Document:

exv10w1

Exhibit 10.1

EXECUTION VERSION

      

MASTER TRANSACTION AGREEMENT

by and among

PARKWAY PROPERTIES, INC.;

PARKWAY PROPERTIES LP;

EOLA OFFICE PARTNERS LLC (“EOP”);

EOLA CAPITAL LLC (“EOC”);

and

THE INDIVIDUALS LISTED ON THE SIGNATURE PAGE HERETO

April 10, 2011

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 DEFINITIONS
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2 EXECUTIVE EMPLOYMENT WITH PARENT
	 	 	1	 
	2.1 Appointment of Officers
	 	 	1	 
	2.2 Compensation
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 3 ADDITIONAL COVENANTS
	 	 	5	 
	3.1 Residual Obligations
	 	 	5	 
	3.2 Employment Locations of Officers and Management
	 	 	5	 
	3.3 Severance of Employees
	 	 	5	 
	 
	 	 	 	 
	ARTICLE 4 HEADQUARTERS
	 	 	6	 
	4.1 Headquarters
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 5 RIGHT OF FIRST OFFER
	 	 	6	 
	5.1 Touzet Option Property
	 	 	6	 
	5.2 Property Management Option
	 	 	8	 
	5.3 Confidentiality
	 	 	9	 
	5.4 Definitions
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 6 MISCELLANEOUS PROVISIONS
	 	 	10	 
	6.1 Notices
	 	 	10	 
	6.2 Entire Agreement
	 	 	10	 
	6.3 Amendments and Waivers
	 	 	10	 
	6.4 No Assignments
	 	 	10	 
	6.5 Governing Law
	 	 	10	 
	6.6 Jurisdiction and Venue
	 	 	10	 
	6.7 WAIVER OF TRIAL BY JURY
	 	 	11	 
	6.8 Binding Effect
	 	 	11	 
	6.9 Severability
	 	 	11	 
	6.10 Counterparts
	 	 	12	 
	6.11 Third Parties
	 	 	12	 
	6.12 Exhibits
	 	 	12	 
	6.13 Time Periods
	 	 	12	 

 

 

Exhibits

	 	 	 	 	 

	Purchase and Sale Agreement Transactions
	 	 	A	 
	Initial Salaries, Cash Bonus and Equity Incentives
	 	 	B	 
	Change In Control Agreement
	 	 	C	 
	Form of Indemnification Agreement
	 	 	D	 
	Employment Locations
	 	 	E	 
	Non-Officer Employees Subject to Severance
	 	 	F-1	 
	Form of Release
	 	 	F-2	 

 

 

MASTER TRANSACTION AGREEMENT

     This Master Transaction Agreement (this “Agreement”), dated as of April 10, 2011, is by and
among Eola Office Partners LLC, a Florida limited liability company (“EOP”), EOLA Capital LLC, a
Florida limited liability company (“EOC”), Parkway Properties, Inc., a Maryland corporation
(“Parent”), Parkway Properties LP, a Delaware limited partnership (“Partnership”), and each of the
individuals listed on the signature page to this Agreement (each, an “Executive” and collectively,
the “Executives”). EOP, EOC, Parent, Partnership, and the Executives are sometimes referred to
herein as the “Parties” and each, a “Party.”

     WHEREAS, simultaneously with the execution and delivery of this Agreement, the Parties and
certain of their respective Affiliates are entering into the following other transaction agreements
(the “Related Agreements”): (i) a contribution agreement (the “Contribution Agreement”),
pursuant to which, among other things, (x) all of the membership interests of EOP will be
contributed to the Partnership, and (y) all of the membership interests of EOC owned by Banyan
Street Office Holdings LLC, a Florida limited liability company, will be contributed to the
Partnership (collectively, the “Contributions”); and (ii) purchase and sale agreements, pursuant to
which, among other things, Affiliates of Parent shall directly or indirectly purchase interests in
certain real property and improvements as listed on Exhibit A hereto (collectively, the
“Property Acquisitions” and, together with the
Contributions, the “Transactions”); and

     WHEREAS, the Parties desire to enter into this Agreement to agree to certain terms and
conditions relating to the Transactions, which are not addressed in the Related Agreements.

     NOW THEREFORE, the Parties acknowledge the adequacy and receipt of the consideration provided
to each through their respective representations, warranties, conditions, rights and promises
contained in this Agreement, and other good and valuable consideration, and intending to be legally
bound hereby, agree as provided below.

ARTICLE 1

DEFINITIONS

     1.1 Definitions. Capitalized terms used herein but not otherwise defined shall have
the meanings ascribed to such terms in the Contribution Agreement.

ARTICLE 2

EXECUTIVE EMPLOYMENT WITH PARENT

     2.1 Appointment of Officers.

     2.1.1 Effective the later of (x) June 1, 2011 or (y) the Closing, Parent hereby agrees that
James R. Heistand shall be appointed as Executive Chairman of the Board of Parent and Mr. Heistand
hereby agrees to accept such appointment and to serve in such capacity at the direction of the
Board of Directors of Parent. As the Executive Chairman of the Board of Parent, Mr. Heistand shall
be entitled to observe all meetings of the investment committee of the Board.

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          2.1.2 Effective immediately following the Closing, Parent hereby agrees that Henry F.
Pratt, III shall be appointed as Executive Vice President and Head of Asset Management and Third
Party Services and Mr. Pratt agrees to accept such appointment and to serve in such capacity at the
direction of the Board of Directors of Parent.

          2.1.3 The name and title of each other person that will serve as a member of Parent’s senior
management team upon Closing are set forth on Exhibit B hereto.

     2.2 Compensation.

          2.2.1 Salary. The initial annual base salaries, target cash bonuses and target equity
incentive compensation for Mr. Heistand and Mr. Pratt and all other persons that will be serving as
a member of Parent’s senior management team following the Closing are set forth on Exhibit
B hereto. Each of Mr. Heistand and Mr. Pratt understand and agree that any future annual
adjustments to the amounts set forth on Exhibit B and the amount of any actual bonuses and
equity or other compensation payable to such Executive will be determined by the Compensation
Committee of the Board of Directors of Parent (the “Compensation Committee”), in its sole
discretion; provided however that (i) the base salaries for Mr. Heistand and Mr. Pratt shall not be
reduced below the initial base salary amounts listed on Exhibit B for periods of employment
from the Closing Date through December 31, 2012 and (ii) with respect to the cash bonuses payable
to Mr. Heistand and Mr. Pratt with respect to the fiscal year ended December 31, 2011 only, such
Executive shall be entitled to the full amount of the target cash bonus amounts listed in
Exhibit B without regard to the achievement of any particular performance criteria,
prorated for the period from the Closing Date through December 31, 2011. Annual cash bonuses for
future years will be subject to such conditions as may be determined by the Compensation Committee.
The annual base salaries will be paid in equal bi-weekly amounts and will be prorated from the
Closing Date through December 31, 2011. The base salaries shall be payable on Parent’s regularly
scheduled payroll dates, after such deductions and withholdings as may be required by applicable
law. The payment of annual cash bonuses for each of Mr. Heistand and Mr. Pratt shall be
contingent upon the Executive remaining employed by Parent on the bonus payment date, which bonus
payment date shall be paid concurrent with the bonus payment date for Parent’s other executive
officers who receive bonuses. The bonus payment date for 2011 bonuses is currently expected to be
in February 2012. The initial equity incentive compensation grants to each of Mr. Heistand and Mr.
Pratt shall be granted under individual grant award agreements which shall contain terms that are
consistent with the terms and conditions of Parent’s 2010 Omnibus Equity Incentive Plan.

          2.2.2 Benefits. During the period of their employment by Parent, Mr. Heistand and
Mr. Pratt will be entitled to paid time off and holiday pay in accordance with Parent’s policies in
effect from time to time and will be eligible to participate in such employee benefit plans
currently, or hereafter made, available to executive officers of Parent, in accordance with and
subject to the terms and conditions of such plans; provided that, during the period from the
Closing Date through December 31, 2011, Mr. Heistand and Mr. Pratt may, at Parent’s election,
continue to be eligible to participate in the employee benefit plans, programs and policies of EOC
or EOP, rather than of Parent, on a basis consistent with past practices. A summary of such
benefits currently in effect is set forth in Parent’s Employee Handbook, a copy of which has been
provided to each of Mr. Heistand and Mr. Pratt.

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          2.2.3
Change In Control Agreement; Indemnification Agreement.

	 	(a)	 	At Closing, Parent shall enter into a Change In Control
Agreement with each of Mr. Heistand and Mr. Pratt in the form attached as
Exhibit C hereto.
	 
	 	(b)	 	At Closing, Parent shall enter into an Indemnification
Agreement with each of the Executives in the form attached as Exhibit D
hereto.

          2.2.4 Appointment of Directors. Effective the later of (x) June 1, 2011 or (y) the
Closing, Mr. Heistand and Mr. Touzet shall be appointed as directors of Parent to fill two (2)
newly created directorships of Parent and to serve as directors of Parent until the annual meeting
of stockholders of Parent to be held in May, 2012 (the “2012 Annual Meeting”). The Nominating
and Corporate Governance Committee of the Board of Directors of Parent, and the full Board of
Directors of Parent, have approved Mr. Heistand as a nominee for re-election as a director of
Parent at the 2012 Annual Meeting and Parent agrees to nominate Mr. Heistand for election as a
director at the 2012 Annual Meeting. Each of Mr. Heistand and Mr. Touzet agrees to serve as a
director of Parent effective as of the time described above, and Mr. Heistand agrees to stand for
election as a director of Parent at the 2012 Annual Meeting and further agrees to provide to Parent
all information required by the rules and regulations of the Securities and Exchange Commission for
inclusion in Parent’s proxy statement with respect to the 2012 Annual Meeting. The Parties
understand and acknowledge that upon their appointment neither Mr. Heistand nor Mr. Touzet will be
considered independent directors of Parent. Each of Mr. Heistand and Mr. Touzet agree that he
will recuse himself from any discussion or action by the Board of Directors of Parent, or any
committee thereof, which involves a property in which either Mr. Heistand or Mr. Touzet holds a
direct or indirect ownership or other interest (other than discussions or decisions that relate to
property management matters generally) or any other matter in which Mr. Heistand or Mr. Touzet has
a conflict of interest, consistent with Parent’s Code of Business Conduct and Ethics, as in effect
from time to time.

          2.2.5 No Employment Agreement: At-Will Employment. The Executives understand and
agree that no employee or officer of Parent has an employment agreement with Parent and this
Agreement is not intended to be, and shall not be construed as, an employment agreement as between
any Executive and Parent or any of Parent’s affiliates, or as otherwise conferring upon any
Executive any right to continued employment or any continuing monetary or other benefit, except to
the extent expressly provided in this Agreement. Parent’s employment of Mr. Heistand and Mr. Pratt
is at will. Either Parent, Mr. Heistand or Mr. Pratt may terminate such Executive’s employment at
any time for any or no reason, with or without Cause (as defined below) or notice.

          2.2.6 Touzet Severance. The Parties acknowledge and agree that in connection
with the Transactions, Mr. Touzet shall be terminated as an employee of EOP and/or EOC effective as
of the Closing Date and will not be employed by Parent or any of its Affiliates; provided that Mr.
Touzet shall be entitled to severance pay in the aggregate amount of $1,892,502.13. Such severance
pay shall be paid, subject to applicable federal, state, and local taxes and withholding, in one
lump sum within thirty days following the Closing Date. For purposes hereof, termination of
employment shall mean a “separation from service” within the

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meaning of Internal Revenue Code section 409A. Parent’s obligations under this
Section 2.2.6 shall be contingent upon receipt at Closing of a Release (as defined below)
from Mr. Touzet.

          2.2.7 Breach and Exclusive Remedy. In the event (i) of a breach of Sections 2.1.1,
2.2.1, 2.2.4 or 2.2.6 (as such obligations relate to Mr. Heistand or Mr. Touzet), which
breach Parent fails to cure within ninety (90) days following notice of such breach to Parent, or
(ii) that the employment of Mr. Heistand with Parent is terminated by Parent for any reason other
than Cause, as defined below, (a “Lock-up Breach”), the sole and exclusive remedy of either Mr.
Heistand or Mr. Touzet shall be: (A) such event shall constitute a Principal Termination Event (as
defined in the Contribution Agreement) and Parent and Partnership shall be required to perform all
obligations set forth in each of Sections 3.6.1(f) and 3.6.2(f) of the Contribution Agreement, and
(B) each of Mr. Heistand and Mr. Touzet shall be fully released from his obligations under Article
I of that certain Lock Up and Voting Agreement dated April 10, 2011 (the “Voting Agreement”) by and
among Parent, the Partnership and the Executives (“Lock-up Release”). In the event of a breach of
Sections 2.1.2 or 2.2.1 of this Agreement by Parent, as such obligations relate to
Mr. Pratt, which breach Parent fails to cure within ninety (90) days following notice of such
breach to Parent, Mr. Pratt shall be fully released from his obligations under Article I of the
Voting Agreement (“Additional Lock-up Release”). Any Lock-up Release or Additional Lock-up Release
shall be effective as of the calendar day following the cure period permitted under this
Section 2.2.7, or with respect to a termination for any reason other than for Cause, as of
the effective date of such termination. For purposes of this Agreement “Cause” shall mean (i) the
continued failure by the Executive to perform material responsibilities and duties toward Parent
(other than any such failure resulting from the Executive’s incapacity due to physical or mental
illness), (ii) the engaging by the Executive in willful or reckless conduct that is demonstrably
injurious to Parent monetarily or otherwise, (iii) the conviction of the Executive of a felony,
(iv) the commission or omission of any act by the Executive that is materially inimical to the best
interests of Parent and that constitutes on the part of the Executive common law fraud or
malfeasance, misfeasance or nonfeasance of duty, (v) the failure of the Executive to comply with
the post-Closing covenants contained in Section 11.8.8 or the payment obligations under
Article 12 of the Contribution Agreement (unless the parties are engaged in a bona fide
dispute under such provisions), or (vi) the breach by the Executive of any material term of this
Agreement or the Voting Agreement, which continues after thirty (30) days’ notice by Parent to
Executive as to such breach; provided, however, that Cause shall not include the
Executive’s lack of professional qualifications. For purposes of this Agreement, an act, or failure
to act, on the Executive’s part shall be considered “willful” or “reckless” only if done, or
omitted, by the Executive not in good faith and without reasonable belief that the action or
omission was in the best interest of Parent. The Executive’s employment shall not be deemed to have
been terminated for Cause unless Parent shall have given or delivered to the Executive (A)
reasonable notice setting forth the reasons for Parent’s intention to terminate the Executive’s
employment for Cause, (B) a reasonable opportunity, at any time during the thirty (30)-day period
after the Executive’s receipt of such notice, for the Executive, together with the Executive’s
counsel, to be heard before the Board, and (C) a Notice of Termination (as defined below) stating
that, in the good faith opinion of not less than a majority of the entire membership of the Board,
the Executive was guilty of the conduct set forth in clauses (i), (ii), (iii), (iv) or (v) of the
first sentence of this Section 2.2.7. For purposes of this Agreement “Notice of
Termination” means a written notice that (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for

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termination of the Executive’s employment under the provision so indicated, and (iii) if
the date of termination is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15) days after the giving of such
notice).

ARTICLE 3

ADDITIONAL COVENANTS

     3.1 Residual Obligations. The Parties acknowledge that each of Mr. Heistand, Mr.
Touzet and Mr. Pratt will have continuing obligations to perform asset management and other
services and will continue to have other responsibilities (the “Outside Activities”) with respect
to and for the benefit of certain EOP-managed properties and EOC-managed properties that will not
be acquired as part of the Transactions (the “Excluded Assets”). The Parties agree that Mr.
Heistand’s, Mr. Touzet’s and Mr. Pratt’s continuation of the Outside Activities is permitted under
the terms of this Agreement and that the performance of such Outside Activities will provide
certain benefits to the Parent and the Partnership, as the property managers of the Excluded
Assets. Each of Mr. Heistand, Mr. Touzet and Mr. Pratt may continue to engage in such Outside
Activities so long as such responsibilities do not, materially and on a continuing basis, interfere
with the Executives’ employment or other obligations to Parent. In addition, Parent acknowledges
and agrees that the Board of Directors of Parent has authorized and approved the Outside Activities
to be performed by each of Mr. Heistand and Mr. Touzet and determined that such Outside Activities
do not violate Parent’s Code of Business Conduct and Ethics, Corporate Governance Guidelines or
similar policy of Parent, as in effect from time to time.

     3.2 Employment Locations of Officers and Management. Exhibit E hereto sets forth the
job title and location of employment with Parent for each of the Persons listed therein.

     3.3 Severance of Employees.

          3.3.1 Each of the employees of EOP or EOC immediately prior to the Closing who are terminated
at or immediately prior to Closing as a result of the Contributions, a list of each such affected
persons being set forth on Exhibit F-1 hereto (each, other than Mr. Touzet, an “Other
Employee” and collectively, the “Other Employees”) and who timely sign a release of claims in the
form attached as Exhibit F-2 hereto (a “Release”), will be entitled to receive severance
pay in the aggregate amount set forth opposite such person’s name as set forth on Exhibit
F-1 under the heading “Aggregate Severance Pay.”

          3.3.2 All severance pay to the Other Employees will be paid, subject to applicable federal,
state, and local taxes and withholding, in a single lump sum within thirty (30) days following the
Closing Date.

     3.3.3 Each employee of EOP or EOC immediately prior to the Closing (each, an “Additional
Terminated Employee” and, collectively, the “Additional Terminated
Employees”) who is terminated as a result of the Transactions within six (6) months following
the Closing Date, and who timely signs a Release, will be eligible for severance pay in the
aggregate amount of one month of base salary as in effect immediately prior to such Person’s
termination for every year of service with EOP or EOC, as applicable; provided that,

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notwithstanding the foregoing, the maximum amount of severance payable to any
Additional Terminated Employee shall be twelve (12) months of base salary as in effect immediately
prior to such Person’s termination, and the minimum amount of severance shall be three (3) months
of such base salary. Such severance amount shall be paid, subject to applicable federal, state,
and local taxes and withholding, in a single lump sum within thirty (30) days following the
Additional Terminated Employee’s termination.

          3.3.4 For purposes hereof, termination of employment shall mean a “separation
from service” within the meaning of Internal Revenue Code section 409A.

          3.3.5 For purposes of this Agreement, any Employee who is terminated within six (6) months
following the Closing Date for any reason other than for Cause, shall be deemed to have been
terminated as a result of the Transactions and shall be eligible for the benefits set forth in this
Section 3.3. Any Employee who voluntarily resigns shall not be eligible for the benefits
set forth in this Section 3.3. Parent’s obligations with respect to any employee of EOP or
EOC under this Section 3.3 shall be contingent upon the timely receipt of the Release from
such terminated employee.

          3.3.6 Notwithstanding any other provision of this Agreement, any Employee who is not listed on
Exhibit F-1, who is offered a comparable job with EOP, EOC or Parent following the Closing
and who does not accept such job shall not be eligible for severance pay or other benefits.

ARTICLE 4

HEADQUARTERS

     4.1 Headquarters. At Closing, the principal executive offices of Parent shall remain
in Jackson, Mississippi, and a co-headquarters shall be located in Orlando, Florida.

ARTICLE 5

RIGHT OF FIRST OFFER

     5.1 Touzet Option Property. On the terms and subject to the conditions set forth in
this Section 5.1, Mr. Touzet hereby grants to Parent (or an Affiliate of Parent designated
by Parent in writing) a right of first offer with respect to any Touzet Option Property in
accordance with the terms and conditions set forth in this Article 5, during the twenty
four (24) month period beginning on the Closing Date (the “Option Period”). For purposes of this
Section 5.1, a “Touzet Option Property” means any parcel of real property (i) that
is an office building containing no less than 100,000 rentable square feet, (ii) that is located
in a Parkway Market (as defined below), and (iii) with respect to which a Touzet Purchaser has the
authority to acquire, and controls decision-making with respect to the acquisition of (including
transfer of the right to acquire) the fee simple interest in such parcel of real property;
provided that, for purposes of clarity, Touzet Option Property shall expressly exclude any Managed
Property. For purposes of this Section 5.1, “Touzet Purchaser” means any of (x) Mr.
Touzet, individually, (y) an entity wholly-owned by Mr. Touzet, and/or (z) an entity
partially-owned by Mr. Touzet together with any third Person who is acting as a passive
co-investor in connection with any proposed fee simple acquisition of a Touzet Option Property.

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          5.1.1 In the event that any Touzet Purchaser desires to acquire fee simple title to any
Touzet Option Property at any time during the Option Period, then, prior to the delivery of an
offer by a Touzet Purchaser with respect to the fee simple acquisition of such Touzet Option
Property, Mr. Touzet shall deliver to Parent a notice of the intent to send an offer to the
property owner of, or broker with respect to, such Touzet Option Property (an “Offer Notice”),
accompanied by a copy of such proposed offer.

          5.1.2 Within five (5) business days following the delivery of an Offer Notice to Parent,
Parent shall notify Mr. Touzet in writing if Parent desires to make such offer to the property
owner of, or broker with respect to, such Touzet Option Property on the same terms and conditions
as proposed to be made by the applicable Touzet Purchaser by delivery of written notice of such
election (an “Election Notice”). If Parent timely delivers an Election Notice, then Mr. Touzet
shall use commercially reasonable efforts to assist Parent in submitting such offer to the property
owner. If Parent does not timely submit an Election Notice or declines in writing to submit such
offer, then Mr. Touzet and/or the applicable Touzet Purchaser shall be deemed to have complied with
the obligations under Sections 5.1.1 and 5.1.2, and shall be entitled to submit such offer
to the property owner of, or broker with respect to, such Touzet Option Property.

          5.1.3 In addition to complying with Sections 5.1.1 and 5.1.2, if applicable,
with respect to a Touzet Option Property, in the event that a Touzet Purchaser desires to acquire
fee simple title to a Touzet Option Property as to which no Election Notice was delivered by Parent
under Section 5.1.2 above or as to which an Election Notice was timely delivered by Parent
under Section 5.1.2 above but Parent subsequently determined to abandon the transaction, at
any time during the Option Period, then, prior to the execution of any letter of intent, memorandum
of understanding, purchase contract or similar document between any Touzet Purchaser and any
current property owner of a Touzet Option Property for the fee simple acquisition of such Touzet
Option Property (each, a “Purchase Document”), Mr. Touzet shall deliver to Parent a notice of
intent to enter into a Purchase Document (a “Contract Notice”), together with a copy of such
proposed Purchase Document, including all available exhibits and schedules thereto, and provide
Parent with access to the offering and due diligence materials available to Mr. Touzet (including,
without limitation, title, survey, environmental reports, loan information) with respect to the
Touzet Option Property.

          5.1.4 Within five (5) business days following the delivery of a Contract Notice to Parent,
Parent shall notify Mr. Touzet in writing if Parent desires to execute the applicable Purchase
Document on the terms and conditions set forth therein by delivery of written notice of such
election (a “Purchase Election Notice”). If Parent timely delivers a Purchase Election Notice,
then (i) Mr. Touzet shall use commercially reasonable efforts (but without the requirement to make
any payment) to arrange for the applicable property owner of the Touzet Option Property to execute
the Purchase Document with Parent, or Parent’s designee, as substitute purchaser and otherwise take
all actions reasonably requested by Parent in connection therewith, and (ii) Parent shall reimburse
Mr. Touzet or the Touzet Purchaser for all reasonable and documented out-of-pocket costs and
expenses (including reasonable attorneys’ fees and deposits) incurred by the Touzet Purchaser in
connection with the potential acquisition of the Touzet Option Property within five (5) business
days of Mr. Touzet’s submission of an invoice and reasonable supporting documentation of such costs
and expenses.

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          5.1.5 If Parent does not timely deliver a Purchase Election Notice in accordance
with Section 5.1.4 or declines in writing to execute the applicable Purchase Document, then
Mr. Touzet shall be deemed to have complied with his obligations under this Section 5.1
with respect to such Touzet Option Property, Parent’s rights with respect to such Touzet Option
Property shall expire and Parent shall have no further rights with respect to the purchase of such
Touzet Option Property (but Mr. Touzet shall have no obligation to refund any expenses previously
reimbursed by Parent pursuant to this Section 5.1) and a Touzet Purchaser may consummate
the proposed transaction; provided, however, that (A) the terms of this Section 5.1 shall
continue to apply to any other Touzet Option Property during the Option Period; (B) Mr. Touzet must
consummate the proposed transaction with respect to such Touzet Option Property within one hundred
twenty (120) days following the date of delivery of the Contract Notice on terms no more favorable
in all material respects taken as a whole to the buyer than those set forth in the Purchase
Document (other than such modifications to the transaction terms resulting from findings arising
out of the due diligence process) ; and (C) the provisions of Section 5.2 below, relating
to property management services shall apply with respect to such Touzet Option Property in the
event a Touzet Purchaser acquires such Touzet Option Property.

          5.1.6 If Parent timely elects to execute the applicable Purchase Document but subsequently
determines (before or after executing such Purchase Document) to abandon any negotiations with
respect to the acquisition of a Touzet Option Property, then Mr. Touzet shall be deemed to have
complied with his obligations under this Section 5.1 with respect to such Touzet Option
Property, Parent’s rights with respect to such Touzet Option Property shall expire and Parent shall
have no further rights with respect to the purchase of such Touzet Option Property (but Mr. Touzet
shall have no obligation to refund any expenses previously reimbursed by Parent pursuant to this
Section 5.1); provided, however, that (A) the terms of this Section 5.1 shall
continue to apply to any other Touzet Option Property during the Option Period; (B) the Touzet
Purchaser must consummate the proposed transaction with respect to such Touzet Option Property
within one hundred twenty (120) days following the date on which Parent notifies Mr. Touzet in
writing that it has abandoned the transaction, on terms no more favorable in all material respects
taken as a whole to the buyer than those set forth in the Purchase Document (other than such
modifications to the transaction terms resulting from findings arising out of the due diligence
process); and (C) the provisions of Section 5.2 below, relating to property management
services shall apply with respect to such Touzet Option Property in the event a Touzet Purchaser
acquires such Touzet Option Property.

     5.2 Property Management Option. On the terms and subject to the conditions of this
Section 5.2, Mr. Touzet, on behalf of himself and any Touzet Purchaser, hereby grants to
Parent (or an Affiliate of Parent) a right of first offer with respect to the provision of
property management services to any Touzet Option Property actually acquired by a Touzet Purchaser
during the Option Period.

          5.2.1 Prior to entering into a property management agreement or leasing agreement with
respect to any Touzet Option Property acquired by any Touzet Purchaser, Mr. Touzet shall make
available to Parent the following information with respect to such Touzet Option Property: a
tenant list, rent roll and loan documentation, together with the proposed terms of the property
management arrangement, including management fees, construction management fees and leasing
commissions. The Parties agree that the management agreement for any Touzet

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Option Property subject to this Section 5.2 shall be in a form reasonably
satisfactory to any Person that holds an interest in the Touzet Option Property and any lender
with respect to the Touzet Option Property.

          5.2.2 Parent shall have five (5) business days after receipt of the information identified in
Section 5.2.1 above to notify Mr. Touzet in writing if Parent elects to have an Affiliate
of Parent enter into the proposed management agreement, or to propose alternative terms for the
management agreement by delivery of written notice of such election (a “Management Election
Notice”). If Parent timely delivers a Management Election Notice, then Parent and Mr. Touzet
shall negotiate the terms of the proposed management agreement during the fifteen (15) day period
beginning on Mr. Touzet’s receipt of the Management Election Notice, which terms shall be market
based for the class and location of the property. If Parent and Mr. Touzet cannot agree on the
terms of the proposed management agreement during such fifteen (15) day period, Mr. Touzet shall be
deemed to have complied with his obligations under this Section 5.2 with respect to such
Touzet Option Property and Mr. Touzet or his Affiliates may enter into a management agreement with
respect to such Touzet Option Property with a third party on terms no more favorable in all
material respects taken as a whole to the third party management company than the terms originally
proposed to Parent pursuant to Section 5.2.1 above. If Parent does not timely deliver a
Management Election Notice or declines in writing to enter into the proposed management agreement,
or to propose alternative terms for the management agreement, Mr. Touzet shall be deemed to have
complied with his obligations under this Section 5.2 with respect to such Touzet Option
Property and Mr. Touzet or his Affiliates may enter into a management agreement with respect to
such Touzet Option Property with a third party on terms no more favorable in all material respects
taken as a whole to the third party management company than the terms originally proposed to Parent
pursuant to Section 5.2.1 above.

          5.2.3 Notwithstanding anything to the contrary in this Section 5.2, the obligation of
Mr. Touzet to offer Parent the right to manage any Touzet Option Property shall not apply to any
Touzet Option Property in which Mr. Touzet has a co-investor that (i) is actively engaged in office
property management; (ii) is seeking the right to control management services as part of the
acquisition; and (iii) undertakes the management of such Touzet Option Property.

     5.3 Confidentiality. Parent hereby acknowledges and agrees, on behalf of itself and
each of its Affiliates and Representatives, that each such Person (i) shall be bound by the terms
and conditions of any confidentiality agreement between Mr. Touzet or any other Touzet Purchaser
and the property owner of any Touzet Option Property (or any of its representatives) in connection
with the potential acquisition of any Touzet Option Property; provided that a copy of any such
confidentiality agreement is provided to Parent, and (ii) shall treat and hold as confidential all
information provided to any such Person in connection with any Touzet Option Property or the rights
and obligations under in this Article 5.

     5.4 Definitions. For purposes of Sections 5.1 and 5.2, “Parkway Market” means
any metropolitan statistical area in which Parkway Properties, Inc., or any of its subsidiaries,
manages office properties as of the Closing Date.

9

 

ARTICLE 6

MISCELLANEOUS PROVISIONS

     6.1 Notices. Any notice, request or other communication to be given pursuant to this
Agreement shall be given in writing (including electronic mail, facsimile or similar writing) and
delivered in accordance with Section 16.1 of the Contribution Agreement.

     6.2 Entire Agreement. This Agreement, exhibits hereto, the
Confidentiality Agreement and the Contribution Agreement constitute the entire agreement among the
Parties concerning the subject matter hereof, and supersede all other prior agreements,
understandings and negotiations, oral or written, between the Parties concerning such subject
matter.

     6.3 Amendments and Waivers.

          6.3.1 No modification or waiver of this Agreement shall be enforceable unless made in a
written instrument signed by the Party against whom the modification or waiver would apply.

          6.3.2 No failure or delay by any Party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. 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. Any term, covenant or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but only by a written
notice signed by such Party expressly waiving such term or condition. No waiver by any Party
hereto of any default, misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation
or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of
any prior or subsequent occurrence of such kind.

     6.4 No Assignments. No Party shall assign or delegate any of the rights or
obligations under this Agreement to a third party without the prior written consent of the other
Parties. Any such assignment which is not permitted under this Agreement shall be null and void.

     6.5 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under
applicable principles of conflict of laws thereof.

     6.6 Jurisdiction and Venue. Each of the Parties irrevocably and unconditionally
submits to the sole and exclusive personal jurisdiction of (a) the state courts of the State of
Delaware, and (b) the United States District Court for the District of Delaware (and appropriate
appellate courts therefrom), for the purposes of any dispute, claim, controversy, suit, action or
other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of the
Parties further agrees and covenants (i) to commence any such action, suit or proceeding either in
the United States District Court for the District of Delaware or if such suit, action or

10

 

other proceeding may not be brought in such court for jurisdictional reasons, in any
state court located in the City of Wilmington, Delaware and (ii) to not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such court. Each of the
Parties further agrees and covenants that if subject matter jurisdiction over any action, suit, or
proceeding in connection with any dispute, claim, or controversy arising out of or relating to this
Agreement, the Related Agreements, or the Transactions exists in the Court of Chancery of the State
of Delaware by reason of Section 111 of the DGCL or if there otherwise exists a good faith basis
for concluding that the Court of Chancery of the State of Delaware would have subject matter
jurisdiction in connection with any such action, suit, or proceeding, then any such action, suit,
or proceeding shall be brought exclusively in the Court of Chancery of the State of Delaware, and
each Party agrees that it shall not attempt to deny or defeat subject matter jurisdiction over such
action, suit, or proceeding in the Court of Chancery of the State of Delaware. Each of the Parties
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the Transactions in (a) the United States District
Court for the District of Delaware, or (b) any state court located in the City of Wilmington,
Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. Each of the Parties hereby agrees that this Agreement involves at
least $100,000 and that this Agreement has been entered into in express reliance on 6 Del. C. §
2708.

     6.7 WAIVER OF TRIAL BY JURY. EACH PARTY HERETO HEREBY WAIVES, RELEASES AND
RELINQUISHES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTIONS ARISING
DIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY CLAIM OR ACTION TO REMEDY ANY BREACH OR ALLEGED BREACH HEREOF, TO ENFORCE
ANY TERM HEREOF, OR IN CONNECTION WITH ANY RIGHT, BENEFIT OR OBLIGATION ACCORDED OR IMPOSED BY
THIS AGREEMENT.

     6.8 Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their respective heirs, executors, personal representatives, successors
and permitted assigns.

     6.9 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability of the invalid or
unenforceable term or provision in any other situation or in any other jurisdiction. If a final
judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid
or unenforceable, the Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified.

11

 

     6.10 Counterparts. This Agreement may be executed and delivered in
multiple counterparts, each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. It is the express intent of the Parties to be bound by the
exchange of signatures on this Agreement via facsimile or electronic mail via the portable document
format (PDF). A facsimile or other copy of a signature shall be deemed an original.

     6.11 Third Parties. Except as otherwise expressly stated herein, no provision of
this Agreement is intended or shall confer on any Person, other than the Parties (and their
successors and permitted assignees), any rights under this Agreement.

     6.12 Exhibits. The exhibits, if any, referenced in this Agreement constitute an
integral part of this Agreement and are incorporated herein by reference and made a part hereof.

     6.13 Time Periods. Any action required hereunder to be taken within a certain number
of days shall, unless otherwise provided herein, be taken within that number of calendar days;
provided, however, that if the last day for taking such action falls on a Saturday, a Sunday, or a
legal holiday, the period during which such action may be taken shall be extended to the next
Business Day.

[Signature Page Follows.]

12

 

     IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth
above.

	 	 	 	 	 	 	 

	 	 	EOP:	 	 
	 
	 	 	 	 	 	 
	 	 	EOLA OFFICE PARTNERS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ James R. Heistand	 	 
	 

	 	 	 	 

Name:  James R. Heistand
	 	 
	 

	 	 	 	Title: Manager	 	 
	 
	 	 	 	 	 	 
	 	 	EOC:	 	 
	 
	 	 	 	 	 	 
	 	 	EOLA CAPITAL LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Rodolfo Prio Touzet 	 	 
	 

	 	 	 	 

Name: Rodolfo Prio Touzet
	 	 
	 

	 	 	 	Title: Chief Executive Officer	 	 

Master Transaction Agreement

 

 

	 	 	 	 	 	 	 	 	 

	 	 	PARENT:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PARKWAY PROPERTIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/  Steven G. Rogers	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:   Steven G. Rogers	 	 
	 	 	 	 	Title: President and CEO	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Richard Hickson	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:  Richard Hickson	 	 
	 	 	 	 	Title: Executive Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PARTNERSHIP:

 PARKWAY PROPERTIES LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Parkway Properties General Partners, Inc., general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By: 	/s/ James M. Ingram	 
	 

	 	 	 	 	 

Name: James M. Ingram
	 	 
	 

	 	 	 	 	Title: Executive  Vice President and Chief Investment Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By: 	/s/ M. Jayson Lipsey	 
	 

	 	 	 	 	 

Name:  M. Jayson Lipsey
	 	 
	 

	 	 	 	 	Title: Senior Vice President and Fund Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTIVES:	 	 
	 
	 
	 	 	 	/s/  James R. Heistand	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: James R. Heistand	 	 
	 
	 
	 	 	 	/s/ Rodolfo Prio Touzet	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Rodolfo Prio Touzet	 	 
	 
	 
	 	 	 	/s/  Henry F. Pratt, III	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Henry F. Pratt, III	 	 

Master Transaction Agreementexv10w2

Exhibit 10.2

LOCK UP AND VOTING AGREEMENT

     THIS LOCK UP AND VOTING AGREEMENT (this “Agreement”) is made and entered into as of April
10, 2011, by and among Parkway Properties, Inc., a Maryland corporation (the “REIT”),
Parkway Properties LP, a Delaware limited partnership (the “OP”), and the undersigned
holders (each a “Holder” and collectively, the “Holders” ) of units of limited
partnership interest of the OP (“OP Units”) or, upon any redemption of such OP Units, other
than for cash, shares of common stock of the REIT, $0.001 par value (“Common Stock”).

RECITALS

     WHEREAS, the REIT, the OP, Eola Office Partners LLC, a Florida limited liability company
(“EOP”), Eola Capital LLC, a Florida limited liability company (“EOC”), the members
of each of EOP and EOC and certain beneficial owners of interests in EOC are parties to a
Contribution Agreement, dated as of April 10, 2011 (the “Contribution Agreement”), which,
subject to the terms and conditions of the Contribution Agreement, provides for the contribution of
(x) all of the membership interests of EOP to the OP, and (y) all of the membership interests of
EOC that are owned by Banyan Street Office Holdings LLC, a Florida limited liability company
(“Banyan”), to the OP (collectively, the “Contribution”), and the issuance,
pursuant to the Contribution, of OP Units to the members of EOP and Banyan (or the members of
Banyan);

     WHEREAS, the Holders are entering into this Agreement as holders of OP Units, which they will
receive in connection with the Contribution Agreement and which may be redeemed, pursuant to the
terms of the Amended and Restated Agreement of Limited Partnership of the OP (the “Partnership
Agreement”), for cash or, at the REIT’s election, shares of Common Stock;

     WHEREAS, as a condition and inducement to the REIT and the OP to enter into the Contribution
Agreement, the REIT and the OP have required that the Holders agree to certain matters regarding
the ownership, retention and voting of Shares (as defined below); and

     WHEREAS, capitalized terms used in this Agreement that are not otherwise defined shall have the
meanings given to them in the Contribution Agreement.

     NOW THEREFORE, in consideration of the premises and covenants herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

ARTICLE I

AGREEMENT NOT TO TRANSFER

          1.1 Transfer and Encumbrance. Except as specifically set forth in this Agreement, from the
date of this Agreement until the first anniversary of the closing of the Contribution (the
“Lock Up Period”), each Holder agrees not to, without the prior written consent of the REIT
or the OP, (A) directly or indirectly, sell, transfer, tender, assign, pledge, encumber, contribute
to the capital of any entity, hypothecate, give or otherwise dispose of, or create or permit to
exist any encumbrance of any nature whatsoever with respect to (i) any shares of capital stock of
the REIT, or any securities of the OP, including OP Units, owned of record or beneficially held by
such Holder as of the date of this Agreement, or (ii) any capital stock of the

 

 

REIT (including any options, warrants or other rights to acquire shares of capital stock of the
REIT), and including but not limited to any preferred stock, Common Stock and OP Units received or
to be received pursuant to the Contribution, or that the Holder shall purchase, or with respect to
which the Holder shall otherwise acquire beneficial ownership (including by reason of any stock
split, reverse split, stock dividend, combination, reorganization, recapitalization or other like
change, conversion or exchange of shares, or any other change in the corporate or capital structure
of the REIT or the OP) or over which the Holder shall exercise voting power, either before or after
the execution of this Agreement and during the Lock Up Period, or any interest therein (any such
shares of preferred stock, Common Stock and OP Units or other rights with respect thereto as
described above, collectively being referred to herein as the “Shares”), or
(B) make any offer or enter into any agreement, contract, option or other understanding or
arrangement relating thereto, or consent to any of the foregoing, at any time during the Lock Up
Period; provided that, in addition to the provisions related to the termination of this Agreement
in Article IV hereof, the Lock-Up Period, and all rights and obligations of the parties
with respect to this Section 1.1 only, shall immediately terminate and be of no further
force and effect upon the earlier to occur of (A) a Lock-Up Breach (as defined in that certain
Master Transaction Agreement, dated April 10, 2011 by and among the REIT, the OP, EOP, EOC, James
R. Heistand, Rodolfo Prio Touzet and Henry F. Pratt, III), and (B) a Principal Termination Event
(as defined in the Contribution Agreement).

          1.2 Permitted Transfers and Encumbrances. Notwithstanding the provisions of Section
1.1, during the Lock Up Period, the REIT, the OP and the general partner of the OP agree that
(A) Banyan Street Office Holdings LLC (“Banyan Street”) may distribute to its members,
Rodolfo Prio Touzet and Lorri Dunne, the OP Units issued to Banyan Street pursuant to the
Contribution, (B) a Holder may pledge to third parties up to seventy-five percent (75%) of the
aggregate number of such Holder’s shares of Common Stock and OP Units (including a transfer to such
third party in connection with the exercise of its remedies under such pledge),
(C) a Holder may redeem such Holder’s OP Units for shares of Common Stock pursuant to the terms of
the Partnership Agreement; provided that any and all shares of Common Stock received by a Holder
upon such redemption shall continue to be subject to the terms and conditions of this Agreement,
and (D) a Holder may transfer shares of Common Stock or OP Units to any trust for the direct or
indirect benefit of such Holder or the immediate family of such Holder (for purposes of this
Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin), and (E) each of the Holders may transfer OP Units (or shares of Common
Stock, if redeemed) among each other, so long as such transfers are made in compliance with
applicable securities laws, in each case, without any further consent of the REIT or the OP or the
general partner of the OP; provided that, in each case, the proposed transferor shall notify the
REIT not less than three (3) business days in advance of any proposed transfer of pledge; and
provided further that Rodolfo Prio Touzet, in the case of clause (A), and any permitted transferee,
in the case of clauses (D) and (E) only, agree to be bound by the terms and conditions of this
Agreement.

ARTICLE II

AGREEMENT TO VOTE SHARES; GRANT OF PROXY AND STANDSTILL

          2.1 Agreement to Vote Shares. During the period commencing on the date of this Agreement
and terminating on the third (3rd) anniversary of the closing of the Contribution

2

 

(the “Voting Period”), at every meeting of the stockholders of the REIT or the
partners of the OP called with respect to any of the matters described below, and on every action
or approval by written consent of the stockholders of the REIT or the partners of the OP or in any
other circumstance in which the vote, consent or approval of the stockholders of the REIT or the
partners of the OP, in their capacity as the Holders or partners, is sought, each Holder shall
appear at the meeting or otherwise cause any and all Shares to be counted as present thereat for
purposes of establishing a quorum and agrees to vote (or cause to be voted) any and all Shares or
give consent with respect thereto, or cause consent to be given with respect thereto, as follows:
with respect to (a) any tender offer or exchange offer, any merger, acquisition transaction or
other business combination involving the REIT or the OP or any of their subsidiaries or Affiliates
or any of their respective assets or properties, in the manner recommended by the board of
directors of the REIT (the “Board”), including with respect to any recommendation made by
the Board of the REIT, acting as general partner of the OP, with respect to any vote by partners of
the OP or (b) in the election of directors of the REIT, in favor of nominees recommended by the
Board. During the Voting Period, each Holder agrees that such Holder will not (A) grant any proxy,
power-of-attorney or other authorization, other than the Proxy, as described below, in or with
respect to any Shares, or take any other action that would in any way restrict, limit or interfere
with the performance of the Holder’s obligations hereunder, or (B) directly or indirectly, solicit,
initiate, seek, encourage or support or take any other action the effect of which would be
inconsistent with or violative of any provision contained in this Section 2.1. The undersigned Holders may vote the Shares on all other matters.

          2.2 Exclusive Grant of Proxy. Contemporaneously with the execution and delivery of this
Agreement, each Holder is delivering to the REIT a duly executed proxy in the form attached hereto
as Annex A (the “Proxy”), which shall be irrevocable during the Voting Period,
solely with respect to the matters set forth in Section 2.1. Except for the Proxy, no
Holder shall, during the Voting Period, directly or indirectly, grant any proxy, irrevocable proxy
or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting
trust, or enter into a voting agreement or arrangement with respect to voting any of the Shares
(each a “Voting Proxy”). In addition to the representations and warranties set forth below,
each Holder represents and warrants to the REIT and the OP that such Holder has not granted any
Voting Proxy with respect to any of the Shares with respect to the matters set forth in Section
2.1, and if any Voting Proxy has been granted to any person for such purpose, any such Voting
Proxy is hereby revoked by the Holder.

          2.3 Stockholder Capacity. Each Holder is entering into this Agreement in his or her
capacity as the record and beneficial owner of such Holder’s Shares. Notwithstanding any other
provision of this Agreement, including without limitation Section 2.1, Section 2.2
and Section 3.5, to the extent a Holder serves as an officer or director of the REIT,
nothing contained herein shall limit the ability of such Holder to exercise his ordinary and
customary duties as an officer or director of the REIT, including, without limitation, the exercise
of such Holder’s fiduciary obligations to the REIT and its stockholders.

          2.4 Standstill. During the Voting Period, each Holder hereby agrees that neither Holder nor
any of its affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) will (and neither Holder nor such Holder’s affiliates will
assist, provide or arrange financing to or for others or encourage others to), directly

3

 

or indirectly, acting alone or in concert with others, unless specifically requested in writing or
approved in advance by the Board:

     (i) acquire or agree, offer, seek or propose to acquire (or request permission to do so), ownership
(including, but not limited to, beneficial ownership as defined in Rule 13d-3 under the Exchange
Act) of any material portion of the assets or businesses of the REIT or its affiliates or any
securities issued by the REIT or its affiliates other than as contemplated pursuant to the
Contribution Agreement, or any rights or options to acquire such ownership (including from a third
party), or make any public announcement (or request permission to make any such announcement) with
respect to any of the foregoing; provided, however, that James R. Heistand and Rodolfo Prio Touzet
(together with their affiliates) shall be entitled to acquire, in the aggregate, ownership of a
number of shares of Common Stock equal to no greater than one percent (1%) of the total number of
shares of Common Stock then outstanding; or

     (ii) propose or enter into, directly or indirectly, any merger, consolidation, recapitalization,
business combination or other similar transaction involving the REIT or any of its affiliates; or

     (iii) form, join or enter into a group (within the meaning of Section 13(d)(4) of the Exchange Act)
with respect to any voting securities of the REIT or any of its affiliates; or

     (iv) enter into any discussions, negotiations, arrangements or understandings with any third party
with respect to any of the foregoing, or otherwise advise, assist or encourage any other persons in
furtherance of any of the foregoing, in each case, other than in connection with the performance of
such Holder’s duties as a member of the Board or any committee thereof, if authorized by such Board
or a duly authorized committee.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE HOLDERS

     Each Holder represents, warrants and covenants to the REIT and the OP as follows:

          3.1 Ownership of Shares. Upon closing of the Contribution, the Holder will be the sole
beneficial and record owner and holder of the Shares indicated on the signature pages hereto, which
at all times during the Voting Period, will be free and clear of any Liens except as set forth in
Section 1.2 and except for any Liens imposed by federal or state securities laws.

          3.2 Authority; Due Execution. The Holder has full power and authority (including, if
applicable, full corporate, partnership, limited liability company or trust power and authority) to
make, enter into and carry out the terms of this Agreement. The Holder has duly executed and
delivered this Agreement and (assuming the due authorization, execution and delivery of this
Agreement by the REIT and the OP) this Agreement constitutes a valid and binding obligation of the
Holder.

4

 

          3.3 Non-Contravention. The execution and delivery of this Agreement by the Holder does not,
and the performance of and under this Agreement by the Holder will not (i) to the Holder’s actual
knowledge (without any duty of inquiry), conflict with or violate any federal, state, local,
municipal, foreign or other law, statute, constitution, principle of common law, resolution,
ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by or under the authority of any
government entity, or (ii) result in, give rise to or constitute a violation or breach of or a
default (or any event which with notice or lapse of time or both would become a violation, breach
or default) under any of the terms of any material agreement or other instrument or obligation by
which the Holder or the Shares may be bound. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Holder is settlor or trustee or any other
person or Governmental Authority whose consent, approval, order or authorization is required by or
with respect to the Holder or the Shares for the execution, delivery and performance of this
Agreement by the Holder.

          3.4 Power. The Holder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Articles I and II hereof, sole power of disposition and sole
power to agree to all of the matters set forth in this Agreement, in each case with respect to all
of the Holder’s Shares, with no limitations, qualifications or restrictions on such rights.

          3.5 No Solicitations. Unless specifically authorized by vote of a majority of the directors
of the REIT, during the Voting Period, the Holder, will not, and will not permit any entity under
the Holder’s control, to: (i) solicit proxies of the stockholders of the REIT with respect to (a)
any merger, consolidation, sale of assets, business combination, reorganization or recapitalization
involving the REIT or the OP or their subsidiaries or Affiliates, (b) any transaction that would
result in a change of control of the REIT, or (c) any liquidation or winding up of the REIT or the
OP; (ii) otherwise encourage or assist any party in taking or planning any action that could result
in any of the events described in (a), (b) or (c) above; (iii) initiate vote or action by consent
of securities holders of the REIT or the OP in support of any of the events described in (a), (b)
or (c) above; or (iv) become a member of a “group” (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended) with respect to any voting securities of the REIT or
the OP with respect to any of the events described in (a), (b) or (c) above; provided, however, to
the extent a Holder serves as an officer or director of the REIT, nothing contained in this
Section 3.4 shall limit the ability of such Holder to exercise his ordinary and customary
duties as an officer or director of the REIT, including, without limitation, the exercise of such
Holder’s fiduciary obligations to the REIT and its stockholders.

ARTICLE IV

TERMINATION

     This Agreement, and all rights and obligations of the parties hereunder, shall terminate on the
earliest of (i) the expiration of the Voting Period, (b) the termination of the Contribution
Agreement, (c) the agreement of the REIT, the OP and the Holders to terminate this Agreement, or
(d) with respect to any Shares sold or transferred by a Holder not in violation of Section 1.1
hereof, automatically upon the sale or transfer of such Shares. Nothing in this Article
IV shall

5

 

relieve any party of liability for any breach of this Agreement; provided, that Section5.4
herein shall be the REIT’s and the OP’s sole remedy for a breach of this Agreement by a Holder.

ARTICLE V

MISCELLANEOUS

          5.1 Severability. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

          5.2 Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective successors.
Neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be
assigned by the parties without prior written consent of the other parties hereto.

          5.3 Amendments and Modification. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement executed by the parties
hereto.

          5.4 Specific Performance; Injunctive Relief. The parties hereto acknowledge that the REIT
and the OP will be irreparably harmed and that there will be no adequate remedy at law for a
violation of any of the covenants or agreements of the Holders set forth herein. Therefore, it is
agreed that the REIT and the OP shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to the REIT or the OP at
law or in equity and each Holder hereby irrevocably and unconditionally waives any objection to the
REIT or the OP seeking so to enforce such covenants and agreements by specific performance,
injunctive relief and other means. Such right to enforce this Agreement by specific performance or
injunctive relief shall be the REIT’s and the OP’s sole remedy upon a breach of this Agreement by a
Holder. If any action, suit or other proceeding (whether at law, in equity or otherwise) is
instituted concerning or arising out of this Agreement or any transaction contemplated hereunder,
the prevailing party shall recover, in addition to any other remedy granted to such party therein,
all such party’s reasonable costs and attorneys fees incurred in connection with the prosecution or
defense of such action, suit or other proceeding.

          5.5 Governing Law; Consent to Jurisdiction. All matters arising out of or relating to this
Agreement and the transactions contemplated hereby (including without limitation its
interpretation, construction, performance and enforcement) shall be governed by and construed in
accordance with the laws of the State of Maryland. In any action or proceeding between the parties
arising out of or relating to this Agreement or any of the transactions contemplated hereby, each
party: (i) irrevocably and unconditionally consents and submits to the exclusive jurisdiction and
venue of any State Court located in the city of Baltimore, Maryland (or, in the case of any claim
as to which the federal courts have exclusive subject matter jurisdiction, the Federal court of the
United States of America, sitting in the District of Maryland); (ii) agrees that all claims in
respect of such action or proceeding must be commenced, and may be heard and determined,
exclusively in such Maryland court (or, if applicable, such Federal court); (iii) waives, to the
fullest extent it may legally and effectively do

6

 

so, any objection which it may now or hereafter have to the laying of venue of any such action or
proceeding in such Maryland State court (and, if applicable, such Federal court); and (iv) waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in such Maryland State court (or, if applicable, such Federal court).

          5.6 Entire Agreement. This Agreement contains the entire understanding of the parties in
respect of the subject matter hereof, and supersedes all prior negotiations and understandings
between the parties with respect to such subject matter.

          5.7 Counterparts. This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.

[Signature Pages Follows.]

7

 

     IN WITNESS WHEREOF, the parties have caused this Lock Up and Voting Agreement to be duly executed
as an instrument under seal on the day and year first above written.

	 	 	 	 	 

	 	 	PARKWAY PROPERTIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Steven G. Rogers
	 

	 	 	 	 
	 

	 	 	 	Name:  Steven G. Rogers
	 

	 	 	 	Title: President and CEO
	 
	 	 	 	 
	 

	 	By:	 	/s/ Richard Hickson
	 

	 	 	 	 
	 

	 	 	 	Name: Richard Hickson
	 

	 	 	 	Title: Executive Vice President and Chief Financial Officer

	 	 	 	 	 	 	 

	 	 	PARKWAY PROPERTIES LP
	 
	 	 	 	 	 	 
	 	 	By:	 	Parkway Properties General Partners, Inc., 
general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ James M. Ingram
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:  James M. Ingram
	 

	 	 	 	 	 	Title: Executive Vice President and Chief Investment Officer
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ M. Jayson Lipsey
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: M. Jayson Lipsey
	 

	 	 	 	 	 	Title: Senior Vice  President and Fund Manager

Signature Page to Lock Up and Voting Agreement

 

 

	 	 	 	 	 

	 	 	HOLDERS: 

BANYAN STREET OFFICE HOLDINGS LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Rodolfo Prio Touzet
	 

	 	 	 	 
	 

	 	 	 	Name: Rodolfo Prio Touzet
	 

	 	 	 	Title: Managing Member
	 
	 	 	 	 
	 

	 	 	 	/s/ Rodolfo Prio Touzet
	 

	 	 	 	 
	 

	 	 	 	Rodolfo Prio Touzet
	 
	 	 	 	 
	 

	 	 	 	/s/ Henry F. Pratt, III
	 

	 	 	 	 
	 

	 	 	 	Henry F. Pratt, III
	 
	 	 	 	 
	 

	 	 	 	/s/ James R. Heistand
	 

	 	 	 	 
	 

	 	 	 	James R. Heistand
	 
	 	 	 	 
	 

	 	 	 	/s/ Kyle Burd
	 

	 	 	 	 
	 

	 	 	 	Kyle Burd
	 
	 	 	 	 
	 

	 	 	 	/s/ Scott Francis
	 

	 	 	 	 
	 

	 	 	 	Scott Francis
	 
	 	 	 	 
	 

	 	 	 	/s/ Troy M. Cox
	 

	 	 	 	 
	 

	 	 	 	Troy M. Cox

Signature Page to Lock Up and Voting Agreement

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