Document:

Exhibit
4.2

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is made and entered into as of [             
], 2010 by and between Eola Property Trust, a Maryland real estate
investment trust (the “Company”), and the holders listed on Schedule I hereto (each an “Initial Holder” and,
collectively, the “Initial Holders”).

 

WHEREAS, the Company and Eola Property Trust, L.P.,
a Delaware limited partnership (the “Operating Partnership”), of which
the Company is the sole general partner, are engaging in various related
transactions pursuant to which, among other things, the Company will effect an
initial public offering of its common shares, par value $0.01 per share (the “Common
Shares”), and contribute the proceeds therefrom for a like number of units
of partnership interest (“OP Units”) in the Operating Partnership (such
transactions, the “IPO Transactions”);

 

WHEREAS, in connection with the IPO Transactions,
the Company and the Operating Partnership have concurrently engaged in certain
formation transactions pursuant to which, among other things, the Initial
Holders have received, in exchange for their (or certain related parties’)
respective interests in the properties or entities participating in the
formation transactions or in exchange for services rendered, OP Units (the “Private
Placement Units”) and/or Common Shares (the “Private Placement Shares”),
in each case as set forth on Schedule I hereto; and

 

WHEREAS, the Company has agreed to grant to the
Initial Holders (and their permitted assignees and transferees) the
registration rights described in this Agreement (the “Registration Rights”).

 

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

 

SECTION
1.                            REGISTRATION RIGHTS

 

1.1                                 Issuer
Registration Statement.

 

Subject to Section 1.3 hereof, the
Company shall cause to be filed, during the period beginning fifteen (15) days
prior to the date the Holders (as defined below) are first permitted to redeem
their Private Placement Units pursuant to the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated as of [                     ],
2010, as amended (the “Operating Partnership Agreement”), and ending
fifteen (15) days thereafter, with the Securities and Exchange Commission (the “Commission”)
a registration statement and related prospectus (the “Issuer Registration
Statement”) that complies as to form in all material respects with
applicable Commission rules providing for the registration of the Registrable
Securities (as defined below) that may be issued to such Holders upon
redemption of Private Placement Units held by such Holders (the “Redemption
Shares”).  The Company agrees
(subject to Section 1.3 hereof) to use commercially reasonable efforts
to cause the Issuer Registration Statement to be declared effective by the
Commission as soon as practicable.

 

 

Subject to Section 1.3 hereof, the
Company agrees to use commercially reasonable efforts to keep any Issuer
Registration Statement continuously effective (including the preparation and
filing of any amendments and supplements necessary for that purpose) until the
date on which no such Holder owns any Private Placement Units.  In the event that the Registrable Securities
are issued to any Holder by the Company pursuant to an Issuer Registration
Statement, the Company shall be deemed to have satisfied all of its
registration obligations under this Agreement in respect of such Registrable
Securities.

 

As used in this Agreement, (i) “Registration
Statement” and “Prospectus” refer to an Issuer Registration
Statement and related prospectus (including any preliminary prospectus) and a
Demand Registration Statement (as defined in Section 1.2) and related
prospectus (including any preliminary prospectus), whichever is utilized by the
Company to satisfy a Holder’s Registration Rights under this Agreement, including,
in each case, any documents incorporated therein by reference, (ii) “Registrable
Securities” refer to the Common Shares issued to a Holder with respect to
the Private Placement Units, the Private Placement Shares and any Common Shares
issued to a Holder with respect to the Redemption Shares or the Private
Placement Shares by way of share dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise and any Common Shares or voting common shares
issuable upon conversion, exercise or exchange thereof, and (iii) “Holder”
refers to (a) any Initial Holder who is the record or beneficial owner of any
Registrable Security or (b) any assignee or transferee of such Initial Holder
(including assignments or transfers of Registrable Securities to such assignees
or transferees as a result of the foreclosure on any loans secured by such
Registrable Securities) (x) to the extent permitted under the Operating
Partnership Agreement or the Articles of Amendment and Restatement of
Declaration of Trust of the Company, dated as of [              ], 2010, as amended (the “Charter”),
as applicable, and (y) provided such assignee or transferee agrees in writing
to be bound by the all the provisions hereof. Notwithstanding the foregoing
definition of “Holder” or anything else to the contrary in this Agreement, in
the case of the Initial Holders designated on Schedule I hereto as the “DLF
Initial Holders”, the only assignees or transferees of such DLF Initial Holders
that are permitted to constitute “Holders” for purposes of this Agreement shall
be the following existing members of the DLF Initial Holders:  KC Beteiligungs GmbH; KC Verwaltungs GmbH;
and DLF-Immobilienportfolio-KC Beteiligungs GmbH & Co KG (each such
existing member of the DLF Initial Holders that becomes a Holder hereunder
pursuant to the preceding sentence, together with the DLF Initial Holders, the “DLF
Holders”).

 

1.2                                 Demand
Registration Rights.

 

(a)                                  Subject
to Sections 1.2(d) and 1.3 hereof, at any time after the date
that is 365  days after the closing date of
the Company’s initial public offering (the “IPO Closing Date”) (or, in
the case of a Large Holder (as defined below), at any time after the date that
is 180  days after the IPO Closing Date), each
Holder may deliver to the Company a written notice (a “Demand Registration
Notice”) informing the Company of such Holder’s desire to have some or all
of its Registrable Securities registered for resale and specifying the number of
Registrable Securities to be registered by the Company (a “Demand
Registration”).  Upon receipt of a
Demand Registration Notice from a Holder requesting registration of the lesser
of (i) one million (1,000,000)  Registrable
Securities or (ii) all of such Holder’s Registrable Securities, if the

 

2

 

Company has not already caused such Registrable
Securities to be included as part of an existing shelf registration statement
and related prospectus that the Company then has on file with, and which has
been declared effective by, the Commission and which remains in effect and not
subject to any stop order, injunction or other order or requirement of the
Commission (in which event the Company shall be deemed to have satisfied its
registration obligation under this Section 1.2 with respect to such
Registrable Securities), then the Company shall cause to be filed with the
Commission as soon as reasonably practicable after receiving the Demand
Registration Notice, but in no event more than sixty (60) days following
receipt of such notice, a new registration statement and related prospectus
(any such registration statement used to satisfy the Company’s obligations
under this Section 1.2, the “Demand Registration Statement”) that
complies as to form in all material respects with applicable Commission rules
providing for the sale by such Holder or group of Holders of such Registrable
Securities.  The Company agrees (subject
to Section 1.3 hereof) to use commercially reasonable efforts to cause
the Demand Registration Statement to be declared effective by the Commission as
soon as practicable.

 

As used in this Agreement, “Large Holder”
refers to any Holder who is the record or beneficial owner of at least two
million (2,000,000) Registrable Securities; it being understood that, in the
case of the DLF Holders, any one or more of the DLF Holders who are
collectively the record or beneficial owner of at least two million (2,000,000)
Registrable Securities shall be deemed to collectively constitute a “Large
Holder” for purposes of Section 1.2 if such DLF Holders otherwise collectively
request registration of at least one million (1,000,000)  Registrable
Securities pursuant to Section 1.2(a).

 

Subject to Section 1.3 hereof, the Company
agrees to use commercially reasonable efforts to keep any Demand Registration
Statement continuously effective (including the preparation and filing of any
amendments and supplements necessary for that purpose) until the earlier of (i)
the date that is two (2) years after the date of effectiveness of such Demand
Registration Statement, (ii) the date on which all of the Registrable
Securities covered by such Demand Registration Statement are eligible for sale
without registration pursuant to Rule 144 (or any successor provision) under
the Securities Act of 1933, as amended (the “Securities Act”), without
volume limitations or other restrictions on transfer thereunder, or (iii) the
date on which the Holder or Holders consummate the sale of all of the Registrable
Securities registered under such Demand Registration Statement.  Notwithstanding the foregoing, the Company
may at any time (including, without limitation, prior to or after receiving a
Demand Registration Notice from a Holder), in its sole discretion, include all
additional Registrable Securities then outstanding or any portion thereof in
any registration statement, including by virtue of adding such Registrable
Securities as additional securities to an Issuer Registration Statement, a
Demand Registration Statement or an existing shelf registration statement
pursuant to Rule 462(b) under the Securities Act (in which event the Company
shall be deemed to have satisfied its registration obligation under this Section
1.2(a) with respect to the Registrable Securities so included, so long as
such registration statement remains effective and not the subject of any stop
order, injunction or other order of the Commission).

 

(b)                                 Notice
to Holders.  Upon receipt of a valid Demand Registration
Notice from a Large Holder during the period commencing on the date that is 180
days after the IPO Closing Date and ending on the date that is 365 days after
the IPO Closing Date, the Company

 

3

 

shall give written notice of the proposed filing of
the Demand Registration Statement to all other Large Holders as soon as
practicable, and each Large Holder who wishes to participate in such Demand
Registration Statement shall notify the Company in writing within five
(5) Business Days after the receipt by the Large Holder of the notice from
the Company, and shall specify in such notice the number of Registrable
Securities to be included in the Demand Registration Statement.  Upon receipt of a valid Demand Registration
Notice at any time after the date that is 365 days after the IPO Closing Date,
the Company shall give written notice of the proposed filing of the Demand
Registration Statement to all other Holders as soon as practicable, and each
Holder who wishes to participate in such Demand Registration Statement shall
notify the Company in writing within five (5) Business Days after the
receipt by the Holder of the notice from the Company, and shall specify in such
notice the number of Registrable Securities to be included in the Demand
Registration Statement.

 

(c)                                  Offers
and Sales.  All offers and sales of Registrable
Securities covered by a Demand Registration Statement by the Holder thereof
shall be completed within the period during which such Demand Registration
Statement remains effective and not the subject of any stop order, injunction
or other order of the Commission.  Upon
notice that such Demand Registration Statement is no longer effective, no
Holder will offer or sell the Registrable Securities covered by such Demand
Registration Statement.  If directed in
writing by the Company, each Holder will return all undistributed copies of the
related Prospectus in such Holder’s possession upon the expiration of such
period.

 

(d)                                 Limitations
on Demand Registration Rights.  The Holders, collectively and as a group,
shall be entitled to an unlimited number of exercises of the Registration
Rights under Section 1.2(a); provided, however, that the
Holders, collectively and as a group, shall not be permitted to exercise such
Registration Rights more than once in any consecutive six month period and the
Company shall not be obligated to effect any Demand Registration Statement
within six months after the effective date of a previous Demand Registration
Statement.  Notwithstanding the foregoing,
if a Registration Statement has not been declared effective by the Commission
within 120 days after the original filing date or is suspended for more
than 90 days at any one time, the Holders shall be deemed not to have
exercised their Registration Rights under Section 1.2(a).  Each Holder’s Registration Rights granted
pursuant to this Section 1.2 shall expire upon the date on which all of
such Holder’s Registrable Securities are eligible for sale without registration
pursuant to Rule 144 (or any successor provision) under the Securities Act
without volume limitations or other restrictions on transfer thereunder.  The Registration Rights granted pursuant to
this Section 1.2 may not be exercised in connection with any
underwritten public offering by the Company or by any Holder without the prior
written consent of the Company.

 

(e)                                  Black-Out
Period. 
Each Holder hereby agrees that it shall not, to the extent requested by
the Company or an underwriter of securities of the Company, directly or
indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any Registrable Securities
(other than to donees or affiliates of such Holder who agree to be similarly
bound) within seven (7) days prior to and for up to ninety (90) days, in the
event of any subsequent offering, following the effective date of a
registration statement of the Company filed under the Securities Act or the
date of an underwriting

 

4

 

agreement with respect to an underwritten public
offering of the Company’s securities (the “Black-Out Period”); provided,
however, that:

 

(i)                                     with
respect to the Black-Out Period, such agreement shall not be applicable to the
Registrable Securities to be sold on such Holder’s behalf to the public in an
underwritten offering pursuant to such registration statement;

 

(ii)                                  all
executive officers and trustees of the Company then holding Common Shares shall
enter into similar agreements;

 

(iii)                               the
Company shall use commercially reasonable efforts to obtain similar agreements
from each 10% or greater shareholder of the Company; and

(iv)                              such
Holder shall be allowed any concession or proportionate release allowed to any
officer, trustee or other 10% or greater shareholder of the Company that
entered into similar agreements.

 

In order to enforce the foregoing covenant,
the Company shall have the right to place restrictive legends on the
certificates representing the Registrable Securities subject to this Section
1.2(e) and to impose stop transfer instructions with respect to the
Registrable Securities and such other Common Shares of any Holder (and the
Common Shares or securities of every other person subject to the foregoing
restriction) until the end of such period.

 

1.3                                 Suspension
of Offering.

 

(a)                                  Notwithstanding
Sections 1.1 or 1.2 hereof, the Company shall be entitled to
postpone the filing of a Registration Statement, and from time to time to
require Holders not to sell under a Registration Statement or to suspend the
effectiveness thereof, if (i) the Company is actively pursuing an
underwritten primary offering of equity securities, or (ii) the
negotiation or consummation of a transaction by the Company or its subsidiaries
is pending or an event has occurred, which negotiation, consummation or event
would require additional disclosure by the Company in the Registration
Statement of material information which the Company has a bona fide business
purpose for keeping confidential and the non-disclosure of which in the
Registration Statement would be expected, in the Company’s reasonable
determination, to cause the Registration Statement to fail to comply with
applicable disclosure requirements (each such circumstance a “Suspension
Event”); provided, however, that the Company may not delay,
suspend or withdraw such Registration Statement for more than
ninety (90) days at any one time, or more than twice in any twelve
(12) month period.  Upon receipt of any
written notice from the Company of the happening of any Suspension Event during
the period the Registration Statement is effective or if as a result of a
Suspension Event the Registration Statement or related Prospectus contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made (in the case of the Prospectus)
not misleading, each Holder agrees that (x) it will immediately
discontinue offers and sales of the Registrable Securities under such
Registration Statement until the Holder receives copies of a supplemental or
amended Prospectus (which the Company agrees to promptly prepare) that corrects
the misstatement(s) or omission(s) referred to above and receives notice that
any post-effective

 

5

 

amendment has become effective or unless otherwise
notified by the Company that it may resume such offers and sales, and
(y) it will maintain the confidentiality of any information included in
the written notice delivered by the Company unless otherwise required by law or
subpoena.  If so directed by the Company,
each Holder will deliver to the Company all copies of the Prospectus covering
the Registrable Securities current at the time of receipt of such notice, other
than permanent file copies then in the possession of such Holder’s counsel.

 

(b)                                 If
all reports required to be filed by the Company pursuant to the Exchange Act
have not been filed by the required date taking into account any permissible
extension, upon written notice thereof by the Company to the Holders, the
rights of the Holders to offer, sell or distribute any Registrable Securities
pursuant to any Registration Statement or to require the Company take action
with respect to the registration or sale of any Registrable Securities pursuant
to any Registration Statement shall be suspended until the date on which the
Company has filed such reports, and the Company shall notify the Holders in
writing as promptly as practicable when such suspension is no longer required.

 

1.4                                 Qualification. The Company shall
file such documents as necessary to register or qualify the Registrable
Securities to be covered by a Registration Statement by the time such
Registration Statement is declared effective by the Commission under all
applicable state securities or “blue sky” laws of such jurisdictions as any
Holder may reasonably request in writing, and shall use commercially reasonable
efforts to keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective pursuant to
this Agreement or during the period offers or sales are being made by the
Holders, whichever is shorter, and to do any and all other similar acts and
things which may be reasonably necessary or advisable to enable the Holders to
consummate the disposition of such Registrable Securities in each such
jurisdiction; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where it
would not otherwise be required to qualify but for this Agreement, (ii) take
any action that would cause it to become subject to any taxation in any jurisdiction
where it would not otherwise be subject to such taxation or (iii) take any
action that would subject it to the general service of process in any
jurisdiction where it is not then so subject.

 

1.5                                 Obligations of the Company.
When the Company is required to effect the registration of Registrable
Securities under the Securities Act pursuant to Sections 1.1 or 1.2
of this Agreement, subject to Section 1.3 hereof, the Company shall:

 

(a)                                  prepare
and file with the Commission such amendments and supplements as to the
Registration Statement and the Prospectus used in connection therewith as may
be necessary (i) to keep such Registration Statement effective and (ii) to
comply with the provisions of the Securities Act with respect to the
disposition of the Registrable Securities covered by such Registration
Statement, in each case for such time as is contemplated in Sections 1.1
and 1.2;

 

(b)                                 furnish,
without charge, to the Holders such number of copies of the Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement
(including each

 

6

 

preliminary Prospectus) in conformity with the
requirements of the Securities Act as the Holders may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by the Holders;

 

(c)                                  notify
the Holders: (i) when the Registration Statement, any pre-effective amendment,
the Prospectus or any prospectus supplement related thereto or post-effective
amendment to the Registration Statement has been filed, and, with respect to
the Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation or
threat of any proceedings for that purpose, and (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the securities or “blue sky” laws
of any jurisdiction or the initiation of any proceeding for such purpose;

 

(d)                                 promptly
use commercially reasonable efforts to prevent the issuance of any order suspending
the effectiveness of a Registration Statement, and, if any such order
suspending the effectiveness of a Registration Statement is issued, shall
promptly use commercially reasonable efforts to obtain the withdrawal of such
order at the earliest possible moment;

 

(e)                                  following
receipt of a Demand Registration Notice and thereafter until the sooner of
completion, abandonment or termination of the offering or sale contemplated
thereby and the expiration of the period during which the Company is required
to maintain the effectiveness of the related Registration Statement, promptly
notify the Holders: (i) of the existence of any fact of which the Company is
aware or the happening of any event which has resulted in (A) the Registration
Statement, as then in effect, containing an untrue statement of a material fact
or omitting to state a material fact required to be stated therein or necessary
to make any statements therein not misleading or (B) the Prospectus included in
such Registration Statement containing an untrue statement of a material fact
or omitting to state a material fact required to be stated therein or necessary
to make any statements therein, in the light of the circumstances under which
they were made, not misleading, and (ii) of the Company’s reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate or that there exist circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to any event described in either of the clauses (i) or (ii) of this Section
1.5(e), subject to Section 1.3 above, at the request of the Holders,
the Company shall prepare and, to the extent the exemption from the prospectus
delivery requirements in Rule 172 under the Securities Act is not available,
furnish to the Holders a reasonable number of copies of a supplement or
post-effective amendment to such Registration Statement or related Prospectus
or file any other required document so that (1) such Registration Statement
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (2) as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder, such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;

 

7

 

(f)                                    use
commercially reasonable efforts to cause all such Registrable Securities to be
listed on the national securities exchange on which the Common Shares are then
listed, if the listing of Registrable Securities is then permitted under the
rules of such national securities exchange; and

 

(g)                                 if
requested by any Holder participating in the offering of Registrable
Securities, incorporate in a prospectus supplement or post-effective amendment
such information concerning the Holder or the intended method of distribution
as the Holder reasonably requests to be included therein and is reasonably
necessary to permit the sale of the Registrable Securities pursuant to the
Registration Statement, including, without limitation, information with respect
to the number of Registrable Securities being sold, the purchase price being
paid therefor and any other material terms of the offering of the Registrable
Securities to be sold in such offering; provided, however, that
the Company shall not be obligated to include in any such prospectus supplement
or post-effective amendment any requested information that is not required by
the rules of the Commission and is unreasonable in scope compared with the
Company’s most recent prospectus or prospectus supplement used in connection
with a primary or secondary offering of equity securities by the Company.

 

1.6                                 Obligations of the Holder.  In
connection with any Registration Statement utilized by the Company to satisfy
the Registration Rights pursuant to this Section 1, each Holder agrees
to cooperate with the Company in connection with the preparation of the Registration
Statement, and each Holder agrees that it will (i) respond within ten (10)
Business Days to any written request by the Company to provide or verify
information regarding the Holder or the Holder’s Registrable Securities
(including the proposed manner of sale) that may be required to be included in
such Registration Statement and related Prospectus pursuant to the rules and
regulations of the Commission, and (ii) provide in a timely manner information
regarding the proposed distribution by the Holder of the Registrable Securities
and such other information as may be requested by the Company from time to time
in connection with the preparation of and for inclusion in the Registration
Statement and related Prospectus.  As
used in this Agreement, a “Business Day” is any Monday, Tuesday,
Wednesday, Thursday or Friday other than a day on which banks and other
financial institutions are authorized or required to be closed for business in
the State of New York.

 

SECTION 2. INDEMNIFICATION; CONTRIBUTION

 

2.1                                 Indemnification by the Company.  The Company agrees to indemnify
and hold harmless each Holder and each person, if any, who controls any Holder
within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and any of their partners, members, officers, directors, employees or
representatives, as follows:

 

(i)                                     against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as
incurred, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto) pursuant to which the Registrable Securities were registered
under

 

8

 

the
Securities Act, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

 

(ii)                                  against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and

 

(iii)                               against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or
not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however,
that the indemnity provided pursuant to this Section 2.1 does not
apply to any Holder with respect to any loss, liability, claim, damage,
judgment or expense to the extent arising out of (A) any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and
in conformity with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or (B) any Holder’s
failure to deliver an amended or supplemental Prospectus furnished to such
Holder by the Company, if such loss, liability, claim, damage, judgment or
expense would not have arisen had such delivery occurred.

 

2.2                                 Indemnification by Holder. Each Holder (and each permitted assignee of
such Holder, on a several basis) severally and not jointly agrees to indemnify
and hold harmless the Company, and each of its trustees and officers (including
each trustee and officer of the Company who signed a Registration Statement),
and each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, as follows:

 

(i)                                     against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as
incurred, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto) pursuant to which the Registrable Securities of such Holder
were registered under the Securities Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be 

 

9

 

stated
therein or necessary to make the statements therein not misleading or arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

 

(ii)                                  against
any and all loss, liability, claim, damage, judgment and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of such Holder; and

 

(iii)                               against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or
not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however,
that the indemnity provided pursuant to this Section 2.2 shall only
apply with respect to any loss, liability, claim, damage, judgment or expense
to the extent arising out of (A) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) or (B) any Holder’s failure to
deliver an amended or supplemental Prospectus furnished to the Holder by the
Company, if such loss, liability, claim, damage or expense would not have
arisen had such delivery occurred. 
Notwithstanding the provisions of this Section 2.2, a Holder
and any permitted assignee shall not be required to indemnify the Company, its
officers, trustees or control persons with respect to any amount in excess of
the amount of the total proceeds to such Holder or such permitted assignee, as
the case may be, from sales of the Registrable Securities of such Holder under
the Registration Statement that is the subject of the indemnification claim.

 

2.3                                 Conduct of Indemnification Proceedings.  An
indemnified party hereunder shall give reasonably prompt notice to the
indemnifying party of any action or proceeding commenced against it in respect
of which indemnity may be sought hereunder, but failure to so notify the
indemnifying party (i) shall not relieve it from any liability which it
may have under the indemnity agreement provided in Sections 2.1 or 2.2
above, unless and only to the extent it did not otherwise learn of such action
and the lack of notice by the indemnified party results in the forfeiture by
the indemnifying party of substantial rights and defenses, and (ii) shall
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided under Sections
2.1 or 2.2 above.  If the
indemnifying party so elects within a reasonable time after receipt of such
notice, the indemnifying party may 

 

10

 

assume the defense of such action or proceeding at
such indemnifying party’s own expense with counsel chosen by the indemnifying
party and approved by the indemnified party, which approval shall not be
unreasonably withheld; provided, however, that the indemnifying
party will not settle, compromise or consent to the entry of any judgment with
respect to any such action or proceeding without the written consent of the
indemnified party unless such settlement, compromise or consent secures the
unconditional release of the indemnified party; and provided  further,
that, if the indemnified party reasonably determines that a conflict of
interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense and the indemnified party shall be entitled to
separate counsel at the indemnifying party’s expense. If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the second proviso to the preceding sentence, the indemnifying party’s
counsel shall be entitled to conduct the indemnifying party’s defense and
counsel for the indemnified party shall be entitled to conduct the defense of
the indemnified party, it being understood that both such counsel will
cooperate with each other to conduct the defense of such action or proceeding
as efficiently as possible. If the indemnifying party is not so entitled to
assume the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel for the
indemnified party. In such event, however, the indemnifying party will not be
liable for any settlement effected without the written consent of the
indemnifying party. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, the indemnifying party shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action or proceeding.

 

2.4                                 Contribution.

 

(a)                                  In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in Sections
2.1 and 2.2 above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the Company
and the relevant Holder shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and the Holder, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
the Holder on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities, or expenses.  The relative fault of the indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, the indemnifying party
or the indemnified party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such action.

 

(b)                                 The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.4 were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in 

 

11

 

the
immediately preceding paragraph. Notwithstanding the provisions of this Section 2.4,
a Holder shall not be required to contribute any amount in excess of the amount
of the total proceeds to such Holder from sales of the Registrable Securities
of such Holder under the Registration Statement that is the subject of the
indemnification claim.

 

(c)                                  Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 2.4,
each person, if any, who controls a Holder within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Holder,
and each trustee of the Company, each officer of the Company who signed a
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights
to contribution as the Company.

 

SECTION 3. EXPENSES

 

The Company shall pay all expenses incident to the
performance by the Company of its registration obligations under Section 1
above, including (i) Commission, stock exchange and FINRA registration and
filing fees, (ii) all fees and expenses incurred in complying with
securities or “blue sky” laws (including reasonable fees, charges and
disbursements of counsel to any underwriter incurred in connection with “blue
sky” qualifications of the Registrable Securities as may be set forth in any
underwriting agreement), (iii) all printing, messenger and delivery
expenses, and (iv) the fees, charges and expenses of counsel to the
Company and of its independent public accountants and any other accounting
fees, charges and expenses incurred by the Company (including, without
limitation, any expenses arising from any “comfort” letters or any special
audits incident to or required by any registration or qualification).  Each Holder shall be responsible for the
payment of any brokerage and sales commissions, fees and disbursements of such
Holder’s counsel, accountants and other advisors (except as contemplated by the
preceding sentence), and any transfer taxes relating to the sale or disposition
of the Registrable Securities by such Holder pursuant to this Agreement.

 

SECTION 4. RULE 144 COMPLIANCE

 

The Company covenants that it will use its best
efforts to timely file the reports required to be filed by the Company under
the Securities Act and the Exchange Act so as to enable the Holders to sell the
Registrable Securities pursuant to Rule 144 under the Securities Act.  In connection with any sale, transfer or
other disposition by a Holder of any Registrable Securities pursuant to
Rule 144 under the Securities Act, the Company shall cooperate with the
Holder to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable Securities
to be for such number of shares and registered in such names as such Holder may
reasonably request at least five (5) Business Days prior to any sale of
Registrable Securities hereunder.

 

12

 

SECTION 5. MISCELLANEOUS

 

5.1                                 Integration;
Amendment.  This Agreement constitutes the entire
agreement among the parties hereto with respect to the matters set forth herein
and supersedes and renders of no force and effect all prior oral or written
agreements, commitments and understandings among the parties with respect to
the matters set forth herein. Except as otherwise expressly provided in this
Agreement, no amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by each of the
parties hereto.

 

5.2                                 Waivers.  No waiver by a party hereto
shall be effective unless made in a written instrument duly executed by the
party against whom such waiver is sought to be enforced, and only to the extent
set forth in such instrument. Neither the waiver by any of the parties hereto
of a breach or a default under any of the provisions of this Agreement, nor the
failure of any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder
shall thereafter be construed as a waiver of any subsequent breach or default
of a similar nature, or as a waiver of any such provisions, rights or privileges
hereunder.

 

5.3                                 Assignment;
Successors and Assigns.  This Agreement and the rights granted
hereunder may not be assigned by a Holder without the written consent of the
Company; provided, however, that, except to the extent otherwise
prohibited in Section 1.1, a Holder may assign its rights and obligations
hereunder, without such consent, in connection with a transfer of some or all
of such Holder’s Registrable Securities (i) to the extent permitted under
the Operating Partnership Agreement or the Charter, as applicable, and (ii) provided
such transferee agrees in writing to be bound by all of the provisions hereof
and the Holder provides written notice to the Company within ten (10) days
of the effectiveness of such assignment. 
This Agreement shall inure to the benefit of and be binding upon all of
the parties hereto and their respective heirs, executors, personal and legal
representatives, successors and permitted assigns, including, without
limitation, any successor of the Company by merger, acquisition,
reorganization, recapitalization or otherwise.

 

5.4                                   Notices.  All notices called for under this Agreement
shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, (b) on the first Business Day following
the date of dispatch if delivered by a nationally recognized next-day courier
service, (c) on the fifth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid, or (d) if sent by facsimile transmission during business hours on
a Business Day, when transmitted and receipt is confirmed, or otherwise on the
following Business Day.  All notices
hereunder shall be delivered to the parties at the addresses set forth opposite
their signatures below, or to any other address or addressee as any party
entitled to receive notice under this Agreement shall designate, from time to
time, to others in the manner provided in this Section 5.4 for the
service of notices; provided, however, that notices of a change
of address shall be effective only upon receipt thereof.

 

5.5                                 Specific
Performance.  The parties hereto acknowledge that the
obligations undertaken by them hereunder are unique and that there would be no
adequate remedy at law if 

 

13

 

any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to
(i) compel specific performance of the obligations, covenants and
agreements of any other party under this Agreement in accordance with the terms
and conditions of this Agreement and (ii) obtain preliminary injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement in any court of the United States or any State thereof
having jurisdiction.

 

5.6                                 Governing
Law. 
This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of the State of Maryland (excluding the conflict of
law provisions thereof).

 

5.7                                 Headings.  Section and subsection
headings contained in this Agreement are inserted for convenience of reference
only, shall not be deemed to be a part of this Agreement for any purpose, and
shall not in any way define or affect the meaning, construction or scope of any
of the provisions hereof.

 

5.8                                 Pronouns.  All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the identity of the person or entity may require.

 

5.9                                 Execution
in Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement. 
This Agreement may be executed by facsimile signatures.

 

5.10                           Severability.  If fulfillment of any provision
of this Agreement, at the time such fulfillment shall be due, shall transcend
the limit of validity prescribed by law, then the obligation to be fulfilled
shall be reduced to the limit of such validity; and if any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.

 

5.11                           No
Third Party Beneficiaries.  It is the explicit intention of the parties
hereto that no person or entity other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants, undertakings and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto or their respective successors, heirs,
executors, administrators, legal representatives and permitted assigns.

 

[Signatures on following page]

 

14

 

IN WITNESS WHEREOF, each of the undersigned has
caused this Agreement to be duly executed and delivered in its name and on its
behalf as of the date first written above.

 

	
  Address:

  	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  
	
  390
  N. Orange Avenue, Suite 2400

  	
   

  	
  EOLA PROPERTY TRUST

  
	
  Orlando, Florida 32801

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  INITIAL
  HOLDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

15

 

Schedule I

 

[LIST OF HOLDERS]Exhibit 10.11

 

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, David O’Reilly, 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.

 

C.            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.

 

D.            Concurrently
with the execution and delivery of this Agreement, (i) Eola Capital LLC (“Eola
Capital”), a Florida limited liability company and an affiliate of the Indemnitors,
is entering into an Agreement and Plan of Merger (the “Eola Capital Merger
Agreement”), dated as of  the date
hereof, by and among the Operating Partnership, the Company, Eola MergerSub LLC
(“MergerSub”) and Eola Capital, relating to a transaction pursuant to
which MergerSub will merge with and into Eola Capital with Eola Capital
surviving the merger (the “Eola Capital Merger”) and the membership
interests in Eola Capital will be converted automatically into the right to
receive common units of limited partnership interest (“OP Units”) in the
Operating Partnership, subject to the terms and conditions of the Eola Capital
Merger Agreement, and (ii) Eola Office Partners LLC (“Eola Office”),
a Florida limited liability company and an affiliate of certain of the
Indemnitors, is entering into an Agreement and Plan of Merger (the “Eola
Office Merger Agreement” and, collectively with the Eola Capital Merger
Agreement, the “Merger Agreements”), dated as of  the
date hereof, by and among the Company and Eola Office, relating to a
transaction pursuant to which Eola Office will merge with and into the Company
with the Company surviving the merger (the “Eola Office Merger” and,
collectively with the Eola Capital Merger, the “Mergers”) and the
membership interests in Eola Office will be converted automatically into the
right to receive Common Shares, subject to the terms and conditions of the Eola
Office Merger Agreement.

 

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

 

F.             The
Indemnitors have agreed to execute and deliver a Pledge Agreement
(substantially in the form of Exhibit B
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 as a result of the transactions
contemplated by the Merger Agreements.

 

 

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             Contracts.
 With respect to all management, leasing
and similar agreements (collectively, the “Contracts”), to each
Indemnitor’s Knowledge: (a) Eola Capital is not in default under any such
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 such
Contract, except for matters that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Eola Capital.  True, correct and complete copies of all of
the 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 1.1 to the
Disclosure Schedule, as of the Effective Date, no Indemnitor nor, to each
Indemnitor’s Knowledge, any Entity has given or received written notice of any
material event of default (which remains uncured) under any of the Contracts.

 

Section 1.2             Licenses and Permits.
 To each Indemnitor’s Knowledge, all
licenses, permits or other governmental approvals (including certificates of
occupancy) required by Eola Capital or Eola Office in connection with the
conduct of the business of Eola Capital or Eola Office 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 Eola Capital or Eola Office. 
Neither Eola Capital nor Eola Office 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 Eola Capital).

 

Section 1.3             Compliance with Laws.  To each Indemnitor’s Knowledge,
each of Eola Capital and Eola Office has conducted its business in material
compliance with applicable laws, except for such failures that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Eola Capital or Eola Office, as applicable.  To each Indemnitor’s Knowledge, it has not
received any written notice that it is not in compliance in all material
respects with all applicable laws, ordinances, rules, regulations, codes,
orders and statutes 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 Eola Capital or Eola Office.

 

2

 

Section 1.4             Litigation.  There are no Proceedings pending
or, to any Indemnitor’s Knowledge, threatened in the last twelve (12)  months, against or with respect to Eola Capital or Eola
Office that would reasonably be expected to have a Material Adverse Effect on
the business of Eola Capital or Eola Office. Neither Eola Capital nor Eola
Office is bound by any outstanding order, writ, injunction or decree of any
Governmental Entity which in any such case would reasonably be expected to have
a Material Adverse Effect on Eola Capital’s or Eola Office’s ability to enter
into and perform any of its obligations under this Agreement or the Merger
Agreements or would reasonably be expected to have a Material Adverse Effect on
Eola Capital or Eola Office.

 

Section 1.5             No Insolvency Proceedings.
 No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending, or to any Indemnitor’s
Knowledge, threatened against Eola Capital or Eola Office, nor are any such
proceedings contemplated by Eola Capital or Eola Office.

 

Section 1.6             Tax.  Each of Eola Capital and Eola Office has
timely filed all Tax Returns required to be filed by it (after giving effect to
any filing extension properly granted by a Governmental Entity having the
authority to do so) and all such Tax Returns are accurate and complete in all
material respects.  Each of Eola Capital
and Eola Office has paid all Taxes required to be paid by it.  No income or material non-income Tax Returns
filed by Eola Capital or Eola Office or any of their respective subsidiaries
are the subject of a pending or ongoing audit. 
Except as would not reasonably be expected to have a Material Adverse
Effect on Eola Capital or Eola Office, no deficiencies for any Taxes have been
proposed, asserted or assessed against Eola Capital or Eola Office and no
requests for waivers of the time to assess any such Taxes are pending.  Since
its formation, for U.S. federal income tax purposes, Eola Capital has been
treated either as a S Corporation or as a partnership (and not as a “C
corporation”), and Eola Office has been treated as an S corporation (and not as
a “C corporation”).

 

Section 1.7             Exclusive Representations.  Except as expressly set forth in
this Article 1 and in the Merger Agreements, the Indemnitors make no
representation or warranty of any kind, express or implied, in connection with
the business of Eola Capital or Eola Office and each of the Operating
Partnership and the Company acknowledges that it has not relied upon any other
such representation or warranty.

 

Section 1.8             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 Mergers are consummated, 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

 

3

 

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 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 through any distribution (directly or indirectly) to such Indemnitor
of any OP Units and/or Common Shares received as Merger Consideration under the
Merger Agreements by any entity in which an Indemnitor has an ownership
interest. Notwithstanding anything contained herein to the contrary, the OP
Indemnified Parties shall look first to available insurance proceeds, 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 the OP Units and/or Common Shares to
the applicable Indemnitors, no OP Indemnified Party shall have recourse to any
other assets of the Indemnitors other than the OP Units and/or Common Shares
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 B 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 Merger Agreements (including through any distribution of OP Units and/or
Common Shares to any Indemnitor of any OP Units and/or Common Shares received
as Merger Consideration under the Merger Agreements by an entity in which an
Indemnitor has an ownership interest).

 

4

 

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 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

 

5

 

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 Merger Agreements, 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 this Agreement and the Merger
Agreements, the terms of the Merger Agreements 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.

 

6

 

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 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

 

7

 

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 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 either of the Merger Agreements 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

 

8

 

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]

 

9

 

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David O’Reilly

  
	
   

  	
  David O’Reilly

  
					

 

10

 

	
   

  	
  /s/ Henry F. Pratt III

  
	
   

  	
  Henry F. Pratt III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Scott Francis

  
	
   

  	
  Scott Francis

  

 

11

 

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 through any distribution
(directly or indirectly) to the Indemnitors of any OP Units and/or Common
Shares received as merger consideration under each of the Merger Agreements,
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 Capital Merger Agreement.

 

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

 

(e)           “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).

 

(f)            “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.

 

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

 

(h)           “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.

 

(i)            “Material Adverse Effect” means, with respect to any
Person, (i) any material adverse effect, individually or in the aggregate,
on the assets, business, financial condition or results of operations of such
Person, 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.

 

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

 

1

 

(k)           “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.

 

(l)            “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.

 

(m)          “REIT Shares” shall have the meaning set forth in the
OP Agreement.

 

(n)           “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.

 

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

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Claim Notice

  	
   

  	
  2.5(a)

  
	
  Common Shares

  	
   

  	
  Recital C

  
	
  Company

  	
   

  	
  Preamble

  
	
  Contracts

  	
   

  	
  1.1

  
	
  Disclosure Schedule

  	
   

  	
  Article 1

  
	
  Effective Date

  	
   

  	
  Preamble

  
	
  Eola Capital

  	
   

  	
  Recital D

  
	
  Eola Capital Merger

  	
   

  	
  Recital D

  
	
  Eola Capital Merger Agreement

  	
   

  	
  Recital D

  
	
  Eola Office

  	
   

  	
  Recital D

  
	
  Eola Office Merger

  	
   

  	
  Recital D

  
	
  Eola Office Merger Agreement

  	
   

  	
  Recital D

  
	
  Formation Transactions

  	
   

  	
  Recital B

  
	
  Indemnification Period

  	
   

  	
  2.3(a)

  
	
  Indemnified Party

  	
   

  	
  2.5(a)

  
	
  Indemnifying Party

  	
   

  	
  2.5(a)

  
	
  Indemnitors

  	
   

  	
  Preamble

  
	
  Mergers

  	
   

  	
  Recital D

  
	
  Merger Agreements

  	
   

  	
  Recital D

  
	
  MergerSub

  	
   

  	
  Recital D

  
	
  Operating Partnership

  	
   

  	
  Preamble

  
	
  OP Claims

  	
   

  	
  2.2

  
	
  OP Indemnified Party

  	
   

  	
  2.2

  

 

2

 

	
  OP Units

  	
   

  	
  Recital D

  
	
  Public Offering

  	
   

  	
  Recital C

  
	
  Representatives

  	
   

  	
  3.14

  

 

3

 

EXHIBIT B

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.            (i) Eola
Capital LLC (“Eola Capital”), Eola MergerSub LLC (“MergerSub”),
the Company and the Operating Partnership have entered into an Agreement and
Plan of Merger (the “Eola Capital Merger Agreement”), dated as of  October 5, 2010, relating to the merger of MergerSub
with and into Eola Capital in exchange for the right of holders of interests in
Eola Capital to receive common units of limited partnership of the Operating
Partnership (“OP Units”), subject to the terms and conditions of the
Merger Agreement, (ii) Eola Office Partners LLC (“Eola Office”),
the Company and the Operating Partnership have entered into an Agreement and
Plan of Merger (the “Eola Office Merger Agreement” and, collectively
with the Eola Capital Merger Agreement, the “Merger Agreements”), dated
as of October 5, 2010, relating to the merger of Eola Office with and into
the Company with the Company surviving in exchange for the right of the holders
of interests in Eola Office Partners LLC to receive Common Shares, subject to
the terms and conditions of the Eola Office Merger Agreement, and (iii) the
Pledgors, the Operating Partnership and the Company have entered into a
Representation and Warranty Indemnification Agreement, dated as of October 5,
2010, relating to, among other things, certain representations and warranties
of the Pledgors with respect to Eola Capital, Eola Office and the businesses of
Eola Capital and Eola Office (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/or Common Shares received
by each Pledgor through any distribution (directly or indirectly) to such
Pledgor of any OP Units and/or Common Shares received as merger consideration
pursuant to the terms of the Merger Agreements (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 Merger Agreements, (ii) any
additional OP Units and/or Common Shares that may be acquired by such Pledgor
in respect of such Pledgor OP Units and/or Pledgor Common Shares, (iii) all
rights of such 

 

1

 

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”).

 

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

 

2

 

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 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 Merger Agreements
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 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 OP
Units, Pledgor Common Shares 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 OP Units, Pledgor Common Shares 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 Units
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 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

 

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  James Heistand, on behalf of himself and as the

  
	
   

  	
  representative of the “Indemnitors” under the

  
	
   

  	
  Indemnification Agreement

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Rodolfo Prio Touzet, on behalf of himself and as
  the

  
	
   

  	
  representative of the “Indemnitors” under the

  
	
   

  	
  Indemnification Agreement

  

 

 

SCHEDULE
A

 

TO

 

PLEDGE
AGREEMENT

 

PLEDGOR
OP UNITS AND PLEDGOR COMMON SHARES

 

	
  PLEDGOR

  	
   

  	
  PLEDGOR OP UNITS AND/OR PLEDGOR

  COMMON SHARES

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]