Exhibit 10.12


 


REPRESENTATION AND WARRANTY
  INDEMNIFICATION AGREEMENT


 


This REPRESENTATION AND WARRANTY
INDEMNIFICATION AGREEMENT (including all exhibits and schedules hereto, this “Agreement”)
is made and entered into as of October 5, 2010 (the “Effective Date”)
by and among Eola Property Trust (the “Company”) and Eola Property
Trust, L.P. (the “Operating Partnership”), on the one hand, and James R.
Heistand, Rodolfo Prio Touzet, Troy M. Cox, Henry F. Pratt III and Scott
Francis (collectively, the “Indemnitors”), on the other hand.


 


RECITALS


 


A.            For
purposes of this Agreement, all capitalized terms shall have the meanings given
to such terms in Exhibit A, or as otherwise defined in this
Agreement.


 


B.            The
Operating Partnership desires to consolidate the ownership of a portfolio of
properties through a series of transactions (collectively, the “Formation
Transactions”) whereby the Operating Partnership will acquire, directly or
indirectly, some or all of the interests in certain limited partnerships and
limited liability companies; and the Formation Transactions include the
proposed initial public offering (the “Public Offering”) of  common shares of beneficial interest, par value $0.01 per
share, of the Company (the “Common Shares”), which is (either directly or
indirectly) the sole general partner of the Operating Partnership.


 


C.            One
or more of the Indemnitors, directly or indirectly, have an ownership interest
in certain of the properties set forth on Exhibit B (the “Properties”).


 


D.           Concurrently
with the execution and delivery of this Agreement, the Indemnitors (directly or
through one or more affiliates) are entering into a Contribution Agreement (the
“Eola Contribution Agreement”), dated as of  the
date hereof, by and among the Operating Partnership, the Company and certain
contributors party thereto (including the Indemnitors and/or entities
affiliated with the Indemnitors), relating to the contribution of their
respective interests in certain Entities to the Operating Partnership in
exchange for Common Shares and/or limited partnership units of the Operating
Partnership (“OP Units”), in each case, subject to the terms and
conditions of the Eola Contribution Agreement.


 


E.             In
order to induce the Operating Partnership and the Company to enter into the
Formation Transactions and consummate the Public Offering, the Indemnitors have
agreed to provide certain representations, warranties and indemnities with
respect to the Properties and the Entities as set forth in this Agreement.


 


F.             The
Indemnitors have agreed to execute and deliver a Pledge Agreement
(substantially in the form of Exhibit D
attached hereto) pursuant to which the Indemnitors’ indemnification obligations
under this Agreement shall be secured by pledges by the Indemnitors of an
aggregate amount equal to fifteen percent (15%) of the total number of OP Units
and Common Shares received by the Indemnitors under the terms of the Eola
Contribution Agreement.


 


NOW, THEREFORE, in consideration of the
foregoing premises and the mutual undertakings set forth below, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 

















 


ARTICLE 1.

REPRESENTATIONS AND WARRANTIES


 


Except as otherwise set forth in the
Registration Statement, the Indemnitors jointly and severally represent and
warrant to the Operating Partnership and the Company as of the Closing Date as
follows (subject, in each case, to qualification by the disclosures in the
disclosure schedule delivered in connection with this Agreement (the “Disclosure Schedule”)):


 


Section 1.1             Leases.  With respect to each Property,
a true, correct and complete copy of all leases, licenses, tenancies,
possession agreements and occupancy agreements with the tenants of such
Property, including all amendments, supplements, and modifications to such
agreements (the “Leases”) have been made available to the Operating
Partnership.  With respect to each
Property, to each Indemnitor’s Knowledge, the Leases are in full force and
effect, except for such failures as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on such
Property.  To each Indemnitor’s
Knowledge, (1) no rent or other payment due from the tenant under any Lease is
delinquent for greater than ninety (90) days past its due date or has been paid
more than ninety (90) days in advance of its due date, (2) no monetary or
material non-monetary default (beyond applicable notice and cure periods) by
any Person exists under any such Lease that would reasonably be expected to
have a Material Adverse Effect on the applicable Property, (3) there is no
remaining right in any tenant under any Lease to any “free” rent, rent
abatement (other than upon damage to or destruction or condemnation of the leased
premises) or other rent concession that, in each case, is not documented in the
Lease, (4) there is no remaining obligation on the part of any landlord
under any Lease to construct, install or pay or reimburse the cost of any
tenant improvements, fixtures, furnishings or equipment or otherwise to make
any payments to the tenant that, in each case, is not documented in the Lease,
and (5) none of the tenants under any Lease has provided written notice to
any Indemnitor or any Entity that such tenant is subject to any bankruptcy,
reorganization, insolvency or similar proceedings.


 


Section 1.2             Ground Leases.  With respect to each Property, a
true, correct and complete copy of all ground leases and air space leases (the “Ground
Leases”), if any, have been made available to the Operating
Partnership.  To each Indemnitor’s
Knowledge, such Ground Leases are in full force and effect.  No Indemnitor nor, to any Indemnitor’s
Knowledge, any Entity has received any written notice from any ground lessor
under any of the Ground Leases alleging any material default or material event
of default on the part of an Entity thereunder, in each case, that has not been
cured or otherwise resolved.  Except for
matters that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on a Property, (a) to each
Indemnitor’s Knowledge, no ground lessor under any of the Ground Leases is in
default or is the subject of any voluntary or involuntary bankruptcy or
insolvency proceedings, (b) no Entity is in default under any Ground
Lease, and, (c) to each Indemnitor’s Knowledge, no event has occurred
which with the passage of time or the giving of notice (or both) would
constitute a default under any Ground Lease.


 


Section 1.3             Service Contracts.  With respect to the service, equipment,
franchise, operating, management, parking, supply, utility and maintenance
agreements relating to each Property which are for a contract amount greater
than $50,000 per annum (collectively, the “Service Contracts”), to each
Indemnitor’s Knowledge:  (a) no
Entity is in default under any Service Contract, and (b) no event has
occurred which with the passage of time or the giving of notice (or both) would
constitute a default under any Service Contract, except for matters that would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on such Property. 
There are no employees of any Entity. 
True, correct and complete copies of all Service Contracts have been
made available to the Operating Partnership and, to each Indemnitor’s
Knowledge, are in full force and effect. 
Except as set forth on Schedule 1.3 to the Disclosure Schedule,
as of the Effective Date, no Indemnitor nor, to each


 


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Indemnitor’s Knowledge,
any Entity has given or received written notice of any material event of
default (which remains uncured) under any of the Service Contracts.


 


Section 1.4             Existing Loans.  Schedule 1.4(a) to the Disclosure
Schedule lists, as of the Effective Date, (i) all secured loans
presently encumbering each such Property or any direct or indirect interest in
any Entity, and (ii) all unsecured loans relating to such Property or any
direct or indirect interest in any Entity held by Contributor, in each case
which loan will be assumed by the Operating Partnership or any subsidiary of
the Operating Partnership at Closing (the “Disclosed Loans”), and the
approximate outstanding aggregate principal balance of each such Disclosed
Loan.  Except as set forth on Schedule
1.4(b) to the Disclosure Schedule, the Disclosed Loans and the
documents entered into in connection therewith (collectively, the “Disclosed
Loan Documents”) are, to each Indemnitor’s Knowledge, in full force and
effect as of the Effective Date, and:  (a) no
monetary or material non-monetary default (beyond applicable notice and cure
periods) by any Entity shall exist on the Closing Date under any of such
Disclosed Loan Documents, and (b) to each Indemnitor’s Knowledge, no event
has occurred which with the passage of time or the giving of notice (or both)
would constitute a default under any of such Disclosed Loan Documents, except
for matters that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on such Property.  True, correct and complete copies of the
existing Disclosed Loan Documents have been made available to the Operating
Partnership.


 


Section 1.5             Zoning.  No Indemnitor nor any Entity has
received (i) any written notice (which remains uncured) from any
Governmental Entity stating that any Property is violating any zoning, land use
or other similar rules or ordinances in any material respect, or (ii) any
written notice of any pending or threatened Proceedings for the rezoning (i.e.,
as opposed to the current zoning) of any Property or any material portion
thereof.


 


Section 1.6             Eminent Domain.  There is no existing or, to any
Indemnitor’s Knowledge, proposed or threatened condemnation, eminent domain or
similar Proceeding, or private purchase in lieu of such a Proceeding, in
respect of all or any material portion of any Property.


 


Section 1.7             Licenses and Permits.
 To each Indemnitor’s Knowledge, all
licenses, permits or other governmental approvals (including certificates of
occupancy) required to be obtained by the owner of any Property in connection
with the construction, use, occupancy, management, leasing and operation of the
Property have been obtained and are in full force and effect and in good
standing, except for those licenses, permits and other governmental approvals,
the failure of which to obtain or maintain in good standing would not
reasonably be expected to have a Material Adverse Effect on such Property.  No Indemnitor nor any Entity has received any
written notice from any Governmental Entity revoking, canceling, denying
renewal of, or threatening any such action with respect to, any material
licenses, permits or other governmental approvals (other than typical delays
that occur in the ordinary course of business in connection with obtaining
renewals or replacement licenses, permits or other governmental approvals that
do not have a Material Adverse Effect on the applicable Property).


 


Section 1.8             Real Property Agreements.  To each Indemnitor’s Knowledge, no monetary
or material non-monetary default (beyond applicable notice and cure periods) by
any party exists under any material agreement to which any Indemnitor or any
Entity is a party and that affects any Property (including any of the
covenants, conditions, restrictions, right-of-way or easements constituting one
or more of the Permitted Liens), which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on such Property, and
no event has occurred or, to any Indemnitor’s Knowledge, is threatened, which
through the passage of time or the giving of notice, or both, would constitute
a material default thereunder or would cause the acceleration of any obligation
of any party thereto or the creation of a Lien upon any Property, except for
Permitted Liens and except for defaults or


 


3

















 


other Liens that would
not, individually, or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  To each
Indemnitor’s Knowledge, each such agreement that is for a contract amount
greater than $50,000 per annum is valid and binding and in full force and
effect and has not been materially amended, modified or supplemented since such
time as such agreements were made available to the Operating Partnership.


 


Section 1.9             Compliance with Laws.  Except as set forth in the
Environmental Reports (as defined below), each Property has been maintained,
and no Indemnitor nor any Entity has received any written notice that such
Property is not, in compliance in all material respects with all applicable
laws, ordinances, rules, regulations, codes, orders and statutes (including
those laws currently relating to fire safety, conservation, parking, Americans
with Disabilities Act, zoning and building laws) whether federal, state or
local, in each case, except where the failure to so comply would not reasonably
be expected to have a Material Adverse Effect on such Property.


 


Section 1.10           Environmental Compliance.
 True, correct and complete copies of all
environmental reports with respect to any Property that is in possession of the
Indemnitors or any Entity (the “Environmental Reports”) have been made
available to the Operating Partnership. 
To each Indemnitor’s Knowledge, except as set forth in the Environmental
Reports, each Property is currently in compliance with all Environmental Laws
and Environmental Permits, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect on such Property.  No Indemnitor nor any Entity has received any
written notice from the United States Environmental Protection Agency or any
other federal, state, county or municipal entity or agency that regulates
Hazardous Materials or public health risks or other environmental matters or
any other private party or Person claiming any current violation of, or
requiring current compliance with, any Environmental Laws or Environmental
Permits or demanding payment or contribution for any Release or other
environmental damage in, on, under, or upon any Property, in each case, that
has not been cured or otherwise resolved and that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
applicable Property.  No litigation in
which any Indemnitor or any Entity is a named party is pending with respect to
Hazardous Materials located in, on, under or upon any Property, and, to the
Indemnitors’ Knowledge, (a) no Proceeding in such respect is pending and (b) no
such Proceeding has been threatened in writing in the last twelve (12) months
by any Governmental Entity or any other Person. Except as may be disclosed in
the Environmental Reports, there are no environmental conditions existing at,
on, under, upon or affecting any Property or any portion thereof that would
reasonably be likely to result in any claim, liability or obligation under any
Environmental Laws or Environmental Permit or any claim by any Person that
would reasonably be expected to have a Material Adverse Effect on such
Property.


 


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Section 1.11           Litigation.  Except as set forth on Schedule
1.11 to the Disclosure Schedule, there are no Proceedings pending or, to
each Indemnitor’s Knowledge, threatened in the last twelve (12)  months, against or with respect to any Property, any
Indemnitor or any of the Entities that would reasonably be expected to have a
Material Adverse Effect on any Property. No Indemnitor is bound by any
outstanding order, writ, injunction or decree of any Governmental Entity
against any Entity which in any such case would reasonably be expected to have
a Material Adverse Effect on the Indemnitors’ ability to enter into and perform
all of its obligations under this Agreement or the Eola Contribution Agreement
or would reasonably be expected to have a Material Adverse Effect on such
Entity.


 


Section 1.12           Exclusive Representations.  Except as expressly set forth in
this Article 1 and in the Eola Contribution Agreement, the Indemnitors
make no representation or warranty of any kind, express or implied, in
connection with the Entities or the Properties, and each of the Operating
Partnership and the Company acknowledges that it has not relied upon any other
such representation or warranty.


 


Section 1.13           Schedules.  At any time prior to the Closing, the Indemnitors
shall be entitled to deliver to the Company and the Operating Partnership
updates to, or substitutions of, the Disclosure Schedules.  If the Closing under the Contribution
Agreement occurs, the updated or substitute Disclosure Schedules shall replace,
in whole or in part as the case may be, the Disclosure Schedules previously
delivered hereunder for all purposes.


 


ARTICLE 2.

INDEMNIFICATION AND PLEDGE


 


Section 2.1             Survival.  It is the express intention and agreement of
the parties hereto that the representations, warranties and covenants of the
Indemnitors set forth in this Agreement shall survive the consummation of the
transactions contemplated hereby for a period of one (1) year following
the Closing (subject to Section 2.3 below).  The provisions of this Agreement that
contemplate performance after the Closing and the obligations of the parties
not fully performed at the Closing shall survive the Closing and shall not be
deemed to be merged into or waived by the instruments of Closing.


 


Section 2.2             Indemnification by the Indemnitors.  Upon the terms and subject to
the conditions of this Article 2, from and after the Closing Date, the
Indemnitors shall jointly and severally indemnify, defend and hold harmless the
Operating Partnership and the Company and their respective affiliates, and
their respective directors, officers, managers, members, partners, employees,
agents, advisors and other representatives (collectively, the “OP
Indemnified Parties”), from and against any and all Damages arising out of,
relating to or resulting from any breach or inaccuracy of any representation or
warranty made by the Indemnitors, pursuant to Article 1 of this Agreement
(the “OP Claims”).


 


Section 2.3             Limitations on Indemnification.


 


(a)           The Indemnitors shall only be required to indemnify the OP
Indemnified Parties under Section 2.2 with respect to OP Claims for which
the OP Indemnified Parties have provided written notice to the Indemnitors,
setting forth therein in reasonable detail the basis for such OP Claims, on or
prior to the one (1)-year anniversary of the Closing; provided, however,
that, in the event that the OP Indemnified Parties notify the Indemnitors with
respect to any OP Claim on or prior to the one (1)-year anniversary of the Closing,
then any such OP Claim shall survive until resolved in accordance with the
terms and conditions of this Agreement (the “Indemnification Period”).


 


(b)           The provisions for indemnification contained in Section 2.2
shall be effective only if the aggregate amount of all Damages for all OP
Claims exceeds one percent (1%) of the


 


5

















 


Aggregate
Value (it being understood and agreed that such  one
percent (1%) of the Aggregate Value shall
then be recoverable, together with all other Damages for OP Claims under Section 2.2
in excess thereof, by the OP Indemnified Parties subject to the other
limitations in this Agreement).


 


(c)           In no event shall the
aggregate amount of Damages for which the Indemnitors are liable pursuant to Section 2.2
exceed fifteen percent (15%) of the Aggregate Value.  In addition, in no event shall the amount of
Damages for which any individual Indemnitor is liable pursuant to Section 2.2
exceed fifteen percent (15%) of the Aggregate Value received by such individual
Indemnitor (i) under the Eola Contribution Agreement, or (ii) through
any distribution (directly or indirectly) to such Indemnitor of any OP Units
and/or Common Shares by any Contributor (or direct or indirect owner thereof).
Notwithstanding anything contained herein to the contrary, the OP Indemnified
Parties shall look first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable), and then to the OP
Units and/or Common Shares pledged by the Indemnitors pursuant to the terms of
the Pledge Agreement for indemnification under this Article 2. Following
the Closing and the issuance of Common Shares and/or OP Units to the applicable
Indemnitors, no OP Indemnified Party shall have recourse to any other assets of
the Indemnitors other than the Common Shares and/or OP Units pledged pursuant
to the Pledge Agreement.  The parties
hereto acknowledge and agree that the Collateral (as defined in the Pledge Agreement)
pledged by each Indemnitor pursuant to the terms of the Pledge Agreement shall
be released to satisfy the obligations under this Agreement on a pro rata basis
from each Indemnitor based on each such Indemnitor’s then-applicable Pro Rata
Share.  For purposes of the foregoing,
each Indemnitor’s “Pro Rata Share” is determined, at the time of each
release of the Collateral, by dividing (i) the then-current value of such
Indemnitor’s Collateral that has not already been released to obligations under
this Agreement, by (ii) the then-current aggregate value of all Collateral
that has not already been released to satisfy obligations under this Agreement.


 


Section 2.4             Pledge by the Indemnitors.  At or prior to the Closing, the Indemnitors
shall execute and deliver a Pledge Agreement (substantially in the form of Exhibit D attached hereto)
pursuant to which the Indemnitors’ indemnification obligations contained in
this Article 2 shall be secured by a pledge, at the Closing, by each
Indemnitor of an amount equal to fifteen percent (15%) of the total number of
OP Units and Common Shares received by each such Indemnitor under the terms of
the Eola Contribution Agreement.


 


Section 2.5             Procedures for Indemnification with Respect to Third Party
Claims. The obligations and liabilities of the
Indemnitors pursuant to Section 2.2 of this Agreement shall be subject to
the following procedures:


 


(a)           Any party seeking indemnification pursuant to Section 2.2
(an “Indemnified Party”) shall give to all Indemnitors (the “Indemnifying
Party”) prompt written notice (a “Claim Notice”) of the assertion of
any claim, or the commencement of any Proceeding for which the Indemnified
Party believes the Indemnifying Party may be liable under Section 2.2.  The failure by any Indemnified Party to
notify the Indemnifying Party shall not relieve the Indemnifying Party from
liability under Section 2.2, except to the extent that the Indemnifying
Party shall have been prejudiced in any material respect as the result of such
failure. A Claim Notice shall describe the nature of the Proceeding and shall
indicate the amount of Damages (estimated to the extent that the Damages in
respect of any Proceeding are reasonably capable of being estimated); provided,
however, that the failure to estimate Damages (or the inaccuracy
thereof) shall not effect the validity of a Claim Notice or the amount of
Damages to which the Indemnified Party may be entitled.


 


(b)           The Indemnifying Party shall have the right to elect to
control the defense of any Proceeding and the right to settle or compromise any
such Proceeding; provided that the prior written consent of the
Indemnified Party shall be required in connection with any settlement or
compromise


 


6

















 


unless
such settlement, compromise, discharge or consent to judgment (i) includes
the delivery of a written release from all liability in respect of such
Proceeding, (ii) does not contain any admission or statement suggesting
any wrongdoing or liability on behalf of the Indemnified Party, and (iii) does
not contain any equitable order, judgment or term which in any manner affects,
restrains or interferes with the business of the Indemnified Party or any of
its affiliates. The Indemnifying Party shall exercise such right by delivering
written notice of its intent to undertake the defense of such Proceeding to the
Indemnified Party within twenty (20) days after the receipt of a Claim
Notice.  If the Indemnifying Party elects
to control the defense of the Proceeding, then all expenses and legal fees of
such defense shall be borne by the Indemnifying Party.  If the Indemnifying Party elects to control
the defense of the claim or Proceeding, then the Indemnified Party may
participate therein through counsel of its choice, but the cost of such counsel
shall be borne solely by the Indemnified Party. 
If the Indemnifying Party does not assume such defense within twenty
(20) days after its receipt of a Claim Notice or the Indemnifying Party
notifies the Indemnified Party that it shall not assume such defense, the
Indemnified Party may control the defense of such Proceeding and may settle the
Proceeding on behalf of and for the account and risk of the Indemnifying Party,
who shall be bound by the result and all costs associated therewith shall be
paid by the Indemnifying Party.


 


(c)           The Indemnifying Party or the Indemnified Party, as the case
may be, shall at all times use commercially reasonable efforts to keep the
Indemnifying Party or the Indemnified Party, as the case may be, reasonably
apprised of the status of the defense of any matter the defense of which it is
maintaining and to cooperate in good faith with the Indemnifying Party or the
Indemnified Party, as the case may be, with respect to the defense of any such
matter.


 


ARTICLE 3.

MISCELLANEOUS


 


Section 3.1             Counterparts.
 This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and it shall not
be necessary in making proof of this Agreement or the terms of this Agreement
to produce or account for more than one of such counterparts.  All counterparts shall constitute one and the
same instrument.  Each party may execute
this Agreement via a facsimile (or transmission of a .pdf file) of this
Agreement.  In addition, facsimile or
..pdf signatures of authorized signatories of the parties shall be valid and
binding and delivery of a facsimile or .pdf signature by any party shall
constitute due execution and delivery of this Agreement.


 


Section 3.2             Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without regard to the choice of laws provisions thereof.


 


Section 3.3             Amendment; Waiver.  Any amendment hereto shall be in writing and
signed by all parties hereto.  No waiver
of any provisions of this Agreement shall be valid unless in writing and signed
by the party against whom enforcement is sought.  The waiver by any party of the performance of
any act shall not operate as a waiver of the performance of any other act or an
identical act required to be performed at a later time. Except as otherwise
provided herein, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement.


 


Section 3.4             Entire Agreement.  This Agreement, the Eola Contribution
Agreement, the exhibits and schedules hereto constitute the entire agreement
and supersede conflicting provisions set forth in all other prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof and thereof, as the case may be.  In the event of a conflict between


 


7

















 


this
Agreement and the Eola Contribution Agreement, the terms of the Eola
Contribution Agreement shall prevail.


 


Section 3.5             Assignment.  This Agreement and all of the provisions
hereof shall be binding upon, and shall be enforceable by and inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns and any reference to a party
shall also be a reference to an heir, legal representative, successor or
permitted assign; provided, however, that this Agreement may not
be assigned (except by operation of law) by any party without the prior written
consent of the other parties, and any attempted assignment without such consent
shall be void and of no effect, except that each of the Operating Partnership
and the Company, may assign its rights and obligations hereunder to any
affiliate without the consent of any party hereto.


 


Section 3.6             Titles.  The titles and captions of the Articles,
Sections and paragraphs of this Agreement are included for convenience of
reference only and shall have no effect on the construction or meaning of this
Agreement.


 


Section 3.7             Third Party Beneficiary.  Except as may be expressly provided or
incorporated by reference herein, no provision of this Agreement is intended,
nor shall it be interpreted, to provide or create any third party beneficiary
rights or any other rights of any kind in any customer, affiliate, shareholder,
partner, member, director, officer or employee of any party hereto or any other
Person.  All provisions hereof shall be
personal solely among the parties to this Agreement.


 


Section 3.8             Severability.  If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other Persons or circumstances shall be interpreted so as
reasonably to effect the intent of the parties hereto.  The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that shall achieve, to the extent possible, the economic, business
and other purposes of the void or unenforceable provision and to execute any
amendment, consent or agreement deemed necessary or desirable to effect such
replacement.  To the extent permitted by
applicable law, the parties waive any provision of applicable law which renders
any provision of this Agreement unenforceable in any respect.


 


Section 3.9             Interpretation.  This Agreement shall be read and construed in
the English language.  As used in this
Agreement, any reference to the masculine, feminine or neuter gender shall
include all genders, the plural shall include the singular, and singular shall
include the plural.  References herein to
a party or other Person include their respective successors and assigns.  The words “include,” “includes” and “including”
when used herein shall be deemed to be followed by the phrase “without
limitation” unless such phrase otherwise appears.  Unless the context otherwise requires,
references herein to articles, sections, schedules, exhibits and attachments
shall be deemed references to articles and sections of, and schedules, exhibits
and attachments to, this Agreement.  Unless
the context otherwise requires, the words “hereof,” “hereby” and “herein” and
words of similar meaning when used in this Agreement refer to this Agreement in
its entirety and not to any particular article, section or provision
hereof.  Except when used together with
the word “either” or otherwise for the purpose of identifying mutually
exclusive alternatives, the term “or” has the inclusive meaning represented by
the phrase “and/or.”  Any deadline or
time period set forth in this Agreement that by its terms ends on a day that is
not a Business Day shall be automatically extended to the next succeeding
Business Day.  All references in this
Agreement to “dollars” or “$” shall mean United States dollars.  With regard to each and every term and
condition of this Agreement, the Parties understand and agree that the same
have or has been mutually negotiated, prepared and drafted, and that if at any
time the Parties desire or are required to interpret or construe any such term
or condition or any agreement or instrument subject thereto, no


 


8

















 


consideration
shall be given to the issue of which Party actually prepared, drafted or
requested any term or condition of this Agreement.


 


Section 3.10           Notices.  All notices, requests, demands, waivers and
communications required or permitted to be given under this Agreement shall be
in writing signed by or on behalf of the party making such notice, request,
demand, waiver or communication and shall be deemed to be given (i) on the
day delivered (or if that day is not a Business Day, or if delivered after the
close of business on a Business Day, on the next day that is a Business Day)
when delivered by personal delivery or overnight courier, (ii) on the third
Business Day after mailed by registered or certified mail, postage prepaid,
return receipt requested, or (iii) upon transmission when sent by
facsimile transmission or email transmission (provided that such facsimile or
email is followed by an original of such notice by mail or personal delivery as
provided herein).  Mailed notices shall
be addressed as set forth below, but any party may change the address set forth
below by written notice to other parties in accordance with this paragraph.


 


To the Indemnitors:


 


c/o Eola Capital, LLC

390 N. Orange Avenue, Suite 2400

Orlando, Florida 32801        

Phone: (407) 650-0593 

Facsimile:  (407) 650-0597

Email: JHeistand@eolacapital.com and RTouzet@eolacapital.com

Attn:  James R. Heistand and Rodolfo Prio
Touzet


 


To the Operating Partnership or the Company:


 


c/o Eola Capital, LLC

390 N. Orange Avenue, Suite 2400

Orlando, Florida 32801        

Phone: (407) 650-0593 

Facsimile:  (407) 650-0597

Email: DOReilly@eolacapital.com

Attn:  David O’Reilly


 


with a copy to:


 


Hogan Lovells US LLP

555 Thirteenth Street, N.W.

Washington, DC 20004

Phone: (202) 637-5868

Facsimile: (202) 637-5910

Email: david.bonser@hoganlovells.com

Attn: David W. Bonser


 


Section 3.11           Equitable Remedies.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with the specific terms hereof or were otherwise
breached.  It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any federal or state court located in the State of Delaware (as to
which the parties


 


9

















 


agree to
submit to jurisdiction for the purpose of such action), this being in addition
to any other remedy to which the parties are entitled under this Agreement.


 


Section 3.12           Enforcement Costs.  Should either party institute any Proceeding
to enforce the terms of this Agreement, the prevailing party shall be entitled
to receive all reasonable costs and expenses (including reasonable attorneys’
fees) incurred by such prevailing party in connection with such
Proceeding.  A party entitled to recover
costs and expenses under this Section shall also be entitled to recover
all costs and expenses (including reasonable attorneys’ fees) incurred in the
enforcement of any judgment or settlement obtained in such Proceeding (and in
any such judgment provision shall be made for the recovery of such
post-judgment costs and expenses).


 


Section 3.13           Term of Agreement.  This Agreement shall automatically terminate
upon the termination of the Eola Contribution Agreement and shall thereafter be
of no further force and effect, and thereafter neither the Operating
Partnership and the Company nor the Indemnitors shall have any further
obligations hereunder.


 


Section 3.14           Indemnitor Representatives.  For purposes of this Agreement and the Pledge
Agreement, each of the Indemnitors hereby designates each of James Heistand and Rodolfo Prio Touzet (the “Representatives”)
as the sole and exclusive representatives of such Indemnitor from and after the
Effective Date with respect to the matters arising under this Agreement, with
full powers of substitution to act in the name, place and stead of such
Indemnitor with respect to the performance on behalf of such Indemnitor under
the terms and provisions of this Agreement, as the same may be from time to
time amended, and to do or refrain from doing all such further acts and things,
and to execute all such documents, as the Representatives shall deem necessary
or appropriate in connection with any of the transactions contemplated by this
Agreement.  The appointment of the
Representatives as the Indemnitor’s representative under this Agreement shall
be deemed coupled with an interest and shall be irrevocable, and any other
Person may conclusively and absolutely rely, without inquiry, upon any actions
of the Representatives as the acts of the Indemnitors in all matters referred
to in this Agreement.  The
Representatives shall act for the Indemnitors on all of the matters set forth
in this Agreement in the manner that he believes to be in the best interest of
the Indemnitors, but the Representatives shall not be responsible to any
Indemnitor for any Damage any Indemnitor may suffer by reason of the
performance by the Representatives of their duties as the representative of any
Indemnitor under this Agreement, other than Damages arising from willful
misconduct in the performance of the Representatives’ duties as the
representatives of the Indemnitors under this Agreement.  Each
Indemnitor hereby agrees that such Indemnitor will be bound by any action taken
by the Representatives as representative of the Indemnitors in accordance with this Agreement
or the Pledge Agreement and that such Indemnitor will, if requested by the Representatives,
confirm in writing to be so bound and to ratify the action so taken. The Representatives shall promptly deliver to each Indemnitor
any notice received by him concerning this Agreement. Any Representative may
resign as a representative hereunder at any time upon written notice to the
Indemnitors, the Company and the Operating Partnership, at which time he shall
immediately cease to be a representative hereunder.


 


[Signature Page Follows]


 


10

















 


IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written above.


 


	
   

  	
  OPERATING PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  EOLA PROPERTY TRUST, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  	
  By:    EOLA
  PROPERTY TRUST,

  
	
   

  	
   

  	
  a Maryland  real
  estate investment trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Heistand

  
	
   

  	
   

  	
  Name: James R. Heistand

  
	
   

  	
   

  	
  Title: Executive Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  EOLA PROPERTY TRUST, a Maryland
  real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Heistand

  
	
   

  	
   

  	
  Name: James R. Heistand

  
	
   

  	
   

  	
  Title: Executive Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James R. Heistand

  
	
   

  	
  James R. Heistand

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rodolfo Prio Touzet

  
	
   

  	
  Rodolfo Prio Touzet

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Troy M. Cox

  
	
   

  	
  Troy M. Cox

  



 


11

















 


	
   

  	
  /s/ Henry F. Pratt III

  
	
   

  	
  Henry F. Pratt III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Scott Francis

  
	
   

  	
  Scott Francis

  



 


12














 


EXHIBIT A 

TO 

REPRESENTATION AND WARRANTY INDEMNIFICATION AGREEMENT


 


DEFINITIONS


 


For purposes of the Agreement, the following
terms have the meanings set forth below:


 


(a)                                  “Aggregate Value” means the aggregate value of all OP
Units and/or Common Shares received by the Indemnitors (i) under the Eola
Contribution Agreement, or (ii) through any distribution (directly or
indirectly) to the Indemnitors of any OP Units and/or Common Shares by any
Contributor (or direct or indirect owner thereof), with all OP Units and Common
Shares being valued based upon the initial public offering price of the Common
Shares.


 


(b)                                 “Business Day” means any day other than a Saturday, a
Sunday or a day on which banks in the City of New York are authorized or obligated by applicable law to close.


 


(c)                                  “Closing” shall have the meaning given such term in
the Eola Contribution Agreement.


 


(d)                                 “Closing Date” shall have the meaning given such term
in the Eola Contribution Agreement.


 


(e)                                  “Contributor” shall have the meaning given such term
in the Eola Contribution Agreement.


 


(f)                                    “Damages” means all claims, liabilities, Taxes,
demands, obligations, losses, penalties, fines, assessments, levies and
judgments (at equity or at law), damages (including compensatory damages and
amounts paid in settlement), costs and expenses, including reasonable attorneys’,
accountants’, investigators’, and experts fees and expenses (reasonably
sustained or incurred in connection with the defense or investigation of any
Proceedings, including Proceedings to establish insurance coverage and
insolvency proceedings), whenever arising or incurred, but expressly
excluding exemplary, consequential and punitive damages (except to the extent
awarded in any Proceeding initiated by a third party).


 


(g)                                 “Entity” means each partnership, company or other
Person listed on Exhibit C and each partnership, limited liability
company or other legal entity (i) that is a subsidiary thereof, and (ii) that
directly or indirectly owns any interest in, or ground leases on, any Property.


 


(h)                                 “Environmental Law” means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, demands,
approvals, authorizations and similar items of any Governmental Entity and all
applicable judicial, administrative and regulatory decrees, judgments and
orders relating to the protection of human health or the environment as in
effect on the Closing Date, including those pertaining to reporting, licensing,
permitting, investigation, removal and remediation of Hazardous Materials,
including:  (x) the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251), the Safe Drinking
Water Act (42 U.S.C. 300f et seq.), the Toxic Substances Control Act (15 U.S.C.
2601 et seq.), the Endangered Species Act (16 U.S.C. 1531 et seq.), the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.  11001 et seq.), and (y) applicable state
and local statutory and regulatory laws, statutes and regulations pertaining to
Hazardous Materials.


 


1

















 


(i)                                     “Environmental Permits” means any and all licenses,
certificates, permits, directives, requirements, registrations, government
approvals, agreements, authorizations, and consents that are required under or
are issued pursuant to any Environmental Laws.


 


(j)                                     “Governmental Entity” means any governmental agency
or quasi-governmental agency, bureau, board, commission, court, department,
official, political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign.


 


(k)                                  “Hazardous Material” means any substance:


 


(i)                                     the presence of which requires investigation or remediation under any
Environmental Law action or policy, administrative request or civil complaint
under the foregoing or under common law;


 


(ii)                                  which is controlled, regulated or prohibited under any Environmental Law
as in effect as of the Closing Date, including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.)
and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.);


 


(iii)                               which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and as of the
Closing Date is regulated by any Governmental Entity;


 


(iv)                              the presence of which on, under or about, a Property poses a hazard to
the health or safety of persons on or about such Property;


 


(v)                                 which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls (PCBs) or asbestos or asbestos-containing materials
or urea formaldehyde foam insulation; or


 


(vi)                              radon gas.


 


(l)                                     “Knowledge” means, with respect to each Indemnitor,  all facts actually known by such Indemnitor.


 


(m)                               “Liens” means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), other
charge or security interest or any preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement), and any obligations under capital leases having substantially the
same economic effect as any of the foregoing.


 


(n)                                 “Material Adverse Effect” means, with respect to any
Person or Property, (i) any material adverse effect, individually or in
the aggregate, on the assets, business, financial condition or results of
operations of such Person or Property, or (ii) any material adverse effect
that could adversely affect or delay the ability of such Person to perform its
respective obligations hereunder or in connection with the transactions contemplated
hereby.


 


(o)                                 “Permitted Liens” means:


 


2

















 


(i)                                     Liens securing Taxes, the payment of which (i) is not delinquent or
(ii) is actively being contested in good faith by appropriate proceedings
diligently pursued and is appropriately reserved for in accordance with
generally accepted accounting principles;


 


(i)                                     Zoning laws and ordinances applicable to the Properties which are not
violated by the existing structures or present uses thereof or the transfer of
the Properties;


 


(iii)                               Liens imposed by laws, such as carriers’, warehousemen’s and mechanics’
liens, and other similar liens arising in the ordinary course of business which
secure payment of obligations arising in the ordinary course of business not more
than 60 days past due or which are being contested in good faith by appropriate
proceedings diligently pursued;


 


(iv)                              easements, restrictive covenants, rights of way and similar matters that
are set forth on the existing title insurance policy for a Property none of
which materially adversely affect the marketability or financability of such
Property or the use and operation of such Property as currently used and
operated; and


 


(v)                                 the Liens of all Disclosed Loans.


 


(p)                                 “Person” means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or Governmental Entity.


 


(q)                                 “Proceeding” shall mean any governmental, judicial,
administrative or adversarial proceeding (public or private), any action,
claim, lawsuit, legal proceeding, whistleblower complaint, charge, accusation,
petition, litigation, arbitration or mediation, any hearing, investigation
(internal or otherwise), probe or inquiry by any Governmental Entity or any
other dispute, including any adversarial proceeding.


 


(r)                                    “Registration Statement” shall mean the registration
statement on Form S-11 filed by the Company in connection with the Public
Offering, including all amendments and supplements thereto and any exhibits and
schedules thereto, and each prospectus used by the Company in connection with
the offering of Common Shares in the Public Offering.


 


(s)                                  “Release” shall have the same meaning as the
definition of “release” in the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) at 42 U.S.C. Section 9601(22), but
not including the exclusions identified in that definition at subparts (A) through
(D).


 


(t)                                    “Tax” or “Taxes” means any federal, state,
provincial, local or foreign income, gross receipts, license, payroll,
employment-related, excise, goods and services, harmonized sales, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.


 


(u)                                 Each of the following terms is defined in the section set
forth below opposite such term:


 


3

















 


	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Claim Notice

  	
   

  	
  2.5(a)

  
	
  Common Shares

  	
   

  	
  Recital B

  
	
  Company

  	
   

  	
  Preamble

  
	
  Disclosed Loans

  	
   

  	
  1.4

  
	
  Disclosed Loan Documents

  	
   

  	
  1.4

  
	
  Disclosure Schedule

  	
   

  	
  Article 1

  
	
  Effective Date

  	
   

  	
  Preamble

  
	
  Eola Contribution Agreement

  	
   

  	
  Recital D

  
	
  Environmental Reports

  	
   

  	
  1.10

  
	
  Formation Transactions

  	
   

  	
  Recital B

  
	
  Ground Leases

  	
   

  	
  1.2

  
	
  Indemnification Period

  	
   

  	
  2.3(a)

  
	
  Indemnified Party

  	
   

  	
  2.5(a)

  
	
  Indemnifying Party

  	
   

  	
  2.5(a)

  
	
  Indemnitors

  	
   

  	
  Preamble

  
	
  Leases

  	
   

  	
  1.1

  
	
  Operating Partnership

  	
   

  	
  Preamble

  
	
  OP Claims

  	
   

  	
  2.2

  
	
  OP Indemnified Party

  	
   

  	
  2.2

  
	
  OP Units

  	
   

  	
  Recital D

  
	
  Properties

  	
   

  	
  Recital C

  
	
  Public Offering

  	
   

  	
  Recital B

  
	
  Representatives

  	
   

  	
  3.14

  
	
  Services Contracts

  	
   

  	
  1.3

  



 


4

















 


EXHIBIT B

TO 

REPRESENTATION AND WARRANTY INDEMNIFICATION AGREEMENT


 


PROPERTIES


 


PROPERTY


 


	
  1.

  	
   

  	
  Peachtree Center Mall

  
	
  2.

  	
   

  	
  Peachtree Center North

  
	
  3.

  	
   

  	
  Peachtree Center South

  
	
  4.

  	
   

  	
  Peachtree Center Harris

  
	
  5.

  	
   

  	
  Peachtree Center International

  
	
  6.

  	
   

  	
  Peachtree Center Garage

  
	
  7.

  	
   

  	
  International Garage

  
	
  8.

  	
   

  	
  Courtland Garage

  
	
  9.

  	
   

  	
  Peachtree Marquis I

  
	
  10.

  	
   

  	
  Peachtree Marquis II

  
	
  11.

  	
   

  	
  Center Point I

  
	
  12.

  	
   

  	
  Center Point II

  
	
  13.

  	
   

  	
  Independent Square (Modus
  Building)

  
	
  14.

  	
   

  	
  CBD Parking

  
	
  15.

  	
   

  	
  Interstate Northwest Business Park

  
	
  16.

  	
   

  	
  20 Technology Park

  
	
  17.

  	
   

  	
  3720 Davinci Court

  
	
  18.

  	
   

  	
  3740 Davinci Court

  
	
  19.

  	
   

  	
  Buschwood Park I

  
	
  20.

  	
   

  	
  Buschwood Park II

  
	
  21.

  	
   

  	
  Buschwood Park III

  
	
  22.

  	
   

  	
  Cypress IV Land

  
	
  23.

  	
   

  	
  Capital Plaza I

  
	
  24.

  	
   

  	
  Capital Plaza II

  
	
  25.

  	
   

  	
  Capital Plaza III

  
	
  26.

  	
   

  	
  Cypress Center I

  
	
  27.

  	
   

  	
  Cypress Center II

  
	
  28.

  	
   

  	
  Cypress Center III

  
	
  29.

  	
   

  	
  Cypress West

  
	
  30.

  	
   

  	
  One Orlando Centre

  
	
  31.

  	
   

  	
  280 Interstate North

  
	
  32.

  	
   

  	
  5660 New Northside Drive

  



 


1

















 


	
  33.

  	
   

  	
  Parkwood Point

  
	
  34.

  	
   

  	
  Deerfield Point I

  
	
  35.

  	
   

  	
  Deerfield Point II

  
	
  36.

  	
   

  	
  Windward Pointe 200

  
	
  37.

  	
   

  	
  100 Windward Plaza

  
	
  38.

  	
   

  	
  300 Windward Plaza

  
	
  39.

  	
   

  	
  Southhall Center

  
	
  40.

  	
   

  	
  Millenia Park One

  
	
  41.

  	
   

  	
  Beckrich One

  
	
  42.

  	
   

  	
  Beckrich Two

  
	
  43.

  	
   

  	
  Westshore 500

  
	
  44.

  	
   

  	
  International Plaza Four

  
	
  45.

  	
   

  	
  Millennium (10 Tenth Street)

  
	
  46.

  	
   

  	
  The Cornerstone Building at
  Peachtree Center

  
	
  47.

  	
   

  	
  Two Ravinia

  
	
  48.

  	
   

  	
  Bank of America Center

  
	
  49.

  	
   

  	
  2400 Maitland Center

  
	
  50.

  	
   

  	
  Interlachan Corporate Center

  
	
  51.

  	
   

  	
  500 Winderley Place

  
	
  52.

  	
   

  	
  Maitland Forum

  
	
  53.

  	
   

  	
  Maitland Park Center

  
	
  54.

  	
   

  	
  Westshore Corporate Center

  
	
  55.

  	
   

  	
  Primera V

  
	
  56.

  	
   

  	
  Southwood One

  



 


2

















 


EXHIBIT C

TO 

REPRESENTATION AND WARRANTY INDEMNIFICATION AGREEMENT


 


ENTITIES


 


ENTITY


 


	
  1. 

  	
   

  	
  ACP/DLF Cornerstone Venture LLC

  
	
  2. 

  	
   

  	
  ACP Committee LLC

  
	
  3. 

  	
   

  	
  ACP/Utah VIII LLC

  
	
  4. 

  	
   

  	
  ACP Primera Committee LLC

  
	
  5. 

  	
   

  	
  ACP/DLF Primera LLC

  
	
  6. 

  	
   

  	
  ACP/DLF Peachtree Center LLC

  
	
  7. 

  	
   

  	
  ACP Peachtree Committee LLC

  
	
  8. 

  	
   

  	
  ACP/URS Maitland LLC

  
	
  9. 

  	
   

  	
  ACP Westshore LLC

  
	
  10. 

  	
   

  	
  ACP Westshore Committee LLC

  
	
  11. 

  	
   

  	
  CAT-B Holdings Owner LLC

  
	
  12. 

  	
   

  	
  CAT-B Holdings LLC

  
	
  13. 

  	
   

  	
  JAX-ISQ Manager LLC

  
	
  14. 

  	
   

  	
  INW Holding LLC

  
	
  15. 

  	
   

  	
  DAV Holdings LLC

  
	
  16. 

  	
   

  	
  BSH Capital LLC

  
	
  17. 

  	
   

  	
  CYP4 Owner LLC

  
	
  18. 

  	
   

  	
  Deerwood Manager LLC

  
	
  19. 

  	
   

  	
  CAT-FLA Manager LLC

  
	
  20. 

  	
   

  	
  OOC Holdings Owner LLC

  
	
  21. 

  	
   

  	
  VFG Capital LLC

  
	
  22. 

  	
   

  	
  500 WS Fund III LLC

  
	
  23. 

  	
   

  	
  IP4 Holdings Owner LLC

  
	
  24. 

  	
   

  	
  ACP/Millennium Manager LLC

  
	
  25. 

  	
   

  	
  ACP Ravinia Manager LLC

  
	
  26. 

  	
   

  	
  MAIT Holdings Owner LLC

  
	
  27. 

  	
   

  	
  ACP/Millennium Holdings LLC

  



 


1

















 


EXHIBIT D

TO 

REPRESENTATION AND WARRANTY INDEMNIFICATION AGREEMENT


 


PLEDGE AGREEMENT


 


THIS PLEDGE AGREEMENT (this “Agreement”),
dated as of                             ,
20    , is entered into by and among Eola Property Trust
(the “Company”) and Eola Property Trust, L.P. (the “Operating
Partnership”), on the one hand, and James Heistand and Rodolfo Prio Touzet,
on behalf of themselves and as the representatives of the “Indemnitors” under
the Indemnification Agreement (collectively, the “Pledgors”), on the
other hand.


 


A.                                   All capitalized terms used, by not defined, herein shall have the
meanings ascribed such terms in the Indemnification Agreement (as defined
below).


 


B.                                     The Pledgors, the Company and the Operating Partnership have entered
into (i) a Contribution Agreement (the “Contribution Agreement”),
dated as of  October 5, 2010, by and
among the Operating Partnership, the Company and certain contributors party
thereto (including the Pledgors and/or entities affiliated with the Pledgors),
relating to the contribution of their interests in certain entities to the
Operating Partnership in exchange for common shares of beneficial interest, par
value $0.01, of the Company (“Common Shares”) and/or limited partnership
units of the Operating Partnership (“OP Units”), in each case, subject
to the terms and conditions of the Contribution Agreement, and (ii) a
Representation and Warranty Indemnification Agreement, dated as of October 5,
2010, by and among the Pledgors, the Operating Partnership and the Company,
relating to, among other things, certain representations and warranties of the
Pledgors with respect to the Properties and the entities that directly or indirectly
have an ownership interest in such Properties (the “Indemnification
Agreement”).


 


C.                                     As collateral security for the performance of the Pledgors’
indemnification obligations under Article 2 of the Indemnification
Agreement, the Pledgors have agreed to pledge a portion of the OP Units and
Common Shares received by each Pledgor (i) pursuant to the Eola
Contribution Agreement, and/or (ii) through any distribution (directly or
indirectly) to such Pledgor of any OP Units and/or Common Shares by any Contributor
(or direct or indirect owner thereof) (as to each Pledgor, such OP Units and
Common Shares, respectively, are referred to as the “Pledgor OP Units”
and the “Pledgor Common Shares”).


 


NOW, THEREFORE, in consideration of the
foregoing premises and the mutual undertakings set forth below and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


1.                                       Grant of Security Interest.  As collateral security for the payment of all
obligations under the Indemnification Agreement, each of the Pledgors hereby
pledges, assigns and grants to the Operating Partnership and the Company, for
their own benefit and for the benefit of each OP Indemnified Party, a first
priority lien on, and security interest in, (i) fifteen percent (15%) of
the total number of Pledgor OP Units and Pledgor Common Shares received by such
Pledgor as a result of the transactions contemplated by the Eola Contribution
Agreement, (ii) any additional OP Units and/or Common Shares that may be
acquired by such Pledgor in respect of such Pledgor OP Units and the Pledgor
Common Shares, (iii) all rights of such Pledgor in and to all
distributions in kind declared in respect of any or all of the foregoing, and (iv) subject
to Section 4, all proceeds and profits of any or all of the foregoing
(collectively, the “Collateral”).


 


1

















 


2.                                       Perfection of Security Interest.


 


(a)                                  For the purpose of perfecting the pledge of the security
interest granted by each of the Pledgors to the Operating Partnership and the
Company pursuant to Section 1, each Pledgor authorizes and directs (i) the
Operating Partnership, acting in its capacity as the issuer of the OP Units, to
register the pledge of the Pledgor OP Units on the books and records of the
Operating Partnership or to register the Operating Partnership as the
registered owner (for UCC perfection purposes only) of the Pledgor OP Units on
the appropriate books and records of the Operating Partnership, and (ii) the
Company, acting in its capacity as the issuer of the Common Shares, to register
the pledge of the Pledgor Common Shares on the books and records of the Company
or to register the Company as the registered owner (for UCC perfection purposes
only) of the Pledgor Common Shares on the appropriate books and records of the
Company.


 


(b)                                 In addition, at the request of the Operating Partnership
and/or the Company, each Pledgor will promptly join with the Operating
Partnership and/or the Company in executing financing statements, continuation
statements, assignments, certificates and other documents with respect to the
Collateral pursuant to the Uniform Commercial Code and otherwise as may be
reasonably requested by the Operating Partnership or the Company to enable the
Operating Partnership and the Company to perfect or from time to time to renew
the security interests granted hereby.


 


(c)                                  Each Pledgor grants the Operating Partnership and the
Company the right, at the Operating Partnership and the Company’s option, to
file any or all such financing statements, continuation statements and other
documents pursuant to the Uniform Commercial Code and otherwise, without such
Pledgor’s signatures, and irrevocably appoints each of the Company and the Operating
Partnership as such Pledgor’s attorneys-in-fact to execute any such statements
and documents in the Operating Partnership’s and/or the Company’s name and to
perform all other acts which the Operating Partnership and/or the Company deem
appropriate to perfect and continue the security interests conferred by this
Agreement.


 


3.                                       Pledgors Remain Liable.  Notwithstanding anything herein to the
contrary: (i) each Pledgor shall remain obligated, to the extent set forth
in the agreements (including, without limitation, the partnership agreement of
the Operating Partnership (the “OP Agreement”) and the Declaration of
Trust of the Company) under which it has received, or has rights or obligations
in respect of its ownership of, the Pledgor OP Units and/or the Pledgor Common
Shares (“Related Agreements”), to perform its duties and obligations
thereunder to the same extent as if this Agreement had not been executed; (b) the
exercise by the Operating Partnership and/or the Company of any of its rights
hereunder shall not release any Pledgor from any of its duties or obligations
under the Related Agreements, except to the extent that such duties and
obligations may have been terminated by reason of a sale, transfer or other
disposition of the Collateral pursuant hereto; and (c) the Operating
Partnership and the Company shall not by reason of this Agreement have any
obligations or liabilities under the Related Agreements, nor shall the
Operating Partnership or the Company be obligated to perform any of the
obligations or duties of any Pledgor under the Related Agreements or to take
any action to collect or enforce any claim for payment assigned hereunder.


 


4.                                       Voting Rights and Distributions.


 


(a)                                  Subject to the provisions of the Indemnification Agreement,
until the Collateral is applied to satisfy any obligation of the Pledgors under
the Indemnification Agreement (a “Secured Obligation”), each Pledgor
shall be entitled to exercise all voting rights with respect to the Collateral
and, for that purpose, the Operating Partnership and the Company shall (if such
Collateral is registered in the name of the Operating Partnership or the
Company) execute or cause to be executed from time to time, at


 


2

















 


the expense of the applicable
Pledgor, such proxies or other instruments in favor of the applicable Pledgor
or its nominee in such form and for such purposes as shall be reasonably
required and specified in writing by the applicable Pledgor, to enable the
applicable Pledgor to exercise such voting power with respect to such
Collateral.


 


(b)                                 Until the Operating Partnership and the Company reasonably
determine that the outstanding OP Claims asserted by the OP Indemnified Parties
in one or more Claim Notice may equal or exceed the value of the Collateral
then-available to satisfy such OP Claims, each Pledgor shall be entitled to
receive and retain for its own account any and all regular cash distributions
(but not distributions in the form of any additional OP Units and/or Common
Shares or other securities, distributions in kind or liquidating distributions,
all of which shall be delivered and applied in accordance with Section 5
hereof) and interest at any time and from time to time paid upon any of the
Collateral.


 


5.                                       Extraordinary Payments and Distributions.  In case, upon the
dissolution or liquidation (in whole or in part) of the Operating Partnership
and/or the Company, any sum shall be paid as a liquidating distribution or
otherwise upon or with respect to any of the Collateral, such sum shall be paid
over to the Operating Partnership and/or the Company promptly, and in any event
within 10 days after receipt thereof, to be held by the Operating Partnership
and/or the Company as additional Collateral hereunder.  In case any distribution of any additional OP
Units and/or Common Shares shall be made with respect to the Collateral, or any
additional OP Units and/or Common Shares or fractions thereof shall be issued
pursuant to any split involving any of the Collateral, or any distribution of
capital shall be made on any of the Collateral, or any partnership interests,
shares, obligations or other property shall be distributed upon or with respect
to the Collateral pursuant to a recapitalization or reclassification of the
capital of the Operating Partnership and/or the Company, or pursuant to the
dissolution, liquidation (in whole or in part), bankruptcy or reorganization of
the Operating Partnership and/or the Company, or pursuant to the merger or
consolidation of the Operating Partnership and/or the Company with or into
another entity, a security interest in such partnership interests, shares,
obligations or other property so distributed shall be perfected in accordance
with Section 2 of this Agreement or paid to the Operating Partnership or
the Company as provided in this Section 5, in each case, promptly, and in
any event within 10 days after receipt thereof, to be held by the Operating
Partnership and/or the Company as additional Collateral hereunder, and all of
the same (other than cash) shall constitute Collateral for all purposes hereof.


 


6.                                       Pledgor Obligations Not Affected.  The obligations of
each Pledgor hereunder shall remain in full force and effect and shall not be
impaired by:


 


(a)                                  any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Pledgor;


 


(b)                                 any amendments to or modifications of any instrument (other
than this Agreement) securing any of the Secured Obligations;


 


(c)                                  the taking of additional security for, or any guaranty of,
any of the Secured Obligations or the release or discharge or termination of
any security or guaranty for any of the Secured Obligations; or


 


(d)                                 the lack of enforceability of any of the Secured Obligations against
such Pledgor or any other Person, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.


 


3














 


7.                                       Voting Rights and Certain Payments After Occurrence of
Secured Obligation and Certain Other Events.


 


(a)                                  At such time that the Operating Partnership and the Company
are entitled under this Agreement to apply any Collateral to satisfy a Secured
Obligation hereunder, all rights of any Pledgor to exercise or refrain from
exercising all voting power with respect to such Collateral and to otherwise
exercise all ownership rights arising from such Collateral shall cease, and
thereupon the Operating Partnership and the Company shall be entitled to
exercise all voting power with respect to such Collateral and otherwise
exercise such ownership rights as though the Operating Partnership and/or the
Company were the outright owner of such Collateral.  In the event that the Operating Partnership
and/or the Company reasonably determines that the outstanding claims asserted
by the OP Indemnified Parties in one or more Claim Notices may equal or exceed
the value of the Collateral then-available to satisfy such claims, each Pledgor
shall no longer be the owner of such Collateral for tax purposes and all rights
of each such Pledgor to receive and retain the distributions and interest which
it would otherwise be authorized to receive and retain pursuant to Section 4
hereof shall cease, and thereupon the Operating Partnership and the Company
shall be entitled to receive and retain, as additional Collateral hereunder,
any and all distributions and interest at any time and from time to time paid
upon any of such Collateral, provided that, concurrent with making such
determination, the Operating Partnership and the Company gives notice thereof
to each such Pledgor.


 


(b)                                 All payments, distributions or other property or assets that
are received by any Pledgor contrary to the provisions of paragraph (a) of
this Section 7 shall be received and held in trust for the benefit of the
Operating Partnership and the Company, shall be segregated from other funds of
such Pledgor and shall be forthwith paid over to the Operating Partnership and
the Company.


 


(c)                                  For purposes of this Agreement, any consent, approval,
waiver, notification or other action required or permitted to be taken by the
Pledgors under this Agreement may be taken by a representative of the Pledgors,
as may be designated by the Pledgors in writing to the Operating Partnership
and the Company, as an authorized representative of the Pledgors for purposes
of this Agreement.


 


8.                                       Application of Cash Collateral.  Any cash received
and retained by the Operating Partnership and/or the Company as additional
Collateral pursuant to Section 5 may at any time and from time to time be
applied (in whole or in part) by the Operating Partnership and/or the Company,
at their option, to the satisfaction of (or as reimbursement of amounts
previously paid with respect to) the Secured Obligations which such Collateral
secures (in such order as the Operating Partnership and/or the Company shall,
in their sole discretion determine), if and to the extent any such payment is
required hereunder.


 


9.                                       Application of Proceeds.  Except as otherwise expressly provided
herein, any cash received and retained pursuant to Section 5 shall be
applied by the Operating Partnership and/or the Company:  first to the satisfaction in full of (or as
reimbursement of amounts previously paid with respect to) the Secured
Obligations in accordance with the terms of this Agreement and the
Indemnification Agreement, if and to the extent any such payment is required
hereunder; and then, to the payment to each Pledgor, or its successors or
assigns or as a court of competent jurisdiction may direct, of any surplus then
remaining.


 


10.                                 Remedies with Respect to Collateral.


 


(a)                                  If any Pledgor fails to pay or perform any Secured
Obligation when due, the Operating Partnership and/or the Company, without
obligation to resort to any other security (other than


 


4

















 


insurance
proceeds, if any, as contemplated in Section 2.3(c) of the
Indemnification Agreement), shall have the right at any time and from time to
time to receive all or any part of the Collateral with a value equal to the
amount of such Secured Obligation, and all right, title and interest, claim and
demand therein and right of redemption thereof and to sell the Collateral in
any manner permitted by the Uniform Commercial Code as in effect in the State
of Delaware (the “UCC”).


 


(b)                                 Notwithstanding anything to the contrary in this Agreement,
the sole recourse of the Operating Partnership and the Company against any
Pledgor for the Secured Obligations and the obligations of each such Pledgor
under this Agreement is limited to the rights of such Pledgor in any such
Collateral that is applied to satisfy a Secured Obligation.  The parties hereto acknowledge and agree that
the Pledgor OP Units and/or the Pledgor Common Shares pledged by each Pledgor
pursuant to the terms of this Agreement shall be released to satisfy the
obligations under this Agreement on a pro rata basis from each Pledgor based on
such Pledgor’s Pro Rata Share (as defined in the Indemnification Agreement).


 


(c)                                  No demand, advertisement or notice, all of which are hereby
expressly waived, shall be required in connection with any transfer of
Collateral to the Operating Partnership and/or the Company pursuant to this
Agreement.


 


(d)                                 Each of the Pledgors, the Company and the Operating
Partnership agree to treat, to the extent permitted by applicable law, any
application of the Collateral in discharge of any Secured Obligations as a
non-taxable adjustment to the portion of the consideration received by any such
Pledgor as a result of the transactions contemplated by the Contribution
Agreement in the form of OP Units and/or Common Shares for U.S. federal income
tax purposes.


 


(e)                                  The rights of
the Operating Partnership and the Company under this Agreement shall not be
conditioned or contingent upon the pursuit by the Operating Partnership or the
Company of any right or remedy against the Operating Partnership or the Company
or against any other Person which may be or become liable in respect of all or
any part of the Secured Obligations or against any other security therefor,
guarantee thereof or right of offset with respect thereto.  Neither the Operating Partnership nor the
Company shall be liable for any failure to demand, collect or realize upon all
or any part of the Collateral or for any delay in doing so, nor shall it be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgors or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.


 


(f)                                    The Pledgors
recognize that the Operating Partnership and the Company may be unable to
effect a public sale of the Collateral by reason of certain provisions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws and, under the circumstances then existing, may reasonably
resort to a private sale to a registered group of purchasers who will be
obliged to agree, among other things, to acquire the Collateral for their own
account for investment and not with a view to the distribution or resale of the
Collateral.  The Pledgors agree that a
private sale so made may be at a price and on other terms less favorable to the
seller than if the Collateral were sold at public sale and that the Operating
Partnership and the Company shall have no obligation to delay sale of the
Collateral for the period of time necessary to permit the Pledgors, even if the
Pledgors would agree, to register or qualify the Collateral for public sale under
the Securities Act of 1933, as amended, and applicable state securities
laws.  The Pledgors agree that a private
sale made under the foregoing circumstances and otherwise in a commercially
reasonable manner shall be deemed to have been made in a commercially
reasonable manner under the UCC.


 


11.                                 Care of
Collateral.  The Operating Partnership and the Company shall have no duty as to the
collection or protection of the Collateral or any income thereon or as to the
preservation of any rights


 


5

















 


pertaining thereto, beyond the safe custody of any
thereof actually in its possession.  With
respect to any maturities, calls, conversions, exchanges, redemptions, offers,
tenders or similar matters relating to any of the Collateral (herein called “events”),
the Operating Partnership’s and the Company’s duties shall be fully satisfied
if (i) the Operating Partnership or the Company, as applicable, exercises
reasonable care to ascertain the occurrence and to give reasonable notice to
each Pledgor of any events applicable to any Collateral which are registered
and held in the name of the Operating Partnership or the Company, or its
nominee, (ii) the Operating Partnership or the Company gives each Pledgor
reasonable notice of the occurrence of any events, of which the Operating
Partnership or the Company, as applicable, has received actual knowledge, as to
any securities which are in bearer form or are not registered and held in the
name of the Operating Partnership or the Company, as applicable, or its nominee
(each such Pledgor agreeing to give the Operating Partnership and the Company
reasonable notice of the occurrence of any events applicable to any securities
in the possession of the Operating Partnership or the Company of which any such
Pledgor has received knowledge), and (iii) (a) the Operating
Partnership and the Company endeavor to take such action with respect to any of
the events as any Pledgor may reasonably and specifically request in writing in
sufficient time for such action to be evaluated and taken, or (b) if the
Operating Partnership and the Company reasonably determine that the action
requested might adversely affect the value of the Collateral, the collection of
the Secured Obligations, or otherwise prejudice the interests of the Operating
Partnership or the Company, the Operating Partnership or the Company gives
reasonable notice to the applicable Pledgor that any such requested action will
not be taken and if the Operating Partnership or the Company makes such
determination or if the applicable Pledgor fails to make such timely request,
the Operating Partnership or the Company takes such other action as it deems
advisable in the circumstances.  Except
as hereinabove specifically set forth, the Operating Partnership and the
Company shall have no further obligation to ascertain the occurrence of, or to
notify any Pledgor with respect to, any events and shall not be deemed to
assume any such further obligation as a result of the establishment by the
Operating Partnership or the Company of any internal procedures with respect to
any Collateral in its possession.  Except
for any claims, causes of action or demands arising out of the Operating
Partnership or the Company’s failure to perform its agreements set forth in
this section, each Pledgor releases the Operating Partnership and the Company
from any claims, causes of action and demands at any time arising out of or
with respect to this Agreement, the Collateral and/or any actions taken or
omitted to be taken by the Operating Partnership or the Company with respect
thereto, and each Pledgor hereby agrees to hold the Operating Partnership and
the Company harmless from and with respect to any and all such claims, causes
of action and demands.


 


12.                                 Power of
Attorney.  Each Pledgor hereby appoints the Operating Partnership and the Company to act
during the Indemnification Period as such Pledgor’s attorneys-in-fact for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Operating Partnership and/or the Company
reasonably may deem necessary or advisable to accomplish the purposes
hereof.  Without limiting the generality
of the foregoing, during the Indemnification Period, the Operating Partnership
and/or the Company shall have the right and power (a) upon application of
any Collateral to satisfy a Secured Obligation, to receive, endorse and collect
all checks and other orders for the payment of money made payable to any
Pledgor representing any interest or other distribution payable in respect of
such Collateral or any part thereof and to give full discharge for the same,
and (b) to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Collateral; provided,  that the Operating Partnership and/or the Company shall
provide written notice to each applicable Pledgor reasonably prior to taking
any such action under the foregoing clauses (a) and (b).


 


13.                                 Representations and Warranties of Pledgors.  Each Pledgor represents and
warrants that (i) it or he has all requisite power and authority or
capacity, as applicable, to enter into this Agreement and to carry out the
transactions contemplated by this Agreement, (ii) this Agreement has been
duly executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor, enforceable in accordance with its terms,
and (iii) except for the security interest granted to the Operating


 


6

















 


Partnership and the Company hereunder, such Pledgor
is the owner of all legal and beneficial interests in the Pledgor OP Units
and/or the Pledgor Common Shares set forth on Schedule A hereto, owning
such interests free and clear of any Liens.


 


14.                                 Covenants of Pledgors.  Each Pledgor hereby covenants that, until the
release of the Collateral from the pledge granted hereunder pursuant to the
terms of the Indemnification Agreement, he or it shall (i) defend the
Operating Partnership’s and/or the Company’s, as the case may be, right, title
and security interest in and to the Collateral against the claims of any
Person, (ii) at any time, and from time to time, upon the written request
of the Operating Partnership and/or the Company, execute and deliver such
further documents and do such further acts and things as the Operating
Partnership and/or the Company may reasonably request to effect the purposes of
this Agreement, (iii) not grant or convey any Lien on all or any portion
of the Collateral or any interest therein other than the Lien contemplated by
this Agreement, (iv) not sell, assign, pledge or transfer the Collateral
without the prior written consent of the Operating Partnership and the Company
which the Operating Partnership and the Company may grant or withhold in their
sole and absolute discretion, (v) cooperate fully with the Operating
Partnership and the Company in their efforts to preserve the Collateral and to
take such actions to preserve the Collateral as the Operating Partnership and
the Company may in good faith direct, and (vi) deliver immediately any
certificates that may be issued following the date of this Agreement
representing Pledgor Common Shares and/or Pledgor OP Units or other Collateral,
and to execute and deliver one or more transfer powers, in form and content
reasonably satisfactory to the Operating Partnership or the Company (as
directed) to which the Pledgors assign, in blank, such Pledgor Common Shares
and/or Pledgor OP Units and other Collateral.


 


15.                                 Termination.  This Agreement, and the pledge granted
hereunder, shall terminate at the end of the Indemnification Period in
accordance with the terms of the Indemnification Agreement (the “Termination
Date”).  Upon termination of the
Indemnification Period, each Pledgor shall be entitled to, and the Operating
Partnership and the Company promptly shall effect, the return to the applicable
Pledgor of all of the Collateral (and all other cash held as additional
Collateral hereunder) of such Pledgor that has not been used or applied toward
the satisfaction of the Secured Obligations in accordance with the terms hereof
(it being understood, for the sake of clarity, that all Collateral not so used
or applied shall become subject to the foregoing return obligation on and as of
the day following the Termination Date). 
The Operating Partnership and the Company shall take all reasonable
actions to effect and evidence the return of Collateral under this Section 15,
including, without limitation, the filing of UCC termination statements with respect
to, the removal of the recorded pledge on the books of the Operating
Partnership or the Company, as the case may be, and the return to the
applicable Pledgor of certificates, if any, representing the Pledgor OP Unit or
the Pledgor Common Shares of such Pledgor comprising such Collateral.  The assignment by the Operating Partnership
and/or the Company to each applicable Pledgor of such Collateral shall be
without representation or warranty of any nature whatsoever and wholly without
recourse.  Notwithstanding the foregoing,
each Pledgor’s release of the Operating Partnership and/or the Company and
agreement to hold the Operating Partnership and/or the Company harmless set
forth in the last sentence of Section 11 shall survive any return of
Collateral or termination of this Agreement.


 


16.                                 Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and it shall not be
necessary in making proof of this Agreement or the terms of this Agreement to
produce or account for more than one of such counterparts.  All counterparts shall constitute one and the
same instrument.  Each party may execute
this Agreement via a facsimile (or transmission of a .pdf file) of this
Agreement.  In addition, facsimile or .pdf
signatures of authorized signatories of the parties shall be valid and binding
and delivery of a facsimile or .pdf signature by any party shall constitute due
execution and delivery of this Agreement.


 


7

















 


17.                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without regard to the choice of laws provisions thereof.


 


18.                                 No Waiver.                                   No failure on the part of the Operating Partnership or the Company to
exercise, and no delay on the part of the Operating Partnership or the Company
in exercising, any of its options, powers, rights or remedies hereunder, or
partial or single exercise thereof, shall constitute a waiver thereof or preclude
any other or further exercise thereof or the exercise of any other option,
power, right or remedy.


 


19.                                 Assignment.  This Agreement and all of the provisions
hereof shall be binding upon, and shall be enforceable by and inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns and any reference to a party
shall also be a reference to an heir, legal representative, successor or
permitted assign; provided, however, that this Agreement may not
be assigned (except by operation of law) by any Pledgor without the prior
written consent of the Operating Partnership and the Company, and any attempted
assignment without such consent shall be void and of no effect.  Notwithstanding anything to the contrary
herein, the Operating Partnership and the Company may assign their rights and
obligations hereunder to any affiliate without the prior written consent of the
other parties hereto.


 


20.                                 Titles.  The titles and captions of the Sections and
paragraphs of this Agreement are included for convenience of reference only and
shall have no effect on the construction or meaning of this Agreement.


 


21.                                 Third Party Beneficiary.  Except as may be expressly provided or
incorporated by reference herein, no provision of this Agreement is intended,
nor shall it be interpreted, to provide or create any third party beneficiary
rights or any other rights of any kind in any customer, affiliate, shareholder,
partner, member, director, officer or employee of any party hereto or any other
Person.  All provisions hereof shall be
personal solely among the parties to this Agreement.


 


22.                                 Severability.  If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other Persons or circumstances shall be interpreted so as
reasonably to effect the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that shall achieve, to the extent possible, the economic, business
and other purposes of the void or unenforceable provision and to execute any
amendment, consent or agreement deemed necessary or desirable to effect such
replacement.  To the extent permitted by
applicable law, the parties waive any provision of applicable law which renders
any provision of this Agreement unenforceable in any respect.


 


23.                                 Interpretation.  This Agreement shall be read and construed in
the English language.  As used in this
Agreement, any reference to the masculine, feminine or neuter gender shall
include all genders, the plural shall include the singular, and singular shall
include the plural.  References herein to
a party or other Person include their respective successors and assigns.  The words “include,” “includes” and “including”
when used herein shall be deemed to be followed by the phrase “without
limitation” unless such phrase otherwise appears.  Unless the context otherwise requires,
references herein to articles, sections, schedules, exhibits and attachments
shall be deemed references to articles and sections of, and schedules, exhibits
and attachments to, this Agreement. 
Unless the context otherwise requires, the words “hereof,” “hereby” and “herein”
and words of similar meaning when used in this Agreement refer to this
Agreement in its entirety and not to any particular article, section or
provision hereof.  Except when used
together with the word “either” or otherwise for the purpose of identifying
mutually exclusive alternatives, the term “or” has the inclusive meaning
represented by the phrase “and/or.”  Any
deadline or time period


 


8

















 


set forth in this Agreement that by its terms ends
on a day that is not a Business Day shall be automatically extended to the next
succeeding Business Day.  All references
in this Agreement to “dollars” or “$” shall mean United States dollars.  With regard to each and every term and
condition of this Agreement, the parties understand and agree that the same
have or has been mutually negotiated, prepared and drafted, and that if at any
time the parties desire or are required to interpret or construe any such term
or condition or any agreement or instrument subject thereto, no consideration
shall be given to the issue of which Party actually prepared, drafted or
requested any term or condition of this Agreement.


 


24.                                 Notices.  All notices, requests, demands, waivers and
communications required or permitted to be given under this Agreement shall be
in writing signed by or on behalf of the party making such notice, request,
demand, waiver or communication and shall be deemed to be given (i) on the
day delivered (or if that day is not a Business Day, or if delivered after the
close of business on a Business Day, on the next day that is a Business Day)
when delivered by personal delivery or overnight courier, (ii) on the
third Business Day after mailed by registered or certified mail, postage
prepaid, return receipt requested, or (iii) upon transmission when sent by
facsimile transmission or email transmission (provided that such facsimile or
email is followed by an original of such notice by mail or personal delivery as
provided herein).  Mailed notices shall
be addressed as set forth below, but any party may change the address set forth
below by written notice to other parties in accordance with this paragraph.


 


To the Pledgors:


 


c/o Eola Capital LLC

390 N. Orange Avenue, Suite 2400

Orlando, Florida 32801

Phone: (407) 650-0593

Facsimile:  (407) 650-0597

Email: JHeistand@eolacapital.com and RTouzet@eolacapital.com

Attn:  James Heistand and Rodolfo Prio
Touzet


 


To the Operating Partnership or the Company:


 


c/o Eola Capital LLC

390 N. Orange Avenue, Suite 2400

Orlando, Florida 32801

Phone: (407) 650-0593

Facsimile:  (407) 650-0597

Email: DOReilly@eolacapital.com

Attn:  David O’Reilly


 


with a copy to:


 


Hogan Lovells US LLP

555 Thirteenth Street, N.W.

Washington, DC 20004

Phone: (202) 637-5868

Facsimile: (202) 637-5910

Email: david.bonser@hoganlovells.com

Attn: David W. Bonser


 


9

















 


26.                                 Enforcement Costs.  Should the Operating Partnership and/or the
Company, on the one hand, or one or more Pledgors, on the other hand, institute
any Proceeding to enforce the terms of this Agreement, the prevailing party
shall be entitled to receive all reasonable costs and expenses (including
reasonable attorneys’ fees) incurred by such prevailing party in connection
with such Proceeding.  A party entitled
to recover costs and expenses under this Section shall also be entitled to
recover all costs and expenses (including reasonable attorneys’ fees) incurred
in the enforcement of any judgment or settlement obtained in such Proceeding
(and in any such judgment provision shall be made for the recovery of such
post-judgment costs and expenses).


 


27.                                 Amendment; Waiver.  Any amendment hereto shall be in writing and
signed by all parties hereto.  No waiver
of any provisions of this Agreement shall be valid unless in writing and signed
by the party against whom enforcement is sought.  The waiver by any party of the performance of
any act shall not operate as a waiver of the performance of any other act or an
identical act required to be performed at a later time.  Consistent with the foregoing, the waiver by
the Operating Partnership and the Company of any provision of this Agreement
with respect to a particular Pledgor shall not constitute a waiver with respect
to any other Pledgor or otherwise effect the rights and obligations hereunder
with respect to any other Pledgor. 
Except as otherwise provided herein, no action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance
with any representations, warranties, covenants or agreements contained in this
Agreement.


 


[Signature Page Follows]


 


10

















 


IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first written above.


 


	
   

  	
  OPERATING PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  EOLA PROPERTY TRUST, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:     EOLA
  PROPERTY TRUST,

  
	
   

  	
  a
  Maryland  real estate investment trust

  
	
   

  	
   

  
	
   

  	
  Its:  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  EOLA PROPERTY TRUST, a Maryland
  real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLEDGORS

  



 

















 


SCHEDULE
A


 


TO


 


PLEDGE
AGREEMENT


 


PLEDGOR
OP UNITS AND PLEDGOR COMMON SHARES


 


	
  PLEDGOR

  	
   

  	
  PLEDGOR OP UNITS AND/OR PLEDGOR

  COMMON SHARES