Exhibit 10.11
FOURTH LOAN MODIFICATION AGREEMENT
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THIS FOURTH LOAN MODIFICATION AGREEMENT (this "Agreement") is made this
28th day of September, 1998, by and among ST. BARNABAS LIMITED PARTNERSHIP, a
Maryland limited partnership, (hereinafter referred to as the "Borrower");
CONSTELLATION PROPERTIES, INC., a Maryland corporation, (hereinafter referred to
as the "Existing Guarantor"); CORPORATE OFFICE PROPERTIES, L.P., a Delaware
limited partnership, (hereinafter referred to as the "Substitute Guarantor") and
NATIONSBANK, N.A., a national banking association and successor-by-merger to
Maryland National Bank, (hereinafter referred to as the "Lender").
INTRODUCTORY STATEMENT
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A. On August 31, 1988, the Lender extended to the Borrower a credit facility
in the original principal amount of $30,245,000 (hereinafter referred to as the
"Loan") to finance the development by the Borrower of approximately 25.03 acres
of land located on Oxen Hill Road in Prince George's County, Maryland and known
generally as "Constellation Center". The terms of the Loan have previously been
modified pursuant to the terms of, among other things, (i) a Loan Modification
Agreement and Amendment dated May 28, 1993 executed by and between the Borrower
and the Lender, (ii) a Second Loan Modification Agreement and Amendment dated
January 14, 1995 executed by and among the Borrower, the Existing Guarantor and
the Lender and (iii) a Third Loan Modification and Extension Agreement dated
November 12, 1997 executed by and among the Borrower, the Existing Guarantor and
the Lender (hereinafter referred to as the "Modification Agreements").
B. The Loan and the Borrower's obligations to the Lender with respect
thereto (hereinafter referred to collectively as the "Obligations") are
currently evidenced by (i) an Amended and Restated Promissory Note dated January
12, 1995 executed by the Borrower, as maker, in favor of the Lender, as payee,
in the principal amount of $12,024,849.58 (such Amended and Restated Promissory
Note, together with all modifications thereto, extensions or renewals thereof
and substitutions therefor being hereinafter referred to as the "Office Project
Note") and (ii) an Amended and Restated Promissory Note dated January 12, 1995
executed by the Borrower, as maker, in favor of the Lender, as payee, in the
principal amount of $568,388.86 (such Amended and Restated Promissory Note,
together with all modifications thereto, extensions or renewals thereof and
substitutions therefor being hereinafter referred to as the "Bank Facility
Note"; the Office Project Note and the Bank Facility Note being hereinafter
sometimes referred to individually as a "Note" and collectively as the "Notes").
C. The Loan and the Obligations are currently secured by, among other
things, the lien of a Deed of Trust dated December 31, 1986 executed by the
Borrower, as grantor, in favor of Mark A. Merino and Joseph V. Prado, as
trustees, for the benefit of the Lender covering the Borrower's interest in the
real property known as "Constellation Center" and duly recorded among the Land
Records of Prince George's County, Maryland in Liber 6596, Folio 884, as amended
(i) by a First Amendment to Deed of Trust dated April 20, 1987 executed by and
between, among others, the Borrower and the Lender and duly recorded among the
Land Records of Prince George's County, Maryland in Liber 6655, folio 206, (ii)
by a Second Amendment to Deed of Trust dated August 31, 1988 executed by and
between, among others, the Borrower and the Lender and duly recorded among the
Land Records of Prince George's County, Maryland in Liber 7077, folio 586, (iii)
by a Third Amendment to Deed of Trust dated September 27, 1991 executed by and
between, among others, the Borrower and the Lender and duly recorded among the
Land Records of Prince George's County, Maryland in Liber 8080, folio 912, and
(iv) by a Fourth Amendment to Deed of Trust dated January 12, 1995 executed by
and between, among others, the Borrower and the Lender and duly recorded among
the Land Records of Prince George's County, Maryland in Liber 10013, folio 313
(such Deed of Trust, together with all modifications thereto, extensions or
renewals thereof and substitutions therefor being hereinafter referred to as the
"Deed of Trust"; all real and personal property currently remaining subject to
the lien of the Deed of Trust being hereinafter collectively referred to as the
"Property").
D. The payment and performance of all of the Obligations of the Borrower to
the Lender are unconditionally and irrevocably guaranteed by the Existing
Guarantor pursuant to the terms of a certain Guaranty dated September 27, 1991
executed by the Existing Guarantor in favor of the Lender (such Guaranty,
together with all modifications thereto, extensions or renewals thereof and
substitutions therefor being hereinafter referred to as the "Guaranty").
E. On this date the Borrower continues to be the owner of the Property and
the Borrower, the Existing Guarantor and the Substitute Guarantor acknowledge
and agree that the Deed of Trust constitutes a valid and subsisting first lien
on the Borrower's fee simple interest in the Property for the aggregate
outstanding principal balance of the Notes and interest thereon, all in
accordance with the terms, covenants, conditions and warranties of the Deed of
Trust and the Notes secured thereby, and that all of the other provisions of the
same are in full force and effect.
F. The Existing Guarantor and the Substitute Guarantor have now entered into
one or more agreements pursuant to which the ownership interests in the Borrower
have been or shall be transferred to the Substitute Guarantor or to other
entities related to or affiliated with the Substitute Guarantor and the
Borrower, the Existing Guarantor and the Substitute Guarantor have requested
that the Lender (i) consent to such transfers and (ii) release the Existing
Guarantor from all Obligations arising out of or connected with the Loan,
including without limitation, those obligations arising out of the Guaranty.
G. In order to induce the Lender to agree to the foregoing requests and upon
the express condition that the lien of the Deed of Trust remains a valid and
subsisting first lien on the Property, and that the execution and delivery of
this Agreement shall not impair the lien thereof, the parties hereto have agreed
to execute and deliver this Agreement to modify the terms of repayment of the
Obligations as hereinafter more particularly set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for the sum of One
Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties hereto, for themselves,
their respective heirs, personal representatives, successors and assigns do
hereby mutually covenant and agree as follows:
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1. Incorporation of Recitals. The parties hereto acknowledge and agree
that the recitals hereinabove set forth are true and correct in all respects and
that the same are incorporated herein and made a part hereof.
2. Outstanding Obligations. The parties hereto acknowledge and agree (a)
that the outstanding principal balance of the Loan, as of the date hereof, but
prior to the application of the required principal curtailment referred to in
Paragraph 6 below, is $11,017,938.44 (consisting of the outstanding principal
balance of $10,547,118.58 under the Office Project Note and the outstanding
principal balance of $470,819.86 under the Bank Facility Note), (b) that
interest on the unpaid principal balance of each of the Notes has been paid
through August 31, 1998, and (c) that the unpaid principal balance of each of
the Notes, together with accrued and unpaid interest thereon, is due and owing
subject to the terms of repayment hereinafter set forth, without defense or
offset.
3. Confirmation of Lien. The parties hereto hereby acknowledge and agree
that the Property is and shall remain in all respects subject to the lien,
charge and encumbrance of the Deed of Trust, and that nothing herein contained,
and nothing done pursuant hereto, shall adversely affect or be construed to
adversely affect the lien, charge or encumbrance of, or warranty of title in, or
conveyance effected by the Deed of Trust, or the priority thereof over other
liens, charges, encumbrances or conveyances, or except as otherwise expressly
set forth in Paragraph 8 below, to release or adversely affect the liability of
any party or parties whomsoever who may now or hereafter be liable under or on
account of the Obligations or any of the Loan Documents (as hereinafter
defined), nor shall anything herein contained or done in pursuance hereof
adversely affect or be construed to adversely affect any other security or
instrument held by the Lender as security for or evidence of the indebtedness
evidenced and secured thereby.
4. Continuation of Loan Terms. Except as otherwise expressly set forth
below, the outstanding principal balance of the Notes shall continue to bear
interest and to be repaid on the terms and subject to the conditions set forth
in the Notes and the other documents evidencing and securing the Obligations
(this Agreement, the Notes, the Deed of Trust, the Guaranty, the Modification
Agreements and all such other documents, whether currently existing or hereafter
executed, and all modifications thereto, extensions or renewals thereof and
substitutions therefor being hereinafter collectively referred to as the "Loan
Documents").
5. Assumption by the Substitute Guarantor of the Existing Guarantor's
Obligations. In consideration of the agreement by the Lender to release the
Existing Guarantor from all of its obligations under the Loan and the Loan
Documents, the Substitute Guarantor hereby agrees to assume and be responsible
for all of the obligations of the Existing Guarantor under the Loan and the Loan
Documents, including without limitation, those obligations arising under or
relating to the Guaranty. Thus, the Substitute Guarantor hereby (a) guarantees
to the Lender the due and punctual payment of the principal balance of the Notes
and all interest thereon and all other sums and charges at any time owing to the
Lender under the terms of the Notes, as and when the same shall be due and
payable, whether on any installment payment date or at the stated or accelerated
maturity, all according to the terms of the Notes, and (b) covenants, promises
and agrees to pay and perform each and all of the other Obligations, covenants
and agreements in the Loan Documents to be paid and/or performed by the Existing
Guarantor, at the time, in the manner and in all respects as therein provided
and to be bound by each and all of the terms and provisions of the Guaranty and
each of the other Loan Documents, if any, executed by the Existing Guarantor, as
though such instruments and agreements had originally been made, executed and
delivered by the Substitute Guarantor. From and as of the date hereof, the term
"Guarantor" in each of the Loan Documents shall mean and refer in each instance
to the Substitute Guarantor, and whenever the Existing Guarantor shall be
referred to in the Loan Documents, whether by name or by reference to any
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defined term, such provision or provisions shall be deemed to refer to, or to
include, as the case may be, the Substitute Guarantor.
6. Required Principal Curtailment. In further consideration of the
agreement of the Lender to release the Existing Guarantor from all of the
Obligations under the Loan and the Loan Documents, the Borrower shall pay or
cause to be paid to the Lender, on the date of the execution and delivery of
this Agreement, a mandatory principal curtailment on the Loan in an amount equal
to not less than $1,000,000, which sum shall be applied to the balances due
under the Notes in such order or manner as the Lender may determine in its sole
discretion.
7. Release of Extension Option. Notwithstanding anything contained herein
or in any of the other Loan Documents to the contrary, unless sooner paid, the
Loan shall mature and the entire principal balance of the Loan, together with
all accrued and unpaid interest thereon, shall be due and payable on January 15,
1999. The extension option provided to the Borrower pursuant to the terms of the
Third Loan Modification and Extension Agreement dated November 12, 1997 is
hereby deleted and shall be of no further force or effect.
8. Release of the Existing Guarantor. In consideration of the assumption
by the Substitute Guarantor of the obligations and liabilities of the Existing
Guarantor under the Loan and the execution and delivery of this Agreement by the
parties hereto, the Lender hereby irrevocably, unconditionally and completely
releases and forever discharges the Existing Guarantor and CPO Constellation
Centre, Inc. and their respective officers, directors, stockholders and
employees from all obligations, claims, demands, expenses and/or liabilities
whatsoever, at law or in equity, which the Lender has or hereafter may have with
respect to, or arising under, the Loan, including without limitation, those
obligations arising under the Guaranty and the other Loan Documents and
regardless of whether such obligations, claims, demands, expenses and/or
liabilities arise in their capacity as guarantors, obligors, promisors or as
partners of any limited partnership or member of any limited liability company.
9. Consent of the Borrower. By its execution hereof, the Borrower hereby
consents to the release by the Lender of the Existing Guarantor from, and the
assumption by the Substitute Guarantor of, all of the obligations of the
Existing Guarantor under the Loan and the Loan Documents.
10. Acknowledgements of the Substitute Guarantor. The Substitute Guarantor
hereby acknowledges and agrees, for the benefit of the Lender, as follows:
(a) That, the Substitute Guarantor (i) has sufficient knowledge and
experience in financial and business matters, including the ownership and
development of real property, to be able to evaluate the risks and merits of
its agreements with respect to the Loan, the Property, the Borrower and all
other material parties to this transaction and (ii) is able to bear the
economic risks associated with its assumption of the Obligations under the
Loan Documents;
(b) That, the Substitute Guarantor has made its own inquiry and
analysis with respect to the project which is the subject of the Loan, the
Loan and the security therefor, the Borrower and all other material parties
and factors affecting the Loan and the Obligations arising under the Loan
Documents. The Substitute Guarantor understands that no offering statement,
offering circular or other prospectus containing material information with
respect to the foregoing has been or will be issued in connection therewith;
(c) That, the Substitute Guarantor hereby (i) waives any claim or
defense that it now or hereafter may have against the Lender alleging that it
was not supplied with or did not have access to information, including
financial statements and other financial information, which may have been
necessary to make its decision with respect to the Property and/or its
assumption of the Obligations under the Loan Documents and (ii) acknowledges
that it has had the opportunity to ask questions and receive
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answers from knowledgeable individuals, including without limitation,
attorneys, accountants and engineers, concerning the Borrower, the Property,
the Loan and the security therefor; and
(d) That, the Substitute Guarantor acknowledges and represents that
it has not sought from the Lender or received from the Lender or looked to or
relied upon the Lender or any agent of the Lender for any information with
respect to the Borrower, the Property, the Loan or the security therefor, and
that the Lender has not supplied the Substitute Guarantor with any
information relating to the foregoing.
11. Fees and Expenses. In consideration of the Lender's agreement to modify
the Loan and in addition to the payments of principal and interest required
above, the Borrower and/or the Substitute Guarantor shall pay to the Lender upon
the execution and delivery of this Agreement all fees, costs, charges and
expenses incurred by the Lender in connection with the preparation of this
Agreement and the modification of the Loan, including without limitation, the
Lender's reasonable attorneys' fees and all recording costs.
12. Additional Events of Default. In addition to those events of default
specifically enumerated in the Notes, the Deed of Trust and/or any of the other
Loan Documents, the failure of the Borrower or the Substitute Guarantor to
comply with the terms of any covenant or agreement contained herein shall
constitute an event of default and shall entitle the Lender to exercise all
rights and remedies provided in the Notes and the Deed of Trust, as well as all
other rights and remedies provided to the Lender under the terms of any of the
other Loan Documents as a result of the occurrence of the same.
13. Release of Claims. The Borrower and the Existing Guarantor for
themselves and for each of their respective heirs, personal representatives,
successors and assigns, hereby release and waive all claims and/or defenses they
now or hereafter may have against the Lender and its successors and assigns on
account of any occurrence relating to the Obligations, the Loan Documents,
and/or the Property which accrued prior to the date hereof, including, but not
limited to, any claim that the Lender (a) breached any obligation to the
Borrower or the Existing Guarantor in connection with the Loan, (b) was or is in
any way involved with the Borrower and/or the Existing Guarantor as a partner,
joint venturer, or in any other capacity whatsoever other than as a lender, (c)
failed to fund any portion of the Loan or any other sums as required under any
document or agreement in reference thereto, or (d) failed to timely respond to
any offers to cure any defaults under any document or agreement executed by the
Borrower, the Existing Guarantor or any third party or parties in favor of the
Lender; but expressly excluding any claim of gross negligence, intentional
misconduct or fraud on the part of the Lender of which neither the Borrower nor
the Existing Guarantor is actually aware as of the date hereof. This release and
waiver shall be effective as of the date of this Agreement and shall be binding
upon the Borrower and the Existing Guarantor and each of their respective heirs,
personal representatives, successors and assigns, and shall inure to the benefit
of the Lender and its successors and assigns. The term "Lender" as used herein
shall include, but shall not be limited to, its present and former officers,
directors, employees, agents and attorneys.
14. Service of Process. (a) The Substitute Guarantor hereby irrevocably
designates and appoints John Harris Gurley, as its authorized agent to accept
and acknowledge on its behalf service of any and all process that may be served
in any suit, action, or proceeding instituted in connection with the Loan and/or
the Loan Documents. If such agent shall cease so to act, the Substitute
Guarantor shall irrevocably designate and appoint without delay another such
agent in the State of Maryland satisfactory to the Lender and shall promptly
deliver to the Lender evidence in writing of such agent's acceptance of such
appointment and its agreement that such appointment shall be irrevocable.
(b) The Substitute Guarantor hereby consents to process being served
in any suit, action, or proceeding instituted in connection with the Loan
and/or the Loan Documents by (i) the mailing of a copy thereof by certified
mail, postage prepaid, return receipt requested, to it at its address
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designated below and (ii) serving a copy thereof upon the agent, if any,
hereinabove designated and appointed by the Substitute Guarantor as the
Substitute Guarantor's agent for service of process. The Substitute Guarantor
irrevocably agrees that such service shall be deemed in every respect to be
effective service of process in any such suit, action, or proceeding. Nothing
herein shall affect the right of the Lender to serve process in any other
manner permitted by law.
15. Notices. Any notice, demand, request or other communication which the
Lender may desire to give to the Substitute Guarantor with respect to the Loan
shall be deemed to have been properly given if in writing and delivered by hand,
sent by overnight courier or mailed by certified mail, postage prepaid,
addressed as follows:
Corporate Office Properties Trust
8815 Centre Park Drive, Suite 400
Columbia, Maryland 21045
Attn: General Counsel
16. Waiver of Trial by Jury. The Borrower, the Substitute Guarantor and the
Lender hereby jointly and severally waive trial by jury in any action or
proceeding to which the Borrower and/or the Substitute Guarantor and the Lender
may be parties, arising out of or in any way pertaining to (a) the Loan, (b) the
Loan Documents, or (c) the Property. It is agreed and understood that this
waiver constitutes a waiver of trial by jury of all claims against all parties
to such actions or proceedings, including claims against parties who are not
parties to this Agreement. This waiver is knowingly, willingly and voluntarily
made by the Borrower and the Substitute Guarantor, and the Borrower and the
Substitute Guarantor hereby represent that no representations of fact or opinion
have been made by any individual to induce this waiver of trial by jury or to in
any way modify or nullify its effect. The Borrower and the Substitute Guarantor
further represent that they have been represented in the signing of this
Agreement and in the making of this waiver by independent legal counsel,
selected of their own free will, and that they have had the opportunity to
discuss this waiver with counsel.
17. Continuing Agreements; Novation. Except as expressly modified hereby,
the parties hereto ratify and confirm each and every provision of the Notes, the
Deed of Trust, the Guaranty and each of the other Loan Documents as if the same
were set forth herein. In the event that any of the terms and conditions in the
Notes or in any of the other Loan Documents conflict in any way with the terms
and provisions hereof, the terms and provisions hereof shall prevail. The
parties hereto covenant and agree that the execution of this Agreement is not
intended to and shall not cause or result in a novation with regard to the Notes
and/or the other Loan Documents and that the existing indebtedness of the
Borrower to the Lender evidenced by the Notes is continuing, without
interruption, and has not been discharged by a new agreement.
18. Entire Agreement. NO STATEMENTS, AGREEMENTS OR REPRESENTATIONS, ORAL OR
WRITTEN, WHICH MAY HAVE BEEN MADE TO THE BORROWER, THE EXISTING GUARANTOR OR THE
SUBSTITUTE GUARANTOR OR TO ANY EMPLOYEE OR AGENT OF THE BORROWER, THE EXISTING
GUARANTOR OR THE SUBSTITUTE GUARANTOR, EITHER BY THE LENDER OR BY ANY EMPLOYEE,
AGENT OR BROKER ACTING ON THE LENDER'S BEHALF, WITH RESPECT TO THE MODIFICATION
OF THE LOAN, SHALL BE OF ANY FORCE OR EFFECT, EXCEPT TO THE EXTENT STATED IN
THIS AGREEMENT OR IN ANY OTHER AGREEMENT EXECUTED IN CONNECTION HEREWITH, AND
ALL PRIOR AGREEMENTS AND REPRESENTATIONS WITH RESPECT TO THE MODIFICATION OF THE
LOAN ARE MERGED HEREIN AND THEREIN.
19. Captions. The captions herein set forth are for convenience only and
shall not be deemed to define, limit or describe the scope or intent of this
Agreement.
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20. Governing Law. The provisions of this Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland as
the same may be in effect from time to time.
21. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original. It
shall not be necessary that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on more
than one counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first above written.
WITNESS: ST. BARNABAS LIMITED PARTNERSHIP
By: COPT Columbia, LLC
General Partner
By: Corporate Office Properties, L.P.
Sole Member
By: Corporate Office Properties Trust
General Partner
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Clay W. Hamlin, III
President
WITNESS: CONSTELLATION PROPERTIES, INC.
- ------------------------------ By (SEAL)
---------------------------------
Dan R. Skowronski
Secretary
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WITNESS: CORPORATE OFFICE PROPERTIES, L.P.
By: Corporate Office Properties Trust
General Partner
- ------------------------------ By (SEAL)
---------------------------------
Clay W. Hamlin, III
President
WITNESS: NATIONSBANK, N.A.
- ------------------------------ By (SEAL)
---------------------------------
Louis O. Kiang
Vice President
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ______ day of ______________, 1998, before
me, the undersigned Notary Public of said State, personally appeared Clay W.
Hamlin, III, who acknowledged himself to be the President of Corporate Office
Properties Trust, a Maryland real estate investment trust and a general partner
of Corporate Office Properties, L.P., a Delaware limited partnership and the
sole member of COPT Columbia LLC, a Maryland limited liability company and the
general partner of St. Barnabas Limited Partnership, a Maryland limited
partnership, 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 as the duly authorized President of said
real estate investment trust by signing the name of the real estate investment
trust by himself as President.
WITNESS my hand and Notarial Seal.
-----------------------------
Notary Public
My Commission Expires:
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ______ day of ______________, 1998, before
me, the undersigned Notary Public of said State, personally appeared Dan R.
Skowronski, who acknowledged himself to be the Secretary of Constellation
Properties, Inc., a Maryland corporation, 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 as the
duly authorized Secretary of said corporation by signing the name of the
corporation by himself as Secretary .
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WITNESS my hand and Notarial Seal.
-----------------------------
Notary Public
My Commission Expires:
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ______ day of ______________, 1998, before
me, the undersigned Notary Public of said State, personally appeared Clay W.
Hamlin, III, who acknowledged himself to be the President of Corporate Office
Properties Trust, a Maryland real estate investment trust and a general partner
of Corporate Office Properties, L.P., a Delaware limited partnership, 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 as the duly authorized President of said real estate
investment trust by signing the name of the real estate investment trust by
himself as President.
WITNESS my hand and Notarial Seal.
-----------------------------
Notary Public
My Commission Expires:
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STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ______ day of ______________, 1998, before
me, the undersigned Notary Public of said State, personally appeared Louis O.
Kiang, who acknowledged himself to be a Vice President of NationsBank, N.A., a
national banking association, 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 as the duly authorized
Vice President of said Bank by signing the name of the Bank by himself as Vice
President.
WITNESS my hand and Notarial Seal.
-----------------------------
Notary Public
My Commission Expires:
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