INDEMNITY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
by and between
AIRPORT SQUARE II, LLC
AIRPORT SQUARE IV, LLC
AIRPORT SQUARE V, LLC
AIRPORT SQUARE X, LLC
AIRPORT SQUARE XI, LLC
AIRPORT SQUARE XIII, LLC
AIRPORT SQUARE XIV, LLC
AIRPORT SQUARE XIX, LLC
AIRPORT SQUARE XX, LLC
AIRPORT SQUARE XXI, LLC
TECH PARK I, LLC
TECH PARK II, LLC
and
TECH PARK IV, LLC
as Grantor
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as Trustees
for the benefit of
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA,
As Lender
Property Known As
Airport Square II
Airport Square IV
Airport Square V
Airport Square X
Airport Square XI
Airport Square XIII
Airport Square XIV
Airport Square XIX
Airport Square XX
Airport Square XXI
Tech Park I
Tech Park II
Tech Park IV
This Indemnity Deed of Trust Was Prepared By
And After Recordation This Indemnity Deed of Trust Should be
Returned To:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
c/o Teachers Insurance and Annuity
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
INDEMNITY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
THIS INDEMNITY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT (this "DEED OF TRUST") made this 30 day of September, 1999,
by Airport Square II, LLC, Airport Square IV, LLC, Airport Square V, LLC,
Airport Square X, LLC, Airport Square XI, LLC, Airport Square XIII, LLC, Airport
Square XIV, LLC, Airport Square XIX, LLC, Airport Square XX, LLC, Airport Square
XXI, LLC, Tech Park I, LLC, Tech Park II, LLC, and Tech Park IV, LLC
(collectively, "GRANTOR"), each, a Maryland limited liability company, having
their principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ having an
office at ▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ("TRUSTEES"), for the
benefit of TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA ("LENDER"), a
New York corporation, having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
RECITALS:
A. Lender agreed to make a loan to Corporate Office Properties, L.P. a
Delaware limited partnership (the "BORROWER") and Borrower has agreed to accept
a loan (the "LOAN") in the maximum principal amount of $60,000,000.
B. To evidence the Loan, Borrower executed and delivered to Lender
Borrower's promissory note (the "NOTE"), dated of even date herewith, in the
principal amount of Sixty Million Dollars ($60,000,000) (that amount or so much
as is outstanding from time to time is referred to as the "PRINCIPAL"). Pursuant
to the Note, Borrower promises to pay the Principal with interest thereon to the
order of Lender as set forth in the Note and with the balance, if any, of the
Debt being due and payable on October 1, 2006 (the "MATURITY DATE").
C. Grantor has executed a Conditional Guaranty Agreement of even date
herewith, to and for the benefit of Lender (the "GUARANTY"), pursuant to which
Grantor has, jointly and severally, conditionally guaranteed to Lender the
Borrower's obligations under the Note. The Guarantor is not primarily obligated
under the Loan.
D. To secure the Grantor's obligations under the Guaranty, this Deed
of Trust conveys, among other things, Grantor's fee interest in the certain real
property located in the County of ▇▇▇▇ Arundel, State of Maryland more
particularly described in EXHIBIT A as Parcels 1 through 13 (the "LAND").
E. As a condition precedent to making the Loan to Borrower, Lender
required Grantor to execute and deliver this Deed of Trust to secure the
Guarantor's Obligations under the Guaranty. As used herein, "OBLIGATIONS" means
and includes: (a) all present and future liabilities and obligations of Grantor
under the Guaranty, this Deed of Trust and the other Financing Documents,
including principal, interest and all other amounts due or to become due
under the Guaranty, this Deed of Trust and the other Financing Documents, and
(b) all present and future liabilities and obligations of Grantor under the
provisions of this Deed of Trust including (i) all Expenses, and (ii) any and
all other amounts and indemnifications which are included as a part of the
Obligations pursuant to the provisions of this Deed of Trust. The Guaranty,
this Deed of Trust, and any other agreements or documents both now and
hereafter furnished or executed by Grantor or any other person or persons to
evidence, secure, guaranty or in connection with the Obligations are
hereinafter collectively referred to as the "FINANCING DOCUMENTS".
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1. DEFINITIONS. Capitalized terms used in this Deed of Trust are
defined in EXHIBIT B or in the text with a cross-reference in EXHIBIT B.
SECTION 1.2. RULES OF CONSTRUCTION. This Deed of Trust will be interpreted
in accordance with the rules of construction set forth in EXHIBIT C.
ARTICLE II
GRANTING CLAUSES
SECTION 2.1. ENCUMBERED PROPERTY. Grantor irrevocably grants, mortgages,
warrants, conveys, assigns and pledges to Trustees, in trust, WITH POWER OF SALE
and the right of entry and possession, and grants to Trustees a security
interest in, the following property, rights, interests and estates now or in the
future owned or held by Grantor (the "PROPERTY") for the uses and purposes set
forth in this Deed of Trust forever:
(i) the Land;
(ii) all buildings and improvements located on the Land (the
"IMPROVEMENTS");
(iii) all easements; rights of way or use, including any rights of ingress
and egress; streets, roads, ways, sidewalks, alleys and passages; strips
and gores; sewer rights; water, water rights, water courses, riparian
rights and drainage rights; air rights and development rights; oil and
mineral rights; and tenements, hereditaments and appurtenances, in each
instance adjoining or otherwise appurtenant to or benefitting the Land or
the Improvements;
(iv) all materials intended for construction, re-construction, alteration
or repair of the Improvements, such materials to be deemed included in the
Land and the Improvements
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immediately on delivery to the Land; all fixtures and personal property
that are attached to, contained in or used in connection with the Land or
the Improvements (excluding personal property owned by tenants and
excluding removable fixtures and appurtenances), including: furniture;
furnishings; machinery; motors; elevators; fittings; microwave ovens;
refrigerators; office systems and equipment; plumbing, heating,
ventilating and air conditioning systems and equipment; maintenance and
landscaping equipment; lighting, cooking, laundry, dry cleaning,
refrigerating, incinerating and sprinkler systems and equipment;
telecommunications systems and equipment; computer or word processing
systems and equipment; security systems and equipment; and equipment
leases for any of the property described in this subsection (the "FIXTURES
AND PERSONAL PROPERTY");
(v) all agreements, ground leases, grants of easements or rights-of-way,
permits, declarations of covenants, conditions and restrictions,
disposition and development agreements, planned unit development
agreements, cooperative, condominium or similar ownership or conversion
plans, management, leasing, brokerage or parking agreements or other
material documents affecting Borrower of the Land, the Improvements or the
Fixtures and Personal Property, including the documents described in
EXHIBIT D but expressly excluding the Leases (the "PROPERTY DOCUMENTS");
(vi) all inventory (including all goods, merchandise, raw materials,
incidentals, office supplies and packaging materials) held for sale, lease
or resale or furnished or to be furnished under contracts of service, or
used or consumed in the ownership, use or operation of the Land, the
Improvements or the Fixtures and Personal Property, all documents of title
evidencing any part of any of the foregoing and all returned or
repossessed goods arising from or relating to any sale or disposition of
inventory;
(vii) all intangible personal property relating to the Land, the
Improvements or the Fixtures and Personal Property, including choses in
action and causes of action (except those personal to Grantor), corporate
and other business records, inventions, designs, promotional materials,
blueprints, plans, specifications, patents, patent applications,
trademarks, trade names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, claims for refunds or rebates of
taxes, insurance surpluses, refunds or rebates of taxes and any letter of
credit, guarantee, claim, security interest or other security held by or
granted to Grantor to secure payment by an account debtor of any of the
accounts of Grantor arising out of the ownership, use or operation of the
Land, the Improvements or the Fixtures and Personal Property, and
documents covering all of the foregoing; all accounts, accounts
receivable, documents, instruments, money, deposit accounts, funds
deposited in accounts established with a bank, savings and loan
association, trust company or other financial institution in connection
with the ownership, use or operation of the Property, including any
reserve accounts or escrow accounts, and all investments of the funds and
all other general intangibles;
(viii) all awards and other compensation paid after the date of this Deed
of Trust for any Condemnation (the "CONDEMNATION AWARDS");
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(ix) all proceeds of and all unearned premiums on the Policies (the
"INSURANCE PROCEEDS");
(x) all licenses, certificates of occupancy, contracts, management
agreements, operating agreements, operating covenants, franchise
agreements, permits and variances relating to the Land, the Improvements
or the Fixtures and Personal Property;
(xi) all books, records and other information, wherever located, which are
in Borrower's possession, custody or control or to which Grantor is
entitled at law or in equity and which are related to the Property,
including all computer or other equipment used to record, store, manage,
manipulate or access the information;
(xii) all deposits held from time to time by the Accumulations Depositary
to provide reserves for Taxes and Assessments together with interest
thereon, if any (the "ACCUMULATIONS");
(xiii) all after-acquired title to or remainder or reversion in any of the
property described in this Section; all additions, accessions and
extensions to, improvements of and substitutions or replacements for any
of such property; all products and all cash and non-cash proceeds,
immediate or remote, of any sale or other disposition of any of such
property, excluding sales or other dispositions of inventory in the
ordinary course of the business of operating the Land or the Improvements;
and all ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, interests, rights or other property
acquired by Grantor after the date of this Deed of Trust for use in
connection with the Land and Improvements, all without the need for any
additional mortgage, assignment, pledge or conveyance to Lender but
Grantor will execute and deliver to Lender, upon Lender's request, any
documents reasonably requested by Lender to further evidence the
foregoing; and
(xiv) all deposits for reserves held from time to time by an escrow holder
in accordance with the Pledge and Security Agreement described in the
Section entitled "RESERVES" and all accounts established to maintain the
deposits together with investments thereof and interest thereon.
SECTION 2.2. HABENDUM CLAUSE. The Property is conveyed to Trustees, and
the Trustees' successors and assigns, to have and to hold forever in fee simple,
but subject, however, to defeasance as described in Section 2.4 of this Deed of
Trust.
SECTION 2.3. SECURITY AGREEMENT.
The Property includes both real and personal property and this Deed of
Trust is a real property mortgage and also a "security agreement" and a
"financing statement" within the meaning of the Maryland Uniform Commercial
Code. By executing and delivering this Deed of Trust, Grantor grants to Lender,
as security for the Obligations, a security interest in the Property to the full
extent that any of the Property may be subject to the Uniform Commercial Code.
SECTION 2.4. CONDITIONS TO GRANT. This Deed of Trust is made on the
express condition
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that if Grantor pays and performs the Obligations in full in accordance with the
Loan Documents, whether such obligations are now existing or hereafter arising,
then, the lien of this Deed of Trust will be released at Grantor's expense. Any
contractual provisions of a Loan Document that expressly provides in such Loan
Document to continue beyond the repayment of the Loan and release of lien of the
Deed of Trust shall continue in accordance with their terms.
ARTICLE III
OBLIGATIONS SECURED
SECTION 3.1. THE OBLIGATIONS. This Deed of Trust secures the Obligations,
PROVIDED that the foregoing does not limit, qualify or affect in any way the
present, absolute nature of the Assignment.
ARTICLE IV
TITLE AND AUTHORITY
SECTION 4.1. TITLE TO THE PROPERTY.
(a) Subject to the conveyance effectuated by this Deed of Trust, Grantor
has and will continue to have good and marketable title in fee simple absolute
to the Land and the Improvements and good and marketable title to the Fixtures
and Personal Property, all free and clear of liens, encumbrances and charges
except the Permitted Exceptions, and has the right to mortgage, give, grant,
bargain, sell, lien, setoff, convey, confirm, pledge, assign and hypothecate the
same. To Grantor's knowledge, there are no facts or circumstances that might
give rise to a lien, encumbrance or charge on the Property. Subject to the
Permitted Exceptions, Grantor shall forever specially warrant, defend and
preserve such title and the validity and priority of the lien of this Deed of
Trust and shall forever warrant and defend the same to Lender against the claims
of all persons whomsoever.
(b) Grantor owns and will continue to own all of the other Property free
and clear of all liens, encumbrances and charges except the Permitted
Exceptions.
(c) This Deed of Trust is and will remain a valid and enforceable first
lien on and security interest in the Property, subject only to the Permitted
Exceptions.
SECTION 4.2. AUTHORITY.
(a) Grantor is and will continue to be (i) duly organized, validly
existing and in good standing under the Laws of the state or commonwealth in
which it was organized or incorporated and (ii) duly qualified to conduct
business, in good standing, in the state or commonwealth where the Property is
located.
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(b) Grantor has and will continue to have all approvals required by Law or
otherwise and full right, power and authority to (i) own and operate the
Property and carry on Grantor's business as now conducted or as proposed to be
conducted; (ii) execute and deliver those of the Financing Documents to which it
is a party; (iii) grant, mortgage, warrant the title to, convey, assign and
pledge the Property to Lender pursuant to the provisions of this Deed of Trust;
and (iv) perform the Obligations.
(c) The execution and delivery of the Financing Documents and the
performance of the Obligations do not and will not conflict with or result in a
default under any Laws or any Leases or Property Documents and do not and will
not conflict with or result in a default under any agreement binding upon any
party to the Financing Documents.
(d) The Financing Documents constitute and will continue to constitute
legal, valid and binding obligations of all parties to the Financing Documents
enforceable in accordance with their respective terms.
SECTION 4.3. NO FOREIGN PERSON. Grantor is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code. Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
SECTION 4.4. LITIGATION. There are no Proceedings or, to Grantor's
knowledge, investigations against or affecting Grantor or the Property and, to
Grantor's knowledge, there are no facts or circumstances that might give rise to
a Proceeding or an investigation against or affecting Grantor or the Property.
Grantor will give Lender prompt notice of the commencement of any Proceeding or
investigation against or affecting the Property or Grantor which could have a
material adverse effect on the Property or on Lender's interests in the Property
or under the Financing Documents. Grantor also will deliver to Lender such
additional information relating to the Proceeding or investigation as Lender may
request from time to time.
ARTICLE V
PROPERTY STATUS, MAINTENANCE AND LEASES
SECTION 5.1. STATUS OF THE PROPERTY.
(a) Grantor has obtained and will maintain in full force and effect all
certificates, licenses, permits and approvals that are issued or required by Law
or by any entity having jurisdiction over the Property or over Grantor or that
are necessary for the Permitted Use, for occupancy and operation of the Property
for the conveyance described in this Deed of Trust and for the conduct of
Grantor's business on the Property in accordance with the Permitted Use.
(b) The Property is and will continue to be serviced by all public
utilities required for the Permitted Use of the Property.
(c) All roads and streets necessary for service of and access to the
Property for the current or contemplated use of the Property have been completed
and are and will continue to be
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serviceable, physically open and dedicated to and accepted by the Government for
use by the public.
(d) The Property is free from damage caused by a Casualty.
(e) All costs and expenses of labor, materials, supplies and equipment
used in the construction of the Improvements have been paid in full.
SECTION 5.2. MAINTENANCE OF THE PROPERTY. Grantor will maintain the
Property in thorough repair and good and safe condition, suitable for the
Permitted Use, including, to the extent necessary, replacing the Fixtures and
Personal Property with property at least equal in quality and condition to that
being replaced. Grantor will not erect any new buildings, building additions or
other structures on the Land or otherwise materially alter the Improvements
without Lender's prior consent which may be withheld in Lender's sole
discretion. The Property will be managed by a property manager satisfactory to
Lender pursuant to a management agreement satisfactory to Lender and terminable
by Grantor upon 30 days notice to the property manager.
SECTION 5.3. CHANGE IN USE. Grantor will use and permit the use of the
Property for the Permitted Use and for no other purpose.
SECTION 5.4. WASTE. Grantor will not commit or permit any waste (including
economic and non-physical waste), impairment or deterioration of the Property or
any alteration, demolition or removal of any of the Property without Lender's
prior consent which may be withheld in Lender's sole discretion.
SECTION 5.5. INSPECTION OF THE PROPERTY. Subject to the rights of tenants
having a highly restrictive entry provision under the Leases in GSA or other
United States government leases in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇, ▇▇, ▇▇▇, ▇▇▇, ▇▇ and
XXI, Lender has the right to enter and inspect the Property on reasonable prior
notice, except during the existence of an Event of Default, when no prior notice
is necessary. Lender has the right to engage an independent expert to review and
report on Grantor's compliance with Grantor's obligations under this Deed of
Trust to maintain the Property, comply with Law and refrain from waste,
impairment or deterioration of the Property and the alteration, demolition or
removal of any of the Property except as may be permitted by the provisions of
this Deed of Trust. If the independent expert's report discloses material
failure to comply with such obligations or if Lender engages the independent
expert after the occurrence of an Event of Default, then the independent
expert's review and report will be at Grantor's expense, payable on demand.
SECTION 5.6. LEASES AND RENTS.
Grantor assigns the Leases and the Rents to Lender absolutely and not
merely as additional collateral or security for the payment and performance of
the Obligations, but subject to a license back to Grantor of the right to
collect the Rents unless and until an Event of Default occurs at which time the
license will terminate automatically, all as more particularly set forth in the
Assignment, the provisions of which are incorporated in this Deed of Trust by
reference.
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SECTION 5.7. PARKING. Grantor will provide, maintain, police and light
parking areas within the Property, including any sidewalks, aisles, streets,
driveways, sidewalk cuts and rights-of-way to and from the adjacent public
streets, in a manner consistent with the Permitted Use and sufficient to
accommodate the greatest of: (i) the number of parking spaces required by Law;
(ii) the number of parking spaces required by the Leases and the Property
Documents; or (iii) for each of the parcels constituting the Property, the
following number of spaces: (A) Parcel 1 - 435 spaces, (B) Parcel 2 - 212
spaces, (C) Parcel 3 - 353 spaces, (D) Parcel 4 - 263 spaces, (E) Parcel 5 - 242
spaces, (F) Parcel 6 - 250 spaces, (G) Parcel 7 - 260 spaces, (H) Parcel 8 - 286
spaces, (I) Parcel 9 - 374 spaces, (J) Parcel 10 - 278 spaces, (K) Parcel 11 -
198 spaces, (L) Parcel 12 - 187 spaces; and (M) Parcel 13 - 206 spaces; subject,
however, in each instance to temporary reduction resulting from repairs or
alterations at the Property. The parking areas will be reserved and used
exclusively for ingress, egress and parking for Grantor and the tenants under
the Leases and their respective employees, customers and invitees and in
accordance with the Leases and the Property Documents.
SECTION 5.8. SEPARATE TAX LOT. Each of the Parcels constituting the
Property is and will remain assessed for real estate tax purposes as one or more
wholly independent tax lots, separate from any property that is not part of the
Property.
SECTION 5.9. CHANGES IN ZONING OR RESTRICTIVE COVENANTS. Grantor will not
(i) initiate, join in or consent to any change in any Laws pertaining to zoning,
any restrictive covenant or other restriction which would restrict the Permitted
Uses for the Property; (ii) permit the Property to be used to fulfill any
requirements of Law for the construction or maintenance of any improvements on
property that is not part of the Property; (iii) permit the Property to be used
for any purpose not included in the Permitted Use; or (iv) impair the integrity
of each of the Parcels of the Property as a single, legally subdivided zoning
lot separate from all other property.
SECTION 5.10. LENDER'S RIGHT TO APPEAR. Lender has the right to appear in
and defend any Proceeding brought regarding the Property and to bring any
Proceeding, in the name and on behalf of Borrower or Grantor or in Lender's
name, which Lender, in its sole but reasonable discretion, determines should be
brought to protect Lender's interest in the Property.
ARTICLE VI
IMPOSITIONS AND ACCUMULATIONS
SECTION 6.1. IMPOSITIONS. Subject to the requirements of any separate
agreement between Grantor and Lender as described in Sections 6.2 and 6.4:
(a) Grantor will pay each Imposition at least 5 days before the date (the
"IMPOSITION PENALTY DATE") that is the earlier of (i) the date on which the
Imposition becomes delinquent and (ii) the date on which any penalty, interest
or charge for non-payment of the Imposition accrues.
(b) Before each Imposition Penalty Date, Grantor will deliver to Lender a
receipted ▇▇▇▇
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or other evidence of payment.
(c) Grantor, at its own expense, may contest any Taxes or Assessments,
PROVIDED that the following conditions are met:
(i) not less than 15 days prior to the Imposition Penalty Date, Grantor
delivers to Lender notice of the proposed contest;
(ii) the contest is by a Proceeding promptly initiated and conducted
diligently and in good faith;
(iii) there is no Event of Default;
(iv) the Proceeding suspends the collection of the contested Taxes or
Assessments or Grantor otherwise secures assurances reasonably
satisfactory to Lender from the taxing authority that the taxation will be
stayed pending such proceeding;
(v) the Proceeding is permitted under and is conducted in accordance with
the Leases and the Property Documents;
(vi) the Proceeding precludes imposition of criminal or civil penalties
and sale or forfeiture of the Property and Lender will not be subject to
any civil suit; and
(vii) Grantor either deposits with the Accumulations Depository reserves
or furnishes a bond or other security satisfactory to Lender, in either
case in an amount sufficient to pay the contested Taxes or Assessments,
together with all interest and penalties or Grantor pays all of the
contested Taxes or Assessments under protest.
(d) INSTALLMENT PAYMENTS. If any Assessment is payable in installments,
Grantor will nevertheless pay the Assessment in its entirety on the day the
first installment becomes due and payable or a lien, unless Lender, in its sole
discretion, approves payment of the Assessment in installments.
SECTION 6.2. ACCUMULATIONS.
(a) Grantor made an initial deposit with either Lender or a mortgage
servicer or financial institution designated or approved by Lender from time to
time to receive, hold and disburse the Accumulations in accordance with this
Section (the "ACCUMULATIONS DEPOSITORY") and in accordance with the Pledge and
Security Agreement (the "Pledge and Security Agreement") to be entered into
among Grantor, Lender and a pledge agent for the Accumulations Depository. On
the first day of each calendar month during the Term Grantor will deposit with
the Accumulations Depository an amount equal to one-twelfth (1/12) of the annual
Taxes and Assessments as determined by Lender or its designee. At least 30 days
before each Imposition Penalty Date, Grantor will deliver to the Accumulations
Depository any bills and other documents that are necessary to pay the Taxes and
Assessments.
9
(b) The Accumulations will be applied to the payment of Taxes and
Assessments. Any excess Accumulations after payment of Taxes and Assessments
will be returned to Grantor or credited against future payments of the
Accumulations, at Lender's election or as required by Law. If the Accumulations
are not sufficient to pay Taxes and Assessments, Grantor will pay the deficiency
to the Accumulations Depository within 5 days of demand. At any time after an
Event of Default occurs, Lender may apply the Accumulations as a credit against
any portion of the Obligations selected by Lender in its sole discretion.
(c) The Accumulations Depository will hold the Accumulations as additional
security for the Obligations until applied in accordance with the provisions of
this Deed of Trust. If Lender is not the Accumulations Depository, the
Accumulations Depository will deliver the Accumulations to Lender upon Lender's
demand at any time after an Event of Default.
(d) If the Property is sold or conveyed other than by foreclosure or
transfer in lieu of foreclosure, all right, title and interest of Grantor to the
Accumulations will automatically, and without necessity of further assignment,
be held for the account of the new owner, subject to the provisions of this
Section and Grantor will have no further interest in the Accumulations.
(e) The Accumulations Depository has deposited the initial deposit and
will deposit the monthly deposits into a separate interest bearing account in
the name of Borrower, as pledged to the Lender as secured party, all in
accordance with the Pledge and Security Agreement.
(f) Lender has the right to pay, or to direct the Accumulations Depository
to pay, any Taxes or Assessments unless Grantor is contesting the Taxes or
Assessments in accordance with the provisions of this Deed of Trust, in which
event any payment of the contested Taxes or Assessments will be made under
protest in the manner prescribed by Law or, at Lender's election, will be
withheld.
(g) If Lender assigns this Deed of Trust, Lender will pay, or cause the
Accumulations Depository to pay, the unapplied balance of the Accumulations to
or at the direction of the assignee. Simultaneously with the payment, Lender and
the Accumulations Depository will be released from all liability with respect to
the Accumulations and Grantor will look solely to the assignee with respect to
the Accumulations. When the Obligations have been fully satisfied, any unapplied
balance of the Accumulations will be returned to Grantor.
SECTION 6.3. CHANGES IN TAX LAWS. If a Law requires the deduction of the
Obligations from the value of the Property for the purpose of taxation or
imposes a tax, either directly or indirectly, on the Obligations, any Financing
Document or Lender's interest in the Property, Grantor will pay the tax with
interest and penalties, if any. If Lender determines that Grantor's payment of
the tax may be unlawful, unenforceable, usurious or taxable to Lender, the
Obligations will become immediately due and payable on 90 days' prior notice
unless the tax must be paid within the 120-day period, in which case, the
Obligations will be due and payable within the lesser period, but in such latter
event, without the payment of the Prepayment Premium or the Evasion Premium, if
then applicable.
SECTION 6.4. RESERVES. Grantor made an initial deposit and will make
periodic deposits
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into an account established as additional security for the payment and
performance of the Obligations and further deposits towards potential
obligations of capital improvement costs at the Property, each to be held and
disbursed in accordance with the Pledge and Security Agreement.
ARTICLE VII
INSURANCE, CASUALTY, CONDEMNATION
AND RESTORATION
SECTION 7.1. INSURANCE COVERAGES.
(a) Borrower and Grantor will maintain such insurance coverages and
endorsements in form and substance and in amounts as Lender may require in its
sole reasonable discretion, from time to time. Until Lender notifies Borrower or
Grantor of changes in Lender's requirements, Borrower and Grantor will maintain
not less than the insurance coverages and endorsements Lender required for
closing of the Loan.
(b) The insurance, including renewals, required under this Section will be
issued on valid and enforceable policies and endorsements reasonably
satisfactory to Lender (the "POLICIES").
Each Policy will contain a standard waiver of subrogation and a
replacement cost endorsement and will provide that Lender will receive not less
than 30 days' prior written notice of any cancellation, termination or
non-renewal of a Policy or any material change other than an increase in
coverage and that Lender will be named under a standard mortgage endorsement as
loss payee.
(c) The insurance companies issuing the Policies (the "INSURERS") must be
authorized to do business in the State or Commonwealth where the Property is
located, must have been in business for at least 5 years, must carry an A.M.
Best Company, Inc. policy holder rating of A or better and an A.M. Best Company,
Inc. financial category rating of Class X or better and must be otherwise
satisfactory to Lender. Lender may select an alternative credit rating agency
and may impose different credit rating standards for the Insurers.
Notwithstanding Lender's right to approve the Insurers and to establish credit
rating standards for the Insurers, Lender will not be responsible for the
solvency of any Insurer.
(d) Notwithstanding Lender's rights under this Article, Lender will not be
liable for any loss, damage or injury resulting from the inadequacy or lack of
any insurance coverage.
(e) Grantor and Borrower will each comply with the provisions of the
Policies and with the requirements, notices and demands imposed by the Insurers
and applicable to Grantor, Borrower or the Property.
(f) Grantor and Borrower will pay the Insurance Premiums for each Policy
not less than 30 days before the expiration date of the Policy being replaced or
renewed and will deliver to Lender a certified copy of each Policy (for the
initial closing or any replacements of the original policy, with an ▇▇▇▇▇ 27
certificate for any renewals thereafter) marked "Paid" not less than
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10 days prior to the expiration date of the Policy being replaced or renewed.
(g) Neither Grantor nor Borrower will carry separate insurance concurrent
in kind or form or contributing in the event of loss with any other insurance
carried by Grantor or Borrower.
(h) If Grantor and/or Borrower carries any insurance under a blanket
policy, it will deliver to Lender prior to the date hereof or for any
replacement policy a certified duplicate copy of the blanket policy (and
certificates as described in paragraph (f), above, for renewals) which will
allocate to the Property the amount of coverage required under this Section and
otherwise will provide the same coverage and protection as would a separate
policy insuring only the Property.
(i) Grantor will give the Insurers prompt notice of any change in
ownership or use of the Property. This subsection does not abrogate the
prohibitions on transfers set forth in this Deed of Trust.
(j) If the Property is sold at a foreclosure sale or otherwise is
transferred so as to extinguish the Obligations, all of Grantor's right, title
and interest in and to the Policies then in force will be transferred
automatically to the purchaser or transferee.
SECTION 7.2. CASUALTY AND CONDEMNATION.
(a) Grantor will give Lender notice of any Casualty immediately after it
occurs and will give Lender notice of any Proceeding in Condemnation immediately
after Grantor receives notice of commencement or notice that such a Proceeding
will be commencing. Grantor immediately will deliver to Lender copies of all
documents Grantor delivers or receives relating to the Casualty or the
Proceeding, as the case may be.
(b) If the amount of any Insurance Proceeds or Condemnation Awards, as
estimated by Lender in its sole but reasonable discretion, is equal to or less
than Five Hundred Thousand Dollars ($500,000), and if Grantor is not at the date
of the Casualty subject of an Event of Default beyond any applicable notice and
cure period, then in the event of both such instances Grantor shall be
authorized to act without Lender's review or consent in collecting, adjusting
and compromising any claims for loss, damage or destruction under the Policies
or with any Condemnation Proceeding, as may be applicable. If Grantor is
entitled to settle such claims without Lender's review or consent, Grantor shall
still be required to have the Insurance proceeds or Condemnation Awards, as the
case may be, held and applied in accordance with the terms of this Section 7.2
(c) If the amount of any Insurance Proceeds or Condemnation Award exceeds
$500,000, in Lender's sole but reasonable estimation, or if any Event of Default
under any Loan Document then remains uncured beyond any applicable notice or
cure period (each such event, a "Consent Trigger"), then Grantor authorizes
Lender, at Lender's option, to act on Grantor's behalf to collect, adjust and
compromise any claims for loss, damage or destruction under the Policies on such
terms as Lender determines in Lender's sole discretion. Further, in the event of
any
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Consent Trigger, Grantor authorizes Lender to act, at Lender's option, on
Grantor's behalf in connection with any Condemnation Proceeding. Grantor will
execute and deliver to Lender all documents requested by Lender and all
documents as may be required by Law to confirm such authorizations. Nothing in
this Section will be construed to limit or prevent Lender from joining with
Grantor either as a co-defendant or as a co-plaintiff in any Condemnation
Proceeding.
(c) If a Consent Trigger occurs but Lender elects not to act on Grantor's
behalf as provided in this Section, then Grantor promptly will file and
prosecute all claims (including Lender's claims) relating to the Casualty and
will prosecute or defend (including defense of Lender's interest) any
Condemnation Proceeding. Grantor will have the authority to settle or compromise
the claims or Proceeding, as the case may be, PROVIDED that Lender has approved
in Lender's sole discretion any compromise or settlement that exceeds
$500,000.00. Any check for Insurance Proceeds or Condemnation Awards, as the
case may be (the "PROCEEDS") will be made payable to Lender and Grantor. Grantor
will endorse the check to Lender immediately upon Lender presenting the check to
Grantor for endorsement or if Grantor receives the check first, will endorse the
check immediately upon receipt and forward it to Lender. If any Proceeds are
paid to Grantor, Grantor immediately will deposit the Proceeds with Lender, to
be applied or disbursed in accordance with the provisions of this Deed of Trust.
Lender will be responsible for only the Proceeds actually received by Lender.
SECTION 7.3. APPLICATION OF PROCEEDS. After deducting the costs incurred
by Lender in collecting the Proceeds, Lender may, in its sole discretion, (i)
apply the Proceeds as a credit against any portion of the Debt selected by
Lender in its sole discretion of the Debt (in which event neither the Prepayment
Premium nor the Evasion Premium, if any, shall apply); (ii) apply the Proceeds
to restore the Improvements, PROVIDED that Lender will not be obligated to see
to the proper application of the Proceeds and PROVIDED FURTHER that any amounts
released for Restoration will not be deemed a payment on the Debt; or (iii)
deliver the Proceeds to Grantor.
SECTION 7.4. CONDITIONS TO AVAILABILITY OF PROCEEDS FOR RESTORATION.
Notwithstanding the preceding Section, after a Casualty or a Condemnation
(a "DESTRUCTION EVENT"), Lender will make the Proceeds (less any costs incurred
by Lender in collecting the Proceeds) available for Restoration in accordance
with the conditions for disbursements set forth in the Section entitled
"RESTORATION", PROVIDED that the following conditions are met:
(i) Each of the entities described above as an original Grantor hereunder,
or the transferee under a Permitted Transfer, if any, continues to be
Grantor at the time of the Destruction Event and at all times thereafter
until the Proceeds have been fully disbursed;
(ii) no default under the Financing Documents exists at the time of the
Destruction Event;
(iii) all Leases in effect immediately prior to the Destruction Event and
all Property Documents in effect immediately prior to the Destruction
Event that are essential to the use and operation of the Property continue
in full force and effect, subject to any rental
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abatements provided in the leases, notwithstanding the Destruction Event;
(iv) the annual Rents (excluding security deposits) under Leases in effect
on the date of the Destruction Event, plus any rental insurance proceeds
paid or to be paid to Grantor, plus any additional collateral satisfactory
to Lender in its sole but reasonable discretion, are providing debt
service coverage for the annual Debt Service Payments of 1.40 after
payment of annual Insurance Premiums, Impositions and operating expenses
of the Property (including ground rent, if any), PROVIDED that, if the
combined Rents, rental insurance and other approved collateral, if any, do
not provide such debt service coverage, then Grantor expressly authorizes
and directs Lender to apply an amount from the Proceeds to reduction of
Principal in order to reduce the annual Debt Service Payments sufficiently
for such debt service coverage to be achieved (in which event neither the
Prepayment Premium nor the Evasion Premium, if any, shall apply). The
reduced debt service payments will be calculated using the Fixed Interest
Rate and an amortization schedule that will achieve the same proportionate
amortization of the reduced Principal over the then remaining Term as
would have been achieved if the Principal and the originally scheduled
Debt Service Payments had not been reduced. Grantor will execute any
documentation that Lender deems reasonably necessary to evidence the
reduced Principal and debt service payments.
SECTION 7.5. RESTORATION.
(a) If the total Proceeds for any Destruction Event are $500,000.00 or
less and Lender elects or is obligated by Law or under this Article to make the
Proceeds available for Restoration, Lender will disburse to Grantor the entire
amount received by Lender and Grantor will commence Restoration promptly after
the Destruction Event and complete Restoration not later than the Restoration
Completion Date.
(b) If the Proceeds for any Destruction Event exceed $500,000.00 and
Lender elects or is obligated by Law or under this Article to make the Proceeds
available for Restoration, Lender will disburse the Proceeds and any Additional
Funds (the "RESTORATION FUNDS") upon Grantor's request as Restoration
progresses, generally in accordance with normal construction lending practices
for disbursing funds for construction costs, PROVIDED that the following
conditions are met:
(i) Grantor commences Restoration promptly after the Destruction Event
and completes Restoration on or before the Restoration Completion
Date;
(ii) if Lender requests, Grantor delivers to Lender prior to commencing
Restoration, for Lender's approval, plans and specifications and a
detailed budget for the Restoration;
(iii) Grantor delivers to Lender satisfactory evidence of the costs of
Restoration incurred prior to the date of the request, and such
other documents as Lender may request including mechanics' lien
waivers and title insurance endorsements;
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(iv) Grantor pays all costs of Restoration whether or not the Restoration
Funds are sufficient and, if at any time during Restoration, Lender
determines that the undisbursed balance of the Restoration Funds is
insufficient to complete Restoration, Grantor deposits with Lender,
as part of the Restoration Funds, an amount equal to the deficiency
(or a guaranty or other collateral reasonably satisfactory to Lender
in its sole but reasonable discretion) within 30 days of receiving
notice of the deficiency from Lender; and
(v) there is no default under the Financing Documents at the time
Grantor requests funds or at the time Lender disburses funds.
(c) If an Event of Default occurs at any time after the Destruction Event,
then Lender will have no further obligation to make any remaining Proceeds
available for Restoration and may apply any remaining Proceeds as a credit
against any portion of the Debt selected by Lender in its sole discretion.
(d) Lender may elect at any time prior to commencement of Restoration or
while work is in progress to retain, at Grantor's expense, an independent
engineer or other consultant to review the plans and specifications, to inspect
the work as it progresses and to provide reports. If any matter included in a
report by the engineer or consultant is unsatisfactory to Lender, Lender may
suspend disbursement of the Restoration Funds until the unsatisfactory matters
contained in the report are resolved to Lender's satisfaction.
(e) If Grantor fails to commence and complete Restoration in accordance
with the terms of this Article, then in addition to the Remedies, Lender may
elect to restore the Improvements on Grantor's behalf and reimburse itself out
of the Restoration Funds for costs and expenses incurred by Lender in restoring
the Improvements, or Lender may apply the Restoration Funds as a credit against
any portion of the Debt selected by Lender in its sole discretion.
(f) Lender may commingle the Restoration Funds with its general assets but
shall assure that any Restoration Funds so commingled shall nonetheless be made
available by Lender for application under this Section 7.5; and Lender will not
be liable to pay any interest or other return on the Restoration Funds unless
otherwise required by Law. Lender will not hold any Restoration Funds in trust.
Lender may elect to deposit the Restoration Funds with a depository satisfactory
to Lender under a disbursement and security agreement satisfactory to Lender,
which Agreement shall provide for a segregation of funds and obligation to pay
interest.
(g) Grantor will pay all of Lender's expenses incurred in connection with
a Destruction Event or Restoration. If Grantor fails to do so, then in addition
to the Remedies, Lender may from time to time reimburse itself out of the
Restoration Funds.
(h) If any excess Proceeds remains after Restoration, Lender may elect, in
its sole discretion either to apply the excess as a credit against any portion
of the Debt as selected by Lender in its sole discretion or to deliver the
excess to Grantor.
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ARTICLE VIII
COMPLIANCE WITH LAW AND AGREEMENTS
SECTION 8.1. COMPLIANCE WITH LAW. Grantor, the Property and the use of the
Property complies and will continue to comply with Law and with all agreements
and conditions necessary to preserve and extend all rights, licenses, permits,
privileges, franchises and concessions (including zoning variances, special
exceptions and non-conforming uses) relating to the Property or Grantor. Grantor
will notify Lender of the commencement of any investigation or Proceeding
relating to a possible violation of Law promptly (but in no event beyond five
(5) business days) after Grantor receives notice thereof and, will deliver
promptly to Lender copies of all documents Grantor receives or delivers in
connection with the investigation or Proceeding. Grantor will not alter the
Property in any manner that would increase Grantor's responsibilities for
compliance with Law.
SECTION 8.2. COMPLIANCE WITH AGREEMENTS. There are no defaults, events of
defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Property Documents. Grantor will
pay and perform all of its obligations under the Property Documents as and when
required by the Property Documents. Grantor will cause all other parties to the
Property Documents to pay and perform their obligations under the Property
Documents as and when required by the Property Documents. Grantor will not amend
or waive any provisions of the Property Documents; exercise any options under
the Property Documents; give any approval required or permitted under the
Property Documents that would adversely affect the Property or Lender's rights
and interests under the Financing Documents; cancel or surrender any of the
Property Documents; or release or discharge or permit the release or discharge
of any party to or entity bound by any of the Property Documents, without, in
each instance, Lender's prior approval (excepting therefrom all service
contracts or other agreements entered into in the normal course of business that
are cancelable upon not more than 30 days notice). Grantor promptly will deliver
to Lender copies of any notices of default or of termination that Grantor
receives or delivers relating to any Property Document.
SECTION 8.3. ERISA COMPLIANCE.
(a) Neither Grantor nor any of its constituent entities is or will be an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA") that is subject to Title I of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Code that is subject to Section
4975 of the Code, and neither the assets of Borrower, Grantor or of any of their
constituent entities are or will constitute "plan assets" of one or more such
plans for purposes of Title I of ERISA or Section 4975 of the Code.
(b) Grantor is not and will continue to not be a "GOVERNMENTAL PLAN"
within the meaning of Section 3(32) of ERISA and transactions by or with Grantor
or Borrower are not and will not be subject to any Laws regulating investments
of and fiduciary obligations with respect to governmental plans.
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(c) Grantor will not engage in any transaction which would cause any
obligation or any action under the Financing Documents or the Loan Documents,
including Lender's exercise of the Remedies, to be a non-exempt prohibited
transaction under ERISA.
SECTION 8.4. SECTION 6045(e) FILING. Grantor will supply or cause to be
supplied to Lender either (i) a copy of a completed Form 1099-S, Statement for
Recipients of Proceeds from Real Estate, Broker and Barter Exchange Proceeds
prepared by Grantor's attorney or other person responsible for the preparation
of the form, together with a certificate from the person who prepared the form
to the effect that the form has, to the best of the preparer's knowledge, been
accurately prepared and that the preparer will timely file the form; or (ii) a
certification from Grantor that the Loan is a refinancing of the Property or is
otherwise not required to be reported to the Internal Revenue Service pursuant
to Section 6045(e) of the Code. Under no circumstances will Lender or Lender's
counsel be obligated to file the reports or returns.
ARTICLE IX
ENVIRONMENTAL
SECTION 9.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Except as disclosed in the Environmental Report and to Grantor's knowledge
as of the date of this Deed of Trust:
(i) no Environmental Activity has occurred or is occurring on the
Property other than the use, storage, and disposal of Hazardous
Materials which (A) is in the ordinary course of business consistent
with the Permitted Use; (B) is in compliance with all Environmental
Laws and (C) has not resulted in Material Environmental
Contamination of the Property; and
(ii) no Environmental Activity has occurred or is occurring on any
property in the vicinity of the Property which has resulted in
Material Environmental Contamination of the Property.
SECTION 9.2. ENVIRONMENTAL COVENANTS.
(a) Grantor will not cause or permit any Material Environmental
Contamination of the Property.
(b) No Environmental Activity will occur on the Property other than the
use, storage and disposal of Hazardous Materials which (A) is in the ordinary
course of business consistent with the Permitted Use; (B) is in compliance with
all Environmental Laws; and (C) does not create a risk of Material Environmental
Contamination of the Property.
(c) Grantor will notify Lender immediately upon Grantor becoming aware of
(i) any Material Environmental Contamination of the Property or (ii) any
Environmental Activity with
17
respect to the Property that is not in accordance with the preceding subsection
(b). Grantor promptly will deliver to Lender copies of all documents delivered
to or received by Grantor regarding the matters set forth in this subsection,
including notices of Proceedings or investigations concerning any Material
Environmental Contamination of the Property or Environmental Activity or
concerning Grantor's status as a potentially responsible party (as defined in
the Environmental Laws). Grantor's notification of Lender in accordance with the
provisions of this subsection will not be deemed to excuse any default under the
Financing Documents resulting from the violation of Environmental Laws or the
Material Environmental Contamination of the Property or Environmental Activity
that is the subject of the notice. If Grantor receives notice of a suspected
violation of Environmental Laws in the vicinity of the Property that poses a
risk of Material Environmental Contamination of the Property, Grantor will give
Lender notice and copies of any documents received relating to such suspected
violation.
(d) From time to time at Lender's request, Grantor will deliver to Lender
any information known and documents available to Grantor relating to the
environmental condition of the Property.
(e) Lender may perform or engage an independent consultant to perform an
assessment of the environmental condition of the Property and of Grantor's
compliance with this Section at any time for reasonable cause or after an Event
of Default (if, in both instances, Lender has reasonable suspicion to believe
that an Environmental Activity has occurred which could result in a Material
Environmental Contamination). In connection with the assessment: (i) Lender or
consultant may enter and inspect the Property and perform tests of the air,
soil, ground water and building materials; (ii) Grantor will cooperate and use
best efforts to cause tenants and other occupants of the Property to cooperate
with Lender or consultant; (iii) Grantor will receive a copy of any final report
prepared after the assessment, to be delivered to Grantor not more than 10 days
after Grantor requests a copy and executes Lender's standard confidentiality and
waiver of liability letter; (iv) Grantor will accept custody of and arrange for
lawful disposal of any Hazardous Materials required to be disposed of as a
result of the tests; (v) Lender will not have liability to Grantor with respect
to the results of the assessment; and (vi) Lender will not be responsible for
any damage to the Property resulting from the tests described in this subsection
and Grantor will look solely to the consultants to reimburse Grantor for any
such damage. The consultant's assessment and reports will be at Grantor's
expense (i) if the reports disclose any material adverse change in the
environmental condition of the Property from that disclosed in the Environmental
Report; (ii) if Lender engaged the consultant when Lender had reasonable cause
to believe Grantor was not in compliance with the terms of this Article and,
after written notice from Lender, Grantor failed to provide promptly reasonable
evidence that Grantor is in compliance; or (iii) if Lender engaged the
consultant or after the occurrence of an Event of Default.
(f) If Lender has reasonable cause to believe that there is Environmental
Activity at the Property, Lender may elect in its sole discretion to direct the
Trustees to Reconvey any portion of the Property affected by the Environmental
Activity and Grantor will accept the reconveyance.
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ARTICLE X
FINANCIAL REPORTING
SECTION 10.1. FINANCIAL REPORTING.
(a) Grantor will deliver to Lender within 90 days after the close of each
Fiscal Year an annual financial statement (the "ANNUAL FINANCIAL STATEMENT") for
the Property and for Corporate Office Properties Trust, upon request of Lender,
for the Fiscal Year, which will include a comparative balance sheet, a cash flow
statement, an income and expense statement, a detailed breakdown of all receipts
and expenses and all supporting schedules. The Annual Financial Statement will
be:
(i) unaudited, but certified by the Chief Financial Officer of Corporate
Office Properties Trust, on a GAAP basis;
(ii) accompanied by an opinion of such Chief Financial Officer that, in
all material respects, the Annual Financial Statement fairly presents the
financial position of the Property; and
(iii) separate and distinct from any consolidated statement or report for
Grantor, Borrower or any other entity or any other property.
(b) Grantor will keep full and accurate Financial Books and Records for
each Fiscal Year. Grantor will permit Lender or Lender's accountants or auditors
to inspect or audit the Financial Books and Records from time to time and
without notice. Grantor will maintain the Financial Books and Records for each
Fiscal Year for not less than 3 years after the date Grantor delivers to Lender
the Annual Financial Statement and the other financial certificates, statements
and information to be delivered to Lender for the Fiscal Year. Financial Books
and Records will be maintained at Grantor's (as applicable) address set forth in
the section entitled "NOTICES" or at any other location as may be approved by
Lender.
ARTICLE XI
EXPENSES AND DUTY TO DEFEND
SECTION 11.1. PAYMENT OF EXPENSES.
(a) Grantor is obligated to pay all fees and expenses (the "EXPENSES")
incurred by Lender, Trustees or that are otherwise payable in connection with
the Loan, the Property or Grantor, including attorneys' fees and expenses and
any fees and expenses relating to (i) the preparation, execution,
acknowledgment, delivery and recording or filing of the Loan Documents; (ii) any
Proceeding or other claim asserted against Lender; (iii) any inspection,
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assessment, survey and test permitted under the Financing Documents; (iv) any
Destruction Event; (v) the preservation of Trustees' title, Lender's security
and the exercise of any rights or remedies available at Law, in equity or
otherwise; and (vi) the Leases and the Property Documents.
(b) Grantor will pay the Expenses immediately on demand, together with any
applicable interest, premiums or penalties. If Lender pays any of the Expenses,
Grantor will reimburse Lender the amount paid by Lender immediately upon demand,
together with interest on such amount at the Default Interest Rate from the date
Lender paid the Expenses through and including the date Grantor reimburses
Lender. The Expenses together with any applicable interest, premiums or
penalties constitute a portion of the Obligations secured by this Deed of Trust.
SECTION 11.2. DUTY TO DEFEND. If Lender or any of its trustees, officers,
participants, employees or affiliates is a party in any Proceeding relating to
the Property, Grantor, Borrower or the Loan, Grantor will indemnify and hold
harmless the party and will defend the party with attorneys and other
professionals retained by Grantor and approved by Lender. Lender may elect to
engage its own attorneys and other professionals, at Grantor's expense, to
defend or to assist in the defense of the party. In all events, case strategy
will be determined by Lender if Lender so elects and no Proceeding will be
settled without Lender's prior approval which may be withheld in its sole
discretion.
SECTION 11.3. FUTURE ADVANCES. Lender may make future advances to Grantor
or to Borrower under the Loan guaranteed by Grantor, and all such future
advances and readvances shall be fully secured by the lien and security interest
of this Deed of Trust.
ARTICLE XII
TRANSFERS LIENS AND ENCUMBRANCES
SECTION 12.1. PROHIBITIONS ON TRANSFERS, LIENS AND ENCUMBRANCES.
(a) Grantor acknowledges that in making the Loan, Lender is relying to a
material extent on the business expertise and net worth of Grantor and its
general partners, members or principals and on the continuing interest that it
has, directly or indirectly, in the Property. Accordingly, except as
specifically set forth in this Deed of Trust, Grantor (i) will not, and will not
permit its partners or members to, effect a Transfer without Lender's prior
approval, which may be withheld in Lender's sole discretion and (ii) will keep
the Property free from all liens and encumbrances other than the lien of this
Deed of Trust and the Permitted Exceptions. A "TRANSFER" is defined as any sale,
grant, lease (other than bona fide third-party space leases with tenants),
conveyance, assignment or other transfer of, or any encumbrance or pledge
against, the Property, any interest in the Property, any interest of Grantor's
partners, members or principals in the Property, or any change in Grantor's
composition, in each instance whether voluntary or involuntary, direct or
indirect, by operation of law or otherwise and including the grant of an option
or the execution of an agreement relating to any of the foregoing matters.
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(b) Grantor represents, warrants and covenants that:
(i) Each entity constituting Grantor is a Maryland limited liability
company whose managing member is the Borrower, a Delaware limited
partnership owning 100% of the of the interests in Grantor.
(ii) If Grantor's member is in turn a partnership, corporation or limited
liability company, the general partner, principal or member thereof and
the percentage of partnership interest, stock or membership interest held
by each (and so on at each level) are as follows: the sole general partner
of the Borrower is COPT (defined below); the percentage of interest in the
Borrower currently held by COPT varies because its shares are traded due
to its "upreit" structure.
SECTION 12.2. PERMITTED TRANSFERS.
(a) Notwithstanding the prohibitions regarding Transfers, transfer of
shares in Corporate Office Properties Trust ("COPT"), an affiliate of Grantor
and the Borrower, and transfers of limited partnership interests and pledges of
both general and limited partnership interests in the Borrower, (each, a
"Permitted Transfer") may occur without Lender's prior consent, PROVIDED that
the following conditions are met:
(i) at all times COPT remains the sole general partner in the Borrower and
Borrower delivers to Lender on a quarterly basis notices of changes in the
ownership interests of limited partners owning one percent (1%) or more of
the Borrower; and
(ii) a Permitted Transfer does not permit a disposition in a single
transfer or a series of related transfers of all or substantially all of
the shares of COPT or of all of the limited partnership interests in the
Borrower and does not permit a merger of COPT with one or more entities
without Lender's prior written consent unless COPT is the surviving and
controlling entity or unless such successor is a real estate company
having the same standards of professional expertise and net worth as that
of COPT as of the date of this Deed of Trust or as of the date immediately
prior to the Transfer, whichever is greater;
(iii) at least 30 days prior to the proposed Permitted Transfer (other
than transfers of shares of COPT on the open market or of any limited
partnership interests in the Borrower), Grantor or Borrower delivers to
Lender a notice that is sufficiently detailed to enable Lender to
determine that the proposed Permitted Transfer complies with the terms of
this Section;
(iv) there is no default under the Financing Documents either when Lender
receives the notice or when the proposed Permitted Transfer occurs;
(v) the proposed Permitted Transfer (other than transfers of shares of
COPT on the open market or of any limited partnership interests in the
Borrower) will not result in a violation of any of the covenants contained
in the Section entitled, "ERISA
21
COMPLIANCE" and Grantor or Borrower will deliver to Lender such
documentation of compliance as Lender requests in its sole discretion;
(vi) other than in instances of transfers of shares in COPT or of
transfers of any limited partnership interests in the Borrower, when
Lender receives the notice and when the proposed Permitted Transfer
occurs, the transferee (other than a transferee that is a publicly traded
entity) has never been an adverse party to Lender in any litigation to
which Lender was a party; the transferee has never defaulted on a loan
from Lender or on any contract or other agreement with Lender; and the
transferee has never threatened litigation against Lender (for purposes of
this subsection "transferee" includes the transferee's constituent
entities at all levels and "Lender" includes Lender's subsidiaries);
(vii) Grantor or Borrower pays all of Lender's expenses relating to the
Transfer including Lender's attorneys' fees; and
(viii) Lender is satisfied that the Property will continue to be managed
by a manager satisfactory to Lender.
SECTION 12.3. RIGHT TO CONTEST LIENS. Grantor, at its own expense, may
contest the amount, validity or application, in whole or in part, of any
mechanic's, materialmen's or environmental liens in which event Lender will
refrain from exercising any of the Remedies, PROVIDED that the following
conditions are met:
(i) Grantor delivers to Lender notice of the proposed contest not more
than 30 days after the lien is filed;
(ii) the contest is by a Proceeding promptly initiated and conducted in
good faith and with due diligence;
(iii) there is no Event of Default other than the Event of Default arising
from the filing of the lien;
(iv) the Proceeding suspends enforcement of collection of the lien,
imposition of criminal or civil penalties and sale or forfeiture of the
Property and Lender will not be subject to any civil suit;
(v) the Proceeding is permitted under and is conducted in accordance with
the Leases and the Property Document;
(vi) Grantor furnishes a bond or other security satisfactory to Lender, in
either case in an amount sufficient to pay the claim giving rise to the
lien, together with all interest and penalties, and secures an endorsement
to Lender's policy of title insurance insuring against sale of the
Property by the lienor to collect its lien, or Grantor pays the contested
lien under protest; and
(vii) with respect to an environmental lien, Grantor is using best efforts
to mitigate or
22
prevent any deterioration of the Property resulting from the alleged
violation of any Environmental Laws or the alleged Environmental Activity.
SECTION 12.4. SUBSTITUTE COLLATERAL.
Upon request from Grantor, and at Grantor's expense, Trustees shall
release from the lien of this Deed of Trust any one or more of the parcels
constituting the Property, upon conveyance by Grantor and/or its affiliates of
substitute collateral property (the "Substitute Collateral") from time to time,
but not more than one time for each parcel, and not more than four times during
the duration the lien of this Deed of Trust, upon the following terms and
subject to the following conditions:
(i) the quality of the Substitute Collateral shall be comparable to
or greater than that of the parcel of Property for which the Substitute
Collateral is replacing the current-to-be-released Property;
(ii) No Event of Default shall exist under this Deed of Trust or any
other Loan Document;
(iii) The appraised value of the Substitute Collateral shall be
equal to or greater than the greater of (A) the appraised value of
current-to-be-released Property, as determined at the time of the closing of the
substitution of collateral, or (B) the appraised value of the current-to-be
released Property at the time of such substitution;
(iv) the Debt Service Coverage Ratio (as defined below) for the
aggregate Property (inclusive of the Substitute Collateral) shall be greater
than or equal to the actual Debt Service Coverage Ratio for the aggregate
Property (inclusive of the current-to-be released Property), for the one year
prior to the substitution, and Grantor shall execute and deliver appropriate
amendments to this Deed of Trust and Loan Documents making the Substitute
Collateral part of the security for the Guaranty, and Lender shall have received
such title assurances and endorsements to its then-existing policies confirming
the priority of its lien under this Deed of Trust on the Substitute Collateral,
consenting to the release of the released Property, and otherwise confirming no
adverse changes in title coverage or the amount thereof.
(v) the Substitute Collateral shall satisfy each of the covenants
and conditions to closing set forth in the commitment letter with the Lender for
the Loan guaranteed under the Guaranty, that would have been applicable had such
Substitute Collateral been an original parcel of the Property;
(vi) the Substitute Collateral shall conform in all respects to such
other underwriting standards and criteria of the Lender and criteria such as
other appraisal, legal, business, environmental, engineering, diversification,
leasing or title requirements, all as Lender may determine in its sole
discretion.
As used herein, the following defined term shall apply:
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"DEBT SERVICE COVERAGE RATIO" means the Net Operating Income of the Property
divided by the amount of scheduled annual payments of Debt Service on the Loan
guaranteed by the Guaranty.
"NET OPERATING INCOME" means the total gross rental income received in the most
recent twelve month period, plus other income received during the most recent
twelve month period, less actual operating expenses for the most recent twelve
month period.
ARTICLE XIII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 13.1. FURTHER ASSURANCES.
(a) Grantor will execute, acknowledge and deliver to Lender or to any
other entity Lender designates any additional or replacement documents and
perform any additional actions that Lender determines are reasonably necessary
to evidence, perfect or protect Lender's first lien on and prior security
interest in the Property or to carry out the intent or facilitate the
performance of the provisions of the Financing Documents and the Note.
(b) Grantor appoints Lender as Grantor's attorney-in-fact to perform, at
Lender's election, any actions and to execute and record any of the additional
or replacement documents referred to in this Section, in each instance only at
Lender's election and only to the extent Grantor or Borrower has failed to
comply with the terms of this Section.
(c) Grantor shall pay upon demand of Lender all costs of, and incidental
to, the recording of this Deed of Trust and any such documents described above,
whether now or hereafter due and payable, including, without limitation, the
Maryland recordation tax and any other tax required to be paid at any time with
respect to such recording. The Grantor hereby agrees to indemnify and hold the
Trustees and Lender harmless from and against any liability or loss incurred by
the Trustees or Lender resulting from the failure of the Grantor to pay when due
and payable any such amounts. The foregoing indemnity will survive the payment
of the Obligations and the Guaranty and the release of this Deed of Trust. The
obligations of the Grantor pursuant to such indemnity will bear interest payable
upon demand of Lender from the date due until paid in full at the Default
Interest Rate and such obligations with interest thereon as aforesaid shall be a
part of the Obligations secured hereby.
Section 13.2. ESTOPPEL CERTIFICATES.
(a) Within 10 days of Lender's request, Grantor will deliver to Lender or
to any entity Lender designates a certificate certifying (i) the original
principal amount of the Note; (ii) the unpaid principal amount of the Note;
(iii) the Fixed Interest Rate; (iv) the amount of the then current Debt Service
Payments; (v) the Maturity Date; (vi) the date a Debt Service Payment was last
made; (vii) that, except as may be disclosed in the statement, there are no
defaults or events which, with the passage of time or the giving of notice,
would constitute an Event of Default; and (viii) there are no offsets or
defenses against any portion of the Obligations except as may be disclosed in
the statement.
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(b) If Lender requests, Grantor promptly will deliver to Lender or to any
entity Lender designates a certificate from each party to any Property Document,
certifying that the Property Document is in full force and effect with no
defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Property Document and that there
are no defenses or offsets against the performance of its obligations under the
Property Document.
(c) If Lender requests, Grantor promptly will use its commercially
reasonable efforts to obtain and deliver to Lender, or to any entity Lender
designates, a certificate from each tenant under a Lease then affecting the
Property, certifying to any facts regarding the Lease as Lender may require,
including that the Lease is in full force and effect with no defaults or events
which, with the passage of time or the giving of notice, would constitute an
event of default under the Lease by any party, that the rent has not been paid
more than one month in advance and that the tenant claims no defense or offset
against the performance of its obligations under the Lease; provided, that
Lender shall not request such certificates more often than one time in any two
calendar year period except for the purpose of a sale of the Loan.
ARTICLE XIV
DEFAULTS AND REMEDIES
Section 14.1. EVENTS OF DEFAULT. The term "EVENT OF DEFAULT" means the
occurrence of any of the following events:
(i) if Grantor fails to pay any amount due, as and when required, under
any Financing Document and the failure continues for a period of 5 days;
(ii) if Grantor makes a general assignment for the benefit of creditors or
generally is not paying, or is unable to pay, or admits in writing its
inability to pay, its debts as they become due; or if Grantor or any other
party commences any Proceeding (A) relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, in each instance
with respect to Grantor; (B) seeking to have an order for relief entered
with respect to Grantor; (C) seeking attachment, distraint or execution of
a judgment with respect to Grantor; (D) seeking to adjudicate Grantor as
bankrupt or insolvent; (E) seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to Grantor or Grantor's debts; or (F) seeking
appointment of a Receiver, trustee, custodian, conservator or other
similar official for Grantor or for all or any substantial part of
Grantor's assets, PROVIDED that if the Proceeding is commenced by a party
other than Grantor or any of Grantor's general partners or members,
Grantor will have 120 days to have the Proceeding dismissed or discharged
before an Event of Default occurs;
(iii) if Grantor is in default beyond any applicable grace and cure period
under any other
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mortgage, deed of trust, deed to secure debt or other security agreement
encumbering the Property whether junior or senior to the lien of this Deed
of Trust;
(iv) if a Transfer occurs except in accordance with the provisions of this
Deed of Trust;
(v) if Grantor abandons the Property or ceases to conduct its business at
the Property; or
(vi) if Grantor fails to deposit either the letter of credit required
under the letter agreement of even date herewith between Grantor and
Lender, or fails to make the deposits required or otherwise defaults under
the Pledge and Security Agreement of even date among, INTER ALIA, Grantor
and Lender; or
(vii) if there is a default in the performance of any other provision of
any Financing Document or if there is any inaccuracy or falsehood in any
representation or warranty contained in any Financing Document which is
not remedied within 15 days after Grantor receives notice thereof,
PROVIDED that if the default, inaccuracy or falsehood is of a nature that
it cannot be cured within the 15-day period and during that period Grantor
commences to cure, and thereafter diligently continues to cure, the
default, inaccuracy or falsehood, then the 15-day period will be extended
for a reasonable period not to exceed 120 days after the notice to
Grantor.
SECTION 14.2. Remedies.
(a) If an Event of Default occurs, Lender may take any of the following
actions (the "REMEDIES") without notice to Grantor or Borrower:
(i) declare all or any portion of the Obligations immediately due and
payable ("ACCELERATION");
(ii) pay or perform any Obligation;
(iii) institute a Proceeding for the specific performance of any
Obligation;
(iv) apply for the appointment of a Receiver to be vested with the fullest
powers permitted by Law, without bond being required, which appointment
may be made EX PARTE, as a matter of right and without regard to the value
of the Property, the amount of the Debt or the solvency of Grantor or
Borrower or any other person liable for the payment or performance of any
portion of the Obligations;
(v) directly, by its agents or representatives or through a Receiver
appointed by a court of competent jurisdiction, enter on the Land and
Improvements, take possession of the Property, dispossess Grantor and
exercise Grantor's rights with respect to the Property, either in
Grantor's name or otherwise;
(vi) institute a Proceeding for the foreclosure of this Deed of Trust or,
if applicable, sell by power of sale all or any portion of the Property;
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(vii) institute proceedings for the partial foreclosure of this Deed of
Trust for the portion of the Obligations then due and payable, subject to
the continuing lien of this Deed of Trust for the balance of the
Obligations not then due;
(viii) deliver to Trustees a declaration of default and demand for sale
and a notice of default and election to cause Grantor's interest in the
Property or any portion of the Property to be sold, which notice Trustees
or Lender will file in the official records of the county in which the
Property is located or any parcel comprising the same is located;
(ix) exercise any and all rights and remedies granted to a secured party
under the Uniform Commercial Code; and
(x) pursue any other right or remedy available to Lender at Law, in equity
or otherwise.
(b) If an Event of Default occurs, the license granted to Grantor in the
Financing Documents to collect Rents will terminate automatically without any
action required of Lender.
SECTION 14.3. GENERAL PROVISIONS PERTAINING TO REMEDIES.
(a) The Remedies are cumulative and may be pursued by Lender or Trustees
concurrently or otherwise, at such time and in such order as Lender or Trustees
may determine in their sole discretion and without presentment, demand, protest
or further notice of any kind, all of which are expressly waived by Grantor.
(b) The enumeration in the Financing Documents of specific rights or
powers will not be construed to limit any general rights or powers or impair
Lender's or Trustees' rights with respect to the Remedies.
(c) If Lender or Trustees exercise any of the Remedies, Lender will not be
deemed a mortgagee-in-possession unless Lender has elected affirmatively to be a
mortgagee-in-possession.
(d) Lender and Trustees will not be liable for any act or omission of
Lender or Trustee in connection with the exercise of the Remedies.
(e) Lender's and Trustees' right to exercise any Remedy will not be
impaired by any delay in exercising or failure to exercise the Remedy and the
delay or failure will not be construed as extending any cure period or
constitute a waiver of the default or Event of Default.
(f) If an Event of Default occurs, Lender's payment or performance or
acceptance of payment or performance will not be deemed a waiver or cure of the
Event of Default.
(g) Lender's acceptance of partial payment or receipt of Rents will not
extend or affect any grace period or constitute a waiver of a default or Event
of Default or constitute a recision of Acceleration.
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SECTION 14.4. FORECLOSURE; ASSENT TO DECREE AND POWER OF SALE.
In the event the Trustee or Lender elects to institute foreclosure
proceedings upon the occurrence of an Event of Default, the Grantor and
Acquisition Grantors each assent to the passage of a decree for the sale of the
Property and any or all of the parcels comprising the same and further
authorizes the Trustee to sell the Property. Any sale of the Property or any of
the parcels so being sold, whether by way of the assent to decree or power of
sale, shall be made in accordance with the provisions of Section 7-105, REAL
PROPERTY ARTICLE, ANNOTATED CODE OF MARYLAND, as amended, and Section 14-200 ET
SEQ. of the MARYLAND RULES OF PROCEDURE, as amended, or other applicable Laws.
The terms of the sale may be cash upon settlement of the sale or upon such other
and additional terms as the Trustee deems necessary, proper or convenient,
except as specifically limited by applicable law or court rule. Such sale may be
of the entire Property as a unit or of such parts or parcels of the entire
Property as the Trustee, in its sole and absolute discretion, deems necessary,
proper, or convenient.
(a) APPLICATION OF PROCEEDS. Upon the sale of the Property, the proceeds
shall be applied as follows:
(i) To the payment of all expenses incident to the sale, including
reasonable and necessary counsel fees and expenses; and a commission to the
Trustee equal to the commission allowed the Trustee for making sales of property
by virtue of a decree of a court of equity in the State of Maryland. As used
herein, expenses of sale shall specifically include auctioneer's fees at the
auctioneer's customary rate, which shall be in addition to the Trustee's
commission, and the costs of a preforeclosure appraisal;
(ii) To the payment of the Obligations other than those owed with
respect to the Guaranty and then to the payment of those Obligations owed with
respect to the Guaranty, if such Obligations have matured and are due under the
terms of the Guaranty, and including without limitation the payment of any
Evasion Premium, or if not, to be held in a demand account as a pledged fund
(which shall be interest bearing for the benefit of the Grantor) up to the
maximum sum, as determined by Lender, which could be due under the Guaranty by
the Grantor as security for the Obligations owed with respect to the Guaranty,
and to be applied to the Obligations owed with respect to the Guaranty after a
default under the Guaranty;
(iii) And the balance remaining, if any, shall be paid to the
Grantor, or to whomsoever shall be judicially determined to be entitled to the
same.
(b) PAYMENT BEFORE SALE. In the event the Obligations shall be paid after
the filing of a foreclosure proceeding, but before sale of the Property, the
Grantor shall also be required to pay all of the expenses of any advertisement
or notice, all court costs, and all other expenses incident to or resulting from
the foreclosure proceedings under this Deed of Trust, and a commission on the
total amount of the indebtedness owed with respect to the Loan, both principal
and interest, remaining unpaid, equal to one-half (1/2) of the percentage
allowed as commission to trustees making a sale under a decree of a court of
equity in Maryland and such reasonable and necessary counsel fees and expenses
as the Trustee or Lender may have incurred; provided, however, that the sale may
be proceeded with unless, prior to the date on which the sale is scheduled,
payment is made by Grantor of the Obligations then due (including payment of all
costs, expenses, commissions and fees, as provided herein).
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(c) LENDER MAY BID. Upon any sale made under this Section 14, whether made
under the power of sale or by virtue of judicial proceedings or a judgment of
foreclosure, Lender may bid for and acquire the Property. If the Obligations
owed with respect to the Guaranty are then due, in lieu of paying cash therefor
the Lender may make settlement for the purchase price by crediting the
Obligations of Grantor secured by this Deed of Trust against the net sales
price, after deducting the expenses and costs of the sale and any other sums
which Lender is authorized to deduct under this Deed of Trust.
(d) LEASES. In the event of a sale of the Property under either the power
of sale or assent to decree, such sale may be made, at the option of Lender,
subject to one or more of the tenancies entered into subsequent to the recording
of this Deed of Trust, in accordance with the provisions of Section 7-105(f)(2),
REAL PROPERTY ARTICLE, ANNOTATED CODE OF MARYLAND, as amended.
(e) RIGHT TO MAINTAIN SEPARATE ACTION. In the event Grantor shall fail to
pay the Obligations, Trustee and Lender shall be empowered to institute
Proceedings as may be advised by its counsel for the collection of the sums so
due and unpaid, and may prosecute any Proceedings to judgment or final decree,
and may enforce any judgments or final decree against Grantor and collect, out
of the Property in any manner provided by law, monies adjudged to be payable.
Lender shall be entitled to recover judgment before, after, or during the
pendency of any Proceedings, or the foreclosure of the lien of this Deed of
Trust. In the event of a sale of all or any parcel of the Property, and of the
application of the proceeds of sale as provided in this Deed of Trust to the
payment of the Obligations, Lender and the Trustee shall be entitled to enforce
payment of and to receive all amounts then remaining due upon the Obligations,
and shall be entitled to recover judgment for any portion of the Obligations
remaining unpaid, with interest as provided in the Guaranty. The recovery of any
judgment by Lender, and the levy of an execution under any judgment upon all or
any parcel of the Property, shall not affect in any manner the lien of this Deed
of Trust upon the Property, or any Remedies of the Trustee or of the Lender, and
the Remedies shall continue unimpaired. Any monies collected by the Trustee or
Lender under this Section 14.4(e) shall be applied in accordance with the
provisions of Section 14.4(a).
(f) WAIVERS OF STAY, EXEMPTIONS. Grantor shall not claim or take any
advantage of any stay or extension or moratorium law, or any exemption from
execution of sale of all or any parcels of the Property, wherever enacted, which
may affect the covenants of this Deed of Trust, nor claim or insist upon any
advantage of any Law providing for the valuation or appraisal of all or any
parcels of the Property prior to any sale or pursuant to the order of any court;
nor after any sale, claim or any right under any Law to redeem the property so
sold. Grantor expressly waives all benefit or advantage of any such Law and
covenants not to impede the execution of any power herein granted or delegated
to the Trustee, but to suffer the execution of every power as though no Law had
been enacted.
SECTION 14.5. GENERAL PROVISIONS PERTAINING TO MORTGAGEE-IN-POSSESSION OR
RECEIVER.
(a) If an Event of Default occurs, any court of competent jurisdiction
will, upon application by Lender, appoint a Receiver as designated in the
application and issue an injunction prohibiting Grantor from interfering with
the Receiver, collecting Rents, disposing of any Rents or all of or any parcel
of the Property, committing waste or doing any other act that will tend to
affect the preservation of the Leases, the Rents and the Property and Grantor
29
approves the appointment of the designated Receiver or any other Receiver
appointed by the court. Grantor agrees that the appointment may be made EX PARTE
and as a matter of right to Lender or Trustees, either before or after sale of
all or any parcels of the Property, without further notice, and without regard
to the solvency or insolvency, at the time of application for the Receiver, of
the person or persons, if any, liable for the payment of any portion of the
Obligations and the performance of any portion of the Obligations and without
regard to the value of the Property or whether the Property is occupied as a
homestead and without bond being required of the applicant.
(b) The Receiver will be vested with the fullest powers permitted by Law
including all powers necessary or usual in similar cases for the protection,
possession and operation of all or any parcels of the Property and all the
powers and duties of Lender as a mortgagee-in-possession as provided in this
Deed of Trust and may continue to exercise all the usual powers and duties until
the Receiver is discharged by the court.
(c) In addition to the Remedies and all other available rights, Lender or
the Receiver may take any of the following actions:
(i) take exclusive possession, custody and control of all or any parcels
of the Property and manage the same so as to prevent waste;
(ii) require Grantor to deliver to Lender or the Receiver all keys,
security deposits, operating accounts, prepaid Rents, past due Rents, the
Books and Records and all original counterparts of the Leases and the
Property Documents;
(iii) collect, ▇▇▇ for and give receipts for the Rents and, after paying
all expenses of collection, including reasonable receiver's, broker's and
attorney's fees, apply the net collections to any portion of the
Obligations selected by Lender in its sole discretion,
(iv) enter into, modify, extend, enforce, terminate, renew or accept
surrender of Leases and evict tenants except that in the case of a
Receiver, such actions may be taken only with the written consent of
Lender as provided in this Deed of Trust and in the Assignment;
(v) enter into, modify, extend, enforce, terminate or renew Property
Documents except that in the case of a Receiver, such actions may be taken
only with the written consent of Lender as provided in this Deed of Trust
and in the Assignment;
(vi) appear in and defend any Proceeding brought in connection with the
Property and bring any Proceeding to protect all or any parcels of the
Property as well as Grantor's and Lender's respective interests in all or
any parcels of the Property (unless any such Proceeding has been assigned
previously to Lender in the Assignment, or if so assigned, Lender has not
expressly assigned such Proceeding to the Receiver and consented to such
appearance or defense by Receiver); and
(vii) perform any act in the place of Grantor that Lender or the Receiver
deems necessary
30
(A) to preserve the value, marketability or rentability of all or any
parcels of the Property; (B) upon consent by Lender, to increase the gross
receipts from all or any parcels of the Property; or (C) otherwise to
protect Grantor's and Lender's respective interests in all or any parcels
of the Property.
(d) Grantor appoints Lender as Grantor's attorney-in-fact, at Lender's
election, to perform any actions and to execute and record any instruments
necessary to effectuate the actions described in this Section, in each instance
only at Lender's election and only to the extent Grantor has failed to comply
with the provisions of this Section.
SECTION 14.6. GENERAL PROVISIONS PERTAINING TO FORECLOSURES AND THE POWER
OF SALE. The following provisions will apply to any Proceeding to foreclose and
to any sale of the Property by power of sale or pursuant to a judgment of
foreclosure and sale:
(i) Lender's or Trustees' right to institute a Proceeding to foreclose or
to sell by power of sale will not be exhausted by a Proceeding or a sale
that is defective or not completed;
(ii) a sale pursuant to a judgment of foreclosure and sale may be held at
such time or times and such place or places and upon such terms and
conditions or after such previous public announcement as required by Law
and as Trustees may deem appropriate;
(iii) with respect to sale pursuant to a judgment of foreclosure and sale,
the Property may be sold as an entirety or in parcels, at one or more
sales, at the time and place, on terms and in the order that Trustees deem
expedient in its sole discretion with such postponement of any such sale
as Trustees may deem appropriate without regard to any right of Grantor or
any other person to the marshalling of assets and Grantor hereby waives
all right to have the Property marshalled upon any foreclosure under this
Deed of Trust;
(iv) if a portion of the Property is sold pursuant to this Article, the
Financing Documents will remain in full force and effect with respect to
any portion of the Obligations and this Deed of Trust will continue as a
valid and enforceable first lien on and security interest in the remaining
portion of the Property, subject only to the Permitted Exceptions, without
loss of priority and without impairment of any of Lender's or Trustees'
rights and remedies with respect to the unmatured portion of the
Obligations;
(v) Lender may bid and become the purchaser at any such sale, and will,
upon presentation of the Guaranty or a true copy thereof at such sale, be
credited for the unpaid balance due under the Guaranty and any interest
accrued and unpaid thereon, or such potion of such unpaid balance or
interest as Lender may specify, against any price bid by Lender at such
sale. The terms of sale being complied with, Trustees will convey to and
at the cost of the purchaser at such sale Grantor's interest in, so much
of the Property as is so sold, free of and discharged from all estate,
right, title or interest of Grantor at law or in equity. Lender's receipt
of the proceeds of a sale will be sufficient consideration for the portion
of the Property sold and Lender will apply the proceeds set forth in the
Deed of Trust; and
31
(vi) Upon any sale of Grantor's interest in any or all of the Property,
whether under the assent to a decree or power of sale herein granted, or
by other foreclosure or judicial proceedings, Trustees will apply the
proceeds of such sale, together with any other sum then held as security
hereunder or due under any of the provisions of the Financing Documents as
part of the Property (after paying all expenses of sale, including
reasonable attorneys' fees and a commission to the party making the sale
equal to the commission allowed to trustees for making sales of property
under orders or decrees of a court having competent jurisdiction, and all
Impositions which either Trustees or Lender deem it advisable or expedient
to pay and all sums advanced, with interest thereon, as herein provided)
to the payment of the aggregate Obligations and interest thereon to the
date of payment and prepayment fees, if any, paying over the surplus, if
any, less the expense, if any, of obtaining possession, to Grantor or any
person entitled thereto upon the surrender and delivery to the purchaser
of possession of the Property.
SECTION 14.7. UNIFORM COMMERCIAL CODE. Lender, or the Trustee acting on
behalf of Lender, may exercise all rights and remedies of a secured creditor
under the MARYLAND UNIFORM COMMERCIAL CODE, as amended, with respect to any part
of the Property constituting personal property and subject to the security
interest created by this Deed of Trust. These rights include the right to take
possession of the personal property without the use of judicial process (Grantor
hereby waiving all right to prior notice and a judicial hearing) and the right
to require Grantor to assemble the same at the Property or such other place as
Lender or Trustee may notify the Grantor. Any disposition of the personal
property shall be considered commercially reasonable if made pursuant to a
public sale which is advertised at least twice in a newspaper of local
circulation in ▇▇▇▇ Arundel County, Maryland. Any notice required by Section
9-504 of the MARYLAND UNIFORM COMMERCIAL CODE to be given to Grantor shall be
considered reasonable and properly given if given in the manner and at the
address provided in the notice provisions of this Deed of Trust at least five
(5) business days prior to the date of any scheduled public sale.
SECTION 14.8. POWER OF ATTORNEY. Grantor appoints Lender as Grantor's
attorney-in-fact to perform any actions necessary and incidental to exercising
the Remedies.
SECTION 14.9. TENANT AT SUFFERANCE. If Lender, Trustees, or a Receiver
enters the Property in the exercise of the Remedies and Grantor is allowed to
remain in occupancy of the Property, Grantor will pay to Lender, Trustees, or
the Receiver, as the case may be, in advance, a reasonable rent for the Property
occupied by Grantor. If Grantor fails to pay the rent, Grantor may be
dispossessed by the usual Proceedings available against defaulting tenants.
ARTICLE XV
LIMITATION OF LIABILITY
SECTION 15.1. LIMITATION OF LIABILITY.
(a) Notwithstanding any provision in the Financing Documents to the
contrary, except as
32
set forth in subsections (b) and (e), if Lender seeks to enforce the collection
of the Obligations, Lender will foreclose this Deed of Trust instead of
instituting suit on the Guaranty. If following a foreclosure and sale of all
parcels comprising the Property under this Deed of Trust a lesser sum is
realized therefrom than that due under the Obligations, Lender will not
institute any Proceeding against Grantor or Grantor's general partners, if any,
for or on account of the deficiency, and Lender shall not have recourse against
any entity constituting Grantor for any portion of the Obligations, except in
each instance as set forth in subsections (b) through (e).
(b) The limitation of liability in subsection (a) will not affect or
impair (i) the lien of this Deed of Trust or Lender's other rights and Remedies
under the Financing Documents, including Lender's right as mortgagee or secured
party to commence an action to foreclose any lien or security interest Lender
has under the Financing Documents against any parcel remaining encumbered by
this Deed of Trust and against any additional collateral held; (ii) the validity
of the Financing Documents or the Obligations; or (iii) Lender's right to
present and collect on any letter of credit or other credit enhancement document
held by Lender in connection with the Obligations.
(c) The following are excluded and excepted from the limitation of
liability in subsection (a) and Lender may recover personally against Grantor
for the following:
(i) all losses suffered and liabilities and expenses incurred by Lender
relating to any fraud or intentional misrepresentation or omission by
Grantor or Borrower or any of their partners, members, officers,
directors, shareholders or principals in connection with (A) the
performance of any of the conditions to Lender making the Loan; (B) any
inducements to Lender to make the Loan; (C) the execution and delivery of
the Financing Documents; (D) any certificates, representations or
warranties given in connection with the Loan; or (E) Grantor's performance
of the Obligations;
(ii) all Rents derived from the Property after a default under the
Financing Documents which default is a basis of a Proceeding by Lender to
enforce collection of the Obligations and all moneys that, on the date
such a default occurs, are on deposit in one or more accounts used by or
on behalf of Grantor relating to the operation of the Property, except to
the extent properly applied to payment of Debt Service Payments,
Impositions, Insurance Premiums and any reasonable and customary expenses
incurred by Grantor in the operation, maintenance and leasing of the
Property or delivered to Lender;
(iii) the cost of remediation of any Environmental Activity affecting the
Property and any other losses suffered and liabilities and expenses
incurred by Lender relating to a default under the Article entitled
"ENVIRONMENTAL";
(iv) all security deposits collected by Grantor or any of Grantor's
predecessors and not refunded to Tenants in accordance with their
respective Leases, applied in accordance with the Leases or Law or
delivered to Lender, and all advance rents (more than thirty (30) days in
advance) collected by Grantor or any of Grantor's predecessors and not
applied in accordance with the Leases or delivered to Lender;
33
(v) the replacement cost of any Fixtures or Personal Property removed from
the Property after a default occurs;
(vi) all losses suffered and liabilities and expenses incurred by Lender
relating to any acts or omissions by Grantor that result in waste
(including economic and non-physical waste) on the Property;
(vii) all protective advances and other payments made by Lender pursuant
to express provisions of the Financing Documents to protect Lender's
security interest in the Property or to protect the assignment of the
property described in and effected by the Assignment, but only to the
extent that the Rents would have been sufficient to permit Grantor to make
the payment and Grantor failed to do so;
(viii) all mechanics' or similar liens relating to work performed on or
materials delivered to the Property prior to Lender exercising its
Remedies, but only to the extent Lender had advanced funds to pay for the
work or materials;
(ix) all Proceeds that are not applied in accordance with this Deed of
Trust or not paid to Lender as required under this Deed of Trust; and
(x) all losses suffered and liabilities and expenses incurred by Lender or
Trustees in connection with the imposition or collection by any Government
or any person, at any time, of any recordation tax, transfer tax or any
other charge relating to or on account of the recordation of this Deed of
Trust or Lender's lien hereunder.
(d) Nothing under subparagraph (a) above will be deemed to be a waiver of
any right which Lender may have under Section 506(a), 506(b), 1111(b) or any
other provisions of the Bankruptcy Code or under any other Law relating to
bankruptcy or insolvency to file a claim for the full amount of the Obligations
or to require that all collateral will continue to secure all of the Obligations
in accordance with the Financing Documents.
(e) Notwithstanding the foregoing, it is expressly understood and agreed
that the aforesaid limitation of liability shall in no way affect or apply to
Grantor, and Grantor shall be liable for the entire indebtedness evidenced
hereby (including all principal, interest, prepayment charges and other
charges), if Grantor, or any of its general partners, members or officers, as
the case may be, or any person, seeks to set aside the Guaranty as a preference
in any bankruptcy or similar proceeding.
ARTICLE XVI
WAIVERS
SECTION 16.1. WAIVER OF STATUTE OF LIMITATIONS. GRANTOR WAIVES THE RIGHT
TO CLAIM ANY STATUTE OF LIMITATIONS AS A DEFENSE
34
TO GRANTOR'S PAYMENT AND PERFORMANCE OF THE OBLIGATIONS.
SECTION 16.2. WAIVER OF NOTICE. GRANTOR WAIVES THE RIGHT TO RECEIVE ANY
NOTICE FROM LENDER OR TRUSTEES WITH RESPECT TO THE FINANCING DOCUMENTS EXCEPT
FOR THOSE NOTICES THAT LENDER OR TRUSTEES ARE EXPRESSLY REQUIRED TO DELIVER
PURSUANT TO THE FINANCING DOCUMENTS.
SECTION 16.3. WAIVER OF MARSHALLING AND OTHER MATTERS. GRANTOR WAIVES THE
BENEFIT OF ANY RIGHTS OF MARSHALLING OR ANY OTHER RIGHT TO DIRECT THE ORDER IN
WHICH ANY OF THE PROPERTY WILL BE (i) SOLD; OR (ii) MADE AVAILABLE TO ANY ENTITY
IF THE PROPERTY IS SOLD BY POWER OF SALE OR PURSUANT TO A JUDGMENT OF
FORECLOSURE AND SALE. GRANTOR ALSO WAIVES THE BENEFIT OF ANY LAWS RELATING TO
APPRAISEMENT, VALUATION, STAY, EXTENSION, REINSTATEMENT, MORATORIUM, HOMESTEAD
AND EXEMPTION RIGHTS OR A SALE IN INVERSE ORDER OF ALIENATION.
SECTION 16.4. WAIVER OF TRIAL BY JURY. GRANTOR WAIVES TRIAL BY JURY IN ANY
PROCEEDING BROUGHT BY, OR AGAINST, OR COUNTERCLAIM OR CROSS-COMPLAINT ASSERTED
BY OR AGAINST, LENDER OR TRUSTEES RELATING TO THE LOAN, THE PROPERTY DOCUMENTS
OR THE LEASES.
SECTION 16.5. [INTENTIONALLY DELETED
SECTION 16.6. WAIVER OF JUDICIAL NOTICE AND HEARING. GRANTOR WAIVES ANY
RIGHT GRANTOR MAY HAVE UNDER LAW TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE
EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THE FINANCING DOCUMENTS TO LENDER
AND GRANTOR WAIVES THE RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE DULY
CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THE FINANCING DOCUMENTS ON THE
GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING.
SECTION 16.7. WAIVER OF SUBROGATION. GRANTOR WAIVES ALL RIGHTS OF
SUBROGATION TO LENDER'S RIGHTS OR CLAIMS RELATED TO OR AFFECTING THE PROPERTY OR
ANY OTHER SECURITY FOR THE LOAN UNTIL THE LOAN IS PAID IN FULL AND ALL FUNDING
OBLIGATIONS UNDER THE FINANCING DOCUMENTS HAVE BEEN TERMINATED.
SECTION 16.8. GENERAL WAIVER. GRANTOR ACKNOWLEDGES THAT (A) GRANTOR AND
GRANTOR'S PARTNERS, MEMBERS OR PRINCIPALS, AS THE CASE MAY BE, ARE KNOWLEDGEABLE
BORROWERS OF COMMERCIAL FUNDS AND EXPERIENCED REAL ESTATE DEVELOPERS OR
INVESTORS WHO
35
UNDERSTAND FULLY THE EFFECT OF THE ABOVE PROVISIONS; (B) LENDER WOULD NOT MAKE
THE LOAN WITHOUT THE PROVISIONS OF THIS ARTICLE; (C) THE LOAN IS A COMMERCIAL OR
BUSINESS LOAN UNDER THE LAWS OF THE STATE OR COMMONWEALTH WHERE THE PROPERTY IS
LOCATED NEGOTIATED BY LENDER, GRANTOR AND BORROWER AND THEIR RESPECTIVE
ATTORNEYS AT ARMS LENGTH; AND (D) ALL WAIVERS BY GRANTOR IN THIS ARTICLE HAVE
BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER GRANTOR FIRST HAVE
BEEN INFORMED BY COUNSEL OF GRANTOR'S OWN CHOOSING AS TO POSSIBLE ALTERNATIVE
RIGHTS, AND HAVE BEEN MADE AS AN INTENTIONAL RELINQUISHMENT AND ABANDONMENT OF A
KNOWN RIGHT AND PRIVILEGE. THE FOREGOING ACKNOWLEDGMENT IS MADE WITH THE INTENT
THAT LENDER AND ANY SUBSEQUENT HOLDER OF THE GUARANTY WILL RELY ON THE
ACKNOWLEDGMENT.
ARTICLE XVII
NOTICES
SECTION 17.1. NOTICES. All acceptances, approvals, consents, demands,
notices, requests, waivers and other communications (the "NOTICES") required or
permitted to be given under the Financing Documents must be in writing and (a)
delivered personally by a process server providing a sworn declaration
evidencing the date of service, the individual served, and the address where the
service was made; (b) sent by certified mail, return receipt requested; or (c)
delivered by nationally recognized overnight delivery service that provides
evidence of the date of delivery, with all charges prepaid (for next morning
delivery if sent by overnight delivery service), addressed to the appropriate
party at its address listed below:
If to Lender: Teachers Insurance and Annuity
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Director Portfolio Management
Mortgage and Real Estate/Northeast
Southern Territory
Application #MD-539
Mortgage #M-000469600
with a courtesy copy to: Teachers Insurance and Annuity
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Chief
Counsel--Mortgage and Real Estate Law
Application #MD-539
Mortgage #M-000469600
36
If to Grantor: Corporate Office Properties Trust
c/o Corporate Office Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
with a courtesy copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Trustee: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Teachers Insurance and Annuity
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lender and Grantor each may change from time to time the address to which
Notices must be sent, by notice given in accordance with the provisions of this
Section. All Notices given in accordance with the provisions of this Section
will be deemed to have been received on the earliest of (i) actual receipt; (ii)
Grantor's and Borrower's rejection of delivery; or (iii) 3 Business Days after
having been deposited in any mail depository regularly maintained by the United
States postal service, if sent by certified mail, or 1 Business Day after having
been deposited with a nationally recognized overnight delivery service, if sent
by overnight delivery or on the date of personal service, if served by a process
server.
SECTION 17.2. CHANGE IN GRANTOR'S NAME OR PLACE OF BUSINESS. Grantor will
immediately notify Lender in writing of any change in Grantor's name or the
place of business set forth in the beginning of this Deed of Trust.
ARTICLE XVIII
MISCELLANEOUS
SECTION 18.1. APPLICABLE LAW. The Financing Documents are governed by and
will be construed in accordance with the Laws of the State of Maryland.
SECTION 18.2. USURY LIMITATIONS. Grantor and Lender intend to comply with
all Laws with respect to the charging and receiving of interest. Any amounts
charged or received by Lender for the use or forbearance of the Principal to the
extent permitted by Law, will be amortized and spread throughout the Term until
payment in full so that the rate or amount of
37
interest charged or received by Lender on account of the Principal does not
exceed the Maximum Interest Rate. If any amount charged or received under the
Financing Documents that is deemed to be interest is determined to be in excess
of the amount permitted to be charged or received at the Maximum Interest Rate,
the excess will be deemed to be a prepayment of Principal when paid, without
premium, and any portion of the excess not capable of being so applied will be
refunded to Grantor. If during the Term the Maximum Interest Rate, if any, is
eliminated, then for purposes of the Loan, there will be no Maximum Interest
Rate.
SECTION 18.3. LENDER'S DISCRETION. Wherever under the Financing Documents
any matter is required to be satisfactory to Lender, Lender has the right to
approve or determine any matter or Lender has an election, Lender's approval,
determination or election will be made in Lender's reasonable discretion unless
expressly provided to the contrary.
SECTION 18.4. UNENFORCEABLE PROVISIONS. If any provision in the Financing
Documents is found to be illegal or unenforceable or would operate to invalidate
any of the Financing Documents, then the provision will be deemed expunged and
the Financing Documents will be construed as though the provision was not
contained in the Financing Documents and the remainder of the Financing
Documents will remain in full force and effect.
SECTION 18.5. SURVIVAL OF GRANTOR'S OBLIGATIONS. Grantor's
representations, warranties and covenants contained in the Financing Documents
will continue in full force and effect and survive (i) satisfaction of the
Obligations; (ii) reconveyance of the lien of this property by Trustees; (iii)
assignment or other transfer of all or any portion of Lender's interest in the
Financing Documents or the Property; (iv) Lender's or Trustees' exercise of any
of the Remedies or any of Lender's or Trustees' other rights under the Financing
Documents; (v) a Transfer; (vi) amendments to the Financing Documents; and (vii)
any other act or omission that might otherwise be construed as a release or
discharge of Grantor.
SECTION 18.6. RELATIONSHIP BETWEEN GRANTOR AND LENDER; NO THIRD PARTY
BENEFICIARIES.
(a) Lender is not a partner of or joint venturer with Grantor or any other
entity as a result of the Loan or Lender's rights under the Financing Documents;
the relationship between Lender and Grantor is strictly that of creditor and
debtor. Each Financing Document and the Note is an agreement between the parties
to that Financing Document or Note for the mutual benefit of the parties and no
entities other than the parties to that Financing Document or Note will be a
third party beneficiary or will have any claim against Lender or Grantor by
virtue of the Financing Document or the Note. As between Lender and Grantor, any
actions taken by Lender under the Financing Documents and the Note will be taken
for Lender's protection only, and Lender has not and will not be deemed to have
assumed any responsibility to Grantor or to any other entity by virtue of
Lender's actions.
(b) All conditions to Lender's performance of its obligations under the
Financing Documents are imposed solely for the benefit of Lender. No entity
other than Lender will have standing to require satisfaction of the conditions
in accordance with their provisions or will be entitled to assume that Lender
will refuse to perform its obligations in the absence of strict compliance with
any of the conditions.
38
SECTION 18.7. PARTIAL RECONVEYANCES OR RELEASES, EXTENSIONS, WAIVERS.
Lender may: (i) permit the reconveyance of any part of the Property or release
any entity obligated for the Obligations; (ii) extend the time for payment or
performance of any of the Obligations or otherwise amend the provisions for
payment or performance by agreement with any entity that is obligated for the
Obligations or that has an interest in the Property; (iii) accept additional
security for the payment and performance of the Obligations; and (iv) waive any
entity's performance of an Obligation, release any entity or individual now or
in the future liable for the performance of the Obligation or waive the exercise
of any Remedy or option. Lender may exercise any of the foregoing rights without
notice, without regard to the amount of any consideration given, without
affecting the priority of the Financing Documents, without releasing any entity
not specifically released from its obligations under the Financing Documents,
without releasing any guarantor(s) or surety(ies) of the Obligations, without
effecting a novation of the Financing Documents and, with respect to a waiver,
without waiving future performance of the Obligation or exercise of the Remedy
waived.
SECTION 18.8. SERVICE OF PROCESS. Grantor irrevocably consents to service
of process by registered or certified mail, postage prepaid, return receipt
requested, to Grantor or at address set forth for Grantor in the Article
entitled "NOTICES".
SECTION 18.9. ENTIRE AGREEMENT. Oral agreements or commitments between
Grantor and/or Borrower and Lender to lend money, to extend credit or to forbear
from enforcing repayment of a debt, including promises to extend or renew the
debt, are not enforceable. Any agreements among Grantor, Lender and Trustee
relating to the Loan are contained in the Financing Documents and the Note,
which contain the complete and exclusive statement of the agreements among
Grantor, Lender and Trustee, except as Grantor, Lender and, if applicable,
Trustees may later agree in writing to amend the Loan Documents. The language of
each Financing Document will be construed as a whole according to its fair
meaning and will not be construed against the draftsman.
SECTION 18.10. NO ORAL AMENDMENT. The Financing Documents may not be
amended, waived or terminated orally or by any act or omission made individually
by Grantor, Lender or Trustees but may be amended, waived or terminated only by
a written document signed by the party against which enforcement of the
amendment, waiver or termination is sought.
SECTION 18.11. SEVERABILITY. The invalidity, illegality or
unenforceability of any provision of any of the Financing Documents will not
affect any other provisions of the Financing Documents, which will be construed
as if the invalid, illegal or unenforceable provision never had been included.
SECTION 18.12. COVENANTS RUN WITH THE LAND. Subject to the restrictions on
transfer contained in the Article entitled "TRANSFERS, LIENS AND ENCUMBRANCES",
all of the covenants of this Deed of Trust and the Assignment run with the Land,
will bind all parties hereto and all tenants and subtenants of the Land or the
Improvements and their respective heirs, executors, administrators, successors
and assigns, and all occupants and subsequent owners of the Property, and will
inure to the benefit of Lender and all subsequent holders of the Note and
39
this Deed of Trust.
SECTION 18.13. TIME OF THE ESSENCE. Time is of the essence with respect to
Grantor's payment and performance of the Obligations.
SECTION 18.14. SUBROGATION. If the Principal or any other amount advanced
by Lender is used directly or indirectly to pay off, discharge or satisfy all or
any part of an encumbrance affecting the Property, then Lender is subrogated to
the encumbrance and to any security held by the holder of the encumbrance, all
of which will continue in full force and effect in favor of Lender as additional
security for the Obligations.
SECTION 18.15. JOINT AND SEVERAL LIABILITY. If Grantor consists of more
than one person or entity, the obligations and liabilities of each such person
or entity under this Deed of Trust are joint and several.
SECTION 18.16. SUCCESSORS AND ASSIGNS. The Financing Documents bind the
parties to the Financing Documents and their respective successors, assigns,
heirs, administrators, executors, agents and representatives and inure to the
benefit of Lender and its successors, assigns, heirs, administrators, executors,
agents and representatives and to the extent applicable inure to the benefit of
Trustees and their successors, assigns, heirs, administrators, executors, agents
and representatives.
SECTION 18.17. DUPLICATES AND COUNTERPARTS. Duplicate counterparts of any
of the Financing Documents, other than the Note, may be executed and together
will constitute a single original document.
ARTICLE XIX
TRUSTEE PROVISIONS
SECTION 19.1. ACCEPTANCE BY TRUSTEES. Trustees accept this trust when this
Deed of Trust, duly executed and acknowledged, is made a public record as
provided by law.
SECTION 19.2. ACTION IN ACCORDANCE WITH INSTRUCTIONS. Upon receipt by
Trustees of instructions from Lender at any time or from time to time, Trustees
will (a) give any notice or direction or exercise any right, remedy or power
hereunder or in respect of any part or all of the Property as shall be specified
in such instructions and (b) approve as satisfactory all matters required by the
terms hereof to be satisfactory to Trustees or to Lender. Trustees may, but need
not, take any of such actions in the absence of such instructions. The powers
and duties of the Trustees may be executed by either one of them with the same
legal force and effect as though executed by both of them, including the right
and power by either Trustees to execute and deliver a full or partial release of
this Deed of Trust or an amendment or modification of this Deed of Trust. At any
time or from time to time, upon request of Lender, and without affecting the
liability of any person for payment of the Obligations, Trustees will reconvey
all or any part of the Property, consent to the making of any map or plat
thereof, join in granting any easement
40
thereon, or join in any extension agreement or any agreement subordinating the
lien and estate hereof.
SECTION 19.3. RESIGNATION. Trustees may resign at any time upon giving not
less than sixty (60) days prior notice to Lender, but shall continue to act as
trustees until a successor or successors shall have been chosen and qualified.
SECTION 19.4. SUCCESSOR TRUSTEES. In the event of the death, removal,
resignation or refusal or inability of either or both of the Trustees to act, or
for any reason, at any time, Lender shall have the irrevocable power, with or
without cause, without prior notice of any kind, and without applying to any
court, to select and appoint a successor trustee. Each such appointment and
substitution shall be made by recording notice of such in each office in which
this Deed of Trust is recorded. Such notice shall be executed and acknowledged
by Lender and shall contain reference to this Deed of Trust and when so recorded
shall be conclusive proof of proper appointment of the successor trustee. Such
successors shall not be required to give bond for the faithful performance of
its duties unless required by Lender.
SECTION 19.5. TRUST IS IRREVOCABLE. The trust created hereby is
irrevocable by Grantor subject to defeasance in accordance with this Deed of
Trust.
SECTION 19.6. GENERAL. Trustees shall be protected by any document
believed by them to be genuine and to have been signed by the party or parties
purporting to sign the same. Trustees shall not be liable for any error of
judgment nor for any act done or step taken or omitted, nor for any mistakes of
law or fact, nor for anything which the Trustees may do or refrain from doing in
good faith. The Trustees make no representations as to the validity, legality or
sufficiency of this Deed of Trust, the Note or any of the other Financing
Documents. Lender shall have the power to remove or substitute the Trustees at
any time and from time to time.
41
IN WITNESS WHEREOF, Grantor has executed and delivered this Deed of Trust
as of the date first set forth above.
WITNESS/ATTEST: WITNESS/ATTEST:
Airport Square II, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square IV, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square V, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ X, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square XI, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square XIII, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ XIV, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square XIX, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Airport Square XX, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ XXI, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Tech Park I, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS/ATTEST: Tech Park II, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
45
WITNESS/ATTEST: Tech Park IV, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS: TRUSTEE:
(SEAL)
-------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITNESS: TRUSTEE:
(SEAL)
-------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITNESS/ATTEST: TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
By: (SEAL)
-------------------- ----------------------------
Name:
----------------------------
Title:
----------------------------
▇▇
▇▇▇▇▇▇▇/▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇ IV, LLC
By: Corporate Office Properties, L.P., its member
by: Corporate Office Properties Trust,
its general partner
by: (SEAL)
-------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Title: Senior Vice President
----------------------------
WITNESS: TRUSTEE:
/s/▇▇▇▇▇ ▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
-------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITNESS: TRUSTEE:
/s/▇▇▇▇▇ ▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
-------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITNESS/ATTEST: TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
/s/▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/HALTON WEST (SEAL)
-------------------- ----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Name: Halton West
----------------------------
Title: Associate Director
----------------------------
46
ACKNOWLEDGMENTS
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square II, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square IV, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square V, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square X, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XI, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XIII, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XIV, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XIX, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XX, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Airport Square XXI, LLC, a Maryland
limited liability company, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained in the capacity
described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Tech Park I, LLC, a Maryland limited
liability company, known to me (or satisfactorily proven) to be the person whose
name is subscribed to the within instrument, and acknowledged that he executed
the same for the purposes therein contained in the capacity described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
STATE OF MARYLAND, COUNTY OF BALTIMORE, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Tech Park II, LLC, a Maryland limited
liability company, known to me (or satisfactorily proven) to be the person whose
name is subscribed to the within instrument, and acknowledged that he executed
the same for the purposes therein contained in the capacity described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, TO WIT:
------ ---------
I HEREBY CERTIFY, that on this 30 day of September, 1999, before me, the
undersigned Notary Public of the State of Maryland, personally appeared ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., who acknowledged himself to be the Senior Vice President of
Corporate Office Properties Trust, the general partner of Corporate Office
Properties, L.P., which is the member of Tech Park IV, LLC, a Maryland limited
liability company, known to me (or satisfactorily proven) to be the person whose
name is subscribed to the within instrument, and acknowledged that he executed
the same for the purposes therein contained in the capacity described above.
AS WITNESS my hand and Notarial Seal.
▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇ ▇▇▇▇▇
NOTARY PUBLIC STATE OF MARYLAND --------------------------------------
My Commission Expires November 25, 2002 Notary Public
Commission Expires: ____________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
----------------------
) To Wit:
CITY/COUNTY OF NEW YORK )
----------------
I HEREBY CERTIFY that on this 24TH day of September, 1999, before me,
the undersigned, a Notary Public of said State aforesaid, personally appeared
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee under this Deed of Trust, and executed the same
for the purposes contained therein by signing his name, as Trustee.
WITNESS my hand and Notarial Seal.
/S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
----------------------------
Notary Public
My Commission Expires:_____________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public in and for
the State of New York
Commission No. 01HA5075538
My Commission Expires: April 7, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
----------------------
) To Wit:
CITY/COUNTY OF NEW YORK )
----------------
I HEREBY CERTIFY that on this 24TH day of September, 1999, before me, the
undersigned, a Notary Public of said State aforesaid, personally appeared
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee under this Deed of Trust, and executed the same
for the purposes contained therein by signing his name, as Trustee.
WITNESS my hand and Notarial Seal.
/S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
----------------------------
Notary Public
My Commission Expires:_____________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public in and for
the State of New York
Commission No. 01HA5075538
My Commission Expires: April 7, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
----------------------
) To Wit:
CITY/COUNTY OF NEW YORK )
----------------
I HEREBY CERTIFY that on this 24TH day of September, 1999, before me, the
undersigned, a Notary Public of said State aforesaid, personally appeared HALTON
WEST, who acknowledged himself to be the ASSOCIATE DIRECTOR of TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation, and that
he as ASSOC. DIRECTOR, being authorized so to do, executed the same for the
purposes contained therein in the capacity described above.
WITNESS my hand and Notarial Seal.
/S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
----------------------------
Notary Public
My Commission Expires:_____________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public in and for
the State of New York
Commission No. 01HA5075538
My Commission Expires: April 7, 2001
54
ATTORNEY CERTIFICATION
The undersigned, an attorney admitted to practice before the Court of
Appeals of Maryland, hereby certifies that the within instrument was prepared by
me or under my supervision.
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
55
EXHIBIT A
LEGAL DESCRIPTION
56
EXHIBIT B
DEFINITIONS
"ACCELERATION" is defined in Section 14.2(a)(i).
"ACCUMULATIONS" is defined in Section 2.1(xii).
"ACCUMULATIONS DEPOSITORY" is defined in Section 6.2(a).
"ADDITIONAL FUNDS" is defined in Section 7.4(v).
"ANNUAL FINANCIAL STATEMENT" is defined in Section 10.1(a).
"ASSESSMENTS" is defined as all assessments now or hereafter levied, assessed or
imposed against the Property.
"ASSIGNMENT" is defined as the Assignment of Leases and Rents dated of even date
with this Deed of Trust made by Grantor for the benefit of Lender.
"BANKRUPTCY CODE" means Title 11 of the United States Code.
"BORROWER" is defined in the Recitals.
"BUDGET" is defined in Section 10.2.
"BUSINESS DAYS" is defined as any day on which commercial banks are not
authorized or required by Law to close in New York, New York.
"CASUALTY" is defined as damage to or destruction of the Property by fire or
other casualty.
"CODE" is defined as the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"CONDEMNATION" is defined as the permanent or temporary taking of all or any
portion of the Property, or any interest therein or right accruing thereto, by
the exercise of the right of eminent domain (including any transfer in lieu of
or in anticipation of the exercise of the right), inverse condemnation or any
similar injury or damage to or decrease in the value of the Property, including
severance and change in the grade of any streets
"CONDEMNATION AWARDS" is defined in Section 2.1(viii).
"CONDEMNATION PROCEEDING" is defined as a Proceeding that could result in a
Condemnation.
"CPA" is defined as an independent certified public accountant satisfactory to
Lender.
57
"DEBT" means the Principal, the Interest, the Late Charges, the prepayment
Premiums, the Expenses, any additional advances made by Lender in connection
with the Loan and all other amounts payable under the Loan Documents.
"DEBT SERVICE PAYMENTS" is defined as the monthly installments of principal and
interest payable by Borrower to Lender as set forth in the Note.
"DEED OF TRUST" is defined as this Indemnity Deed of Trust, Assignment of Leases
and Rents and Security Agreement.
"DESTRUCTION EVENT" is defined in Section 7.4.
"ENVIRONMENTAL ACTIVITY" is defined as any actual, suspected or threatened
abatement, cleanup, disposal, generation, handling, manufacture, possession,
release, remediation, removal, storage, transportation, treatment or use of any
Hazardous Material. The actual, suspected or threatened presence of any
Hazardous Material, or the actual, suspected or threatened noncompliance with
any Environmental Laws, will be deemed Environmental Activity.
"ENVIRONMENTAL INDEMNITY" is defined as the Environmental Indemnity Agreement of
even date with this Deed of Trust by Grantor and Borrower to Lender.
"ENVIRONMENTAL LAWS" is defined as all Laws pertaining to health, safety,
protection of the environment, natural resources, conservation, wildlife, waste
management, Environmental Activities and pollution.
"ENVIRONMENTAL REPORT" is defined as the three reports prepared by ENSR, dated
August 1999, as amended.
"ERISA" is defined in Section 8.3(a).
"EVENT OF DEFAULT" is defined in Section 14.1.
"EXISTING MEMBER" is defined in Section 12.1(b).
"EXPENSES" is defined in Section 11.1(a).
"FINANCIAL BOOKS AND RECORDS" is defined as detailed accounts of the income and
expenses of the Property and of Grantor and all other data, records and
information that either are specifically referred to in the Article entitled
"FINANCIAL REPORTING" or are necessary to the preparation of any of the
statements, reports or certificates required under such Article and includes all
supporting schedules prepared or used by the CPA in auditing the Annual
Financial Statement or in issuing its opinion.
"FINANCING DOCUMENTS" is defined as the Guaranty, this Deed of Trust, the
Assignment and all documents now or hereafter executed by Grantor or held by
Lender or Trustees relating to the
58
Guaranty, including all amendments.
"FISCAL YEAR" is defined as any calendar year or partial calendar year during
the Term.
"FIXTURES AND PERSONAL PROPERTY" is defined in Section 2.1(iv).
"GOVERNMENT" is defined as any federal, state or municipal governmental or
quasi-governmental authority including executive, legislative or judicial
branch, division and any subdivision or agency of any of them and any entity to
which any of them has delegated authority.
"GRANTOR" is defined in the introductory paragraph.
"GUARANTY" is defined in the introductory paragraph.
"HAZARDOUS MATERIALS" is defined as any by-product, chemical, compound,
contaminant, pollutant, product, substance, waste or other material (i) that is
hazardous or toxic or (ii) the abatement, cleanup, discharge, disposal,
emission, exposure to, generation, handling, manufacture, possession, presence,
release, removal, remediation, storage, transportation, treatment or use of
which is controlled, prohibited or regulated by any Environmental Laws,
including asbestos, petroleum and petroleum products and polychlorinated
biphenyls.
"IMPOSITION PENALTY DATE" is defined in Section 6.1(a).
"IMPOSITIONS" is defined as all Taxes, Assessments, ground rent, if any, water
and sewer rents, fees and charges, levies, permit, inspection and license fees
and other dues, charges or impositions, including all charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, maintenance
and similar charges and charges for utility services, in each instance whether
now or in the future, directly or indirectly, levied, assessed or imposed on the
Property or Grantor and whether levied, assessed or imposed as excise, privilege
or property taxes.
"IMPROVEMENTS" is defined in Section 2.1(ii).
"INSURANCE PREMIUMS" is defined as all present and future premiums and other
charges due and payable on policies of fire, rental value and other insurance
covering the Property and required pursuant to the provisions of this Deed of
Trust.
"INSURANCE PROCEEDS" is defined in Section 2.1(ix).
"INSURERS" is defined in Section 7.1(c).
"INSTITUTIONAL INVESTOR" is defined as any bank, savings institution, charitable
foundation, insurance company, real estate investment trust, pension fund or
investment advisor registered under the Investment Advisors Act of 1940, as
amended, and acting as trustee or agent.
"LAND" is defined in the Recitals.
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"LATE CHARGE" is defined in the Note.
"LAW" is defined as all present and future codes, constitutions, cases,
opinions, rules, manuals, regulations, determinations, laws, orders, ordinances,
requirements and statutes, as amended, of any Government that affect or that may
be interpreted to affect the Property, Grantor or the Loan, including amendments
and all guidance documents and publications promulgated thereunder.
"LEASES" is defined as all present and future leases, subleases, licenses and
other agreements for the use and occupancy of the Land and Improvements, any
related guarantees and including any use and occupancy arrangements created
pursuant to Section 365 (h) of the Bankruptcy Code or otherwise in connection
with the commencement or continuation of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar Proceedings, or
any assignment for the benefit of creditors, in respect of any tenant or other
occupant of the Land and Improvements.
"LENDER" is defined in the introductory paragraph.
"LOAN" is defined in the Recitals.
"LOAN DOCUMENTS" means the Note, the Pledge and Security Agreement, and the
Financing Documents.
"MATERIAL ENVIRONMENTAL CONTAMINATION" is defined as contamination of the
Property with Hazardous Materials (i) that constitutes a violation of one or
more Environmental Laws; (ii) for which there is a significant possibility that
remediation will be required under Environmental Laws; (iii) that results in a
material risk of liability or expense to Lender; or (iv) that diminishes the
value of the Property.
"MATURITY DATE" is defined in the Recitals.
"MAXIMUM INTEREST RATE" is defined as the maximum rate of interest, if any,
permitted by Law as of the date of this Deed of Trust to be charged with respect
to the Loan.
"NOTE" is defined in the Recitals.
"NOTE PAYMENTS" is defined in the Note.
"NOTICES" is defined in Section 17.1.
"OBLIGATIONS" is defined in the Recitals.
"PERMITTED EXCEPTIONS" is defined as the matters shown in Schedule B, Part 1 and
2 of the title insurance policy insuring the lien of this Deed of Trust.
"PERMITTED TRANSFERS" is defined in Section 12.2.
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"PERMITTED USE" is defined as use as a first-class commercial office building
consistent in character, size and age of similar buildings in the
Baltimore-Washington, D.C. suburban area, and uses incidentally and directly
related to such use.
"PLEDGE AND SECURITY AGREEMENT" is defined in Section 6.2.
"POLICIES" is defined in Section 7.1(b).
"PREPAYMENT PREMIUM" is defined in the Note.
"PRINCIPAL" is defined in the Recitals.
"PROCEEDING" is defined as a pending or threatened action, claim or litigation
before a legal, equitable or administrative tribunal having proper jurisdiction.
"PROCEEDS" is defined in Section 7.2(c).
"PROPERTY" is defined in Section 2.1.
"PROPERTY DOCUMENTS" is defined in Section 2.1(v).
"RECEIVER" is defined as a receiver, custodian, trustee, liquidator or
conservator of the Property.
"REMEDIES" is defined in Section 14.2(a).
"RENTS" is defined as all rents, prepaid rents, percentage, participation or
contingent rents, issues, profits, proceeds, revenues and other consideration
accruing under the Leases or otherwise derived from the use and occupancy of the
Land or the Improvements, including tenant contributions to expenses, security
deposits, royalties and contingent rent, if any, all other fees or payments paid
to or for the benefit of Grantor and any payments received pursuant to Section
502(b) of the Bankruptcy Code or otherwise in connection with the commencement
or continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or other occupant of the Land or
the Improvements and all claims as a creditor in connection with any of the
foregoing.
"RESTORATION" is defined as the restoration of the Property after a Destruction
Event as nearly as possible to its condition immediately prior to the
Destruction Event, in accordance with the plans and specifications, in a
first-class workmanlike manner using materials substantially equivalent in
quality and character to those used for the original improvements, in accordance
with Law and free and clear of all liens, encumbrances or other charges other
than this Deed of Trust and the Permitted Exceptions.
"RESTORATION COMPLETION DATE" is defined in Section 7.4(viii).
"RESTORATION FUNDS" is defined in Section 7.5(b).
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"TAXES" is defined as all present and future real estate taxes levied, assessed
or imposed against the Property.
"TERM" is defined as the scheduled term of this Deed of Trust commencing on the
date Lender makes the first disbursement of the Loan and terminating on the
Maturity Date.
"TRANSFER" is defined in Section 12.1(a).
"UNIFORM COMMERCIAL CODE" is defined as the Uniform Commercial Code in effect in
the jurisdiction where the Land is located.
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EXHIBIT C
RULES OF CONSTRUCTION
(a) References in any Financing Document to numbered Articles or Sections
are references to the Articles and Sections of that Financing Document.
References in any Financing Document to lettered Exhibits are references to the
Exhibits attached to that Financing Document, all of which are incorporated in
and constitute a part of that Financing Document. Article, Section and Exhibit
captions used in any Financing Document are for reference only and do not
describe or limit the substance, scope or intent of that Financing Document or
the individual Articles, Sections or Exhibits of that Financing Document.
(b) The terms "include", "including" and similar terms are construed as if
followed by the phrase "without limitation".
(c) The terms "Land", "Improvements", "Fixtures and Personal Property",
"Condemnation Awards", "Insurance Proceeds" and "Property" are construed as if
followed by the phrase "or any part thereof".
(d) Any agreement by or duty imposed on Grantor or Borrower in any
Financing Document to perform any obligation or to refrain from any act or
omission constitutes a covenant running with the ownership or occupancy of the
Land and the Improvements, which will bind all parties hereto and their
respective successors and assigns, and all lessees, subtenants and assigns of
same, and all occupants and subsequent owners of the Property, and will inure to
the benefit of Lender and all subsequent holders of the Note and this Deed of
Trust and includes a covenant by Grantor and Borrower to cause its partners,
members, principals, agents, representatives and employees to perform the
obligation or to refrain from the act or omission in accordance with the
Financing Documents. Any statement or disclosure contained in any Financing
Document about facts or circumstances relating to the Property, Grantor or
Borrower or the Loan constitutes a representation and warranty by Grantor and
Borrower made as of the date of the Financing Document in which the statement or
disclosure is contained.
(e) The term "to Grantor's knowledge" is construed as meaning to the best
of Grantor's knowledge after diligent inquiry.
(f) The singular of any word includes the plural and the plural includes
the singular. The use of any gender includes all genders.
(g) The terms "person", "party" and "entity" include natural persons,
firms, partnerships, limited liability companies and partnerships, corporations
and any other public or private legal entity.
(h) The term "provisions" includes terms, covenants, conditions,
agreements and requirements.
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(i) The term "amend" includes modify, supplement, renew, extend, replace
or substitute and the term "amendment" includes modification, supplement,
renewal, extension, replacement and substitution.
(j) Reference to any specific Law or to any document or agreement,
including the Note, this Deed of Trust, any of the other Financing Documents,
the Leases and Property Documents includes any future amendments to the Law,
document or agreement, as the case may be.
(k) No inference in favor of or against a party with respect to any
provision in any Financing Document may be drawn from the fact that the party
drafted the Financing Document.
(l) The term "certificate" means the sworn, notarized statement of the
entity giving the certificate, made by a duly authorized person satisfactory to
Lender affirming the truth and accuracy of every statement in the certificate.
Any document that is "certified" means the document has been appended to a
certificate of the entity certifying the document that affirms the truth and
accuracy of everything in the document being certified. In all instances the
entity issuing a certificate must be satisfactory to Lender.
(m) Any appointment of Lender as Grantor's attorney-in-fact is irrevocable
and coupled with an interest. Lender may appoint a substitute attorney-in-fact.
Grantor ratifies all actions taken by the attorney-in-fact but, nevertheless, if
Lender requests, Grantor will specifically ratify any action taken by the
attorney-in-fact by executing and delivering to the attorney-in-fact or to any
entity designated by the attorney-in-fact all documents necessary to effect the
ratification.
(n) Any document, instrument or agreement to be delivered by Grantor will
be in form and content satisfactory to Lender.
(o) All obligations, rights, remedies and waivers contained in the Note or
the Financing Documents will be construed as being limited only to the extent
required to be enforceable under the Law.
(p) The unmodified word "days" means calendar days.
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