Exhibit 10.7
LOAN MODIFICATION AGREEMENT
THIS LOAN MODIFICATION AGREEMENT (this "Agreement") is made and entered into
as of the 28th day of September, 1998, by and among CRANBERRY- 140 LIMITED
PARTNERSHIP, a Maryland limited partnership (the "Borrower"), and SECURITY LIFE
OF DENVER INSURANCE COMPANY, a Colorado corporation ("Lender").
RECITALS
R-1. Borrower is justly indebted to the Lender for a real estate mortgage
loan in the original principal amount of Ten Million and 00/100 Dollars
($10,000,000.00) ("the Loan"). The Loan is evidenced by an Amended and Restated
Deed of Trust Note in the original principal amount of Ten Million and 00/100
Dollars ($10,000,000.00) dated October 6, 1995, executed and delivered by
Borrower, as maker, to and in favor of the Lender, as holder (as modified on the
date hereof, the "Note").
R-2. The indebtedness evidenced by the Note is secured by (a) that certain
Amended and Restated Deed of Trust and Security Agreement, executed October 6,
1995, by Borrower for the benefit of Lender, and recorded October 10, 1995, in
Deed Book 1732, Page 262 of the Land Records of Carroll County, Maryland, (as
modified on the date hereof, the "Deed of Trust"), and (b) that certain Amended
and Restated Assignment of Leases and Rents, executed October 6, 1995, by
Borrower for the benefit of Lender and recorded on October 10, 1995, in Deed
Book 1732, Page 318 of the Land Records of Carroll County, Maryland (as modified
on the date hereof, the "Lease Assignment").
R-3. Borrower has requested that Lender permit the transfer of the
partnership interests in Borrower from Constellation Properties, Inc. and CPI
Partner, Inc. (collectively, the "Existing Partners") to Corporate Office
Properties, L.P. and COPT Columbia, LLC ("the Transfer"), and the subsequent
conversion of Borrower into a Maryland limited liability company ("the
Conversion") and that Lender not declare a default under the Deed of Trust as a
result of the Transfer or the Conversion.
R-4. Lender has agreed to waive its right to declare a default under the
terms of the Deed of Trust as a result of the Transfer or the Conversion,
subject to the terms and conditions herein contained.
R-5. Capitalized terms not otherwise defined herein shall have the meaning
ascribed to such term in the Deed of Trust.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the foregoing, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the undersigned, the parties hereby agree as follows:
1. Incorporation of Recitals. The Recitals set forth hereinabove are
hereby incorporated as a substantive part of this Agreement.
2. Security Documents. As used herein, the term "Security Documents" shall
mean this Agreement, the Note, the Deed of Trust, the Lease Assignment, the
Environmental Indemnity Agreement (subject to the release of Constellation Real
Estate Group, Inc., as set forth in Section 13 below), the New Environmental
Indemnity, the New Guaranty and any other instrument or document now or
hereafter evidencing, securing or otherwise relating to the indebtedness
evidenced by the Note, as each may be amended on the date hereof.
3. Ratification of Obligations. Borrower hereby expressly ratifies and
confirms its obligations under the Security Documents. All of the provisions of
the Security Documents are incorporated herein by reference and shall continue
in full force and effect. Lender and Borrower agree that it is their intention
that nothing herein shall be construed to extinguish, release or discharge or
constitute, create or effect a novation of, or an agreement to extinguish, any
of the obligations, indebtedness and liabilities of any party under the
provisions of the Security Documents.
4. Representations and Warranties. Borrower hereby represents, warrants
and agrees as follows:
(a) Each of the representations and warranties of Borrower contained in
the Security Documents are true and correct as of the date hereof, and
Borrower's execution and delivery of this Agreement to Lender shall
constitute its representation and warranty that such is the case.
(b) The execution and delivery of this Agreement does not violate,
conflict with, or result in a breach or default under any limited
partnership agreement, articles of incorporation, operating agreement,
bylaws, or any other agreement by which Borrower is bound. Borrower has been
duly authorized and has all requisite authority to consummate this
transaction, and no other approvals or consents are necessary for the
consummation of this transaction by Borrower.
(c) Borrower is a limited partnership, validly existing and in good
standing under the laws of the State of Maryland.
(d) Borrower has provided to Lender copies of each document pursuant to
which Borrower's partnership interests are to be transferred and the copy of
each such document provided to Lender is a true and complete copy of the
original of such document.
5. New Environmental Indemnity and New Guaranty.
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(a) Simultaneously with the execution and delivery of this Agreement,
Corporate Office Properties, L.P. ("COPLP") shall execute and deliver to
Lender (i) an Environmental Indemnification Agreement (the "New
Environmental Indemnity") subject to the terms, provisions, and limitations
set forth in the New Environmental Indemnity, and (ii) a Guaranty Agreement
(the "New Guaranty") of certain obligations of Borrower subject to the
terms, provisions, and limitations set forth in the New Guaranty.
(b) Any and all references to "guarantor" or "guarantors" under the
Security Documents shall hereinafter be deemed to refer to and include
COPLP.
6. No Additional Advances. Notwithstanding any provisions of the Note, the
Deed of Trust or any other Security Document to the contrary, Borrower hereby
acknowledges and agrees that no additional Loan proceeds are to be advanced to
Borrower and that the Lender has no additional funding obligations under the
Loan.
7. Effect of this Agreement on Note. The provisions in this Agreement
modifying the Note shall be deemed to be a part of the Note, as fully and
completely as if these provisions were set forth at length in the body of the
Note.
8. Modification of Security Documents.
(a) Note. In the Note:
(1) In the 2nd line of the 2nd paragraph of Section 24, the words
"Constellation Real Estate Group, Inc." are deleted and replaced with
the words "Corporate Office Properties, L.P.".
(2) In the 5th line of Section 24(vi), the words "Constellation
Real Estate Group, Inc." are deleted and replaced with the words
"Corporate Office Properties, L.P.".
(b) Deed of Trust. In the Deed of Trust:
(1) The term "Environmental Indemnity Agreement" shall henceforth
mean the existing Environmental Indemnity Agreement dated October 6,
1995 executed by Borrower to and for the benefit of Lender (the
"Original Environmental Indemnity") and the New Environmental
Indemnity, as defined herein.
(2) The term "Guaranty" shall henceforth mean the New Guaranty, as
defined herein.
(3) The term "Management Agreement" shall henceforth mean any
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agreement executed by Borrower for the management of all or any portion of the
Property.
(4) In the 8th line of Section 21.2, the words "Constellation Real
Estate Group, Inc." are hereby deleted and replaced with the words "Corporate
Office Properties, L.P.".
(5) In the 2nd line of the 2nd paragraph of Section 29, the words
"Constellation Real Estate Group, Inc." are hereby deleted and replaced with the
words "Corporate Office Properties, L.P.".
(6) In the 5th line of Section 29(vi), the words "Constellation Real
Estate Group, Inc." are deleted and replaced with the words "Corporate Office
Properties, L.P.".
(7) Section 11.3 is deleted in its entirety.
(c) Lease Assignment. In the Lease Assignment:
(1) In the 2nd line of the 2nd paragraph of Section 10, the words
"Constellation Real Estate Group, Inc." are hereby deleted and replaced
with the words "Corporate Office Properties, L.P.".
(2) In the 5th line of Section 10(vi), the words "Constellation
Real Estate Group, Inc." are deleted and replaced with the words
"Corporate Office Properties, L.P.".
9. Notice. So long as Borrower holds legal title to the Property, all
notices required or permitted by the Security Documents to be given to the
mortgagor under the Deed of Trust or to the maker under the Note shall be given
in writing and delivered in the manner provided in the Security Documents,
respectively, addressed to Borrower, until further notice, as follows:
Cranberry-140 Limited Partnership
c/o Corporate Office Properties Trust
8815 Centre Park Drive, Suite 400
Columbia, Maryland 21045
Attn: President
with a copy to:
Cranberry-140 Limited Partnership
c/o Corporate Office Properties Trust
8815 Centre Park Drive, Suite 400
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Columbia, Maryland 21045
Attn: General Counsel
10. Transfer Fee. Simultaneously with the closing of the assignment and
assumption contemplated herein, Borrower shall deliver to Lender, in immediately
available funds, a cashier's check or wire in the sum of $95,696.63 as a
transfer fee (the "Transfer Fee"). The Transfer Fee shall not reduce the
outstanding principal balance under the Note.
11. Additional Events of Default. In addition to those events of default
specifically set forth heretofore in the Security Documents, the failure of
Borrower or COPLP to comply with the terms and provisions of any covenant or
agreement contained herein shall constitute an Event of Default under the Deed
of Trust and shall entitle Lender to exercise all rights and remedies provided
for in the Security Documents.
12. Consent by Lender. Lender joins in the execution of this Agreement for
the purposes of:
(a) waiving its right to declare an event of default under the terms of
the Security Documents as a result of the Transfer; however, the foregoing
waiver shall not amend or modify the Security Documents as to any future
sale, transfer or conveyance of the partnership interests or any portion
thereof or interest therein;
(b) acknowledging that the Transfer represents the one-time transfer
referenced in Section 11.3 of the Deed of Trust;
(c) effecting certain releases as more fully described herein;
(d) consenting to the modifications to the Security Documents as more
particularly set forth herein.
13. Release of Original Guarantor. Subject to the satisfaction of the
Conditions Precedent contained in Section 14 below, Lender hereby releases and
discharges Constellation Real Estate Group, Inc. ("CREG") and the Existing
Partners, and their respective successors, stockholders, officers, directors,
and employees from all obligations, claims, demands, expenses and liabilities
which the Lender has or hereafter may have with respect to or arising under the
Loan, regardless of whether such obligations, claims, demands, expenses and
liabilities arise in their capacity as guarantors, obligors, promisors, or as
partners of any limited partnership. The foregoing release shall specifically
include those obligations of CREG arising under (i) the Guaranty Agreement dated
October 6, 1995 executed by CREG to and for the benefit of Lender and (ii) the
Environmental Indemnity Agreement dated October 6, 1995 and executed by Borrower
and CREG for the benefit of Lender.
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14. Conditions Precedent.
(i) The following shall be conditions precedent to the effectiveness of this
Agreement:
(a) Documents. On or before the date hereof, Borrower and COPLP (as the
case may be) shall have executed and delivered to Lender this Agreement, the
New Guaranty, the New Environmental Indemnity, a General Certificate of
Borrower and Guarantor, a UCC-3 Financing Statement Amendment reflecting the
new ownership of Borrower, and all other agreements required by Lender to
effect the transactions contemplated herein, each in form and substance
acceptable to Lender.
(b) Opinion. On or before the date hereof, Lender shall receive an
opinion of Borrower's and COPLP's counsel as to the continued enforceability
of the Security Documents and such other matters as are required by Lender,
in form and substance acceptable to Lender.
(c) Confirmation of Authority. On or before the date hereof, Borrower
and COPLP shall deliver to Lender evidence satisfactory to Lender of their
existence, good standing, authority to do business in Maryland and
resolutions respecting its authority to consummate the transactions provided
for herein, each in form and substance acceptable to Lender.
(d) Payment of Transfer Fee and Attorneys' Fees. On or before the date
hereof, Borrower shall deliver the Transfer Fee to Lender and pay all
attorneys' fees and expenses incurred in connection with the transactions
contemplated herein.
(e) No Default. There shall be no Event of Default continuing under the
Security Documents at the time of closing.
(ii) By its execution and delivery of this Agreement, the Lender hereby
confirms that the conditions precedent contained in Section 14(i) have been
satisfied.
15. Provisions Regarding Conversion to LLC. Lender hereby consents to the
Conversion of Borrower to a limited liability company (the "LLC"), upon the
satisfaction of the following conditions:
(a) Prior to the Conversion, Borrower shall provide to Lender, for
Lender's review and approval:
(1) the proposed form of LLC Articles of Organization and
Operating Agreement ("LLC Organizational Documents");
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(2) the proposed form of confirmatory deed conveying the Property
from Borrower to the LLC (the "Confirmatory Deed); and
(3) a proforma title endorsement evidencing the record transfer of
the Property to the LLC and assuring the Lender of no loss of priority
of its Deed of Trust as a result of such transfer (the "Title
Endorsement").
(b) Upon Lender's approval of the form of LLC Organizational Documents,
the form of Confirmatory Deed, and the form of Title Endorsement, the LLC
and Lender shall enter into an Loan Assumption and Ratification Agreement
with Lender in the form attached hereto as Exhibit A.
16. Absence and Waiver of Claims. Borrower hereby affirms that there has
been no occurrence to date of any event or fact which would give rise to any
claim or any right of setoff, counterclaim or any other defense to the rights of
Lender under the Security Documents and to the extent such claim, right or
defense has arisen, Borrower hereby waives and releases such claim, right or
defense.
17. Payment of Lender's Expenses. Borrower (i) agrees to pay all costs
incurred by Lender in connection with its entry into this Agreement, including
but not limited to, reasonable attorneys' fees, and (ii) acknowledges that the
provisions of this Agreement shall not be effective to modify the Security
Documents unless and until its obligation to reimburse Lender for said expenses
has been satisfied.
18. No Amendment. Except as may be amended or modified hereby, the Security
Documents shall otherwise remain in full force and effect.
19. Counterparts. This Agreement may be executed in multiple counterparts,
which, when taken together, shall constitute the whole.
20. Trustees. Raymond G. Truitt and Jon M. Laria, the trustees under the
Deed of Trust, join in the execution of this Agreement to acknowledge the
modifications and amendments contained hereinabove.
21. Binding Effect; Governing Law. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns, and
shall be governed by the law of the State of Maryland.
22. Further Assurances. Borrower agrees to execute and deliver such
additional instruments as may be reasonably requested by Lender in furtherance
of the terms of this Agreement.
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[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
executed as of the day and year first above written.
BORROWER:
WITNESS: CRANBERRY-140 LIMITED PARTNERSHIP, a
Maryland limited partnership
By: COPT Columbia, LLC, a Maryland
limited liability company, its general
partner
By: Corporate Office Properties, L.P.,
a Delaware limited partnership,
its sole member
By: Corporate Office
Properties Trust, a
Maryland trust company,
its general partner
- --------------------------
By: (SEAL)
-------------------------
Name: Clay W. Hamlin, III
Title:
LENDER:
WITNESS: SECURITY LIFE OF DENVER INSURANCE
COMPANY, a Colorado corporation
- --------------------------
By: (SEAL)
--------------------------
Name:
Title:
---------------------------(SEAL)
RAYMOND G. TRUITT, Trustee
---------------------------(SEAL)
JON M. LARIA, Trustee
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[NOTARY BLOCKS BEGIN ON FOLLOWING PAGE]
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STATE OF : COUNTY OF : TO WIT:
I HEREBY CERTIFY that on this ____ day of __________, 1998, before me, a
Notary Public for the state and county aforesaid, personally appeared CLAY W.
HAMLIN, III, known to me or satisfactorily proven to be the person whose name is
subscribed to the foregoing instrument, who acknowledged that he is the
______________ of CORPORATE OFFICE PROPERTIES TRUST, a Maryland trust company,
the general partner of CORPORATE OFFICE PROPERTIES, L.P., a Delaware limited
partnership, the sole member of COPT COLUMBIA, LLC, a Maryland limited liability
company, the general partner of CRANBERRY-140 LIMITED PARTNERSHIP, a Maryland
limited partnership, and that he has been duly authorized to execute, and has
executed, the foregoing instrument on behalf of the said entity for the purposes
therein set forth, and that the same is its act and deed.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year
first above written.
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Notary Public
My commission expires on .
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STATE OF : COUNTY OF : TO WIT:
I HEREBY CERTIFY that on this ____ day of _______________, 1998, before me,
a Notary Public for the state and county aforesaid, personally appeared
_______________________________, known to me or satisfactorily proven to be the
person whose name is subscribed to the foregoing instrument, who acknowledged
that he is the _____________ of SECURITY LIFE OF DENVER INSURANCE COMPANY, a
Colorado corporation, that he has been duly authorized to execute, and has
executed, the foregoing instrument on behalf of the said entity for the purposes
therein set forth, and that the same is its act and deed.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the
day and year first above written.
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Notary Public
My commission expires on .
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STATE OF : COUNTY OF : TO WIT:
I HEREBY CERTIFY that on this ________ day of _______, 199__, before me, a
Notary Public for the state and county aforesaid, personally appeared RAYMOND G.
TRUITT, known to me or satisfactorily proven to be the person whose name is
subscribed to the foregoing instrument, who acknowledged that he has executed,
the foregoing instrument for the purposes therein set forth.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year
first above written.
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Notary Public
My commission expires on .
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STATE OF : COUNTY OF : TO WIT:
I HEREBY CERTIFY that on this ________ day of _______, 199__, before me, a
Notary Public for the state and county aforesaid, personally appeared JON M.
LARIA, known to me or satisfactorily proven to be the person whose name is
subscribed to the foregoing instrument, who acknowledged that he has executed,
the foregoing instrument for the purposes therein set forth.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year
first above written.
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Notary Public
My commission expires on .
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Exhibit A
Form of Loan Assumption and Ratification Agreement
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