an Eligible
Property.


 


“Borrowing Base Certificate” means a report in substantially
the form of Exhibit B, certified by the chief financial officer or
treasurer of the Parent, setting forth the calculations required to establish
the Borrowing Base Value for each Borrowing Base Property and the 


 


3

















 


Borrowing
Base for all Borrowing Base Properties as of a specified date, all in form and
detail reasonably satisfactory to the Agent.


 


“Borrowing Base Property” means an Eligible Property which
the Agent or the Requisite Lenders, as the case may be, have agreed to include
in calculations of the Borrowing Base pursuant to Section 5.1.


 


“Borrowing Base Property Sub-Facility” has the meaning given
that term in Section 2.1.(c).


 


“Borrowing Base Value” means, with respect to a Borrowing
Base Property for any date of determination, an amount, as determined by the
Agent in its sole discretion, equal to the lesser of (a) 85% of the total
budgeted cost of Construction of the applicable Improvements on the Borrowing Base
Property as set out in the Total Development Budget (which Total Development
Budget shall not exceed $50,000,000), (b) 70% of the Proforma Value, and (c) the
Maximum DSCR Loan Amount, as such amount may be reduced by the Agent following
the Agent’s receipt and review of the Appraisal of such Borrowing Base
Property.


 


“Business Day” means (a) any day other than a Saturday,
Sunday or other day on which banks in Cleveland, Ohio are authorized or
required to close and (b) with reference to a LIBOR Loan, any such day
that is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.


 


“Capitalized Lease Obligation” means obligations under a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP.  The amount of a
Capitalized Lease Obligation is the capitalized amount of such obligation
determined in accordance with GAAP.


 


“Collateral”
means any property directly or indirectly securing any of the Obligations or
any other obligation of a Person under or in respect of any Loan Document to
which it is a party, and includes, without limitation, all “Pledged Collateral”
under and as defined in the Pledge Agreement.


 


“Commitment”
means, as to each Lender, such Lender’s obligation to make Loans
pursuant to Section 2.1., in an amount up to, but not exceeding, the
amount set forth for such Lender on Schedule I as such Lender’s “Commitment
Amount” or as set forth in the applicable Assignment and Acceptance Agreement
or as may be increased from time to time pursuant to Section 2.11. or as appropriate to reflect any
assignments to or by such Lender effected in accordance with Section 12.5.


 


“Commitment Percentage” means, as to each Lender, the ratio,
expressed as a percentage, of (a) the amount of such Lender’s Commitment
to (b) the aggregate amount of the Commitments of all Lenders; provided,
however, that if at the time of determination the Commitments have terminated
or been reduced to zero, the “Commitment Percentage” of each Lender shall be
the Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.


 


4

















 


“Completion Date” means, (a) for any Construction on a
Borrowing Base Property where the Improvements consist of a shell completion
and additional tenant improvements, the earlier of (i) the completion date
required by the Lease for such Improvements to be constructed on the Borrowing
Base Property, or (ii) the completion date listed in the Construction
Schedule or (b) for any Construction on a Borrowing Base Property where
the Improvements consist solely of the shell completion of the relevant office
building, the completion date listed in the Construction Schedule, each as
approved by the Agent, as such Construction Schedule may be modified pursuant
to the terms of this Agreement; provided that in no event shall any Completion
Date be a date later than a date ninety (90) days prior to the existing
Termination Date.


 


“Compliance Certificate” has the meaning set forth in Section 9.1.


 


“Construction or construction” means the construction and
equipping of the Improvements in accordance with the Plans and Specifications
to complete the Borrowing Base Property’s shell completion, the installation of
all personal property, fixtures and equipment required for the operation of the
Borrowing Base Property and all applicable tenant improvements required by the
applicable Leases.


 


“Construction Documents” means, with respect to the
Construction of Improvements on each Borrowing Base Property, the General
Contract, the applicable site plan, Plans and Specifications and the
Construction Schedule.


 


“Construction Schedule” means a schedule satisfactory to the
Agent, establishing a timetable for completion of the Construction, showing, on
a monthly basis, the anticipated progress of the Construction and also showing
that the Improvements can be completed on or before the applicable Completion
Date.


 


“Continue”, “Continuation”
and “Continued” each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest
Period pursuant to Section 2.6.


 


“Convert”, “Conversion” and
“Converted” each refers to the
conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.7.


 


“Credit Event” means any of the following: (a) the
making (or deemed making) of any Loan and (b) the Conversion of a Loan.


 


“Date of Borrowing” has the meaning set forth in Section 2.1.(g).


 


“Default” means any of the events specified in Section 10.1.,
whether or not there has been satisfied any requirement for the giving of
notice, the lapse of time, or both.


 


“Defaulting Lender” has the meaning set forth in Section 3.11.


 


“Dollars” or “$” means the
lawful currency of the United States of America.


 


5

















 


“Draw Request” means a written request for any disbursement
of Loan proceeds with respect to a Borrowing Base Property, in the form
attached hereto as Exhibit C or in such other format as is acceptable to
the Agent and otherwise in compliance with Section 2.1.(d).


 


“Effective Date” means the later of:  (a) the Agreement Date; and (b) the
date on which all of the conditions precedent set forth in Section 6.1.
shall have been fulfilled or waived in writing by the Requisite Lenders.


 


“Eligible Assignee” means any Person who is, at the time of
determination: (i) a Lender or an affiliate of a Lender; (ii) a
commercial bank, trust, trust company, insurance company, investment bank or
pension fund organized under the laws of the United States of America, or any
state thereof, and having total assets in excess of $5,000,000,000; (iii) a
savings and loan association or savings bank organized under the laws of the
United States of America, or any state thereof, and having a tangible net worth
of at least $500,000,000; or (iv) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having total assets in excess of $10,000,000,000, provided that such bank
is acting through a branch or agency located in the United States of
America.  If such Person is not currently
a Lender or an affiliate of a Lender, such Person’s (or its parent’s) senior
unsecured long term indebtedness must be rated BBB or higher by S&P, Baa2
or higher by Moody’s, or the equivalent or higher of either such rating by
another rating agency reasonably acceptable to the Agent.


 


“Eligible Property” means a Property which satisfies all of
the following requirements:  (a) the
Property is owned or leased under a ground lease entirely by the Property
Owner; (b) such Property is zoned by the applicable Governmental Authority
to have a commercial office building; (c) such Property is located in one
of the 48 contiguous states of the United States of America or in the District
of Columbia and is located in one of Borrower’s core markets or is part of the
Borrower’s tenant relationship driven development program; (d) none of the
Equity Interests issued by the Property Owner that owns such Property or issued
by any Subsidiary that owns, directly or indirectly, any Equity Interests in
such Property Owner is subject to any Negative Pledge or any Lien other than
Permitted Liens; (e) subject to such exceptions as may be acceptable to
the Agent, the following actions may be taken without the need to obtain the
consent of any Person:  (i) Liens
may be granted to the Agent for the benefit of the Lenders in all such Equity
Interests as security for the Obligations, (ii) the Agent may exercise its
remedies with respect to any such Lien while an Event of Default exists, (iii) the
Agent, any Lender or any of their affiliates may become the owner of such
Equity Interests, and (iv) the Borrower, directly or indirectly through a
Subsidiary, has the right to sell, transfer or otherwise dispose of any of such
Equity Interests; (f) such Property is free of all structural defects or
major architectural deficiencies, title defects, environmental conditions or
other adverse matters except for defects, deficiencies, conditions or other
matters individually or collectively which are not material to the profitable
operation of such Property; (g) the Property is in compliance with all
Environmental Laws; (h) the Total Development Budget for such Property
shall not exceed $50,000,000; and (i) such Property is not subject to any
Liens, except Permitted Liens.


 


6
















 


“Environmental Laws” means any Applicable Law relating to
environmental protection or the manufacture, storage, remediation, disposal or
clean-up of Hazardous Materials including, without limitation, the following:
Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act,
33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601
et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.;
regulations of the Environmental Protection Agency and any applicable rule of
common law and any judicial interpretation thereof relating primarily to the
environment or Hazardous Materials.


 


“Environmental Proceedings” means any environmental
proceedings, whether civil (including actions by private parties), criminal or
administrative proceedings, relating to the Borrowing Base Property.


 


“Equity Interest” means, with respect to any Person, any
share of capital stock of (or other ownership or profit interests in) such
Person, any warrant, option or other right for the purchase or other
acquisition from such Person of any share of capital stock of (or other
ownership or profit interests in) such Person, any security convertible into or
exchangeable for any share of capital stock of (or other ownership or profit
interests in) such Person or warrant, right or option for the purchase or other
acquisition from such Person of such shares (or such other interests), and any
other ownership or profit interest in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such share, warrant, option, right or other interest
is authorized or otherwise existing on any date of determination.


 


“ERISA” means the Employee Retirement Income Security Act of
1974, as in effect from time to time.


 


“Event of Default” means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any other
condition has been satisfied.


 


“Existing Credit
Agreement” means that certain Second Amended and Restated
Credit Agreement dated as October 1, 2007, by and among the Parent, the
Borrower, the lenders party thereto, KeyBank National Association, as Agent,
and the other parties thereto.


 


“Existing Credit Agreement Default” means any event or
condition set forth in Section 10.1 of the Existing Credit Agreement or
such other section or provision of the Existing Credit Agreement which relates
to Events of Default (as defined in such Existing Credit Agreement) if such
Existing Credit Agreement is amended and such amendments are incorporated into
this Agreement pursuant to Section 12.19.


 


“Existing Credit Agreement Representations” means the
representations and warranties set forth in Article VI of the Existing
Credit Agreement.


 


“Extension Request” has the meaning set forth in Section 2.9.


 


7

















 


“Federal Funds Rate” means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent by federal funds dealers selected by the Agent
on such day on such transaction as determined by the Agent.


 


“Fees” means the fees and commissions provided for or
referred to in Section 3.6. and any other fees payable by the Borrower
hereunder or under any other Loan Document.


 


“FIRREA” means the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended from time to time.


 


“Funds from Operations” shall have the meaning set forth in
the Existing Credit Agreement.


 


“General Contract” means the general contract(s) between
the Borrower or relevant Property Owner and General Contractor, pertaining to
the construction of all Improvements for a Borrowing Base Property.


 


“General Contractor” means the general contractor for a
Borrowing Base Property.


 


“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.


 


“Governmental Approvals” means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities, including, without limitation, all
consents, licenses and permits (including, without limitation, any building
permit, environmental permit, utility permit, land use permit, wetland permit and
any other permits) and all other authorization or approvals required from any
Governmental Authority for the Construction in accordance with the Plans and
Specifications or required from any Governmental Authority for the operation of
the Improvements on any Borrowing Base Property.


 


“Governmental Authority” means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau, commission, board, department
or other entity (including, without limitation, the Federal Deposit 


 


8

















 


Insurance
Corporation, the Comptroller of the Currency or the Federal Reserve Board, any
central bank or any comparable authority) or any arbitrator with authority to
bind a party at law.


 


“Guarantor” means any Person that is a party to the Guaranty
as a “Guarantor” and in any event shall include the Parent and each existing or
future Property Owner.


 


“Guaranty” means the Guaranty to which each Guarantor is a
party substantially in the form of Exhibit D.


 


“Hard Cost Advances” has the meaning set forth in Section 2.1.(f).


 


“Hazardous Material” means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as “hazardous substances”, “hazardous materials”,
“hazardous wastes”, “toxic substances” or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP”
toxicity or “EP toxicity”; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c) any
flammable substances or explosives or any radioactive materials; (d) asbestos
in any form; (e) toxic mold; and (f) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million.


 


“Improvements” means the improvements more particularly
described in each of the Plans and Specifications for each Borrowing Base
Property, and offsite improvements and together with any existing improvements
not to be demolished.


 


“Indebtedness” has the meaning given that term in the
Existing Credit Agreement as in effect on the Agreement Date.


 


“Indemnified Costs” has the meaning set forth in Section 12.9.


 


“Indemnified Parties” has the meaning set forth in Section 12.9.


 


“Indemnity Proceeding” has the meaning set forth in Section 12.9.


 


“Interest Period” means with respect to any LIBOR Loan, each
period commencing on the date such LIBOR Loan is made or the last day of the
next preceding Interest Period for such Loan and ending seven (7) days, or
1, 2, 3 or 6 months thereafter, as the Borrower may select in a Notice of
Borrowing, Notice of Continuation or Notice of Conversion, as the case may be,
except that each Interest Period (other than an Interest Period of 7-days’
duration) that commences on the last Business Day of a calendar month shall end
on the last Business Day of the appropriate subsequent calendar month.  Notwithstanding the foregoing:  (i) if any Interest Period would
otherwise end after the Termination Date, such Interest Period shall end on the
Termination Date; and (ii) each Interest Period that would otherwise end
on a day which is not a Business Day shall end on the immediately following
Business Day (or, if such immediately 


 


9

















 


following
Business Day falls in the next calendar month, on the immediately preceding
Business Day).


 


“Internal Revenue Code” means the Internal Revenue Code of
1986, as amended.


 


“KeyBank” means KeyBank National Association, together with
its successors and assigns.


 


“Leases” means a collective reference to all leases,
subleases and occupancy agreements affecting a Borrowing Base Property or any
part thereof existing as of the Agreement Date or executed thereafter and all
amendments, modifications or supplements thereto approved in writing by the
Agent, if required hereunder.


 


“Lender” means each financial institution from time to time
party hereto as a “Lender”, together with its respective successors and
permitted assigns.


 


“Lending Office” means, for each Lender and for each Type of
Loan, the office of such Lender specified in such Lender’s Administrative
Questionnaire, or such other office of such Lender of which such Lender may
notify the Agent in writing from time to time.


 


“Level” has the meaning given that term in
the definition of the term “Applicable Margin.”


 


“LIBOR” means, for any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period.  If for any reason such rate is
not available, the term “LIBOR” shall mean, for any LIBOR Loan for any Interest
Period therefor, the applicable British Bankers’ Association LIBOR rate for
deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period.  If for any reason
none of the foregoing rates is available to the Agent, LIBOR shall be, for any
Interest Period, the rate determined by the Agent to be the rate at which
KeyBank or one of its affiliate banks offers to place deposits in Dollars with
first class banks in the London interbank market at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such
Interest Period, in the approximate amount of the relevant LIBOR Loan and
having a maturity equal to such Interest Period.


 


“LIBOR Loan” means a Loan bearing interest at a rate based on
LIBOR.


 


“Lien” as applied to the property of any Person means:  (a) any security interest, encumbrance,
mortgage, deed to secure debt, deed of trust, assignment of leases and rents,
pledge, lien, charge or lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income, rents or profits therefrom; (b) any arrangement, 


 


10

















 


express
or implied, under which any property of such Person is transferred, sequestered
or otherwise identified for the purpose of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person; (c) the filing
of any financing statement under the Uniform Commercial Code or its equivalent
in any jurisdiction, other than any precautionary filing not otherwise
constituting or giving rise to a Lien, including a financing statement filed (i) in
respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505
(or a successor provision) of the Uniform Commercial Code or its equivalent as
in effect in an applicable jurisdiction or (ii) in connection with a sale
or other disposition of accounts or other assets not prohibited by this
Agreement in a transaction not otherwise constituting or giving rise to a Lien;
and (d) any agreement by such Person to grant, give or otherwise convey
any of the foregoing.


 


“Loan” means a loan made by a Lender to the Borrower pursuant
to Section 2.1.


 


“Loan Document” means this Agreement, each Note, the
Guaranty, the Pledge Agreement and each other document or instrument now or
hereafter executed and delivered by a Loan Party in connection with, pursuant
to or relating to this Agreement.


 


“Loan Party” means the Borrower, the Parent, each Guarantor,
each Pledgor and each Property Owner and any New Loan Party.


 


“Material Adverse Effect” means a materially adverse effect
on (a) the business, assets, liabilities, condition (financial or
otherwise), results of operations or business prospects of the Parent and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or any
other Loan Party to perform its obligations under any Loan Document to which it
is a party, (c) the validity or enforceability of any of the Loan
Documents or the Agent’s Lien in any of the Collateral, (d) the rights and
remedies of the Lenders and the Agent under any of the Loan Documents or (e) the
timely payment of the principal of or interest on the Loans or other amounts
payable in connection therewith.


 


“Material Subsidiary” has the meaning
given that term in the Existing Credit Agreement.


 


“Maximum DSCR Loan Amount” means the amount equal to (a) the
Proforma NOI for the applicable Borrowing Base Property divided by 1.25%,
divided by (b) the Mortgage Constant.


 


“Moody’s” means Moody’s Investors Service, Inc., and its
successors.


 


“Mortgage Constant” means the greater of (a) a debt
constant based on the then current 10-year Treasury Bond as of the date of
determination, plus 2.00%, or (b) 7.00%, and a 25-year amortization
schedule.


 


“Negative Pledge” means, with respect to a given asset, any
provision of a document, instrument or agreement (other than any Loan Document)
which prohibits or proports to prohibit 


 


11

















 


the
creation or assumption of any Lien on such asset as security for Indebtedness
of the Person owning such asset or any other Person.


 


“New Loan Parties” has the meaning set forth in Section 5.1.(d).


 


“NOI” means, for any period, the gross income from operations
of the applicable Borrowing Base Property derived from arm’s length, market
rate rents from leases with unaffiliated third parties (unless otherwise
approved by the Agent), service fees or charges, less operating expenses (such
as cleaning, utilities, administrative, landscaping, security and management
expenses), repairs and maintenance and reserves for replacements, and less
fixed expenses (such as insurance, real estate and other taxes).  All operating expenses shall be related to
the applicable Borrowing Base Property, shall be for services from arm’s length
third party transactions or equivalent to the same and shall exclude all
expenses for capital improvements and replacements, debt service and
depreciation or amortization of capital expenditures and other similar non-cash
items.


 


“Note” has the meaning set forth in Section 2.8.(a).


 


“Notice of Completion” means a notice delivered to the Agent
after all Construction for Improvements for a particular Borrowing Base
Property has been completed and Borrower or Property Owner has received all
Governmental Approvals, including, if applicable, a certificate of occupancy or
similar permit, in order to operate and lease the Improvements on the Borrowing
Base Property.


 


“Notice of Continuation” means a notice in the form of Exhibit E
to be delivered to the Agent pursuant to Section 2.6. evidencing the
Borrower’s request for the Continuation of a LIBOR Loan.


 


“Notice of Conversion” means a notice in the form of Exhibit F
to be delivered to the Agent pursuant to Section 2.7. evidencing the
Borrower’s request for the Conversion of a Loan from one Type to another Type.


 


“Notice of Satisfaction of Conditions Precedent” has the
meaning set forth in Section 2.1.(g).


 


“Obligations” means, individually and collectively:  (a) the aggregate principal balance of,
and all accrued and unpaid interest on, all Loans; and (b) all other
indebtedness, liabilities, obligations, covenants and duties of the Borrower and
the other Loan Parties owing to the Agent or any Lender of every kind, nature
and description, under or in respect of this Agreement or any of the other Loan
Documents, including, without limitation, the Fees and indemnification
obligations, whether direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.


 


“OFAC” means U.S. Department of the Treasury’s Office of
Foreign Assets Control and any successor Governmental Authority.


 


12

















 


“OFAC Review Process” means that certain review process
established by the Agent to determine if any potential transferee of any
interests in, or any assignee of any portion of, a Commitment or Loan assigned
by a Lender is a party with whom the Agent and any Lender are restricted from
doing business under (i) the regulations of OFAC, including any Sanctioned
Person, or (ii) any other statute, executive order or other governmental
action or list (including the September 24, 2001 Executive Order Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism.


 


“Operating Account” has the meaning set forth in Section 2.1.(i).


 


“Parent” has the meaning set forth in the introductory
paragraph hereof and shall include the Parent’s successors and permitted
assigns.


 


“Participant” has the meaning set forth in Section 12.5.(i).


 


“Patriot Act Customer Identification Process” means that certain
customer identification and review process established by the Agent pursuant to
the requirements of 31 U.S.C. §5318(1) and 31 C.F.R. §103.121 to verify
the identity of all permitted transferees of interests in the Borrower and any
assignees of a portion of a Commitment or Loan assigned by a Lender.


 


“Permitted Liens” means, as to any Person:  (a) Liens securing taxes, assessments
and other charges or levies imposed by any Governmental Authority (excluding
any Lien imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 7.6. of the Existing Credit Agreement; (b) Liens
consisting of deposits or pledges made, in the ordinary course of business, in
connection with, or to secure payment of, obligations under workers’
compensation, unemployment insurance or similar Applicable Laws; (c) Liens
consisting of encumbrances in the nature of zoning restrictions, easements, and
rights or restrictions of record on the use of real property, which do not
materially detract from the value of such property or impair the use thereof in
the business of such Person; (d) the rights of tenants under leases or
subleases not interfering with the ordinary conduct of business of such Person;
(e) all restrictions, covenants and other instruments of record existing
as of the date the initial Loan is made with respect to any Borrowing Base
Property Sub-Facility in question and set forth in any Title Report furnished
by Borrower and/or any Property Owner to Agent in connection with such
Borrowing Base Property Sub-Facility; (f) any other easements or other
agreements necessary for the completion of Construction of Improvements for a
Borrowing Base Property; and (g) Liens in favor of the Agent for the
benefit of the Lenders.


 


“Person” means an individual, corporation, partnership,
limited liability company, association, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.


 


13

















 


“Plans and Specifications” means detailed plans and specifications
for the Improvements for a Borrowing Base Property, as modified hereafter as
expressly permitted by this Agreement.


 


“Pledge Agreement” means the Pledge Agreement executed by the
Borrower and the Pledgors in favor of the Agent and substantially in the form
of Exhibit G.


 


“Pledgor” means any Subsidiary of the Borrower or the Parent
that owns, directly or indirectly, any Equity Interests of a Property Owner.


 


“Post-Default Rate” means, in respect of any principal of any
Loan or any other Obligation that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment or otherwise), a
rate per annum equal to the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans plus two percent (2%).


 


“Prime Rate” means the rate of interest per annum announced
publicly by the Lender then acting as the Agent as its prime rate from time to
time.  The Prime Rate is not necessarily
the best or the lowest rate of interest offered by the Lender acting as the
Agent or any other Lender.


 


“Principal Office” means the office of the Agent located at
127 Public Square, Cleveland, Ohio 44114, or such other office of the Agent as
the Agent may designate from time to time.


 


“Proforma NOI” means the amount equal to the proforma NOI for
the first stabilized year derived from ten (10) year “as stabilized” cash
flow projections for the applicable Borrowing Base Property, which are provided
by the Borrower and which are acceptable to the Agent.


 


“Proforma Value” means the sum determined by dividing the
Proforma NOI for the applicable Borrowing Base Property by 7.50%.


 


“Project Equity” means for a Borrowing Base Property the
amount of equity to be provided by Borrower and invested in the related
Construction of Improvements equal to the Total Development Budget for such
Borrowing Base Property (which Total Development Budget in any event shall not
be greater than $50,000,000) less the Borrowing Base Value for such Borrowing
Base Property.  Such equity shall be from
sources other than the applicable Borrowing Base Property Sub-Facility or any
other Loan and shall be applied to the costs of Construction for the applicable
Improvements prior to any disbursement under a Borrowing Base Property
Sub-Facility.


 


“Property” means any parcel of real property owned or leased
(in whole or in part) by the Borrower or any Property Owner and the applicable
Improvements, if any, associated therewith.


 


“Property Release” has the meaning set forth in Section 5.2.


 


14

















 


“Property Owner” means the Borrower or a Subsidiary of the
Borrower which owns a Borrowing Base Property.


 


“Regulatory Change” means, with respect to any Lender, any
change effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental
Authority or monetary authority charged with the interpretation or
administration thereof or compliance by any Lender with any request or
directive regarding capital adequacy.


 


“Requisite Lenders” means, as of any date, Lenders having at
least 66-2/3% of the aggregate amount of the Commitments (not held by
Defaulting Lenders who are not entitled to vote), or, if the Commitments have
been terminated or reduced to zero, Lenders holding at least 66-2/3% of the
principal amount of the aggregate outstanding Loans (not held by Defaulting
Lenders who are not entitled to vote). 
Commitments and Loans held by Defaulting Lenders shall be disregarded
when determining the Requisite Lenders.


 


“Responsible Officer” means with respect to the Parent or any
Subsidiary, the chief executive officer, the chief operating officer, the chief
financial officer, or president of the Parent or such Subsidiary.


 


“Sanctioned Entity” means (a) an agency of the
government of, (b) an organization directly or indirectly controlled by,
or (c) a Person resident in, in each case, a country that is subject to a
sanctions program identified on the list maintained by the OFAC and published
from time to time, as such program may be applicable to such agency,
organization or Person.


 


“Sanctioned Person” means a Person named on the list of
Specially Designated Nationals or Blocked Persons maintained by the OFAC as
published from time to time.


 


“Soft Cost Advances” has the meaning set forth in Section 2.1.(f).


 


“Solvent” means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities computed at the
amount which, in light of all the facts and circumstances existing at such
time, represents the amount that could reasonably be expected to become an
actual and matured liability); (b) such Person is able to pay its debts or
other obligations in the ordinary course as they mature; and (c) such
Person has capital not unreasonably small to carry on its business and all
business in which it proposes to be engaged.


 


“S&P” means Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc., and its successors.


 


15

















 


“Subsidiary” means, for any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (without regard to
the occurrence of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries of such Person, and shall include all
Persons the accounts of which are consolidated with those of such Person
pursuant to GAAP.


 


“Supplemental Equity Deposit” means the amount, if any,
required to be deposited from time to time by the Borrower in connection with a
Borrowing Base Property pursuant to Section 2.1.(h) and Section 8.5.(m).


 


“Survey” means a plat of subdivision, if applicable, and,
only to the extent available, a survey prepared by a surveyor registered or
licensed to do business in the State in which the Property is located.


 


“Taxes” has the meaning given that term in Section 3.12.


 


“Tenant” means the tenant under a Lease.


 


“Termination Date” means May 2, 2011, or such later date
to which the Termination Date may be extended pursuant to Section 2.9.


 


“Titled Agent” means, collectively and individually, each of
the Arranger, the Documentation Agent, the Syndication Agent and their
respective successors and permitted assigns.


 


“Title Report” means a title insurance report covering the
applicable Borrowing Base Property or proposed Borrowing Base Property.


 


“Total Asset Value” has the meaning given that term in the
Existing Credit Agreement as in effect as of the Agreement Date.


 


“Total Development Budget” means the applicable budget for a
Borrowing Base Property specifying all costs and expenses of every kind and
nature whatever to be incurred by the Borrower in connection with the
Construction of Improvements on such Borrowing Base Property prior to the
Termination Date.  The Total Development
Budget for a Borrowing Base Property shall specify the amount of Project Equity
invested in a Borrowing Base Property.


 


“Total Indebtedness” has the meaning given that term in the
Existing Credit Agreement as in effect as of the Agreement Date.


 


“Type” with respect to any Loan, refers to whether such Loan
is a LIBOR Loan or Base Rate Loan.


 


16
















 


“Unavoidable Delay” means any delay in the Construction of
the Improvements on a Borrowing Base Property, caused by natural disaster,
fire, earthquake, floods, explosion, extraordinary adverse weather conditions,
inability to procure or a general shortage of labor, equipment, facilities,
energy, materials or supplies in the open market, failure of transportation,
strikes or lockouts for which the Borrower has notified the Agent in writing.


 


“Unused Amounts” has the meaning set forth in Section 3.6.


 


“Wholly Owned Subsidiary” means any Subsidiary of a Person in
respect of which all of the equity securities or other ownership interests
(other than, in the case of a corporation, directors’ qualifying shares) are at
the time directly or indirectly owned or controlled by such Person or one or
more other Subsidiaries of such Person or by such Person and one or more other
Subsidiaries of such Person.


 


Section 1.2.           General; References to Times.


 


Unless
otherwise indicated, all accounting terms, ratios and measurements shall be
interpreted or determined in accordance with GAAP; provided that, if at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Requisite Lenders shall so request, the Agent, the Lenders and the Borrower
shall negotiate in good faith to amend such ratio or requirement to preserve
the original intent thereof in light of such change in GAAP (subject to the
approval of the Requisite Lenders); provided further that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Parent shall provide to the
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP. 
References in this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules”
are to sections, articles, exhibits and schedules herein and hereto unless
otherwise indicated.  References in this
Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
supplemented, restated or otherwise modified as of the date of this Agreement
and from time to time thereafter to the extent not prohibited hereby and in
effect at any given time; provided, however, to the extent any amendment,
supplement, restatement or other modification of the Existing Credit Agreement
affects any of the definitions, representations, covenants or other provisions
thereof incorporated in this Agreement by reference, such amendment,
supplement, restatement or other modification shall only be given effect
hereunder as provided in Section 12.19. 
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. 
Unless explicitly set forth to the contrary, a reference to “Subsidiary”
means a Subsidiary of the Parent or a Subsidiary of such Subsidiary and a
reference to an “Affiliate” means a reference to an Affiliate of the
Parent.  Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit 


 


17

















 


nor
amplify the provisions of this Agreement. 
Unless otherwise indicated, all references to time are references to
Cleveland, Ohio time.


 


ARTICLE II. CREDIT FACILITY


 


Section 2.1.           Loans.


 


(a)           Generally.  Subject to the terms and conditions hereof,
during the period from the Effective Date to but excluding the Termination
Date, each Lender severally and not jointly agrees to make Loans to the
Borrower in an aggregate principal amount at any one time outstanding up to,
but not exceeding, the amount of such Lender’s Commitment.  Subject to the terms and conditions of this
Agreement, during the period from the Effective Date to but excluding the
Termination Date, the Borrower may borrow, repay and reborrow Loans hereunder.


 


(b)           Purpose of Loan.  To the extent provided in the Total
Development Budget, Loans made pursuant to this Agreement shall only be used to
reimburse the Borrower for the actual costs incurred or expended for the
Construction of Improvements on the Borrowing Base Properties included in the
Borrowing Base, as approved by the Agent.


 


(c)           Borrowing Base
Property Facilities.  Subject to
the terms and conditions hereof, during the period from the Effective Date to
but excluding the Termination Date, the funding of a construction project for a
particular Borrowing Base Property shall be a distinct construction loan
facility for such particular Borrowing Base Property allocated from the total
Commitments available (each such facility, a “Borrowing
Base Property Sub-Facility”); provided that in no event shall the
aggregate of the Loans provided for any such Borrowing Base Property
Sub-Facility exceed the applicable Borrowing Base Value for such Borrowing Base
Property; and, provided further, that in no event shall the amount available
under a Borrowing Base Property Sub-Facility for draws exceed the Available
Funding Capacity.  A Lender’s obligation
to fund a Borrowing Base Property Sub-Facility shall be several (and not joint
and several) and shall be limited to its proportionate share according to the
amount of its Commitment pursuant to Section 3.2.


 


(d)           Requesting
Loans.  Provided that the applicable
Borrowing Base Property is part of the Borrowing Base pursuant to Article V.,
for each Loan for such particular Borrowing Base Property Sub-Facility, the
Borrower shall submit a completed Draw Request to the Agent, setting forth the
identification of the Borrowing Base Property, the amount of Loan proceeds
desired, the Type of Loan desired, the disbursement instructions, the
information required for any Hard Cost Advances or Soft Cost Advances, and the
applicable conditions precedent in accordance with Article VI., together
with such certification and additional information as the Agent may reasonably
require, signed by a duly authorized representative of the Borrower.  Such Draw Request shall be submitted not less
than five (5) Business Days prior to the date on which the requested Loan
is to be made.  The Agent will transmit a
copy of the Draw Request to each Lender no later than five (5) Business
Days after delivering the Notice of Satisfaction of Conditions Precedent.  Each Draw Request shall be irrevocable once
given and binding on the Borrower.


 


18

















 


(e)           Frequency of
Draw Requests and Advances.  For each Borrowing Base Property, the
Borrower may only submit one Draw Request to the Agent each calendar
month.  For each Borrowing Base Property
Sub-Facility, Loans shall be made no more frequently than monthly.


 


(f)            Types of
Advances.


 


(i)            Hard
Cost Advances.  Advances by
the Lenders for the payment of any sums due under any Construction Document,
any subcontract or for any other labor performed and/or materials supplied with
respect to the direct costs of the construction of all or any portion of the
Improvements (collectively, “Hard Cost Advances”)
shall be made on requisitions in a form approved by the Agent, which
requisitions must be signed by the chief financial officer or treasurer of the
Parent and must be approved by or on behalf of the Agent.  The Borrower shall submit with each
requisition a statement that the work completed to the date of such requisition
is of quality consistent with the Plans and Specifications.  Disbursements for Hard Cost Advances shall
not exceed ninety-five percent (95%) of each requisition for direct
construction costs.  Subject to the
applicable conditions precedent contained in Article VI., the final
holdback of direct construction costs with respect to each Borrowing Base
Property shall be available for requisition by the Borrower upon the completion
of the Construction of such Improvements for such Borrowing Base Property;
provided, however, that so long as no Event of Default shall have occurred and
be continuing, upon the election of the Borrower to fully advance on a
completed subcontract, the Lenders shall fully disburse the retained amounts
under such subcontract upon completion of the work to be performed under such
subcontract in accordance with the Plans and Specifications.


 


(ii)           Soft
Cost Advances. 
Requisitions for the payment of settlement expenses, interest and all
other indirect expenses under a Borrowing Base Property Sub-Facility and
included in the applicable Total Development Budget (collectively, “Soft Cost Advances”) shall be signed by the chief financial
officer or treasurer of the Parent, and in the event that the same shall
individually exceed the sum of $250,000, must be supported by invoices,
receipts for payment and such other detail as the agent may reasonably request
to assure that amounts requisitioned are to be used to reimburse the Borrower
for costs previously paid by the Borrower and/or applicable Property Owner or
to pay costs incurred by the Borrower and/or the applicable Property Owner
which are due and owing.  Soft Cost
Advances shall be in an amount equal to one hundred percent (100%) of the
approved requisition.


 


(g)           Disbursements
of Loan Proceeds.  Upon the
satisfaction of all applicable conditions precedent to the making of a Loan set
forth in Article VI., with respect to Loans to be made after the Effective
Date, the Agent shall deliver a notice of such satisfaction to the Lenders (“Notice of Satisfaction of Conditions Precedent”).  No later than 1:00 p.m. (i) in the
case of Base Rate Loans, on the date that is one Business Day after receipt of
such Notice of Satisfaction of Conditions Precedent (provided if such date is
not a Business Day, the next succeeding Business Day) or (ii) in the case
of LIBOR Loans, on the date that is three (3) Business Days after receipt
of such Notice of Satisfaction of Conditions Precedent (provided if such date
is not a Business Day, the next succeeding Business Day) (each a “Date of Borrowing”) or no later than 1:00 p.m. on the
Effective Date for Loans to be made on such date, each Lender will make 


 


19

















 


available
for the account of its applicable Lending Office to the Agent at the Principal
Office, in immediately available funds, the proceeds of the Loan to be made by
such Lender.  With respect to Loans to be
made after the Effective Date, unless the Agent shall have been notified by any
Lender prior to the specified Date of Borrowing that such Lender does not
intend to make available to the Agent the Loan to be made by such Lender on
such date, the Agent may assume that such Lender will make the proceeds of such
Loan available to the Agent on the applicable Date of Borrowing and the Agent
may (but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower the amount of such Loan to be provided by such
Lender.  Subject to terms and conditions
hereof, the Agent will make the proceeds of such borrowing available to the
Borrower no later than 2:00 p.m. on the applicable Date of Borrowing and
at the account specified by the Borrower in such Draw Request or, pursuant to Section 2.1.(i).,
to the Operating Account.


 


(h)           Borrowing Base
Property Equity and Supplemental Equity Deposits.  As to each Borrowing Base Property and the
Construction of the related Improvements, the Borrower shall contribute the
Project Equity for such Construction of the Improvements, and such Project
Equity shall be from sources other than the applicable Borrowing Base Property
Sub-Facility, or any other Loan and shall be applied to the costs of
Construction for the applicable Improvements prior to any disbursement under a
Borrowing Base Property Sub-Facility. 
The Borrower’s equity must be disbursed prior to the first disbursement
of any applicable Loan proceeds, and used to pay direct Borrowing Base Property
costs with evidence of payment delivered to the Agent prior to the disbursement
of the Loan proceeds related to such Borrowing Base Property Sub-Facility.  If the Agent at any time determines that the
undisbursed portion of such Borrowing Base Property Sub-Facility, plus the
amount of all Project Equity and other equity investments made or scheduled to
be made by the Borrower are not sufficient to complete fully the Improvements
in accordance with the applicable Plans and Specifications, the Agent shall
have the option of requiring the Borrower to deposit with the Lender additional
funds from some other source (or submit evidence to the Agent of equity
investments previously made), in amounts sufficient to cover the resulting
deficit before the Lenders will disburse any further Loan proceeds with respect
to that particular Borrowing Base Property. 
Such Supplemental Equity Deposit shall be disbursed to the Borrower as
construction progresses in accordance with this Agreement before proceeds of
any Loans are disbursed with respect to that particular Borrowing Base
Property.


 


(i)            Operating
Account.  After the occurrence of a
Default or an Event of Default (but without impairing any Lender’s right under Section 6.2),
the Agent may at its election disburse funds directly to a special bank account
maintained at the Agent, on behalf of the Lenders (the “Operating
Account”), or at its option and at such Borrower’s cost, disburse
funds through a title company, or to contractors, subcontractors, materialmen
or laborers directly, but any such election shall not prevent the Agent from
making subsequent disbursements in a different manner or through or to a
different party.  The Loan proceeds shall
be deemed to be disbursed to the Borrower from the date of deposit into the
Operating Account, the escrow of the title company or directly to any
contractor, subcontractor, materialmen or laborer, and interest shall accrue on
those proceeds from that date (and with respect to a disbursement to an escrow
of a title company, interest shall accrue on the proceeds from the date of
delivery to such escrow regardless of the date such proceeds are released by
the title company).


 


20

















 


(j)            No Implied
Waivers.  The making of any Loan for a
Borrowing Base Property shall not be deemed a waiver of the Agent’s or any
Lender’s rights hereunder with respect to any further or future Loan for such
Borrowing Base Property, nor shall it be construed to be a waiver of any of the
conditions precedent to the Lenders’ obligations to make further or future
Loans to such Borrowing Base Property.


 


Section 2.2.           Rates and Payment of Interest on Loans.


 


(a)           Rates.  The Borrower promises to pay to the Agent for
the account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period from and including the date of the making of
such Loan to but excluding the date such Loan shall be paid in full, at the
following per annum rates:


 


(i)            during such
periods as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time
to time) plus the Applicable Margin for Base Rate Loans; and


 


(ii)           during such
periods as such Loan is a LIBOR Loan, at Adjusted LIBOR for such Loan for the
Interest Period therefor plus the Applicable Margin for LIBOR Loans.


 


Notwithstanding
the foregoing, during the continuance of an Event of Default, the Borrower
shall pay to the Agent for the account of each Lender interest at the
Post-Default Rate on the outstanding principal amount of each Loan made by such
Lender, and on any other amount payable by the Borrower hereunder or under the
Note held by such Lender to or for the account of such Lender (including
without limitation, accrued but unpaid interest to the extent permitted under
Applicable Law).


 


(b)           Payment of Interest.  Accrued and unpaid interest on each Loan
shall be payable (i) in the case of a Base Rate Loan, monthly in arrears
on the first day of each calendar month, (ii) in the case of a LIBOR Loan,
in arrears on the last day of each Interest Period therefor, and, if such
Interest Period is longer than ninety (90) days, at three-month intervals
following the first day of such Interest Period, and (iii) in the case of
any Loan, in arrears upon the payment, prepayment or Continuation thereof or
the Conversion of such Loan to a Loan of another Type (but only on the
principal amount so paid, prepaid, Continued or Converted).  Interest payable at the Post-Default Rate
shall be payable from time to time on demand. 
Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall give notice thereof to the
Lenders to which such interest is payable and to the Borrower.  All determinations by the Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.


 


(c)           Inaccurate Financial
Statements or Compliance Certificates.  If any financial statement or Compliance
Certificate delivered pursuant to Section 9.1. is shown to be inaccurate
as a result of any fraudulent act or omission of a Loan Party or its agents or
representatives acting on behalf of such Loan Party (regardless of whether this
Agreement is in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin for any period (an “Applicable Period”)
than the Applicable Margin applied for such Applicable Period, then (i) the
Borrower shall immediately deliver to the Agent 


 


21

















 


a
correct Compliance Certificate for such Applicable Period and (ii) the
Borrower shall immediately pay to the Agent for the account of the Lenders the
additional accrued additional interest owing calculated based on such higher
Applicable Margin for such Applicable Period, which payment shall be promptly
applied by the Agent in accordance with Section 3.2. This subsection shall
not in any way limit the rights of the Agent and Lenders (x) with respect
to the last sentence of the immediately preceding subsection (a) or (y) under
Article X.


 


Section 2.3.           Number of Interest Periods.


 


There
may be no more than eight (8) different Interest Periods for LIBOR Loans
outstanding at the same time (for which purpose Interest Periods described in
the definition of the term “Interest Period” shall be deemed to be different
Interest Periods even if they are coterminous).


 


Section 2.4.           Repayment of Loans.


 


The
Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Loans and all other sums due under this
Agreement on the Termination Date.


 


Section 2.5.           Prepayments.


 


(a)           Optional.  Subject to Section 4.4., the Borrower
may prepay any Loan, in whole or in part, at any time without premium or
penalty.  The Borrower shall give the
Agent at least one (1) Business Day’s prior written notice of the
prepayment of any Loan.


 


(b)           Mandatory.


 


(i)            If at any time
the aggregate principal amount of all outstanding Loans exceeds the Borrowing
Base, the Borrower shall within five (5) Business Days of the Borrower
obtaining knowledge of the occurrence of any such excess eliminate such excess.


 


(ii)           If at any time
a Borrowing Base Property remains in the Borrowing Base for more than twelve
(12) months after the shell completion of the Improvements for such Borrowing
Base Property is complete, pursuant to the applicable Plans and Specifications
and as determined by the Agent, then the Agent may, in its sole discretion,
obtain an “as stabilized” Appraisal at the Borrower’s cost for such Borrowing
Base Property.  If, based on such “as
stabilized” Appraisal, the Agent determines that the loan-to-value ratio
expressed as a percentage for such Borrowing Base Property Sub-Facility is
greater than seventy percent (70%), then the Borrower shall pay to the Agent
within fifteen (15) Business Days of notice from the Agent the amounts required
to make the loan-to-value ratio expressed as a percentage for such Borrowing
Base Property Sub-Facility no greater than seventy percent (70%).


 


If
such excess identified in either (i) and/or (ii) above is not
eliminated within such time period provided, then the entire outstanding
principal balance of all Loans and all other Obligations 


 


22

















 


shall
be immediately due and payable in full. 
All payments under this subsection (b) shall be applied to pay all
amounts of principal outstanding on the Loans pro rata in accordance with Section 3.2.  If the Borrower is required to pay any
outstanding LIBOR Loans by reason of this Section prior to the end of the
applicable Interest Period therefor, the Borrower shall pay all amounts due
under Section 4.4.


 


Section 2.6.           Continuation.


 


So
long as no Event of Default shall exist, the Borrower may on any Business Day,
with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any
portion thereof as a LIBOR Loan by selecting a new Interest Period for such
LIBOR Loan.  Each new Interest Period
selected under this Section shall commence on the last day of the
immediately preceding Interest Period. 
Each selection of a new Interest Period shall be made by the Borrower
giving to the Agent a Notice of Continuation not later than 11:00 a.m. on
the third Business Day prior to the date of any such Continuation.  Such notice by the Borrower of a Continuation
shall be by telephone or telecopy, confirmed immediately in writing if by
telephone, in the form of a Notice of Continuation, specifying (a) the
proposed date of such Continuation, (b) the LIBOR Loans and portions
thereof subject to such Continuation and (c) the duration of the selected
Interest Period, all of which shall be specified in such manner as is necessary
to comply with all limitations on Loans outstanding hereunder.  Each Notice of Continuation shall be irrevocable
by and binding on the Borrower once given. 
Promptly after receipt of a Notice of Continuation, the Agent shall
notify each Lender by telecopy, or other similar form of transmission, of the
proposed Continuation.  If the Borrower
shall fail to select in a timely manner a new Interest Period for any LIBOR
Loan in accordance with this Section, or if an Event of Default shall exist,
such Loan will automatically, on the last day of the current Interest Period
therefor, Convert into a Base Rate Loan notwithstanding the first sentence of Section 2.7.
or the Borrower’s failure to comply with any of the terms of such Section.


 


Section 2.7.           Conversion.


 


The
Borrower may on any Business Day, upon the Borrower’s giving of a Notice of
Conversion to the Agent, Convert all or a portion of a Loan of one Type into a
Loan of another Type; provided, however, a Base Rate Loan may not be Converted
to a LIBOR Loan if an Event of Default shall exist.  Any Conversion of a LIBOR Loan into a Base
Rate Loan shall be made on, and only on, the last day of an Interest Period for
such LIBOR Loan and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the
Borrower shall pay accrued interest to the date of Conversion on the principal
amount so Converted.  Each such Notice of
Conversion shall be given not later than 11:00 a.m. on the Business Day
prior to the date of any proposed Conversion into Base Rate Loans and on the
third Business Day prior to the date of any proposed Conversion into LIBOR
Loans.  Promptly after receipt of a
Notice of Conversion, the Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed Conversion.  Subject to the restrictions specified above,
each Notice of Conversion shall be by telephone (confirmed immediately in
writing) or telecopy in the form of a Notice of Conversion specifying (a) the
requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the
portion of such Type of Loan to be Converted, (d) the Type of Loan such
Loan is to be Converted into and (e) if such Conversion is into a LIBOR
Loan, the requested duration of the Interest Period of such 


 


23

















 


Loan.  Each Notice of Conversion shall be
irrevocable by and binding on the Borrower once given.


 


Section 2.8.           Notes.


 


(a)           Notes.  The Borrower shall execute and deliver on the
Effective Date to each Lender requesting the same (or to the Agent for that
Lender) a promissory note (each a “Note”)
substantially in the form of Exhibit H, payable to the order of such
Lender to evidence its Commitment.  Any
Lender not receiving a Note may request at any time that the Borrower issue it
such Note on the terms set forth herein, and the Borrower agrees to issue such
Note promptly upon the request of a Lender or the Agent for such Lender.  The Notes and the Obligations evidenced
thereby shall be governed by, subject to and benefit from all of the terms and
conditions of this Agreement and the other Loan Documents and shall be secured
by the Collateral.  Lenders shall not
require separate promissory notes for each Borrowing Base Property
Sub-Facility.


 


(b)           Records.  The date, amount, interest rate, Type and
duration of Interest Periods (if applicable) of each Loan made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and such entries shall be binding
on the Borrower, absent manifest error; provided, however, that the failure of
a Lender to make any such record shall not affect the obligations of the
Borrower under any of the Loan Documents.


 


(c)           Lost, Stolen, Destroyed or
Mutilated Notes. Upon receipt by the Borrower of (i) written
notice from a Lender that the Note of such Lender has been lost, stolen,
destroyed or mutilated, and (ii) (A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender in form
reasonably satisfactory to the Borrower, or (B) in the case of mutilation,
upon surrender and cancellation of such Note, the Borrower shall at its own
expense execute and deliver to such Lender a new Note dated the date of such
lost, stolen, destroyed or mutilated Note.


 


Section 2.9.           Extension of Termination Date.


 


The
Borrower shall have the right, exercisable one time, to extend the Termination
Date by one year.  The Borrower may exercise
such right only by executing and delivering to the Agent at least ninety (90)
days but not more than one hundred eighty (180) days prior to the current
Termination Date, a written request for such extension (an “Extension Request”). 
The Agent shall forward to each Lender a copy of the Extension Request
delivered to the Agent promptly upon receipt thereof.  Subject to satisfaction of the following
conditions, the Termination Date shall be extended for one year: (a) immediately
prior to such extension and immediately after giving effect thereto, (i) no
Default or Event of Default shall exist and (ii) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on
and as of the date of such extension with the same force and effect as if made
on and as of such date except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date), and (b) the Borrower shall have paid the Fees payable under Section 3.6.(b).


 


24

















 


Section 2.10.        Amount Limitations.


 


Notwithstanding any other term of this Agreement or any other Loan
Document, no Lender shall be required to make a Loan if immediately after the
making of such Loan the aggregate principal amount of all outstanding Loans
would exceed the lesser of (a) the aggregate amount of the Commitments at
such time or (b) Borrowing Base.


 


Section 2.11.        Increase of Commitments.


 


With
the prior consent of the Agent, such consent not to be unreasonably withheld,
conditioned or delayed, the Borrower shall have the right at any time prior to
the date one year prior to the Termination Date (without giving effect to any
extension thereof pursuant to Section 2.9.) to request an increase in the
aggregate amount of the Commitments (provided that after giving effect to any increases
in the Commitments pursuant to this Section, the aggregate amount of the
Commitments may not exceed $325,000,000) by providing written notice to the
Agent, which notice shall be irrevocable once given and shall be forwarded by
the Agent to each Lender; provided, however, the Borrower shall not have the
right to make more than two (2) requests for increases in the aggregate
amount of the Commitments during the term of this Agreement.  Each such increase in the Commitments must be
in an aggregate minimum amount of $25,000,000 and integral multiples of
$5,000,000 in excess thereof.  No Lender
shall be required to increase its Commitment and any new Lender becoming a
party to this Agreement in connection with any such requested increase must be
an Eligible Assignee.  If a new Lender
becomes a party to this Agreement, or if any existing Lender agrees to increase
its Commitment, such Lender shall on the date it becomes a Lender hereunder (or
increases its Commitment, in the case of an existing Lender) (and as a
condition thereto) purchase from the other Lenders its Commitment Percentage
(or in the case of an existing Lender, increase the amount of its Commitment
Percentage), in each case, as determined after giving effect to the increase of
Commitments, of any outstanding Loans, by making available to the Agent for the
account of such other Lenders at the Principal Office, in same day funds, an
amount equal to the sum of (A) the portion of the outstanding principal
amount of such Loans to be purchased by such Lender plus (B) interest
accrued and unpaid to and as of such date on such portion of the outstanding
principal amount of such Loans.  The
Borrower shall pay to the Lenders amounts payable, if any, to such Lenders
under Section 4.4. as a result of the prepayment of any such Loans.  No increase of the Commitments may be
effected under this Section if (x) a Default or Event of Default
shall be in existence on the effective date of such increase or (y) any
representation or warranty made or deemed made by the Borrower or any other
Loan Party in any Loan Document to which any such Loan Party is a party is not
(or would not be) true or correct on the effective date of such increase and
after giving effect thereto (except for representations or warranties which
expressly relate solely to an earlier date). 
In connection with any increase in the aggregate amount of the
Commitments pursuant to this subsection, (a) any Lender becoming a party
hereto shall execute such documents and agreements as the Agent may reasonably
request and (b) the Borrower shall make appropriate arrangements so that
each new Lender, and any existing Lender increasing its Commitment, receives a
new or replacement Note, as appropriate, in the amount of such Lender’s
Commitment within five (5) Business Days of the effectiveness of the
applicable increase in the aggregate amount of Commitments.


 


25

















 


ARTICLE III. 
PAYMENTS, FEES AND OTHER GENERAL PROVISIONS


 


Section 3.1.           Payments.


 


                Except to the
extent otherwise provided herein, all payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or any other Loan
Document shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to the Agent at its Principal Office, not
later than 2:00 p.m. on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). 
Subject to Section 10.4., the Borrower may, at the time of making
each payment under this Agreement or any Note, specify to the Agent the amounts
payable by the Borrower hereunder to which such payment is to be applied.  Each payment received by the Agent for the account
of a Lender under this Agreement or any Note shall be paid to such Lender at
the applicable Lending Office of such Lender no later than 4:00 p.m. on
the date of receipt.  If the Agent fails
to pay such amount to a Lender as provided in the previous sentence, the Agent
shall pay interest on such amount until paid at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
If the due date of any payment under this Agreement or any other Loan
Document would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest shall be
payable for the period of such extension.


 


Section 3.2.           Pro Rata Treatment.


 


Except
to the extent otherwise provided herein: 
(a) each borrowing of Loans from the Lenders under Section 2.1.
shall be made from the Lenders, and each payment of the Fees under
Sections 3.6.(a) and (b) shall be made for the account of the
Lenders, pro rata according to the amounts of their respective Commitments; (b) each
payment or prepayment of principal of Loans by the Borrower shall be made for
the account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans held by them; (c) each payment of interest
on Loans by the Borrower shall be made for the account of the Lenders pro rata
in accordance with the amounts of interest on such Loans then due and payable
to the respective Lenders; and (d) the making, Conversion and Continuation
of Loans of a particular Type (other than Conversions provided for by Section 4.5.)
shall be made pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of making of Loans) or their respective
Loans (in the case of Conversions and Continuations of Loans) and the then
current Interest Period for each Lender’s portion of each Loan of such Type
shall be coterminous.


 


Section 3.3.           Sharing of Payments, Etc.


 


If
a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrower under this Agreement, or shall obtain payment on any
other Obligation owing by the Borrower or a Loan Party through the exercise of
any right of set-off, banker’s lien or counterclaim or similar right or
otherwise or through voluntary prepayments directly to a Lender or other
payments made by the Borrower to a Lender not in accordance with the terms of
this Agreement and such payment should be distributed to the Lenders pro rata
in accordance with Section 3.2. or Section 10.4., as applicable, such
Lender shall promptly purchase from the other Lenders participations in (or, if
and to the extent specified by such Lender, direct interests in) the 


 


26

















 


Loans
made by the other Lenders or other Obligations owed to such other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
payment (net of any reasonable expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with Section 3.2.
or Section 10.4., as applicable.  To
such end, all the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. 
The Borrower agrees that any Lender so purchasing a participation (or
direct interest) in the Loans or other Obligations owed to such other Lenders
may exercise all rights of set-off, banker’s lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans in the amount of such participation.  Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrower.


 


Section 3.4.           Several Obligations.


 


No
Lender, Agent, Arranger, Syndication Agent or Documentation Agent shall be
responsible for the failure of any other Lender to make a Loan or to perform
any other obligation to be made or performed by such other Lender hereunder,
and the failure of any Lender to make a Loan or to perform any other obligation
to be made or performed by it hereunder shall not relieve the obligation of any
other Lender to make any Loan or to perform any other obligation to be made or
performed by such other Lender.


 


Section 3.5.           Minimum Amounts.


 


(a)           Borrowings and Conversions.  For the initial Loan in any Borrowing Base
Property Sub-Facility, each such borrowing of LIBOR Loans shall be in an
aggregate minimum amount of $500,000. 
Each Conversion of LIBOR Loans shall be in an aggregate minimum amount
of $500,000.


 


(b)           Prepayments.  Each voluntary prepayment of Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000
in excess thereof (or, if less, the aggregate principal amount of Loans then
outstanding).


 


Section 3.6.           Fees.


 


(a)           Unused Fee. During the
period from the Effective Date to but excluding the Termination Date, the
Borrower agrees to pay to the Agent for the account of the Lenders an unused
facility fee with respect to the average daily difference between the (i) aggregate
amount of the Commitments and (ii) the aggregate principal amount of all
outstanding Loans (the “Unused Amount”).  Such fee shall be computed by multiplying the
Unused Amount with respect to such quarter by the corresponding per annum rate
set forth below:


 


	
  Unused Amount

  	
   

  	
  Unused Fee

  	
   

  
	
  Greater than or equal to 50% of the aggregate amount of Commitments

  	
   

  	
  0.20

  	
  %

  
	
  Less than 50% of the aggregate amount of Commitments

  	
   

  	
  0.125

  	
  %

  



 


27

















 


Such
fee shall be payable in arrears on the last day of each March, June, September or
December of each calendar year.  Any
such accrued and unpaid fee shall also be payable on the Termination Date or
any earlier date of termination of the Commitments or reduction of the
Commitments to zero.


 


(b)           Extension Fee.  If the Borrower exercises its right to extend
the Termination Date pursuant to Section 2.9., the Borrower agrees to pay
to the Agent for the account of each Lender a fee equal to two-tenths of one
percent (0.20%) of the amount of such Lender’s Commitment (whether or not
utilized) at the time of such extension. 
Such fee shall be due and payable in full on the date the Agent receives
the Extension Request pursuant to such Section.


 


(c)           Administrative and Other
Fees.  The Borrower agrees to pay the
administrative and other fees of the Agent as may be agreed to in writing by
the Borrower and the Agent from time to time.


 


Section 3.7.           Computations.


 


Unless
otherwise expressly set forth herein, any accrued interest on any Loan, any
Fees or any other Obligations due hereunder shall be computed on the basis of a
year of three hundred sixty (360) days and the actual number of days elapsed; provided, however, any accrued interest
on any Base Rate Loan shall be computed on the basis of a year of three hundred
sixty-five (365) or three hundred sixty-six (366) days, as applicable, and the
actual number of days elapsed.


 


Section 3.8.           Usury.


 


In
no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrower or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of
principal, unless the Borrower shall notify the respective Lender in writing
that the Borrower elects to have such excess sum returned to it forthwith.  It is the express intent of the parties
hereto that the Borrower not pay and the Lenders not receive, directly or
indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the Borrower under Applicable Law.


 


Section 3.9.           Agreement Regarding Interest and Charges.


 


The
parties hereto hereby agree and stipulate that the only charge imposed upon the
Borrower for the use of money in connection with this Agreement is and shall be
the interest specifically described in Section 2.2.(a).(i) and
(ii).  Notwithstanding the foregoing, the
parties hereto further agree and stipulate that all agency fees, syndication
fees, facility fees, closing fees, underwriting fees, default charges, late
charges, funding or “breakage” charges, increased cost charges, attorneys’ fees
and reimbursement for costs and expenses paid by the Agent or any Lender to
third parties or for damages incurred by the Agent or any Lender, in each case
in connection with the transactions contemplated by this Agreement and the
other Loan Documents, are charges made to compensate the Agent or any such
Lender for underwriting or administrative services and costs or losses
performed or incurred, and to be performed or 


 


28

















 


incurred,
by the Agent and the Lenders in connection with this Agreement and shall under
no circumstances be deemed to be charges for the use of money.  All charges other than charges for the use of
money shall be fully earned and nonrefundable when due.


 


Section 3.10.        Statements of Account.


 


The
Agent will account to the Borrower monthly with a statement of Loans, accrued
interest and Fees, charges and payments made pursuant to this Agreement and the
other Loan Documents, and such account rendered by the Agent shall be deemed
conclusive upon the Borrower to the extent the Borrower shall fail to object to
such account in writing within five (5) Business Days of the receipt
thereof.  The failure of the Agent to
deliver such a statement of accounts shall not relieve or discharge the
Borrower from any of its obligations hereunder.


 


Section 3.11.        Defaulting Lenders.


 


(a)           Generally.  If for any reason any Lender (a “Defaulting Lender”) shall fail or refuse to perform any of
its obligations under this Agreement or any other Loan Document to which it is
a party within the time period specified for performance of such obligation or,
if no time period is specified, if such failure or refusal continues for a
period of two (2) Business Days after notice from the Agent, then, in
addition to the rights and remedies that may be available to the Agent or the
Borrower under this Agreement or Applicable Law, such Defaulting Lender’s right
to participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Agent or to be taken
into account in the calculation of the Requisite Lenders, shall be suspended
during the pendency of such failure or refusal. 
If a Lender is a Defaulting Lender because it has failed to make timely
payment to the Agent of any amount required to be paid to the Agent hereunder
(without giving effect to any notice or cure periods), in addition to other
rights and remedies which the Agent or the Borrower may have under this
Agreement or otherwise, the Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate, (ii) to withhold or setoff and to apply
in satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest.  Any amounts
received by the Agent in respect of a Defaulting Lender’s Loans shall not be
paid to such Defaulting Lender and shall be held uninvested by the Agent and
either applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon the Defaulting
Lender’s curing of its default.


 


(b)           Purchase of Defaulting
Lender’s Commitment.  The
Borrower may request the Agent to notify the Lenders that a Lender has become a
Defaulting Lender.  Any Lender who is not
a Defaulting Lender shall have the right, but not the obligation, in its sole
discretion, to acquire all of a Defaulting Lender’s Commitment.  Any Lender desiring to exercise such right
shall give written notice thereof to the Agent and the Borrower no sooner than
two (2) Business Days and not later than five (5) Business Days after
such Defaulting Lender became a Defaulting Lender.  If more than one Lender exercises such right,
each such Lender shall have the right to 


 


29

















 


acquire
an amount of such Defaulting Lender’s Commitment in proportion to its
Commitments to the aggregate Commitments of all Lenders exercising such
right.  If after such fifth (5th) Business Day, the Lenders
have not elected to purchase all of the Commitment of such Defaulting Lender,
then the Borrower may, by giving written notice thereof to the Agent, such
Defaulting Lender and the other Lenders, demand that such Defaulting Lender
assign its Commitment to an Eligible Assignee subject to and in accordance with
the provisions of Section 12.5. for the purchase price provided for
below.  No party hereto shall have any
obligation whatsoever to initiate any such replacement or to assist in finding
an Eligible Assignee.  Upon any such
purchase or assignment, the Defaulting Lender’s interest in the Loans and its
rights hereunder (but not its liability in respect thereof or under the Loan
Documents or this Agreement to the extent the same relate to the period prior
to the effective date of the purchase) shall terminate on the date of purchase,
and the Defaulting Lender shall promptly execute all documents reasonably
requested to surrender and transfer such interest to the purchaser or assignee
thereof, including an appropriate Assignment and Acceptance Agreement and,
notwithstanding Section 12.5., shall pay to the Agent an assignment fee in
the amount of $7,000.  The purchase price
for the Commitment of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender.  Prior to payment of
such purchase price to a Defaulting Lender, the Agent shall apply against such
purchase price any amounts retained by the Agent pursuant to the last sentence
of the immediately preceding subsection (a).  The Defaulting Lender shall be entitled to
receive amounts owed to it by the Borrower under the Loan Documents which
accrued prior to the date of the default by the Defaulting Lender, to the
extent the same are received by the Agent from or on behalf of the
Borrower.  There shall be no recourse
against any Lender or the Agent for the payment of such sums except to the
extent of the receipt of payments from any other party or in respect of the
Loans.


 


Section 3.12.        Taxes.


 


(a)           Taxes Generally.  All payments by the Borrower of principal of,
and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding (i) franchise taxes, (ii) any taxes imposed on or measured
by any Lender’s assets, net income, receipts or branch profits, (iii) any
taxes (other than withholding taxes) with respect to the Agent or a Lender that
would not be imposed but for a connection between the Agent or such Lender and
the jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of the Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), and (iv) any taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other charges to
the extent imposed as a result of the failure of the Agent or a Lender, as
applicable, to provide and keep current (to the extent legally able) any
certificates, documents or other evidence required to qualify for an exemption
from, or reduced rate of, any such taxes fees, duties, levies, imposts, charges,
deductions, withholdings or other charges or required by the immediately
following subsection (c) to be furnished by the Agent or such Lender,
as applicable (such non-excluded items being collectively called “Taxes”).  If any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any Applicable Law, then the
Borrower will:


 


30
















 


(i)                                     pay
directly to the relevant Governmental Authority the full amount required to be
so withheld or deducted;


 


(ii)                                  promptly
forward to the Agent an official receipt or other documentation satisfactory to
the Agent evidencing such payment to such Governmental Authority; and


 


(iii)                               pay
to the Agent for its account or the account of the applicable Lender, as the
case may be, such additional amount or amounts as is necessary to ensure that
the net amount actually received by the Agent or such Lender will equal the
full amount that the Agent or such Lender would have received had no such
withholding or deduction been required.


 


(b)                                 Tax Indemnification.
If the Borrower fails to pay any Taxes when due to the appropriate Governmental
Authority or fails to remit to the Agent, for its account or the account of the
respective Lender, as the case may be, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders
for any incremental Taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. For purposes of this
Section, a distribution hereunder by the Agent or any Lender to or for the
account of any Lender shall be deemed a payment by the Borrower.


 


(c)                                  Tax Forms. Prior
to the date that any Lender or Participant organized under the laws of a
jurisdiction outside the United States of America becomes a party hereto, such
Person shall deliver to the Borrower and the Agent such certificates, documents
or other evidence, as required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto (including Internal Revenue Service
Forms W-8ECI and W-8BEN, as
applicable, or appropriate successor forms), properly completed, currently
effective and duly executed by such Lender or Participant establishing that
payments to it hereunder and under the Notes are (i) not subject to United
States Federal backup withholding tax and (ii) not subject to United
States Federal withholding tax imposed under the Internal Revenue Code. Each
such Lender or Participant shall, to the extent it may lawfully do so, (x) deliver
further copies of such forms or other appropriate certifications on or before
the date that any such forms expire or become obsolete and after the occurrence
of any event requiring a change in the most recent form delivered to the
Borrower or the Agent and (y) obtain such extensions of the time for
filing, and renew such forms and certifications thereof, as may be reasonably
requested by the Borrower or the Agent. The Borrower shall not be required to
pay any amount pursuant to the last sentence of subsection (a) above to
any Lender or Participant that is organized under the laws of a jurisdiction
outside of the United States of America or the Agent, if it is organized under
the laws of a jurisdiction outside of the United States of America, if such
Lender, Participant or the Agent, as applicable, fails to comply with the
requirements of this subsection. If any such Lender or Participant, to the
extent it may lawfully do so, fails to deliver the above forms or other
documentation, then the Agent may withhold from any payments to be made to such
Lender under any of the Loan Documents such amounts as are required by the
Internal Revenue Code. If any Governmental Authority asserts that the Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Agent under
this Section, and costs


 


31

















 


and expenses (including all reasonable fees and disbursements of any
law firm or other external counsel and the allocated cost of internal legal
services and all disbursements of internal counsel) of the Agent. The
obligation of the Lenders under this Section shall survive the termination
of the Commitments, repayment of all Obligations and the resignation or
replacement of the Agent.


 


ARTICLE
IV. YIELD PROTECTION, ETC.


 


Section 4.1.                                Additional
Costs; Capital Adequacy.


 


(a)                                  Additional Costs.
The Borrower shall promptly pay to the Agent for the account of a Lender from
time to time such amounts as such Lender may determine to be necessary to
compensate such Lender for any costs incurred by such Lender that it determines
are attributable to its making or maintaining of any LIBOR Loans or its
obligation to make any LIBOR Loans hereunder, any reduction in any amount
receivable by such Lender under this Agreement or any of the other Loan
Documents in respect of any of such Loans or such obligation or the maintenance
by such Lender of capital in respect of its Loans or its Commitment (such increases
in costs and reductions in amounts receivable being herein called “Additional Costs”), to the extent any such Additional Costs
result from any Regulatory Change that:  (i) changes
the basis of taxation of any amounts payable to such Lender under this Agreement
or any of the other Loan Documents in respect of any of such Loans or its
Commitment (other than taxes, fees, duties, levies, imposts, charges,
deductions, withholdings or other charges which are excluded from the
definition of Taxes pursuant to the first sentence of Section 3.12.(a));
or (ii) imposes or modifies any reserve, special deposit or similar
requirements (other than Regulation D of the Board of Governors of the Federal
Reserve System or other reserve requirement to the extent utilized in the
determination of Adjusted LIBOR for such Loan) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Lender, or any commitment of such Lender (including, without limitation, the
Commitment of such Lender hereunder); or (iii) has or would have the
effect of reducing the rate of return on capital of such Lender to a level
below that which such Lender could have achieved but for such Regulatory Change
(taking into consideration such Lender’s policies with respect to capital
adequacy).


 


(b)                                 Lender’s Suspension
of LIBOR Loans. Without limiting the effect of the provisions of the
immediately preceding subsection (a), if, by reason of any Regulatory
Change, any Lender either (i) incurs or would incur Additional Costs based
on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of such Lender that includes deposits
by reference to which the interest rate on LIBOR Loans is determined as
provided in this Agreement or a category of extensions of credit or other
assets of such Lender that includes LIBOR Loans or (ii) becomes subject to
restrictions on the amount of such a category of liabilities or assets that it
may hold, then, if such Lender so elects by notice to the Borrower (with a copy
to the Agent), the obligation of such Lender to make or Continue, or to Convert
any other Type of Loans into, LIBOR Loans hereunder shall be suspended until
such Regulatory Change ceases to be in effect (in which case the provisions of Section 4.5.
shall apply).


 


(c)                                  Notification and
Determination of Additional Costs. Each of the Agent and each Lender agrees
to notify the Borrower of any event occurring after the Agreement Date
entitling the Agent or such Lender to compensation under any of the preceding
subsections of this Section


 


32

















 


as promptly as practicable; provided, however, the failure of the Agent
or any Lender to give such notice shall not release the Borrower from any of
its obligations hereunder (and in the case of a Lender, to the Agent). The
Agent or such Lender agrees to furnish to the Borrower (and in the case of a
Lender, to the Agent) a certificate setting forth the basis and amount of each
request by the Agent or such Lender for compensation under this Section. Absent
manifest error, determinations by the Agent or any Lender of the effect of any
Regulatory Change shall be conclusive, provided that such determinations are
made on a reasonable basis and in good faith.


 


Section 4.2.                                Suspension
of LIBOR Loans.


 


Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBOR Rate for any
Interest Period:


 


(a)                                  the
Agent reasonably determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining Adjusted LIBOR for such Interest Period, or


 


(b)                                 the
Agent reasonably determines (which determination shall be conclusive) that Adjusted
LIBOR will not adequately and fairly reflect the cost to the Lenders of making
or maintaining LIBOR Loans for such Interest Period;


 


then the Agent shall give the Borrower and each Lender prompt notice
thereof and, so long as such condition remains in effect, the Lenders shall be
under no obligation to, and shall not, make additional LIBOR Loans, Continue
LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on the
last day of each current Interest Period for each outstanding LIBOR Loan,
either repay such Loan or Convert such Loan into a Base Rate Loan.


 


Section 4.3.                                Illegality.


 


Notwithstanding any other provision of this
Agreement, if any Lender shall reasonably determine (which determination shall
be conclusive and binding) that it has become unlawful for such Lender to honor
its obligation to make or maintain LIBOR Loans hereunder, then such Lender
shall promptly notify the Borrower thereof (with a copy to the Agent) and such
Lender’s obligation to make or Continue, or to Convert Loans of any other Type
into, LIBOR Loans shall be suspended until such time as such Lender may again
make and maintain LIBOR Loans (in which case the provisions of Section 4.5.
shall be applicable).


 


Section 4.4.                                Compensation.


 


The Borrower shall pay to the Agent for the
account of each Lender, upon the request of such Lender through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense that such Lender
reasonably determines is attributable to:


 


(a)                                  any
payment or prepayment (whether mandatory or optional) of a LIBOR Loan, or
Conversion of a LIBOR Loan, made by such Lender for any reason (including,


 


33

















 


without limitation, acceleration) on a date
other than the last day of the Interest Period for such Loan; or


 


(b)                                 any
failure by the Borrower for any reason (including, without limitation, the
failure of any of the applicable conditions precedent specified in Article VI.
to be satisfied) to borrow a LIBOR Loan from such Lender on the requested date
for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or
Continue a LIBOR Loan on the requested date of such Conversion or Continuation.


 


Upon the Borrower’s request, any Lender requesting compensation under
this Section shall provide the Borrower with a statement setting forth the
basis for requesting such compensation and the method for determining the
amount thereof. Absent manifest error, determinations by any Lender in any such
statement shall be conclusive, provided that such determinations are made on a
reasonable basis and in good faith.


 


Section 4.5.                                Treatment of
Affected Loans.


 


If the obligation of any Lender to make LIBOR
Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be
suspended pursuant to Section 4.1.(b)., 4.2. or 4.3., then such Lender’s
LIBOR Loans shall be automatically Converted into Base Rate Loans on the last
day(s) of the then current Interest Period(s) for LIBOR Loans (or, in
the case of a Conversion required by Section 4.1.(b). or 4.3., on such
earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 4.2. or 4.3. that gave rise to such
Conversion no longer exist:


 


(a)                                  to the extent that
such Lender’s LIBOR Loans have been so Converted, all payments and prepayments
of principal that would otherwise be applied to such Lender’s LIBOR Loans shall
be applied instead to its Base Rate Loans; and


 


(b)                                 all Loans that would
otherwise be made or Continued by such Lender as LIBOR Loans shall be made or
Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender
that would otherwise be Converted into LIBOR Loans shall remain as Base Rate
Loans.


 


If such Lender gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 4.1. or 4.3. that gave rise to
the Conversion of such Lender’s LIBOR Loans pursuant to this Section no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans made by other Lenders are
outstanding, then such Lender’s Base Rate Loans shall be automatically Converted,
on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.


 


34

















 


Section 4.6.                                Change of
Lending Office.


 


Each Lender agrees that it will use
reasonable efforts to designate an alternate Lending Office with respect to any
of its Loans affected by the matters or circumstances described in
Sections 3.12., 4.1. or 4.3. to reduce the liability of the Borrower or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion, except that such Lender shall have no obligation to designate a
Lending Office located in the United States of America.


 


Section 4.7.                                Assumptions
Concerning Funding of LIBOR Loans.


 


Calculation of all amounts payable to a
Lender under this Article IV. shall be made as though such Lender had
actually funded LIBOR Loans through the purchase of deposits in the relevant
market bearing interest at the rate applicable to such LIBOR Loans in an amount
equal to the amount of the LIBOR Loans and having a maturity comparable to the
relevant Interest Period; provided, however, that each Lender may fund each of
its LIBOR Loans in any manner it sees fit and the foregoing assumption shall be
used only for calculation of amounts payable under this Article IV.


 


ARTICLE
V. BORROWING BASE PROPERTIES


 


Section 5.1.                                Eligibility
of Properties.


 


(a)                                  Initial Borrowing
Base Properties. As of the date hereof, the Lenders have approved for
inclusion in calculations of the Borrowing Base, the Properties identified on
Schedule 5.1., as well as the Borrowing Base Value initially attributable
to each such Property. The Borrower represents that it has provided, prior to
the Agreement Date, to the Agent for each such Borrowing Base Property the
documents and instruments listed in Section 5.1.(b). and that no material
change has occurred as of the Agreement Date that would otherwise amend, modify
or terminate such documents, materially change the information provided or
otherwise cause the Properties identified in Schedule 5.1. to no longer be
Eligible Properties. The Borrower further represents that it shall deliver to
the Agent prior to any disbursement of Loan proceeds for each of such Borrowing
Base Properties the documents and instruments listed in Sections 5.1(d).(i). -
(viii).


 


(b)                                 Additional
Borrowing Base Properties. If after the Effective Date the Borrower desires
that any additional Property be included in calculations of the Borrowing Base,
the Borrower shall so notify the Agent in writing. No Property will be
evaluated by the Agent unless and until the Borrower delivers to the Agent all
of the following, in form and substance satisfactory to the Agent:


 


(i)                                     A description of
the proposed Improvements on such Property;


 


(ii)                                  Evidence that the
proposed Property is an Eligible Property;


 


(iii)                               The Total Development
Budget for the proposed Property, which shall evidence that the total
development costs for such Property net of the Borrower’s Project


 


35

















 


Equity does not exceed the Available Funding Capacity and does not
exceed $50,000,000;


 


(iv)                              Evidence that the Parent,
the applicable Borrower or their respective Subsidiaries are the sole
member(s), shareholder(s) or partner(s), as the case may be, of the
Property Owner;


 


(v)                                 Copies of any executed
Lease and any lease letter of intent entered into by any Loan Party in
connection with the Construction and/or the operation of the proposed Property;


 


(vi)                              A Proforma NOI for such
proposed Property in form and substance satisfactory to the Agent; and


 


(vii)                           To the extent not provided
under the immediately preceding clause (vi), such projections, proforma
operating statements and other information concerning the anticipated operation
of such Property as the Agent may reasonably request.


 


Upon receipt of all of the foregoing documents and information, the
Agent shall promptly distribute, at the Borrower’s cost, a copy of such
documents and information to the Lenders. If, after receipt and review of all
of the foregoing documents and information, the Agent is prepared to accept
such Property as a Borrowing Base Property, the Agent will so notify the
Borrower and each Lender within ten (10) Business Days after receipt of
all of such documents and information. If the Agent fails to give such notice
within such time period, the Agent shall be deemed to have rejected such
Property as a Borrowing Base Property. The Agent shall determine whether to
accept such Property as a Borrowing Base Property in its reasonable judgment.


 


(c)                                  Nonconforming
Properties. If the Agent rejects any Property as a Borrowing Base Property
under the immediately preceding subsection (b), or if a Property which the
Borrower wants to have included in calculations of the Borrowing Base does not
satisfy the requirements of an Eligible Property, then the Agent, upon written
request of the Borrower shall request that the Lenders determine whether such
Property shall be included as a Borrowing Base Property. If such a request is
made by the Agent to the Lenders, within ten (10) Business Days of the
date on which a Lender has received such request and all of the items referred
to in the immediately preceding subsection (b), such Lender shall notify
the Agent in writing whether or not such Lender accepts such Property as a
Borrowing Base Property. If a Lender fails to give such notice within such time
period, such Lender shall be deemed to have rejected such Property as a
Borrowing Base Property. A Property shall become a Borrowing Base Property
under this subsection only upon the approval of the Requisite Lenders.


 


(d)                                 Conditions to
Property Becoming a Borrowing Base Property. Notwithstanding anything to
the contrary contained in this Agreement, no Property shall become a Borrowing
Base Property until the Agent or the Requisite Lenders, as applicable, shall
have approved of such Property as provided in the immediately preceding
subsection (b) or (c), as the case may be, and the Borrower shall
have caused to be executed, if applicable, and delivered to the Agent the


 


36

















 


following instruments, documents and agreements in respect of such
Property, each to be in form and substance satisfactory to the Agent:


 


(i)                                     The
Borrowing Base Certificate for the proposed Property calculated to give
proforma effect to the inclusion of such Property as a Borrowing Base Property
(and any Property Release being effected in connection with the addition of
such Property as a Borrowing Base Property);


 


(ii)                                  The
most currently available Phase I environmental report and Phase II
environmental report, if applicable, demonstrating that the project site for
the applicable Property is free from any Hazardous Materials and is in
compliance with Environmental Laws and showing the flood zone designation of
the applicable Property;


 


(iii)                               Evidence
that the applicable Property Owner holds a one hundred percent (100%) fee
simple interest and clear and marketable title in the Property or, if such
Property Owner holds a ground leasehold estate in such Property, a certified
copy of a fully executed counterpart of the related ground lease and all
amendments thereto, which ground lease shall contain provisions (including,
without limitation, a term of thirty (30) years or more from the Agreement
Date, transfer and assignment provisions and rights to sublease) acceptable to
the Agent;


 


(iv)                              A
Title Report demonstrating that the applicable Property is free of all Liens,
other than Permitted Liens;


 


(v)                                 Copies
of the Construction Documents;


 


(vi)                              Evidence
satisfactory to the Lender that the Borrower has funded the Project Equity or
has such Project Equity in immediately available funds to apply toward any
Construction on the proposed Property;


 


(vii)                           Copies
of all insurance policies (or satisfactory certificates of insurance)
evidencing that insurance coverages are in effect with respect to the proposed
Property and Property Owner, in accordance with the “Ground-Up New Construction”
insurance requirements attached hereto as Schedule 8.5(f), for which the
premiums have been fully prepaid;


 


(viii)                        A Survey;


 


(ix)                                An
amendment to the Pledge Agreement executed by the Borrower, the Pledgors and
each Subsidiary that owns, directly or indirectly, any Equity Interests in such
Property Owner (such new Property Owner and each such Subsidiary, the “New Loan Parties”) subjecting to the Lien created thereby
all of the outstanding Equity Interests of (x) the Property Owner that
owns such Property and (y) any Subsidiary that owns, directly or
indirectly, any Equity Interests in such Property Owner;


 


37

















 


(x)                                   A
certificate executed by the Borrower and the Parent updating the information
set forth on Schedule 7.1(b) to this Agreement to include the
relevant information relating to the new Property Owner and confirming to the
Agent that the representations and warranties contained in Section 7.1.(b).
are true and correct;


 


(xi)                                An
accession agreement to the Guaranty to add the new Property Owner as an
additional Guarantor;


 


(xii)                             The
certificate or articles of incorporation, articles of organization, certificate
of limited partnership, declaration of trust or other comparable organizational
instrument (if any) of the New Loan Parties, certified as of a recent date by
the Secretary of State of the State of formation of such Person;


 


(xiii)                          A Certificate of Good
Standing or certificate of similar meaning with respect to each New Loan Party
(and in the case of a limited partnership, the general partner of such New Loan
Party) issued as of a recent date by the Secretary of State of the State of
formation of each such Person and, if the proposed Property is located in a
State different than the State of formation of such New Loan Party, certificates
of qualification to transact business or other comparable certificates issued
by such Secretary of State (and any state department of taxation, as
applicable) of the State of the location of the proposed Property;


 


(xiv)                         A
certificate of incumbency signed by the Secretary or Assistant Secretary (or
other individual performing similar functions) of each New Loan Party that is
becoming a Pledgor or a Guarantor, as the case may be, with respect to each of
the officers of such Person authorized to execute and deliver the amendments to
the applicable Loan Documents referred to above;


 


(xv)                            Copies
certified by the Secretary or Assistant Secretary (or other individual
performing similar functions) of each New Loan Party of the by-laws of such
Person, if a corporation, the operating agreement, if a limited liability
company, the partnership agreement, if a limited or general partnership, or
other comparable document in the case of any other form of legal entity;


 


(xvi)                         Unless a
blanket resolution reasonably satisfactory to the Agent has been previously
delivered to Agent, copies certified by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each New Loan Party that
is becoming a Pledgor or Guarantor, as the case may be, of all corporate,
partnership, member or other necessary action taken by each Pledgor or
Guarantor, as the case may be, to authorize the execution, delivery and
performance of the amendments to the applicable Loan Documents referred to
above;


 


(xvii)                      Such UCC Financing
Statements naming the Borrower and each New Loan Party that is becoming a
Pledgor as debtor and the Agent as secured party, as the Agent shall have
requested in order to perfect the security interests and other Liens


 


38

















 


created pursuant to the Pledge Agreement as
amended by the amendment thereto referred to above;


 


(xviii)                   Satisfactory
reports of UCC, tax lien, judgment and litigation searches conducted by a
search firm reasonably acceptable to the Agent with respect to the Collateral
being added to the Pledge Agreement, the Borrower and each New Loan Party that
is becoming a Pledgor, such searches to be conducted where the Property is
located and where any UCC Financing Statements will be filed; and


 


(xix)                           Such
other documents, agreements and instruments as the Agent on behalf of the
Lenders may reasonably request.


 


Section 5.2.                                Release of
Properties.


 


From time to time the Borrower may request,
upon not less than ten (10) Business Days prior written notice to the
Agent, that a Borrowing Base Property be no longer considered a Borrowing Base
Property, which release (the “Property Release”)
shall be effected by the Agent if the Agent determines all of the following
conditions are satisfied as of the date of such Property Release:


 


(a)                                  No Default or Event
of Default exists or will exist immediately after giving effect to such
Property Release and the reduction in the Borrowing Base by reason of the
release of such Property;


 


(b)                                 The Borrower repays
the Loans attributable to the applicable Borrowing Base Property Sub-Facility
relating to such Property Release; and


 


(c)                                  The Borrower shall
have delivered to the Agent a Borrowing Base Certificate and Compliance
Certificate demonstrating on a proforma basis, and the Agent shall have
determined to its satisfaction, that the outstanding principal balance of the
Loans will not exceed the Borrowing Base after giving effect to such request
and any prepayment to be made and/or the acceptance of any Property as an additional
or replacement Borrowing Base Property to be given concurrently with such
request and that the Parent and the Borrower will be in compliance with the
covenants set forth in Section 9.1. of the Existing Credit Agreement after
giving effect to the Property Release.


 


The Agent agrees to execute, at the Borrower’s sole cost and expense,
such documents and instruments as the Borrower may reasonably request to effect
and evidence a Property Release.


 


Section 5.3.                                Frequency of
Calculations of Borrowing Base.


 


Initially, the Borrowing Base shall be the
amount set forth as such in the Borrowing Base Certificate delivered under Section 6.1.
Thereafter, the Borrowing Base shall be the amount set forth as such in any
Borrowing Base Certificate delivered from time to time under Article V. or
Article IX. Any increase in the Borrowing Base Value of a Borrowing Base
Property shall become effective as of the next determination of the Borrowing
Base Value as provided in this Section.


 


39

















 


ARTICLE
VI. CONDITIONS PRECEDENT


 


Section 6.1.                                Conditions
Precedent to Effectiveness of Agreement.


 


The effectiveness of this Agreement and
obligation of the Lenders to make the initial Loans on the Effective Date is
subject to the following conditions precedent:


 


(a)                                  The Agent shall have
received each of the following, in form and substance satisfactory to the
Agent:


 


(i)                                     Counterparts
of this Agreement executed by each of the parties hereto;


 


(ii)                                  Notes
executed by the Borrower, payable to each Lender and complying with the
applicable provisions of Section 2.8.;


 


(iii)                               The
Guaranty executed by the Parent and each Property Owner existing as of the
Effective Date;


 


(iv)                              The
Pledge Agreement executed by the Borrower and the Pledgors;


 


(v)                                 An
opinion of the general counsel of the Parent and the Loan Parties, addressed to
the Agent and the Lenders, addressing the matters set forth in Exhibit I;


 


(vi)                              An
opinion of Alston & Bird, LLP, counsel to the Agent, and addressed to
the Agent and the Lenders, addressing the enforceability of the Loan Documents
and such matters as the Agent shall reasonably request;


 


(vii)                           A
certificate of incumbency signed by the Secretary or Assistant Secretary of the
Parent with respect to each of the officers of the Parent authorized to execute
and deliver on behalf of the Parent and the Borrower the Loan Documents to
which the Parent or the Borrower is a party and to execute and deliver (or make
by telephone in the case of Notices of Conversion or Continuation) on behalf of
the Borrower Draw Requests, Notices of Conversion and Notices of Continuation;


 


(viii)                        A
certified copy (certified by the Secretary or Assistant Secretary of the
Parent) of all necessary action taken by the Parent to authorize the execution,
delivery and performance of the Loan Documents to which either the Parent or
the Borrower is a party;


 


(ix)                                The
certificate or articles of incorporation, articles of organization, certificate
of limited partnership, declaration of trust or other comparable organizational
instrument (if any) of the Parent, the Borrower and each Loan Party, certified
as of a recent date by the Secretary of State of the State of formation of such
Person;


 


(x)                                   A
Certificate of Good Standing or certificate of similar meaning with respect to
the Parent, the Borrower and each other Loan Party (and in the case of a


 


40

















 


limited partnership, the general partner of
such Loan Party) issued as of a recent date by the Secretary of State of the
State of formation of each such Person and, if the applicable Borrowing Base
Property is located in a State different than the State of formation of the
applicable Loan Party, certificates of qualification to transact business or
other comparable certificates issued by such Secretary of State (and any state
department of taxation, as applicable) of the State of the location of the
applicable Borrowing Base Property;


 


(xi)                                Copies
certified by the Secretary or Assistant Secretary (or other individual
performing similar functions) of the Parent, the Borrower and each Loan Party
of the by-laws of such Person, if a corporation, the operating agreement, if a
limited liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of
legal entity;


 


(xii)                             A
certificate of incumbency signed by the Secretary or Assistant Secretary (or
other individual performing similar functions) of each Loan Party with respect
to each of the officers of such Person authorized to execute and deliver the
Loan Documents to which such Person is a party;


 


(xiii)                          Copies
certified by the Secretary or Assistant Secretary (or other individual
performing similar functions) of each Loan Party of all corporate, partnership,
member or other necessary action taken by each Loan Party to authorize the
execution, delivery and performance of the Loan Documents to which such Person
is a party;


 


(xiv)                         Such UCC
Financing Statements naming the Borrower and each Pledgor as debtor and the
Agent as secured party, as the Agent shall have requested in order to perfect
the security interests and other Liens created pursuant to the Pledge
Agreement;


 


(xv)                            Satisfactory
reports of UCC, tax lien, judgment and litigation searches conducted by a search
firm reasonably acceptable to the Agent with respect to the Collateral, the
Borrower, each Pledgor and each Property Owner, such searches to be conducted
where the Borrowing Base Properties are located and where any UCC Financing
Statements will be filed;


 


(xvi)                         Any Fees
payable to the Agent, the Titled Agent and the Lenders on or prior to the
Effective Date;


 


(xvii)                      A Borrowing
Base Certificate calculated as of the Effective Date; and


 


(xviii)                   Such other
documents, agreements, information and instruments as the Agent on behalf of
the Lenders may reasonably request; and


 


(b)                                 In the good faith
judgment of the Agent  and the
Lenders:


 


(i)                                     There
shall not have occurred or become known to the Agent  or any of the Lenders any event, condition, situation or status
since the date of the information


 


41

















 


contained in the financial and business
projections, budgets, proforma data and forecasts concerning the Borrower and
its Subsidiaries delivered to the Agent and the Lenders prior to the Agreement
Date that has had or could reasonably be expected to result in a Material
Adverse Effect;


 


(ii)                                  The
Borrower and its Subsidiaries shall have received all approvals, consents and
waivers, and shall have made or given all necessary filings and notices as
shall be required to consummate the transactions contemplated hereby without
the occurrence of any default under, conflict with or violation of (1) any
Applicable Law or (2) any agreement, document or instrument to which the
Borrower or any other Loan Party is a party or by which any of them or their
respective properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not reasonably
be likely to (A) have a Material Adverse Effect, or (B) restrain or
enjoin, impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Borrower or any other Loan Party to fulfill
its obligations under the Loan Documents to which it is a party; and


 


(iii)                               There
shall not have occurred or exist any other material disruption of financial or
capital markets that could reasonably be expected to materially and adversely
affect the transactions contemplated by the Loan Documents.


 


Section 6.2.                                Additional
Conditions Precedent To All Loans.


 


The obligation of the Lenders to make any
Loan is subject to the further condition precedent that:


 


(a)                                  no Default or Event
of Default shall exist as of the date of the making of such Loans or would
exist immediately after giving effect thereto;


 


(b)                                 no litigation, action,
suit, investigation or other arbitral, administrative or judicial proceeding
shall be pending or threatened which could reasonably be expected to (i) result
in a Material Adverse Effect or (ii) restrain or enjoin, impose materially
burdensome conditions on, or otherwise materially and adversely affect the
ability of the Borrower or any other Loan Party to fulfill its obligations
under the Loan Documents to which it is a party;


 


(c)                                  the representations
and warranties made or deemed made by the Borrower and each other Loan Party in
the Loan Documents to which any of them is a party, shall be true and correct
on and as of the date of the making of such Loans with the same force and
effect as if made on and as of such date except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted hereunder.


 


Each Credit Event shall constitute a
certification by the Borrower to the effect set forth in the preceding
subsections (a), (b) and (c) (both as of the date of the giving of notice
relating to such Credit Event and, unless the Borrower otherwise notifies the
Agent prior to the date of such Credit Event, as of the date of the occurrence
of such Credit Event). In addition, if such Credit


 


42

















 


Event is the making of a Loan,
the Borrower shall be deemed to have represented to the Agent and the Lenders
at the time such Loan is made that all conditions to the occurrence of such
Credit Event contained in Article VI. have been satisfied.


 


Section 6.3.                                Initial
Construction Requirements to Making of Loans Under a Borrowing Base Property
Sub-Facility.


 


The obligation of the Lenders to make the
initial Loan to the Borrower under a Borrowing Base Property Sub-Facility for a
particular Borrowing Base Property is subject to the condition precedent that
the requirements of Section 5.1. and 6.2. have been satisfied and, in
addition, shall have received each of the following items in form and substance
satisfactory to the Agent:


 


(a)                                  A completed Draw
Request;


 


(b)                                 A certification made
by the chief financial officer or treasurer of the Parent made to Agent and
Lenders in a form acceptable to Agent regarding all hard and soft costs
incurred or paid as of the date of the Draw Request and all related invoices
and supporting documentation associated with any Soft Cost Advance or any Hard
Cost Advance pursuant to Section 2.1.(f).;


 


(c)                                  Fully executed copies
of the Construction Documents and Leases and any amendments not previously
delivered to Agent; and


 


(d)                                 Such other papers,
materials and documents as the Agent may reasonably require with respect to the
Construction.


 


Section 6.4.                                Deliveries
for Subsequent Loans for Borrowing Base Properties.


 


The obligation of the Lenders to make any
Loan to the Borrower under a Borrowing Base Property Sub-Facility following the
initial Loan thereunder is subject to the satisfaction of all items set forth
in Sections 5.1., 6.2. and 6.3. above and, in addition, the Agent shall have
received each of the following items in form and substance satisfactory to
Agent:


 


(a)                                  A completed Draw
Request;


 


(b)                                 A certification made
by the chief financial officer or treasurer of the Parent made to Agent and
Lenders in a form acceptable to Agent regarding all hard and soft costs
incurred or paid (and not reimbursed by proceeds from a prior draw) as of the
date of the applicable Draw Request, and detailing such costs incurred since
the prior draw, and all related invoices and supporting documentation
associated with any Soft Cost Advance or Hard Cost Advance pursuant to Section 2.1.(f).;


 


(c)                                  Copies of any
amendments or modifications to the Construction Documents and Leases since the
prior draw;


 


(d)                                 Evidence of payment of
any required Supplemental Equity Deposit; and


 


43

















 


(e)                                  Such other items as
the Agent may reasonably require to establish the construction progress of such
Construction of Improvements for such Borrowing Base Property.


 


Section 6.5.                                Deliveries
for Final Disbursements.


 


The final disbursement to Borrower of any and
all Loan proceeds previously retained by the Lenders in connection with a
Borrowing Base Property Sub-Facility for a Borrowing Base Property shall be
subject to the conditions listed in Sections 5.1., 6.2., 6.3. and 6.4., and
Agent shall advance to Borrower the final disbursement for such Borrowing Base
Property Sub-Facility when the following conditions have been complied with to
the satisfaction of the Agent:


 


(a)                                  The Improvements have
been fully completed and equipped in accordance with the Plans and
Specifications free and clear of Liens and a Notice of Completion has been
delivered to Agent;


 


(b)                                 The Borrower shall
have furnished to the Agent evidence of “all risks” casualty insurance in
accordance with Section 8.5.(f).;


 


(c)                                  If requested by the
Agent, the Borrower shall have delivered to the Agent a notice of title continuation
indicating that there has been no change in the status of title and no
exceptions other than Permitted Liens unless otherwise approved by the Agent;
and


 


(d)                                 Such other items as
the Agent may reasonably require to establish the completion of the applicable
Construction.


 


Section 6.6.                                Conditions
as Covenants.


 


If the Lenders make any Loans prior to the
satisfaction of any or all conditions precedent set forth in Article VI.,
the Borrower shall nevertheless cause such condition or conditions to be
satisfied within five (5) Business Days after the date of the making of
such Loans.


 


ARTICLE
VII. REPRESENTATIONS AND WARRANTIES


 


Section 7.1.                                Representations
and Warranties.


 


In order to induce the Agent and each Lender
to enter into this Agreement and to make Loans, the Parent and the Borrower
represent and warrant to the Agent and each Lender as follows:


 


(a)                                  Organization;
Power; Qualification. Each of the Parent, the Borrower and the other Loan
Parties is a corporation, partnership or other legal entity, duly organized or
formed, validly existing and in good standing under the jurisdiction of its
incorporation or formation, has the power and authority to own or lease its
respective properties and to carry on its respective business as now being and
hereafter proposed to be conducted and is duly qualified and is in good
standing as a foreign corporation, partnership or other legal entity, and
authorized to do business, in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization and where the failure to be so qualified or authorized could
reasonably be expected to have, in each instance, a Material Adverse Effect.


 


44
















 


(b)                                 Ownership
of Property Owners. Each of the Property Owners is a Wholly Owned
Subsidiary of the Borrower. Schedule 7.1.(b) and any certificate delivered
in accordance with Section 5.1.(d).(x). set forth for each Property Owner and
Pledgor (except the Borrower), (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding any Equity Interests in such
Subsidiary, (iii) the nature of the Equity Interests held by each such
Person, (iv) the percentage of ownership of such Subsidiary represented by
such Equity Interests, and (v) the Borrowing Base Properties held by such
Property Owner. Except as disclosed in such Schedule and any certificate
delivered in accordance with Section 5.1.(d).(x)., (i) the Borrower or a
Pledgor, as applicable, owns, free and clear of all Liens (other than Permitted
Liens), and has the unencumbered right to vote, all outstanding Equity
Interests in each Person shown to be held by it on such Schedule and
(ii) there are no outstanding subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including, without
limitation, any stockholders’ or voting trust agreements) for the issuance,
sale, registration or voting of, or outstanding securities convertible into,
any additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, any such Person.


 


(c)                                  Authorization
of Agreement, Etc. The Borrower has the right and power, and has taken all
necessary action to authorize it, to borrow and obtain the extensions of credit
hereunder. The Parent, the Borrower and each other Loan Party have the right
and power, and has taken all necessary action to authorize it, to execute,
deliver and perform each of the Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated hereby and thereby. The Loan Documents to which the Borrower or
any other Loan Party is a party have been duly executed and delivered by the
duly authorized officers of such Person and each is a legal, valid and binding
obligation of such Person enforceable against such Person in accordance with
its respective terms except as the same may be limited by bankruptcy,
insolvency, and other similar laws affecting the rights of creditors generally
and the availability of equitable remedies for the enforcement of certain
obligations (other than the payment of principal) contained herein or therein
and as may be limited by equitable principles generally.


 


(d)                                 Compliance
of Loan Documents with Laws, Etc. The execution, delivery and performance
of this Agreement, the Notes and the other Loan Documents to which the Borrower
or any other Loan Party is a party in accordance with their respective terms
and the borrowings and other extensions of credit hereunder do not and will
not, by the passage of time, the giving of notice, or both:  (i) require any Governmental Approval or
violate any Applicable Law (including all Environmental Laws) relating to the
Borrower or any other Loan Party; (ii) conflict with, result in a breach
of or constitute a default under the organizational documents of the Borrower
or any other Loan Party, or any indenture, agreement or other instrument to
which the Borrower or any other Loan Party is a party or by which it or any of
its respective properties may be bound; or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Borrower or any other Loan Party.


 


(e)                                  Absence
of Defaults. Neither the Parent, the Borrower nor any other Loan Party is
in default under its articles of incorporation, bylaws, partnership agreement
or other similar organizational documents, and no event has occurred, which has
not been remedied, cured or waived, which, in any such case:  (i) constitutes a Default or an Event of
Default; or (ii) constitutes, or which with the passage of time, the
giving of notice, a determination of 


 


45

















 


materiality, the satisfaction
of any condition, or any combination of the foregoing, would constitute, a
default or event of default by the Parent, the Borrower or any Subsidiary under
any agreement (other than this Agreement) or judgment, decree or order to which
the Parent, the Borrower, any Subsidiary or any other Loan Party is a party or
by which the Parent, the Borrower or any Subsidiary or other Loan Party or any
of their respective properties may be bound where such default or event of
default could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.


 


(f)                                    Broker’s
Fees. No broker’s or finder’s fee, commission or similar compensation will
be payable with respect to the transactions contemplated hereby. No other
similar fees or commissions will be payable by any Loan Party for any other
services rendered to the Parent or any of its Subsidiaries ancillary to the
transactions contemplated hereby.


 


(g)                                 Accuracy
and Completeness of Information. No written information, report or other
papers or data (excluding financial projections and other forward looking
statements) furnished to the Agent or any Lender by, on behalf of, or at the
direction of, the Parent, the Borrower, any Subsidiary or any other Loan Party
in connection with or relating in any way to this Agreement, contained any
untrue statement of a fact material to the creditworthiness of the Parent, the
Borrower, any Subsidiary or any other Loan Party or omitted to state a material
fact necessary in order to make such statements contained therein, in light of
the circumstances under which they were made, not misleading. All financial
statements furnished to the Agent or any Lender by, on behalf of, or at the
direction of, the Parent, the Borrower, any Subsidiary or any other Loan Party
in connection with or relating in any way to this Agreement, present fairly, in
accordance with GAAP consistently applied throughout the periods involved, the
financial position of the Persons involved as at the date thereof and the
results of operations for such periods. All financial projections and other
forward looking statements prepared by or on behalf of the Parent, the
Borrower, any Subsidiary or any other Loan Party that have been or may
hereafter be made available to the Agent or any Lender were or will be prepared
in good faith based on reasonable assumptions. As of the Effective Date, no
fact is known to the Parent or the Borrower which has had, or may in the future
have (so far as the Parent or the Borrower can reasonably foresee), a Material
Adverse Effect which has not been set forth in the financial statements
referred to in Article VIII of the Existing Credit Agreement or in such
information, reports or other papers or data or otherwise disclosed in writing
to the Agent and the Lenders.


 


(h)                                 Properties.
Each Property Owner has good, marketable and legal title to, or a valid
leasehold interest in the Borrowing Base Property. Each of the Properties
included in calculations of the Borrowing Base satisfies all of the
requirements contained in the definition of “Eligible Property.”


 


(i)                                     Security
Interests and Liens. The Pledge Agreement creates, as security for the
Obligations, a valid and enforceable, perfected first priority security
interest in and Lien on all of the Collateral, in favor of the Agent for the
benefit of the Lenders, and subject to no other Liens other than Permitted
Liens. Such security interest in and Lien on the Collateral shall be superior
to and prior to the rights of all third parties in the Collateral, and, other
than in connection with any future change in the name of the Borrower or a
Pledgor or the location in which the Borrower or a Pledgor is organized or
registered, no further recordings or filings are or will be 


 


46

















 


required in connection with the
creation, perfection or enforcement of such security interest and Lien, other
than the filing of continuation statements in accordance with Applicable Law.


 


(j)                                     Existing
Credit Agreement Representations. Subject to Section 12.19, the Existing
Credit Agreement Representations are each true and correct on and as of the
Agreement Date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date) and except for changes in factual circumstances not prohibited hereunder.
The Existing Credit Agreement Representations are hereby incorporated herein by
reference and made to the Agent and the Lenders on and as of the date of the
making of the Loans as if set forth herein in full together with the related
definitions, except to the extent that such representations and warranties
expressly relate solely to an earlier date.


 


(k)                                  No
Material Adverse Change. Since December 31, 2007, there has been no
material adverse change in the business, assets, liabilities, financial
condition, results of operations, business or prospects of the Parent and its
Subsidiaries taken as a whole. Each of the Parent, its Subsidiaries and the
other Loan Parties is Solvent.


 


(l)                                     Foreign
Assets Control. To the best of the Borrower’s knowledge after due inquiry,
the Borrower, the Parent and each Loan Party are not Persons with whom the
Agent and the Lenders are restricted from doing business under the regulations
of OFAC (including, Sanctioned Persons) or under any statute, executive order
(including, the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action and is not engaged in any
dealings or transactions or otherwise be associated with such Persons.


 


(m)                               Environmental
Proceedings. There are no Environmental Proceedings and the Borrower has no
knowledge of any threatened Environmental Proceedings or any facts or
circumstances which may give rise to any future Environmental Proceedings.


 


(n)                                 Condemnation.
(i) No condemnation of any portion of the Borrowing Base Property,
(ii) no condemnation or relocation of any roadways abutting the Borrowing
Base Property, and (iii) no proceeding to deny access to the Borrowing
Base Property from any point or planned point of access to the Borrowing Base
Property, has commenced or, to the best of the Borrower’s knowledge, is
contemplated by any Governmental Authority.


 


(o)                                 Itemization.
The amounts set forth in the budgets, including, without limitation, the
applicable Total Development Budget, present a full and complete itemization by
category of all costs, expenses and fees which the Borrower reasonably expects
to pay or reasonably anticipates becoming obligated to pay to complete the
related Construction and operate the related Borrowing Base Property (until
such Borrowing Base Property achieves breakeven operations). The Borrower is
unaware of any other such costs, expenses or fees which are material and are
not covered by such Total Development Budget.


 


(p)                                 Violation.
Neither the Construction of any Improvements nor the use of any Borrowing Base
Property when completed and the contemplated accessory uses will violate
(i) any Applicable Laws (including subdivision, zoning, building,
environmental protection and 


 


47

















 


wetland protection laws), or
(ii) any building permits, restrictions of record, or agreements affecting
the Borrowing Base Property or any part thereof. Neither the zoning
authorizations, approvals or variances nor any other right to construct or to
use the Borrowing Base Property is to any extent dependent upon or related to
any real estate other than the Borrowing Base Property. All Governmental
Approvals required for the Construction in accordance with the Plans and
Specifications have been obtained or will be obtained prior to the initial
funding from an applicable Borrowing Base Property Sub-Facility, except for
those approved by the Agent, and all Applicable Laws relating to the
Construction and operation of the Improvements have been complied with and all
permits and licenses required for the operation of the Borrowing Base Property
which cannot be obtained until the Construction is completed can be obtained if
the Improvements are completed in accordance with the Plans and Specifications.


 


(q)                                 Public
Utilities. Each Borrowing Base Property will have adequate water, gas and
electrical supply, storm and sanitary sewerage facilities, other required
public utilities, fire and police protection, and means of access between such
Borrowing Base Property and public highways; none of the foregoing will be foreseeably
delayed or impeded by virtue of any requirements under any Applicable Laws.


 


(r)                                    Public
Roads and On-Site Parking. The roads and other off-site work, if any, that
are a part of each Borrowing Base Property will be constructed and installed in
accordance with the standards and requirements of the state, county and local jurisdictions
in which the Borrowing Base Property is located and other requirements of law. Each
Borrowing Base Property currently has or will have upon completion of the
Construction in accordance with the Plans and Specifications, adequate roads,
drives, curb cuts, easements, sources of direct ingress and egress to public
roads and adequate parking on the land to permit the Construction of
Improvements for a Borrowing Base Property to be fully used and occupied for
its intended purposes as reflected in the information provided to the Agent
pursuant to Section 5.1 and sufficient to comply with the terms of all Leases
and all zoning and land use requirements of the jurisdiction in which the
Borrowing Base Property is located.


 


(s)                                  Hazardous
Material. Except as disclosed by the Borrower to the Agent in writing and
to the Borrower’s knowledge after due inquiry, (i) each Borrowing Base Property
is in a clean, safe and healthful condition, and, except for materials used in
the ordinary course of construction, maintenance and operation of such
Borrowing Base Property, is free of all Hazardous Material and is in compliance
with all Applicable Laws (including Environmental Laws); (ii) neither Borrower
nor, to the best knowledge of the Borrower, any other person or entity, has
ever caused or permitted any Hazardous Material to be placed, held, located or
disposed of on, under, at or in a manner to affect the Borrowing Base Property,
or any part thereof, and the Borrowing Base Property has never been used
(whether by the Borrower or, to the best knowledge of the Borrower, by any
other person or entity) for any activities involving, directly or indirectly,
the use, generation, treatment, storage, transportation, or disposal of any
Hazardous Material; and (iii) neither the Borrowing Base Property nor the
Borrower is subject to any existing, pending, or, to the best of the Borrower’s
knowledge, threatened investigation or inquiry by any Governmental Authority,
and the Borrowing Base Property is not subject to any remedial obligations
under any applicable Laws pertaining to health or the environment.


 


48

















 


(t)                                    Completion.
When each Construction for an applicable Borrowing Base Property is completed
in accordance with the Plans and Specifications, no building or other
improvement will encroach upon any property line, building line, setback line,
side yard line or any recorded or visible easement (or other easement of which
the Borrower is aware or has reason to believe may exist) with respect to such
Borrowing Base Property.


 


Section 7.2.                                Survival of
Representations and Warranties, Etc.


 


All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Parent, the Borrower, any
Subsidiary or any other Loan Party to the Agent or any Lender pursuant to or in
connection with this Agreement or any of the other Loan Documents (including,
but not limited to, any such statement made in or in connection with any
amendment thereto or any statement contained in any certificate, financial
statement or other instrument delivered by or on behalf of the Parent or the
Borrower prior to the Agreement Date and delivered to the Agent or any Lender
in connection with the underwriting or closing of the transactions contemplated
hereby) shall constitute representations and warranties made by the Borrower
and the Parent in favor of the Agent or any of the Lenders under this Agreement.
All representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date, the
Effective Date, the date any new Borrowing Base Property becomes part of the
Borrowing Base, the date on which any extension of the Termination Date is
effectuated pursuant to Section 2.9. and the date of the occurrence of any
Credit Event, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date) and except for changes in factual circumstances not prohibited hereunder.
All such representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the Loan Documents and the making of
the Loans.


 


ARTICLE VIII. AFFIRMATIVE COVENANTS


 


For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders)
shall otherwise consent in the manner provided for in Section 12.6., the
Parent and the Borrower shall comply with the following covenants:


 


Section 8.1.                                Use of
Proceeds.


 


The Borrower shall use the proceeds of the Loans to finance the
construction costs actually incurred with respect to Construction of
Improvements on any Borrowing Base Property and to the extent provided for in
the Total Development Budget. No part of the proceeds of any Loan will be used
(a) for the purpose of buying or carrying “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or (b) to fund any operations in, finance any investments
or activities in, or make any payments to, a Sanctioned Person or Sanctioned
Entity.


 


49

















 


Section 8.2.                                Further
Assurances.


 


The Parent and the Borrower shall, at the Borrower’s cost and expense
and upon request of the Agent, execute and deliver or cause to be executed and
delivered, to the Agent such further instruments, documents and certificates,
and do and cause to be done such further acts that may be reasonably necessary
or advisable in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement and the other Loan
Documents.


 


Section 8.3.                                Certain
Covenants of Existing Credit Agreement.


 


(a)                                  Complying
With Existing Credit Agreement Covenants. Subject to Section 12.19, the
Borrower will perform, comply with and be bound by, for the benefit of the
Agent and the Lenders, each of its agreements, covenants and obligations
contained in Articles VII (other than Section 7.8. and Section 7.12.
thereof), VIII (other than Section 8.3. thereof) and IX of the Existing Credit
Agreement, each of which (together with the related definitions and ancillary
and referenced provisions) is hereby incorporated herein by reference.


 


(b)                                 Certifications.
Financial statements required to be delivered pursuant to Sections 8.1. and
8.2. of the Existing Credit Agreement may be certified by the treasurer of the
Parent, as well as the chief financial officer or controller of the Parent. Such
certifications shall be made in the same manner as provided for in Sections
8.1. and 8.2. of the Existing Credit Agreement.


 


Section 8.4.                                Foreign
Assets Control.


 


The Borrower and each Loan Party shall not be at any time a Person with
whom the Agent and the Lenders are restricted from doing business under the
regulations of OFAC (including, Sanctioned Persons) or under any statute,
executive order (including, the September 24, 2001 Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism), or other governmental action and shall not
engage in any dealings or transactions or otherwise be associated with such
Persons.


 


Section 8.5.                                Construction
Related Covenants.


 


(a)                                  Construction
of Improvements. The Improvements shall be constructed and fully equipped
in a good and workmanlike manner with materials of high quality, strictly in
accordance with the Plans and Specifications, and such construction and
equipping will be prosecuted with due diligence and continuity in accordance
with the Construction Schedule and fully completed not later than the
Completion Date. The Completion Date shall be extended in writing by the Agent
by the number of days resulting from any Unavoidable Delay in the Construction
of the Improvements on the Borrowing Base Property (but under no circumstances
shall the Agent be obligated to extend the Completion Date beyond a date that
is less than ninety (90) days prior to the Termination Date), provided that the
Agent shall not be obligated to grant any such extension unless (i) the
Borrower gives notice of such delay to the Agent as soon as reasonably
practicable upon learning of the event resulting in such delay, and
(ii) after giving effect to the consequences of such delay, the available
amount under the applicable Borrowing Base Property Sub-Facility and all
Project Equity is sufficient to complete the Construction in the sole
determination of the Agent.


 


50

















 


(b)                                 Changes
in Budgets. All material changes to any budget, including any Total
Development Budget, associated with a Borrowing Base Property shall be subject
to the written approval of the Agent, which approval shall not be unreasonably
withheld, conditioned or delayed. The Agent’s approval of any budget or changes
thereto shall not constitute a representation or agreement of the Agent that
all costs and expenses for a related Construction of Improvements are accurate
or properly reflected in such budget, the responsibility therefore being solely
with the Borrower.


 


(c)                                  Inspection
by Agent. The Borrower will cooperate with the Agent in arranging for
inspections by representatives of the Agent of the progress of any Construction
from time to time including an examination of (i) the Improvements, (ii) all
materials to be used in such Construction, (iii) all plans and shop drawings
which are or may be kept at the construction site, (iv) any contracts, bills of
sale, statements, receipts or vouchers in connection with such Improvements,
(v) all work done, labor performed, materials furnished in and about the
Improvements, (vi) all books, contracts and records with respect to such
Improvements, and (vii) any other documents relating to such Improvements
or such Construction. The Borrower shall cooperate with Agent or any of its
agents to enable it to perform its functions hereunder.


 


(d)                                 Liens.


 


(i)                                     Liens in General. Neither the Borrower nor any of the
Property Owners shall create, assume or suffer to exist any Lien upon any
Borrowing Base Property other than any Permitted Lien.


 


(ii)                                  Mechanics’ Liens and Contest Thereof. The Borrower will not
suffer or permit and the Borrower shall cause the Property Owners to not suffer
or permit any mechanics’ lien claims to be filed or otherwise asserted against
any Borrowing Base Property or any funds due to the General Contractor, and
will promptly discharge the same in case of the filing of any claims for Lien
or proceedings for the enforcement thereof, provided, however, that the
Borrower and/or the relevant Property Owner shall have the right to contest in
good faith and with reasonable diligence the validity of any such Lien or claim
provided that the Borrower posts a statutory lien bond which removes such Lien
from title to the Borrowing Base Property within thirty (30) days of written
notice by the Agent to the Borrower of the existence of the Lien.  The
Agent will not be required to make any further disbursements of the proceeds of
a Borrowing Base Property Sub-Facility if such mechanics’ lien claims have not
been removed within such thirty (30) day period. After such thirty (30) day
period, the Agent may also, at its option, restrict disbursements to reserve
sufficient sums to pay one hundred twenty-five percent (125%) of the Lien.


 


(iii)                               Settlement of Mechanics’ Lien Claims. If the Borrower and/or
the relevant Property Owner shall fail promptly either (i) to discharge
any such Lien, or (ii) post a statutory lien bond in the manner provided
in Section 8.5.(d)., the Agent may, at its election (but shall not be required to),
procure the release and discharge of any such claim and any judgment or decree
thereon and, further, may in its sole discretion effect any settlement or
compromise of the same and any amounts so expended by the Agent or Lenders,
including premiums paid or security furnished in connection with the issuance 


 


51

















 


of any surety company bonds, shall be deemed
to constitute disbursement of the proceeds of the applicable Borrowing Base
Property Sub-Facility. In settling, compromising or discharging any claims for
lien, the Agent shall not be required to inquire into the validity or amount of
any such claim.


 


(e)                                  Payment
of Taxes. The Borrower shall or shall cause the applicable Loan Party to
pay all real estate taxes and assessments and charges of every kind upon the
Borrowing Base Property before the same become delinquent, provided, however,
that the Borrower or the applicable Loan Party shall have the right to pay such
tax under protest or to otherwise contest any such tax or assessment, but only
if (i) such contest has the effect of preventing the collection of such
taxes so contested and also of preventing the sale or forfeiture of the
Borrowing Base Property or any part thereof or any interest therein and (ii) the
Borrower has notified the Agent of the Borrower’s intent to contest such taxes.
If the Borrower or the applicable Loan Party fails to commence such contest or,
having commenced to contest the same, shall thereafter fail to prosecute such
contest in good faith or with due diligence, or, upon adverse conclusion of any
such contest, shall fail to pay such tax, assessment or charge, the Agent may,
at its election (but shall not be required to), pay and discharge any such tax,
assessment or charge, and any interest or penalty thereon, and any amounts so
expended by the Agent shall be deemed to constitute disbursements of the
applicable Borrowing Base Property Sub-Facility.


 


(f)                                    Insurance.
During Construction, the Borrower shall cause insurance policies for a
Borrowing Base Property to be maintained in compliance with the “Ground-Up New
Construction” insurance requirements contained in Schedule 8.5.(f). at all
times. Upon completion of Construction and provided that the applicable
Borrowing Base Property remains in the Borrowing Base, the Borrower shall cause
insurance policies for a Borrowing Base Property to be maintained in compliance
with “all risks” insurance policies similar to (and with no material deviations
from) “all risk” insurance policies previously provided by the Borrower to and
accepted by the Agent. The Agent has approved the “all risks” insurance
policies maintained as of the date hereof by the Borrower for properties
similar to Borrowing Base Properties. The Borrower shall timely pay all
premiums on all insurance policies required hereunder.


 


(g)                                 Appraisals.
The Agent shall have the right to obtain an Appraisal of the Borrowing Base
Property if such Borrowing Base Property remains in the Borrowing Base for more
than twelve (12) months after the shell completion of the Improvements for such
Borrowing Base Property. The Borrower shall cooperate with the Agent in this
regard. The Borrower shall pay for any such Appraisal upon the Agent’s request.


 


(h)                                 Lease.
The Borrower shall or shall cause the applicable Property Owner to not enter
into, modify, amend, terminate or cancel any Lease related to a particular
Borrowing Base Property, without the prior written approval of the Agent, which
approval shall not be unreasonably withheld, conditioned or delayed. Notwithstanding
anything contained herein to the contrary, the Agent shall be deemed to have
approved any Lease or amendment thereto which (a) is on a standard lease form
which has been approved by the Agent, without material change, and (b) the
tenant’s creditworthiness has been reasonably approved by the Borrower;
provided that the Agent is provided with a copy of each such Lease promptly
following its execution.


 


52

















 


(i)                                     Furnishing
Notices. The Borrower shall provide the Agent with copies of all notices
pertaining to any Borrowing Base Property and relating to a Material Adverse
Effect received by the Borrower from any Tenant, General Contractor, laborer,
contractor, subcontractor, architect, Governmental Authority or insurance
company within seven (7) days after such notice is received. Within fifteen
(15) Business Days of the completion of the shell of any Improvement for a
Borrowing Base Property, Borrower shall notify the Agent in writing of such
completion. The Borrower shall provide the Agent with a Notice of Completion
upon the completion of all Construction for a Borrowing Base Property
contemplated by the Total Development Budget and related Construction Documents
within fifteen (15) Business Days of such completion.


 


(j)                                     Construction
Contracts. The Borrower will furnish the Agent promptly after execution
thereof executed copies of all Construction Documents that may not have been
furnished at the time of the initial Loan under the applicable Borrowing Base
Property Sub Facility.


 


(k)                                  Correction
of Defects. Within five (5) days after the Borrower acquires knowledge of
or receives notice of a defect in the Improvements or any departure from the
Plans and Specifications, or any other requirement of this Agreement, the
Borrower will commence to correct all such defects and departures.


 


(l)                                     Hold
Disbursements in Trust. The Borrower shall receive and hold in trust for
the sole benefit of the Agent and the Lenders (and not for the benefit of any
other person, including, but not limited to, contractors or any subcontractors)
all advances made hereunder directly to the Borrower, for the purpose of paying
costs of the Construction in accordance with the applicable Total Development
Budget. The Borrower shall use the proceeds of the Loan solely for the payment
of costs as specified in the applicable Total Development Budget. The Borrower
will pay all other costs, expenses and fees relating to the acquisition,
equipping, use and operation of the applicable Borrowing Base Property.


 


(m)                               Supplemental
Equity Deposit. The Borrower shall make any required Supplemental Equity
Deposit within ten (10) days of written notice to the Borrower from the Agent
of such requirement. No credit enhancement items (i.e. letters of credit, certificates
of deposit, depository accounts, prospective rent, or other items of liquid
collateral) securing any of the Obligations of the Borrower shall be the source
of such Supplemental Equity Deposit.


 


(n)                                 Timely
Payment of Costs. Except as provided herein, the Borrower and the Property
Owners shall pay when due all bills for services or labor performed and
materials supplied in connection with the development of the Borrowing Base
Property and the Construction of the Improvements.


 


(o)                                 Existence,
Etc. The Borrower shall cause each of the Property Owners to (a) do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence; and (b) do or cause to be done all things necessary to
obtain, extend, preserve, renew and keep in full force and effect the rights,
licenses, permits, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
comply in all material 


 


53

















 


respects with all laws, rules,
regulations and governmental orders (whether Federal, state or local)
applicable to the operation of such business whether now in effect or hereafter
enacted and with any and all other applicable laws, rules, regulations and
governmental orders; and at all times maintain, preserve and protect all
property material to the conduct of such business and keep such property in
good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times. The Borrower shall
cause the Property Owners to not incur any Indebtedness other than that
permitted or contemplated under this Agreement.


 


ARTICLE IX. INFORMATION


 


For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.6., all of the Lenders) shall
otherwise consent in the manner set forth in Section 12.6., the Borrower
and the Parent shall furnish to each Lender (or to the Agent if so provided
below) at its Lending Office:


 


Section 9.1.                                Compliance
Certificate.


 


At the time financial statements are furnished pursuant to
Sections 8.1. and 8.2. of the Existing Credit Agreement, and within five
(5) Business Days of the Agent’s request with respect to any other fiscal
period, a certificate substantially in the form of Exhibit J (a “Compliance Certificate”) executed by the chief financial
officer or treasurer of each of the Parent and the Borrower: (a) setting
forth in reasonable detail as at the end of such quarterly accounting period,
fiscal year, or other fiscal period, as the case may be, the calculations
required to establish whether or not the Parent and the Borrower were in
compliance with the covenants contained in Section 9.1. of the Existing
Credit Agreement and (b) stating that, to the best of such Person’s
knowledge, information and belief after due inquiry, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event
of Default and its nature, when it occurred, whether it is continuing and the
steps being taken by the Borrower with respect to such event, condition or
failure. Together with each Compliance Certificate delivered in connection with
quarterly or annual financial statements, the Borrower and the Parent shall
deliver a report, in form and detail reasonably satisfactory to the Agent,
setting forth a Statement of Funds From Operations for the fiscal period then
ending.


 


Section 9.2.                                Other
Information.


 


(a)                                  Default.
Notice of the occurrence of any Default or Event of Default promptly upon a
Responsible Officer of the Parent or the Borrower obtaining knowledge thereof;


 


(b)                                 Borrowing
Base Certificate. At the time the financial statements are furnished
pursuant to Sections 8.1. and 8.2. of the Existing Credit Agreement, or within five
(5) Business Days of request by the Agent, a Borrowing Base Certificate setting
forth the information to be contained therein, as of the last day of such
fiscal quarter. The Borrower shall also deliver a Borrowing Base Certificate as
required pursuant to Section 5.2.(b);


 


54
















 


(c)                                  Rent Roll and
Operating Summary. At the time the financial statements are furnished
pursuant to Sections 8.1. and 8.2. of the Existing Credit Agreement, or within
five (5) Business Days of request by the Agent, an operating summary with
respect to each Borrowing Base Property, including, without limitation, a
quarterly and year-to-date statement of NOI and a leasing/occupancy status
report together with a current rent roll for such Borrowing Base Properties
that are substantially complete and have Tenants in occupancy and paying rent;


 


(d)                                 Lease Agreements.
If not previously provided to the Agent, at the time the financial statements
are furnished pursuant to Sections 8.1. and 8.2. of the Existing Credit
Agreement, or within five (5) Business Days of request by the Agent, all
Leases and similar contracts, including any amendments thereto, entered into
with respect to each Borrowing Base Property.


 


(e)                                  Patriot Act
Information, Etc. From time to time and promptly upon each request, (i) information
identifying the Borrower as a Lender may request in order to comply with the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) and (ii) any information that the Agent reasonably deems necessary
from time to time in order to ensure compliance with all Applicable Laws
concerning money laundering and similar activities;


 


(f)                                    Other
Information. From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Parent, the Borrower, the
Loan Parties or any of their respective Subsidiaries as the Agent or any Lender
may reasonably request.


 


ARTICLE
X. DEFAULT


 


Section 10.1.                         Events of
Default.


 


Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of Applicable Law or
pursuant to any judgment or order of any Governmental Authority:


 


(a)                                  Default in Payment
of Principal. The Borrower shall fail to pay when due (whether upon demand,
at maturity, by reason of acceleration or otherwise) the principal of any of
the Loans.


 


(b)                                 Default in Payment
of Interest and Other Obligations. The Borrower shall fail to pay when due
any interest on any of the Loans or any of the other payment Obligations (other
than those referenced in Section 10.1.(a)) owing by the Borrower under
this Agreement or any other Loan Document, or any other Loan Party shall fail
to pay when due any payment Obligation owing by such other Loan Party under any
Loan Document to which it is a party, and such failure shall continue for a
period of five (5) Business Days.


 


(c)                                  Default in
Performance. (i) The Parent or the Borrower shall fail to perform or
observe any term, covenant, condition or agreement contained in Section 9.2.(a).
and/or Section 8.3. that relates to Section 7.13. of the Existing
Credit Agreement as modified by Section 12.19. 


 


55

















 


and/or Article IX of the
Existing Credit Agreement as modified by Section 12.19. or (ii) the
Borrower or any other Loan Party shall fail to perform or observe any term,
covenant, condition or agreement contained in this Agreement or any other Loan
Document to which it is a party and not otherwise mentioned in this Section and
in the case of this clause (ii) only such failure shall continue for
a period of thirty (30) days after the earlier of (x) the date upon
which a Responsible Officer of the Borrower or such Loan Party obtains
knowledge of such failure or (y) the date upon which the Borrower has
received written notice of such failure from the Agent; provided that with
respect to any failure to complete any Construction by the applicable
Completion Date in accordance with Section 8.5.(a). the thirty (30) day
grace period provided above shall in no event apply if the application of such
grace period would cause or would enable the applicable Completion Date to
extend beyond a date that is less than ninety (90) days prior to the
Termination Date.


 


(d)                                 Misrepresentations.
Any written statement, representation or warranty made or deemed made by or on
behalf of the Parent, the Borrower or any other Loan Party under this Agreement
or under any other Loan Document, or any amendment hereto or thereto, or in any
other writing or statement at any time furnished or made or deemed made by or
on behalf of the Borrower or any other Loan Party to the Agent or any Lender,
shall at any time prove to have been incorrect or misleading, in light of the
circumstances in which made or deemed made, in any material respect when
furnished or made or deemed made.


 


(e)                                  Voluntary
Bankruptcy Proceeding. The Parent, the Borrower, any Guarantor, any
Pledgor, any Property Owner or any Material Subsidiary shall:  (i) commence a voluntary case under the
Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now
or hereafter in effect); (ii) file a petition seeking to take advantage of
any other Applicable Laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts; (iii) consent
to, or fail to contest in a timely and appropriate manner, any petition filed
against it in an involuntary case under such bankruptcy laws or other
Applicable Laws or consent to any proceeding or action described in the
immediately following subsection; (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator of itself or of
a substantial part of its property, domestic or foreign; (v) admit in
writing its inability to pay its debts as they become due; (vi) make a
general assignment for the benefit of creditors; (vii) make a conveyance
fraudulent as to creditors under any Applicable Law; or (viii) take any
corporate or partnership action for the purpose of effecting any of the
foregoing.


 


(f)                                    Involuntary
Bankruptcy Proceeding. A case or other proceeding shall be commenced
against the Parent, the Borrower, any Guarantor, any Pledgor, any Property
Owner or any Material Subsidiary of the Parent or the Borrower in any court of
competent jurisdiction seeking:  (i) relief
under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws
(as now or hereafter in effect) or under any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Person, or of all or any
substantial part of the assets, domestic or foreign, of such Person, and such
case or proceeding shall continue undismissed or unstayed for a period of
60 consecutive calendar days, or an order granting the remedy or other
relief requested in such case or 


 


56

















 


proceeding against the Parent,
the Borrower, such Subsidiary or such other Loan Party (including, but not
limited to, an order for relief under such Bankruptcy Code or such other
federal bankruptcy laws) shall be entered.


 


(g)                                 Litigation;
Enforceability. The Parent, the Borrower, any Guarantor, any Subsidiary or
any other Loan Party shall disavow, revoke or terminate (or attempt to
terminate) any Loan Document to which it is a party or shall otherwise
challenge or contest in any action, suit or proceeding in any court or before
any Governmental Authority the validity or enforceability of this Agreement,
any Note or any other Loan Document or this Agreement, any Note, the Guaranty
or any other Loan Document shall cease to be in full force and effect (except
as a result of the express terms thereof).


 


(h)                                 Loan Documents.
An Event of Default (as defined therein) shall occur under any of the other
Loan Documents.


 


(i)                                     Existing Credit
Agreement Default. An Existing Credit Agreement Default (each Existing
Credit Agreement Default being hereby incorporated herein by reference) shall
occur and remains uncured beyond any applicable grace period.


 


(j)                                     Failure of
Security. The Agent shall cease to have a valid and perfected first
priority security interest in any of the Collateral for any reason other than
the failure of the Agent to take any action within its control.


 


Section 10.2.                         Remedies
Upon Event of Default.


 


Upon the occurrence of an Event of Default
the following provisions shall apply:


 


(a)                                  Acceleration;
Termination of Facilities.


 


(i)                                     Automatic.
Upon the occurrence of an Event of Default specified in Sections 10.1.(e) or
10.1.(f), (A)(i) the principal of, and all accrued interest on, the Loans
and the Notes at the time outstanding and (ii) all of the other
Obligations of the Borrower, including, but not limited to, the other amounts
owed to the Lenders and the Agent under this Agreement, the Notes or any of the
other Loan Documents shall become immediately and automatically due and payable
by the Borrower without presentment, demand, protest, or other notice of any
kind, all of which are expressly waived by the Borrower and (B) all of the
Commitments and the obligation of the Lenders to make Loans shall all
immediately and automatically terminate.


 


(ii)                                  Optional.
If any other Event of Default shall exist, the Agent shall, at the direction of
the Requisite Lenders:  (A) declare (1) the
principal of, and accrued interest on, the Loans and the Notes at the time
outstanding and (2) all of the other Obligations, including, but not
limited to, the other amounts owed to the Lenders and the Agent under this
Agreement, the Notes or any of the other Loan Documents to be forthwith due and
payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly 


 


57

















 


waived by the Borrower and (B) terminate
the Commitments and the obligation of the Lenders to make Loans hereunder.


 


(b)                                 Loan Documents.
The Requisite Lenders may direct the Agent to, and the Agent if so directed
shall, exercise any and all of its rights under any and all of the other Loan
Documents.


 


(c)                                  Applicable Law.
The Requisite Lenders may direct the Agent to, and the Agent if so directed
shall, exercise all other rights and remedies it may have under any Applicable
Law.


 


(d)                                 Appointment of
Receiver. To the extent permitted by Applicable Law, the Agent and the
Lenders shall be entitled to the appointment of a receiver for the assets and
properties of the Parent, the Borrower and their respective Subsidiaries,
without notice of any kind whatsoever and without regard to the adequacy of any
security for the Obligations or the solvency of any party bound for its
payment, to take possession of all or any portion of the business operations of
the Parent, the Borrower and their respective Subsidiaries and to exercise such
power as the court shall confer upon such receiver.


 


Section 10.3.                         Remedies
Upon Default.


 


Upon the occurrence of a Default specified in
Sections 10.1.(e) or 10.1.(f), the Commitments shall immediately and
automatically terminate.


 


Section 10.4.                         Allocation
of Proceeds.


 


If an Event of Default shall exist and
maturity of any of the Obligations has been accelerated, all payments received
by the Agent under any of the Loan Documents, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower
hereunder or thereunder, shall be applied in the following order and priority:


 


(a)                                  amounts
due to the Agent in respect of fees and expenses due under Section 12.2.;


 


(b)                                 amounts
due to the Lenders in respect of fees and expenses due under Section 12.2.,
pro rata in the amount then due each Lender;


 


(c)                                  payments
of interest on all other Loans, to be applied for the ratable benefit of the
Lenders;


 


(d)                                 payments
of principal of all other Loans, to be applied for the ratable benefit of the
Lenders;


 


(e)                                  amounts
due the Agent and the Lenders pursuant to Sections 11.8. and 12.9.;


 


58

















 


(f)                                    payments
of all other Obligations and other amounts due and owing by the Borrower and
the other Loan Parties under any of the Loan Documents, if any, to be applied
for the ratable benefit of the Lenders; and


 


(g)                                 any
amount remaining after application as provided above, shall be paid to the
Borrower or whomever else may be legally entitled thereto.


 


Section 10.5.                         Performance
by Agent.


 


If the Parent or the Borrower shall fail to
perform any covenant, duty or agreement contained in any of the Loan Documents,
and such failure has continued after the expiration of any cure or grace period
set forth herein, the Agent may, after notice to the Parent or the Borrower,
perform or attempt to perform such covenant, duty or agreement on behalf of the
Parent or the Borrower. In such event, the Borrower shall, at the request of
the Agent, promptly pay any amount reasonably expended by the Agent in such
performance or attempted performance to the Agent, together with interest
thereon at the applicable Post-Default Rate from the date of such expenditure
until paid. Notwithstanding the foregoing, neither the Agent nor any Lender
shall have any liability or responsibility whatsoever for the performance of
any obligation of the Borrower under this Agreement or any other Loan Document.


 


Section 10.6.                         Rights
Cumulative.


 


The rights and remedies of the Agent and the
Lenders under this Agreement and each of the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which any of them may
otherwise have under Applicable Law. In exercising their respective rights and
remedies the Agent and the Lenders may be selective and no failure or delay by
the Agent or any of the Lenders in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.


 


ARTICLE
XI. THE AGENT


 


Section 11.1.                         Authorization
and Action.


 


Each Lender
hereby appoints and authorizes the Agent to take such action as contractual
representative on such Lender’s behalf and to exercise such powers under this
Agreement and the other Loan Documents as are specifically delegated to the
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Not in limitation of the foregoing, each Lender
authorizes and directs the Agent to enter into the Loan Documents for the
benefit of the Lenders. Each Lender hereby agrees that, except as otherwise set
forth herein, any action taken by the Requisite Lenders in accordance with the
provisions of this Agreement or the Loan Documents, and the exercise by the
Requisite Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. Nothing herein shall be construed to deem the
Agent a trustee or fiduciary for any Lender nor to impose on the Agent duties
or obligations other than those expressly provided for herein. At the request
of a Lender, the Agent will forward to such Lender copies or, where
appropriate, originals of the documents delivered to the Agent pursuant to this
Agreement or the other Loan Documents. The Agent will also furnish to any
Lender, 


 


59

















 


upon
the request of such Lender, a copy of any certificate or notice furnished to
the Agent by the Borrower, any Loan Party or any other Affiliate of the
Borrower, pursuant to this Agreement or any other Loan Document not already
delivered to such Lender pursuant to the terms of this Agreement or any such
other Loan Document. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of any of
the Obligations), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders (or all of the Lenders if explicitly
required under any other provision of this Agreement), and such instructions
shall be binding upon all Lenders and all holders of any of the Obligations;
provided, however, that, notwithstanding anything in this Agreement to the contrary,
the Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or any other Loan
Document or Applicable Law. Not in limitation of the foregoing, the Agent shall
not exercise any right or remedy it or the Lenders may have under any Loan
Document upon the occurrence of a Default or an Event of Default unless the
Requisite Lenders have so directed the Agent to exercise such right or remedy.


 


Section 11.2.                         Agent’s
Reliance, Etc.


 


Notwithstanding any other provisions of this
Agreement or any other Loan Documents, neither the Agent nor any of its
directors, officers, agents, employees or counsel shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Loan Document, except for its or their own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final, non-appealable judgment. Without limiting the
generality of the foregoing, the Agent: (a) may treat the payee of any
Note as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Agent; (b) may consult with legal counsel (including its own counsel
or counsel for the Borrower or any other Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible
to any Lender or any other Person for any statements, warranties or
representations made by any Person in or in connection with this Agreement or
any other Loan Document; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any of this Agreement or any other Loan Document or the satisfaction
of any conditions precedent under this Agreement or any Loan Document on the
part of the Borrower or other Persons or inspect the property, books or records
of the Borrower or any other Person; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document, any other
instrument or document furnished pursuant thereto or any collateral covered
thereby or the perfection or priority of any Lien in favor of the Agent on
behalf of the Lenders in any such collateral; and (f) shall incur no
liability under or in respect of this Agreement or any other Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telephone or telecopy) believed by it to be genuine and
signed, sent or given by the proper party or parties.


 


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Section 11.3.                         Notice of
Defaults.


 


The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless the Agent
has received notice from a Lender, the Parent or the Borrower referring to this
Agreement, describing with reasonable specificity such Default or Event of
Default and stating that such notice is a “notice of default.”  If any Lender (excluding the Lender which is
also serving as the Agent) becomes aware of any Default or Event of Default, it
shall promptly send to the Agent such a “notice of default.”  Further, if the Agent receives such a “notice
of default”, the Agent shall give prompt notice thereof to the Lenders.


 


Section 11.4.                         KeyBank as
Lender.


 


KeyBank, as a Lender, shall have the same
rights and powers under this Agreement and any other Loan Document as any other
Lender and may exercise the same as though it were not the Agent; and the term “Lender”
or “Lenders” shall, unless otherwise expressly indicated, include KeyBank in
each case in its individual capacity. KeyBank and its affiliates may each
accept deposits from, maintain deposits or credit balances for, invest in, lend
money to, act as trustee under indentures of, serve as financial advisor to,
and generally engage in any kind of business with, the Parent, the Borrower,
any other Loan Party or any other affiliate thereof as if it were any other
bank and without any duty to account therefor to the other Lenders. Further,
the Agent and any affiliate may accept fees and other consideration from the
Parent or the Borrower for services in connection with this Agreement and
otherwise without having to account for the same to the other Lenders. The
Lenders acknowledge that, pursuant to such activities, KeyBank or its
affiliates may receive information regarding the Parent, the Borrower, other
Loan Parties, other Subsidiaries and other Affiliates (including information
that may be subject to confidentiality obligations in favor of such Person) and
acknowledge that the Agent shall be under no obligation to provide such
information to them.


 


Section 11.5.                         Approvals of
Lenders.


 


All communications from the Agent to any
Lender requesting such Lender’s determination, consent, approval or disapproval
(a) shall be given in the form of a written notice to such Lender, (b) shall
be accompanied by a description of the matter or issue as to which such
determination, approval, consent or disapproval is requested, or shall advise
such Lender where information, if any, regarding such matter or issue may be
inspected, or shall otherwise describe the matter or issue to be resolved, (c) shall
include, if reasonably requested by such Lender and to the extent not
previously provided to such Lender, written materials and a summary of all oral
information provided to the Agent by the Parent and the Borrower in respect of
the matter or issue to be resolved, and (d) shall include the Agent’s
recommended course of action or determination in respect thereof. Each Lender
shall reply promptly, but in any event within ten (10) Business Days (or
such lesser or greater period as may be specifically required under the Loan
Documents) of receipt of such communication. Except as otherwise provided in
this Agreement, unless a Lender shall give written notice to the Agent that it
specifically objects to the recommendation or determination of the Agent
(together with a written explanation of the reasons behind such objection)
within the applicable time period for reply (which shall be no less than ten (10) Business
Days), such Lender shall be deemed to have conclusively approved of or
consented to such recommendation or determination.


 


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Section 11.6.                         Lender
Credit Decision, Etc.


 


Each Lender expressly acknowledges and agrees
that neither the Agent nor any of its officers, directors, employees, agents,
counsel, attorneys-in-fact or other affiliates has made any representations or
warranties as to the financial condition, operations, creditworthiness,
solvency or other information concerning the business or affairs of the
Borrower, any other Loan Party, any Subsidiary or any other Person to such
Lender and that no act by the Agent hereafter taken, including any review of
the affairs of the Parent, the Borrower, any other Loan Party or any other
Subsidiary of the Parent or the Borrower, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender. Each Lender acknowledges
that it has made its own credit and legal analysis and decision to enter into
this Agreement and the transactions contemplated hereby, independently and
without reliance upon the Agent, any other Lender or counsel to the Agent, or
any of their respective officers, directors, employees and agents, and based on
the financial statements of the Parent, the Borrower, the Subsidiaries or any
other Affiliate thereof, and inquiries of such Persons, its independent due
diligence of the business and affairs of the Borrower, the Loan Parties, the
Subsidiaries of the Parent and the Borrower and other Persons, its review of
the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent, any other Lender or
counsel to the Agent or any of their respective officers, directors, employees
and agents, and based on such review, advice, documents and information as it
shall deem appropriate at the time, continue to make its own decisions in
taking or not taking action under the Loan Documents. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent under this Agreement or any of the other Loan
Documents, the Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower,
any other Loan Party or any other Affiliate thereof which may come into
possession of the Agent, or any of its officers, directors, employees, agents,
attorneys-in-fact or other affiliates. Each Lender acknowledges that the Agent’s
legal counsel in connection with the transactions contemplated by this
Agreement is only acting as counsel to the Agent and is not acting as counsel
to such Lender.


 


Section 11.7.                         Collateral
Matters.


 


(a)                                  The Agent is
authorized on behalf of all of the Lenders, without the necessity of any notice
to or further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Loan Documents
which may be necessary to perfect and maintain perfected the Liens upon the
Collateral granted pursuant to any of the Loan Documents.


 


(b)                                 The Lenders hereby
authorize the Agent, at its option and in its discretion, to release any Lien
granted to or held by the Agent upon any Collateral (i) upon termination
of this Agreement in accordance with Section 12.10.; or (ii) as
required or permitted by Section 5.2. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent’s authority 


 


62

















 


to release particular types or
items of Collateral pursuant to this Section or any other applicable
provision of any of the other Loan Documents.


 


(c)                                  Upon any sale and
transfer of Collateral which is expressly permitted pursuant to the terms of
this Agreement, and upon at least five (5) Business Days’ prior written
request by the Borrower, the Agent shall (and is hereby irrevocably authorized
by all of the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided, however, that (i) the Agent shall not be required
to execute any such document on terms which, in the Agent’s opinion, would
expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty;
and (ii) such release shall not in any manner discharge, affect or impair
the Obligations or any Liens upon (or obligations of the Borrower or any Loan
Party in respect of) all interests retained by the Borrower or any Subsidiary,
including (without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Agent from the proceeds of any such sale, transfer
or foreclosure.


 


(d)                                 The Agent shall have
no obligation whatsoever to the Lenders or to any other Person to assure that
the Collateral exists or is owned by any Loan Party or is cared for, protected
or insured or that the Liens granted to the Agent herein or pursuant hereto
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Agent in this Section or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent’s own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to the Lenders, except to the extent found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the Agent’s gross negligence or willful misconduct.


 


Section 11.8.                         Indemnification
of Agent.


 


Each Lender agrees to indemnify the Agent (to
the extent not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so) pro rata in accordance with such Lender’s respective
Commitment Percentage (determined at the time any such claim is made), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as Agent but not as a Lender) in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, “Indemnifiable Amounts”);
provided, however, that no Lender shall be liable for any portion of such
Indemnifiable Amounts to the extent resulting from the Agent’s gross negligence
or willful misconduct as determined by a court of competent jurisdiction in a
final, non-appealable judgment or if the Agent fails to follow the written
direction of the Requisite Lenders (or all of the Lenders if expressly required
hereunder) unless such failure 


 


63

















 


results from the Agent
following the advice of counsel to the Agent of which advice the Lenders have
received notice. Without limiting the generality of the foregoing but subject
to the preceding proviso, each Lender agrees to reimburse the Agent (to the
extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees of the counsel(s) of the
Agent’s own choosing) incurred by the Agent in connection with the preparation,
negotiation, execution, or enforcement of, or legal advice with respect to the
rights or responsibilities of the parties under, the Loan Documents, any suit
or action brought by the Agent to enforce the terms of the Loan Documents
and/or collect any Obligations, any “lender liability” suit or claim brought
against the Agent and/or the Lenders, and any claim or suit brought against the
Agent, and/or the Lenders arising under any Environmental Laws. Such
out-of-pocket expenses (including counsel fees) shall be advanced by the
Lenders on the request of the Agent notwithstanding any claim or assertion that
the Agent is not entitled to indemnification hereunder upon receipt of an
undertaking by the Agent that the Agent will reimburse the Lenders if it is
actually and finally determined by a court of competent jurisdiction that the
Agent is not so entitled to indemnification. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder or
under the other Loan Documents and the termination of this Agreement. If the
Borrower shall reimburse the Agent for any Indemnifiable Amount following
payment by any Lender to the Agent in respect of such Indemnifiable Amount pursuant
to this Section, the Agent shall share such reimbursement on a ratable basis
with each Lender making any such payment.


 


Section 11.9.                         Successor
Agent.


 


The Agent may resign at any time as Agent
under the Loan Documents by giving written notice thereof to the Lenders and
the Borrower. The Agent may be removed as Agent under the Loan Documents for
gross negligence or willful misconduct upon 30-day’s prior written notice by
all Lenders (other than the Lender then acting as Agent). Upon any such resignation
or removal, the Requisite Lenders shall have the right to appoint a successor
Agent which appointment shall, provided no Default or Event of Default exists,
be subject to the Borrower’s approval, which approval shall not be unreasonably
withheld or delayed (except that the Borrower shall, in all events, be deemed
to have approved each Lender and its affiliates as a successor Agent). If no
successor Agent shall have been so appointed in accordance with the immediately
preceding sentence, and shall have accepted such appointment, within thirty
(30) days after the resigning Agent’s giving of notice of resignation or the
giving of notice of the removal of the Agent, then the resigning or removed
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be
a Lender, if any Lender shall be willing to serve, and otherwise shall be a
commercial bank having total combined assets of at least $50,000,000,000;
provided, the resigning or removed Agent shall continue to serve as Agent until
such time as a successor Agent shall have accepted such appointment. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents; provided, however, such retiring Agent shall not be relieved from
any obligations arising prior to its discharge the extent resulting from the
Agent’s gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable judgment or from the failure
by the Agent to follow the written direction of the Requisite Lenders (or all
of the 


 


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Lenders if expressly required
hereunder) unless such failure results from the Agent following the advice of
counsel to the Agent of which advice the Lenders have received notice. After
any Agent’s resignation or removal hereunder as Agent, the provisions of this Article XI.
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents.


 


Section 11.10.                  Titled
Agent.


 


Each of the Titled Agents in each such
respective capacity, assumes no responsibility or obligation hereunder,
including, without limitation, for servicing, enforcement or collection of any
of the Loans, nor any duties as an agent hereunder for the Lenders. The titles
of “Arranger”, “Syndication Agent” and “Documentation Agent” are solely
honorific and imply no fiduciary responsibility on the part of the Titled
Agents to the Agent, the Borrower or any Lender and the use of such titles does
not impose on the Titled Agents any duties or obligations greater than those of
any other Lender or entitle the Titled Agents to any rights other than those to
which any other Lender is entitled.


 


ARTICLE
XII. MISCELLANEOUS


 


Section 12.1.                         Notices.


 


Unless otherwise provided herein, communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered as follows:


 


If to the Parent:


 


Corporate Office Properties Trust


6711 Columbia Gateway Drive, Suite 300


Columbia, Maryland 21046 


Attention: General Counsel


Telephone
Number:               (443)
285-5400


Telecopy
Number:                      (443)
285-7650


 


If to the Borrower:


 


Corporate Office Properties, L.P.


6711 Columbia Gateway Drive, Suite 300


Columbia, Maryland 21046


Attention: General Counsel


Telephone
Number:               (443)
285-5400


Telecopy
Number:                      (443)
285-7650


 


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If to the Agent:


 


KeyBank National Association


127 Public Square, 8th Floor


Cleveland, Ohio 
44114


Attn: 
John C. Scott


Telephone:                                    (216) 689-5986


Telecopy:                                           (216)
689-4997


 


with a copy to:


 


KeyBank National Association


800 Superior Avenue


Cleveland, Ohio  44114


Attn: 
REC Services


Telephone:                                    (216) 828-7512


Telecopy:                                           (216)
828-7523


 


If to a Lender:


 


To such Lender’s address or telecopy number,
as applicable, set forth in its Administrative Questionnaire;


 


or, as to each party at such other address as shall be designated by
such party in a written notice to the other parties delivered in compliance
with this Section. All such notices and other communications shall be effective
(i) if mailed, when received; (ii) if telecopied, when transmitted;
or (iii) if hand delivered or sent by overnight courier, when delivered. Notwithstanding
the immediately preceding sentence, all notices or communications to the Agent
or any Lender under Article II. shall be effective only when actually
received or when receipt is refused. Neither the Agent nor any Lender shall
incur any liability to the Borrower (nor shall the Agent incur any liability to
the Lenders) for acting upon any telephonic notice referred to in this
Agreement which the Agent or such Lender, as the case may be, believes in good
faith to have been given by a Person authorized to deliver such notice or for
otherwise acting in good faith hereunder. Failure of a Person designated to get
a copy of a notice to receive such copy shall not affect the validity of notice
properly given to any other Person.


 


Section 12.2.                         Expenses.


 


The Borrower agrees (a) to pay or
reimburse the Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of, and
any amendment, supplement or modification to, any of the Loan 


 


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Documents (including due
diligence expenses and travel expenses relating to closing), and the
consummation and administration of the transactions contemplated thereby,
including the reasonable fees and disbursements of counsel to the Agent and
costs and expenses in connection with the use of Intralinks, Inc. or other
similar information transmission systems in connection with the Loan Documents,
(b) to pay or reimburse the Agent, and the Lenders for all their costs and
expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents, including the reasonable fees and
disbursements of their respective counsel (including the allocated fees and
expenses of in-house counsel) and any payments in indemnification or otherwise
payable by the Lenders to the Agent pursuant to the Loan Documents, (c) to
pay, and indemnify and hold harmless the Agent, and the Lenders from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any failure to pay or delay in paying, documentary, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of any of the Loan
Documents, or consummation of any amendment, supplement or modification of, or
any waiver or consent under or in respect of, any Loan Document; and (d) to
the extent not already covered by any of the preceding subsections, to pay or
reimburse the Agent, and the Lenders for all their costs and expenses incurred
in connection with any bankruptcy or other proceeding of the type described in
Sections 10.1.(e) or 10.1.(f), including the reasonable fees and
disbursements of counsel to the Agent and any Lender, whether such fees and
expenses are incurred prior to, during or after the commencement of such
proceeding or the confirmation or conclusion of any such proceeding. If the
Borrower shall fail to pay any amounts required to be paid by it pursuant to
this Section, the Agent, and/or the Lenders may pay such amounts on behalf of
the Borrower and either deem the same to be Loans outstanding hereunder or
otherwise Obligations owing hereunder.


 


Section 12.3.                         Setoff.


 


Subject to Section 3.3. and in addition
to any rights now or hereafter granted under Applicable Law and not by way of
limitation of any such rights, the Agent, each Lender and each Participant is
hereby authorized by the Borrower, at any time or from time to time during the
continuance of an Event of Default, without prior notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, but in the case
of a Lender or Participant subject to receipt of the prior written consent of
the Agent exercised in its sole discretion, to set off and to appropriate and
to apply any and all deposits (general or special, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Agent,
such Lender or any affiliate of the Agent or such Lender, to or for the credit
or the account of the Borrower against and on account of any of the
Obligations, irrespective of whether or not any or all of the Loans and all
other Obligations have been declared to be, or have otherwise become, due and
payable as permitted by Section 10.2., and although such obligations shall
be contingent or unmatured.


 


Section 12.4.                         Litigation;
Jurisdiction; Other Matters; Waivers.


 


(a)                                  EACH PARTY HERETO
ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE PARENT, THE
BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND
COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE
PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
LENDERS, THE AGENT, THE PARENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY
HERETO ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR
BY REASON OF 


 


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ANY OTHER SUIT, CAUSE OF ACTION
OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE PARENT, THE BORROWER, THE AGENT OR
ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.


 


(b)                                 EACH OF THE PARENT,
THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN THE
BOROUGH OF MANHATTAN, NEW YORK, NEW YORK, SHALL HAVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE PARENT, THE BORROWER, THE
AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, THE LOANS, THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER
ARISING HEREFROM OR THEREFROM. THE PARENT, THE BORROWER AND EACH OF THE LENDERS
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES. EACH
PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM, AND EACH AGREES NOT
TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL
NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER
OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH
FORUM IN ANY OTHER APPROPRIATE JURISDICTION.


 


(c)                                  THE PROVISIONS OF
THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL
AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL
SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR
UNDER THE OTHER LOAN DOCUMENTS, AND THE TERMINATION OF THIS AGREEMENT.


 


Section 12.5.                         Successors
and Assigns.


 


(a)                                  The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, except that
neither the Parent nor the Borrower may not assign or otherwise transfer any of
their respective rights or obligations under this Agreement without the prior
written consent of all Lenders and any such assignment or other transfer to
which all of the Lenders have not so consented shall be null and void.


 


(b)                                 Each Lender shall have
the right to assign, transfer, sell, negotiate, pledge or otherwise hypothecate
this Agreement and any of its rights and security hereunder and under the other
Loan Documents to any other Eligible Assignee with the prior written consent of
the Agent and with the prior written consent of the Borrower, which consents by
the Agent and the Borrower shall not be unreasonably withheld, conditioned or
delayed (provided that no consent of the Borrower shall be required if the
Eligible Assignee is also a Lender or if an Event of 


 


68

















 


Default then exists) and no
consent of the Agent or the Borrower shall be required if the Eligible Assignee
is also a Lender; provided, however, that (i) the parties to each such
assignment shall execute and deliver to the Agent, for its approval and
acceptance, an Assignment and Acceptance Agreement, (ii) each such
assignment shall be of a constant, and not a varying, percentage of the
assigning Lender’s rights and obligations under this Agreement, (iii) if
the potential assignee is not already a Lender hereunder, at least ten (10) days
prior to the date of the assignment, the potential assignee shall deliver to
the Agent the fully completed Patriot Act and OFAC forms attached as Exhibit K
hereto and such other information as Agent shall require to successfully
complete the Agent’s Patriot Act Customer Identification Process and OFAC
Review Process, (iv) unless the Agent and, so long as no Event of Default
exists, the Borrower otherwise consent, the aggregate amount of the Commitment
of the assigning Lender being assigned pursuant to each such assignment shall
in no event be less than $10,000,000, (v) the Agent shall receive from the
assigning Lender a processing fee of $3,500, and (vi) if the assignment is
less than the assigning Lender’s entire Commitment, the assigning Lender must
retain at least a $10,000,000 Commitment. The Agent may designate any Eligible
Assignee accepting an assignment of a specified portion of the Loan to be a
Co-Agent, an “Arranger” or similar title, but such designation shall not confer
on such Eligible Assignee the rights or duties of the Agent. Upon such
execution, delivery, approval and acceptance, and upon the effective date
specified in the applicable Assignment and Acceptance Agreement, (x) the
Eligible Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance Agreement, have the rights and obligations of a
Lender hereunder and under the other Loan Documents, and the Borrower hereby
agrees that all of the rights and remedies of Lenders in connection with the
interest so assigned shall be enforceable against the Borrower by an Eligible
Assignee with the same force and effect and to the same extent as the same
would have been enforceable but for such assignment, and (y) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance Agreement, relinquish its rights and be released from
its obligations hereunder and thereunder.


 


(c)                                  By executing and
delivering an Assignment and Acceptance Agreement, the assigning Lender
thereunder and the Eligible Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) except as provided in
such Assignment and Acceptance Agreement, such assigning Lender and the Agent
make no representation or warranty and assume no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document or any other instrument or document furnished in connection
therewith; (ii) such assigning Lender and the Agent make no representation
or warranty and assume no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by any Loan Party
of any of its obligations under any Loan Document or any other instrument or
document furnished in connection therewith; (iii) such Eligible Assignee
confirms that it has received a copy of this Agreement together with such
financial statements, Loan Documents and other documents and information as it
has deemed appropriate to make its own independent credit analysis and decision
to enter into the Assignment and Acceptance Agreement and to become a Lender
hereunder; (iv) such Eligible 


 


69

















 


Assignee will, independently
and without reliance upon the Agent, the assigning Lender or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time continue to make its own independent credit decisions in taking or not
taking action under this Agreement; (v) such Eligible Assignee appoints
and authorizes the Agent to take such action as the Agent on its behalf and to
exercise such powers under. this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vi) such Eligible
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.


 


(d)                                 The Agent shall
maintain a copy of each Assignment and Acceptance Agreement delivered to and accepted
by it and shall record in its records the name and address of each Lender and
the Commitment of such Lender from time to time. The Borrower, the Agent and
the Lenders may treat each entity whose name is so recorded as a Lender
hereunder for all purposes of this Agreement. In the case of any assignment by
a Lender, within five (5) Business Days after its receipt of written
notice of such assignment, the Borrower, at its own expense, shall, if
requested by the applicable Lender, execute and deliver to the Agent in
exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant
to such Assignment and Acceptance Agreement and, if any assigning Lender has
retained a Commitment hereunder, a new Note to the order of such assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes, if any, shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes and shall be dated
the effective date of such Assignment and Acceptance.


 


(e)                                  Upon receipt of an
Assignment and Acceptance Agreement executed by an assigning Lender and an
Eligible Assignee, the Agent shall, if such Assignment and Acceptance Agreement
has been properly completed and consented to if required herein, accept such
Assignment and Acceptance Agreement, and record the information contained
therein in its records, and the Agent shall give prompt written notice thereof
to the Borrower (provided that neither the Agent nor the Lenders shall be
liable for any failure to give such notice).


 


(f)                                    The Borrower shall
use reasonable efforts to cooperate with the Agent and each Lender in
connection with the assignment of interest under this Agreement or the sale of
participations herein.


 


(g)                                 Anything in this
Agreement to the contrary notwithstanding, and without the need to comply with
any of the formal or procedural requirements of this Agreement, including this
Section, any Lender may at any time and from time to time pledge and assign all
or any portion of its rights under all or any of the Loan Documents to a
Federal Reserve Bank; provided that no such pledge or assignment shall release
such Lender from its obligations hereunder or increase the Borrower’s or any
other Loan Party’s obligations hereunder. To facilitate any such pledge or
assignment, the Agent shall, at the request of such Lender, enter into a letter
agreement with the Federal Reserve Bank in, or substantially in, the form of
the exhibit to Appendix C to the Federal Reserve Bank of New York Operating
Circular No. 12, or other applicable form.


 


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(h)                                 Anything in this
Agreement to the contrary notwithstanding, any Lender may assign all or any
portion of its rights and obligations under this Agreement to another branch or
affiliate of such Lender without first obtaining the approval of any Agent or the
Borrower, provided that (i) such Lender remains liable hereunder unless
the Borrower and the Agent shall otherwise agree, (ii) at the time of such
assignment such Lender is not a Defaulting Lender, (iii) such Lender gives
the Agent and the Borrower at least fifteen (15) days prior written notice of
any such assignment; (iv) the parties to each such assignment execute and
deliver to the Agent an Assignment and Acceptance Agreement, and (v) the
Agent receives from the assigning Lender a processing fee of $1,500.


 


(i)                                     Each Lender shall
have the right, without the consent of the Borrower, to sell participations to
one or more Eligible Assignees (each a “Participant”)
in or to all or a portion of its rights and obligations under the Loan
Documents; provided, however, that (i) such Lender’s obligations under
this Agreement (including without limitation its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and with regard to any and
all payments to be made under this Agreement and (iv) the holder of any
such participation shall not be entitled to voting rights under this Agreement
or the other Loan Documents (but such holder may contract with the Lender
selling such Eligible Assignee its interest in such Lender’s share of the Loan
as to voting of such Lender’s interest under Section 12.6.(b), but not
under any other section of this Agreement; provided that any such agreement by
a Lender shall bind only such Lender alone and not the Borrower, the other Lenders
or the Agent).


 


(j)                                     No Eligible
Assignee of any rights and obligations under this Agreement shall be permitted
to subassign such rights and obligations. No Participant in any rights and
obligations under this Agreement shall be permitted to sell subparticipations
of such rights and obligations.


 


(k)                                  Each of the Parent
and the Borrower acknowledges and agrees that the Lenders may provide to any
Eligible Assignee or Participant originals or copies of this Agreement, any
other Loan Document and any other documents, instruments, certificates,
opinions, insurance policies, letters of credit, reports, requisitions and
other material and information of every nature or description, and may
communicate all oral information, at any time submitted by or on behalf of any
Loan Party or received by any Lender in connection with the Loan Documents or
with respect to any Loan Party; provided that prior to any such delivery or
communication, such Eligible Assignees or Participants shall agree to preserve
the confidentiality of any of the foregoing to the same extent that such Lender
agreed to preserve such confidentiality. In order to facilitate assignments to
Eligible Assignees and sales to Eligible Assignees, the Borrower shall execute
such further documents, instruments or agreements as the Lenders may reasonably
require; provided, that the Borrower shall not be required (i) to execute
any document or agreement which would decrease its rights, or increase its
obligations, relative to those set forth in this Agreement or any of the other
Loan Documents (including financial obligations, personal recourse,
representations and warranties and reporting requirements), or (ii) to
expend more than incidental sums of money or incidental administrative time for
which it does not receive


 


71

















 


reasonable reimbursement in order to comply with any requests or
requirements of any Lender in connection with such assignment or sale
arrangement.


 


Section 12.6.                         Amendments.


 


(a)                                  Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement or any other Loan Document to be given by the
Lenders may be given, and any term of this Agreement or of any other Loan
Document may be amended, and the performance or observance by the Borrower or
any other Loan Party or any Subsidiary of any terms of this Agreement or such
other Loan Document or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Requisite Lenders (and, in the case of an amendment to any Loan Document, the
written consent of each Loan Party a party thereto).


 


(b)                                 Notwithstanding the
foregoing, without the prior written consent of each Lender adversely affected
thereby, no amendment, waiver or consent shall do any of the following:


 


(i)                                     increase
the Commitments of the Lenders (except for any increase in the Commitments
effectuated pursuant to Section 2.11.) or subject the Lenders to any
additional obligations;


 


(ii)                                  reduce
the principal of, or interest rates that have accrued or that will be charged
on the outstanding principal amount of, any Loans or other Obligations;


 


(iii)                               reduce
the amount of any Fees payable hereunder or postpone any date fixed for payment
thereof;


 


(iv)                              modify
the definition of the term “Termination Date” (except as contemplated under Section 2.9.)
or otherwise postpone any date fixed for any payment of any principal of, or
interest on, any Loans or any other Obligations (including the waiver of any
Default or Event of Default as a result of the nonpayment of any such
Obligations as and when due);


 


(v)                                 amend
or otherwise modify the provisions of Section 3.2.;


 


(vi)                              modify
the definition of the term “Requisite Lenders” or otherwise modify in any other
manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof,
including without limitation, any modification of this Section 12.6. if
such modification would have such effect;


 


(vii)                           except
in connection with any Property Release pursuant to Article V., release
the Guarantor from its obligations under the Guaranty or release any of the
Collateral;


 


(viii)                        amend or
otherwise modify the provisions of Section 10.4.; or


 


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(ix)                                increase
the number of Interest Periods permitted with respect to Loans under Section 2.3.


 


(c)                                  No amendment, waiver
or consent, unless in writing and signed by the Agent, in such capacity, in
addition to the Lenders required hereinabove to take such action, shall affect
the rights or duties of the Agent under this Agreement or any of the other Loan
Documents.


 


(d)                                 No waiver shall extend
to or affect any obligation not expressly waived or impair any right consequent
thereon and any amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose set forth therein. No course of dealing
or delay or omission on the part of the Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. Any
Event of Default occurring hereunder shall continue to exist until such time as
such Event of Default is waived in writing in accordance with the terms of this
Section, notwithstanding any attempted cure or other action by the Borrower,
any other Loan Party or any other Person subsequent to the occurrence of such
Event of Default. Except as otherwise explicitly provided for herein or in any
other Loan Document, no notice to or demand upon the Borrower shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.


 


Section 12.7.                         Nonliability
of Agent and Lenders.


 


The relationship between the Borrower and the
Lenders and the Agent shall be solely that of borrower and lender. Neither the
Agent nor any Lender shall have any fiduciary responsibilities to the Parent or
the Borrower and no provision in this Agreement or in any of the other Loan
Documents, and no course of dealing between or among any of the parties hereto,
shall be deemed to create any fiduciary duty owing by the Agent or any Lender
to any Lender, the Parent, the Borrower, any Subsidiary of the Parent or the
Borrower or any other Loan Party. Neither the Agent nor any Lender undertakes
any responsibility to the Borrower or the Parent to review or inform the
Borrower or the Parent of any matter in connection with any phase of the
Borrower’s or the Parent’s business or operations.


 


Section 12.8.                         Confidentiality.


 


The Agent and each Lender shall use
reasonable efforts to assure that information about the Borrower, the Parent,
the other Loan Parties and other Subsidiaries of the Parent and the Borrower,
and the Properties thereof and their operations, affairs and financial
condition, not generally disclosed to the public, which is furnished to the
Agent or any Lender pursuant to the provisions of this Agreement or any other
Loan Document, is used only for the purposes of this Agreement and the other
Loan Documents and shall not be divulged to any Person other than the Agent,
the Lenders, and their respective agents who are actively and directly
participating in the evaluation, administration or enforcement of the Loan
Documents and other transactions between the Agent or such Lender, as
applicable, and the Borrower and the Parent, but in any event the Agent and the
Lenders may make disclosure: (a) to any of their respective affiliates
(provided such affiliates shall agree to keep such information confidential in
accordance with the terms of this Section 12.8.); (b) as reasonably
requested by any bona fide Assignee, Participant or other transferee in
connection with the contemplated transfer of any Commitment or


 


73

















 


participations therein as permitted hereunder (provided they shall
agree to keep such information confidential in accordance with the terms of
this Section); (c) as required or requested by any Governmental Authority
or representative thereof or pursuant to legal process or in connection with
any legal proceedings; (d) to the Agent’s or such Lender’s independent
auditors and other professional advisors (provided they shall be notified of
the confidential nature of the information); (e) after the happening and
during the continuance of an Event of Default, to any other Person, in
connection with the exercise by the Agent or the Lenders of rights hereunder or
under any of the other Loan Documents; (f) upon the Borrower’s prior
consent (which consent shall not be unreasonably withheld), to any contractual
counter-parties to any swap or similar hedging agreement or to any rating
agency; and (g) to the extent such information (x) becomes publicly
available other than as a result of a breach of this Section actually
known to such Lender to be such a breach or (y) becomes available to the
Agent or any Lender on a nonconfidential basis from a source other than the
Parent, the Borrower or any Affiliate. Notwithstanding the foregoing, the Agent
and each Lender may disclose any such confidential information, upon notice to
the Borrower or any other Loan Party, to the extent practicable (provided,
that, any failure by the Agent or any Lender to give such notice to the
Borrower or any Loan Party shall not subject the Agent or any Lender to any
liability which may arise from such failure to give notice), to Governmental
Authorities in connection with any regulatory examination of the Agent or such
Lender or in accordance with the regulatory compliance policy of the Agent or
such Lender.


 


Section 12.9.                         Indemnification.


 


(a)                                  The Borrower shall
and hereby agrees to indemnify, defend and hold harmless the Agent, each of the
Lenders, any affiliate of the Agent or any Lender, and their respective
directors, officers, shareholders, agents, employees and counsel (each referred
to herein as an “Indemnified Party”) from and
against any and all of the following (collectively, the “Indemnified
Costs”):  losses, costs,
claims, damages, liabilities, deficiencies, judgments or expenses of every kind
and nature (including, without limitation, amounts paid in settlement, court
costs and the reasonable fees and disbursements of counsel incurred in
connection with any litigation, investigation, claim or proceeding or any
advice rendered in connection therewith, but excluding losses, costs, claims,
damages, liabilities, deficiencies, judgments or expenses indemnification in
respect of which is specifically covered by Section 3.12. or 4.1. or expressly
excluded from the coverage of such Sections 3.12. or 4.1.) incurred by an
Indemnified Party in connection with, arising out of, or by reason of, any
suit, cause of action, claim, arbitration, investigation or settlement, consent
decree or other proceeding (the foregoing referred to herein as an “Indemnity Proceeding”) which is in any way related directly
or indirectly to: (i) this Agreement or any other Loan Document or the
transactions contemplated thereby, including, without limitation, any act or
failure to act by any Person arising from or resulting from the construction,
use, occupancy or operation of any Borrowing Base Property or any act or
omission relating thereto; (ii) the making of any Loans hereunder; (iii) any
actual or proposed use by the Borrower of the proceeds of the Loans; (iv) the
Agent’s or any Lender’s entering into this Agreement; (v) the fact that
the Agent and the Lenders have established the credit facility evidenced hereby
in favor of the Borrower; (vi) the fact that the Agent and the Lenders are
creditors of the Borrower and have or are alleged to have information regarding
the financial condition, strategic plans or business operations of the Parent,
the Borrower and their respective Subsidiaries; (vii) the fact that the Agent
and the Lenders are material creditors of the Borrower


 


74

















 


and are alleged to influence directly or indirectly the business
decisions or affairs of the Parent, the Borrower and their respective Subsidiaries
or their financial condition; (viii) the exercise of any right or remedy
the Agent or the Lenders may have under this Agreement or the other Loan
Documents; (ix) any civil penalty or fine assessed by the OFAC against,
and all reasonable costs and expenses (including counsel fees and
disbursements) incurred in connection with defense thereof by, the Agent or any
Lender as a result of conduct of the Borrower, any other Loan Party or any
Subsidiary that violates a sanction enforced by the OFAC; or (x) any
violation or non-compliance by the Parent, the Borrower or any Subsidiary of
any Applicable Law (including any Environmental Law) including, but not limited
to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service
or state taxing authority or (B) any Governmental Authority or other
Person under any Environmental Law, including any Indemnity Proceeding
commenced by a Governmental Authority or other Person seeking remedial or other
action to cause the Parent, the Borrower or their respective Subsidiaries (or
its respective properties) (or the Agent and/or the Lenders as successors to
the Borrower) to be in compliance with such Environmental Laws; provided,
however, that the Borrower shall not be obligated to indemnify any Indemnified
Party for (A) any acts or omissions of such Indemnified Party in
connection with matters described in this subsection to the extent arising from
the gross negligence or willful misconduct of such Indemnified Party, as
determined by a court of competent jurisdiction in a final, non-appealable
judgment or (B) Indemnified Costs to the extent arising directly out of or
resulting directly from claims of one or more Indemnified Parties against
another Indemnified Party.


 


(b)                                 The Borrower’s
indemnification obligations under this Section 12.9. shall apply to all
Indemnity Proceedings arising out of, or related to, the foregoing whether or
not an Indemnified Party is a named party in such Indemnity Proceeding. In this
regard, this indemnification shall cover all Indemnified Costs of any
Indemnified Party in connection with any deposition of any Indemnified Party or
compliance with any subpoena (including any subpoena requesting the production
of documents). This indemnification shall, among other things, apply to any
Indemnity Proceeding commenced by other creditors of the Parent, the Borrower
or any Subsidiary, any shareholder of the Parent, the Borrower or any
Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of the
Borrower or the Parent), any account debtor of the Parent, the Borrower or any
Subsidiary or by any Governmental Authority. If indemnification is to be sought
hereunder by an Indemnified Party, then such Indemnified Party shall notify the
Borrower in writing of the commencement of any Indemnity Proceeding; provided,
however, that the failure to so notify the Borrower shall not relieve the
Borrower from any liability that it may have to such Indemnified Party pursuant
to this Section 12.9.


 


(c)                                  This indemnification
shall apply to any Indemnity Proceeding arising during the pendency of any
bankruptcy proceeding filed by or against the Parent, the Borrower and/or any
Subsidiary.


 


(d)                                 All out-of-pocket fees
and expenses of, and all amounts paid to third-persons by, an Indemnified Party
shall be advanced by the Borrower at the request of such Indemnified Party
notwithstanding any claim or assertion by the Borrower that such Indemnified
Party is not entitled to indemnification hereunder, upon receipt of an
undertaking by such Indemnified Party that such Indemnified Party will
reimburse the Borrower if it is actually and finally determined


 


75

















 


by a court of competent jurisdiction that such Indemnified Party is not
so entitled to indemnification hereunder.


 


(e)                                  An Indemnified Party
may conduct its own investigation and defense of, and may formulate its own
strategy with respect to, any Indemnity Proceeding covered by this Section and,
as provided above, all Indemnified Costs incurred by such Indemnified Party
shall be reimbursed by the Borrower. No action taken by legal counsel chosen by
an Indemnified Party in investigating or defending against any such Indemnity
Proceeding shall vitiate or in any way impair the obligations and duties of the
Borrower hereunder to indemnify and hold harmless each such Indemnified Party;
provided, however, that if (i) the Borrower is required to indemnify an
Indemnified Party pursuant hereto and (ii) the Borrower has provided
evidence reasonably satisfactory to such Indemnified Party that the Borrower
has the financial wherewithal to reimburse such Indemnified Party for any
amount paid by such Indemnified Party with respect to such Indemnity
Proceeding, such Indemnified Party shall not settle or compromise any such
Indemnity Proceeding without the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing, an Indemnified Party may settle or compromise any such Indemnity
Proceeding without the prior written consent of the Borrower where (x) no
monetary relief is sought against such Indemnified Party in such Indemnity
Proceeding or (y) there is an allegation of a violation of law by such
Indemnified Party.


 


(f)                                    If and to the
extent that the obligations of the Borrower under this Section are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.


 


(g)                                 The Borrower’s
obligations under this Section shall survive any termination of this
Agreement and the other Loan Documents and the payment in full in cash of the
Obligations, and are in addition to, and not in substitution of, any other of
their obligations set forth in this Agreement or any other Loan Document to
which it is a party.


 


Section 12.10.                              Termination;
Survival.


 


At such time as (a) all of the
Commitments have been terminated, (b) none of the Lenders is obligated any
longer under this Agreement to make any Loans and (c) all Obligations
(other than obligations which survive as provided in the following sentence)
have been paid and satisfied in full, this Agreement shall terminate. The
indemnities to which the Agent and the Lenders are entitled under the
provisions of Sections 3.12., 4.1., 4.4., 12.2. and 12.9. and any other
provision of this Agreement and the other Loan Documents, and the provisions of
Section 12.4., shall continue in full force and effect and shall protect
the Agent and the Lenders (i) notwithstanding any termination of this
Agreement, or of the other Loan Documents, against events arising before such
termination as well as, in the case of Sections 11.8., 12.4. and 12.9., after
such termination and (ii) at all times after any such party ceases to be a
party to this Agreement with respect to all matters and events existing on or
prior to the date such party ceased to be a party to this Agreement.


 


76

















 


Section 12.11.                              Severability
of Provisions.


 


Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining
provisions or affecting the validity or enforceability of such provision in any
other jurisdiction.


 


Section 12.12.                              GOVERNING
LAW.


 


THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.


 


Section 12.13.                              Counterparts.


 


This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument.


 


Section 12.14.                              Obligations
With Respect to Loan Parties.


 


The obligations of the Parent and the
Borrower to direct or prohibit the taking of certain actions by the other Loan
Parties as specified herein shall be absolute and not subject to any defense
the Parent or the Borrower may have that the Parent or the Borrower does not
control such Loan Parties.


 


Section 12.15.                              Limitation
of Liability.


 


Neither the Agent nor any Lender, nor any
affiliate, officer, director, employee, attorney, or agent of the Agent or any
Lender shall have any liability with respect to, and the Parent and the
Borrower hereby waives, releases, and agrees not to sue any of them upon, any
claim for any special, indirect, incidental, or consequential damages suffered
or incurred by the Parent or the Borrower in connection with, arising out of,
or in any way related to, this Agreement or any of the other Loan Documents, or
any of the transactions contemplated by this Agreement or any of the other Loan
Documents. Each of the Parent and the Borrower hereby waives, releases, and agrees
not to sue the Agent or any Lender or any of the Agent’s or any Lender’s
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of
the transactions contemplated by this Agreement or financed hereby.


 


Section 12.16.                              Entire
Agreement.


 


This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof and thereof and may not be contradicted or varied by
evidence of prior,


 


77

















 


contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto.


 


Section 12.17.                              Construction.


 


The Agent, the Borrower, the Parent and each
Lender acknowledge that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review this Agreement
and the other Loan Documents with its legal counsel and that this Agreement and
the other Loan Documents shall be construed as if jointly drafted by the Agent,
the Borrower, the Parent and each Lender.


 


Section 12.18.                              Patriot Act.


 


The Lenders and the Agent each hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or the Agent, as applicable, to
identify the Borrower in accordance with such Act.


 


Section 12.19.                              Existing
Credit Agreement Provisions.


 


(a)                                  Notwithstanding any
provision of any Loan Document to the contrary, the Borrower, the Parent, the
Agent and the Lenders hereby agree that on or after the Agreement Date any
amendment to, or waiver of, (i) the Existing Credit Agreement
Representations, (ii) the Existing Credit Agreement Defaults or (iii) the
covenants from the Existing Credit Agreement referred to in Section 8.3., which has been consented to by
the Requisite Lenders, shall be deemed to be incorporated herein by reference
and shall become effective hereunder when such amendment or waiver becomes
effective thereunder, without any further action necessary by the Borrower, the
Guarantors, the Agent or the Lenders. Any such amendment or waiver shall be
effective only in the specific instance and for the specific purpose for which
given. The Borrower agrees to provide promptly the Agent and each Lender with a
copy of such amendment or waiver.


 


(b)                                 The Existing Credit
Agreement Representations, the Existing Credit Agreement Defaults and the
covenants from the Existing Credit Agreement referred to in Section 8.3.
incorporated herein by reference and any definitions or other terms or
provisions of the Existing Credit Agreement incorporated herein by reference,
will be deemed to continue in effect for the benefit of the Agent and the
Lenders until this Agreement has terminated in accordance with its terms,
including, without limitation, whether or not the Existing Credit Agreement
remains in effect or whether or not the Existing Credit Agreement is amended,
restated or terminated after the date hereof. For purposes of the Existing
Credit Agreement Representations and the covenants from the Existing Credit
Agreement referred to in Section 8.3., (i) references in the
provisions of the Existing Credit Agreement incorporated herein by reference
to:  (A) the “Borrower” shall refer
to the Borrower; (B)  the “Agent,” “Lenders” and “Lender” shall refer to
the Agent, the Lenders and a Lender, respectively; (C)  “Material Adverse
Effect” shall refer to a Material Adverse Effect; (D) ”Loan Party” shall
refer to the Loan Party; (E) ”Obligations” shall refer to Obligations; (F) ”Agreement
Date” shall refer to Agreement Date; (G) ”Default” and


 


78

















 


“Event of Default” shall refer to Default and Event of Default,
respectively; and (H) ”Lien” and “Permitted Lien” shall refer to Lien and
Permitted Lien, respectively; and (ii) the terms “Agreement,” “hereto” and
“hereof” when used in the provisions of the Existing Credit Agreement
incorporated herein by referenced shall refer to this Agreement.


 


[Signatures on Following Pages]


 


79

















 


IN WITNESS WHEREOF, the parties hereto have
caused this Construction Loan Agreement to be executed by their authorized
officers all as of the day and year first above written.


 


 


	
   

  	
  CORPORATE OFFICE PROPERTIES, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Corporate Office Properties Trust,

  its sole general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen E. Riffee

  
	
   

  	
   

  	
   

  	
  Name: Stephen E. Riffee

  
	
   

  	
   

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORPORATE OFFICE PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen E. Riffee

  
	
   

  	
   

  	
  Name:

  	
  Stephen E. Riffee

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
						



 
















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  KEYBANC
  CAPITAL MARKETS, INC.,

  
	
   

  	
  as
  Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jay Johns

  
	
   

  	
  Name:

  	
  Jay
  Johns

  
	
   

  	
  Title:

  	
  Director

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION, as Agent and 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Scott

  
	
   

  	
  Name:

  	
  John
  Scott

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature
Page to Construction Loan Agreement with


Corporate
Office Properties, L.P.]


 


 


	
   

  	
  BANK
  OF AMERICA, N.A., as Syndication Agent

  
	
   

  	
  and
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Thebaud

  
	
   

  	
  Name:

  	
  Deborah
  A. Thebaud

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  MANUFACTURERS
  AND TRADERS TRUST

  
	
   

  	
  COMPANY,
  as Documentation Agent and as

  
	
   

  	
  a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Matthew Lind

  
	
   

  	
  Name:

  	
  Matthew
  Lind

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  CITIZENS
  BANK OF PENNSYLVANIA, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kellie Anderson

  
	
   

  	
  Name:

  	
  Kellie
  Anderson

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as

  
	
   

  	
  a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Casey Foulks

  
	
   

  	
  Name:

  	
  Casey
  Foulks

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  COMMERCE
  BANK, NA, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian J. Gormley

  
	
   

  	
  Name:

  	
  Brian
  J. Gormley

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION, as

  
	
   

  	
  a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy P. Gleeson

  
	
   

  	
  Name:

  	
  Timothy
  P. Gleeson

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  REGIONS
  BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kerri Raines

  
	
   

  	
  Name:

  	
  Kerri
  Raines

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


 


[Signatures Continued Next Page]


 

















 


[Signature Page to Construction Loan Agreement with


Corporate Office Properties, L.P.]


 


 


	
   

  	
  SUNTRUST
  BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory T. Horstman

  
	
   

  	
  Name:

  	
  Gregory
  T. Horstman

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 
















 


SCHEDULE I


 


Commitments


 


	
  Lender

  	
   

  	
  Commitment Amount

  	
   

  
	
  KeyBank National Association

  	
   

  	
  $

  	
  38,333,333.34

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  38,333,333.33

  	
   

  
	
  Manufacturers and Traders Trust Company

  	
   

  	
  $

  	
  38,333,333.33

  	
   

  
	
  Citizens Bank of Pennsylvania

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  
	
  PNC Bank, National Association

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  Commerce Bank, NA

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  Regions Bank

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  225,000,000.00

  	
   

  



 

















 


SCHEDULE 5.1

BORROWING BASE PROPERTIES


 


1.             6721 Gateway Drive,
Columbia Maryland, Howard County


2.             5520 Research Park
Drive, Baltimore, Maryland, Baltimore County


3.             9945 Federal Drive,
Colorado Springs, Colorado, El Paso County


4.             9925 Federal Drive,
Colorado Springs, Colorado, El Paso County


5.             655 Space Center
Drive, Colorado Springs, Colorado, El Paso County


 

















 


SCHEDULE 7.1(B)

OWNERSHIP STRUCTURE


 


	
  NAME OF

  PROPERTY

  OWNER

  	
   

  	
  JURISDICTION

  	
   

  	
  PERSONS

  HOLDING AN

  EQUITY

  INTEREST

  	
   

  	
  NATURE OF

  INTERESTS

  HELD

  	
   

  	
  PERCENTAGE

  OWNERSHIP

  	
   

  	
  BORROWING BASE

  PROPERTY

  
	
  6721 Gateway, LLC

  	
   

  	
  Maryland

  	
   

  	
  Corporate Office Properties, L.P. (“COPLP”)

  	
   

  	
  Sole member

  	
   

  	
  100%

  	
   

  	
  6721 Columbia Gateway Drive

  Columbia, MD

  Howard County

  
	
  COPT Baltimore County II, LLC

  	
   

  	
  Maryland

  	
   

  	
  COPLP

  	
   

  	
  Sole member

  	
   

  	
  100%

  	
   

  	
  5520 Research Drive

  Baltimore, MD

  Baltimore County

  
	
  COPT Patriot Park VI, LLC

  	
   

  	
  Colorado

  	
   

  	
  COPLP

  	
   

  	
  Sole member

  	
   

  	
  100%

  	
   

  	
  655 Space Center Drive

  Colorado Springs, CO

  El Paso County

  
	
  COPT Interquest Hybrid I, LLC

  	
   

  	
  Colorado

  	
   

  	
  COPLP

  	
   

  	
  Sole member

  	
   

  	
  100%

  	
   

  	
  9945 Federal Drive

  Colorado Springs, CO

  El Paso County

  
	
  COPT Interquest Hybrid II, LLC

  	
   

  	
  Colorado

  	
   

  	
  COPLP

  	
   

  	
  Sole member

  	
   

  	
  100%

  	
   

  	
  9925 Federal Drive

  Colorado Springs, CO

  El Paso County

  



 


COPLP owns, free and clear of all Liens (other than Permitted Liens),
and has the unencumbered right to vote, all outstanding equity interests in the
Property Owners listed above. There are no outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including,
without limitation, any stockholders’ or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in any of the Property
Owners listed above.


 

















 


SCHEDULE 8.5(f)


 


 INSURANCE REQUIREMENTS FOR COMMERCIAL REAL
ESTATE LOANS


GROUND-UP NEW CONSTRUCTION


 


Named Insured (Borrower): Corporate Office
Properties, LP and the entity owning the property


 


Property Address:


 


 


	
  Mortgagee:

  	
  KeyBank National Association, its successors and/or assignees,

  
	
   

  	
  for itself and as agent for other participating lenders

  
	
   

  	
   

  
	
  Mortgagee address:

  	
  800 Superior, 6th Floor

  
	
   

  	
  Attn: REC Services

  Cleveland, OH 44114

  



 


	
  Deductible under any line of coverage must not exceed:

  	
  $25,000

  



 


BUILDER’S RISK


 


	
  Causes of loss insured against:

  	
  ·      “Special Form” equivalent to ISO
  standard, or “Risks of loss not otherwise excluded” for coverage comparable
  to ISO Special Form, including damage from windstorm and hail

  ·      Boiler & Machinery or Breakdown
  coverage for buildings with elevators and central HVAC (not required for
  per-unit HVAC)

  
	
   

  	
   

  
	
  Additional causes of loss if specified:

  	
  o Flood - mandatory at
  NFIP limits ($500,000 per commercial bldg.) if building is in a Special Flood
  Hazard Area

  o Earthquake: 20% of
  projected completed value. Only required if located in Seismic Zone 4.

  o Terrorism: x
  certified only. Only required if building is high profile, in a geographic
  high risk area or has a governmental or other politically exposed tenant.

  x Ordinance or Law:
  (A) Loss of value of undamaged part - within building limit;

  (B) Demolition and (C) Increased Cost of Construction

  o Other             

  
	
   

  	
   

  
	
  Amount of insurance:

  	
  Sufficient to cover all hard costs of
  vertical construction, including value of foundations, overhead and profits,
  hard cost contingency, materials and supplies (sufficient to cover maximum
  values at any time on and off site, and in transit if borrower takes title
  before delivery) and soft costs. Not to be less than $50,000,000 or the
  amount contained in the Total Development Budget.

  
	
   

  	
   

  
	
  Additional coverage conditions:

  	
  ·      Completed value, non-reporting coverage
  form

  ·      Replacement cost valuation

  ·      No coinsurance / coinsurance waived

  ·      Permission to complete and occupy - e.g.
  for residential properties where occupancy may be staggered

  
	
   

  	
   

  
	
  Mortgagee Clause:

  	
  Not applicable.

  
	
   

  	
   

  
	
  Documentation:

  	
  Acord 28 Evidence of Property Insurance extending at least 30 days’
  notice of cancellation (45 days in Washington state) except 10 days’ notice
  for non-payment of premium,

  ·      All details specified above must be
  specifically addressed.

  ·      All deductibles and any sub-limits must
  be disclosed.

  ·      If program is blanket over other
  locations as well as loan property, show policy limits along with values
  reported to insurer for the subject location.

  The use of any form other than Acord 28
  (2003/10) may result in agent and/or insurer having to provide additional
  coverage documentation.

  



 


(NOTE: When building is complete and
certificate of occupancy is issued, building should be transitioned to “all
risk” or “special form” Property insurance, documented to lender with form,
terms, and conditions acceptable to lender.)


 


1

















 


GENERAL LIABILITY


 


	
  Coverage form:

  	
  Commercial General Liability - equivalent to ISO standard
  occurrence-based form, including BI, PD, PI/AI, Contractual

  
	
   

  	
   

  
	
  Limit of liability per occurrence:

  	
  Not less than $30,000,000 combining primary and excess

  
	
   

  	
   

  
	
  Mortgagee as Additional Insured:

  	
  Not applicable.

  
	
   

  	
   

  
	
  Documentation:

  	
  Acord 25 Certificate of Liability Insurance extending at least 30
  days’ notice of cancellation.

  



 


BORROWER’S PROPERTY, GENERAL LIABILITY AND
UMBRELLA/EXCESS INSURERS MUST HAVE BEST’S RATINGS NOT LESS THAN A:X
UNLESS OTHERWISE AGREED TO BY LENDER.


 


OTHER COVERAGES


 


	
  Workers’ Compensation:

  	
  Statutory benefits for the state where the building is located. This
  requirement may be waived if borrowing entity has no employees and
  general contractor produces evidence of workers’ compensation coverage.

  
	
   

  	
   

  
	
  Employer’s Liability:

  	
  $100,000 per accident for accidental injury; $100,000 per employee
  and $100,000 aggregate for occupational illness or disease.

  
	
   

  	
   

  
	
  Business Auto Liability:

  	
  Covering owned, non-owned and hired/rented vehicles

  
	
   

  	
   

  
	
  Environmental Liability:

  	
  o Requirement
  applies only if checked. Form should cover liability for bodily injury and
  property damage claims, both on and off site. Full quote and specimen forms
  must be submitted for lender approval.

  
	
   

  	
   

  
	
   

  	
  Required limit: To be determined if required.

  



 


EXPECTATIONS FOR GENERAL CONTRACTOR’S
INSURANCE:


 


	
  General Liability:

  	
  Commercial General Liability - equivalent to ISO standard
  occurrence-based form, including BI, PD, PI/AI, Contractual, and covering
  completed operations

  
	
   

  	
  ·      Covering Borrower (and lender, if
  possible) as Additional Insured for current work.

  
	
   

  	
  ·      When obtainable, covering Borrower (and
  lender, if possible) as Additional Insured for completed work if project will
  become at least partly occupied during term of construction/before loan is
  repaid

  
	
   

  	
   

  
	
  Limit of liability per occurrence:

  	
  Not less than $30,000,000 combining primary and excess

  
	
   

  	
   

  
	
  Workers’ Compensation:

  	
  Statutory benefits for state where work will be performed.

  



 


2

















 


EXHIBIT A


 


FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT


 


THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT
dated as of                         ,
20    (the “Agreement”) by and among                                              (the
“Assignor”),
                        (the
“Assignee”),  and KEYBANK NATIONAL
ASSOCIATION, as Agent (the “Agent”).


 


WHEREAS, the Assignor is a Lender under that certain Construction Loan
Agreement dated as of May 2, 2008 (as amended, restated, supplemented or
otherwise modified from time to time, the “Construction
Loan Agreement”),  by and among Corporate Office
Properties, L.P. (the “Borrower”),  Corporate
Office Properties Trust, the financial institutions party thereto and their
assignees under Section 12.5. thereof (the “Lenders”),  the
Agent and the other parties thereto;


 


WHEREAS, the Assignor desires to assign to the Assignee, among other
things, all or a portion of the Assignor’s Loans under the Construction Loan
Agreement, all on the terms and conditions set forth herein; and


 


WHEREAS, the Agent consents to such assignment on the terms and
conditions set forth herein;


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:


 


Section 1. Assignment.


 


(a)           Subject to the terms
and conditions of this Agreement and in consideration of the payment to be made
by the Assignee to the Assignor pursuant to Section 2 of this Agreement, effective
as of                  ,
20     (the “Assignment
Date”),  the Assignor hereby irrevocably sells,
transfers and assigns to the Assignee, without recourse, $                    of
the outstanding principal amount of the Loans made by the Assignor (such
interest being the “Assigned Loans”,  which
represents   % in respect of the aggregate amount of all
outstanding Loans) and all voting rights of the Assignor associated with the
Assigned Loans, all rights to receive interest on such amount of Loans and all
Fees with respect to the Assigned Loans and other rights of the Assignor under
the Construction Loan Agreement and the other Loan Documents with respect to
the Assigned Loans. The Assignee, subject to the terms and conditions hereof,
hereby assumes all obligations of the Assignor with respect to the Assigned
Loans as if the Assignee were an original Lender under and signatory to the
Construction Loan Agreement having a Loans equal to the Assigned Loans, which
obligations shall include, but shall not be limited to, the obligation to indemnify
the Agent as provided therein (the foregoing enumerated obligations, together
with all other similar obligations more particularly set forth in the
Construction Loan Agreement and the other Loan Documents, collectively, the “Assigned Obligations”).  The
Assignor shall have no further duties or obligations with respect to, and shall
have no further interest in, the Assigned Obligations or the Assigned Loans
from and after the Assignment Date.


 


A-1

















 


(b)           The assignment by
the Assignor to the Assignee hereunder is without recourse to the
Assignor.   The Assignee makes and
confirms to the Agent, the Assignor, and the other Lenders all of the
representations, warranties and covenants of a Lender under Article XI. of the Construction
Loan Agreement. Not in limitation of the foregoing, the Assignee acknowledges and
agrees that, except as set forth in Section 4 below, the Assignor is making no
representations or warranties with respect to, and the Assignee hereby releases
and discharges the Assignor for any responsibility or liability for: (i) the
present or future solvency or financial condition of the Borrower,  any Subsidiary or any other Loan Party,  (ii) any representations,  warranties, statements or information made or
furnished by the Borrower, any Subsidiary or any other Loan Party in connection
with the Construction Loan Agreement or otherwise, (iii) the validity, efficacy,
sufficiency, or enforceability of the Construction Loan Agreement, any other
Loan Document or any other document or instrument executed in connection
therewith, or the collectibility of the Assigned Obligations, (iv) the
perfection, priority or validity of any Lien with respect to any collateral at
any time securing the Obligations or the Assigned Obligations under the Notes
or the Construction Loan Agreement and (v) the performance or failure to
perform by the Borrower or any other Loan Party of any obligation under the
Construction Loan Agreement or any other Loan Document to which it is a
party.  Further, the Assignee
acknowledges that it has, independently and without reliance upon the Agent, or
on any affiliate or subsidiary thereof, the Assignor or any other Lender and
based on the financial statements supplied by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit analysis
and decision to become a Lender under the Construction Loan Agreement.    The Assignee also acknowledges that it
will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Construction Loan Agreement or any other Loan Documents or
pursuant to any other obligation.  Except
as expressly provided in the Construction Loan Agreement, the Agent shall have
no duty or responsibility whatsoever, either initially or on a continuing
basis, to provide the Assignee with any credit or other information with
respect to the Borrower or any other Loan Party or to notify the Assignee of
any Default or Event of Default. The Assignee has not relied on the Agent as to
any legal or factual matter in connection therewith or in connection with the transactions
contemplated thereunder.


 


Section 2. Payment by Assignee. In consideration of the
assignment made pursuant to Section 1 of this Agreement, the Assignee agrees to
pay to the Assignor on the Assignment Date, such amount as they may agree.


 


Section 3. Payments by Assignor. The Assignor agrees to pay to
the Agent on the Assignment Date the administration fee, if any, payable under
the applicable provisions of the Construction Loan Agreement.


 


Section 4. Representations and Warranties of Assignor. The
Assignor hereby represents and warrants to the Assignee that (a) as of the
Assignment Date (i) the Assignor is a Lender under the Construction Loan
Agreement and that the Assignor is not in default of its obligations under the
Construction Loan Agreement; and (ii) the outstanding balance of Loans owing to
the Assignor (without reduction by any assignments thereof which have not yet
become effective) is


 


A-2

















 


$                  ;
and (b) it is the legal and beneficial owner of the Assigned Loans which are free
and clear of any adverse claim created by the Assignor.


 


Section 5. Representations, Warranties and Agreements of Assignee.
 The Assignee (a) represents and warrants
that it is (i) legally authorized to enter into this Agreement, (ii) an
“accredited investor” (as such term is used in Regulation D of the Securities
Act) and (iii) an Eligible Assignee; (b) confirms that it has received a copy
of the Construction Loan Agreement, together with copies of the most recent
financial statements delivered pursuant thereto and such other documents and
information (including without limitation the Loan Documents) as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (c) appoints and authorizes the Agent to take such action as
contractual representative on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof together with
such powers as are reasonably incidental thereto; and (d) agrees that it will
become a party to and shall be bound by the Construction Loan Agreement and the
other Loan Documents to which the other Lenders are a party on the Assignment
Date and will perform in accordance therewith all of the obligations which are
required to be performed by it as a Lender.


 


Section 6. Recording and Acknowledgment by the Agent. Following
the execution of this Agreement, the Assignor will deliver to the Agent (a) a
duly executed copy of this Agreement for acknowledgment and recording by the
Agent and (b) the Assignor’s Note. Upon such acknowledgment and recording, from
and after the Assignment Date, the Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal, interest, Fees
and other amounts) to the Assignee. The Assignor and the Assignee shall make
all appropriate adjustments in payments under the Construction Loan Agreement
for periods prior to the Assignment Date directly between themselves.


 


Section 7. Addresses. The Assignee specifies as its address for
notices and its Lending Office for all Loans, the offices set forth below:


 


	
  Notice Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone No.:

  
	
   

  	
  Telecopy No.:

  
	
   

  	
   

  
	
  Lending Office:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone No.:

  
	
   

  	
  Telecopy No.:

  



 


Section 8. Payment Instructions. All
payments to be made to the Assignee under this Agreement by the Assignor, and
all payments to be made to the Assignee under the Construction Loan Agreement,
shall be made as provided in the Construction Loan Agreement in accordance with
the following instructions:


 


A-3

















 


 


 


Section 9. Effectiveness of Assignment.
This Agreement, and the assignment and assumption contemplated herein, shall
not be effective until (a) this Agreement is executed and delivered by each of
the Assignor, the Assignee, the Agent, and if required under Section 12.5.(d)
of the Construction Loan Agreement, the Borrower, and (b) the payment to the
Assignor of the amounts, if any, owing by the Assignee pursuant to Section 2
hereof and (c) the payment to the Agent of the amounts, if any, owing by the
Assignor pursuant to Section 3 hereof. Upon recording and acknowledgment of
this Agreement by the Agent, from and after the Assignment Date, (i) the
Assignee shall be a party to the Construction Loan Agreement and, to the extent
provided in this Agreement, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Agreement, relinquish its rights (except as otherwise provided in Section 12.10,
of the Construction Loan Agreement) and be released from its obligations under
the Construction Loan Agreement; provided, however, that if the Assignor does
not assign its entire interest under the Loan Documents, it shall remain a
Lender entitled to all of the benefits and subject to all of the obligations
thereunder with respect to its Commitment.


 


Section 10. Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.


 


Section 11. Counterparts. This
Agreement may be executed in any number of counterparts each of which, when
taken together, shall constitute one and the same agreement.


 


Section 12. Headings. Section headings
have been inserted herein for convenience only and shall not be construed to be
a part hereof.


 


Section 13. Amendments; Waivers. This
Agreement may not be amended, changed, waived or modified except by a writing
executed by the Assignee and the Assignor; provided, however, any amendment,
waiver or consent which shall affect the rights or duties of the Agent under
this Agreement shall not be effective unless signed by the Agent.


 


Section 14. Entire Agreement. This
Agreement embodies the entire agreement between the Assignor and the Assignee
with respect to the subject matter hereof and supersedes all other prior
arrangements and understandings relating to the subject matter hereof.


 


Section 15. Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.


 


Section 16. Definitions. Terms not
otherwise defined herein are used herein with the respective meanings given
them in the Construction Loan Agreement.


 


A-4

















 


[Include this Section only if Borrower’s
consent is required under Section 12.5.(d) Section 17.
Agreements of the Borrower. The Borrower hereby agrees that the Assignee
shall be a Lender under the Construction Loan Agreement having Loans equal to
principal amount of the Assigned Loans. The Borrower agrees that the Assignee
shall have all of the rights and remedies of a Lender under the Construction
Loan Agreement and the other Loan Documents as if the Assignee were an original
Lender under and signatory to the Construction Loan Agreement, including, but
not limited to, the right of a Lender to receive payments of principal and
interest with respect to the Assigned Obligations and to receive the commitment
and other Fees payable to the Lenders as provided in the Construction Loan
Agreement. Further, the Assignee shall be entitled to the indemnification
provisions from the Borrower in favor of the Lenders as provided in the
Construction Loan Agreement and the other Loan Documents. The Borrower further
agrees, upon the execution and delivery of this Agreement, to execute in favor
of the Assignee Notes as required by Section 12.5.(d) of the Construction Loan
Agreement. Upon receipt by the Assignor of the amounts due the Assignor under
Section 2, the Assignor agrees to surrender to the Borrower such Assignor’s
Notes.]


 


[Signatures on Following Pages]


 


A-5

















 


IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and Acceptance Agreement as of the date and year first written
above.


 


 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted as of the date first written above.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KEYBANK NATIONAL ASSOCIATION, as 

  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  



 


[Signatures Continued on Following Page]


 


A-6

















 


[Include signature
of the Borrower only if required 

under Section 12.5.(d) of the Construction Loan

Agreement]


 


Agreed and consented to as of the 

date first written above.


 


BORROWER:


 


CORPORATE OFFICE PROPERTIES, L.P.


 


 


	
  By: 

  	
  Corporate Office Properties Trust, its 

  general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  
								



 


A-7

















 


EXHIBIT B


 


FORM OF BORROWING BASE CERTIFICATE


 


Reference is made to that certain Construction Loan Agreement dated as
of May 2, 2008 (as amended, restated, supplemented or otherwise modified
from time to time, the “Construction Loan
Agreement”), by and
among Corporate Office Properties, L.P. (the “Borrower”),  Corporate
Office Properties Trust, the financial institutions party thereto and their
assignees under Section 12.5, thereof and KeyBank National Association, as
Agent (the “Agent”). Capitalized terms used herein, and
not otherwise defined herein, have their respective meanings given them in the
Construction Loan Agreement.


 


Pursuant to Section 9.2.(b) of the Construction Loan
Agreement, the undersigned hereby certifies to the Agent and the Lenders that:


 


1.          Schedule
1 attached hereto accurately and completely sets forth the calculations required
to establish the Borrowing Base as of                           ,
20   , including, without limitation, the calculations of the
Borrowing Base Value of each Borrowing Base Property.


 


2.          The
aggregate principal amount of all outstanding Loans as of the date hereof is $
                    and
such amount does not exceed the Borrowing Base of $                         .


 


3.          No
Existing Credit Agreement Default, Default or Event of Default has occurred and
is continuing, the Existing Credit Agreement Representations and the
representations and warranties of the Borrower contained in the Construction
Loan Agreement and the other Loan Documents are true and correct in all
material respects, except to the extent such representations or warranties
specifically relate to an earlier date or such representations or warranties
become untrue by reason of events or conditions otherwise permitted under
Existing Credit Agreement (with respect to the Existing Credit Agreement
Representations), the Construction Loan Agreement or the other Loan Documents.


 


IN WITNESS WHEREOF, the undersigned has
signed this Borrowing Base Certificate on and as of                     ,     .


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  [Chief Financial Officer] [Treasurer]

  
					



 


B-1

















 


Schedule 1


 


 


[Spreadsheet to be provided]


 


B-2

















 


EXHIBIT C 




FORM OF DRAW REQUEST


 


                , 20
   


 


KeyBank National Association, as Agent 


127 Public Square, 8th Floor 


Cleveland, Ohio 44114 


Attention: John C. Scott


 


Ladies and Gentlemen:


 


Reference is made to that certain Construction Loan Agreement dated as
of May 2, 2008 (as amended, restated, supplemented or otherwise modified
from time to time, the “Construction Loan
Agreement”),  by and among Corporate Office Properties,
L.P. (the “Borrower”), Corporate Office Properties Trust,
the financial institutions party thereto and their assignees under
Section 12.5. thereof (the “Lenders”), KeyBank National Association, as
Agent (the “Agent”), and the other parties thereto. Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Construction Loan Agreement.


 


1.           Pursuant to
Section 2.l.(b) of the Construction Loan Agreement, the Borrower
hereby requests that the Lenders make Loans to the Borrower in an aggregate
principal amount equal to $                           .


 


2.           The Borrowing Base
Property with respect to which this request for Loans is made is                                     .


 


3.           Set forth on Schedule 1 is
that portion of the hard costs and soft or indirect costs of Construction and
completion of the Improvements set forth on the Total Development Budget that
the Borrower has incurred and intends to pay with the proceeds of this Loan.


 


4.           The Borrower requests that such Loans
be made available to the Borrower on                      , 20
   .


 


[Continued on Next Page]


 


C-1

















 


5.             The
Borrower hereby requests that the requested Loans all be of the following Type:


 


[Check one box only]


 


o    Base Rate Loans


o    LIBOR Loans, each with an initial Interest
Period for a duration of:


 


[Check one box only]  o   seven
days 


o   one
month 


o   two months 


o   three months 


o   six months


 


6.             The
Borrower requests that the proceeds of this borrowing of Loans be made available
to the Borrower by
                                               .


 


The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof and as of the date of the making of the requested Loans and
after giving effect thereto, (a) no Existing Credit Agreement Default,
Default or Event of Default exists or shall exist, and (b) the Existing
Credit Agreement Representations and the representations and warranties of the
Borrower and each other Loan Party contained in the Loan Documents are and
shall be true and correct in all material respects, except to the extent that
such representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties were true and accurate on and as
of such earlier date). In addition, the Borrower certifies to the Agent and the
Lenders that all conditions to the making of the requested Loans contained in
Articles V. and VI. of the Construction Loan Agreement will have been satisfied
(or waived in accordance with the applicable provisions of the Loan Documents)
at the time such Loans are made, including, without limitation, that the
Project Equity has been funded with respect to the applicable Borrowing Base
Property.


 


IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Notice of Borrowing as of the date first written above.


 


	
   

  	
  CORPORATE OFFICE PROPERTIES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Corporate Office Properties Trust, its 

  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


C-2






 












 


EXHIBIT D


 


FORM OF
GUARANTY


 


THIS GUARANTY dated as of May 2, 2008,
executed and delivered by each of the undersigned and the other Persons from
time to time party hereto pursuant to the execution and delivery of an
Accession Agreement in the form of Annex I hereto (all of the undersigned,
together with such other Persons, each a “Guarantor”
and collectively, the “Guarantors”)
in favor of (a) KEYBANK NATIONAL ASSOCIATION, in its capacity as Agent
(the “Agent”) for the Lenders
under that certain Construction Loan Agreement dated as of May 2, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the “Construction Loan Agreement”), by and among
Corporate Office Properties, L.P. (the “Borrower”),
Corporate Officer Properties Trust, the financial institutions party thereto
and their assignees under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties
thereto, and (b) the Lenders.


 


WHEREAS, pursuant to the Construction Loan
Agreement, the Agent and the Lenders have agreed to make available to the
Borrower certain financial accommodations on the terms and conditions set forth
in the Construction Loan Agreement;


 


WHEREAS, the Borrower and the Guarantors,
though separate legal entities, are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation and have
determined it to be in their mutual best interests to obtain financing from the
Agent and the Lenders through their collective efforts;


 


WHEREAS, each Guarantor acknowledges that it
will receive direct and indirect benefits from the Agent and the Lenders making
such financial accommodations available to the Borrower under the Construction
Loan Agreement and, accordingly, each Guarantor is willing to guarantee the
Borrower’s obligations to the Agent and the Lenders on the terms and conditions
contained herein; and


 


WHEREAS, each Guarantor’s execution and
delivery of this Guaranty is a condition to the Agent and the Lenders making,
and continuing to make, such financial accommodations to the Borrower.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and as a material inducement to Lenders to
extend credit to the Borrower, the Guarantors hereby guarantee to the Agent and
the Lenders the prompt and full payment and performance of the indebtedness and
obligations described below in this Guaranty (collectively called the “Guaranteed Obligations”), this Guaranty being upon the
following terms and conditions:


 


1.             Guaranty of Payment. Each
Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due
and punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of all of the following:  (a) all indebtedness and


 


D-1

















 


obligations owing by the Borrower to any
Lender or the Agent under or in connection with the Construction Loan Agreement
and any other Loan Document, including without limitation, the repayment of all
principal of the Loans, and the payment of all interest, Fees, charges,
attorneys’ fees and other amounts payable to any Lender or the Agent thereunder
or in connection therewith; (b) any and all extensions, renewals,
modifications, amendments or substitutions of the foregoing; (c) all
expenses, including, without limitation, reasonable attorneys’ fees and
disbursements, that are incurred by the Lenders and the Agent in the
enforcement of any of the foregoing or any obligation of such Guarantor
hereunder; and (d) all other Obligations. This Guaranty covers the
Guaranteed Obligations, whether presently outstanding or arising subsequent to
the date hereof, including all amounts advanced by Lenders in stages or
installments and all amounts readvanced by the Lenders. The Guaranteed
Obligations shall include, by way of illustration and not limitation,
compliance with any Environmental Laws and indemnification of the Agent and the
Lenders against any loss, claim, damage or liability arising out of, or with
respect to, Hazardous Materials located on, or affecting all or any portion of
the Borrowing Base Properties. The liability of the Guarantors with respect to
Hazardous Materials and compliance with Environmental Laws with respect to a
particular Borrowing Base Property shall survive until the date that is the
earlier of (a) one (1) year after the date of the release of such
Borrowing Base Property from the Borrowing Base, if applicable, or (b) one
(1) year after the repayment of all of the Loans and Obligations. The
guaranty of Guarantors as set forth in this Section 1 is a continuing
guaranty of payment and not a guaranty of collection, and a debt of each
Guarantor for its own account. Accordingly, none of the Lenders or the Agent
shall be obligated or required before enforcing this Guaranty against any
Guarantor: (a)  to pursue any right or remedy any of them may have against
the Borrower or any other Person or commence any suit or other proceeding
against the Borrower or any other Person in any court or other tribunal; (b) to
make any claim in a liquidation or bankruptcy of the Borrower or any other
Person; or (c) to make demand of the Borrower or any other Person or to
enforce or seek to enforce or realize upon any collateral security held by the
Lenders or the Agent which may secure any of the Guaranteed Obligations.


 


2.             Guaranty of Performance.
Each Guarantor additionally hereby absolutely, unconditionally and
irrevocably guarantees to the Agent and the Lenders the timely performance of
all other obligations of the Borrower under all of the Loan Documents,
including, without limiting the generality of the foregoing, that:


 


(a)           all Improvements
will be constructed in accordance with the Loan Agreement and with the Plans
and Specifications;


 


(b)           all Improvements
will be completed, lien free, and ready for occupancy, including delivery of
any permits, certificates or governmental approvals required by law or the
Construction Loan Agreement, on or before the required Completion Date required
in the Construction Loan Agreement; and


 


(c)           Borrower will duly
and punctually perform and observe all other terms, covenants, and conditions
of the Notes, the Construction Loan Agreement and any other Loan Documents,
whether according to the present terms thereof, at any earlier or accelerated
date or dates as provided therein, or pursuant to any extension of time or to


 


D-2

















 


any change or
changes in the terms, covenants, or conditions thereof now or hereafter made or
granted.


 


If any of such obligations of Borrower are not complied with, in any
respect whatsoever, and without the necessity of any notice from the Agent or
any Lender to any Guarantor, each Guarantor agrees to (i) assume all
responsibility for the completion of the Improvements and, at Guarantor’s own
cost and expense, cause the Improvements to be fully completed in accordance
with the Plans and Specifications and the Loan Documents; (ii) pay all
bills in connection with the construction of the Improvements; and (iii) indemnify
and hold the Agent and the Lenders harmless from any and all loss, cost,
liability or expense that the Lender may suffer by reason of any such
non-compliance. The Agent and the Lenders do not have and shall never have any
obligation to complete the Improvements or take any such action. The
obligations and liability of each Guarantor under this Section 2 shall not
be limited or restricted by the existence of (or any terms of) the guaranty of
payment under Section 1.


 


Section 3.       Guaranty Absolute. Each Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the documents evidencing the same, regardless of any
Applicable Law now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of the Agent or the Lenders with respect thereto. The
liability of each Guarantor under this Guaranty shall be absolute, irrevocable
and unconditional in accordance with its terms and shall remain in full force
and effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including without limitation, the following (whether or not such Guarantor
consents thereto or has notice thereof):


 


(a)           (i) any
change in the amount, interest rate or due date or other term of any of the
Guaranteed Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Guaranteed Obligations, (iii) any
amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Construction Loan Agreement, any other Loan Document, or
any other document or instrument evidencing or relating to any Guaranteed
Obligations, or (iv) any waiver, renewal, extension, addition, or supplement
to, or deletion from, or any other action or inaction under or in respect of,
the Construction Loan Agreement, any of the other Loan Documents, or any other
documents, instruments or agreements relating to the Guaranteed Obligations or
any other instrument or agreement referred to therein or evidencing any
Guaranteed Obligations or any assignment or transfer of any of the foregoing;


 


(b)           any
lack of validity or enforceability of the Construction Loan Agreement, any of
the other Loan Documents, or any other document, instrument or agreement
referred to therein or evidencing any Guaranteed Obligations or any assignment
or transfer of any of the foregoing;


 


(c)           any
furnishing to the Agent or the Lenders of any security for the Guaranteed
Obligations, or any sale, exchange, release or surrender of, or realization on,
any collateral securing any of the Obligations;


 


(d)           any
settlement or compromise of any of the Guaranteed Obligations, any security
therefor, or any liability of any other party with respect to the Guaranteed
Obligations, or any


 


D-3

















 


subordination of the payment of the Guaranteed Obligations to the
payment of any other liability of the Borrower or any other Loan Party;


 


(e)           any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to such Guarantor, the Borrower,
any other Loan Party or any other Person, or any action taken with respect to
this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;


 


(f)            any
act or failure to act by the Borrower, any other Loan Party or any other Person
which may adversely affect such Guarantor’s subrogation rights, if any, against
the Borrower to recover payments made under this Guaranty;


 


(g)           any
nonperfection or impairment of any security interest or other Lien on any
collateral, if any, securing in any way any of the Obligations;


 


(h)           any
application of sums paid by the Borrower or any other Person with respect to
the liabilities of the Borrower to the Agent or the Lenders, regardless of what
liabilities of the Borrower remain unpaid;


 


(i)            any
defect, limitation or insufficiency in the borrowing powers of the Borrower or
in the exercise thereof; or


 


(j)            any
other circumstance which might otherwise constitute a defense available to, or
a discharge of, a Guarantor hereunder (other than indefeasible payment and
performance in full).


 


Section 4.       Action with Respect to Guaranteed
Obligations. The Lenders and the Agent may, at any time and from time to
time, without the consent of, or notice to, any Guarantor, and without
discharging any Guarantor from its obligations hereunder, take any and all
actions described in Section 3 and may otherwise: (a) amend, modify,
alter or supplement the terms of any of the Guaranteed Obligations, including,
but not limited to, extending or shortening the time of payment of any of the
Guaranteed Obligations or changing the interest rate that may accrue on any of
the Guaranteed Obligations; (b) amend, modify, alter or supplement the
Construction Loan Agreement or any other Loan Document; (c) sell,
exchange, release or otherwise deal with all, or any part, of any collateral
securing any of the Obligations; (d) release any other Loan Party or other
Person liable in any manner for the payment or collection of the Guaranteed
Obligations; (e) exercise, or refrain from exercising, any rights against
the Borrower or any other Person; and (f) apply any sum, by whomsoever
paid or however realized, to the Guaranteed Obligations in such order as the
Lenders shall elect.


 


Section 5.       Representations and Warranties. Each
Guarantor hereby makes to the Agent and the Lenders all of the representations
and warranties made by the Borrower with respect to or in any way relating to
such Guarantor in the Existing Credit Agreement, the Construction Loan
Agreement and the other Loan Documents, as if the same were set forth herein in
full.


 


D-4

















 


Section 6.       Covenants. Each Guarantor will
comply with all covenants which the Borrower is to cause such Guarantor to
comply with under the terms of the Construction Loan Agreement or any of the
other Loan Documents.


 


Section 7.       Waiver. Each Guarantor, to the
fullest extent permitted by Applicable Law, hereby waives notice of acceptance
hereof or any presentment, demand, protest or notice of any kind, and any other
act or thing, or omission or delay to do any other act or thing, which in any
manner or to any extent might vary the risk of such Guarantor or which
otherwise might operate to discharge such Guarantor from its obligations
hereunder.


 


Section 8.       Inability to Accelerate Loan. If
the Agent and/or the Lenders are prevented under Applicable Law or otherwise
from demanding or accelerating payment of any of the Guaranteed Obligations by
reason of any automatic stay or otherwise, the Agent and/or the Lenders shall
be entitled to receive from each Guarantor, upon demand therefor, the sums
which otherwise would have been due had such demand or acceleration occurred.


 


Section 9.       Reinstatement of Guaranteed
Obligations. If claim is ever made on the Agent or any Lender for repayment
or recovery of any amount or amounts received in payment or on account of any
of the Guaranteed Obligations, and the Agent or such Lender repays all or part
of said amount by reason of (a) any judgment, decree or order of any court
or administrative body of competent jurisdiction, or (b) any settlement or
compromise of any such claim effected by the Agent or such Lender with any such
claimant (including the Borrower or a trustee in bankruptcy for the Borrower),
then and in such event each Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Construction Loan Agreement, any
of the other Loan Documents, or any other instrument evidencing any liability
of the Borrower, and such Guarantor shall be and remain liable to the Agent or
such Lender for the amounts so repaid or recovered to the same extent as if
such amount had never originally been paid to the Agent or such Lender.


 


Section 10.     Subrogation. Upon the making by any
Guarantor of any payment hereunder for the account of the Borrower, such
Guarantor shall be subrogated to the rights of the payee against the Borrower;
provided, however, that such Guarantor shall not enforce any right or receive
any payment by way of subrogation or otherwise take any action in respect of
any other claim or cause of action such Guarantor may have against the Borrower
arising by reason of any payment or performance by such Guarantor pursuant to
this Guaranty, unless and until all of the Guaranteed Obligations have been
indefeasibly paid and performed in full. If any amount shall be paid to any
Guarantor on account of or in respect of such subrogation rights or other
claims or causes of action, such Guarantor shall hold such amount in trust for
the benefit of the Agent and the Lenders and shall forthwith pay such amount to
the Agent to be credited and applied against the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Construction
Loan Agreement or to be held by the Agent as collateral security for any
Guaranteed Obligations existing.


 


Section 11.     Payments Free and Clear. All sums
payable by any Guarantor hereunder, whether of principal, interest, Fees,
expenses, premiums or otherwise, shall be paid in full, without set-off or
counterclaim or any deduction or withholding whatsoever (including any


 


D-5

















 


Taxes), and if any Guarantor is required by Applicable Law or by a
Governmental Authority to make any such deduction or withholding, such
Guarantor shall pay to the Agent and the Lenders such additional amount as will
result in the receipt by the Agent and the Lenders of the full amount payable
hereunder had such deduction or withholding not occurred or been required.


 


Section 12.     Set-off. In addition to any rights
now or hereafter granted under any of the other Loan Documents or Applicable
Law and not by way of limitation of any such rights, each Guarantor hereby
authorizes the Agent and each Lender, at any time during the continuance of an
Event of Default, without any prior notice to such Guarantor or to any other
Person, any such notice being hereby expressly waived, but in the case of a
Lender or Participant subject to receipt of the prior written consent of the
Agent exercised in its sole discretion, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Agent,
such Lender, or any affiliate of the Agent or such Lender, to or for the credit
or the account of such Guarantor against and on account of any of the
Guaranteed Obligations, although such obligations shall be contingent or
unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable
Law, that any Participant may exercise rights of setoff or counterclaim and
other rights with respect to its participation as fully as if such Participant
were a direct creditor of such Guarantor in the amount of such participation.


 


Section 13.     Subordination. Each Guarantor hereby
expressly covenants and agrees for the benefit of the Agent and the Lenders
that all obligations and liabilities of the Borrower to such Guarantor of
whatever description, including without limitation, all intercompany
receivables of such Guarantor from the Borrower (collectively, the “Junior Claims”) shall be subordinate and
junior in right of payment to all Guaranteed Obligations. If an Event of
Default shall exist, then no Guarantor shall accept any direct or indirect
payment (in cash, property or securities, by setoff or otherwise) from the
Borrower on account of or in any manner in respect of any Junior Claim until
all of the Guaranteed Obligations have been indefeasibly paid in full.


 


Section 14.     Avoidance Provisions. It is the
intent of each Guarantor, the Agent and the Lenders that in any Proceeding,
such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the Agent
and the Lenders) to be avoidable or unenforceable against such Guarantor in
such Proceeding as a result of Applicable Law, including without limitation, (a) Section 548
of the Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and (b) any state fraudulent transfer
or fraudulent conveyance act or statute applied in such Proceeding, whether by
virtue of Section 544 of the Bankruptcy Code or otherwise. The Applicable
Laws under which the possible avoidance or unenforceability of the obligations
of each Guarantor hereunder (or any other obligations of the Guarantor to the
Agent and the Lenders) shall be determined in any such Proceeding are referred
to as the “Avoidance Provisions”. Accordingly,
to the extent that the obligations of any Guarantor hereunder would otherwise
be subject to avoidance under the Avoidance Provisions, the maximum Guaranteed
Obligations for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, as of the time any of the Guaranteed Obligations are
deemed to have been incurred under the Avoidance Provisions, would not cause
the obligations of such


 


D-6

















 


Guarantor hereunder (or any other obligations of such Guarantor to the
Agent and the Lenders), to be subject to avoidance under the Avoidance
Provisions. This Section is intended solely to preserve the rights of the
Agent and the Lenders hereunder to the maximum extent that would not cause the
obligations of any Guarantor hereunder to be subject to avoidance under the
Avoidance Provisions, and no Guarantor or any other Person shall have any right
or claim under this Section as against the Agent and the Lenders that
would not otherwise be available to such Person under the Avoidance Provisions.


 


Section 15.     Information. Each Guarantor assumes
all responsibility for being and keeping itself informed of the financial
condition of the Borrower, and of all other circumstances bearing upon the risk
of nonpayment of any of the Guaranteed Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Agent or the Lenders shall have any duty whatsoever to
advise such Guarantor of information regarding such circumstances or risks.


 


Section 16.     Governing Law. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.


 


SECTION 17.  WAIVER OF JURY TRIAL.


 


(a)           EACH
PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG ANY
OF THE GUARANTORS, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT
AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE
PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
LENDERS, THE AGENT AND THE GUARANTORS HEREBY WAIVES ITS RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL
IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING
OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT,
CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE GUARANTORS, THE
AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN
DOCUMENTS.


 


(b)           EACH GUARANTOR, THE AGENT AND EACH
LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK OR, AT THE OPTION OF THE AGENT, ANY STATE COURT LOCATED IN THE
BOROUGH OF MANHATTAN, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN OR AMONG SUCH GUARANTOR, THE AGENT OR ANY OF THE LENDERS,
PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT
OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. EACH GUARANTOR AND EACH OF THE
LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR PROCEEDING COMMENCED IN SUCH COURTS


 


D-7

















 


WITH RESPECT TO SUCH
CLAIMS OR DISPUTES. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM
AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH
IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION
BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY
JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.


 


(c)           THE PROVISIONS OF THIS SECTION HAVE
BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL
UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT
OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN
DOCUMENTS, AND THE TERMINATION OF THIS GUARANTY.


 


Section 18.     Loan Accounts. The Agent and each
Lender may maintain books and accounts setting forth the amounts of principal,
interest and other sums paid and payable with respect to the Guaranteed
Obligations, and in the case of any dispute relating to any of the outstanding
amount, payment or receipt of any of the Guaranteed Obligations or otherwise,
the entries in such books and accounts shall be deemed conclusive evidence of
the amounts and other matters set forth herein, absent manifest error. The
failure of the Agent or any Lender to maintain such books and accounts shall
not in any way relieve or discharge any Guarantor of any of its obligations
hereunder.


 


Section 19.     Waiver of Remedies. No delay or
failure on the part of the Agent or any Lender in the exercise of any right or
remedy it may have against any Guarantor hereunder or otherwise shall operate
as a waiver thereof, and no single or partial exercise by the Agent or any
Lender of any such right or remedy shall preclude any other or further exercise
thereof or the exercise of any other such right or remedy.


 


Section 20.     Termination. This Guaranty shall
remain in full force and effect until indefeasible payment in full of the
Guaranteed Obligations and the other Obligations and the termination or
cancellation of the Construction Loan Agreement in accordance with its terms.


 


Section 21.     Successors and Assigns. Each
reference herein to the Agent or the Lenders shall be deemed to include such
Person’s respective successors and assigns (including, but not limited to, any
holder of the Guaranteed Obligations) in whose favor the provisions of this
Guaranty also shall inure, and each reference herein to any Guarantor shall be
deemed to include such Guarantor’s successors and assigns, upon whom this
Guaranty also shall be binding. The Lenders may, in accordance with the
applicable provisions of the Construction Loan Agreement, assign, transfer or
sell any Guaranteed Obligation, or grant or sell participations in any
Guaranteed Obligations, to any Person without the consent of, or notice to, any
Guarantor and without releasing, discharging or modifying such Guarantor’s
obligations hereunder. Subject to Section 12.8. of the Construction Loan
Agreement, each Guarantor hereby consents to the


 


D-8

















 


delivery by the Agent or any Lender to any Assignee or Participant (or
any prospective Assignee or Participant) of any financial or other information
regarding the Borrower or such Guarantor. No Guarantor may assign or transfer
its obligations hereunder to any Person without the prior written consent of
all Lenders and any such assignment or other transfer to which all of the
Lenders have not so consented shall be null and void.


 


Section 22.     JOINT AND SEVERAL OBLIGATIONS. THE
OBLIGATIONS OF THE GUARANTORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND
ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF
THE “GUARANTEED OBLIGATIONS” AND
ALL OF THE OBLIGATIONS AND LIABILITIES OF THE OTHER GUARANTOR HEREUNDER.


 


Section 23.     Amendments. This Guaranty may not be
amended except in writing signed by the Requisite Lenders (or all of the
Lenders if required under the terms of the Construction Loan Agreement), the
Agent and each Guarantor.


 


Section 24.     Payments. All payments to be made by
any Guarantor pursuant to this Guaranty shall be made in Dollars, in
immediately available funds to the Agent at the Principal Office, not later than
2:00 p.m. on the date of demand therefor.


 


Section 25.     Notices. All notices, requests and
other communications hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given (a) to each Guarantor
at its address set forth below its signature hereto, (b) to the Agent or
any Lender at its respective address for notices provided for in the
Construction Loan Agreement, or (c) as to each such party at such other
address as such party shall designate in a written notice to the other parties.
Each such notice, request or other communication shall be effective (i) if
mailed, when received or when receipt is refused; (ii) if telecopied, when
transmitted; or (iii) if hand delivered, when delivered; provided,
however, that any notice of a change of address for notices shall not be
effective until received.


 


Section 26.     Severability. In case any provision
of this Guaranty shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


Section 27.     Headings. Section headings used
in this Guaranty are for convenience only and shall not affect the construction
of this Guaranty.


 


Section 28.     Limitation of Liability. Neither the
Agent nor any Lender, nor any affiliate, officer, director, employee, attorney,
or agent of the Agent or any Lender, shall have any liability with respect to,
and each Guarantor hereby waives, releases, and agrees not to sue any of them upon,
any claim for any special, indirect, incidental, or consequential damages
suffered or incurred by a Guarantor in connection with, arising out of, or in
any way related to, this Guaranty or any of the other Loan Documents, or any of
the transactions contemplated by this Guaranty, the Construction Loan Agreement
or any of the other Loan Documents. Each Guarantor hereby waives, releases, and
agrees not to sue the Agent or any Lender or any of the Agent’s or any Lender’s
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in


 


D-9

















 


respect of any claim in connection with, arising out of, or in any way
related to, this Guaranty, the Construction Loan Agreement or any of the other
Loan Documents, or any of the transactions contemplated by Construction Loan
Agreement or financed thereby.


 


Section 29.     Definitions. (a) For the
purposes of this Guaranty:


 


“Proceeding”
means, with respect to any Guarantor, any of the following: (i) a voluntary
or involuntary case concerning such Guarantor shall be commenced under the
Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such
Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or
takes charge of, all or any substantial part of the property of such Guarantor;
(iii) any other proceeding under any Applicable Law, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding-up or composition
for adjustment of debts, whether now or hereafter in effect, is commenced
relating to such Guarantor; (iv) such Guarantor is adjudicated insolvent
or bankrupt; (v) any order of relief or other order approving any such
case or proceeding is entered by a court of competent jurisdiction; (vi) such
Guarantor makes a general assignment for the benefit of creditors; (vii) such
Guarantor shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; (viii) such
Guarantor shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; (ix) such Guarantor shall by any
act or failure to act indicate its consent to, approval of or acquiescence in
any of the foregoing; or (x) any corporate action shall be taken by such
Guarantor for the purpose of effecting any of the foregoing.


 


(b)           Terms
not otherwise defined herein are used herein with the respective meanings given
them in the Construction Loan Agreement.


 


[Signature on Next Page]


 


D-10

















 


IN WITNESS WHEREOF, the Guarantor has duly
executed and delivered this Guaranty as of the date and year first written
above.


 


 


	
   

  	
  CORPORATE OFFICE PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
   

  	
  Name:    

  	
  Stephen E. Riffee

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
  [INSERT NAMES OF OTHER GUARANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices for each Guarantor:

  
	
   

  	
   

  
	
   

  	
  c/o Corporate Office Properties, L.P.

  
	
   

  	
  6711 Columbia Gateway Drive, Suite 300

  
	
   

  	
  Columbia, Maryland 21046

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telephone Number:

  	
  (443) 285-5400

  
	
   

  	
  Telecopy Number:

  	
  (443) 285-7650

  
					



 


D-11
















 


ANNEX I


 


FORM OF ACCESSION AGREEMENT


 


THIS
ACCESSION AGREEMENT dated as of
                        ,
20      , executed and delivered by                                             ,
a
                          
(the “New Guarantor”), in favor of
(a) KEYBANK NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders under that certain
Construction Loan Agreement dated as of May 2, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Construction Loan Agreement”), by and among
CORPORATE OFFICE PROPERTIES, L.P. (the “Borrower”),
Corporate Office Properties Trust, the financial institutions party thereto and
their assignees under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties
thereto, and (b) the Lenders.


 


WHEREAS,
pursuant to the Construction Loan Agreement, the Agent and the Lenders have
agreed to make available to the Borrower certain financial accommodations on
the terms and conditions set forth in the Construction Loan Agreement;


 


WHEREAS,
the Borrower, the New Guarantor, and the existing Guarantors, though separate
legal entities, are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation and have determined it to be
in their mutual best interests to obtain financing from the Agent and the
Lenders through their collective efforts;


 


WHEREAS,
the New Guarantor acknowledges that it will receive direct and indirect
benefits from the Agent and the Lenders making such financial accommodations
available to the Borrower under the Construction Loan Agreement, the New
Guarantor is willing to guarantee the Borrower’s obligations to the Agent and
the Lenders;


 


WHEREAS,
the New Guarantor’s execution and delivery of this Agreement is a condition to
the Agent and the Lenders continuing to make such financial accommodations to
the Borrower;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the New Guarantor, the New Guarantor agrees as
follows:


 


Section 1.  Accession to Guaranty.  The New Guarantor hereby agrees that it is a “Guarantor” under that certain Guaranty
dated as of May 2, 2008 (as amended, supplemented, restated or otherwise
modified from time to time, the “Guaranty”),
made by each Subsidiary of the Borrower a party thereto in favor of the Agent
and the Lenders and assumes all obligations of a “Guarantor” thereunder and agrees to be bound thereby, all as
if the New Guarantor had been an original signatory to the Guaranty.  Without limiting the generality of the
foregoing, the New Guarantor hereby:


 


(a)           irrevocably and
unconditionally guarantees the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all
Guaranteed Obligations (as defined in the Guaranty);


 


D-12

















 


(b)           makes to the Agent and the
Lenders as of the date hereof each of the representations and warranties
contained in Section 5 of the Guaranty, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and except for changes in factual
circumstances not prohibited by the Guaranty, and agrees to be bound by each of
the covenants contained in Section 6 of the Guaranty; and


 


(c)           consents and agrees to each
provision set forth in the Guaranty.


 


SECTION 2.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.


 


Section 3.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given
them in the Construction Loan Agreement.


 


[Signatures on Next Page]


 


D-13

















 


IN
WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of
the date first written above.


 


	
   

  	
   

  	
  [NEW
  GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
       Name:

  	
   

  
	
   

  	
   

  	
       Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  	
   c/o Corporate Office Properties, L.P.

  
	
   

  	
   

  	
  6711 Columbia Gateway Drive, Suite 300

  
	
   

  	
   

  	
  Columbia, Maryland 21046

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telephone Number:

  	
  (443) 285-5400

  
	
   

  	
   

  	
  Telecopy
  Number:

  	
  (443)
  285-7650

  
							



 


 


Accepted:


 


KEYBANK NATIONAL

ASSOCIATION, as Agent


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


D-14

















 


EXHIBIT E 


 


FORM OF NOTICE OF CONTINUATION


 


                 ,20
   


 


KeyBank
National Association, as Agent 


127
Public Square, 8th Floor 

Cleveland, Ohio 44114 

Attention: John C. Scott


 


Ladies
and Gentlemen:


 


Reference
is made to that certain Construction Loan Agreement dated as of May 2,
2008 (as amended, restated, supplemented or otherwise modified from time to
time, the “Construction Loan Agreement”), by and among Corporate Office
Properties, L.P. (the “Borrower”), Corporate Office Properties Trust,
the financial institutions party thereto and their assignees under
Section 12.5. thereof (the “Lenders”), KeyBank National Association, as
Agent (the “Agent”), and the other parties thereto.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Construction Loan Agreement.


 


Pursuant
to Section 2.6. of the Construction Loan Agreement, the Borrower hereby
requests a Continuation of a borrowing of Loans under the Construction Loan
Agreement, and in that connection sets forth below the information relating to
such Continuation as required by such Section of the Construction Loan
Agreement:


 


1.             The proposed
date of such Continuation
is                             ,
20    .


 


2.             The aggregate
principal amount of Loans subject to the requested Continuation is $                           and
was originally borrowed by the Borrower on                       , 20   and
applied to the following Borrowing Base Property:
                                                                    .


 


3.             The portion of
such principal amount subject to such Continuation is
$                                     .


 


4.             The current
Interest Period for each of the Loans subject to such Continuation ends
on                            ,
20    .


 


E-1

















 


5.             The duration of the new
Interest Period for each of such Loans or portion thereof subject to such
Continuation is:


 


[Check
one box only]  o  seven days


o  one month


o  two months


o  three months


o  six months


 


The Borrower hereby certifies to the Agent and the
Lenders that as of the date hereof, as of the proposed date of the requested
Continuation, and after giving effect to such Continuation, no Existing Credit
Agreement Default, Default or Event of Default exists or will exist.


 


If notice of the requested Continuation was given
previously by telephone, this notice is to be considered the written
confirmation of such telephone notice required by Section 2.6. of the
Construction Loan Agreement.


 


IN WITNESS WHEREOF, the undersigned has duly
executed and delivered this Notice of Continuation as of the date first written
above.


 


	
   

  	
  CORPORATE OFFICE
  PROPERTIES, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Corporate Office
  Properties Trust, its 

  general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							



 


E-2

















 


EXHIBIT F


 


FORM OF NOTICE OF CONVERSION


 


               ,
20    


 


 


KeyBank
National Association, as Agent 

127 Public Square, 8th Floor 

Cleveland, Ohio 44114 

Attention: John C. Scott


 


Ladies
and Gentlemen:


 


Reference
is made to that certain Construction Loan Agreement dated as of May 2,
2008 (as amended, restated, supplemented or otherwise modified from time to
time, the “Construction Loan Agreement”),  by
and among Corporate Office Properties, L.P. (the “Borrower”), Corporate
Office Properties Trust, the financial institutions party thereto and their
assignees under Section 12.5. thereof (the “Lenders”), KeyBank
National Association, as Agent (the “Agent”), and the other parties thereto.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Construction Loan Agreement.


 


Pursuant
to Section 2.7. of the Construction Loan Agreement, the Borrower hereby
requests a Conversion of a borrowing of Loans of one Type into Loans of another
Type under the Construction Loan Agreement, and in that connection sets forth
below the information relating to such Conversion as required by such
Section of the Construction Loan Agreement:


 


1.             The proposed date of such
Conversion
is                            ,
20   .


 


2.             The Loans to be Converted
pursuant hereto are currently:


 


[Check one box only] o  Base Rate Loans 


o  LIBOR Loans


 


3.             The aggregate
principal amount of Loans subject to the requested Conversion is $                                       and
was originally borrowed by the Borrower on
                 ,
20   and applied to the following Borrowing Base Property
                                .


 


4.             The portion of
such principal amount subject to such Conversion is $                                 .


 


F-1

















 


5.             The amount of such Loans to
be so Converted is to be converted into Loans of the following Type:


 


[Check one box only]


 


o            Base Rate Loans


 


o            LIBOR Loans, each with an
initial Interest Period for a duration of:


 


[Check one box only] o  seven days


o  one month


o  two months


o  three months


o  six months


 


The
Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof and as of the date of the requested Conversion and after giving effect
thereto, (a) no Existing Credit Agreement Default, Default or Event of
Default exists or shall exist (provided the certification under this clause
(a) shall not be made in connection with the Conversion of a Loan into a
LIBOR Loan), and (b) the Existing Credit Agreement Representations and the
representations and warranties of the Borrower and each other Loan Party
contained in the Loan Documents are and shall be true and correct in all
material respects, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties were true and accurate on and as of such earlier
date).


 


If
notice of the requested Conversion was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.7. of the Construction Loan Agreement.


 


IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Conversion as of the date first written above.


 


	
   

  	
  CORPORATE OFFICE
  PROPERTIES, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Corporate Office
  Properties Trust, its 

  general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							



 


F-2
















 


EXHIBIT G


 


FORM OF
PLEDGE AGREEMENT


 


THIS
PLEDGE AGREEMENT dated as of May 2, 2008, executed and delivered by each
of the undersigned and the other Persons who may become Pledgors hereunder
pursuant to the execution and delivery of a Pledge Agreement Supplement
substantially in the form of Annex 1 hereto (all of the undersigned each a
“Pledgor” and collectively, the “Pledgors”) in favor of (a) KEYBANK
NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders under that certain Construction Loan
Agreement dated as of May 2, 2008 (as amended, restated, supplemented or
otherwise modified from time to time, the “Construction
Loan Agreement”), by and among Corporate Office Properties, L.P.
(the “Borrower”), Corporate Office
Properties Trust, the financial institutions party thereto and their assignees
under Section 12.5. thereof (the “Lenders”),
the Agent, and the other parties thereto, and (b) the Lenders.


 


WHEREAS, pursuant to the Construction Loan Agreement, the Agent and the
Lenders have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Construction Loan
Agreement; and


 


WHEREAS,
each Pledgor’s execution and delivery of this Pledge Agreement is a condition
to the Agent and the Lenders making, and continuing to make, such financial
accommodations to the Borrower.


 


NOW,
THEREFORE, in consideration of the mutual agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:


 


Section 1.  Pledge.  As collateral for the Secured Obligations (as
defined in Section 2 hereof), each Pledgor hereby pledges, hypothecates,
assigns, transfers, sets over and delivers unto the Agent, for its own benefit
and for the benefit of the Lenders, and grants to the Agent, for its own
benefit and for the benefit of the Lenders, a security interest in, all of its
right, title and interest in, to and under the following (collectively, the “Pledged Collateral”):


 


(a)           the Pledged Interests;


 


(b)           all distributions to which such
Pledgor shall at any time be entitled in respect of the Pledged Interests;


 


(c)           all other payments due or to become
due to such Pledgor in respect of any Pledged Interest, whether under any
Organizational Document, any other agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;


 


G-1

















 


(d)           all of such Pledgor’s claims, rights,
powers, privileges, authority, puts, calls, options, security interests, liens
and remedies, if any, in respect of the Pledged Interests under any
Organizational Document, other agreement, at law or otherwise;


 


(e)           all of such Pledgor’s rights under
any Organizational Document, other agreement or at law to exercise and enforce
any and every right, power, remedy, authority, option and privilege of such
Pledgor relating to any Pledged Interests including any power to (i) 
execute any instruments and to take any and all other action on behalf of and
in the name of such Pledgor in respect of any Pledged Interests, (ii) exercise
voting rights or make determinations, (iii) exercise any election
(including, but not limited to, election of remedies), (iv) exercise any “put”, right of first offer or first
refusal, or other option, (v) exercise any right of redemption or
repurchase, (vi) give or receive any notice, consent, amendment, waiver or
approval, (vii) demand, receive, enforce, collect or receipt for any of the
foregoing, (viii) enforce or execute any checks, or other instruments or
orders, (ix) file any claims and to take any action in connection with any
of the foregoing, or (x) otherwise act as if such Pledgor were the
absolute owner of such Pledged Interests and all rights associated therewith;


 


(f)            all other property hereafter
delivered in substitution for or in addition to any of the foregoing;


 


(g)           all certificates and instruments
representing or evidencing any of the foregoing;


 


(h)           all other rights, titles, interests,
powers, privileges and preferences pertaining to any of the foregoing;


 


(i)            all products and proceeds of any of
the foregoing; and


 


(j)            all cash, securities, interest,
distributions, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof.


 


Section 2.  Obligations Secured.  This Agreement is made, and the security
interest created hereby is granted to the Agent, for its own benefit and for
the benefit of the Lenders, to secure the prompt performance and payment in
full of the following (collectively, the “Secured
Obligations”): (a)  all of the Obligations; (b) all of the
Pledgors’ obligations under this Agreement; and (c) all reasonable costs
and expenses incurred by the Agent, the Lenders or their respective counsel in
connection with the realization of the security for which this Agreement
provides, including, without limitation, all reasonable attorney’s fees and
reasonable costs and expenses of any proceedings to which this Agreement may
give rise.


 


Section 3.  Representations and Warranties.  Each Pledgor hereby represents and warrants
to the Agent and the Lenders as follows:


 


(a)           Validly Issued, etc.  All of the Pledged Interests have been duly
authorized and are validly issued.


 


G-2

















 


(b)           Title and Liens.  Such Pledgor is the sole legal and beneficial
owner of the Pledged Collateral pledged by it and none of the Pledged
Collateral is subject to any Lien.  No
financing statement under the Uniform Commercial Code of any jurisdiction which
names any Pledgor as debtor or covers any of the Pledged Collateral, or any
other notice filed in the public records indicating the existence of a Lien
thereon, has been filed and is still effective in any state or other
jurisdiction, other than Uniform Commercial Code financing statements filed in
favor of the Agent, and no Pledgor has signed any such financing statement or
notice or any security agreement or other document authorizing the filing of
any such financing statement or notice, other than Uniform Commercial Code
financing statements filed in favor of the Agent for its own benefit and for
the benefit of the Lenders.


 


(c)           Name; Chief Executive Office.  The correct legal name of each Pledgor is set
forth in the signature pages to this Agreement.  The chief executive office and principal
place of business of each Pledgor is located at 6711 Columbia Gateway Drive, Suite 300,
Columbia, Maryland 21046 and the location of each Pledgor’s books and records
relating to the Pledged Collateral is 6711 Columbia Gateway Drive, Suite 300,
Columbia, Maryland 21046.


 


Section 4.  Covenants.  Each Pledgor hereby unconditionally covenants
and agrees as follows:


 


(a)           No Liens; No Sale of Pledged
Collateral.  Such Pledgor will not
create, assume, incur or permit or suffer to exist or to be created, assumed or
incurred, any Lien on any of the Pledged Collateral (or any interest therein),
nor, sell, lease, assign, transfer or otherwise dispose of all or any portion
of the Pledged Collateral (or any interest therein).


 


(b)           Change of Locations, Name, Etc.  Without giving the Agent at least 30 days’
prior written notice, such Pledgor will not change its name, identity, state of
organization, or structure.


 


Section 5.  Registration in Nominee Name,
Denominations.  The Agent shall have
the right (in its sole and absolute discretion) to hold any Equity Interests
which are part of the Pledged Collateral in its own name as pledgee, the name
of its nominee (as Agent or as sub-agent) or the name of the Pledgor thereof,
endorsed or assigned in blank or in favor of the Agent.  Such Pledgor will promptly give to the Agent
copies of any notices or other communications received by it with respect to
any such Equity Interests constituting Pledged Collateral registered in the
name of such Pledgor.  The Agent shall at
all times have the right to request that each Issuer of any Pledged Collateral
issue certificates representing the Pledged Collateral and to exchange the
certificates representing such Pledged Collateral for certificates of smaller
or larger numbers of shares for any purpose consistent with this Agreement.


 


Section 6.  Voting Rights; Dividends, etc.


 


(a)           So long as no Event of Default shall
have occurred and be continuing:


 


(i)            each Pledgor shall
be entitled to exercise any and all voting and/or consensual rights and powers
accruing to an owner of the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms and conditions of this Agreement 


 


G-3

















 


or
any agreement giving rise to or otherwise relating to any of the Secured
Obligations; provided, however, that no Pledgor shall exercise,
or refrain from exercising, any such right or power if any such action would
have a material adverse effect on the value of such Pledged Collateral; and


 


(ii)           each Pledgor shall
be entitled to retain and use any and all cash distributions paid on the
Pledged Collateral, but any and all equity and/or liquidating distributions,
other distributions in property, return of capital or other distributions made
on or in respect of Pledged Collateral, whether resulting from a subdivision,
combination or reclassification of outstanding Equity Interests which are
pledged hereunder or received in exchange for Pledged Collateral or any part
thereof or as a result of any merger, consolidation, acquisition or other
exchange of assets or on the liquidation, whether voluntary or involuntary, of
any Issuer, or otherwise, shall be and become part of the Pledged Collateral
pledged hereunder and, if received by such Pledgor, shall forthwith be
delivered to the Agent to be held as collateral subject to the terms and
conditions of this Agreement.


 


The
Agent agrees to execute and deliver to each Pledgor, or cause to be executed
and delivered to such Pledgor, as appropriate, at the sole cost and expense of
such Pledgor, all such proxies, powers of attorney, dividend orders and other
instruments as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the voting and/or consensual rights and powers which
such Pledgor is entitled to exercise pursuant to clause (i) above and/or
to receive the distributions and other amounts which such Pledgor is authorized
to retain pursuant to clause (ii) above.


 


(b)           Upon the occurrence of an Event of
Default, all rights of the Pledgors to exercise the voting and/or consensual
rights and powers which the Pledgors are entitled to exercise pursuant to
subsection (a)(i) above and/or to receive the distributions and other
amounts which the Pledgors are authorized to receive and retain pursuant to
subsection (a)(ii) above shall cease, and all such rights thereupon
shall become immediately vested in the Agent, which shall have, to the extent
permitted by law, the sole and exclusive right and authority to exercise such
voting and/or consensual rights and powers which the Pledgors shall otherwise
be entitled to exercise pursuant to subsection (a)(i) above and/or to
receive and retain the distributions and other amounts which the Pledgors shall
otherwise be authorized to retain pursuant to subsection (a)(ii) above.  Any and all money and other property paid
over to or received by the Agent pursuant to the provisions of this subsection (b) shall
be retained by the Agent as additional collateral hereunder and shall be
applied in accordance with the provisions of Section 9.  If any Pledgor shall receive any
distributions or other property which it is not entitled to receive under this
Section, such Pledgor shall hold the same in trust for the Agent and the
Lenders, without commingling the same with other funds or property of or held
by such Pledgor, and shall promptly deliver the same to the Agent upon receipt
by such Pledgor in the identical form received, together with any necessary
endorsements.


 


Section 7.  Event of Default Defined.  For purposes of this Agreement, “Event of Default” shall mean any of the
following events, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any 


 


G-4

















 


judgment or order of any court or any order, rule or
regulation of any governmental or nongovernmental body: (i)        the failure of any Pledgor to comply
with any of the terms and provisions of this Agreement; (ii) the
occurrence of an “Event of Default”
as such term is defined in the Construction Loan Agreement; or (iii) any
action is taken by the issuer of any Pledged Interests or the members or
trustees thereof to amend or modify the Organizational Documents in a manner
that would adversely affect (A) the voting, liquidation, preference,
redemption or other similar rights of any holder of the Pledged Interests or, (B) the
Agent’s or the Lenders’ rights or remedies under this Pledge Agreement.


 


Section 8.  Remedies upon Default.


 


(a)           In addition to any right or remedy
that the Agent or any Lender may have under the Construction Loan Agreement or
any other Loan Document or otherwise under applicable law, if an Event of
Default shall have occurred, the Agent may exercise any and all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any applicable jurisdiction and may otherwise sell, assign, transfer, endorse
and deliver the whole or, from time to time, any part of the Pledged Collateral
at a public or private sale or on any securities exchange, for cash, upon
credit or for other property, for immediate or future delivery, and for such
price or prices and on such terms as the Agent in its discretion shall deem
appropriate.  The Agent shall be
authorized at any sale (if they deem it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Pledged Collateral for their own account in compliance
with the Securities Act and upon consummation of any such sale the Agent shall
have the right to assign, transfer, endorse and deliver to the purchaser or
purchasers thereof the Pledged Collateral so sold.  Each purchaser at any sale of Pledged
Collateral shall take and hold the property sold absolutely free from any claim
or right on the part of any Pledgor, and each Pledgor hereby waives (to the fullest
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which such Pledgor now has or may at any time in the future have
under any applicable law now existing or hereafter enacted.  Each Pledgor agrees that, to the extent
notice of sale shall be required by applicable law, at least ten days’ prior
written notice to such Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification, but notice given in any other reasonable manner or at any other
reasonable time shall also constitute reasonable notification.  Such notice, in case of public sale, shall
state the time and place for such sale, and, in the case of sale on a
securities exchange, shall state the exchange on which such sale is to be made
and the day on which the Pledged Collateral, or portion thereof, will first be
offered for sale at such exchange.  Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Agent may fix and shall state in the
notice or publication (if any) of such sale. 
At any such sale, the Pledged Collateral, or portion thereof to be sold,
may be sold in one lot as an entirety or in separate parcels, as the Agent may
determine in its sole and absolute discretion. 
Neither the Agent nor any Lender shall be obligated to make any sale of
the Pledged Collateral if it shall determine not to do so regardless of the
fact that notice of sale of the Pledged Collateral may have been given.  The Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale
may, without further notice, be made at the time and place to which the same
was so adjourned.  In case the sale of
all or any part of the Pledged Collateral is made 


 


G-5

















 


on credit or for future
delivery, the Pledged Collateral so sold may be retained by the Agent until the
sale price is paid by the purchaser or purchasers thereof, but neither the
Agent nor any Lender shall incur any liability to any Pledgor in case any such
purchaser or purchasers shall fail to take up and pay for the Pledged
Collateral so sold and, in case of any such failure, such Pledged Collateral
may be sold again upon like notice.  At
any public sale made pursuant to this Agreement, the Agent or any Lender, to
the extent permitted by applicable law, may bid for or purchase, free from any
right of redemption, stay and/or appraisal on the part of any Pledgor (all said
rights being also hereby waived and released to the extent permitted by
applicable law), any part of or all the Pledged Collateral offered for sale and
may make payment on account thereof by using any claim then due and payable to
the Agent or any Lender from any Pledgor as a credit against the purchase
price, and the Agent and the Lenders may, upon compliance with the terms of
sale and to the extent permitted by applicable law, hold, retain and dispose of
such property without further accountability to any Pledgor therefor.  For purposes hereof, a written agreement to
purchase all or any part of the Pledged Collateral shall be treated as a sale
thereof; the Agent shall be free to carry out such sale pursuant to such
agreement and no Pledgor shall be entitled to the return of any Pledged
Collateral subject thereto, notwithstanding the fact that after the Agent shall
have entered into such an agreement all Events of Default may have been
remedied or the Secured Obligations may have been paid in full as herein
provided.  Each Pledgor hereby waives any
right to require any marshaling of assets and any similar right.


 


(b)           In addition to exercising the power of
sale herein conferred upon it, the Agent shall also have the option to proceed
by suit or suits at law or in equity to foreclose this Agreement and sell the
Pledged Collateral or any portion thereof pursuant to judgment or decree of a
court or courts having competent jurisdiction.


 


(c)           The rights and remedies of the Agent
and the Lenders under this Agreement are cumulative and not exclusive of any
rights or remedies which they would otherwise have.


 


Section 9.  Application of Proceeds of Sale and Cash.  The proceeds of any sale of the whole or any
part of the Pledged Collateral, together with any other moneys held by the
Agent or any Lender under the provisions of this Agreement, shall be applied in
accordance with the Construction Loan Agreement.  The Pledgor shall remain liable and will pay,
on demand, any deficiency remaining in respect of the Secured Obligations.


 


Section 10.  Agent Appointed Attorney-in-Fact.  Each Pledgor hereby constitutes and appoints
the Agent as the attorney-in-fact of such Pledgor with full power of
substitution either in the Agent’s name or in the name of such Pledgor to do
any of the following: (a) to perform any obligation of such Pledgor
hereunder in such Pledgor’s name or otherwise; (b) upon an Event of
Default, to ask for, demand, sue for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and by virtue of
any Pledged Collateral; (c) to prepare, execute, file, record or deliver
notices, assignments, financing statements, continuation statements,
applications for registration or like papers to perfect, preserve or release
the Agent’s security interest in the Pledged Collateral or any of the
documents, instruments, certificates and agreements described in Section 13.(b);
(d) to verify facts concerning the Pledged Collateral in its own name or a
fictitious name; (e) upon an Event of Default, to endorse checks, drafts,
orders and other instruments for the payment of money payable to such Pledgor,
representing any 


 


G-6

















 


interest
or dividend or other distribution payable in respect of the Pledged Collateral
or any part thereof or on account thereof and to give full discharge for the
same; (f) upon an Event of Default, to exercise all rights, powers and
remedies which such Pledgor would have, but for this Agreement, under the
Pledged Collateral; and (g) to carry out the provisions of this Agreement
and to take any action and execute any instrument (not taken or executed by
such Pledgor promptly upon the request of the Agent) which the Agent may deem
necessary or advisable to accomplish the purposes hereof, and to do all acts
and things and execute all documents in the name of the Pledgor or otherwise,
deemed by the Agent as necessary, proper and convenient in connection with the
preservation, perfection or enforcement of its rights hereunder.  Nothing herein contained shall be construed
as requiring or obligating the Agent or any Lender to make any commitment or to
make any inquiry as to the nature or sufficiency of any payment received by it,
or to present or file any claim or notice, or to take any action with respect
to the Pledged Collateral or any part thereof or the moneys due or to become
due in respect thereof or any property covered thereby, and no action taken by
the Agent or any Lender or omitted to be taken with respect to the Pledged
Collateral or any part thereof shall give rise to any defense, counterclaim or
offset in favor of any Pledgor or to any claim or action against the Agent or
any Lender.  The power of attorney
granted herein is irrevocable and coupled with an interest.


 


Section 11.  Reimbursement of Agent.  Each Pledgor agrees to pay upon demand to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees disbursements and other charges of its counsel and of any experts or
agents, that the Agent may incur in connection with (a) the administration
of this Agreement, (b) the custody or preservation of, or any sale of,
collection from, or other realization upon, any of the Pledged Collateral, (c) the
exercise or enforcement of any of the rights of the Agent or the Lenders
hereunder, or (d) the failure by such Pledgor to perform or observe any of
the provisions hereof.  Any such amounts
payable as provided hereunder shall be Secured Obligations.


 


Section 12.  Further Assurances.  Each Pledgor shall, at its sole cost and
expense, take all action that may be necessary or desirable in the Agent’s sole
discretion, so as at all times to maintain the validity, perfection,
enforceability and priority of the Agent’s security interest in the Pledged
Collateral, or to enable the Agent or the Lenders to exercise or enforce their
respective rights hereunder, including without limitation (a) delivering
to the Agent, endorsed or accompanied by such instruments of assignment as the
Agent may specify, any and all chattel paper, instruments, letters of credit
and all other advices of guaranty and documents evidencing or forming a part of
the Pledged Collateral and (b) executing and delivering pledges,
designations, notices and assignments, in each case in form and substance
satisfactory to the Agent, relating to the creation, validity, perfection,
priority or continuation of the security interest granted hereunder.  Each Pledgor agrees to take, and authorizes
the Agent to take on such Pledgor’s behalf, any or all of the following actions
with respect to any Pledged Collateral as the Agent shall deem necessary to
perfect the security interest and pledge created hereby or to enable the Agent
to enforce its rights and remedies hereunder: (i) to register in the name
of the Agent any Pledged Collateral in certificated or uncertificated form; (ii) to
endorse in the name of the Agent any Pledged Collateral issued in certificated form;
and (iii) by book entry or otherwise, identify as belonging to the Agent a
quantity of securities or partnership interests that constitutes all or part of
the Pledged Collateral registered in the name of the Agent.  Notwithstanding the foregoing, each Pledgor
agrees that Pledged Collateral which is not in certificated form or is 


 


G-7

















 


otherwise
in book-entry form shall be held for the account of the Agent.  Each Pledgor hereby authorizes the Agent to
file in all necessary and appropriate jurisdictions (as determined by the
Agent) one or more financing or continuation statements (or any other document
or instrument referred to in the immediately preceding clause (b)) in the name
of such Pledgor.  To the extent permitted
by applicable law, a carbon, photographic, xerographic or other reproduction of
this Agreement or any financing statement is sufficient as a financing
statement.  Any property comprising part
of the Pledged Collateral required to be delivered to the Agent pursuant to
this Pledge Agreement shall be accompanied by proper instruments of assignment
duly executed by the Pledgors and by such other instruments or documents as the
Agent may reasonably request.


 


Section 13.  Securities Act.  In view of the position of any Pledgor in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act or any similar
applicable law hereafter enacted analogous in purpose or effect (such Act and
any such similar applicable law as from time to time in effect being called the
“Federal Securities Laws”) with
respect to any disposition of the Pledged Collateral permitted hereunder.  Each Pledgor understands that compliance with
the Federal Securities Laws might very strictly limit the course of conduct of
the Agent if the Agent were to attempt to dispose of all or any part of the
Pledged Collateral in accordance with the terms hereof, and might also limit
the extent to which or the manner in which any subsequent transferee of any
Pledged Collateral could dispose of the same. 
Similarly, there may be other legal restrictions or limitations
affecting the Agent in any attempt to dispose of all or part of the Pledged
Collateral in accordance with the terms hereof under applicable Blue Sky or
other state securities laws or similar applicable law analogous in purpose or
effect.  Each Pledgor recognizes that in
light of the foregoing restrictions and limitations the Agent may, with respect
to any sale of the Pledged Collateral, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Collateral for their own
account, for investment, and not with a view to the distribution or resale
thereof.  Each Pledgor acknowledges and
agrees that in light of the foregoing restrictions and limitations, the Agent,
in its sole and absolute discretion, may, in accordance with applicable law, (a) proceed
to make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws and (b) approach and negotiate with a single
potential purchaser to effect such sale. 
Each Pledgor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions.  In the
event of any such sale, neither the Agent nor any Lender shall incur any
responsibility or liability for selling all or any part of the Pledged
Collateral in accordance with the terms hereof at a price that the Agent, in
its sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher
price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were
approached.  The provisions of this Section will
apply notwithstanding the existence of public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Agent sells. If such registration statement is available at the time of
disposing of any of the Equity Interests contained in the Pledged Collateral,
the Agent agrees to use its reasonable best efforts to utilize such
registration statement in connection with the disposition.


 


G-8

















 


Section 14.  Investment Property.  The Pledgor shall not, and shall not allow
any issuer of any Pledged Collateral to elect that Pledged Interests except as
directed or requested by the Agent be securities governed by Article 8 of
the Uniform Commercial Code.  No issuer
of any Pledged Collateral has made such an election.


 


Section 15.  Indemnification.  Each Pledgor agrees to indemnify and hold the
Agent, each Lender and any Person controlling, controlled by, or under common
control with, the Agent or any Lender and any officer, attorney, director,
shareholder, agent or employee of the Agent or any Lender or any such Person
(each an “Indemnified Person”),
harmless from and against any claim, loss, damage, action, cause of action,
liability, cost and expense or suit of any kind or nature whatsoever
(collectively, “Losses”), brought
against or incurred by an Indemnified Person, in any manner arising out of or,
directly or indirectly, related to or connected with this Agreement, including
without limitation, the exercise by the Agent or any Lender of any of its
rights and remedies under this Agreement or any other action taken by the Agent
or any Lender pursuant to the terms of this Agreement; provided, however,
the Pledgor shall not be liable to an Indemnified Person for any Losses to the
extent that such Losses result from the willful misconduct or gross negligence
of such Indemnified Person.  The
Pledgor’s obligations under this section shall survive the termination of this
Agreement and the payment in full of the Secured Obligations.


 


Section 16.  Security Interest Absolute.  All rights of the Agent hereunder, the grant of
a security interest in the Pledged Collateral and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Note, any agreement with respect to
any of the Secured Obligations or any other agreement or instrument relating to
any of the foregoing, (b) any change in the time, manner or place of the
payment of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from any of
the documents, instruments or agreements evidencing any of the Secured
Obligations, (c) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any guaranty, for all or any of the Secured Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Secured Obligations or in respect
of this Agreement (other than the indefeasible payment in full of all the
Secured Obligations).


 


Section 17.  Continuing Security Interest.  This Agreement shall create a continuing
security interest in the Pledged Collateral and shall remain in full force and
effect until it terminates in accordance with its terms.  The Pledgors or the Agent hereby agree that
the security interest created by this Agreement in the Pledged Collateral shall
not terminate and shall continue and remain in full force and effect
notwithstanding the transfer to the Pledgors or any person designated by it of
all or any portion of the Pledged Collateral.


 


Section 18.  No Waiver.  Neither the failure on the part of the Agent
or any Lender to exercise, nor the delay on its part in exercising any right,
power or remedy hereunder, nor any course of dealing between the Agent or any
Lender and any Pledgor shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power, or remedy hereunder 


 


G-9

















 


preclude
any other or the further exercise thereof or the exercise of any other right,
power or remedy.


 


Section 19.  Notices.  All notices, requests and other
communications hereunder shall be in writing (including facsimile transmission
or similar writing) and shall be given (a) to the Pledgor at its address
set forth below its signature hereto, (b) to the Agent or any Lender at
its respective address for notices provided for in the Construction Loan
Agreement, or (c) as to each such party at such other address as such
party shall designate in a written notice to the other parties.  Each such notice, request or other
communication shall be effective (i) if mailed, when received or when
receipt is refused; (ii) if telecopied, when transmitted; or (iii) if
hand delivered, when delivered; provided, however, that any notice of a change
of address for notices shall not be effective until received.


 


SECTION 20.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.


 


Section 21.  Amendments.  No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Pledgor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.


 


Section 22.  Binding Agreement; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that no Pledgor can assign this Agreement or any interest
herein or in the Pledged Collateral, or any part thereof, or any cash or
property held by the Agent or any Lender as collateral under this Agreement.


 


Section 23.  Termination.  Upon indefeasible payment in full of all of
the Secured Obligations, this Agreement shall terminate.  Upon termination of this Agreement in
accordance with its terms the Agent agrees to take such actions as the Pledgors
may reasonably request, and at the sole cost and expense of the Pledgors, (a) to
return the Pledged Collateral to the Pledgors, and (b) to evidence the
termination of this Agreement, including, without limitation, the filing of any
releases or any termination statements under the Uniform Commercial Code.


 


Section 24.  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.


 


Section 25.  Headings.  Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.


 


G-10

















 


Section 26.  Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
shall constitute but one agreement.


 


Section 27.  Definitions.


 


(a)           As
used herein, the following terms have the indicated meanings:


 


“Equity Interests” means all of the
following: (a) all capital stock of any corporation; (b) all
partnership interests in any general or limited partnership; (c) all membership
interests in any limited liability company; (d) all securities and equity
interests or beneficial in any other form of legal organization or entity.


 


“Event of Default” has the meaning set forth
in Section 7.


 


“Issuer” means a Person which issued any
Equity Interest that constitutes any part of the Pledged Collateral.


 


“Organizational Documents” means any
declaration of trust, operating agreement, partnership agreement, by-laws,
articles or certificate of incorporation, articles of organization, certificate
of limited partnership, or other similar agreement or document.


 


“Person” means an individual, corporation,
partnership, limited liability company, association, trust or unincorporated
organization, or a government or any agency or political subdivision thereof.


 


“Pledged Interests” means, with respect to
each Pledgor, such Pledgor’s
right, title and interest Equity Interests of the Persons as described on Exhibit A,
whether now owned or hereafter acquired.


 


“Securities Act” means the Securities Act of
1933, as amended from time to time, together with all rules and
regulations issued thereunder.


 


(b)           Terms not otherwise defined herein
are used herein with the respective meanings given to them in the Construction
Loan Agreement.  Terms which are defined
in the New York Uniform Commercial Code have the meanings given such terms
therein.


 


[Signatures on Next Page]


 


G-11






 












 


IN
WITNESS WHEREOF, each Pledgor has executed and delivered this Pledge Agreement
under seal as of this the date first written above.


 


	
   

  	
  [PLEDGORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Stephen
  E. Riffee

  
	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for Notices for all Pledgors:

  
	
   

  	
   

  
	
   

  	
  c/o
  Corporate Office Properties, L.P.

  
	
   

  	
  6711
  Columbia Gateway Drive, Suite 300

  
	
   

  	
  Columbia,
  Maryland 21046

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Telephone
  Number:

  	
  (443)
  285-5400

  
	
   

  	
  Telecopy
  Number:

  	
  (443)
  285-7650

  
					



 


G-12

















 


Exhibit A


 


Pledged Interests


 


	
  Pledgor

  	
   

  	
  Issuer

  	
   

  	
  Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


G-13

















 


FORM OF PLEDGE AGREEMENT SUPPLEMENT


 


THIS
PLEDGE AGREEMENT SUPPLEMENT dated as of
                      ,
20       (this “Supplement”)
executed and delivered by
                                            ,
a
                          
(the “New Pledgor”) in favor of
KEYBANK NATIONAL ASSOCIATION, as Agent (the “Agent”).


 


WHEREAS,
pursuant to that certain Construction Loan Agreement dated as of May 2,
2008 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by
and among Corporate Office Properties, L.P. (the “Borrower”), Corporate Offices Properties Trust, the financial
institutions from time to time party thereto as “Lenders”, the Agent, and the other parties thereto, the
Lenders and the Agent have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the
Construction Loan Agreement;


 


WHEREAS,
to secure obligations owning by certain parties under the Construction Loan
Agreement and the other Loan Documents, the Borrower and the other “Pledgors” thereunder have executed and
delivered that certain Pledge Agreement dated as of May 2, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the “Pledge Agreement”) in favor of the Agent
and the Lenders;


 


WHEREAS,
it is a condition precedent to the continued extension of such financial accommodations
under the Construction Loan Agreement that the New Pledgor execute this
Supplement to become a party to the Pledge Agreement.


 


NOW,
THEREFORE, in consideration of the above premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the New Pledgor, the New Pledgor hereby agrees as follows:


 


Section 1.  Accession to Pledge Agreement; Grant of
Security Interest.  The New Pledgor
agrees that it is a “Pledgor”
under the Pledge Agreement and assumes all obligations of a “Pledgor” thereunder, all as if the New
Pledgor had been an original signatory to the Pledge Agreement.  Without limiting the generality of the
foregoing, the New Pledgor hereby:


 


(a)           pledges to the Agent for its benefit
and the benefit of the Lenders, and grants to the Agent for its benefit and the
benefit of the Lenders a security interest in, all of the New Pledgor’s right,
title and interest in, to and under the Collateral, including the Equity
Interests described on Exhibit I attached hereto, as security for the
Secured Obligations;


 


(b)           makes to the Agent and the Lenders as
of the date hereof each of the representations and warranties contained in Section 3
of the Pledge Agreement, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances not
prohibited by the Pledge Agreement, and agrees to be bound by each of the
covenants contained in the Pledge Agreement, including without limitation,
those contained in Section 4 thereof; and


 


G-14

















 


(c)           consents and agrees to each other
provision set forth in the Pledge Agreement.


 


SECTION 2.  GOVERNING LAW.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.


 


Section 3.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given
them in the Pledge Agreement.


 


[Signatures on Next Page]


 


G-15

















 


IN
WITNESS WHEREOF, the New Pledgor has caused this Pledge Agreement Supplement to
be duly executed and delivered under seal by its duly authorized officers as of
the date first written above.


 


	
   

  	
  [NEW
  PLEDGOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Stephen
  E. Riffee

  
	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for Notices: 

  
	
   

  	
   

  
	
   

  	
  c/o
  Corporate Office Properties, L.P.

  
	
   

  	
  6711
  Columbia Gateway Drive, Suite 300

  
	
   

  	
  Columbia,
  Maryland 21046

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Telephone
  Number:

  	
  (443)
  285-5400

  
	
   

  	
  Telecopy
  Number:

  	
  (443)
  285-7650

  
					



 


 


Accepted:


 


KEYBANK, NATIONAL ASSOCIATION, as

Agent


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


G-16

















 


EXHIBIT H


 


FORM OF NOTE


 


$                                                                                                                                                                                                        ,
20


 


FOR VALUE RECEIVED, the undersigned, CORPORATE
OFFICE PROPERTIES, L.P., a limited partnership formed under the laws of the
State of Delaware (the “Borrower”),
hereby promises to pay to the order of
                                        
(the “Lender”), in care of KeyBank
National Association, as Agent (the “Agent”)
at KeyBank National Association, 127 Public Square, 8th Floor, Cleveland, Ohio, or at such other
address as may be specified in writing by the Agent to the Borrower, the
principal sum of
                                
AND         /100 DOLLARS
($                        )
(or such lesser amount as shall equal the aggregate unpaid principal amount of
Loans made by the Lender to the Borrower under the Construction Loan Agreement
(as herein defined)), on the dates and in the principal amounts provided in the
Construction Loan Agreement, and to pay interest on the unpaid principal amount
owing hereunder, at the rates and on the dates provided in the Construction
Loan Agreement.


 


The
date, amount of each Loan made by the Lender to the Borrower, and each payment
made on account of the principal thereof, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by the Lender on
the schedule attached hereto or any continuation thereof, provided that the
failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower to make a payment when due of any amount
owing under the Construction Loan Agreement or hereunder in respect of the
Loans made by the Lender.


 


This
Note is one of the Notes referred to in the Construction Loan Agreement dated
as of May 2, 2008 (as amended, restated, supplemented or otherwise
modified from time to time, the “Construction
Loan Agreement”), by and among the Borrower, Corporate Office
Properties Trust, the financial institutions party thereto and their assignees
under Section 12.5. thereof (the “Lenders”),
the Agent, and the other parties thereto. 
Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Construction Loan Agreement.


 


The
Construction Loan Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.


 


Except
as permitted by Section 12.5.(d) of the Construction Loan Agreement,
this Note may not be assigned by the Lender to any other Person.


 


H-1

















 


THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN
SUCH STATE.


 


The
Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.


 


Time
is of the essence for this Note.


 


IN
WITNESS WHEREOF, the undersigned has executed and delivered this Note under
seal as of the date first written above.


 


	
   

  	
  CORPORATE OFFICE PROPERTIES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Corporate Office
  Properties Trust, its 

  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Stephen
  E. Riffee

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
					



 


H-2

















 


SCHEDULE OF LOANS


 


This Note evidences Loans made under the
within-described Construction Loan Agreement to the Borrower, on the dates, in
the principal amounts, bearing interest at the rates and maturing on the dates
set forth below, subject to the payments and prepayments of principal set forth
below:


 




	
  Date of

  Loan

  	
   

  	
  Principal

  Amount of

  Loan

  	
   

  	
  Amount

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 


H-3

















 


EXHIBIT I


 


FORM OF OPINION OF COUNSEL


 


[LETTERHEAD OF COUNSEL TO THE LOAN PARTIES]


 


           ,
2008


 


KeyBank
National Association, as Agent 


127
Public Square, 8th Floor 


Cleveland,
Ohio 44114


 


The Lenders party to the Construction Loan 

Agreement referred to below


 


Ladies
and Gentlemen:


 


We
have acted as counsel to Corporate Office Properties, L.P., a limited
partnership formed under the laws of the State of Delaware (the “Borrower”) in connection with the
negotiation, execution and delivery of that certain Construction Loan Agreement
dated as of May 2, 2008 (the “Construction
Loan Agreement”), by and among the Borrower, Corporate Office Properties
Trust (the “Parent”), the
financial institutions party thereto and their assignees under
Section 12.5. thereof (the “Lenders”), KeyBank
National Association, as Agent (the “Agent”),
and the other parties thereto. We have also acted as counsel to (i) the
Parent in connection with the Construction Loan Agreement, the Guaranty and the
other Loan Documents identified below to which it is a party; and
(ii) [PROVIDE PLEDGORS AND PROPERTY OWNERS WITH RESPECT TO WHICH OPINION
IS ALSO TO BE GIVEN] (together with                            ,
the “Loan Parties”). Capitalized terms not otherwise defined herein have the
respective meaning given them in the Construction Loan Agreement.


 


In
these capacities, we have reviewed executed copies of the following:


 


(a)           the Construction Loan
Agreement;


 


(b)           the Notes;


 


(c)           the Guaranty;


 


(d)           the Pledge Agreement;


 


(e)           [list other applicable Loan
Documents]; and


 


I-1

















 


(f)            each of the UCC Financing Statements attached to Schedule
1 hereto (the “Financing Statements”) to
be filed in the offices set forth on such Schedule 1 (the “Filing Office”) with respect to each
Financing Statement.


 


The documents and instruments set forth in items (a) through (       )
above are referred to herein as the “Loan
Documents”.


 


In
addition to the foregoing, we have reviewed the declaration of trust, operating
agreement and partnership agreement, as applicable, of each Loan Party and
certain resolutions of the board of trustees, managers or directors, as
applicable, of each Loan Party (collectively, the “Organizational Documents”) and have also examined originals
or copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, and other instruments, and made such other
investigations of law and fact, as we have deemed necessary or advisable for
the purposes of rendering this opinion. In our examination of documents, we
assumed the genuineness of all signatures on documents presented to us as
originals (other than the signatures of officers of the Loan Parties) and the
conformity to originals of documents presented to us as conformed or reproduced
copies.


 


Based
upon the foregoing, and subject to all of the qualifications and assumptions
set forth herein, we are of the opinion that:


 


1.             The Parent is a real estate
investment trust, duly organized, validly existing and in good standing under
the laws of the State of Maryland, and has the power to execute and deliver,
and to perform its obligations under, the Loan Documents to which it is a
party, to own and use its assets, and to conduct its business as presently
conducted. The Parent is qualified to transact business as a foreign real
estate investment trust in the following jurisdictions:                                          .


 


2.             The Borrower is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has the power to execute and deliver, and to
perform its obligations under, the Loan Documents to which it is a party, to
own and use its assets, and to conduct its business as presently conducted. The
Borrower is qualified to transact business as a foreign limited partnership in
the following jurisdictions:
                                                 .


 


3.             [Complete for each other
Loan Party] [INSERT NAME OF APPLICABLE LOAN PARTY]is a [limited liability
company] [corporation] [limited partnership], duly organized, validly existing
and in good standing under the laws of the State of [INSERT STATE OF
FORMATION], and has the power to execute and deliver, and to perform its
obligations under, the Loan Documents to which it is a party, to own and use
its assets, and to conduct its business as presently conducted.                            is
qualified to transact business as a foreign limited liability company in the
following
jurisdictions:                                                .


 


4.             Each Loan Party has duly
authorized the execution and delivery of the Loan Documents to which it is a
party and the performance by such Loan Party of all of its obligations under
each such Loan Document.


 


I-2

















 


5.             Each Loan Party has duly
executed and delivered the Loan Documents to which it is a party.


 


6.             The execution and delivery
by each Loan Party of the Loan Documents to which it is a party do not, and if
each Loan Party were now to perform its obligations under such Loan Documents,
such performance would not, result in any:


 


(a)           violation of
such Loan Party’s Organizational Documents;


 


(b)           violation of
any existing federal or state constitution, statute, regulation, rule, order,
or law to which such Loan Party or its assets are subject;


 


(c)           breach or
violation of or default under, any agreement, instrument, indenture or other
document evidencing any indebtedness for money borrowed or any other material
agreement to which, to our knowledge, such Loan Party is bound or under which a
Loan Party or its assets is subject;


 


(d)           creation or
imposition of a lien or security interest in, on or against the assets of such
Loan Party under any agreement, instrument, indenture or other document
evidencing any indebtedness for money borrowed or any other material agreement
to which, to our knowledge, such Loan Party is bound or under which a Loan
Party or its assets is subject; or


 


(e)           violation of
any judicial or administrative decree, writ, judgment or order to which, to our
knowledge, such Loan Party or its assets are subject.


 


7.             The execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party,
and the consummation of the transactions thereunder, do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority of the United States of
America or the States of               ,                     or
                  .


 


8.             To our knowledge, there are
no judgments outstanding against any of the Loan Parties or affecting any of
their respective assets, nor is there any litigation or other proceeding
against any of the Loan Parties or its assets pending or overtly threatened,
could reasonably be expected to have a materially adverse effect on
(a) the business, assets, liabilities, condition (financial or otherwise),
results of operations or business prospects of the Borrower or any other Loan
Party or (b) the validity or enforceability of any of the Loan Documents.


 


9.             None of the Loan Parties is,
or, after giving effect to any Loan will be, subject to the Investment Company
Act of 1940 or to any federal or state statute or regulation limiting its
ability to incur indebtedness for borrowed money.


 


10.           No transfer, mortgage,
intangible, documentary stamp or similar taxes are payable by the Agent or the
Lenders to the States of                  or              or
any political


 


I-3

















 


subdivision
thereof in connection with (a) the execution and delivery of the Loan
Documents or (b) the creation of the Indebtedness and the other
Obligations evidenced by any of the Loan Documents.


 


11.          Assuming that
Borrower applies the proceeds of the Loans as provided in the Construction Loan
Agreement, the transactions contemplated by the Loan Documents do not violate
the provisions of Regulations T, U or X of the Board of Governors of the
Federal Reserve System of the United States of America.


 


12.          The
consideration to be paid to the Agent and the Lenders for the financial
accommodations to be provided to the Loan Parties pursuant to the Construction
Loan Agreement does not violate any law of the States of                 or            relating
to interest and usury.


 


13.          Under
Section 9-501 of the Uniform Commercial Code (the “UCC”)
as enacted and in effect in
the             and            (the
“           UCC”
and “             ”, respectively) the Filing Office set
forth with respect to each Loan Party is the correct place to file financing
statements against such Loan Party in respect of Pledged Collateral (as defined
in each such Pledge Agreement, the “Pledged
Collateral”).  Assuming the Pledge Agreement
creates a valid security interest in favor of the Agent in the Pledged Property
of each Loan Party a party thereto in which and to the extent a security
interest may be created under Article 9 of the UCC of the State of New
York, upon the filing of the Financing Statements naming such Loan Party a
party to the Pledge Agreement as Debtor with the Filing Office with respect to
such Loan Party and the payment of all applicable filing fees, the security
interest granted by such Loan Party in the Pledged Property in which such Loan
Party has rights or the power to transfer rights shall be perfected to the
extent a security interest may be perfected by the filing of a financing
statement in the Filing Office.


 


[14.          If
any of the Pledged Collateral is certificated, add the following opinion: Upon
the Agent’s taking and retaining possession of the stock certificates
evidencing the Equity Interests
of                        (the
“Pledged Certificated Equity Interests”), together with the stock power
properly endorsed in blank by                 ,
the security interest  granted to the
Agent, for the benefit of the Secured Creditors, in the Pledged Certificated
Equity Interests will be perfected. Assuming that the Agent (i) is a
“protected purchaser” (as defined in Section 8-303 of the New York UCC)
with respect to its security interest in the Pledged Certificated Equity
Interests and (ii) takes delivery of the certificates evidencing the
Pledged Certificated Equity Interests together with undated transfer powers
executed in blank, the Agent will acquire such security interest in the Pledged
Certificated Equity Interest free of any “adverse claim” (as defined in
Section 8-1-2(a)(1) of the Uniform Commercial Code as currently in
effect in the State of                   .


 


This opinion is limited to the laws of the States of                      ,                     and
                   and
the federal laws of the United States of America, and we express no opinions with
respect to the law of any other jurisdiction.


 


[Other
Customary Qualifications/Assumptions/Limitations]


 


I-4

















 


This
opinion is furnished to you solely for your benefit in connection with the
consummation of the transactions contemplated by the Construction Loan
Agreement and may not be relied upon by any other Person, other than an
Assignee of a Lender or a Participant, or for any other purpose without our
express, prior written consent.


 


Very truly yours,


 


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SCHEDULE 1 




Financing Statements


 


	
  Name

  	
   

  	
  Filing Office

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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EXHIBIT J 



FORM OF COMPLIANCE CERTIFICATE


 


                  ,
20   


 


KeyBank
National Association, as Agent 

127 Public Square, 8th Floor 

Cleveland, Ohio 44114 

Attention: John C. Scott


 


Each of the Lenders Party to the Construction 

Loan Agreement referred to below


 


Ladies
and Gentlemen:


 


Reference
is made to that certain Construction Loan Agreement dated as of May 2,
2008 (as amended, restated, supplemented or otherwise modified from time to
time, the “Construction Loan Agreement”), by and among Corporate Office
Properties, L.P. (the “Borrower”), Corporate Office Properties Trust,
the financial institutions party thereto and their assignees under
Section 12.5. thereof (the “Lenders”), KeyBank National Association, as
Agent (the “Agent”) and the other parties thereto.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Construction Loan Agreement.


 


Pursuant
to Section 9.1. of the Construction Loan Agreement, the undersigned hereby
certifies to the Agent and the Lenders as follows:


 


(1)         The undersigned
is the                             of the Borrower.


 


(2)         The undersigned
has examined the books and records of the Borrower and has conducted such other
examinations and investigations as are reasonably necessary to provide this
Compliance Certificate.


 


(3)         No Existing
Credit Agreement Default, Default or Event of Default exists [if such is not the case, specify such Existing
Credit Agreement Default, Default or Event of Default and its nature, when it
occurred and whether it is continuing and the steps being taken by the Borrower
with respect to such event, condition or failure].


 


(4)         The Existing
Credit Agreement Representations and the representations and warranties made or
deemed made by the Borrower and the other Loan Parties in the Loan Documents to
which any is a party, are true and correct in all material respects on and as
of the date hereof except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date).


 


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(5)           Attached hereto as Schedule
1 are reasonably detailed calculations establishing whether or not the Borrower
and its Subsidiaries were in compliance with the covenants contained in
Section 9.1. of the Existing Credit Agreement.


 


IN
WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first above written.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


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Schedule 1 




[Calculations to be Attached]


 


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EXHIBIT K 



PATRIOT ACT AND OFAC FORM


 


Patriot Act and OFAC Transferee and Assignee
Identifying Information Form 


 


1.           Patriot
Act Checklist


 


	
  ADDITIONAL LENDER REQUIRED INFORMATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Identification



  (a)             (US Company) TIN

  (b)            (Non-US) Gov’t issued
  document certifying existence

  	
   

  	
   

   

   

  (a)

  (b)

  
	
   

  	
   

  	
   

  
	
  Phone
  Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BUSINESS REPRESENTATIVE REQUIRED INFORMATION PERSON WHO
  WILL EXECUTE DOCUMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Residential
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  of Birth

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Form of
  Identification



  (a)           (US Citizen) Social Security Number

  (b)           (No-US) TIN, Passport Number (country of issuance,
  number & date), or Alien Identification Number

  	
   

  	
   

   

  (a)

  (b)

  
	
   

  	
   

  	
   

  
	
  2.           OFAC Checklist:

   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Co-Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  General
  Partner/Managing Member/Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Limited
  Partners/Members/Beneficiaries

  	
   

  	
   

  



 


K-1