Exhibit
10.23


 


INDEMNITY DEED OF TRUST NOTE


(Reserve Parcel Note)


 


	
  $7,235,315.07

  	
   

  	
  Columbia, Maryland

  
	
   

  	
   

  	
  November 14, 2003

  



 


FOR VALUE RECEIVED, CORPORATE OFFICE
PROPERTIES, L.P., a Delaware limited partnership (“Borrower”),
promises to pay to the order of JOLLY KNOLLS, LLC, a Maryland limited
liability company (“Lender”; the Lender and any assignee or
other lawful owner of this Note being hereinafter called the “Holder”),
at its principal office in Columbia, Maryland, or at such other place or to
such other party as the holder hereof may from time to time designate, the
principal sum of Seven Million Two Hundred Thirty Five Thousand Three Hundred
Fifteen and 07/100 Dollars ($7,235,315.07) (the “Principal Sum”), together
with interest on the unpaid Principal Sum, on the terms set forth in this
Note.  Every word or term in this Note
that is capitalized for the purpose of indicating a particular meaning and not
specifically defined herein has the meaning set forth in the Deed of Trust
(hereinafter defined).


 


BORROWER FURTHER PROMISES, COVENANTS
AND AGREES AS FOLLOWS:


 


1.             Definitions,
Rules of Construction.


 


1.1           Definitions.  As used in this Note, the terms defined in
the preamble hereto shall have the respective meanings specified therein, and
the following terms, when used in this Note, shall have the definitions
provided in this Section 1:


 


“Additional  Guaranty” means a Guaranty of
even date herewith from COPT II, as guarantor, to Lender, which is secured, in
part, by the Deed of Trust.


 


“Business Day” means a day
other than a Saturday, Sunday or legal holiday.


 


“COPT II” means Jolly COPT II, LLC, a
Maryland limited liability company, which has the Borrower as its sole member.


 


“County” means Anne Arundel County,
Maryland.


 


“Deed of Trust” means the Indemnity Deed of Trust, Assignment of
Leases and Rents and Security Agreement from COPT II, recorded


 


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or intended to be recorded in the Land Records of the County from
Borrower to Richard Rubin and Susan M. Wilkins, Trustees, covering, inter
alia, certain real property located in the County, as described
therein (the “Property”).


 


“Default Rate” means an annual
interest rate equal to the greater of (i) fifteen percent (15%); and (ii) the
rate of eight percent (8%) in excess of the “prime rate” as announced from time
to time in the “Money Rates” section of the Wall Street Journal.


 


“Financing Statement” means the UCC-1
financing statement, perfecting Lender’s security interest in those items
secured by the Deed of Trust and required or permitted to be perfected by a
financing statement.


 


“Guaranty” means a Guaranty of
even date herewith from Corporate Office Properties Trust, as guarantor, to
Lender.


 


“Loan Documents” means this
Note, the Guaranty, the Additional Guaranty, the Deed of Trust, the Financing
Statement, the Declaration Regarding FAR dated as of January 21, 2003 and
recorded among the Land Records of the County at Liber 12452, folio 533, the
Master FAR Declaration dated as of January 21, 2003 and recorded among the Land
Records of the County at Liber 12452, folio 546 and any certificates,
assignments, and other documents executed in connection herewith or therewith,
and all current and future supplements, amendments and attachments thereto.


 


“Maturity Date” means December
31, 2007.


 


“Note” means this Indemnity
Deed of Trust Note.


 


“Payment Address” is defined in Section 4
below.


 


1.2           Capitalized Terms.  Any capitalized term used herein and not
otherwise defined herein shall have the meaning given to such term in the Deed
of Trust.


 


1.3           Rules of
Construction.  All references made
(a) in the neuter, masculine or feminine gender shall be deemed to have been
made in all such genders, and (b) in the singular or plural number shall be
deemed to have been made, respectively, in the plural or singular number as
well.


 


2.             Interest.  Commencing as of October 1, 2002 (which
date is prior to the date hereof) and continuing until repayment in full of all
sums due hereunder, the unpaid Principal Sum shall bear interest and be payable
at the rate of three percent (3 %) per annum. 
All interest payable under the terms of this Note shall be calculated on
the basis of a 365-day year and the actual number of days elapsed.


 


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3.             Payments,
Maturity Date.


 


3.1           Payments.  The unpaid Principal Sum, together
with interest thereon at the rate provided above, shall be payable by Borrower
to the Holder in four (4) yearly installments in the following manner:


 


(i)            On or before November
14, 2004, a principal payment in the amount of One Million Four Hundred Forty
Seven Thousand Sixty Three and 00/100 Dollars ($1,447,063.00), together with
accrued and unpaid interest on the Principal Sum;


 


(ii)           On or before November
14, 2005, a principal payment in the amount of One Million Four Hundred Forty
Seven Thousand Sixty Three and 00/100 Dollars ($1,447,063.00), together with
accrued and unpaid interest on the unpaid Principal Sum;


 


(iii)          On or before November
14, 2006, a principal payment in the amount of One Million Four Hundred Forty
Seven Thousand Sixty Three and 00/100 Dollars ($1,447,063.00), together with
accrued and unpaid interest on the unpaid Principal Sum;


 


(iv)          On or before November
14, 2007, a principal payment in the amount of One Million Four Hundred Forty
Seven Thousand Sixty Three and 00/100 Dollars ($1,447,063.00), together with
accrued and unpaid interest on the unpaid Principal Sum; and


 


(v)           On or before the
Maturity Date, the remaining unpaid balance of the Principal Sum, together with
accrued and unpaid interest on the unpaid Principal Sum, shall be due and
payable.


 


3.2           Principal
Curtailment.  If Borrower makes a
principal payment to Holder in excess of that required under Subsection 3.1
above, then such excess principal payment shall be credited against the next
principal payment installment.


 


4.             Place and
Time of Payment.  All
payments of principal and interest shall be made during regular business hours
at the principal office of Lender at 8815 Centre Park Drive, Suite 104, Columbia,
Maryland 21045, or at such other place as the Holder may from time to time
designate in writing (the “Payment Address”) and shall be made in coin
or currency of the United States of America, which at the time of payment is
legal tender for the payment of public or private debts.


 


5.             Security
for Note.  This Note is
given to evidence a loan in the amount of the Principal Sum made to the
Borrower by the Lender (the Borrower’s


 


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receipt of which is hereby acknowledged), and is secured by the
Guaranty and the Additional Guaranty.


 


6.             Application
of Payments.  All
payments made hereunder shall be applied first to late charges or other sums
owing to the Holder, next to accrued interest, and then to principal.


 


7.             Prepayment.         The Borrower may prepay
the unpaid Principal Sum in whole or in part, at any time or from time to time,
without premium or penalty.


 


8.             Default.  If default be made in the payment of the
whole or any part of the debt evidenced hereby beyond any applicable notice and
cure period, or if an Event of Default (as defined in the Deed of Trust) be
made in the performance of any of the terms, agreements, covenants, or
conditions contained herein or contained in the Guaranty, Additional Guaranty
or in any Loan Document, then, in any of these events, the entire unpaid
balance of the Principal Sum due hereunder, plus all accrued interest, together
with all other sums evidenced hereby or secured by the Guaranty and/or
Additional Guaranty, shall, at the option of the holder hereof, at once become
and be due and payable, without notice to Borrower or any other person.


 


9.             Default
Rate of Interest.  On
default for ten (10) days after written notice to Borrower in the payment of
any installment of principal or interest, or either (provided that Borrower
shall not be entitled to more than two notices of monetary default in any
twelve month period), the entire unpaid principal balance shall bear interest
thereafter at the Default Rate. 
Interest at the Default Rate shall be payable with the payment of the
overdue amount, and otherwise shall be compounded on the first day of each and
every calendar month until paid in full. 
Such interest calculation shall be made on the basis of a 365 day year.


 


10.           Late Charge.  Borrower covenants and agrees that if any
sum required hereunder or under the Deed of Trust should not be received by the
holder hereof within ten (10) days from its due date, a late charge of five
percent (5%) of such overdue payment, including principal and interest, may (in
addition to any other remedies provided for hereunder) be charged for the
purpose of defraying expenses incident to handling such delinquent payments.


 


11.           Payment
of Costs.  If, after any
default hereunder or under the Deed of Trust, the Guaranty or the Additional
Guaranty which continues beyond any applicable notice and cure period, the
Holder retains an attorney with respect to any enforcement action which the
Holder may be entitled to take, including but not limited to, any suit or
action, which is instituted to collect any or all of the Principal Sum, any
interest accrued thereon or any other sum falling due under the provisions of
this Note, or if this Note is placed in the hands of an attorney for
collection, the Borrower hereby agrees to pay all reasonable costs thereby
incurred by the Holder, including reasonable


 


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attorneys’ fees, all of which shall be added to and become part of the
debt evidenced hereby.


 


12.           Confessed Judgment.
Upon the occurrence of a default in the payment of the whole or any part of the
debt evidenced hereby beyond any applicable notice and cure period, or if an
Event of Default (as defined in the Deed of Trust) be made in the performance
of any of the terms, agreements, covenants, or conditions contained herein or
contained in the Additional Guaranty, the Deed of Trust or in any Loan
Document, Borrower authorizes and empowers any attorney or any clerk of any
court of record in the United States of America to appear on behalf of Borrower
in any court having jurisdiction, in one or more proceedings, or before any
clerk thereof or other court official, and TO CONFESS JUDGMENT AGAINST BORROWER, WITHOUT PRIOR
NOTICE OR OPPORTUNITY OF BORROWER FOR PRIOR HEARING, in favor of
Lender or the Holder for and in the amount of the unpaid Principal Sum, all
interest accrued and unpaid thereon, all other amounts due and payable by
Borrower to Lender or the Holder under the terms of this Note, court costs,
expenses, and attorneys’ fees of five percent (5%) of the total amount then due
hereunder.  Notwithstanding the Lender’s
right to the attorneys’ fees described above in connection with any confession
of judgment proceeding, the Lender may only collect such actual reasonable
attorneys’ fees and expenses that are incurred by its counsel in connection
therewith, and upon payment of the amount of the judgment, including such
actual reasonable attorneys’ fees and expenses, the judgment shall be
considered satisfied.  Borrower waives
and releases, to the extent permitted by applicable law, the benefit of any and
every statute, ordinance, rule of court and all errors and all rights of
exemption, appeal, stay of execution, inquisition, other relief from the
enforcement or immediate enforcement of a judgment or related proceedings on a
judgment, and other rights to which Borrower may otherwise be entitled under
the laws of the United States of America or of any state or possession of the
United States of America now in force or which may hereafter be enacted.  The authority and power to appear for and
enter judgment against Borrower shall not be exhausted by one or more exercises
thereof, or by any imperfect exercise thereof, and shall not be extinguished by
any judgment entered pursuant thereto. 
Such authority and power may be exercised on one or more occasions, from
time to time, in the same or different jurisdictions as often as Lender or the
Holder shall deem necessary or advisable, for all of which this Note shall be
sufficient authority.


 


13.           Commercial
Loan.  Borrower
stipulates and warrants that (a) the loan evidenced hereby is a “commercial
loan” within the meaning of Section 12-101(c) of the Commercial Law Article of
the Annotated Code of Maryland, and (b) all loan proceeds will be used for such
commercial loan purpose.


 


14.           Severability.  If any provision (or any part of any
provision) contained in this Note shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision (or remaining part of the
affected provision) of this Note, but this Note shall be construed as if such
invalid, illegal or unenforceable provision (or part


 


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thereof) had never been contained herein, but only to the extent it is
invalid, illegal, or unenforceable.


 


15.           Governing
Law; Jurisdiction; Service of Process.  Borrower hereby acknowledges, consents and agrees (a) that the
provisions of this Note and the rights of all parties mentioned herein shall be
governed by Maryland law and interpreted and construed in accordance with such
laws (excluding Maryland conflict of laws), and (b) that the United States
District Court for the Northern District of Maryland, or any Maryland court of
competent jurisdiction, shall have jurisdiction in any proceeding instituted to
enforce this Note, and any objections to venue are hereby waived.  Borrower hereby consents to process being
served in any suit, action, or proceeding instituted in connection with this
Note by (a) the mailing of a copy thereof by certified mail, postage prepaid,
return receipt requested, to it at its address designated herein and (b)
serving a copy thereof upon John H. Gurley, Esquire, the agent hereby
designated and appointed by Borrower as Borrower’s agent for service of
process. Borrower irrevocably agrees that such service shall be deemed in every
respect to be effective service of process in any such suit, action, or
proceeding. Nothing in this Note shall affect the right of Lender to serve
process in any manner otherwise permitted by law and nothing in this Note will
limit the right of Lender otherwise to bring proceedings against Borrower in
the courts of any other appropriate jurisdiction or jurisdictions.


 


16.           Time of
the Essence.  The
Borrower agrees that time is strictly of the essence hereof.


 


17.           Extensions.  The Maturity Date and/or any other date by
which payment is required to be made hereunder may be extended by the Holder
from time to time in its sole discretion, without in any way altering or
impairing the Borrower’s liability hereunder.


 


18.           Estoppel
Certificates.  The
Borrower agrees to furnish to the Holder at any time and from time to time,
within fifteen (15) days after written request therefor, a written estoppel
certificate, duly executed and acknowledged, setting forth the amount then due
under this Note, and whether any claim, offset or defense then exists
hereunder.


 


19.           Remedies
Cumulative.  Each right,
power, and remedy of Lender as provided for in this Note or any of the other
Loan Documents, or now or hereafter existing under any applicable law or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy provided for in this Note or any of the other Loan
Documents or now or hereafter existing under any applicable law.  The exercise or beginning of the exercise by
Lender of any one or more of such rights, powers, or remedies shall not
preclude the simultaneous or later exercise by Lender of any or all such other
rights, powers or remedies.  No failure
or delay by Lender to insist on the strict performance of any term, condition,
covenant or agreement of this Note or any of the other Loan Documents, or to
exercise any right, power or


 


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remedy consequent on a breach thereof, shall constitute a waiver of any
such term, condition, covenant, or agreement or of any such breach, or preclude
Lender from exercising any such right, power or remedy at a later time or
times.  No provision hereof may be
waived or modified orally, but all such waivers or modifications shall be in
writing, expressly waiving or modifying such provision and signed by the party
against whom enforcement of any waiver or modification is sought.


 


20.           Assignability.  This Note may be assigned by the Lender or
any subsequent Holder at any time and from time to time, and shall inure to the
benefit of and shall be enforceable by the Lender and its successors and assigns
and any other person to whom the Lender may grant an interest in the Borrower’s
obligations to the Lender, and shall be binding and enforceable against the
Borrower and the Borrower’s successors and assigns.


 


21.           Waiver of
Jury Trial.  BORROWER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND
ASSIGNS, WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY
JURY OF ANY AND ALL CLAIMS ARISING UNDER THIS NOTE, THE DEED OF TRUST, OR ANY
OTHER DOCUMENTS AND AGREEMENTS EXECUTED IN CONNECTION, DIRECTLY OR INDIRECTLY,
WITH THIS LOAN TRANSACTION, AND ANY AND ALL CLAIMS ARISING UNDER COMMON LAW OR
UNDER ANY STATUTE OF ANY STATE OR THE UNITED STATES OF AMERICA, WHETHER ANY
SUCH CLAIMS BE NOW EXISTING OR HEREAFTER ARISING, NOW KNOWN OR UNKNOWN.  IN MAKING THIS WAIVER BORROWER ACKNOWLEDGES
AND AGREES THAT ANY AND ALL CLAIMS MADE BY THE HOLDER OF THIS NOTE AGAINST THE
BORROWER AND ALL CLAIMS MADE BY BORROWER AGAINST THE HOLDER OF THIS NOTE SHALL
BE HEARD BY A JUDGE OF A COURT OF PROPER JURISDICTION AND SHALL NOT BE HEARD BY
A JURY.  THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY THE BORROWER, AND THE BORROWER HEREBY REPRESENTS AND
WARRANTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT.  THE BORROWER
FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.


 


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Signature
Appears on Next Page


 


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IN WITNESS WHEREOF,
Borrower has executed this Deed of Trust Note on the day and year first above
written, intending it to be a sealed instrument.


 


	
  WITNESS:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CORPORATE
  OFFICE PROPERTIES,

  
	
   

  	
   

  	
  L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Corporate
  Office Properties Trust,

  
	
   

  	
   

  	
   

  	
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Stephanie L.
  Shack

  	
   

  	
   

  	
  By:

  	
  /s/ Roger A.
  Waesche, Jr.

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Roger A. Waesche, Jr.

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
									



 


	
  STATE
  OF MARYLAND

  	
  )

  	
   

  
	
   

  	
  )

  	
  TO
  WIT:

  
	
  CITY/COUNTY
  OF

  	
  )

  	
   

  



 


I HEREBY CERTIFY that on November 14, 2003,
before me, a Notary Public of the State of Maryland, personally appeared Roger
A. Waesche, Jr., who acknowledged himself/herself to be the Sr. VP of Corporate
Office Properties Trust, a Maryland corporation, general partner of Corporate Office Properties, L.P., a
Delaware limited partnership, and that he/she as such officer, being authorized
so to do, executed the foregoing instrument on behalf of the corporation acting
in its capacity as general partner of the limited partnership.


 


WITNESS my hand and Notarial Seal.


 


	
   

  	
   

  	
  /s/ Robert N. Cantor

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
  My Commission
  Expires: 11/1/04

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [SEAL]

  



 


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