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Exhibit 10.12    
  

 
  STAND-BY PURCHASE AGREEMENT    
  

    STAND-BY PURCHASE AGREEMENT dated as of October 25, 2000 (the "Agreement"), between Ramius
Capital Group, LLC, a limited liability company organized and existing under the laws of the State of Delaware (the "Investor"), and Axonyx Inc.,
a corporation organized and existing under the laws of the State of Nevada (the "Company"). 

W I T N E S S E T H:  

    WHEREAS, pursuant to the Common Stock Underwriting Agreement between Ramius Securities, LLC (the "Underwriter")
and the Company dated as of the date hereof and attached hereto as Exhibit 1 (the "Underwriting Agreement"), the Underwriter agreed to sell, as
the Company's agent, on a best efforts basis, up to $25 million of the Company's Common Stock, $.001 par value per share (the "Common Stock"); 

    WHEREAS,
upon the terms and subject to the conditions of this Agreement, should the Underwriter fail to fulfill its Selling Period Obligation then the Investor shall be obligated to
purchase the number of shares of the Company's Common Stock necessary to fulfill the Underwriter's Selling Period Obligation; 

    WHEREAS,
terms used in this Agreement without being specifically defined herein shall have the meanings set forth in the Underwriting Agreement. 

    NOW,
THEREFORE, the parties hereto agree as follows: 

I.  DEFINITIONS.  

    Capitalized terms not defined herein shall have the same meaning ascribed to them in the Underwriting Agreement. As used in this Agreement, the following terms
shall have the following meanings: 

    "Closing
Date" shall mean, with respect to the purchase and sale of Common Stock subject to the conditions contained herein, the First Trading Day following the expiration of the
Selling Period if the Underwriter fails to fulfill its Selling Period Obligation for such Selling Period. 

    "Notice
of Blocking Period" shall mean the notice delivered by the Company to the Underwriter pursuant to Section 3.2, in the form attached hereto as Exhibit 3.2. 

    "Purchase
Price" shall mean 97% of the VWAP for the first Trading Day following the expiration of the Selling Period; provided, that if the VWAP for such Trading Day is at or below
the Hard Floor Price, the VWAP for such day shall be deemed to be the Hard Floor Price. 

    "Registrable
Securities" shall mean any shares of Common Stock issued or issuable to the Investor or any holder or transferee pursuant to this Agreement and any shares of Capital
Stock issued or issuable with respect to the foregoing as a result of any stock split, stock dividend, recapitalization, exchange or similar event. 

    "Settlement
Date" shall mean, with respect to the purchase and sale of Common Stock, subject to the conditions contained herein, the Trading Day no later than three days following the
Closing Date. 

II.  PURCHASE AND SALE OF COMMON STOCK.  

    2.1  Investments.  If pursuant to the terms and conditions of the Underwriting Agreement, the Company
delivers a Capital Demand Notice to the Underwriter and the Underwriter fails to fulfill its Selling Period Obligation, then the Investor, subject to the terms and conditions of this Agreement, shall
be
obligated to purchase from the Company the number of shares of Common Stock necessary to fulfill the Underwriter's Selling Period Obligation. 

 

    2.2  Limitations on Investment Amount.  

    (a)  Selling Period Obligation.  The Investor's obligation to purchase shares of the Company's Common
Stock shall be null and void if (i) a Blocking Event occurs (as provided in Section 2.4); or (ii) the remaining Selling Period Obligation multiplied by the Purchase Price is less
than $50,000. The Investor may waive, in its sole discretion, in whole or in part, the limitations on the Investor's obligations to purchase shares of Common Stock contained in this
Section 2.2(a). 

    (b)  4.9% Limit.  Notwithstanding anything herein to the contrary, the Investor shall not be required nor
allowed to purchase, and the Company shall not issue, shares of Common Stock pursuant to this Agreement on the Closing Date to the extent such purchase, when aggregated with all other shares of Common
Stock then beneficially owned by the Investor, would result in the Investor or any Affiliate of the Investor beneficially owning more than 4.9% of all the issued and outstanding Common Stock on such
Closing Date. For purposes of this Agreement, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. 

    2.3  Closings and Settlements.  

    (a)  Deliveries.  On the Settlement Date (i) the Company shall credit such aggregate number of
shares of Common Stock that the Investor had purchased on the Closing Date to the Investor's or its designee's balance account with The Depository Trust Company ("DTC") through its Deposit and
Withdrawal At Custodian system or deliver such shares by such other means as may be mutually agreed upon by the parties; and (ii) if such shares are so received no later than 1:00 p.m.
Eastern time, the Investor shall deliver to the Company's brokerage account at the Underwriter, (or if later than 1:00 p.m. Eastern time, in funds available the next Trading Day) on or prior to
the Settlement Date, a dollar amount equal to (A) the number of shares so received multiplied by (B) the Purchase Price. In addition to the requirements of Article III, prior to
the Closing Date, each of the Company and the Investor shall deliver all other documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this
Agreement in order to implement and effect the transactions contemplated herein. 

    (b)  Company's Failure to Deliver Shares.  If the Company shall fail to issue the shares of Common Stock
by the fifth Business Day after the Settlement Date for such shares, the Company shall pay damages to the Investor equal to any actual damages incurred by the Investor because of the Company's failure
to deliver such required shares, including damages resulting from (A) the Investor's need, as determined by the Investor in its sole discretion, to "unwind" any and all sales of the Company's
Common Stock made by the Investor and to reimburse any and all purchasers for their completed purchases of the Company's Common Stock and (B) resulting from the Investor's need to "buy in"
shares of Common Stock to the extent necessary to satisfy its securities delivery requirements ("Buy-In Actual Damages"). Moreover, if the shares have not been delivered by such date, the
Investor will not be obligated to pay the Company (unless the Company has already paid the Investor's actual damages, if any, incurred during such Selling Period) for any shares purchased by the
Investor or that the Investor agreed to purchase or was obligated to purchase during the Selling Period. In addition, if the shares have not been delivered by the Company by the fifth Business Day
after the Settlement Date, at the Investor's sole option, it may terminate this Agreement. 

    2.4  Termination, Suspension and Modification of Investment Obligation.  

    (a)  Blocking Events.  The Investor shall not be obligated to purchase any shares of Common Stock from
the Company when there shall exist any one or more of the following: 

     (i) the
withdrawal or suspension of the effectiveness of a registration statement (the "Registration Statement") for the registration of not less than the number of
shares of Common Stock equal to Maximum Draw Down Amount divided by the Hard Floor Price, 

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which Registration Statement shall have been declared effective by the Securities and Exchange Commission (the "SEC"); 

    (ii) the
failure of the Common Stock issuable hereunder to be validly listed on the Principal Market; 

    (iii) the
Company's failure to satisfy the requirements of Section 3.1 or 3.3; 

    (iv) any
failure or interruption in the compliance by the Company with any of the covenants provided in Article VI; 

    (v) any
merger or consolidation of the Company with or into, or a transfer of all or substantially all of the assets of the Company to, another entity; or 

    (vi) receipt
or Deemed Receipt (as provided in Section 3.2) by the Investor of a Notice of Blocking Period (each of (i), (ii), (iii), (iv), (v) or (vi), a
"Blocking Event"). 

    (b) The
Company shall be obligated to notify the Investor in writing using the form attached hereto as Exhibit 3.2 immediately upon the occurrence of a Blocking
Event. The Investor shall be entitled, in its sole discretion, to waive any Blocking Event in writing. 

III.  CONDITIONS PRECEDENT.  

    3.1  Conditions Precedent to the Obligation of the Investor to Purchase Common Stock Pursuant to a Capital Demand
Notice.  The obligation of the Investor to purchase Common Stock and to acquire and pay for Common Stock on the Closing Date is subject to the satisfaction on
the Closing Date (the "Condition Precedent Date") of the conditions precedent set forth in Section 3.1 of the Underwriting Agreement (other than the conditions set forth in Subsections 3.1(l)
and 3.1(n)), which conditions are incorporated by reference herein as if fully set forth in this Agreement as of the date hereof and which cannot be waived without the prior written consent of the
Investor. 

    3.2  Occurrence of Material Events.  If the Company's management determines in its good faith judgment
(i) that it is required or advisable to do so or (ii) that any fact exists or any event has occurred that makes any statement of a material fact made in the Registration Statement, the
prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue in any material respect, or that requires the making of any additions to or changes in the
Registration Statement or the prospectus, in order to make the statements therein not misleading in any material respect, the Company shall notify the Investor using the form attached hereto as
Exhibit 3.2 (a "Notice of Blocking Period") that it may not sell the Registrable Securities pursuant to any Registration Statement or prospectus; provided, that if the Investor reasonably
believes, after advice from its attorneys and notice to and consultation with the Company, that a fact exists or an event has occurred that makes any statement of a material fact made in the
Registration Statement, the prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue in any material respect, or that requires the making of any
additions to or changes in the Registration Statement or the prospectus, in order to make the statements therein not misleading in any material respect, then the Company shall have been deemed to have
delivered a Notice of Blocking Period to
the Investor ("Deemed Receipt"). The Investor agrees by acquisition of the Registrable Securities that, upon receipt of a Notice of Blocking Period from the Company of the existence of any fact of the
kind described in the immediately preceding sentence, the Investor shall not dispose of, sell or offer for sale the Registrable Securities pursuant to the Registration Statement until such Investor
receives (i) copies of the supplemented or amended prospectus, or until counsel for the Company shall have determined that such disclosure is not required due to subsequent events,
(ii) notice in writing (the "Advice") from the Company that the use of the prospectus may be resumed and (iii) copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company in connection with any such notice, the Investor will deliver to the Company 

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(at the Company's expense) all copies, other than permanent file copies then in such Investor's possession, of the prospectus covering such Registrable Securities that was current immediately prior to
the time of receipt of such notice. 

    3.3  Due Diligence Review.  The Investor shall be entitled to rely on and have the benefits of the due
diligence review conducted by the Underwriter pursuant to Section 3.2 of the Underwriting Agreement. 

IV.  REPRESENTATIONS AND WARRANTIES OF INVESTOR.  

    The Investor represents and warrants to the Company as follows: 

    4.1  Authorization; Enforcement.  The Investor has full power and authority to execute and deliver this
Agreement, and to consummate the transactions contemplated hereby in accordance with the terms hereof. The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Investor. No other proceedings on the part of Investor are necessary to approve and authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby in accordance with the terms hereof. This Agreement has been validly executed and delivered by the Investor and is a valid and binding agreement of
the Investor enforceable against it in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and similar laws relating to, or affecting generally the enforcement of, applicable creditors' rights and remedies. 

    4.2  Not an Affiliate.  The Investor is not an officer, director or Affiliate of the Company. 

    4.3  Organization and Standing.  The Investor is duly organized, validly existing, and in good standing
under the laws of Delaware, and has all requisite power and authority to carry on its business as now being conducted, and is duly qualified to do business and in good standing in each jurisdiction in
which the nature of the business conducted by it makes such qualifications necessary, except where the failure to be so qualified or in good standing would not have a material adverse effect. 

    4.4  Absence of Conflicts.  The execution and delivery of this Agreement and any other document or
instrument executed in connection herewith, and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof, will not violate the
provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material
default thereunder, or result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the
Investor to any third party. 

V.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  

    The representations and warranties of the Company set forth in Article V of the Underwriting Agreement are incorporated by reference herein as if fully
set forth in this Agreement as of the date hereof and are for the benefit of the Investor. 

VI.  COVENANTS.  

    In addition to the covenant set forth below, the covenants of the Company set forth in Article VI of the Underwriting Agreement are incorporated by
reference herein as if fully set forth in this Agreement as of the date hereof and are for the benefit of the Investor. 

    6.1  Short Selling.  Investor and its Affiliates shall not engage in any short selling activities with
respect to the Company's Common Stock. 

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VII.  ASSIGNMENT, ENTIRE AGREEMENT, AMENDMENT, TERMINATION.  

    7.1  Successors and Assigns.  Neither this Agreement nor any rights of the Investor or the Company
hereunder may be assigned by either party to any other Person. Notwithstanding the foregoing, the Investor's rights and obligations under this Agreement may be assigned at any time, in whole, with the
prior written consent of the Company (which consent shall not be unreasonably withheld) to any Affiliate of the Investor (a "Permitted Transferee"). The rights and obligations of the Investor under
this Agreement shall inure to the benefit of, and be enforceable by and against, any such Permitted Transferee. 

    7.2  Entire Agreement; Amendment.  This Agreement, the Underwriting Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof, and supercedes all other prior oral or written
agreements between the parties, their Affiliates, or persons acting on their behalf. No party shall be liable or bound to any other party in any manner by any warranties, representations or covenants
except as specifically set forth in this Agreement or therein. Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. 

    7.3  Publicity.  Each of the Company and the Investor agrees that they will not disclose, and will not
include in any public announcement, the name of the other without its prior consent, unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such
requirement. Except as may be required by law, each of the Company and the Investor shall consult with the other before issuing any press release or otherwise making any public statements with respect
to this Agreement and shall not issue any such press release or make any such public statement prior to such consultation. 

    7.4  Termination.  

    (a) The
Company may, in its sole discretion, terminate the Investor's obligation to purchase any Common Stock pursuant to Section 2.1; provided, however, that
such termination shall not affect the continuing obligations of the Company set forth in this Agreement, including the survival of representations, warranties, covenants and indemnification rights of
the Investor. 

    (b) The
Investor may (in its sole and absolute discretion) terminate this Agreement and its obligation to purchase shares of Common Stock as a result of (i) a
breach by the Company of any material representation, warranty, covenant or other obligation in connection with this Agreement, (ii) failure by the Company to comply with the requirements of
Section 6.2, 6.3, 6.4, 6.5 or 6.6 of the Underwriting Agreement, (iii) the Company, at any date after the date hereof, effecting any merger or consolidation of the Company with or into,
or transferring all or substantially all of the assets of the Company to, another entity or (iv) the Investor reasonably determining, at any time that the adoption of, or change in, or any
change in the interpretation or application of, any law, regulation, rule, guideline or treaty (including, but not limited to, changes of capital adequacy) makes it illegal or materially impracticable
for the Investor to fulfill its commitment pursuant to this Agreement, but in the case of (i) or (iv) above, the Investor may terminate this Agreement only after a 30-day
period beginning when the Investor gives the Company notice of its intent to terminate this Agreement (but the Investor's right to terminate its obligation to purchase any shares of Common Stock
pursuant to a Capital Demand Notice shall not be subject to any delay or contingency), in which, in the case of (i), the Company has not cured such breach as provided above, or, in the case of (iv),
the parties negotiate in good faith a reasonable alternative manner not illegal or impracticable for the Investor to fulfill its commitment pursuant to this Agreement;  provided, however, that such
termination shall not affect the continuing obligations of the Company as set forth in this Agreement, including the
survival of representations, warranties, covenants and 

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indemnification rights of the Investor. If the Company becomes aware of its failure to comply with its requirements under Section 6.2, 6.3, 6.4, 6.5 or 6.6 of the Underwriting Agreement
pursuant to clause (ii) above, the Company shall notify the Investor within two (2) days of the time it becomes aware of the failure to comply with any such covenants. If the Investor
elects to terminate this Agreement pursuant to clause (ii) above, it must first give the Company notice of such election and may terminate this Agreement only after a 10-day period
in which the Company has not cured the failure to comply with any such covenants; provided, however, that such termination shall not affect the
continuing obligations of the Company as set forth in this Agreement, including the survival of representations, warranties, covenants and indemnification rights of the Investor. The Investor may
also, in its sole and absolute discretion, terminate this Agreement if the Company shall fail to maintain the listing of the Common Stock on a Principal Market, or if trading of the Common Stock on a
Principal Market shall have been suspended for a period of ten (10) consecutive Trading Days; provided, however, that such termination shall not
affect the continuing obligations of the Company set forth in this Agreement, including the survival of representations, warranties, covenants and indemnification rights of the Investor. The Investor
may waive, in its sole and absolute discretion, in whole or in part, any of the termination events contained in this Section 7.4. 

    (c) Upon
the termination of the Underwriting Agreement pursuant to Section 7.4 contained therein, this Agreement shall terminate;  provided, however, that such termination shall not affect the continuing
obligations of the Company set forth in this Agreement, including the survival
of representations, warranties, covenants and indemnification rights of the Investor. 

VIII.  NOTICES; COSTS AND EXPENSES.  

    8.1  Notices.  All notices, demands, requests, consents, approvals or other communications required or
permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, (iv) transmitted by hand delivery, or (v) transmitted
by facsimile and electronic mail, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice: 

If
to the Company, to: 

Axonyx Inc.

825 Third Avenue

40th Floor

New York, NY 10022

Attention: Michael R. Espey, Esq.

Facsimile No.: (212) 688-4843

E-mail: mespey@axonyx.com 

With
a copy (which shall not constitute notice) to: 

Brobeck,
Phleger & Harrison LLP

1633 Broadway

47th Floor

New York, New York 10019

Attention: Ellen Corenswet, Esq.

Facsimile No.: (212) 586-7878

E-mail: ecorenswet@brobeck.com 

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If to the Investor, to 

Ramius
Capital Group, LLC

666 Third Avenue,

26th Floor

New York, NY 10017

Attention: Jeffrey M. Solomon

Facsimile No.: (212) 845-7999 

With
a copy (which shall not constitute notice) to: 

Schulte
Roth & Zabel LLP

900 Third Avenue

New York, NY 10022

Attention: Eleazer N. Klein, Esq.

Facsimile No.: (212) 593-5955

E-mail: eleazer.klein@srz.com 

    Any
notice sent by one party to another with confirmation of acceptance or otherwise received in writing via courier, hand delivery or first-class mail (return receipt requested) by
the Company, or, if received on any day which is not a Trading Day or after 12:00 noon on a Trading Day, shall be deemed to be delivered on the immediately succeeding Trading Day. Notice shall be
deemed given on the date of service or transmission if personally served or transmitted by facsimile or electronic mail during normal business hours of the recipient; provided, that such transmission
by facsimile or electronic mail shall have been confirmed received. Notice otherwise sent as provided herein shall be deemed given on the third (3rd) business day following the date mailed or on the
second business day following the date of deposit for delivery of such notice with a reputable air courier service. 

    8.2  Costs and Expenses.  In the event payment from the Company to the Underwriter is not received within
the thirty (30) day period set forth in Section 8.2 of the Underwriting Agreement, Investor shall have the right to deduct any such amounts owed by the Company to the Investor or the
Underwriter from any amounts owed by the Investor to the Company pursuant hereto. 

IX.  INDEMNIFICATION AND CONTRIBUTION.  

    9.1  Indemnification.  

    (a) To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, the directors, officers, partners,
employees and agents of the Investor and each Person, if any, who controls any Investor within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint or several (collectively, "Claims"), incurred in
investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC or NASD, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the
securities or other Blue Sky Laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which the statements therein were made, not 

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misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities pursuant to a Registration Statement, or (iv) any breach of any representation, warranty, covenant or agreement contained in this Agreement or any document
delivered in connection with this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "Violations"). The Company shall reimburse the Investors and each
such controlling person, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending
any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 9.1(a): (i) shall not apply to a Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company; (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such person from whom the
person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company, and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it; and
(iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investor. 

    (b) In
connection with any Registration Statement or any amendment or supplement thereto in which the Investor is participating, the Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth in Section 9.1(a), the Company, each of its directors, each of its officers who signs the Registration Statement,
each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively and together with an Indemnified Person, an "Indemnified Party"), against any
Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages (i) arise out of or
are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by
such Investor expressly for use in connection with any Registration Statement covering Registrable Securities or (ii) arise out of or are based upon the sale of common stock by the Investor to
any third party pursuant to the Registration Statement despite the fact that the Investor has received a Notice of Blocking Period from the Company and has not received the Advice from the Company
signaling the end of such Blocking Period; and, subject to Section 9.1(c), such Investor will reimburse such Indemnified Parties promptly as such expenses are incurred and are due and payable
for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement 

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contained in this Section 9.1(b) and the agreement with respect to contribution contained in Section 9.2 shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable under this
Section 9.1(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investor. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 9.1(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented. 

    (c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 9.1 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party
under this Section 9.1, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right (at its expense) to participate in, and,
to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that such indemnifying party shall diligently pursue such defense and that an Indemnified
Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the
Indemnified Person or Indemnified Party, as the case may be, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Company shall pay reasonable fees
for only one separate legal counsel for the Investor. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such
action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into
any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified
Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 9.1, except
to the extent that the indemnifying party is prejudiced in its ability to defend such action. 

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    (d) The indemnification required by this Section 9.1 shall be made by periodic payments of the amount thereof during the course of the investigation or defense,
as and when bills are received or Indemnified Damages are incurred. 

    (e) The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 

    9.2  Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited
by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 9.1 to the fullest extent permitted by
law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in
Section 9.1; (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in
amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities. 

X.  GOVERNING LAW; MISCELLANEOUS.  

    10.1  Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York without regard to the principles of conflict of laws. 

    10.2  Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event any signature page is delivered by
facsimile transmission, the party using such means of delivery shall cause four (4) additional original executed signature pages to be physically delivered to the other party within five
(5) days of the execution and delivery hereof. 

    10.3  Headings.  The headings of this Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Agreement. 

    10.4  Severability.  If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party. 

    10.5  Survival.  The representations, warranties, covenants and agreements of the parties hereto shall
survive the Closing hereunder. The indemnity and contribution agreements contained in Sections 9.1 and 9.2 hereof shall survive and remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on behalf of any indemnified party or by or on behalf of the Company, and (iii) the consummation of the
sale or successive resales of the Common Stock. 

    10.6  No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except as provided in Article IX. 

    10.7  Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent 

10

 

and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 

    10.8  Construction.  The language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will be applied against any party. Unless the context of this Agreement otherwise clearly requires, references to the plural
include the singular, the singular the plural and the part the whole and "or" has the inclusive meaning represented by the phrase "and/or". Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and
not to any particular provision hereof, and (iv) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement. 

    10.9  Equitable Relief.  The Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Investor. The Company therefore agrees that the Investor shall be entitled to
seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. 

    10.10  Consent to Jurisdiction.  The parties hereto expressly submit themselves to the exclusive
jurisdiction of the state and federal courts of New York, New York in any action or proceeding relating to this Agreement or any of the other documents contemplated hereby or any of the transactions
contemplated hereby or thereby. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such action,
suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum. The parties hereto hereby
irrevocably waive any and all right to a trial by jury with respect to any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The parties hereto
irrevocably and unconditionally consent to the service of process of any of the aforementioned courts in any such action, suit or proceeding by the mailing of copies thereof by registered or certified
mail, return receipt requested, postage prepaid, at their respective addresses set forth or provided for herein, such service to become effective ten (10) days after such mailing. Nothing
herein shall affect the right of any party to serve process in any manner permitted by law or to commence legal proceedings or otherwise proceed against the other parties in any other jurisdiction. 

11

 

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date hereof. 

	 	 	RAMIUS CAPITAL GROUP, LLC
	

 	
 	

By:	
 	

/s/ JEFFREY M. SOLOMON   

	 	 	 	 	Name: Jeffrey M. Solomon

Title: Principal
	

 	
 	

AXONYX INC.
	

 	
 	

By:	
 	

/s/ MARVIN S. HAUSMAN, M.D.   

	 	 	 	 	Name: Marvin S. Hausman, M.D.

Title: President & CEO

12

QuickLinks

Exhibit 10.12

STAND-BY PURCHASE AGREEMENT<PAGE>
                                                                     Exhibit 4.7

                             ARTICLES SUPPLEMENTARY
                                       OF
                        CORPORATE OFFICE PROPERTIES TRUST
                   SERIES D CUMULATIVE CONVERTIBLE REDEEMABLE
                                PREFERRED SHARES
                           (PAR VALUE $.01 PER SHARE)

      CORPORATE OFFICE PROPERTIES TRUST, a Maryland real estate investment trust
(hereinafter called the "Trust"), having its principal office in Columbia,
Maryland, hereby certifies to the Department of Assessments and Taxation of the
State of Maryland that:

      FIRST: Pursuant to authority expressly vested in the Board of Trustees of
the Trust by Article VI of the Declaration of Trust of the Trust, as amended to
date (the "Declaration of Trust"), the Board of Trustees has duly classified
544,000 authorized but unissued preferred shares of beneficial interest of the
Trust, par value $.01 per share (the "Preferred Shares"), into a class
designated as Series D Cumulative Convertible Redeemable Preferred Shares, par
value $.01 per share, and has provided for the issuance of such class by
adoption of a resolution in the form of Article Third hereof effective as of
January 12, 2001.

      SECOND: The classification increases the number of shares classified as
Series D Cumulative Convertible Redeemable Preferred Shares, par value $.01 per
share, from no shares immediately prior to the classification to 544,000 shares
immediately after the classification. The classification decreases the number of
unclassified Preferred Shares from 2,875,000 to 2,331,000.

      THIRD: The terms of the Series D Cumulative Convertible Redeemable
Preferred Shares (including the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Trustees are as follows:

      1.       NUMBER OF SHARES AND DESIGNATION.

      This series of Preferred Shares shall be designated as Series D Cumulative
Convertible Redeemable Preferred Shares, par value $.01 per share (the "Series D
Preferred Shares"), and 544,000 shall be the authorized number of such Series D
Preferred Shares constituting such series.

      2.       DEFINITIONS.

      For purposes of the Series D Preferred Shares, the following terms shall
have the meanings indicated:

      "Affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.

<PAGE>

      "Board of Trustees" shall mean the Board of Trustees of the Trust or any
committee authorized by such Board of Trustees to perform any of its
responsibilities with respect to the Series D Preferred Shares; provided that,
for purposes of paragraph (a) of Section 9 of this Article, the term "Board of
Trustees" shall not include any such committee.

      "Business Day" shall mean any day other than a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are not required to be open.

      "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto. Reference to any provision of the
Code shall mean such provision as in effect from time to time, as the same may
be amended, and any successor thereto, as interpreted by any applicable
regulations or other administrative pronouncements as in effect from time to
time.

      "Common Shares" shall mean the common shares of beneficial interest, $.01
par value per share, of the Trust.

      "Conversion Rate" shall mean 2.20 Common Shares for each Series D
Preferred Share, subject to adjustment as provided in paragraph (f) of Section 6
of this Article.

      "Current Market Price" of publicly traded Common Shares or any other class
or series of capital shares or other security of the Trust or of any similar
security of any other issuer for any day shall mean the last reported sales
price, regular way settlement on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices regular way on
such day, in either case as reported on the New York Stock Exchange ("NYSE") or,
if such security is not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange, on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or, if such
security is not quoted on such National Market, the average of the closing bid
and asked prices on such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on such
day as furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Chief Executive Officer of the Trust
or the Trustees or if any class or series of securities are not publicly traded,
the fair value of the shares of such class as determined reasonably and in good
faith by the Trustees.

      "Declaration of Trust" shall mean the Amended and Restated Declaration of
Trust of the Trust as filed for record with the State Department of Assessments
and Taxation of Maryland, and any amendments thereto.

      "Dividend Payment Date" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, that if any Dividend Payment Date falls on
any day other than

                                       2
<PAGE>

a Business Day, the dividend payment payable on such Dividend Payment Date shall
be paid on the Business Day immediately following such Dividend Payment Date and
no interest shall accrue on such dividend from such date to such Dividend
Payment Date.

      "Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January 15,
April 15, July 15 and October 15 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period, other than
the Dividend Period during which any Series D Preferred Shares shall be redeemed
pursuant to Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Series D Preferred Shares being redeemed.

      "Dividend Record Date" shall have the meaning set forth in paragraph (a)
of Section 3 of this Article.

      "Equity Shares" shall mean shares of any class or series of shares of
beneficial ownership in the Trust.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including April 16, 2001.

      "Issue Date" shall mean the date of original issuance of the Series D
Preferred Shares.

      "Junior Shares" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.

      "Liquidation Preference" shall have the meaning set forth in paragraph (a)
of Section 4 of this Article.

      "Operating Partnership" shall mean Corporate Office Properties,
L.P., a Delaware limited partnership.

      "Parity Shares" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.

      "Person" shall mean an individual, corporation, partnership, estate, trust
(including a trust qualifying under Section 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, "private
foundation," within the meaning of Section 509(a) of the Code, joint stock
company or other entity, and also includes a "group," as that term is used for
purposes of Section 13(d)(3) of the Exchange Act, and a group to which an
Excepted Holder limit applies.

      "Redemption Date" shall mean, in the case of any redemption of any Series
D Preferred Shares, the date fixed for redemption of such shares.

                                       3
<PAGE>

      "Redemption Notice" shall have the meaning set forth in paragraph (d) of
Section 5 of this Article.

      "Redemption Price" shall mean, with respect to any Series D Preferred
Shares to be redeemed, a cash payment equal to 100% of the Liquidation
Preference thereof plus, all accrued and unpaid dividends, if any, to the
Redemption Date.

      "REIT" shall mean a "real estate investment trust," as defined in Section
856 of the Code.

      "Senior Shares" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.

      "Series A Preferred Shares" shall mean the Trust's 5.5% Series A
Convertible Preferred Shares of beneficial interest, par value $.01 per share.

      "Series B Preferred Shares" shall mean the Trust's 10% Series B Cumulative
Redeemable Preferred Shares of beneficial interest, par value $.01 per share.

      "Series D Preferred Shares" shall have the meaning set forth in Section 1
of this Article.

      "Set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Trustees, the
allocation of funds to be so paid on any series or class of Equity Shares of the
Trust; provided, however, that if any funds for any class or series of Junior
Shares or any class or series of Parity Shares are placed in a separate account
of the Trust or delivered to a disbursing, paying or other similar agent, then
"set apart for payment" with respect to the Series D Preferred Shares shall mean
placing such funds in a separate account or delivering such funds to a
disbursing, paying or other similar agent.

      "Trading Day", as to any Common Shares, shall mean any day on which such
Common Shares are traded on the NYSE or, if such Common Shares are not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such Common Shares are listed or admitted or, if such Common Shares are
not listed or admitted for trading on any national securities exchange, on the
National Market of NASDAQ or, if such Common Shares are not quoted on such
National Market, in the Common Shares market in which such Common Shares are
traded.

      "Transfer Agent" means Norwest Bank or such transfer agent as may be
designated from time to time by the Board of Trustees or its designee as the
transfer agent for the Series D Preferred Shares.

      "Trustee" shall mean a member of the Board of Trustees.

                                       4
<PAGE>

      "Voting Parity Shares" shall have the meaning set forth in paragraph (a)
of Section 9 of this Article.

      Capitalized terms used but not defined in these Articles shall have the
meanings set forth in the Declaration of Trust.

      3.       DIVIDENDS.

      (a) The holders of Series D Preferred Shares shall be entitled to receive,
when, as and if declared by the Board of Trustees, out of funds legally
available for that purpose, quarterly cash dividends on the Series D Preferred
Shares at the rate of 4% of the Liquidation Preference per year (equivalent to
$.25 per quarter per Series D Preferred Share). Such dividends shall be
cumulative from the Issue Date, whether or not in any Dividend Period or Periods
such dividends shall be declared or there shall be funds of the Trust legally
available for the payment of such dividends, and shall be payable quarterly in
arrears on each Dividend Payment Date. Each such dividend shall be payable in
arrears to the holders of record of the Series D Preferred Shares, as they
appear on the share records of the Trust at the close of business on the
applicable record date (the "DIVIDEND RECORD DATE"), which shall be fixed by the
Board of Trustees and which shall be not more than 60 days nor less than 10 days
prior to each such Dividend Payment Date. Accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date as may be
fixed by the Board of Trustees, which date shall not precede by more than 45
days nor less than 15 days the payment date thereof.

      (b) Any dividend payable on the Series D Preferred Shares for any partial
Dividend Period shall be computed ratably on the basis of twelve 30-day months
and a 360-day year. Holders of Series D Preferred Shares shall not be entitled
to any dividends in excess of full cumulative dividends, as herein provided, on
the Series D Preferred Shares. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series D
Preferred Shares that may be in arrears.

      (c) So long as any of the Series D Preferred Shares are outstanding, when
dividends are not paid in full upon the Series D Preferred Shares or any other
class or series of Parity Shares, or a sum sufficient for such payment is not
set apart for payment, all dividends declared upon the Series D Preferred Shares
and any Parity Shares shall be declared ratably in proportion to the respective
amounts of dividends accrued and unpaid on the Series D Preferred Shares and
accrued and unpaid on such Parity Shares. Except as set forth in the preceding
sentence, unless dividends on the Series D Preferred Shares equal to the full
amount of accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof has
been or contemporaneously is set apart for such payment, for all past dividends
periods, no dividends shall be declared or paid or set apart for payment by the
Trust and no other distribution of cash or other property may be declared or
made, directly or indirectly, by the Trust with respect to any Parity Shares.

      (d) So long as any of the Series D Preferred Shares are outstanding,
unless dividends equal to the full amount of all accrued and unpaid dividends on
the Series D

                                       5
<PAGE>

Preferred Shares have been paid, or declared and set apart for payment, for all
past dividend periods, no dividends (other than dividends or distributions paid
in Junior Shares or options, warrants or rights to subscribe for or purchase
Junior Shares) may be declared or paid or set apart for payment by the Trust,
and no other distribution of cash or other property may be declared or made
(directly or indirectly) by the Trust, with respect to any Junior Shares, nor
shall any Junior Shares be redeemed, purchased or otherwise acquired (except for
a redemption, purchase or other acquisition of Common Shares made for purposes
of an employee incentive or benefit plan of the Trust or a subsidiary of the
Trust) for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Junior Shares), directly or
indirectly, by the Trust (except by conversion into or exchange for Junior
Shares, or options, warrants or rights to subscribe for or purchase Junior
Shares), nor shall any other cash or other property be paid or distributed to or
for the benefit of holders of Junior Shares.

      (e) In the event that any Series D Preferred Share is converted into
Common Shares pursuant to Section 6 below, holders of Series D Preferred Shares
whose conversion is deemed effective before the close of business on a Dividend
Record Date will not be entitled to receive any portion of the dividend payable
on such Series D Preferred Shares on the corresponding Dividend Payment Date for
the current quarter to which that Dividend Record Date pertains but will,
however, be entitled to receive the entire dividend for such quarterly period
payable, if any, on the Common Shares issuable upon conversion provided that any
conversion of Series D Preferred Shares becomes effective prior to the close of
business on the record date for such dividend payable on such Common Shares and
such holders are the holders of record on the record date for such Common Share
dividend. A holder of Series D Preferred Shares on a Dividend Record Date who
(or whose transferee) tenders such shares for conversion into Common Shares
after such Dividend Record Date will be entitled to receive the dividend payable
on such Series D Preferred Shares on the corresponding Dividend Payment Date.
Except as provided above, the Trust will pay at the time of conversion all
accrued and unpaid dividends, whether or not declared, on converted Series D
Preferred Shares, unless restricted by the rights of holders of Senior Shares or
Parity Shares.

      (f) Notwithstanding the provisions of this Section 3, the Trust shall not
be prohibited from (i) declaring or paying or setting apart for payment any
dividend or distribution on any Parity Shares or (ii) redeeming, purchasing or
otherwise acquiring any Parity Shares, in each case, if such declaration,
payment, redemption, purchase or other acquisition is necessary in order to
maintain the continued qualification of the Trust as a REIT under Section 856 of
the Code.

      4.       LIQUIDATION PREFERENCE.

      (a) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Trust, before any payment or distribution by the Trust shall
be made to or set apart for payment to the holders of any Junior Shares, the
holders of Series D Preferred Shares shall be entitled to receive a liquidation
preference of Twenty-Five Dollars ($25.00) per Series D Preferred Share (the
"LIQUIDATION PREFERENCE"), plus an amount equal to all accrued and unpaid
dividends (whether or not earned or declared) to the date of final distribution
to such holders; but such holders shall not be entitled to any further payment.

                                       6
<PAGE>

Until the holders of the Series D Preferred Shares have been paid the
Liquidation Preference in full, plus an amount equal to all accrued and unpaid
dividends (whether or not earned or declared) to the date of final distribution
to such holders, no payment will be made to any holder of Junior Shares upon the
liquidation, dissolution or winding-up of the Trust. If, upon any liquidation,
dissolution or winding-up of the Trust, the assets of the Trust, or proceeds
thereof, distributable among the holders of Series D Preferred Shares shall be
insufficient to pay in full the Liquidation Preference and liquidating payments
on any other shares of any class or series of Parity Shares, then such assets,
or the proceeds thereof, shall be distributed among the holders of Series D
Preferred Shares and any such other Parity Shares ratably in the same proportion
as the respective amounts that would be payable on such Series D Preferred
Shares and any such other Parity Shares if all amounts payable thereon were paid
in full. For the purposes of this Section 4, a voluntary or involuntary
liquidation, dissolution or winding-up of the Trust shall not include (i) a
consolidation or merger of the Trust with or into one or more other entities,
(ii) a sale or transfer of all or substantially all of the Trust's assets, or
(iii) a statutory share exchange.

      (b) Upon any liquidation, dissolution or winding-up of the Trust, after
payment shall have been made in full to the holders of Series D Preferred Shares
and any Parity Shares, as provided in Section 4(a), any other series or class or
classes of Junior Shares shall, subject to the respective terms thereof, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series D Preferred Shares and any Parity Shares shall not be
entitled to share therein.

      5.       REDEMPTION AT THE OPTION OF THE TRUST.

      (a) Series D Preferred Shares shall not be redeemable by the Trust prior
to the fifth anniversary of the Issue Date, except as set forth in Article VII
of the Declaration of Trust which is incorporated by reference herein. On or
after the fifth anniversary of the issue date, the Trust, at its option, may
redeem Series D Preferred Shares, in whole or from time to time in part, at the
Redemption Price; subject, however, to the holder's right to convert such shares
pursuant to Section 6 at any time prior to the Redemption Date.

      (b) In the event of a redemption of Series D Preferred Shares, if the
Redemption Date occurs after a Dividend Record Date and on or prior to the
related Dividend Payment Date, the dividend payable on such Dividend Payment
Date in respect of such shares called for redemption shall be payable on such
Dividend Payment Date to the holders of record at the close of business on such
Dividend Record Date and shall not be payable as part of the Redemption Price
for such shares. If full cumulative dividends on all outstanding Series D
Preferred Shares have not been paid or declared and set apart for payment, no
Series D Preferred Shares may be redeemed unless all outstanding Series D
Preferred Shares are simultaneously redeemed and neither the Trust nor any
Affiliate of the Trust may purchase or acquire Series D Preferred Shares,
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of Series D Preferred Shares.

      (c) If fewer than all the outstanding Series D Preferred Shares are to be
redeemed, the Trust will select those Series D Preferred Shares to be redeemed
pro rata in

                                       7
<PAGE>

proportion to the numbers of Series D Preferred Shares held by holders (with
adjustment to avoid redemption of fractional shares) or by lot or in such other
manner as the Board of Trustees may determine. If fewer than all Series D
Preferred Shares represented by any certificate are redeemed, then a new
certificate representing the unredeemed Series D Preferred Shares shall be
issued without cost to the holders thereof.

      (d) If the Trust shall redeem Series D Preferred Shares pursuant to
paragraph (a) of this Section 5, notice of the redemption shall be mailed by the
Trust not less than 30 days nor more than 60 days prior to the Redemption Date
to each holder of record of the Series D Preferred Shares to be redeemed (the
"REDEMPTION NOTICE"). Such Redemption Notice shall be provided by first class
mail, postage prepaid, at such holder's address as the same appears on the share
records of the Trust. Neither the failure to mail the Redemption Notice, nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the Redemption Notice or the validity of the proceedings for
redemption with respect to the other holders. A Redemption Notice which has been
mailed in the manner herein provided shall be conclusively presumed to have been
duly given on the date mailed whether or not the holder receives the Redemption
Notice. Each Redemption Notice shall state, as appropriate: (i) the Redemption
Date; (ii) the number of Series D Preferred Shares to be redeemed; (iii) the
place or places where certificates for such Series D Preferred Shares are to be
surrendered; and (iv) the Redemption Price payable on such Redemption Date,
including, without limitation, a statement as to whether or not accrued and
unpaid dividends will be (x) payable as part of the Redemption Price, or (y)
payable on the next Dividend Payment Date to the record holder at the close of
business on the relevant Dividend Record Date as described in the next
succeeding sentence. A Redemption Notice having been mailed as aforesaid, from
and after the Redemption Date (unless the Trust shall fail to make available the
amount of cash necessary to effect such redemption), (i) dividends on the Series
D Preferred Shares so called for redemption shall cease to accrue on said
shares, (ii) said shares shall no longer be deemed to be outstanding, and (iii)
all rights of the holders thereof as holders of Series D Preferred Shares shall
cease, except (a) the right to receive the Redemption Price, without interest
thereon, and (b) if the Redemption Date for any Series D Preferred Shares occurs
after any Dividend Record Date and on or prior to the related Dividend Payment
Date, the full dividend payable on such Dividend Payment Date in respect of such
Series D Preferred Shares called for redemption shall be payable on such
Dividend Payment Date to the holders of record of such shares at the close of
business on the corresponding Dividend Record Date notwithstanding the prior
redemption of such shares. The Trust's obligation to make available the cash
necessary to effect such redemption in accordance with the preceding sentence
shall be deemed fulfilled if, on or before the applicable Redemption Date, the
Trust shall irrevocably deposit in trust with a bank or trust company (which may
not be an Affiliate of the Trust) that has, or is an Affiliate of a bank or
trust company that has, a capital and surplus of at least $50,000,000, such
amount of cash as is necessary for such redemption plus, if such Redemption Date
occurs after any Dividend Record Date and on or prior to the related Dividend
Payment Date, such amount of cash as is necessary to pay the dividend payable on
such Dividend Payment Date in respect of such Series D Preferred Shares called
for redemption, with irrevocable instructions that such cash be applied to the
redemption of the Series D Preferred Shares so called for redemption and, if
applicable, the payment of such dividend. No interest shall accrue for the
benefit of the holders of Series D Preferred

                                       8
<PAGE>

Shares to be redeemed on any cash so set aside by the Trust. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years from
the Redemption Date shall revert to the general funds of the Trust, after which
reversion the holders of Series D Preferred Shares so called for redemption
shall look only to the general funds of the Trust for the payment of such cash.
As promptly as practicable after the surrender in accordance with the Redemption
Notice of the certificates for any such Series D Preferred Shares to be so
redeemed (properly endorsed or assigned for Transfer, if the Trust shall so
require and the Redemption Notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such Series D Preferred
Shares have been redeemed in accordance with such Redemption Notice.

      6.    CONVERSION AT OPTION OF THE HOLDER.

            Holders of Series D Preferred Shares shall have the right to convert
all or a portion of such shares into Common Shares, as follows:

            (a)   Subject to and upon compliance with the provisions of this
Section 6, a holder of Series D Preferred Shares shall have the right, at such
holder's option, at any time after December 31, 2003, to convert such shares, in
whole or in part, into the number of fully paid and nonassessable shares of
authorized but previously unissued Common Shares obtained by multiplying the
Conversion Rate by the number of Series D Preferred Shares to be converted by
surrendering such shares to be converted, such surrender to be made in the
manner provided in paragraph (b) of this Section 6.

            (b)   In order to exercise the conversion right, the holder of each
Series D Preferred Share to be converted shall surrender the certificate
representing such shares, duly endorsed or assigned to the Trust or in blank, at
the office of the Transfer Agent, accompanied by written notice to the Trust
that the holder thereof elects to convert such Series D Preferred Shares. Unless
the shares issuable on conversion are to be issued in the same name as the name
in which such Series D Preferred Shares are registered, each share surrendered
for conversion shall be accompanied by instruments of transfer, in form
reasonably satisfactory to the Trust, duly executed by the holder or such
holder's duly authorized attorney, and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Trust demonstrating
that such taxes have been paid) as required by paragraph (j) of this Section 6.
As promptly as practicable after the surrender of certificates for Series D
Preferred Shares as aforesaid, the Trust shall issue and shall deliver at such
office to such holder, or send on such holder's written order, a certificate or
certificates for the number of full Common Shares issuable upon the conversion
of such Series D Preferred Shares in accordance with provisions of this Section
6, and any fractional interest in respect of a Common Share arising upon such
conversion shall be settled as provided in paragraph (c) of this Section 6. If
all Series D Preferred Shares evidenced by any certificate are not converted,
the Trust shall issue and deliver at such office to such holder a certificate
for the remaining Series D Preferred Shares not converted. Each conversion shall
be deemed to have been effected immediately prior to the close of business on
the date on which the certificates for Series D Preferred Shares shall have been
surrendered and such notice received by the Trust as aforesaid, and the Person
or Persons in whose name or names any certificate or certificates for Common
Shares shall be issuable upon such conversion shall be deemed

                                        9
<PAGE>

to have become the holder or holders of record of the shares represented thereby
at such time on such date unless the share transfer books of the Trust shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such transfer books are open, provided that such
closure of the share transfer books shall not delay the date on which such
Person shall become a holder of such shares by more than two Business Days.

            (c)   No fractional Common Share or scrip representing fractions of
a Common Share shall be issued upon conversion of the Series D Preferred Shares.
Instead of any fractional interest in a Common Share that would otherwise be
deliverable upon the conversion of Series D Preferred Shares, the Trust shall
pay to the holder of such share an amount in cash based upon the Current Market
Price of the Common Shares on the Trading Day immediately preceding the date of
conversion. If more than one share shall be surrendered for conversion at one
time by the same holder, the number of full Common Shares issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Series D Preferred Shares so surrendered.

            (d)   If the Trust shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange or
reclassification of the Common Shares (each of the foregoing being referred to
herein as a "Transaction")), in each case as a result of which Common Shares
shall be converted into the right to receive shares, securities or other
property (including cash or any combination thereof), each Series D Preferred
Share which is not converted into the right to receive shares, securities or
other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of shares, securities and other property
(including cash or any combination thereof) receivable upon such consummation by
a holder of that number of Common Shares into which one Series D Preferred Share
was convertible immediately prior to such Transaction. The Trust shall not be a
party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this paragraph (d), and it shall not consent or agree to
the occurrence of any Transaction until the Trust has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of
the holders of the Series D Preferred Shares that will contain provisions
enabling the holders of the Series D Preferred Shares that remain outstanding
after such Transaction to convert into the consideration received by holders of
Common Shares at the Conversion Rate. The provisions of this paragraph (d) shall
similarly apply to successive Transactions.

            (e)   If there shall be any reclassification of the Common Shares or
any consolidation or merger to which the Trust is a party and for which approval
of any shareholders of the Trust is required, or a statutory share exchange, or
the voluntary or involuntary liquidation, dissolution and winding up of the
Trust, then the Trust shall cause to be mailed to each holder of Series D
Preferred Shares at such holder's address as shown on the records of the Trust,
as promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating the date on which such reclassification,
consolidation, merger, statutory share exchange or liquidation, dissolution and
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Shares of record shall be entitled to exchange
their

                                       10
<PAGE>

Common Shares for securities or other property, if any, deliverable upon such
event. Failure to give or receive such notice or any defect therein shall not
affect the legality or validity of the proceedings described in this Section 6.

            (f)   (i) In the event the Trust should at any time or from time to
time after the date of issuance of the Series D Preferred Shares fix a record
date for the effectuation of a split or subdivision of the outstanding Common
Shares or the determination of holders of Common Shares entitled to receive a
dividend or other distribution payable in additional Common Shares without
payment of any consideration by such holder for the additional Common Shares,
then, as of such record date (or the date of such dividend distribution, split
or subdivision if no record date is fixed), the Conversion Rate shall be
appropriately increased so that the number of Common Shares issuable on
conversion of each Series D Preferred Share shall be increased in proportion to
such increase of outstanding Common Shares. If the number of Common Shares
outstanding at any time after the date of issuance of the Series D Preferred
Shares is decreased by a combination of the then outstanding Common Shares,
then, following the record date of such combination (or the date of such
combination if no record date is fixed), the Conversion Rate for the Series D
Preferred Shares shall be appropriately decreased so that the number of shares
of Common Stock issuable on conversion of each Series D Preferred Share shall be
decreased in proportion to such decrease in outstanding Common Shares. Whenever
the Conversion Rate is adjusted as herein provided, the Trust shall promptly
file with the Transfer Agent an officer's certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment which certificate shall be conclusive evidence
of the correctness of such adjustment absent manifest error. Promptly after
delivery of such certificate, the Trust shall prepare a notice of such
adjustment setting forth the adjusted Conversion Rate and the effective date
such adjustment becomes effective and shall mail such notice of such adjustment
to each holder of Series D Preferred Shares at such holder's last address as
shown on the share records of the Trust.

                  (ii) In the event the Trust at any time, or from time to time,
shall make or issue, or fix a record date for the determination of holders of
Common Shares entitled to receive, a dividend or other distribution payable in
securities of the Trust other than Common Shares, then and in each such event,
provision shall be made so that the holders of Series D Preferred Shares shall
receive upon conversion thereof, in addition to the number of Common Shares
receivable thereupon, the amount of securities of the Trust which they would
have received had their Series D Preferred Shares been converted into Common
Shares on the date of such event and had thereafter, during the period from the
date of such event to and including the date of conversion, retained such
securities receivable by them as aforesaid during such period, giving
application to all adjustments called for during such period under this Section
6(f) with respect to the rights of the holders of Series D Preferred Shares.

            (g)   In any case in which paragraph (f) of this Section 6 provides
that an adjustment shall become effective on the day next following the record
date for an event, the Trust may defer until the occurrence of such event (A)
issuing to the holder of any Series D Preferred Share converted after such
record date and before the occurrence of such event the additional Common Shares
issuable upon such conversion by reason of

                                       11
<PAGE>

the adjustment required by such event over and above the Common Shares issuable
upon such conversion before giving effect to such adjustment and (B) paying to
such holder any amount of cash in lieu of any fraction pursuant to paragraph (c)
of this Section 6; provided, however, that the holder of such Series D Preferred
Shares shall be entitled to such additional Common Shares and cash, as
applicable, upon such event.

            (h)   There shall be no adjustment of the Conversion Rate in case of
the issuance of any capital shares of the Trust, including issuance in
connection with a reorganization, acquisition or other similar transaction
except as specifically set forth in this Section 6. If any action or transaction
would require adjustment of the Conversion Rate pursuant to more than one
paragraph of this Section 6, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute value
to the holder of Series D Preferred Shares.

            (i)   The Trust shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Shares solely for the purpose of effecting conversion of the Series D
Preferred Shares, the full number of Common Shares deliverable upon the
conversion of all outstanding Series D Preferred Shares not theretofore
converted into Common Shares. For purposes of this paragraph (i), the number of
Common Shares that shall be deliverable upon the conversion of all outstanding
Series D Preferred Shares shall be computed as if at the time of computation all
such outstanding shares were held by a single holder. The Trust covenants that
any Common Shares issued upon conversion of the Series D Preferred Shares shall
be validly issued, fully paid and non-assessable. The Trust shall list the
Common Shares required to be delivered upon conversion of the Series D Preferred
Shares, prior to such delivery, upon each national securities exchange, if any,
upon which the outstanding Common Shares are listed at the time of such
delivery.

            (j)   The Trust will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of Common
Shares or other securities or property on conversion of Series D Preferred
Shares pursuant hereto; provided, however, that the Trust shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of Common Shares or other securities or property in a name
other than that of the holder of the Series D Preferred Shares to be converted,
and no such issue or delivery shall be made unless and until the Person
requesting such issue or delivery has paid to the Trust the amount of any such
tax or established, to the reasonable satisfaction of the Trust, that such tax
has been paid.

      7.    STATUS OF REACQUIRED SHARES.

      All Series D Preferred Shares that have been issued and are reacquired in
any manner by the Trust (including, without limitation, Series D Preferred
Shares which are redeemed or converted) shall be returned to the status of
authorized but unissued Series D Preferred Shares.

      8.       RANKING.

      The Series D Preferred Shares will, with respect to dividend rights and
rights

                                       12
<PAGE>

upon the liquidation, dissolution or winding-up of the Trust, rank:

      (a)   prior or senior to the Common Shares and any other class or series
of Equity Shares authorized or designated in the future if the terms of such
class or series provide that the holders of Series D Preferred Shares shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding-up in preference or priority to the holders
of shares of such class or series ("JUNIOR SHARES");

      (b)   on a parity with the Series A Preferred Shares, Series B Preferred
Shares and any other class or series of Equity Shares authorized or designated
in the future if the terms of such class or series provide that the holders of
such class or series and the Series D Preferred Shares shall be entitled to the
receipt of dividends and of amounts distributable upon liquidation, dissolution
or winding-up in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, without preference or priority
of one over the other ("PARITY SHARES"); and

      (c)   junior to any class or series of Equity Shares authorized or
designated in the future if the terms of such class or series provide that the
holders of such class or series shall be entitled to the receipt of dividends
and amounts distributable upon liquidation, dissolution or winding-up in
preference or priority to the holders of the Series D Preferred Shares ("SENIOR
SHARES").

      9.       VOTING.

      (a)   If and whenever six quarterly dividends (whether or not consecutive)
payable on the Series D Preferred Shares or any series or class of Parity Shares
shall be in arrears (which shall, with respect to any such quarterly dividend,
mean that any such dividend has not been paid in full), whether or not declared,
the number of Trustees then constituting the Board of Trustees shall be
increased by two (if not already increased by reason of similar types of
provisions with respect to Parity Shares of any other class or series which is
entitled to similar voting rights, other than the Series A Preferred Shares (the
"VOTING PARITY SHARES")) and the holders of Series D Preferred Shares, together
with the holders of all other Voting Parity Shares then entitled to exercise
similar voting rights, voting as a single class regardless of series, shall be
entitled to elect the two additional Trustees to serve on the Board of Trustees
at any annual meeting of shareholders or at a special meeting of the holders of
the Series D Preferred Shares and the Voting Parity Shares called as hereinafter
provided. At any time when such right to elect Trustees separately shall have
been so vested in the holders of Series D Preferred Shares and the Voting Parity
Shares, if applicable, the Secretary of the Trust may, and upon the written
request of the holders of record of not less than 20% of the total number of
Series D Preferred Shares and Voting Parity Shares (addressed to the Secretary
at the principal office of the Trust) shall, call a special meeting of the
holders of the Series D Preferred Shares and of the Voting Parity Shares for the
election of the two Trustees to be elected by them as herein provided, such call
to be made by notice similar to that provided in the Bylaws of the Trust for a
special meeting of the shareholders or as required by law. Such special meeting
shall be held, in the case of such written request, within 90 days after the
delivery of such request, provided that the Trust shall not be required to call
such a special meeting if such request is received less than 120 days

                                       13
<PAGE>

before the date fixed for the next ensuing annual meeting of shareholders and
the holders of the Series D Preferred Shares and Voting Parity Share are offered
the opportunity to elect such Trustees at such annual meeting. The Trustees
elected at any such special meeting shall hold office until the next annual
meeting of the shareholders or special meeting held in lieu thereof if such
office shall not have previously terminated as provided below. If any vacancy
shall occur among the Trustees elected by the holders of the Series D Preferred
Shares and the Voting Parity Shares by reason of death, resignation or
disability, a successor shall be elected by the Board of Trustees, upon the
nomination of the then-remaining Trustee elected by the holders of the Series D
Preferred Shares and the Voting Parity Shares or the successor of such remaining
Trustee, to serve until the next annual meeting of the shareholders or special
meeting held in place thereof if such office shall not have previously
terminated as provided below. Whenever all arrears in dividends on the Series D
Preferred Shares and the Voting Parity Shares then outstanding shall have been
paid and dividends thereon for the current Dividend Period shall have been
declared and paid, or declared and set apart for payment, then the right of the
holders of the Series D Preferred Shares and the Voting Parity Shares to elect
such additional two Trustees shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as Trustees
by the holders of the Series D Preferred Shares and the Voting Parity Shares
shall forthwith terminate and the number of Trustees constituting the Board of
Trustees shall be reduced accordingly.

      (b)   So long as any Series D Preferred Shares are outstanding, in
addition to any other vote or consent of shareholders required by law or by the
Declaration of Trust of the Trust, the affirmative vote or consent of at least
66-2/3% of the votes entitled to be cast by the holders of the outstanding
Series D Preferred Shares voting as a single class with the holders of all other
classes or series of Voting Parity Shares entitled to vote on such matters,
given in person or by proxy, either in writing without a meeting or by vote at
any meeting called for the purpose, shall be necessary for effecting or
validating:

            (i)   Any amendment, alteration or repeal of any of the provisions
      of, or the addition of any provision to, these Articles Supplementary, the
      Declaration of Trust or the By-Laws of the Trust that materially adversely
      affects the voting powers, rights or preferences of the holders of the
      Series D Preferred Shares; provided, however, that the amendment of or
      supplement to the provisions of the Declaration of Trust to authorize,
      create, increase or decrease the authorized amount of, or to issue, Junior
      Shares, Series D Preferred Shares or any class of Parity Shares shall not
      be deemed to materially adversely affect the voting powers, rights or
      preferences of the holders of Series D Preferred Shares; or

            (ii)  The authorization, creation of, increase in the authorized
      amount of, or issuance of shares of any class or series of Senior Shares
      or any security convertible into shares of any class or series of Senior
      Shares (whether or not such class or series of Senior Shares is currently
      authorized);

provided, however, that no such vote of the holders of Series D Preferred Shares
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such Senior Shares or
convertible or exchangeable

                                       14
<PAGE>

security is to be made, as the case may be, provision is made for the redemption
of all outstanding Series D Preferred Shares to the extent such redemption is
authorized by Section 5 of this Article.

      For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each Series D Preferred Share shall have one (1)
vote per share, except that when any other class or series of preferred shares
of the Trust shall have the right to vote with the Series D Preferred Shares as
a single class on any matter, then the Series D Preferred Shares and such other
class or series shall have with respect to such matters one quarter of one vote
per $25.00 of stated liquidation preference. Except as otherwise required by
applicable law or as set forth herein or in the Declaration of Trust, the Series
D Preferred Shares shall not have any relative, participating, optional or other
special voting rights and powers other than as set forth herein, and the consent
of the holders thereof shall not be required for the taking of any action by the
Trust.

      (c)   In no event shall the Series A Preferred Shares be treated as Parity
Shares for the purposes of this Section 9, and the voting rights of the Series A
Preferred Shares as fixed by the Articles Supplementary establishing such series
remain in full force and effect.

      10.      RECORD HOLDERS.

      The Trust and the Transfer Agent may deem and treat the record holder of
any Series D Preferred Share as the true and lawful owner thereof for all
purposes, and neither the Trust nor the Transfer Agent shall be affected by any
notice to the contrary.

      11.   RESTRICTIONS ON OWNERSHIP AND TRANSFER; REMEDIES.

      Article VII of the Declaration of Trust sets forth certain ownership and
transfer restrictions relating to the Equity Shares, including the Series D
Preferred Shares. Article VII of the Declaration of Trust is hereby incorporated
by reference herein. With respect to any conflict between the terms of these
Articles Supplementary and Article VII of the Declaration of Trust, the
provisions of Article VII of the Declaration of Trust shall control.

FOURTH: These Articles Supplementary have been duly adopted by all
necessary action on the part of the Trust.

                                       15
<PAGE>

      IN WITNESS WHEREOF, the Trust has caused these Articles Supplementary be
signed in its name and on its behalf by its Chief Executive Officer and
witnessed by its Assistant Secretary on January 25, 2001.

WITNESS:                                  CORPORATE OFFICE PROPERTIES TRUST

       /s/ John H. Gurley                 By:    /s/ Roger A. Waesche
       ---------------------------               -------------------------------
Name:  John H. Gurley                     Name:  Roger A. Waesche
Title: Vice President and General         Title: Senior Vice President and Chief
       Counsel                                   Financial Officer

      THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
CORPORATE OFFICE PROPERTIES TRUST, who executed on behalf of the Trust the
Articles Supplementary of which this Certificate is made a part, hereby
acknowledges in the name and on behalf of said Trust the foregoing Articles
Supplementary to be the official act of said Trust and hereby certifies that the
matters and facts set forth herein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.

        /s/ Roger A. Waesche
        ---------------------------
        Name: Roger A. Waesche
        Title: Senior Vice President and Chief Financial Officer

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