Document:

EXHIBIT 10.15

 

CHANGE OF CONTROL AGREEMENT

 

	
  Parties:

  	
   

  	
  Ciprico Inc.

  	
   

  	
  (“Company”)

  
	
   

  	
   

  	
  17400 Medina Road

  Plymouth, MN 55447

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Robert G. Brown

  	
   

  	
  (“Executive”)

  
	
   

  	
   

  	
  5835 Juneau Lane North

  Plymouth, MN 55447

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective Date:

  	
  November 15, 2003

  	
   

  	
   

  
								

 

RECITALS:

 

1.             Executive has been employed by Company
since May 1997 as Vice President of Sales, has extensive knowledge and
expertise relating to Company’s business and has contributed to Company’s
success.

 

2.             The parties recognize that a “Change of
Control” may materially change or diminish Executive’s responsibilities and
substantially frustrate Executive’s commitment to the Company.

 

3.             The parties further recognize that it is
in the best interests of the Company and its stockholders to provide certain benefits
payable upon a “Change of Control Termination” to encourage Executive to
continue in his position in the event of a Change of Control, although no such
Change of Control is now contemplated or foreseen.

 

4.             The parties further desire to provide for certain
benefits payable upon certain involuntary terminations of Executive’s
employment.

 

AGREEMENTS:

 

In consideration of the mutual covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Term of
Agreement.  The term of this
Agreement shall commence on the Effective Date and shall continue in effect
until termination of Executive’s employment which does not constitute a Change
of Control Termination; provided, however, that if a Change of Control of the
Company shall occur during the term of this Agreement, this Agreement shall
instead continue in effect for a period of twelve (12) months following the
date of such Change of Control.  Any
rights and obligations accruing before the termination or expiration of this
Agreement shall survive to the extent necessary to enforce such rights and
obligations.

 

2.             “Change
of Control.”  For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

 

(a)           A
merger or consolidation to which the Company is a party if the individuals and
entities who were shareholders of the Company immediately prior to the
effective date of such merger or consolidation have, immediately following the
effective date of such merger or consolidation, beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than
fifty percent (50%) of the total combined voting power of all classes of
securities issued by the surviving corporation for the election of directors of
the surviving corporation;

 

(b)           The
acquisition of direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of securities of the Company
by any person or entity or by a group of associated persons or entities acting
in concert in one or a series of transactions, which causes the aggregate
beneficial ownership of such person, entity or group to equal or exceed twenty
percent (20%) or more of the total combined voting power of all classes of the
Company’s then issued and outstanding securities;

 

(c)           The
sale of substantially all of the assets of the Company to any person or entity
that is not a wholly-owned subsidiary of the Company;

 

(d)           The
approval by the stockholders of the Company of any plan or proposal for the
liquidation of the Company;

 

1

 

(e)           A
change in the composition of the Board of the Company at any time during any
consecutive twenty-four (24) month period such that the “Continuity Directors”
no longer constitute at least a seventy percent (70%) majority of the
Board.  For purposes of this event,
“Continuity Directors” means those members of the Board who were directors at
the beginning of such consecutive twenty-four (24) month period or were elected
by, or on the nomination or recommendation of, at least a two thirds (2/3)
majority of the then-existing Board of Directors; or

 

(f)            The
execution by the Company of a letter of intent, an agreement in principle or a
definitive agreement relating to an event described in Section 2(a), 2(b),
2(c), 2(d) or 2(e) that ultimately results in such a Change of Control, or a
tender or exchange offer or proxy contest is commenced that ultimately results
in an event described in Section 2(b) or 2(e).

 

3.             Termination.  For purposes of this Agreement, “Change of
Control Termination” shall mean any of the following events occurring within
twelve (12) months after a change of control occurring during the term of this
Agreement.

 

(a)           The termination of
Executive’s employment by the Company for any reason except Good Cause.  For purposes of this Agreement, “Good Cause”
shall include, but not be limited to, the following:

 

(i)            Executive’s conviction
of or plea of guilty or nolo contendere
to a felony resulting from conduct occurring on or after the date of the Change
of Control;

 

(ii)           Executive’s willful and
repeated failure to fulfill his employment duties with the Company; provided,
however, that for purposes of this clause (ii), an act or failure to act by
Executive shall not be “willful” unless it is done, or omitted to be done, in
bad faith and without any reasonable belief that Executive’s action or omission
was in the best interests of the Company;

 

(iii)          Executive’s incurable
breach of any material element of any proprietary or confidential information
agreement with the Company;

 

(iv)          Executive’s conduct that
is materially detrimental to Company’s business reputation or goodwill;

 

(v)           Any dishonesty in
dealing between Executive and Company or between Executive and Company’s
vendors, advisors, other employees, or customers;

 

(vi)          Executive’s active use
of alcohol or controlled substances in a manner which impairs Executive’s
ability to perform his duties;

 

(vii)         Executive’s violation of
any material portion of this Agreement;

 

(viii)        Executive’s failure to
substantially perform his material duties, which failure is not cured within
thirty (30) days after Executive’s receipt of written notice from Company
specifying the non-performance.

 

In no event shall Executive’s death or
disability (as defined below) constitute Good Cause.  “Disability” shall mean Executive’s failure or inability, for
reasons of health, to perform Executive’s usual and customary duties on behalf
of the Company in the usual and customary manner for a total of more than 90
consecutive business days (excluding Saturdays, Sundays and days during which
the Company is closed due to a recognized holiday).

 

(b)           The
termination of employment with the Company by Executive for Good Reason.  Such termination shall be accomplished by,
and effective upon, Executive giving written notice to the Company of his
decision to terminate.  “Good Reason”
shall mean a good faith determination by Executive, in Executive’s sole and
absolute judgment that any one or more of the following events has occurred on
or after the date of the Change of Control without the Executive’s express
written consent:

 

(i)            A
change in Executive’s reporting responsibilities, titles or offices as in
effect immediately prior to the date of the Change of Control, or any removal
of Executive from or any failure to re-elect Executive to any of such
positions, which has the effect of diminishing Executive’s responsibility or
authority;

 

(ii)           A
reduction in Executive’s base salary in effect immediately prior to the date of
the Change of Control;

 

(iii)          Requiring
Executive to move to or work from a location that is outside of a fifty (50)
mile radius of Executive’s job location on the date of the Change of Control;

 

2

 

(iv)          Without
the adoption of a replacement plan, program or arrangement that provides
benefits to Executive that are equal to or greater than those benefits that are
discontinued or adversely affected:

 

(A)          The Company’s failure to continue in effect,
within its maximum stated term, any pension, bonus, incentive, stock ownership,
stock purchase, stock option, life insurance, health, accident, disability, or
any other employee compensation or benefit plan, program or arrangement, in
which Executive is participating immediately prior to the date of the Change of
Control; or

 

(B)           The Company taking any action that would
adversely affect Executive’s participation or materially reduce Executive’s
benefits under any of such plans, programs or arrangements; or

 

(v)           Any
material breach by the Company of this Agreement so long as Executive has given
the Company thirty (30) days notice of such breach, and the Company has not
cured the breach during that thirty (30) day period.

 

Termination for “Good Reason” shall not
include Executive’s death or a termination of employment by Executive for any
reason other than the events specified in clauses (1) through (5) above.

 

4.             Compensation
and Benefits.  Subject to the
limitations contained in Section 5 below, upon a Change of Control
Termination, Executive shall be entitled to the following compensation and
benefits:

 

(a)           The
Company shall pay to Executive:

 

(i)            Within five (5) days of the Change of
Control Termination, all salary and other compensation earned by Executive
through the date of the Change of Control Termination at the rate in effect
immediately prior to such Change of Control Termination;

 

(ii)           Within fifteen (15) days of the Change of
Control Termination, all other amounts to which Executive may be entitled to
receive under any compensation plan maintained by the Company, subject to any
distribution requirements contained in such compensation plans; and

 

(iii)          A severance benefit in a single lump sum
payment, an aggregate amount equal to one hundred percent (100%) of Employee’s
then current annual base salary.

 

(b)           The
Company shall provide, at no cost to Executive, continued coverage under the
Company’s group life, health or dental benefit plans, if any, at a level
comparable to the benefits which Executive was receiving or entitled to receive
immediately prior to the Change of Control Termination or, if greater, at a
level comparable to the benefits which Executive was receiving immediately
prior to the event which constituted Good Reason.  Executive shall be entitled to such continued coverage for the
maximum period required by applicable federal and state law following such
Change of Control Termination or, if earlier, until Executive is eligible to be
covered for such benefits through his employment with another employer.  The Company may, in its sole discretion,
provide such coverage through the purchase of individual insurance contracts
for Executive.

 

5.             Payment
of Attorneys Fees and Other Costs. 
If, after a Change in Control of the Company, a good faith dispute
arises with respect to the enforcement of Executive’s rights under this
Agreement or if any legal or arbitration proceeding shall be brought in good
faith to enforce or interpret any provision contained herein or to recover
damages for breach hereof, Executive shall recover from the Company (a)
reasonable attorneys’ fees and necessary costs and disbursements incurred by
Executive as a result of such dispute or such legal or arbitration proceeding,
and (b) prejudgment interest on any money judgment or arbitration award
obtained by Executive calculated at the prime rate announced from time to time
by Wells Fargo Bank Minnesota, N. A., or the maximum rate permitted under
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended, or
any successor provision, whichever rate is lower, such prejudgment interest to
be paid from the date that payments to Executive should have been made under this
Agreement.

 

6.             Withholding
Taxes. The Company shall be entitled to deduct from all payments or
benefits provided for under this Agreement any federal, state or local income
and employment related taxes required by law to be withheld with respect to
such payments or benefits.

 

7.             Successors
and Assigns.  This Agreement
shall inure to the benefit of and shall be enforceable by Executive, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.  The Company will require the transferee of
any sale of all or substantially all of the business and assets of the Company
or the survivor of any merger, consolidation or other transaction expressly to
agree to

 

3

 

honor this Agreement in the same manner and to the same extent that the
Company would be required to perform this Agreement if no such event had taken
place.  Failure of the Company to obtain
such agreement before the effective date of such event shall be a breach of
this Agreement and shall entitle Executive to the benefits provided in
Section 4 as if Executive had terminated employment for Good Reason
following a Change in Control.

 

8.             Notices.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. 
All notices to the Company shall be directed to the attention of the
Board of Directors of the Company.

 

	
  For Ciprico:

  	
   

  	
  17400 Medina Road

  Plymouth, MN 55447

  
	
   

  	
   

  	
   

  
	
  For Employee:

  	
   

  	
  5835 Juneau Lane North

  Plymouth, MN 55447

  

 

9.             Captions.  The headings or captions set forth in this
Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.

 

10.           Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Minnesota.

 

11.           Construction.  Wherever possible, each term and provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law.  If any term
or provision of this Agreement is invalid or unenforceable under applicable
law, (a) the remaining terms and provisions shall be unimpaired, and (b) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the unenforceable term or provision.

 

12.           Amendment;
Waivers.  This Agreement may
not be modified, amended, waived or discharged in any manner except by an
instrument in writing signed by both parties hereto.  The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

 

13.           Entire
Agreement.  This Agreement
supersedes all prior or contemporaneous negotiations, commitments, agreements
(written or oral) and writings between the Company and Executive with respect
to the subject matter hereof and constitutes the entire agreement and
understanding between the parties hereto. 
All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder.

 

14.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered as of the day and year
first above written.

 

	
   

  	
  CIPRICO INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Kill

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Robert G. Brown

  	
   

  	
   

  
	
   

  	
  Robert G. Brown

  	
   

  
						

 

4EXHIBIT
4.1

 

ARTICLES
SUPPLEMENTARY

OF

CORPORATE OFFICE PROPERTIES TRUST

SERIES H CUMULATIVE REDEEMABLE PREFERRED SHARES

(PAR VALUE $0.01 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 2,000,000 authorized but unissued
preferred shares of beneficial interest of the Trust, par value $0.01 per share
(the “Preferred Shares”), into a series designated as 7.5% Series H Cumulative
Redeemable Preferred Shares, par value $0.01 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 December 11, 2003.

 

SECOND:
The classification increases the number of shares classified as 7.5% Series H
Cumulative Redeemable Preferred Shares, par value $0.01 per share, from no
shares immediately prior to the classification to 2,000,000 shares immediately
after the classification.  The
classification decreases the number of unclassified Preferred Shares from
7,841,000 to 5,841,000.

 

THIRD: The terms of the 7.5% Series H
Cumulative 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
7.5% Series H Cumulative Redeemable Preferred Shares, par value $0.01 per share
(the “Series H Preferred Shares”), and 2,000,000 shares shall be the authorized
number of such Series H Preferred Shares constituting such series.

 

2.             DEFINITIONS.

 

For purposes of the Series H 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.

 

 

“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 H Preferred Shares; provided that, for purposes of
paragraph (a) of Section 8 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, par value $0.01 per share, of the Trust.

 

“Declaration of Trust” shall mean the Amended and
Restated Declaration of Trust of the Trust as filed for record with the
Department of Assessments and Taxation of the State 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 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 H
Preferred Shares shall be redeemed pursuant to Section 5 hereof, which shall
end on and include the Redemption Date with respect to the Series H 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.

 

2

 

“Initial Dividend Period” shall mean the period
commencing on and including the Issue Date and ending on and including January
14, 2004.

 

“Issue Date” shall mean December 18, 2003.

 

“Junior Shares” shall have the meaning set forth in
paragraph (a) of Section 7 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 7 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 (as defined in Article VII of the
Declaration of Trust) applies.

 

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

 

“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 H 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 7 of this Article.

 

“Series B Preferred Shares” shall mean the Trust’s 10%
Series B Cumulative Redeemable Preferred Shares of beneficial interest, par
value $0.01 per share.

 

“Series D Preferred Shares” shall mean the Trust’s 4%
Series D Cumulative Convertible Redeemable Preferred Shares of beneficial
interest, par value $0.01 per share.

 

3

 

“Series E Preferred Shares” shall mean the Trust’s
10.25% Series E Cumulative Redeemable Preferred Shares of beneficial interest,
par value $0.01 per share.

 

“Series F Preferred Shares” shall mean the Trust’s
9.875% Series F Cumulative Redeemable Preferred Shares of beneficial interest
par value $0.01 per share.

 

“Series G Preferred Shares” shall mean the Trust’s 8%
Series G Cumulative Redeemable Preferred Shares of beneficial interest par
value $0.01 per shares.

 

“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 H
Preferred Shares shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.

 

“Transfer Agent” means Wells Fargo & Company 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 H Preferred Shares.

 

“Trustee” shall mean a member of the Board of
Trustees.

 

“Voting Parity
Shares” shall have the meaning set forth in paragraph (a) of Section 8 of this
Article.

 

3.             DIVIDENDS.

 

(a)           The
holders of Series H 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 H Preferred Shares at the rate of 7.5%
of the Liquidation Preference per year (equivalent to $25.00 per year per
Series H 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, commencing
on January 15, 2004.  Each such dividend
shall be payable in arrears to the holders of record of the Series H 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.  The Dividend Record Date for the dividend
payable on January 15, 2004 shall be December 31, 2003.  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, which date
shall not precede by more

 

4

 

than 45 days nor less than 15 days the payment date thereof, as may be
fixed by the Board of Trustees.

 

(b)           Any
dividend payable on the Series H 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 H
Preferred Shares shall not be entitled to any dividends in excess of full
cumulative dividends, as herein provided, on the Series H 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 H Preferred Shares that may be in arrears.

 

(c)           So
long as any of the Series H Preferred Shares are outstanding, when dividends
are not paid in full upon the Series H 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 H Preferred Shares and any
Parity Shares shall be declared ratably in proportion to the respective amounts
of dividends accrued and unpaid on the Series H Preferred Shares and accrued
and unpaid on such Parity Shares. 
Except as set forth in the preceding sentence, unless dividends on the
Series H 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 H Preferred Shares are outstanding, unless dividends
equal to the full amount of all accrued and unpaid dividends on the Series H
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)           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.

 

5

 

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 H Preferred Shares shall be
entitled to receive a liquidation preference of Twenty-Five Dollars ($25.00)
per Series H 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. 
Until the holders of the Series H 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 H 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 H
Preferred Shares and any such other Parity Shares ratably in the same
proportion as the respective amounts that would be payable on such Series H 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 H 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 H Preferred Shares and any Parity Shares shall not be entitled to
share therein.

 

5.             REDEMPTION
AT THE OPTION OF THE TRUST.

 

(a)           Series
H Preferred Shares shall not be redeemable by the Trust prior to December 18,
2008, except as set forth in Article VII of the Declaration of Trust that is
incorporated by reference herein.  On or
after December 18, 2008, the Trust, at its option, may redeem Series H
Preferred Shares, in whole or from time to time in part, at the Redemption
Price.

 

(b)           In
the event of a redemption of Series H 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 H Preferred Shares have not been paid or declared and
set apart for payment, no Series H Preferred Shares may be redeemed unless all
outstanding Series H Preferred Shares are simultaneously redeemed and neither
the Trust nor any Affiliate of the Trust may purchase or acquire Series H
Preferred Shares, otherwise than

 

6

 

pursuant to a purchase or exchange offer made on the same terms to all
holders of Series H Preferred Shares.

 

(c)           If fewer than all the outstanding
Series H Preferred Shares are to be redeemed, the Trust will select those
Series H Preferred Shares to be redeemed pro rata in proportion to the numbers
of Series H 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 H Preferred Shares represented by any certificate (which may
include a global certificate) are redeemed, then a new certificate (including,
if appropriate, a new global certificate) representing the unredeemed Series H
Preferred Shares shall be issued without cost to the holders thereof.

 

(d)           If
the Trust shall redeem Series H Preferred Shares pursuant to paragraph (a) of
this Section 5, notice of the redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to
be made once a week for two consecutive weeks commencing not less than 30 nor
more than 60 days prior to the Redemption Date.  A similar notice of such 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 H 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 H
Preferred Shares to be redeemed; (iii) the manner in which Series H Preferred
Shares are to be surrendered, including the requisite form of documentation for
such surrender of Series H Preferred Shares to the Trust; 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 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 H 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 H
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
H 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 H 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

 

7

 

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 H
Preferred Shares called for redemption, with irrevocable instructions that such
cash be applied to the redemption of the Series H 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 H Preferred 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 H 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 any such Series H
Preferred Shares to be so redeemed (in the case of certificated shares,
properly endorsed or assigned for Transfer, if the Trust shall so require and
the Redemption Notice shall so state), such surrendered Series H Preferred
Shares shall be exchanged for cash (without interest thereon) for which such
Series H Preferred Shares have been redeemed in accordance with such Redemption
Notice.

 

6.             STATUS OF
REACQUIRED SHARES.

 

All Series H Preferred Shares that have been issued
and are reacquired in any manner by the Trust (including, without limitation,
Series H Preferred Shares which are redeemed) shall be returned to the status
of authorized but unissued Preferred Shares, without designation as to
series.  The Trust may also retire any
unissued Series H Preferred Shares, and such shares shall then be restored to
the status of authorized but unissued Preferred Shares without designation as
to series.

 

7.             RANKING.

 

The Series H Preferred Shares will, with respect to
dividend rights and rights 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 the Trust’s
Equity Shares authorized or designated in the future if the holders of Series H
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 B Preferred Shares, the Series D Preferred Shares, the
Series E Preferred Shares, the Series F Preferred Shares, the Series G
Preferred Shares and any other class or series of the Trust’s Equity Shares
authorized or designated in the future if, by the terms of such class or
series, the holders of such class or series of securities and the Series H
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

 

8

 

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 our Equity Shares authorized or designated in the
future if, by the terms of such class or series, 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 H Preferred Shares (“Senior Shares”).

 

8.             VOTING.

 

(a)           If
and whenever six (6) quarterly dividends (whether or not consecutive) payable
on the Series H 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 (the “Voting Parity Shares”); without limiting the
foregoing, the Series B Preferred Shares, the Series D Preferred Shares, Series
E Preferred Shares, the Series F Preferred Shares and the Series G Preferred
Shares shall be deemed to be entitled to voting rights similar to the Series H
Preferred Shares) and the holders of Series H 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 or class, 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 H 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 H 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 H
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 H 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 before the date fixed
for the next ensuing annual meeting of shareholders and the holders of the
Series H 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
herein.  If any vacancy shall occur
among the Trustees elected by the holders of the Series H 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 H 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 above.  Whenever all arrears in
dividends on the Series H Preferred

 

9

 

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 H 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 H 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 H 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 H 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 H 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 H 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 H 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 or exchangeable 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 H
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 security is to be made, as
the case may be, provision is made for the redemption of all outstanding Series
H 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 H 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 H
Preferred Shares as a single class on any matter, then the Series H 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 H
Preferred Shares shall not have any relative, participating, optional or other
special voting rights and powers other than as set forth

 

10

 

herein, and the consent of the holders thereof shall not be required
for the taking of any action by the Trust.

 

9.             RECORD
HOLDERS.

 

The Trust and the Transfer Agent may deem and treat
the record holder of any Series H 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.

 

10.          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 H Preferred Shares. 
Article VII of the Declaration of Trust is hereby incorporated by
reference herein.

 

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

 

11

 

IN WITNESS WHEREOF, the Trust has caused
these presents to be signed in its name and on its behalf by its President and
Chief Operating Officer and witnessed by its Secretary, Senior Vice President
and General Counsel on December 11, 2003.

 

	
  WITNESS:

  	
   

  	
  CORPORATE OFFICE PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
  JOHN H. GURLEY

  	
   

  	
   

  	
  RANDALL M. GRIFFIN

  	
   

  
	
  Name:

  	
  John H. Gurley

  	
   

  	
  Name: Randall M. Griffin

  
	
  Title:

  	
  Secretary, Vice President &

  General Counsel

  	
   

  	
  Title:   President and Chief Operating Officer

  
						

 

 

THE UNDERSIGNED, Secretary, Senior Vice
President and General Counsel of CORPORATE OFFICE PROPERTIES TRUST, 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.

 

 

	
  JOHN H. GURLEY

  	
   

  
	
  Name:  John
  H. Gurley

  
	
  Title:   Secretary, Senior Vice President
  and General

  Counsel

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