Document:

Exhibit
10.7.2

 

EMPLOYMENT
AGREEMENT

ROGER A. WAESCHE, JR.

 

This Employment Agreement (this “Agreement”), is made
and entered into as of the 12th day of 
September, 2002, by and between Corporate Office Properties L.P., a
Maryland limited liability company (the “Employer”), and Corporate Office
Properties Trust, a Maryland business trust (“COPT”), and Roger A. Waesche, Jr.
(the “Executive”).

 

RECITALS

 

A.                                   The
Executive and former Employer Corporate Office Management Inc. (COMI) and
current employer Corporate Office Properties, L.P. (COPLP) executed an
agreement effective as of December 16, 1999 providing for the employment of the
Executive by the former/current Employer upon the terms and conditions therein
stated (the “Prior Agreement”).

 

B.                                     The
Employer (as referenced in the first paragraph) wishes to terminate the Prior
Agreement and to renegotiate a new Agreement to assure itself of the continued
services of the Executive for the period provided in this Agreement and the
Executive is willing to continue in the employ of the Employer on a full-time
basis for said period, and upon the other terms and conditions hereinafter
provided.

 

C.                                     The
Employer recognizes that circumstances may arise in which a change of control
of the Employer or COPT, through acquisition or otherwise, may occur, thereby
causing uncertainty of employment without regard to the competence or past
contributions of the Executive, and that such uncertainty may result in the
loss of valuable services of the Executive. Accordingly, the Employer and the
Executive wish to provide reasonable security to the Executive against changes
in the employment relationship in the event of any such change of control.

 

D.                                    COPT
has agreed to become a party to this Agreement for the purpose of assuming the
liabilities, obligations and duties of the Employer to the extent provided
herein.

 

E.                                      It
is the intention of the Employer and the Executive that, notwithstanding the
date of execution hereof, the Prior Agreement shall be terminated and this
Agreement shall become effective as of July 1, 2002.

 

NOW, THEREFORE, in consideration of the premises and
of the covenants and agreements hereinafter contained, it is covenanted and
agreed by and between the parties hereto as follows:

 

AGREEMENTS

 

1.                                       TERMINATION
OF PRIOR AGREEMENT.  The Prior Agreement
is hereby terminated and this Agreement shall become effective as of July 1,
2002 (the “Effective Date”).

 

2.                                       POSITION
AND DUTIES.  As of the Effective Date,
the Employer hereby employs the Executive as Senior Vice-President and Chief
Financial Officer of the Employer, or in such other capacity as shall be
mutually agreed between the Employer and the Executive.

 

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During the period of the Executive’s employment hereunder, the Executive
shall devote his best efforts and full business time, energy, skills and
attention to the business and affairs of the Employer.  The Executive’s duties and authority shall
consist of and include all duties and authority customarily performed and held
by persons holding equivalent positions with business organizations similar in
nature and size to the Employer, as such duties and authority are reasonably
defined, modified and delegated from time to time by the Board of Trustees of
the Employer (the “Board”). The Executive shall have the powers necessary to
perform the duties assigned to him, and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accouterments as shall be reasonably necessary and appropriate in the light of
such assigned duties.

 

3.                                       COMPENSATION.  As compensation for the services to be
provided by the Executive hereunder, the Executive shall receive the following
compensation and other benefits:

 

(a)                                  BASE
SALARY.  The Executive shall receive an
aggregate annual minimum “Base Salary” at the annualized rate of Two Hundred
Sixty Five Thousand Dollars ($265,000.00) per annum, payable in periodic
installments in accordance with the regular payroll practices of the Employer.
Such Base Salary shall be subject to review annually by the Board and
Compensation Committee of COPT (“Compensation Committee”) during the term
hereof, in accordance with the established compensation policies of the
Compensation Committee.

 

(b)                                 PERFORMANCE
BONUS.  The Executive shall be entitled
to an annual cash “Performance Bonus,” payable within ninety (90) days after
the end of the fiscal year of the Employer the amount (if any) of which shall
be determined by the Board based upon the recommendation of the Compensation Committee.

 

(c)                                  STOCK
OPTION/RESTRICTED SHARES.  Executive
shall be entitled to stock options and/or restricted shares as determined by
the Compensation Committee and the Board.

 

(d)                                 BENEFITS.  The Executive shall be entitled to all
perquisites extended to similarly situated executives, as such are stated in
the Employer’s Executive Perquisite Policy (the “Perquisite Policy”)
promulgated for the Board or the Compensation Committee, and which Perquisite
Policy is hereby incorporated by reference, as amended by the Board or the
Compensation Committee from time to time. In addition, the Executive shall be
entitled to participate in all plans and benefits generally, from time to time,
accorded to employees of the Employer (“Benefit Plans”), all as determined by the
Board from time to time based upon the input of the Compensation Committee.
Executive shall also receive additional benefits as follows:

 

(i)                                     a
$1,000.00 dollars ($1,000.00) per month automobile allowance; and

 

(ii)                                  five
thousand dollars ($5,000.00) per year for personal financial planning and
personal income tax preparation.

 

(e)                                  WITHHOLDING.  The Employer shall be entitled to withhold,
from amounts payable to the Executive hereunder, any federal, state or local
withholding or other

 

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taxes or charges which it is from time to time required to withhold.
The Employer shall be entitled to rely upon the opinion of its independent
accountants, with regard to any question concerning the amount or requirement of
any such withholding.

 

4.                                       TERM
AND TERMINATION.

 

(a)                                  BASIC
TERM.  The Executive’s employment
hereunder shall be for a six (6) year basic term (the “Basic Term”), commencing
as of the Effective Date. If either the Executive or the Employer notifies the
Compensation Committee in writing at least six (6) months but not more than one
(1) year prior to the expiration of the Basic Term that the Agreement is set to
terminate at the end of the Basic Term, the Agreement shall automatically be
extended after the Basic Term for a continuous, self-renewing one (1) year term
without further action of the parties unless, within ninety (90) days after
receiving such notice, the Compensation Committee notifies the parties in
writing that this Agreement shall not be extended beyond the end of the Basic
Term.  If this Agreement is extended
beyond the Basic Term, either party may at any time thereafter give written
notice to the other party that the term of this Agreement will expire on the
date that is one (1) year following the date of such written notice.  Subject to the foregoing and other
applicable terms of this Agreement, the Executive’s employment may be
terminated by either party, with or without cause, effective as of the first
(1st) business day after written notice to that effect is delivered to the
other party.

 

(b)                                 POST-TERMINATION
SALARY CONTINUATION. After the expiration of the Basic Term, or after the
expiration of any renewal term, the Employer shall continue payment of the
Executive’s Base Salary in periodic installments corresponding to the regular
payroll periods of the Employer for a period of one year from the date of the
expiration of the term of this Agreement.

 

(c)                                  PREMATURE
TERMINATION.

 

(i)                                     In
the event of the termination of the employment of the Executive under this
Agreement by the Employer for any reason other than expiration of the Basic
Term hereof or any renewal term, termination upon disability in accordance with
the provisions of paragraph (g) of this Section 4, or a “for-cause” termination
in accordance with the provisions of paragraph (e) of this Section 4, then
notwithstanding any actual or allegedly available alternative employment or
other mitigation of damages by or available to the Executive, the Executive
shall be entitled to a “Premature Termination Payment” equal to the sum
of:  (w) three (3) times the rate of
annualized Base Salary then payable to the Executive, plus (x) three (3) times
the average of the three (3) most recent annual Performance Bonuses that the
Executive received. In the event of a termination governed by this subparagraph
(c) of Section 4, the Employer shall also: (y) allow a period of eighteen (18)
months following the termination of employment for the Executive (but in no
event beyond the expiration of any option term or period specified in the
option agreement with the Executive) to exercise any options granted under any
stock option or share incentive plan established by Employer or COPT (“Stock
Plan”); and (z) continue for the Executive (provided that such items are not
available to him by virtue of other employment secured after termination) the

 

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perquisites, plans and
benefits provided under the Employer’s Perquisite Policy and Benefit Plans as
of and after the date of termination, [all items in (z) being collectively
referred to as “Post-Termination Perquisites and Benefits”], for the
lesser of the number of full months the Executive has theretofore been employed
by the Employer (but not less than twelve (12) months) or twenty four (24)
months following such termination. The payments and benefits provided under
(w), (x), (y) and (z) above by the Employer shall not be offset against or
diminish any other compensation or benefits accrued as of the date of termination.

 

(ii)                                  Notwithstanding
the vesting schedule otherwise applicable, in the event of a termination
governed by this subparagraph (c) of Section 4, the Executive shall be fully
vested in all of the Executive’s options and restricted shares under any Stock Plan
or similar program.

 

(iii)                               Any
cash payments to the Executive under this Section 4(c) will be made monthly
over twelve (12) months, unless otherwise mutually agreed by the parties to
minimize the Executives’ tax burden in any year.

 

(d)                                 CONSTRUCTIVE
TERMINATION. If at any time during the term of this Agreement, except in
connection with a “for-cause” termination pursuant to paragraph (e) of this
Section 4, the Executive is Constructively Discharged (as hereinafter defined),
then the Executive shall have the right, by written notice to the Employer
given within one hundred and twenty (120) days of such Constructive Discharge,
to terminate his services hereunder, effective as of thirty (30) days after
such notice, and the Executive shall have no rights or obligations under this
Agreement other than as provided in Sections 5 and 6 hereof.  The Executive shall in such event be
entitled to a termination payment as well as all of the Post-Termination
Perquisites and Benefits, as if such termination of his employment had been
effectuated pursuant to paragraph (c) of this Section 4.

 

For purposes of this Agreement, the Executive shall be
deemed to have been “Constructively Discharged” upon the occurrence of any one
of the following events:

 

(i)                                     The
Executive is not re-elected to, or is removed from, the position with the
Employer as set forth in Section 2 hereof, other than as a result of the
Executive’s election or appointment to positions of equal or superior scope and
responsibility; or

 

(ii)                                  The
Executive shall fail to be vested by the Employer with the powers, authority
and support services normally attendant to any of said offices; or

 

(iii)                               The
Employer shall notify the Executive that the employment of the Executive will
be terminated or materially modified in the future or that the Executive will
be Constructively Discharged in the future; or

 

(iv)                              The
Employer changes the primary employment location of the Executive to a place
that is more than fifty (50) miles from the primary

 

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employment location, 8815 Centre Park Drive, Columbia,
Maryland 21045, as of the Effective Date of this Agreement; or

 

(v)                                 The
Employer otherwise commits a material breach of its obligations under this
Agreement.

 

(e)                                  TERMINATION
FOR CAUSE. The employment of the Executive and this Agreement may be terminated
“for-cause” as hereinafter defined. Termination “for-cause” shall mean the
termination of employment on the basis or as a result of (i) a material
violation by the Executive of any applicable material law or regulation
respecting the business of the Employer; (ii) the Executive being found guilty
of, or being publicly associated with, to the Employer’s detriment, a felony or
an act of dishonesty in connection with the performance of his duties as an
officer of the Employer, or the Executive’s commission of an act which in the
opinion of a reasonable third party disqualifies the Executive from serving as
an officer or director of the Employer; or (iii) the willful or negligent failure
of the Executive to perform his duties hereunder in any material respect. The
Executive shall be entitled to at least thirty (30) days’ prior written notice
of the Employer’s intention to terminate his employment for any cause (except
the Executive’s death), specifying the grounds for such termination, affording
the Executive a reasonable opportunity to cure any conduct or act (if curable)
alleged as grounds for such termination, and a reasonable opportunity to
present to the Board his position regarding any dispute relating to the
existence of such cause.  In the event
the Employer terminates the Executive’s employment “for cause” the Executive
shall be entitled only to the Base Salary through the date of the termination
of the Executive’s employment “for cause” and any other additional benefit in
accordance with applicable plans, programs or agreements with the Employer.

 

(f)                                    TERMINATION
UPON DEATH. In the event payments are due and owing under this Agreement at the
death of the Executive, such payments shall be made to such beneficiary,
designee or fiduciary as Executive may have designated in writing, or failing
such designation, to the executor or administrator of his estate, in full
settlement and satisfaction of all claims and demands on behalf of the
Executive. Such payments shall be in addition to any other death benefits of
the Employer made available for the benefit of the Executive, and in full
settlement and satisfaction of all payments provided for in this Agreement.  Notwithstanding the vesting schedule
otherwise applicable in the event of a termination governed by this
subparagraph (f) of Section 4, all of options and restricted shares granted to
the Executive under any Stock Plan or similar program shall be fully vested.

 

(g)                                 TERMINATION
UPON DISABILITY. The Employer may terminate the Executive’s employment after
the Executive is determined to be disabled under the long-term disability
program of the Employer then covering the Executive or by a physician engaged
by the Employer and reasonably approved by the Executive. In the event of a
dispute regarding the Executive’s “disability,” such dispute shall be resolved
through arbitration as provided in paragraph (d) of Section 11 hereof, except
that the arbitrator appointed by the American Arbitration Association shall be
a duly licensed medical doctor. The Executive shall be entitled to the
compensation and benefits provided for under this Agreement during any period
of incapacitation occurring during the term of this Agreement, and occurring
prior to the establishment of the Executive’s “disability” during which the
Executive is unable to work due to

 

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a physical or mental infirmity. Notwithstanding anything contained in
this Agreement to the contrary, until the date specified in a notice of
termination relating to the Executive’s disability, the Executive shall be
entitled to return to his positions with the Employer as set forth in this
Agreement, in which event no disability of the Executive will be deemed to have
occurred.  Notwithstanding the vesting
schedule otherwise applicable, in the event of a termination governed by this
subparagraph (g) of Section 4, the Executive shall be fully vested in all of the
Executive’s options and restricted shares under any Stock Plan or similar
program.

 

(h)                                 TERMINATION
UPON CHANGE OF CONTROL.

 

(i)                                     In
the event of a Change in Control (as defined below) and the termination of the
Executive’s employment by Executive or by the Employer under either 1 or 2
below, the Executive shall be entitled to a Termination Payment equal to the
sum of: (w) three (3) times the rate of annualized Base Salary then payable to
the Executive, plus (x) three (3) times the average of the three (3) most
recent annual Performance Bonuses that the Executive received.  The Employer shall also continue for the
Executive the Post-Termination Perquisites and Benefits for the same period and
to the same extent as provided in paragraph (c) of this Section 4; provided,
however, that notwithstanding the vesting schedule otherwise applicable,
immediately following a Change in Control (whether or not the Executive’s
employment is terminated), the Executive shall be fully vested in all of
Executive’s options and restricted shares outstanding under any Stock Plan or
similar program and shall be allowed a period of eighteen (18) months following
the termination of employment of the Executive for the Executive’s exercise of
such options. The following shall constitute termination under this paragraph:

 

1 .                                    The
Executive terminates his employment under this Agreement pursuant to a written
notice to that effect delivered to the Board within six (6) months after the
occurrence of the Change in Control.

 

2.                                       Executive’s
employment is terminated, including Constructively Discharged, by the Employer
or its successor either in contemplation of or after Change in Control, other
than on a for-cause basis.

 

(ii)                                  For
purposes of this paragraph, the term “Change in Control” shall mean the
following occurring after the date of this Agreement:

 

1.                                       The
consummation of the acquisition by any person, (as such term is defined in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of fifty percent (50%) or more of the combined voting power
embodied in the then outstanding voting securities of COPT or the Employer; or

 

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2.                                       Approval
by the stockholders of COPT or the Employer of: (1) a merger or consolidation
of COPT or the Employer, if the stockholders of COPT or the Employer
immediately before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the entity resulting from such merger or consolidation in substantially the
same proportion as was represented by their ownership of the combined voting power
of the voting securities of COPT or the Employer outstanding immediately before
such merger or consolidation; or (2) a complete or substantial liquidation or
dissolution, or an agreement for the sale or other disposition, of all or
substantially all of the assets of COPT or the Employer.

 

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because fifty percent (50%) or more of the
combined voting then outstanding securities is acquired by: (1) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained for employees of the entity; or (2) any corporation or other entity
which, immediately prior to such acquisition, is owned directly or indirectly
by the stockholders of COPT or the Employer in the same proportion as their
ownership of stock in COPT or the Employer immediately prior to such
acquisition.

 

(iii)                               If
it is determined, in the opinion of the Employer’s independent accountants, in
consultation with the Employer’s independent counsel, that any amount payable
to the Executive by the Employer under this Agreement, or any other plan or
agreement under which the Executive participates or is a party, would
constitute an “Excess Parachute Payment” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”) and be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), the
Employer shall pay to the Executive a “grossing-up” amount equal to the amount
of such Excise Tax and all federal and state income or other taxes with respect
to payment of the amount of such Excise Tax, including all such taxes with
respect to any such grossing-up amount. If at a later date, the Internal
Revenue Service assesses a deficiency against the Executive for the Excise Tax
which is greater than that which was determined at the time such amounts were
paid, the Employer shall pay to the Executive the amount of such unreimbursed
Excise Tax plus any interest, penalties and professional fees or expenses,
incurred by the Executive as a result of such assessment, including all such
taxes with respect to any such additional amount. The highest marginal tax rate
applicable to individuals at the time of payment of such amounts will be used
for purposes of determining the federal and state income and other taxes with
respect thereto. The Employer shall withhold from any amounts paid under this
Agreement the amount of any Excise Tax or other federal, state or local taxes
then required to be withheld. Computations of the amount of any grossing-up
supplemental compensation paid under this subparagraph shall be made by the
Employer’s independent accountants, in consultation with the Employer’s
independent legal counsel. The Employer shall pay all accountant and legal
counsel fees and expenses.

 

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(i)                                     VOLUNTARY
TERMINATION.  In the event of a
termination of employment by the Executive on his own initiative, other than a
termination due to death, disability or a Constructive Discharge, the Executive
shall have the same entitlements as provided in paragraph (e) of this Section 4
for a termination “for-cause.”

 

5.                                       CONFIDENTIALITY
AND LOYALTY. The Executive acknowledges that heretofore or hereafter during the
course of his employment he has produced and received, and may hereafter
produce, receive and otherwise have access to various materials, records, data,
trade secrets and information not generally available to the public
(collectively, “Confidential Information”) regarding the Employer and its
subsidiaries and affiliates. Accordingly, during and subsequent to termination
of this Agreement, the Executive shall hold in confidence and not directly or
indirectly disclose, use, copy or make lists of any such Confidential Information,
except to the extent that such information is or thereafter becomes lawfully
available from public sources, or such disclosure is authorized in writing by
the Employer, required by law or by any competent administrative agency or
judicial authority, or otherwise as reasonably necessary or appropriate in
connection with the performance by the Executive of his duties hereunder. All
records, files, documents, computer diskettes, computer programs and other
computer-generated material, as well as all other materials or copies thereof
relating to the Employer’s business, which the Executive shall prepare or use,
shall be and remain the sole property of the Employer, shall not be removed
from the Employer’s premises without its written consent, and shall be promptly
returned to the Employer upon termination of the Executive’s employment
hereunder. The Executive agrees to abide by the Employer’s reasonable policies,
as in effect from time to time, respecting confidentiality and the avoidance of
interests conflicting with those of the Employer.

 

6.                                       NON-COMPETITION COVENANT.

 

(a)                                  RESTRICTIVE
COVENANT. The Employer and the Executive have jointly reviewed the tenant
lists, property submittals, logs, broker lists, and operations of the Employer,
and have agreed that as an essential ingredient of and in consideration of this
Agreement and the payment of the amounts described in Sections 3 and 4 hereof,
the Executive hereby agrees that, except with the express prior written consent
of the Employer, for a period equal to either (i) twelve (12) months if the
Executive’s employment is terminated as a result of the expiration of the term
of this Agreement or (ii) twenty-four (24) months after the termination of the
Executive’s employment with the Employer for any other reason, (the
“Restrictive Period”), he will not directly or indirectly compete with the
business of the Employer, including, but not by way of limitation, by directly
or indirectly owning, managing, operating, controlling, financing, or by
directly or indirectly serving as an employee, officer or director of or
consultant to, or by soliciting or inducing, or attempting to solicit or
induce, any employee or agent of Employer to terminate employment with Employer
and become employed by any person, firm, partnership, corporation, trust or
other entity which owns or operates a business similar to that of the Employer
(the “Restrictive Covenant”). For purposes of this subparagraph (a), a business
shall be considered “similar” to that of the Employer if it is engaged in the
acquisition, development, ownership, operation, management or leasing of
suburban office property in any geographic market or submarket in which the
Employer owns more than 750,000 s.f. of properties either as of the date hereof
or as of the date of termination of the Executive’s employment. If the
Executive violates the Restrictive Covenant and the Employer brings legal

8

 

action for injunctive or other relief, the Employer shall not, as a result
of the time involved in obtaining such relief, be deprived of the benefit of
the full period
of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be
deemed to have the duration specified in this paragraph (a) computed from the
date the relief is granted but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
Restrictive Covenant by the Executive. In the event that a successor of the
Employer assumes and agrees to perform this Agreement or otherwise acquires the
Employer, this Restrictive Covenant shall continue to apply only to the primary
service area of the Employer as it existed immediately before such assumption
or acquisition and shall not apply to any of the successor’s other offices or
markets. The foregoing Restrictive Covenant shall not prohibit the Executive
from owning, directly or indirectly, capital stock or similar securities which
are listed on a securities exchange or quoted on the National Association of
Securities Dealers Automated Quotation System which do not represent more than
five percent (5%) of the outstanding capital stock of any corporation.

 

(b)                                 REMEDIES
FOR BREACH OF RESTRICTIVE COVENANT. The Executive acknowledges that the
restrictions contained in Sections 5 and 6 of this Agreement are reasonable and
necessary for the protection of the legitimate proprietary business interests
of the Employer; that any violation of these restrictions would cause
substantial injury to the Employer and such interests; that the Employer would
not have entered into this Agreement with the Executive without receiving the
additional consideration offered by the Executive in binding himself to these
restrictions; and that such restrictions were a material inducement to the
Employer to enter into this Agreement. In the event of any violation or
threatened violation of these restrictions, the Employer shall be relieved of
any further obligations under this Agreement, shall be entitled to any rights,
remedies or damages available at law, in equity or otherwise under this
Agreement, and shall be entitled to preliminary and temporary injunctive relief
granted by a court of competent jurisdiction to prevent or restrain any such
violation by the Executive and any and all persons directly or indirectly
acting for or with him, as the case may be, while awaiting the decision of the
arbitrator selected in accordance with paragraph (d) of Section 11 of this
Agreement, which decision, if rendered adverse to the Executive, may include
permanent injunctive relief to be granted by the court.

 

7.                                       INTERCORPORATE
TRANSFERS. If the Executive shall be voluntarily transferred to an affiliate of
the Employer, such transfer shall not be deemed to terminate or modify this
Agreement, and the employing corporation to which the Executive shall have been
transferred shall, for all purposes of this Agreement, be construed as standing
in the same place and stead as the Employer as of the date of such transfer.
For purposes hereof, an affiliate of the Employer shall mean any corporation or
other entity directly or indirectly controlling, controlled by, or under common
control with the Employer. The Employer shall be secondarily liable to the
Executive for the obligations hereunder in the event the affiliate of the
Employer cannot or refuses to honor such obligations. For all relevant purposes
hereof, the tenure of the Executive shall be deemed to include the aggregate
term of his employment by the Employer or its affiliate.

 

8.                                       INTEREST
IN ASSETS. Neither the Executive nor his estate shall acquire hereunder any
rights in funds or assets of the Employer, otherwise than by and through the
actual payment of amounts payable hereunder; nor shall the Executive or his
estate have any power to transfer, assign (except into a trust for purposes of
estate planning), anticipate, hypothecate or

 

9

 

otherwise encumber in advance any of said payments; nor shall any of
such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise of the Executive.

 

9.                                       INDEMNIFICATION.

 

(a)                                  The
Employer shall provide the Executive (including his heirs, personal
representatives, executors and administrators), during the term of this
Agreement and thereafter throughout all applicable limitations periods, with
coverage under the Employer’s then-current directors’ and officers’ liability
insurance policy, at the Employer’s expense.

 

(b)                                 In
addition to the insurance coverage provided for in paragraph (a) of this
Section 9, the Employer shall defend, hold harmless and indemnify the Executive
(and his heirs, personal representatives, executors and administrators) to the
fullest extent permitted under applicable law, and subject to the requirements,
limitations and specifications set forth in the Bylaws and other organizational
documents of the Employer, against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been an officer
of the Employer (whether or not he continues to be an officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys’ fees and
the cost of reasonable settlements.

 

(c)                                  In
the event the Executive becomes a party, or is threatened to be made a party,
to any action, suit or proceeding for which the Employer has agreed to provide
insurance coverage or indemnification under this Section 9, the Employer shall,
to the full extent permitted under applicable law, advance all expenses
(including the reasonable attorneys’ fees of the attorneys selected by Employer
and approved by Executive for the representation of the Executive), judgments,
fines and amounts paid in settlement (collectively “Expenses”) incurred by the
Executive in connection with the investigation, defense, settlement, or appeal
of any threatened, pending or completed action, suit or proceeding, subject to
receipt by the Employer of a written undertaking from the Executive
covenanting: (i) to reimburse the Employer for all Expenses actually paid by
the Employer to or on behalf of the Executive in the event it shall be
ultimately determined that the Executive is not entitled to indemnification by
the Employer for such Expenses; and (ii) to assign to the Employer all rights
of the Executive to insurance proceeds, under any policy of directors’ and
officers’ liability insurance or otherwise, to the extent of the amount of
Expenses actually paid by the Employer to or on behalf of the Executive.

 

10.                                 ASSUMPTION
BY COPT.  By its execution of this
Agreement, COPT agrees to be secondarily liable to the Executive, and shall
assume the liabilities, obligations and duties of the Employer as contained in
this Agreement in the event the Employer cannot or refuses to honor such
obligations.

 

11.                                 GENERAL
PROVISIONS.

 

(a)                                  SUCCESSORS;
ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of
the Executive, the Employer and his and its respective personal

 

10

 

representatives, successors and assigns, and any successor or assign of
the Employer shall be deemed the “Employer” hereunder. The Employer shall
require any successor to all or substantially all of the business and/or assets
of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the
Employer would be required to perform if no such succession had taken
place.  No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or by operation of law.

 

(b)                                 ENTIRE
AGREEMENT; MODIFICATIONS. This Agreement constitutes the entire agreement
between the parties respecting the subject matter hereof, and supersedes all
prior negotiations, undertakings, agreements and arrangements with respect
thereto, whether written or oral. Except as otherwise explicitly provided
herein, this Agreement may not be amended or modified except by written
agreement signed by the Executive and the Employer.

 

(c)                                  ENFORCEMENT
AND GOVERNING LAW. The provisions of this Agreement shall be regarded as
divisible and separate; if any of said provisions should be declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remaining provisions shall not be affected thereby. This
Agreement shall be construed and the legal relations of the parties hereto
shall be determined in accordance with the laws of the State of Maryland as it
constitutes the situs of the corporation and the employment hereunder, without
reference to the law regarding conflicts of law.

 

(d)                                 ARBITRATION.
Except as provided in paragraph (b) of Section 6, any dispute or controversy
arising under or in connection with this Agreement or the Executive’s
employment by the Employer shall be settled exclusively by arbitration,
conducted by a single arbitrator sitting in Baltimore, MD in accordance with
the rules of the American Arbitration Association (the “AAA”) then in effect.
The arbitrator shall be selected by the parties from a list of eleven (11)
arbitrators provided by the AAA, provided that no arbitrator shall be related
to or affiliated with either of the parties. No later than ten (10) days after
the list of proposed arbitrators is received by the parties, the parties, or
their respective representatives, shall meet at a mutually convenient location
in Baltimore, Maryland, or telephonically. At that meeting, the party who
sought arbitration shall eliminate one (1) proposed arbitrator and then the
other party shall eliminate one (1) proposed arbitrator. The parties shall
continue to alternatively eliminate names from the list of proposed arbitrators
in this manner until each party has eliminated five (5) proposed arbitrators.
The remaining arbitrator shall arbitrate the dispute. Each party shall submit,
in writing, the specific requested action or decision it wishes to take, or
make, with respect to the matter in dispute, and the arbitrator shall be
obligated to choose one (1) party’s specific requested action or decision,
without being permitted to effectuate any compromise or “new” position;
provided, however, that the arbitrator is authorized to award amounts not in
dispute during the pendency of any dispute or controversy arising under or in
connection with this Agreement. The Employer shall bear the cost of all
counsel, experts or other representatives that are retained by both parties,
together with all costs of the arbitration proceeding, including, without
limitation, the fees, costs and expenses imposed or incurred by the arbitrator.
Judgment may be entered on the arbitrator’s award in any court having
jurisdiction; including, if applicable, entry of a permanent injunction under
paragraph (b) of Section 6.

 

11

 

(e)                                  PRESS
RELEASES AND PUBLIC DISCLOSURE. Any press release or other public communication
by either the Executive or the Employer with any other person concerning the
terms, conditions or circumstances of Executive’s employment, or the
termination of such employment, shall be subject to prior written approval of
both the Executive and the Employer, subject to the proviso that the Employer
shall be entitled to make requisite and appropriate public disclosure of the
terms of this Agreement, without the Executive’s consent or approval, as
required under applicable statutes, and the rules and regulations of the
Securities and Exchange Commission and the Stock Exchange on which the shares
of Employer may from time to time be listed.

 

(f)                                    WAIVER.
No waiver by either party at any time of any breach by the other party of, or
compliance with, any condition or provision of this Agreement to be performed
by the other party, shall be deemed a waiver of any similar or dissimilar
provisions or conditions at the same time or any prior or subsequent time.

 

(g)                                 NOTICES.
Notices given pursuant to this Agreement shall be in writing, and shall be
deemed given when received, and, if mailed, shall be mailed by United States
registered or certified mail, return receipt requested, postage prepaid.
Notices to the Employer shall be addressed to the principal headquarters of the
Employer, Attention: Chairman. Notices to the Executive shall be sent to the
address set forth below the Executive’s signature on this Agreement, or to such
other address as the party to be notified shall have given to the other.

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.

 

 

	
  “Employer” 

  	
  “Executive”

  
	
  Corporate Office Properties L.P., a

  Maryland limited liability corporation

  
	
   

  
	
  By:

  	
  /s/ Clay W. Hamlin, III

  	
   

  	
  /s/ Roger A. Waesche, Jr.

  
	
   

  	
  Clay W. Hamlin, III, CEO

  	
   

  	
  Roger A. Waesche, Jr.

  
	
   

  	
  8815 Centre Park Drive, Suite 400

  
	
   

  	
  Columbia, MD 21045

  
	
   

  
	
  Corporate Office Properties Trust, a Maryland

  business trust

  
	
   

  
	
  By:

  	
  /s/ Clay W. Hamlin, III

  	
   

  
	
   

  	
  Clay W. Hamlin, III, CEO

  	
   

  

 

12Exhibit
10.15.4

 

FIRST AMENDMENT TO

SECOND AMENDED AND RESTATED

SENIOR SECURED REVOLVING CREDIT AGREEMENT

 

This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR
SECURED REVOLVING CREDIT AGREEMENT (this “Amendment”), dated as of
July 23, 2002, is entered into by and among CORPORATE OFFICE PROPERTIES, L.P.,
a Delaware limited partnership (“Borrower”), CORPORATE OFFICE PROPERTIES TRUST,
a Maryland real estate investment trust (“COPT”), any Mortgaged Property Subsidiary
that is or may become a party to the Credit Agreement (together with Borrower
and COPT, the “Loan Parties”), DEUTSCHE BANK TRUST COMPANY AMERICAS (fka
Bankers Trust Company) and the other Lenders that are or may become a party to
the Credit Agreement (individually, a “Lender” and collectively, the “Lenders”)
and DEUTSCHE
BANK TRUST COMPANY AMERICAS (fka Bankers Trust Company) as agent for
the Lenders (in such capacity, “Agent”).

 

R E C I T A L S

 

A.                                    The
Loan Parties, the Lenders and Agent have entered into that certain Second
Amended and Restated Senior Secured Revolving Credit Agreement dated as of
March 8, 2002 (the “Credit Agreement”).  Initially capitalized terms not otherwise
defined in this Amendment shall have the respective definitions ascribed to
them in the Credit Agreement.

 

B.                                    By
entering into this Amendment, the Loan Parties, the Lenders and Agent desire to
amend the Credit Agreement as more particularly set forth herein.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of the
foregoing Recitals (which by this reference are incorporated herein) and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1.                                      Increase
in Letter of Credit Sublimit. 
Subsection 2.16.1(ii) of the Credit Agreement is amended and restated in
its entirety as follows:

 

“(ii)                            any
Letter of Credit, if after giving effect to such issuance, the Letter of Credit
Usage would exceed $10,000,000;”

 

2.                                      Representations
and Warranties.  Acknowledging that
each of the following representations and warranties is given to induce Agent
and the other Lenders to enter into this Amendment and the documents related
thereto, each of Loan Parties hereby represents and warrants to Agent and the
other Lenders that:

 

(a)          The
execution and delivery of this Amendment and the other documents related
thereto do not contravene, result in the breach of or constitute a default
under any deed of

1

 

trust, loan agreement, indenture or other contract or agreement to
which any Loan Party is a party or by which any Loan Party or any of their
respective properties may be bound (nor would such execution and delivery
constitute such a default with the passage of time or the giving of notice or
both) and does not violate or contravene any law, order, decree, rule,
regulation or restriction to which any Loan Party or any of the Mortgaged
Properties is subject;

 

(b)          This
Amendment and the other documents related thereto, if any, constitute the
legal, valid and binding obligations of Loan Parties that are parties thereto,
and are enforceable against such Loan Parties in accordance with their
respective terms;

 

(c)          The
respective execution and delivery of, and performance under, this Amendment and
the other documents related thereto are within the applicable Loan Parties’
respective power and authority without the joinder or consent of any other
party and have been duly authorized by all requisite action and are not in
contravention of law or their respective organizational documents;

 

(d)          There
exists no Event of Default or Potential Event of Default under the Loan
Documents and there are no offsets, claims or defenses with respect to any of
the Obligations, including the Guarantied Obligations under the COPT Guaranty;

 

(e)          Except
for those representations and warranties that are expressly limited to apply to
or as of a specific date, all the representations and warranties of the Loan
Parties under the Loan Documents and all the representations and warranties of
COPT under the COPT Guaranty are true and correct in all material respects on
the date hereof, all of which are hereby ratified and reaffirmed for all
purposes;

 

(f)            There
has been no amendment or supplement or change to the organizational and
governance documents of the Loan Parties that were delivered and certified to
Agent and the other Lenders at or subsequent to Closing Date, all of which
organizational and governance documents are in full force and effect on the
date hereof; and

 

(g)         As
of the date hereof, each of the Loan Parties is in legal existence and good
standing under the laws of the state of its respective formation or creation
and are duly authorized to conduct business in which their respective Mortgaged
Properties are located.

 

3.                                      Ratification;
Restatement.  Each of the Loan
Parties restates and remakes all of the covenants and agreements contained in
the Credit Agreement and other Loan Documents as of the date hereof, and
acknowledges and agrees that, except as modified herein, the Credit Agreement
has not been otherwise modified or amended and remains in full force and
effect.  The Security Documents are
hereby ratified and confirmed as valid, subsisting and continuing to secure the
Notes, the Loan Documents and any other Obligations, as modified by this Amendment
and all related documents.  Nothing
herein shall in any manner diminish, impair or extinguish the Notes, the
Security Documents, or any of the other Obligations.  The recitals set forth above are true, accurate and complete.

 

4.                                      Conditions
Precedent to Effectiveness.  This
Amendment shall not become effective, nor shall Agent and the other Lenders be
obligated hereunder, until each of the following conditions precedent in favor
of Agent and the other Lenders has been satisfied:

 

2

 

(a)          The
applicable Loan Parties shall have executed and delivered to Agent this
Amendment and all other documents to be executed in connection herewith
(including any amendments to or restatements of the Mortgages, Security Documents,
other Loan Documents or financing statements and fixture filings required by
Agent);

 

(b)          No
Event of Default or Potential Event of Default under the Loan Documents shall
exist and be continuing; and

 

(c)          Agent
shall have received from the Loan Parties all certificates and other evidence
and opinions of counsel as Agent shall in its sole and absolute discretion
require concerning, inter alia, the Loan Parties’ respective due power and
authority to enter into, deliver and perform their respective obligations under
this Amendment and all other documents executed in connection therewith.

 

5.                                      Miscellaneous.

 

(a)          Conflicts.  In the event of any conflict between the
terms and provisions of the Credit Agreement and this Amendment, the terms and
provisions of this Amendment shall control and govern.

 

(b)          Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be considered an original but all of
which, when taken together, shall constitute but one and the same instrument.

 

(c)          Further
Assurances.  Each of the Loan
Parties hereby agrees to execute and deliver to Agent, promptly upon request
from Agent, such other and further documents as may be reasonably necessary or
appropriate to consummate the transactions contemplated in this Amendment and
the other documents related thereto or to perfect the liens, security
interests, collateral assignments and financing statements as Agent may request
to more fully evidence the security and collateral contemplated in such documents.

 

[Remainder of page intentionally blank.]

 

3

 

IN WITNESS WHEREOF, the parties to this
Amendment have caused this Amendment to be executed as of the date first above
written.

 

 

	
  LOAN
  PARTIES: 

  	
  CORPORATE
  OFFICE PROPERTIES, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Corporate Office Properties Trust, a Maryland real
  estate investment trust, its sole general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger A. Waesche, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Roger A. Waesche, Jr.

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

 

	
   

  	
  CORPORATE
  OFFICE PROPERTIES TRUST,

  
	
   

  	
  a Maryland real estate investment trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger A. Waesche, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Roger A. Waesche, Jr.

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  

 

S-1

 

	
  LENDERS
  AND AGENT: 

  	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY AMERICAS

  
	
   

  	
   

  	
   

  	
  (fka Bankers Trust Company),

  as a Lender and the Agent

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Brenda Casey

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  Brenda Casey

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  THE
  BANK OF NOVA SCOTIA,

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/ NEIL J.CRAWFORD

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  NEIL J.CRAWFORD

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  FLEET
  NATIONAL BANK,

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James B. McLaughlin

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  James B. McLaughlin

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  CHEVY
  CHASE BANK, FSB,

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/ J.Jordan O’Neill, III

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  J.Jordan O’Neill, III

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  BRANCH
  BANKING & TRUST COMPANY,

  	 

	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Elizabeth L. Paulson

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  Elizabeth L. Paulson

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  	
   

  	 

 

S-2

 

	
   

  	
   

  	
   

  	
  SUNTRUST
  BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (formerly
  Crestar Bank),

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Nancy B Richards

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Nancy B Richards

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  	
   

  
	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John Scott

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John Scott

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PROVIDENT
  BANK,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  A
  MARYLAND BANKING INSTITUTION,

  	
   

  
	
   

  	
   

  	
   

  	
  as a Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Carole A. Stafford

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Carole A. Stafford

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  

 

S-3

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