Exhibit 10.31

SECOND AMENDED & RESTATED

RESTRICTED PAIRED SHARE AGREEMENT

THIS RESTRICTED PAIRED SHARE AGREEMENT (this “Agreement”) is entered into by and
among ESH Hospitality Holdings LLC, a Delaware limited liability company
(“Holdings”), Extended Stay America, Inc., a Delaware corporation (the
“Company”) and ESH Hospitality, Inc., a Delaware Corporation (“ESH REIT”) as of
March 10, 2014.

WHEREAS, certain employees of HVM L.L.C. received grants of Profit Units
pursuant to the HVM Management Incentive Plan, as amended, modified,
supplemented or restated from time to time (the “HVM Incentive Plan”);

WHEREAS, certain non-voting directors of the board of managers of Holdings (the
“Board”) received grants of Profit Units pursuant to the ESH Manager Incentive
Plan, as amended, modified, supplemented or restated from time to time (the “ESH
Manager Plan”);

WHEREAS, each Profit Unit holder also received grants of Strategies Profit Units
pursuant to the ESH Strategies Incentive Plan, and also on November 12, 2013,
the intellectual property assets held by ESH Hospitality Strategies Holdings LLC
are being transferred to the Company and thereafter, ESH Hospitality Strategies
Holdings LLC is being liquidated;

WHEREAS, the Board has determined that conducting the business of ESH REIT in a
corporate rather than a limited liability company form is necessary to allow an
offering of equity interests in ESH REIT;

WHEREAS, the Board has determined, in accordance with its authority and rights
pursuant to Section 13.01(b) of the Fourth Amended and Restated Limited
Liability Agreement of Holdings, dated as of July 27, 2012, as amended,
modified, supplemented or restated from time to time (the “Holdings LLC
Agreement”), to dissolve Holdings and to distribute to the Profit Unit holders
certain Shares subject to the terms and conditions set forth herein; and

WHEREAS, the Company and ESH REIT wish to enter into this Agreement with
Holdings to set forth the terms and conditions of such Shares;

NOW THEREFORE, the parties hereto agree as follows:

1. Definitions. The capitalized terms herein not otherwise defined shall have
the meaning ascribed to them in the Holdings LLC Agreement. For purposes of this
Agreement:

1.1. “Accelerated Shares” shall have the meaning set forth in Section 2.2(c).

1.2. “Blackstone” means Blackstone Real Estate Partners VI L.P. and its
affiliates.

 

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1.3. “Cause” shall mean means the occurrence or existence of any of the
following (a) with respect to a Distributee who is an employee of the Company or
any of its subsidiaries, as determined in good faith by the Company: (i) in the
case of a Distributee whose employment with the Company is subject to the terms
of an employment agreement which includes a definition of “Cause,” the meaning
set forth in such employment agreement during the period that such employment
agreement remains in effect, and (ii) in all other cases (A) a material breach
of such Distributee’s obligations under any employment or other agreement with
the Company; (B) any act of fraud, misappropriation, dishonesty, embezzlement or
similar conduct against the Company or any of its Affiliates; or (C) conviction
of a felony or any crime involving moral turpitude, and (b) with respect to a
Distributee who is a director of the Company or ESH REIT, the removal of such
Distributee as a director from the board of directors of the Company or ESH
REIT, as applicable, for cause.

1.4. “Centerbridge” means Centerbridge Partners, LP and its affiliates.

1.5. “Change in Control” shall mean the occurrence of any of the following:

(a) An acquisition (other than directly from the Company) of any voting
securities of Extended Stay America (the “Voting Securities”) by any Person,
immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of the combined voting power of the Company’s then-outstanding
Voting Securities; provided, however, that in determining whether a Change in
Control has occurred pursuant to this Section 1.4(a), the acquisition of Voting
Securities in a Non-Control Acquisition (as hereinafter defined) shall not
constitute a Change in Control. A “Non-Control Acquisition” shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other Person the
majority of the voting power, voting equity securities or equity interest of
which is owned, directly or indirectly, by the Company (for purposes of this
definition, a “Related Entity”), (ii) the Company or any Related Entity,
(iii) any of the Principal Stockholders, or (iv) any Person in connection with a
Non-Control Transaction (as hereinafter defined);

(b) The individuals who, as of the effective date of this Agreement are members
of the Board (the “Incumbent Board”), cease for any reason to constitute at
least a majority of the members of the Board; provided, however, that if the
election, or nomination for election by the Company’s common stockholders, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be considered as
a member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (a “Proxy
Contest”) including by reason of any agreement intended to avoid or settle any
Proxy Contest;

(c) The consummation of:

 

  (1) A merger, consolidation or reorganization (x) with or into the Company or
(y) in which securities of the Company are issued (a “Merger”), unless such
Merger is a Non-Control Transaction. A “Non-Control Transaction” shall mean a
Merger in which:

 

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  i. the stockholders of the Company immediately before such Merger own directly
or indirectly immediately following such Merger at least a majority of the
combined voting power of the outstanding voting securities of (1) the
corporation resulting from such Merger (the “Surviving Corporation”), if fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly, by another Person (a “Parent Corporation”), or (2) if
there is one or more than one Parent Corporation, the ultimate Parent
Corporation;

 

  ii. the individuals who were members of the Board immediately prior to the
execution of the agreement providing for such Merger constitute at least a
majority of the members of the board of directors of (1) the Surviving
Corporation, if there is no Parent Corporation, or (2) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation; and

 

  iii. no Person other than (1) the Company or another corporation that is a
party to the agreement of Merger, (2) any Related Entity, (3) any employee
benefit plan (or any trust forming a part thereof) that, immediately prior to
the Merger, was maintained by the Company or any Related Entity, (4) any
Principal Stockholder or (5) any Person who, immediately prior to the Merger,
had Beneficial Ownership of Voting Securities representing more than fifty
percent (50%) of the combined voting power of the Company’s then-outstanding
Voting Securities, has Beneficial Ownership, directly or indirectly, of fifty
percent (50%) or more of the combined voting power of the outstanding voting
securities of (x) the Surviving Corporation, if there is no Parent Corporation,
or (y) if there is one or more than one Parent Corporation, the ultimate Parent
Corporation;

 

  (2) A complete liquidation or dissolution of the Company; or

 

  (3) The sale or other disposition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole to any Person (other than
(x) a transfer to a Related Entity or (y) the distribution to the Company’s
stockholders of the stock of a Related Entity or any other assets).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities then outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person; provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company and, after such
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities and such Beneficial Ownership increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

 

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1.6. “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.7. “Committee” shall refer to both the compensation committee of the board of
directors of the Company and the compensation committee of the board of
directors of ESH REIT which shall act in concert with respect to administration
of this Agreement.

1.8. “Company Charter” shall mean the articles of incorporation of the Company.

1.9. “Corporate Transaction” shall mean a merger, consolidation, reorganization,
recapitalization or other similar change in the capital stock of the Company or
ESH REIT that is not a Change in Control.

1.10. “Distributee” shall mean a former Profit Unit holder who receives
Distributed Shares pursuant to this Agreement.

1.11. “Distributed Shares” shall have the meaning set forth in Section 2.1.

1.12. “Distribution” shall mean the final liquidating distribution of Holdings.

1.13. “ESH REIT Charter” shall mean the articles of incorporation of the ESH
REIT.

1.14. “Grant” shall mean a Distributee’s respective grant of Class B Units
and/or Class C Units that was made under the HVM Incentive Plan or ESH Manager
Plan, as applicable, the terms of which were set forth in an award agreement.

1.15. “IPO” shall mean the initial public offering of the Company and ESH REIT
Company.

1.16. “Pairing Agreement” shall mean the pairing agreement by and between the
Company and ESH REIT dated as of November 12, 2013, as may be amended from time
to time.

1.17. “Paulson” means Paulson & Co. Inc. and its affiliates.

1.18. “Principal Stockholders” include each of Blackstone, Centerbridge and
Paulson.

1.19. “Profit Units” shall mean those Class B Units and Class C Units as granted
to participants under the HVM Incentive Plan and ESH Manager Plan.

1.20. “Restricted Shares” shall have the meaning set forth in Section 2.2(b).

1.21. “Securities Act” shall mean the Securities Act of 1933, as amended, and
its accompanying rules and regulations.

1.22. “Share” shall mean a share of Company common stock, par value $0.01, per
share, and a share of ESH REIT Class B common stock, par value $0.01, per share,
that are stapled together and traded as a Paired Share pursuant to the terms of
the Pairing Agreement, the Company Charter and the ESH REIT Charter.

 

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1.23. “Strategies Profit Units” shall mean Profit Units as defined in the Fourth
Amended and Restated Limited Liability Company Agreement of ESH Hospitality
Strategies Holdings LLC, dated as of July 27, 2012, as amended, modified,
supplemented or restated from time to time.

1.24. “Termination of Service” means a termination of the Distributee’s
employment with the Company and its subsidiaries or service as a director of the
Company and/or ESH REIT, for any reason, including by reason of the
Distributee’s death or disability, in each case as determined by the Company or
ESH REIT, as applicable, and which represents a “separation from service” as
defined in Treasury Regulation §1.409A-1(h), or results from the Distributee’s
death or disability as defined in Treasury Regulation §1.409A-3(i)(4).

1.25. “Vested Equivalent Amount” shall mean, for each Profit Unit holder who
holds vested Profit Units as of immediately prior to the Distribution, with
respect to each outstanding Grant, a number of Distributed Shares as determined
by the Board which together with any tax distribution made in connection with
the Distribution, represents the Profit Unit holder’s interest in the vested
Profit Units with respect to such Grant.

1.26. “Unrestricted Shares” shall have the meaning set forth in Section 2.2(a).

1.27. “Unvested CIC Equivalent Amount” shall mean, for each Profit Unit holder
who holds unvested Profit Units as of immediately prior to the Distribution,
with respect to each outstanding Grant, a number of Distributed Shares as
determined by the Board made in connection with the Distribution, which
represents the Profit Unit holder’s interest in the unvested Profit Units which
were scheduled to vest only upon a Change of Control Transaction with respect to
such Grant.

1.28. “Unvested Equivalent Amount” shall mean, for each Profit Unit holder who
holds unvested Profit Units as of immediately prior to the Distribution, with
respect to each outstanding Grant, a number of Distributed Shares as determined
by the Board made in connection with the Distribution, which represents the
Profit Unit holder’s interest in the unvested Profit Units (other than those
unvested Profit Units which were scheduled to vest only upon a Change of Control
Transaction) with respect to such Grant.

2. Distributed Shares.

2.1. In connection with the Distribution, each Profit Unit holder as of
immediately prior to the Distribution shall receive a number of Shares to be
determined by the Board by applying the provisions of Section 4.03(b) of the
Holdings LLC Agreement based on the value of (a) the Company and ESH REIT and
(b) ESH Hospitality Strategies Holdings LLC as determined based on the IPO price
of the Shares, as adjusted for the effects of the tax distribution received in
connection with certain pre-IPO restructuring transactions, if any (the
“Distributed Shares”).

 

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2.2. A Distributee’s Distributed Shares in respect of each Grant shall consist
of the following:

(a) A number of Distributed Shares equal to the Vested Equivalent Amount which
shall generally not be subject to forfeiture (subject to Section 3.2) and shall
be subject only to the transfer restrictions and ownership guidelines referred
to in Section 2.3 (the “Unrestricted Shares”).

(b) A number of Distributed Shares equal to the Unvested Equivalent Amount (the
“Restricted Shares”). The Restricted Shares shall be subject to the forfeiture
provisions of Section 3 and to the transfer restrictions and ownership
guidelines referred to in Section 2.3. The Restricted Shares shall continue to
vest on the same vesting anniversary date as set forth in the applicable award
agreement that governed such Grant, provided that the Distributee remains in
continuous service to the Company, its subsidiaries or ESH REIT through the
applicable vesting date, as follows:

 

  (1) If Distributee’s Grant was 0% vested as of immediately prior to the
Distribution, 25% of the Restricted Shares shall vest on each of the four
vesting anniversary dates following the Distribution Date;

 

  (2) If Distributee’s Grant was 20% vested as of immediately prior to the
Distribution, 33 1/3% of the Restricted Shares shall vest on each of the three
vesting anniversary dates following the Distribution Date;

 

  (3) If Distributee’s Grant was 40% vested as of immediately prior to the
Distribution, 50% of the Restricted Shares shall vest on each of the two vesting
anniversary dates following the Distribution Date; or

 

  (4) If Distributee’s Grant was 60% vested as of immediately prior to the
Distribution, 100% of the Restricted Shares shall vest on the vesting
anniversary date immediately following the Distribution Date.

(c) A number of Distributed Shares equal to the Unvested CIC Equivalent Amount
(the “Accelerated Shares”). The Accelerated Shares shall be subject to the
forfeiture provisions of Section 3 and the Distributee shall not be permitted to
Transfer (as defined below) such Accelerated Shares until the date on which all
of the Restricted Shares in respect of such Grant have vested or would have
vested in accordance with Section 2.2(b) or, if earlier, Section 2.2(d). The
Accelerated Shares shall also be subject to the transfer restrictions and
ownership guidelines referred to in Section 2.3.

(d) Notwithstanding Section 2.2(b), all of a Distributee’s then outstanding
Restricted Shares that have not vested shall vest immediately upon a Change in
Control.

2.3. Notwithstanding anything to the contrary in this Agreement or otherwise,
all of the Distributed Shares received by a Distributee shall be subject to the
restrictions on Transfer set forth in Exhibit A and the stock ownership
guidelines of the Company and ESH REIT as set forth in Exhibit B and Exhibit C,
respectively. Unless otherwise determined by the Company and ESH REIT, the
Distributed Shares may not be sold, transferred, assigned or otherwise disposed

 

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of, and may not be pledged or otherwise hypothecated (any such transfer,
assignment, disposition, pledge or hypothecation, a “Transfer”) while (a) such
Distributed Shares are subject to the restrictions on Transfer set forth on
Exhibit A and the stock ownership guidelines of the Company and ESH REIT set
forth on Exhibit B and Exhibit C, respectively, and (b)(i) with respect to the
Restricted Shares, while such Restricted Shares are subject to forfeiture to the
Company and ESH REIT, as applicable and (ii) with respect to the Accelerated
Shares, while such Accelerated Shares are subject to the restrictions on
Transfer set forth in Section 2.2(c); provided, however, that the foregoing
shall not prohibit the Transfer of any such Distributed Shares pursuant to a
definitive agreement executed by the Company in connection with a Corporate
Transaction.

2.4. The certificates, if any, evidencing the Distributed Shares will bear the
following legends when issued:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES, OR “BLUE SKY,” LAWS OF ANY
STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION AND RESALE AND MAY
NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN
EFFECT UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR UNLESS THE
DISTRIBUTEE DELIVERS TO THE COMPANY AND ESH REIT A WRITTEN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ESH REIT THAT SUCH REGISTRATION IS
NOT REQUIRED AND THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH
TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS.”

In addition, Holdings acknowledges that each certificate for Distributed Shares
shall bear any additional legend required by any other applicable domestic or
foreign securities or blue sky laws, or as set forth in the Company’s
certificate of incorporation or ESH REIT’s certificate of incorporation.

Until such time as the Transfer of Distributed Shares is permitted under the
restrictions on Transfer referenced in Section 2.3 and the legends described
above have been removed, the Company and ESH REIT will direct its transfer agent
and registrar to maintain stop transfer instructions on record for the
Distributed Shares, as applicable.

2.5. The Distributee acknowledges the Distributed Shares have not been
registered under the Securities Act, or under the securities laws of any other
jurisdiction. Rule 144 promulgated under the Securities Act is not presently
available with respect to the sale of the Distributed Shares. Neither the
Company nor ESH REIT is under any obligation, and has no current plan or
intention, to register or qualify the Distributed Shares for resale by the
Distributees. The Distributee may not Transfer the Distributed Shares or any
portion thereof without compliance with (a) the Securities Act, applicable U.S.
state securities laws, and any applicable securities laws of any other
jurisdiction (or an exemption therefrom), and (b) the restrictive legends set
forth thereon.

 

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2.6. Certificates or evidence of book-entry shares representing the Restricted
Shares shall be issued and held in escrow by the Company and ESH REIT, as
applicable, and shall remain in the custody of the Company and ESH REIT, as
applicable, until their delivery to the Distributee as set forth herein, subject
to the Grantee’s delivery of any document which the Committee, the Company or
ESH REIT may, in its discretion, require as a condition to the delivery of
Shares to the Distributee or his or her estate, including, but not limited to
delivery of a stock power, duly endorsed in blank, relating to the Restricted
Shares.

3. Effect of Distributee’s Termination from Service.

3.1. In the event of a Distributee’s Termination of Service for any reason, all
the Distributee’s Restricted Shares that have not vested as of immediately prior
to the Termination of Service shall immediately terminate and be forfeited to
each of the Company and ESH REIT, as applicable.

3.2. In the event of a Distributee’s Termination of Service by the Company or
ESH REIT, as applicable, for Cause, (i) all Distributed Shares that remain
subject to any restrictions on Transfer in accordance with Section 2.3; and
(ii) all Accelerated Shares held by the Distributee as of immediately prior to
the Termination of Service shall, in each case, immediately terminate and be
forfeited to each of the Company and ESH REIT, as applicable.

4. Rights as a Stockholder. Upon the distribution of the Distributed Shares to
the Distributee and the entry of the Distributee’s name as a stockholder of
record on the books of the Company and ESH REIT, subject to the terms and
conditions set forth in this Agreement applicable to such Distributed Shares,
the Distributee shall be entitled to all rights of a holder of a Share with
respect to each Distributed Share unless and until (i) with respect to any
Restricted Share or Accelerated Share, such Restricted Share or Accelerated
Share is forfeited pursuant to Section 3 of this Agreement or (ii) with respect
to any Distributed Shares, any such Distributed Share is sold or otherwise
disposed of pursuant to Section 2. Such rights shall include, without
limitation, the right to vote such Distributed Shares and the right to receive
all dividends or other distributions paid or made with respect thereto at the
same time as other holders of Shares.

5. Interpretation/Administration. The Committee shall have the ability to
(a) construe and interpret this Agreement, (b) establish, amend and revoke rules
and regulations for the administration of this Agreement, (c) enforce the
provisions under this Agreement, including determining the duration and purposes
for leaves of absence which may be granted to a Distributee on an individual
basis without constituting a Termination of Service for purposes of this
Agreement; (d) cancel, with the consent of the Distributee, outstanding
Restricted Shares or as otherwise permitted under the term of this Agreement;
(e) exercise its discretion with respect to the powers and rights granted to it
as set forth in this Agreement; and (g) generally, exercise such powers and
perform such acts as are deemed necessary or advisable to promote the best
interests of the Company and ESH REIT with respect to this Agreement. The
Committee’s determinations under this Agreement need not be uniform and may be
made by it selectively among Distributees who receive Restricted Shares (whether
or not such persons are similarly situated). All decisions and determinations by
the Committee in the exercise of the above powers shall be final, binding and
conclusive upon each Distributee, the Company and ESH REIT. The parties agree
that the amount of Distributed Shares as well as the amount of any Unrestricted
Shares, Restricted Shares, or Accelerated Shares otherwise due to a Distributee
in connection with this Agreement, may be rounded, as appropriate.

 

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6. Effect of Certain Transactions.

6.1. In connection with a Corporate Transaction, either:

(a) The Restricted Shares and Accelerated Shares shall, unless otherwise
provided in connection with the Corporate Transaction, continue following the
Corporate Transaction and shall be adjusted if and as provided for in the
agreement or plan (in the case of a liquidation or dissolution) entered into or
adopted in connection with the Corporate Transaction (the “Transaction
Agreement”), which may include, in the sole discretion of the Committee or the
parties to the Corporate Transaction, the assumption or continuation of such
Restricted Shares and Accelerated Shares by, or the substitution for such
Restricted Shares and Accelerated Shares of new awards of, the surviving,
successor or resulting entity, or a parent or subsidiary thereof, or the Company
or ESH REIT with such adjustments as to the number and kind of shares or other
securities or property subject to such new awards, and other terms of such new
awards as the Committee or the parties to the Corporate Transaction shall agree,
or

(b) Outstanding Restricted Shares and Accelerated Shares shall terminate upon
the consummation of the Corporate Transaction; provided, however, that
Restricted Shares and Accelerated Shares shall not be terminated without
providing the holders of affected Restricted Shares and Accelerated Shares
payment (in cash or other consideration upon or immediately following the
consummation of the Corporate Transaction, or, to the extent permitted by
Section 409A of the Code, on a deferred basis) in respect of each Restricted
Share and each Accelerated Share being cancelled of the per Share price to be
paid or distributed to stockholders in the Corporate Transaction, in each case
with the value of any non-cash consideration to be determined by the Committee
in good faith.

6.2. Any action permitted under this Section 6 may be taken without the need for
the consent of any Distributee.

7. Compliance with Section 409A. All Distributed Shares distributed under this
Agreement are intended not to be subject to Section 409A of the Code.
Notwithstanding this or any other provision of the Agreement to the contrary,
the Committee may amend the Agreement or any Restricted Share distributed
hereunder in any manner or take any other action that it determines, in its sole
discretion, is necessary, appropriate or advisable (including replacing any
Restricted Share) to cause the Agreement distributed hereunder to comply with
Section 409A of the Code and all regulations and other guidance issued hereunder
or to not be subject to Section 409A of the Code. Any such action, once taken,
shall be deemed to be effective from the earliest date necessary to avoid a
violation of Section 409A of the Code and shall be final, binding and conclusive
on all Distributees and other individuals having or claiming any right or
interest under this Agreement.

8. No Right to Continued Employment or Service. Nothing in this Agreement shall
be interpreted or construed to confer upon a Distributee any right with respect
to the continuation of employment with the Company and its subsidiaries or
continuation of service as a director of the Company or ESH REIT, nor shall this
Agreement restrict in any way or interfere with the rights of the Company and
its subsidiaries or ESH REIT, as applicable, to terminate a Distributee’s
employment or service at any time.

 

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9. Amendment.

9.1. This Agreement shall not be amended, modified, suspended or terminated
without the express consent of each of the Company and ESH REIT.

9.2. No such amendment, modification, suspension or termination shall impair or
adversely alter any Restricted Shares theretofore distributed under this
Agreement, except with the consent of the Distributee, nor shall any amendment,
modification, suspension or termination deprive any Distributee of any Shares
which he or she may have acquired as a result of the Distribution and pursuant
to the terms of this Agreement.

9.3. To the extent necessary under any applicable law, regulation or exchange
requirement, no other amendment shall be effective unless approved by the
stockholders of the Company in accordance with applicable law, regulation or
exchange requirement.

10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to conflict of
laws principles.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed and delivered as of the day and year first written above.

 

ESH HOSPITALITY HOLDINGS LLC By:   /s/ William D. Rahm  

Name: William D. Rahm

Title:   Vice President and Secretary

EXTENDED STAY AMERICA, INC. By:   /s/ Ross W. McCanless  

Name: Ross W. McCanless

Title:   Chief Legal Officer

ESH HOSPITALITY, INC. By:   /s/ Ross W. McCanless  

Name: Ross W. McCanless

Title:   Chief Legal Officer

[Signature Page to 2nd Amended & Restated Restricted Paired Share Agreement]

 

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EXHIBIT A

Applicable Restrictions on Transfer

Transfer Restrictions to Ensure Compliance with Securities Laws

The Distributed Shares have not been registered under the Securities Act of
1933, as amended (the “Securities Act”), or the securities, or “blue sky,” laws
of any state or other domestic or foreign jurisdiction and may not be sold or
offered for sale except pursuant to a registration statement in effect under the
Securities Act and other applicable laws. Accordingly to ensure compliance with
securities laws, until the six month anniversary of a Distributee’s receipt of
his or her Distributed Shares, no Transfer of such Distributed Shares prior to
receipt shall be permitted without the consent of the Company and ESH REIT,
which consent may granted or withheld in the sole discretion of each of the
Company and ESH REIT and/or which may be conditioned upon the Distributee
delivering to the Company and ESH REIT a written opinion of counsel reasonably
satisfactory to the Company and ESH REIT that registration is not required and
that an exemption from registration is available for the Transfer under the
Securities Act and other applicable laws (a “No Registration Opinion”). On or
after such anniversary the Distributed Shares may be Transferred upon the
delivery of a No Registration Opinion to the Company and ESH REIT, which
requirement may be waived in the sole discretion of each of the Company and ESH
REIT.

Rule 144

In general, under Rule 144 of the Securities Act, as in effect on the date
hereof, a person who is not an “affiliate” of the Company and/or ESH REIT at any
time during the three months preceding a sale, and who has beneficially owned
Shares for at least six months, would be entitled to sell an unlimited number of
Shares provided current public information about the Company and ESH REIT is
available and, after owning such Shares for at least one year, would be entitled
to sell an unlimited number of Shares without restriction. Affiliates of the
Company and/or ESH REIT who have beneficially owned Shares for at least six
months are entitled to sell within any three-month period a number of Shares
that does not exceed the greater of:

 

  •   1% of the number of Shares then outstanding, which will equal
approximately 2,004,500 Shares immediately after the IPO; or

 

  •   the average weekly trading volume of the Shares on the NYSE during the
four calendar weeks preceding the filing of a notice on Form 144 with respect to
the sale.

Sales under Rule 144 by affiliates of the Company or ESH REIT are also subject
to manner of sale provisions and notice requirements and to the availability of
current public information about the Company and ESH REIT. An “affiliate” of the
Company and/or ESH REIT is defined by the rules and regulations under the
Securities Act as a person who “directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with”
the Company and/or ESH REIT. Directors, executive officers, substantial
stockholders and others, who by one means or another have the ability to
exercise control over the Company and/or ESH REIT, may be deemed to be
“affiliates”.

 

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Lock-Up Agreements

To the extent that any Distributee is subject to a lock-up agreement, the terms
and conditions of such lock-up agreement shall govern the Distributee’s
Distributed Shares, to the extent applicable.

Transfer Agent Requirements for Transfers

Distributees should note that independent of any opinion or other documentary
requirement required or waived by the Company and/or ESH REIT, the transfer
agent for the Distributed Shares may require that a Distributee deliver a No
Registration Opinion and/or other documentation from the Distributee regarding
the absence of a requirement to register the proposed Transfer of the Shares.

Each Distributee is urged to consult with his or her legal counsel to review the
applicability of Rule 144 before selling Shares (including Shares acquired under
the Restricted Paired Share Agreement).

 

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