EXHIBIT 10.27
Execution Copy

 

SUBLICENSE AGREEMENT

 

This Sublicense Agreement (the “Agreement”) is made as of December 31, 2001 (the
“Effective Date”), in duplicate originals, and is by and between La Quinta
Franchise, LLC, a Nevada limited liability company, having an office and place
of business at 101 Convention Center Drive, Suite 850, Las Vegas, Nevada  89109
(“Sublicensor”) and La Quinta Inns, Inc., a Delaware corporation, having an
office and place of business at 909 Hidden Ridge, Suite 600, Irving, Texas 75038
(“Sublicensee”).

 

STATEMENT

 

Pursuant to that certain Trademark License Agreement dated December 31, 2001
between La Quinta Properties, Inc. (“Licensor”) and Subliscensor (the “Franchise
License Agreement”), Sublicensor was granted the right, license and privilege to
use, and the right to sublicense the right, license and privilege to use, the
Trademarks owned by Licensor on and in connection with the operation and
management of franchised hotels, motels and restaurants and the advertising,
promotion and offering of the franchised hotel, motel and restaurant services in
the Territory, all as defined herein.

 

Sublicensee now desires to obtain from Sublicensor, and Sublicensor has agreed
to grant to Sublicensee, the right, license and privilege to use, and the right
to further sublicense to Franchisees the right, license and privilege to use,
the Trademarks identified on Schedule A hereto, as well as future related
trademarks and other related intellectual property rights which may be developed
by Licensor and made a part of this Agreement, on and in connection with the
operation and management of franchised hotels, motels and restaurants and the
advertising, promotion and offering of the franchised hotel, motel and
restaurant services in the Territory.

 

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NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and for good and valuable consideration, it is agreed as follows:

 

Article I -  Definitions

 

1.1                                 “ADVERTISING MATERIALS” SHALL MEAN ALL
ADVERTISING AND BUSINESS MATERIALS USED BY SUBLICENSEE WHICH BEAR, FEATURE OR
INCLUDE ANY REFERENCE TO THE TRADEMARKS AND ARE USED IN CONNECTION WITH THE
LICENSED SERVICES.

 

1.2                                 “BUSINESS MATERIALS” SHALL MEAN AND INCLUDE
ALL STATIONERY, LETTERHEADS, ENVELOPES, BUSINESS CARDS, INVOICES, ADVERTISING
AND PROMOTIONAL MATERIALS, AND ALL OTHER BUSINESS AND COMMERCIAL MATERIALS USED
BY SUBLICENSEE WHICH BEAR THE TRADEMARKS.

 

1.3                                 “FRANCHISEE” SHALL MEAN ANY THIRD PARTY WITH
WHICH SUBLICENSEE ENTERS INTO AN AGREEMENT FOR THE PURPOSE OF GRANTING THE RIGHT
TO SUBLICENSE, OWN, OPERATE OR MANAGE ONE OR MORE LA QUINTA LODGING FACILITIES
WHICH ARE IDENTIFIED BY THE TRADEMARKS.

 

1.4                                 “GROSS ROOM REVENUES” SHALL MEAN ALL
REVENUES, NET OF DISCOUNTS, FROM THE RENTAL, SALE, USE OR OCCUPANCY OF GUEST
ROOMS OR ANY MEETING ROOMS AT THE FACILITIES, INCLUDING CASH AND CREDIT
TRANSACTIONS, AND THE PROCEEDS FROM ANY BUSINESS INTERRUPTION INSURANCE.  GROSS
ROOM REVENUES DO NOT INCLUDE: (1) FOOD AND BEVERAGE CHARGES AND OTHER INCIDENTAL
SERVICES CHARGES; (2) TAXES REQUIRED TO BE COLLECTED FROM CUSTOMERS AND REMITTED
BY LAW; OR (3) REVENUES FROM TELEPHONE CALLS OR VENDING MACHINES.

 

1.5                                 “LA QUINTA LODGING FACILITIES” OR
“FACILITIES” SHALL MEAN THOSE FACILITIES WHERE THE LICENSED SERVICES ARE
OFFERED.

 

1.6                                 “LICENSED SERVICES” SHALL MEAN THE OPERATION
AND MANAGEMENT OF FRANCHISED HOTELS, MOTELS AND RESTAURANTS IDENTIFIED BY THE
TRADEMARKS AND THE ADVERTISING, PROMOTION AND OFFERING OF THE FRANCHISED HOTEL,
MOTEL AND RESTAURANT SERVICES IDENTIFIED BY THE TRADEMARKS.

 

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1.7                                 “SPECIFIED QUALITY STANDARDS” SHALL MEAN
THOSE STANDARDS OF DESIGN, APPEARANCE AND QUALITY FOR THE LICENSED SERVICES,
FACILITIES, BUSINESS MATERIALS AND ADVERTISING MATERIALS WHICH ARE CONSISTENT
WITH THE PRESTIGE AND INTEGRITY OF THE TRADEMARKS, AND ARE OF A LEVEL AND TYPE
SATISFACTORY TO LICENSOR.

 

1.8                                 “TERRITORY” SHALL MEAN THE WORLD.

 

1.9                                 “TRADEMARKS” SHALL MEAN ALL OF THE
TRADEMARKS, LOGOS, NAMES, BRANDS AND SERVICE MARKS IDENTIFIED IN SCHEDULE A
(INCLUDING THOSE WHICH ARE THE SUBJECT OF REGISTRATION, APPLICATION AND USE
UNDER THE COMMON LAW), WHICH IS ANNEXED HERETO AND MADE A PART HEREOF, AND ALL
COMBINATIONS AND DERIVATIVES THEREOF THAT LICENSOR MAY OWN IN THE FUTURE, AND
OTHER RELATED TRADEMARKS, IF ANY, WHICH MAY BE DEVELOPED BY LICENSOR.  SCHEDULE
A SHALL BE PERIODICALLY UPDATED TO INCORPORATE SUCH NEWLY DEVELOPED TRADEMARKS,
NO LESS FREQUENTLY THAN ONCE ANNUALLY.  ALL USE OF SUCH MARKS SHALL INURE TO THE
BENEFIT OF THE LICENSOR.

 

Article II -  Grant of License

 

2.1                                 SUBLICENSOR HEREBY GRANTS TO SUBLICENSEE THE
EXCLUSIVE RIGHT, LICENSE AND PRIVILEGE TO USE THE TRADEMARKS FOR AND IN
CONNECTION WITH THE LICENSED SERVICES IN THE TERRITORY.  SUBLICENSEE AGREES THAT
UNLESS AUTHORIZED OR REQUIRED BY SUBLICENSOR, IT WILL NOT MAKE, OR AUTHORIZE TO
BE MADE, ANY USE, DIRECTLY OR INDIRECTLY, OF THE TRADEMARKS IN CONNECTION WITH
ANY OTHER SERVICES NOT EXPRESSLY DISCUSSED HEREIN.  SUBLICENSEE SHALL HAVE NO
RIGHT, UNLESS OTHERWISE EXPRESSLY CONSENTED TO BY SUBLICENSOR (AND/OR LICENSOR
AS MAY BE APPLICABLE), TO (I) USE THE TRADEMARKS ON OR IN CONNECTION WITH A WEB
SITE OWNED OR OPERATED BY SUBLICENSEE (II) GRANT RIGHTS TO ANY THIRD PARTY,
INCLUDING BUT NOT LIMITED TO A SUBSIDIARY OR AFFILIATED COMPANY, TO USE THE
TRADEMARKS ON OR IN CONNECTION WITH A THIRD PARTY WEB SITE,

 

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WITHOUT THE PRIOR CONSENT OF SUBLICENSOR AND LICENSOR OR (III) USE OR GRANT THE
RIGHT TO ANY THIRD PARTY TO USE ANY OF THE TRADEMARKS AS PART OF A DOMAIN NAME.

 

2.2                                 SUBLICENSOR HEREBY GRANTS TO SUBLICENSEE THE
RIGHT, LICENSE AND PRIVILEGE TO USE ONE OR MORE OF THE TRADEMARKS AS PART OF A
COMPOSITE TRADE NAME OR CORPORATE NAME, PURSUANT TO ITS OBLIGATIONS UNDER THIS
AGREEMENT, AND IN ACCORDANCE WITH ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.  SUBLICENSEE MAY USE THE TRADEMARKS ON INVOICES, ORDER FORMS,
STATIONERY, BUSINESS CARDS AND TELEPHONE AND DIRECTORY LISTINGS, PROVIDED THAT
ALL SUCH USE OF THE TRADEMARKS SHALL BE MADE IN CONFORMITY WITH GUIDELINES
ESTABLISHED BY SUBLICENSOR.

 

2.3                                 SUBLICENSEE SHALL HAVE THE RIGHT UNDER THIS
AGREEMENT TO DIRECTLY OR INDIRECTLY SUBLICENSE THE RIGHTS, LICENSE AND
PRIVILEGES GRANTED HEREUNDER SOLELY TO FRANCHISEES.  ANY AGREEMENT GRANTING A
FRANCHISEE THE RIGHT TO USE THE TRADEMARKS SHALL CONTAIN REASONABLE PROVISIONS,
SIMILAR TO THOSE CONTAINED IN THIS AGREEMENT, WITH RESPECT TO SPECIFIED QUALITY
STANDARDS.

 

2.4                                 SUBLICENSOR AND SUBLICENSEE AGREE THAT THE
TERMS AND CONDITIONS OF THE FRANCHISE LICENSE AGREEMENT ARE HEREBY INCORPORATED
BY REFERENCE AND THAT SUBLICENSEE SHALL BE BOUND BY THE TERMS AND CONDITIONS
THEREOF.

 

2.5                                 PURSUANT TO THE TERMS OF THE FRANCHISE
LICENSE AGREEMENT, LICENSOR ASSIGNED AND SUBLICENSEE ACCEPTED AND AGREED TO BE
BOUND BY, THAT CERTAIN LICENSE AGREEMENT ENTERED INTO BY LICENSOR, PURSUANT TO
WHICH, SUBLICENSEE HAD THE NONEXCLUSIVE RIGHT AND LICENSE TO USE THE TRADEMARKS
IN CONNECTION WITH THE OPERATION OF FRANCHISED HOTELS AND HOTEL RELATED SERVICES
(INCLUDING RESTAURANTS) IN CANADA (THE “CANADIAN LICENSE”).  LICENSOR ALSO
ASSIGNED AND SUBLICENSOR ACCEPTED AND AGREED TO BE BOUND BY THAT CERTAIN LICENSE
AGREEMENT ENTERED INTO BY LICENSOR, PURSUANT TO WHICH SUBLICENSEE HAD THE
NONEXCLUSIVE

 

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RIGHT AND LICENSE TO USE THE TRADEMARKS IN CONNECTION WITH THE OPERATION OF
FRANCHISED HOTELS AND HOTEL RELATED SERVICES (INCLUDING RESTAURANTS) IN THE
UNITED STATES (THE “U.S. LICENSE”).  SUBLICENSOR AND SUBLICENSEE HEREBY MUTUALLY
ACKNOWLEDGE AND AGREE THAT, EFFECTIVE AS OF THE EFFECTIVE DATE OF THIS
AGREEMENT, THE CANADIAN LICENSE AND U.S. LICENSE SHALL BE TERMINATED AND
SUBLICENSOR AND SUBLICENSEE SHALL BE BOUND BY THE TERMS AND CONDITIONS OF THIS
AGREEMENT HEREAFTER.

 

Article III -  Effective Date and Duration

 

3.1                                 THIS AGREEMENT AND THE LICENSE HEREIN SHALL
COMMENCE ON THE EFFECTIVE DATE HEREOF AND CONTINUE FOR A PERIOD OF TWENTY-ONE
(21) YEARS BEGINNING ON THE EFFECTIVE DATE AND EXTENDING UP TO AND INCLUDING
DECEMBER 30, 2022 (THE “INITIAL TERM”), UNLESS SOONER TERMINATED AS HEREIN
PROVIDED OR AS OTHERWISE AGREED BETWEEN THE PARTIES.

 

3.2                                 UPON THE EXPIRATION OF THE INITIAL TERM,
THIS AGREEMENT SHALL RENEW AUTOMATICALLY, IN PERPETUITY, FOR ADDITIONAL FIVE (5)
YEAR TERMS (“RENEWAL PERIOD”), COMMENCING ON THE ANNIVERSARY OF THE EFFECTIVE
DATE, PROVIDED THAT SUBLICENSEE IS NOT IN BREACH OF ANY PROVISION HEREIN. 
HOWEVER, EITHER PARTY MAY, IN ITS DISCRETION NOTIFY THE OTHER PARTY IN WRITING,
NOT LESS THAN ONE (1) YEAR PRIOR TO THE EXPIRATION OF THE INITIAL TERM OR THE
RENEWAL PERIOD (I.E. DECEMBER 30 OF THE RESPECTIVE YEAR) OF THE EXERCISE OF ITS
DISCRETION TO TERMINATE THIS AGREEMENT (THE “NOTICE PERIOD” AND DECEMBER 30 OF
THE RESPECTIVE YEAR SHALL CONSTITUTE THE “COMMENCEMENT DATE OF THE NOTICE
PERIOD”).

 

3.3                                 (A) IMMEDIATELY FOLLOWING THE COMMENCEMENT
DATE OF THE NOTICE PERIOD, SUBLICENSOR AND SUBLICENSEE SHALL MEET TO EVALUATE
WHETHER ANY AGREEMENTS, PURSUANT TO WHICH SUBLICENSEE GRANTED A FRANCHISEE THE
RIGHT TO OWN, OPERATE OR MANAGE ONE OR MORE LA QUINTA LODGING FACILITIES WHICH
ARE IDENTIFIED BY THE TRADEMARKS AND WHICH ARE IN EFFECT

 

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AS OF THE COMMENCEMENT DATE OF THE NOTICE PERIOD, HAVE A TERM WHICH WILL EXTEND
BEYOND THE EXPIRATION OF THE NOTICE PERIOD (THE “FRANCHISE AGREEMENTS”).

 

(b)  In the event that there are no Franchise Agreements which meet the criteria
set forth in paragraph 3.3(a) above, this Agreement shall terminate effectively
on the expiration of the Notice Period.

 

(c)  In the event that there are Franchise Agreements which meet the criteria
set forth in paragraph 3.3(a) above:

 

i.      Sublicensee’s right to enter into any new franchise agreements and to
renew any existing Franchise Agreements in effect as of the Commencement Date of
the Notice Period, pursuant to paragraph 2.3 herein, shall terminate effectively
on and as of the Commencement Date of the Notice Period;

 

ii.     The terms and conditions set forth in this Agreement, except as set
forth in paragraph 3.3 (c)(i) shall continue in full force and effect until the
terms of all existing Franchise Agreements have expired; and

 

iii.    This Agreement and the license granted hereunder shall terminate
effectively on and as of the expiration date of the last valid and subsisting
Franchise Agreement.

 

Article IV -  Quality Control and Prestige of the Trademarks

 

4.1                                 SUBLICENSEE AGREES THAT THE LICENSED
SERVICES AND FACILITIES COVERED BY THIS AGREEMENT AND THE ADVERTISING MATERIALS
AND BUSINESS MATERIALS USED THEREWITH SHALL BE OF SUCH STYLE, APPEARANCE,
DISTINCTIVENESS AND QUALITY AS TO PROTECT AND ENHANCE THE PRESTIGE OF THE

 

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TRADEMARKS AND THE GOODWILL PERTAINING THERETO; THAT THE LICENSED SERVICES AND
FACILITIES WILL BE ADVERTISED, MARKETED, PROMOTED AND OFFERED IN ACCORDANCE WITH
ALL APPLICABLE LAWS AND REGULATIONS; AND THAT THE POLICY OF SALE AND
EXPLOITATION BY SUBLICENSEE SHALL BE OF A HIGH STANDARD. THE QUALITY OF THE
LICENSED SERVICES AND FACILITIES, AS WELL AS THE QUALITY OF ALL BUSINESS
MATERIALS AND ADVERTISING MATERIALS DEVELOPED BY SUBLICENSEE SHALL MEET AND
SATISFY THE SPECIFIED QUALITY STANDARDS.

 

4.2                                 SUBLICENSEE AGREES THAT THE TRADEMARKS ARE
WELL RECOGNIZED BY THE TRADE AND PUBLIC AND ARE OF GREAT IMPORTANCE AND VALUE. 
ACCORDINGLY, SUBLICENSEE AGREES THAT ITS USE OF THE TRADEMARKS SHALL BE IN A
COMMERCIALLY ACCEPTABLE AND RESPONSIBLE MANNER AND STYLE TO PROTECT AND ENHANCE
THE PRESTIGE OF THE TRADEMARKS, AND ONLY IN CONNECTION WITH THE LICENSED
SERVICES, THE FACILITIES AND THE ADVERTISING MATERIALS AND BUSINESS MATERIALS
ASSOCIATED THEREWITH.

 

4.3                                 THE FACILITIES SHALL RETAIN APPEARANCES
WHICH CONFORM IN ALL RESPECTS TO THE SIGNAGE, DESIGN, LAYOUT, APPEARANCE, STYLE,
TASTE, DECORATION AND LOCATION APPROVED AND ESTABLISHED BY SUBLICENSOR IN
ACCORDANCE WITH THE SPECIFIED QUALITY STANDARDS DESIGNATED BY LICENSOR UNDER THE
FRANCHISE LICENSE AGREEMENT.

 

4.4                                 IN FURTHERANCE OF THE PURPOSE AND INTENT
EXPRESSED ABOVE, SUBLICENSEE SHALL, UPON SUBLICENSOR’S REASONABLE REQUEST,
SUPPLY TO SUBLICENSOR OR A DESIGNATED SUBSIDIARY OF SUBLICENSOR (THE “REVIEWING
PARTY”), SAMPLES OF ANY BUSINESS MATERIALS AND ADVERTISING MATERIALS THAT
INCLUDE THE TRADEMARKS TO ENSURE THAT SUCH BUSINESS MATERIALS AND ADVERTISING
MATERIALS ARE IN COMPLIANCE WITH THE SPECIFIED QUALITY STANDARDS.  THESE
SUBMISSIONS SHALL BE WITH RESPECT TO ANY BUSINESS MATERIALS AND ADVERTISING
MATERIALS WHICH ARE NOT OTHERWISE PREPARED OR PREVIOUSLY APPROVED BY LICENSOR,
SUBLICENSOR OR THE REVIEWING PARTY AND WHICH VARY FROM LICENSOR’S OR
SUBLICENSOR’S STANDARD ADVERTISING

 

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AND PROMOTIONAL MATERIALS.  SUBLICENSEE SHALL, UPON THE REVIEWING PARTY’S
REASONABLE REQUEST, PERMIT REASONABLE INSPECTION OF THE FACILITIES DURING
BUSINESS HOURS BY THE REVIEWING PARTY TO INSPECT THE FACILITIES TO ENSURE THAT
THE OPERATIONS AND METHODS OF OFFERING THE LICENSED SERVICES, AND THE LIKE, THAT
INCLUDE THE USE OF THE TRADEMARKS, ARE IN COMPLIANCE WITH THE SPECIFIED QUALITY
STANDARDS.

 

4.5                                 SUBLICENSOR SHALL HAVE THE RIGHT TO IMPOSE
UPON SUBLICENSEE, AS NECESSARY, OTHER ADDITIONAL SPECIFICATIONS OR REQUIREMENTS
NOT PROVIDED FOR UNDER THIS AGREEMENT TO MAINTAIN CONTROL OVER THE LICENSED
SERVICES TO ENSURE THAT THE REQUISITE QUALITY STANDARD IS BEING MAINTAINED IN
CONNECTION WITH THE OFFERING OF THE LICENSED SERVICES FOR WHICH THE TRADEMARKS
ARE USED.

 

4.6                                 IN THE EVENT SUBLICENSOR DETERMINES THAT ANY
LICENSED SERVICES, FACILITIES OR THE ADVERTISING MATERIALS OR BUSINESS MATERIALS
CREATED BY SUBLICENSEE DO NOT COMPLY WITH THE SPECIFIED QUALITY STANDARDS,
SUBLICENSOR OR THE REVIEWING PARTY SHALL ADVISE SUBLICENSEE OF ALL MATTERS
REQUIRING CHANGE OR IMPROVEMENT AND SUBLICENSEE SHALL COMPLY IN ALL RESPECTS
WITH SUBLICENSOR’S OR THE REVIEWING PARTY’S DIRECTIONS.   SUBLICENSEE SHALL BE
RESPONSIBLE FOR THE COSTS OF DEVELOPING AND MAKING REPRESENTATIVE SAMPLES OF
THOSE BUSINESS MATERIALS AND ADVERTISING MATERIALS WHICH ARE SUBMITTED TO
SUBLICENSOR OR THE REVIEWING PARTY PURSUANT TO PARAGRAPH 4.4 HEREIN.

 

4.7                                 THE REVIEWING PARTY SHALL PROVIDE A REPORT
TO SUBLICENSEE, AND A COPY TO SUBLICENSOR OF THE SAME, WITHIN A REASONABLE
PERIOD OF TIME AFTER THE REVIEWING PARTY’S INSPECTION OF A FACILITIES OR
EXAMINATION OF SUBLICENSEE’S ADVERTISING MATERIALS AND/OR BUSINESS MATERIALS
WHICH SHALL SET FORTH WHETHER THE FACILITIES, ADVERTISING MATERIALS AND/OR
BUSINESS MATERIALS WERE IN COMPLIANCE WITH THE SPECIFIED QUALITY STANDARDS.

 

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Article V -  Property of Licensor

 

5.1                                 SUBLICENSEE RECOGNIZES THE GREAT VALUE OF
THE GOODWILL ASSOCIATED WITH THE TRADEMARKS AND THE IDENTIFICATION OF THE
LICENSED SERVICES WITH THE TRADEMARKS, AND ACKNOWLEDGES THAT THE TRADEMARKS AND
ALL RIGHTS THEREIN AND GOODWILL PERTAINING THERETO, ARE THE EXCLUSIVE PROPERTY
OF AND SOLELY OWNED BY LICENSOR, OR ITS SUCCESSOR IN INTEREST.  SUBLICENSEE WILL
AT ALL TIMES HOLD OUT AND REPRESENT LICENSOR, OR ITS SUCCESSOR IN INTEREST, TO
BE THE OWNER OF THE TRADEMARKS.

 

5.2                                 ALL USE BY SUBLICENSEE OF THE TRADEMARKS
SHALL BE DEEMED TO INURE TO THE BENEFIT OF LICENSOR.  TO THE EXTENT ANY RIGHTS
IN AND TO THE TRADEMARKS ARE DEEMED TO ACCRUE TO SUBLICENSEE, SUBLICENSEE HEREBY
ASSIGNS ANY AND ALL SUCH RIGHTS, AT SUCH TIME AS THEY MAY BE DEEMED TO ACCRUE,
INCLUDING THE RELATED GOODWILL, TO LICENSOR.

 

5.3                                 SUBLICENSEE AGREES THAT IT SHALL CAUSE
APPROPRIATE INDICIA OF OWNERSHIP OF THE TRADEMARKS (AS REQUIRED BY LICENSOR OR
AS REQUIRED BY LAW) TO APPEAR ON OR WITHIN ALL ADVERTISING MATERIALS AND
BUSINESS MATERIALS.

 

5.4                                 SUBLICENSEE AGREES TO USE THE TRADEMARKS
ONLY IN CONNECTION WITH THE LICENSED SERVICES, FACILITIES, BUSINESS MATERIALS
AND ADVERTISING MATERIALS AND OTHERWISE AS SPECIFICALLY PERMITTED HEREIN AND
WILL NOT USE THE TRADEMARKS FOR ANY OTHER PURPOSE OR FOR THE BENEFIT OF ANY
OTHER PARTY.

 

5.5                                 SUBLICENSEE AGREES THAT IT SHALL UNDERTAKE
TO COORDINATE WITH LICENSOR TO REGISTER THE TRADEMARKS IN THOSE COUNTRIES
MUTUALLY AGREED UPON BY SUBLICENSOR AND SUBLICENSEE, WHERE THEY ARE NOT
CURRENTLY SUBJECT OF APPLICATION OR REGISTRATION, AS SHALL BE REASONABLY
NECESSARY OR APPROPRIATE.  THE EXPENSE OF APPLYING AND REGISTERING THE
TRADEMARKS IN SUCH COUNTRIES SHALL BE BORNE BY THE LICENSOR.

 

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Article VI -  Trademark Protection

 

6.1                                 SUBLICENSEE AGREES TO ASSIST SUBLICENSOR,
AND AS MAY BE APPROPRIATE OR NECESSARY, LICENSOR, TO THE EXTENT REASONABLY
REQUIRED OR REQUESTED BY SUBLICENSOR, TO PRESERVE, MAINTAIN AND ENFORCE THE
TRADEMARKS IN THE TERRITORY.

 

6.2                                 SUBLICENSOR AND SUBLICENSEE EACH RECOGNIZE
THAT IT IS IMPORTANT TO PROTECT THE TRADEMARKS FROM INFRINGEMENT OR ENCROACHMENT
IN THE TERRITORY.  THEREFORE, EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED OR
LIMITED BY APPLICABLE LAW, SUBLICENSOR AUTHORIZES SUBLICENSEE TO COMMENCE AND
PROSECUTE ANY CLAIMS OR SUITS FOR INFRINGEMENT IN SUBLICENSEE’S OWN NAME AS
EXCLUSIVE SUBLICENSEE, JOINING SUBLICENSOR AND AS MAY BE APPROPRIATE OR
NECESSARY, LICENSOR, OR ANY OTHER NECESSARY RELATED COMPANY AS A PARTY IF
ADVISABLE OR IF REQUIRED BY THE LAW OF THE PARTICULAR FORUM.  IF SUBLICENSEE
ELECTS NOT TO PROCEED TO TAKE ACTION AGAINST A PARTICULAR INFRINGEMENT UNDER
THIS AGREEMENT, SUBLICENSOR OR LICENSOR MAY CHOOSE TO PROCEED AND TO JOIN
SUBLICENSEE AS A PARTY, AT SUBLICENSOR’S OR LICENSOR’S SOLE COST AND EXPENSE. 
IF SUCH ACTION IS COMMENCED BY SUBLICENSOR OR LICENSOR, SUBLICENSEE SHALL
COOPERATE FULLY.

 

6.3                                 IF SUBLICENSEE CANNOT TAKE UNILATERAL ACTION
TO ENFORCE THE TRADEMARKS, SUBLICENSOR OR LICENSOR AGREES THAT IT SHALL EITHER
JOIN SUBLICENSEE AS A COMPLAINING PARTY OR IT SHALL COMMENCE PROCEEDINGS IN
SUBLICENSOR’S OR AS MAY BE NECESSARY OR APPROPRIATE, LICENSOR’S OWN NAME OR TAKE
ANY OTHER ACTION NECESSARY OR ADVISABLE TO PROTECT THE TRADEMARKS FROM
INFRINGEMENT.  SUBLICENSOR AND LICENSOR SHALL ALSO BE OBLIGATED TO TAKE SUCH
ACTION OR TO COMMENCE PROCEEDINGS TO PROTECT THE TRADEMARKS IN THE TERRITORY. 
THE COSTS AND EXPENSES OF ANY SUCH ACTION OR PROCEEDINGS SHALL BE APPORTIONED IN
ACCORDANCE WITH THE TERMS AND CONDITIONS TO BE AGREED UPON BETWEEN LICENSOR,
SUBLICENSOR AND SUBLICENSEE, AT THAT TIME.

 

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6.4                                 IF THERE IS ANY MONETARY RECOVERY IN ANY
ACTION PROSECUTED BY SUBLICENSEE ON ITS OWN, SUBLICENSEE SHALL HAVE THE RIGHT TO
RETAIN ALL SUCH AMOUNTS RECOVERED, UNLESS THE PARTIES SHALL AGREE OTHERWISE.

 

6.5                                 SUBLICENSEE AGREES THAT IT WILL NOT, DURING
THE TERM OF THIS AGREEMENT OR THEREAFTER, CONTEST THE LICENSOR’S OWNERSHIP,
TITLE OR RIGHTS IN AND TO THE TRADEMARKS, OR CONTEST THE VALIDITY OF THIS
AGREEMENT OR ITS BINDING EFFECT ON SUBLICENSEE.

 

Article VII -  Royalties

 

7.1                                 SUBLICENSEE AGREES TO:

 

A.                                       PAY SUBLICENSOR AN AMOUNT MEASURED BY
TWO AND ONE-HALF PERCENT (2.5%)  (THE “ROYALTY RATE)” OF GROSS ROOM REVENUES
FROM THE OFFERING OF THE LICENSED SERVICES IDENTIFIED BY THE TRADEMARKS IN THE
TERRITORY (EXCLUDING CANADA), PROVIDED HOWEVER, GROSS ROOM REVENUES MAY BE
REDUCED, FOR PURPOSES OF THIS AGREEMENT, FOR THOSE GROSS ROOM REVENUES FOR WHICH
SUBLICENSEE DOES NOT CHARGE OR RECEIVE A ROYALTY FEE FROM ITS FRANCHISEES 
(“EARNED ROYALTIES”).  THE ROYALTY RATE MAY BE MODIFIED AS MUTUALLY AGREED UPON
BY THE SUBLICENSOR AND SUBLICENSEE.

 

B.                                      PAY SUBLICENSOR AN AMOUNT MEASURED BY
ONE-HALF PERCENT (.5%) (THE “CANADIAN ROYALTY RATE”) OF GROSS ROOM REVENUES FROM
THE OFFERING OF THE LICENSED SERVICES IDENTIFIED BY THE TRADEMARKS IN CANADA,
PROVIDED HOWEVER, GROSS ROOM REVENUES MAY BE REDUCED, FOR PURPOSES OF THIS
AGREEMENT, FOR THOSE GROSS ROOM REVENUES FOR WHICH SUBLICENSEE DOES NOT CHARGE
OR RECEIVE A ROYALTY FEE FROM ITS FRANCHISEES (“CANADIAN EARNED ROYALTIES”). 
THE CANADIAN ROYALTY RATE MAY BE MODIFIED AS MUTUALLY

 

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AGREED UPON BY THE SUBLICENSOR AND SUBLICENSEE.

 

7.2                                 SUBLICENSEE’S OBLIGATION TO PAY THE EARNED
ROYALTIES AND THE CANADIAN EARNED ROYALTIES SHALL ACCRUE IMMEDIATELY AND SHALL
BE REPORTED AND PAID QUARTERLY.

 

Article VIII -  Revenue Reports and Record Keeping; Right to Inspect

 

8.1                                 SUBLICENSEE SHALL RENDER TO SUBLICENSOR, ON
OR BEFORE THIRTY (30) DAYS FOLLOWING EACH CALENDAR QUARTER, COMPLETE AND
ACCURATE STATEMENTS, CERTIFIED BY THE CHIEF FINANCIAL OFFICER, CONTROLLER OR AN
INDEPENDENT PUBLIC ACCOUNTANT SELECTED BY SUBLICENSEE AS ACCURATE, SHOWING GROSS
ROOM REVENUES OF EACH FACILITIES AND THE TOTAL COMBINED GROSS ROOM REVENUES OF
ALL FACILITIES FOR THE PRECEDING QUARTER.  FOR THIS PURPOSE, SUBLICENSEE SHALL
USE A FORM OF STATEMENT ACCEPTABLE TO SUBLICENSOR.  SUCH STATEMENT SHALL BE
FURNISHED TO SUBLICENSOR WHETHER OR NOT ANY GROSS ROOM REVENUES WERE EARNED IN
THE PRECEDING QUARTER.  ALONG WITH SAID STATEMENT, SUBLICENSEE SHALL REMIT TO
SUBLICENSOR THE EARNED ROYALTIES AND CANADIAN EARNED ROYALTIES DUE FOR SUCH
QUARTER, AS SET FORTH IN ARTICLE VII ABOVE.

 

8.2                                 SUBLICENSEE SHALL KEEP ACCURATE BOOKS OF
ACCOUNT AND RECORDS COVERING ALL TRANSACTIONS HEREUNDER, AND, UPON SUBLICENSOR’S
REQUEST, SHALL PROVIDE TO SUBLICENSOR, A REPORT ONCE ANNUALLY, SETTING FORTH THE
INFORMATION IN SUBLICENSOR’S QUARTERLY REPORTS IN A DETAILED AND ACCURATE
MANNER, WHICH SHALL MEET SUBLICENSOR’S REASONABLE SATISFACTION.  UPON
SUBLICENSOR’S REQUEST, SUBLICENSEE SHALL PROVIDE SAID BOOKS OF ACCOUNT AND
RECORDS AND ALL OTHER ACCOUNTS, DOCUMENTS, MATERIALS AND INVENTORY IN THE
POSSESSION OR UNDER THE CONTROL OF SUBLICENSEE WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT TO SUBLICENSOR AT SUBLICENSOR’S PLACE OF BUSINESS FOR
EXAMINATION PURPOSES AND FOR THE PURPOSE OF

 

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MAKING ANY COPIES AND/OR EXTRACTS.  ALL SUCH BOOKS OF ACCOUNT AND RECORDS SHALL
BE KEPT AVAILABLE FOR AT LEAST THREE YEARS AFTER THE EXPIRATION OR TERMINATION
OF THIS AGREEMENT.

 

Article IX -  Termination for Insolvency or Bankruptcy of Sublicensee

 

9.1                                 IF SUBLICENSEE FILES A PETITION IN
BANKRUPTCY, OR BY EQUIVALENT PROCEEDING IS ADJUDICATED A BANKRUPT, OR A PETITION
IN BANKRUPTCY IS FILED AGAINST SUBLICENSEE, OR IF SUBLICENSEE BECOMES INSOLVENT
OR MAKES AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR ANY ARRANGEMENT PURSUANT
TO ANY BANKRUPTCY LAW, OR IF SUBLICENSEE DISCONTINUES ITS BUSINESS OR IF A
RECEIVER IS APPOINTED FOR SUBLICENSEE, THIS AGREEMENT AND THE LICENSE HEREBY
GRANTED SHALL AUTOMATICALLY TERMINATE WITHOUT ANY NOTICE, TO THE EXTENT ALLOWED
BY APPLICABLE LAW.  IN THE EVENT THIS AGREEMENT AND THE LICENSE GRANTED HEREIN
ARE SO TERMINATED, SUBLICENSEE, ITS RECEIVERS, REPRESENTATIVES, TRUSTEES,
AGENTS, ADMINISTRATORS, SUCCESSORS AND/OR ASSIGNS, SHALL HAVE NO RIGHT TO SELL,
EXPLOIT OR IN ANY WAY DEAL WITH OR IN ANY OF THE LICENSED SERVICES COVERED BY
THIS AGREEMENT OR USE ANY BUSINESS MATERIALS, ADVERTISING MATERIALS OR OTHER
ITEMS BEARING THE TRADEMARKS EXCEPT WITH AND UNDER THE SPECIAL CONSENT AND
INSTRUCTION OF SUBLICENSOR, WITH SUCH CONSENT AND INSTRUCTION TO BE IN WRITTEN
FORM.

 

9.2                                 THE NON-ASSUMPTION OF THIS AGREEMENT BY A
TRUSTEE PRESIDING OVER A BANKRUPTCY PROCEEDING PURSUANT TO ANY BANKRUPTCY LAW
WHERE THE SUBLICENSEE IS NAMED AS A DEBTOR IN SAID PROCEEDINGS SHALL OPERATE TO
AUTOMATICALLY TERMINATE THIS AGREEMENT AND THE LICENSE HEREBY GRANTED, WITHOUT
ANY NOTICE WHATSOEVER BEING NECESSARY, EFFECTIVE AS OF THE DATE OF THE
COMMENCEMENT OF THE BANKRUPTCY PROCEEDINGS.

 

Article X -  Termination for Breach

 

10.1                           EXCEPT AS OTHERWISE AGREED BETWEEN THE PARTIES,
AND AS PROVIDED HEREIN, IF SUBLICENSEE VIOLATES ANY OF ITS MATERIAL OBLIGATIONS
HEREUNDER, SUBLICENSOR SHALL HAVE THE RIGHT TO

 

13

--------------------------------------------------------------------------------

 

TERMINATE THIS AGREEMENT AND THE LICENSE HEREIN GRANTED, BY GIVING TO
SUBLICENSEE WRITTEN NOTICE OF SUCH BREACH AND INTENT TO TERMINATE THIS
AGREEMENT.  UNLESS SUBLICENSEE CURES SUCH BREACH WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF SUCH WRITTEN NOTICE OR SUCH OTHER EXTENDED TIME PERIOD AS THE PARTIES
SHALL MUTUALLY AGREE, THIS AGREEMENT AND THE LICENSE GRANTED HEREIN SHALL
AUTOMATICALLY TERMINATE ON THE 30TH DAY (OR EXTENDED PERIOD), UNLESS OTHERWISE
AGREED.  TERMINATION OF THIS AGREEMENT AND THE LICENSE HEREBY GRANTED SHALL BE
WITHOUT PREJUDICE TO ANY RIGHTS OR REMEDIES WHICH LICENSOR MAY OTHERWISE HAVE
AGAINST SUBLICENSEE.

 

Article XI -  Consequences of Expiration or Termination of This Agreement

 

11.1                           UPON AND AFTER THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT AND THE LICENSES HEREIN GRANTED AS TO ANY OR ALL OF THE LICENSED
SERVICES, FOR WHATEVER REASON, ALL RIGHTS GRANTED TO SUBLICENSEE HEREUNDER TO
USE THE TRADEMARKS IN ANY MANNER IN CONNECTION THEREWITH SHALL CEASE
IMMEDIATELY.

 

11.2                           FROM AND AFTER THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT AND THE LICENSES HEREIN GRANTED AS TO ANY OR ALL OF THE LICENSED
SERVICES, LICENSEE AGREES NOT TO MAKE REFERENCES TO THE TRADEMARKS IN ITS
ADVERTISING MATERIALS OR ITS BUSINESS MATERIALS OR MAKE REFERENCE TO HAVING BEEN
FORMERLY ASSOCIATED WITH OR LICENSED BY LICENSOR, AS TO SUCH SERVICES.  LICENSEE
AGREES THAT IT SHALL RETURN TO LICENSOR ALL ADVERTISING MATERIALS AND BUSINESS
MATERIALS PREVIOUSLY PROVIDED BY LICENSOR AND SHALL DESTROY ALL ADVERTISING
MATERIALS AND BUSINESS MATERIALS BEARING THE TRADEMARKS, WHICH WERE CREATED BY
LICENSEE FOR USE IN CONNECTION WITH THE LICENSED SERVICES AND FACILITIES
PURSUANT TO THIS AGREEMENT.

 

11.3                           UPON AND AFTER THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT AND THE LICENSES HEREIN GRANTED AS TO ANY OR ALL OF THE LICENSED
SERVICES, ALL RIGHTS AS TO SUCH LICENSED SERVICES

 

14

--------------------------------------------------------------------------------

 

AND USE OF THE TRADEMARKS GRANTED TO SUBLICENSEE HEREUNDER SHALL FORTHWITH
REVERT TO SUBLICENSOR WITHOUT THE NEED FOR ANY OTHER FORMAL OR RATIFYING ACT.

 

11.4                           UPON AND AFTER THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT AND THE LICENSES HEREIN GRANTED AS TO ANY OR ALL OF THE LICENSED
SERVICES, SUBLICENSEE WILL REFRAIN FROM FURTHER USE OF THE TRADEMARKS OR ANY
FURTHER REFERENCE TO THEM, DIRECT OR INDIRECT, OR OF ANYTHING DEEMED BY
SUBLICENSOR TO BE A SIMULATION OF THE TRADEMARKS OR DECEPTIVELY SIMILAR THERETO.

 

11.5                           SUBLICENSEE RECOGNIZES THAT THE UNAUTHORIZED
DISSEMINATION OF ANY MATERIALS BEARING OR INCORPORATING THE TRADEMARKS UPON
TERMINATION OR EXPIRATION OF THIS AGREEMENT, WOULD CAUSE IRREPARABLE DAMAGE TO
THE PRESTIGE OF THE TRADEMARKS AND TO THE GOOD WILL PERTAINING THERETO. 
ACCORDINGLY, SUBLICENSEE COVENANTS AND AGREES THAT IT SHALL COMPLY WITH ALL
DIRECTION AND INSTRUCTION OF SUBLICENSOR CONCERNING THE USE OF THE TRADEMARKS.

 

Article XII -  Equitable Relief

 

12.1                           SUBLICENSEE ACKNOWLEDGES AND ADMITS THAT THERE
WOULD BE NO ADEQUATE REMEDY AT LAW FOR ITS FAILURE TO COMPLY WITH ANY OF THE
MATERIAL TERMS AND CONDITIONS HEREOF, AND SUBLICENSEE AGREES THAT, IN THE EVENT
OF ANY SUCH FAILURE, SUBLICENSOR SHALL BE ENTITLED TO EQUITABLE RELIEF BY WAY OF
TEMPORARY RESTRAINING ORDER, TEMPORARY INJUNCTION AND PERMANENT INJUNCTION AND
SUCH OTHER AND FURTHER RELIEF AS ANY COURT WITH JURISDICTION MAY DEEM PROPER.

 

Article XIII -  Indemnity

 

13.1                           SUBLICENSEE HEREBY INDEMNIFIES SUBLICENSOR AND
UNDERTAKES TO DEFEND AND HOLD SUBLICENSOR HARMLESS FROM ANY CLAIMS, SUITS, LOSS
AND DAMAGE (INCLUDING REASONABLE

 

15

--------------------------------------------------------------------------------

 

ATTORNEYS’ FEES) ARISING OUT OF ANY ALLEGEDLY UNAUTHORIZED USE OF ANY TRADEMARK,
PATENT, PROCESS, IDEA, METHOD, DESIGN, COPYRIGHT OR DEVICE BY SUBLICENSEE IN
CONNECTION WITH THE LICENSED SERVICES COVERED BY THIS AGREEMENT OR ANY OTHER
ALLEGED ACTION BY SUBLICENSEE, AND/OR ITS FRANCHISEES, AND ALSO FROM ANY CLAIMS,
SUITS, LOSS AND DAMAGE (INCLUDING REASONABLE ATTORNEYS’ FEES) ARISING OUT OF THE
OFFERING OF THE LICENSED SERVICES.

 

13.2                           SUBLICENSOR HEREBY INDEMNIFIES SUBLICENSEE AND
ITS FRANCHISEES AND UNDERTAKES TO DEFEND AND HOLD SUBLICENSEE AND ITS
FRANCHISEES HARMLESS FROM ANY CLAIMS, SUITS, LOSS AND DAMAGES (INCLUDING
REASONABLE ATTORNEYS’ FEES) SUSTAINED BY SUBLICENSEE OR ITS FRANCHISEES AS A
RESULT OF CLAIMS THAT SUBLICENSEE’S OR ITS FRANCHISEES’ USE OF THE TRADEMARKS
INFRINGE OR VIOLATE THE RIGHTS OF OTHERS.  SUBLICENSEE SHALL ADVISE SUBLICENSOR
OF ANY SUCH CLAIMS MADE AGAINST SUBLICENSEE OR ITS FRANCHISEES AND SUBLICENSOR
OR LICENSOR, AS MAY BE APPROPRIATE, SHALL BE ENTITLED TO DEFEND ANY SUCH
ALLEGATIONS THROUGH COUNSEL OF ITS OWN CHOOSING.

 

13.3                           SUBLICENSOR ASSUMES NO RESPONSIBILITY TO
SUBLICENSEE OR TO ANY THIRD PARTY WITH RESPECT TO THE CHARACTERISTICS OR QUALITY
OF THE LICENSED SERVICES PROVIDED BY SUBLICENSEE.  SUBLICENSEE AGREES TO DEFEND,
INDEMNIFY, AND HOLD HARMLESS, SUBLICENSOR, ITS SUBSIDIARIES, AND AFFILIATES AND
ANY SUCCESSORS OR ASSIGNS OF SUBLICENSOR OR ANY OF THE TRADEMARKS, AND THEIR
OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES, AGAINST EVERY CLAIM, SUIT, LOSS,
LIABILITY OR DAMAGE WHATSOEVER (INCLUDING BUT NOT LIMITED TO THE EXPENSES OF
INVESTIGATION OF AND DEFENDING AGAINST ANY CLAIM OR SUIT, ANY AMOUNT PAID IN
SETTLEMENT THEREOF, AND ATTORNEY’S FEES), RELATING TO THE CHARACTERISTICS OR
QUALITY OF THE LICENSED SERVICES PROVIDED BY OR ON BEHALF OF SUBLICENSEE,
WHETHER DIRECTLY OR THROUGH A FRANCHISEE OR OTHER PERSON.  SUBLICENSEE AGREES TO
ASSUME THE DEFENSE OF ANY ACTION OR CLAIM WHICH IS WITHIN THE SCOPE OF
SUBLICENSEE’S RESPONSIBILITIES TO DEFEND, INDEMNIFY, AND HOLD HARMLESS
HEREUNDER.

 

16

--------------------------------------------------------------------------------

 

SUBLICENSOR RESERVES THE RIGHT TO PARTICIPATE IN ANY SUCH ACTION OR CLAIM WITH
COUNSEL OF ITS OWN CHOOSING AT ITS OWN EXPENSE.

 

13.4                           SUBLICENSEE AGREES THAT IT WILL OBTAIN AND
MAINTAIN, AT ITS OWN EXPENSE, COMPREHENSIVE GENERAL LIABILITY INSURANCE FROM A
RECOGNIZED INSURANCE COMPANY PROVIDING ADEQUATE PROTECTION NAMING SUBLICENSOR
AND LICENSOR AS ADDITIONAL INSUREDS AGAINST ANY CLAIMS, SUITS, LOSSES OR DAMAGES
FOR WHICH IT MAY BE REQUIRED TO INDEMNIFY SUBLICENSOR AND LICENSOR HEREUNDER. 
UPON WRITTEN REQUEST, SUBLICENSEE WILL SUPPLY A COPY OF THE RELATED INSURANCE
POLICIES TO SUBLICENSOR.

 

13.5                           THE INDEMNITIES SET FORTH HEREIN SHALL SURVIVE
THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

Article XIV -  Miscellaneous

 

14.1                           ALL NOTICES, REQUESTS, CONSENTS, DEMANDS,
APPROVALS AND OTHER COMMUNICATIONS HEREUNDER SHALL BE DEEMED TO HAVE BEEN DULY
GIVEN, MADE OR SERVED IF IN WRITING AND DELIVERED PERSONALLY OR SENT BY
OVERNIGHT CARRIER OR BY TELEX OR TELECOPIER WITH RECEIPT CONFIRMED, TO THE
RESPECTIVE PARTIES TO THIS AGREEMENT AS FOLLOWS:

 

a.             If to Sublicensor:

 

La Quinta Franchise, LLC

101 Convention Center Drive, Suite 850

Las Vegas, Nevada  89109

Attn:  Manager

 

17

--------------------------------------------------------------------------------

 

b.             If to Sublicensee:

 

La Quinta Inns, Inc.

909 Hidden Ridge, Suite 600

Irving, Texas  75038

Attn: Chief Executive Officer

 

The designation of the person to be so notified or the address of such person
for the purposes of such notice may be changed from time to time by similar
notice.

 

14.2                           THE PARTIES HERETO SHALL NOT BE LIABLE FOR
FAILURE OF PERFORMANCE HEREUNDER IF OCCASIONED BY WAR, DECLARED OR UNDECLARED,
FIRE, FLOOD, INTERRUPTION OF TRANSPORTATION, EMBARGO, ACCIDENT, EXPLOSION,
GOVERNMENTAL ORDERS, REGULATIONS, RESTRICTIONS, PRIORITIES OR RATIONING, OR BY
STRIKES, LOCKOUTS, OR OTHER LABOR TROUBLES, INTERFERING WITH THE SUPPLIES OF RAW
MATERIALS ENTERING INTO THEIR PRODUCTION OR ANY OTHER CAUSE BEYOND THE CONTROL
OF THE PARTIES.  ANY SUSPENSION OF PERFORMANCE BY REASON OF THIS PARAGRAPH SHALL
BE LIMITED TO THE PERIOD DURING WHICH SUCH CAUSE OF FAILURE EXISTS, BUT SUCH
SUSPENSION SHALL NOT AFFECT THE RUNNING OF THE TERM OF THIS AGREEMENT AS
HERETOFORE DEFINED.

 

14.3                           NOTHING HEREIN CONTAINED SHALL BE CONSTRUED TO
PLACE THE PARTIES IN A RELATIONSHIP OF PARTNERS OR JOINT VENTURERS AND
SUBLICENSEE SHALL HAVE NO POWER TO OBLIGATE OR BIND SUBLICENSOR OR LICENSOR IN
ANY MANNER WHATSOEVER.

 

14.4                           ANY PROVISION OR PROVISIONS OF THIS AGREEMENT
WHICH IN ANY WAY CONTRAVENES THE LAWS OF ANY STATE OR COUNTRY IN WHICH THIS
AGREEMENT IS EFFECTIVE SHALL, IN SUCH STATE OR COUNTRY AS THE CASE MAY BE, AND
TO THE EXTENT OF SUCH CONTRAVENTION OF LOCAL LAW, BE DEEMED SEPARABLE AND SHALL
NOT AFFECT ANY OTHER PROVISION OR PROVISIONS OF THIS AGREEMENT.

 

14.5                           NONE OF THE TERMS OF THIS AGREEMENT SHALL BE
DEEMED TO BE WAIVED OR MODIFIED, NOR SHALL THIS AGREEMENT BE RENEWED, EXTENDED,
TERMINATED OR DISCHARGED EXCEPT BY AN AGREEMENT IN WRITING SIGNED BY OR ON
BEHALF OF BOTH PARTIES.  THERE ARE NO REPRESENTATIONS, PROMISES,

 

18

--------------------------------------------------------------------------------

 

WARRANTIES, COVENANTS OR UNDERTAKINGS OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT, WHICH REPRESENT THE ENTIRE UNDERSTANDING OF THE PARTIES.

 

14.6                           THE FAILURE OF A PARTY HERETO TO ENFORCE, OR THE
DELAY BY A PARTY HERETO TO ENFORCE, ANY OF ITS RIGHTS UNDER THIS AGREEMENT SHALL
NOT BE DEEMED A CONTINUING WAIVER OR A MODIFICATION BY SUCH PARTY OF ANY OF THE
RIGHTS HEREUNDER AND A PARTY MAY, WITHIN THE TIME PROVIDED BY THE APPLICABLE
LAW, COMMENCE APPROPRIATE LEGAL OR EQUITABLE PROCEEDINGS TO ENFORCE ANY OR ALL
OF ITS RIGHTS UNDER THIS AGREEMENT AND ANY PRIOR FAILURE TO ENFORCE OR DELAY IN
ENFORCEMENT SHALL NOT CONSTITUTE A DEFENSE.

 

14.7                           THIS AGREEMENT IS MADE PURSUANT TO AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO ITS PROVISIONS AS TO CHOICE OF LAW.

 

14.8                           SUBLICENSOR AND SUBLICENSEE SHALL EACH COOPERATE
WITH ONE ANOTHER IN ENTERING INTO AND EXECUTING ANY OTHER WRITTEN AGREEMENTS AND
APPLICATIONS NECESSARY UNDER THE LAWS OF ANY COUNTRY OR JURISDICTION WITHIN THE
TERRITORY TO GIVE THIS AGREEMENT FULL FORCE AND EFFECT.

 

14.9                           THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND
SHALL BE BINDING UPON THE PARTIES, AND THEIR RESPECTIVE PERMITTED SUCCESSORS,
TRANSFEREES AND ASSIGNS; PROVIDED, HOWEVER, THAT SUBJECT TO PARAGRAPH 14.10
HEREIN, SUBLICENSEE MAY NOT ASSIGN ALL OR ANY PORTION OF THIS AGREEMENT WITHOUT
THE EXPRESS PRIOR WRITTEN CONSENT OF SUBLICENSOR, WHICH CONSENT MAY BE GIVEN OR
WITHHELD IN SUBLICENSOR’S ABSOLUTE DISCRETION.

 

14.10                     THIS AGREEMENT MAY NOT BE TRANSFERRED OR ASSIGNED BY
SUBLICENSEE TO AN UNRELATED THIRD PARTY OTHER THAN IN CONNECTION WITH THE SALE,
DISPOSITION OR MERGER OF SUBLICENSEE’S COMPANY OR BUSINESS, OR ENCUMBERED BY A
THIRD PARTY, EXCEPT WITH SUBLICENSOR’S EXPRESS WRITTEN CONSENT.  THE FOLLOWING
CIRCUMSTANCES SHALL NOT BE DEEMED TO BE AN ASSIGNMENT,

 

19

--------------------------------------------------------------------------------

 

AND SHALL NOT REQUIRE SUBLICENSOR’S CONSENT

 

A.                                       THE SALE OR DISPOSITION OF ALL OR
SUBSTANTIALLY ALL OF THE VOTING STOCK OR ASSETS OF SUBLICENSEE; OR

 

B.                                      A PUBLIC OFFERING OR SALE TO
UNDERWRITERS OF CAPITAL STOCK BY SUBLICENSEE OR ANY SUCCESSOR THERE­TO OR ANY
ACQUISITIONS BY OR OF SUBLICENSEE THROUGH MERGER, PURCHASE OF ASSETS OR
OTHERWISE EFFECTED IN WHOLE OR IN PART BY ISSUANCE OR REISSUANCE OF
SUBLICENSEE’S SHARES OF CAPITAL STOCK.

 

14.11                     SUBLICENSEE AGREES TO COMPLY, AT ITS OWN EXPENSE, WITH
ALL LAWS, ORDINANCES, RULES, REGULATIONS, AND OTHER REQUIREMENTS, RELATING TO
SUBLICENSEE’S OFFERING OF THE LICENSED SERVICES AND OPERATION AND MANAGEMENT OF
THE LICENSED SERVICES AND FACILITIES, OF ALL GOVERNMENTAL UNITS HAVING
JURISDICTION PERTAINING TO THIS AGREEMENT.

 

14.12                     EACH PARTY SHALL BE RESPONSIBLE FOR ANY DUTIES, TAXES
OR PENALTIES IMPOSED BY ANY GOVERNMENT ON ITS SERVICES.

 

14.13                     EXCEPT AS EXPRESSLY IDENTIFIED HEREIN, THERE ARE AND
SHALL BE NO THIRD PARTY BENEFICIARIES OF THIS AGREEMENT.

 

[Signature page to follow.]

 

20

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Sublicense Agreement to
be duly executed as of the date and year first written above.

 

 

LA QUINTA FRANCHISE, LLC

 

 

 

By:

   /s/ MICHAEL F. BUSHEE

 

 

 

Name  Michael F. Bushee

 

 

Title:   Vice President

 

 

 

LA QUINTA INNS, INC.

 

 

 

By:

  /s/ STEVEN J. FLOWERS

 

 

 

Name: Steven J. Flowers

 

 

Title:  Vice President — Finance

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

Trademarks

 

Country

 

Trademark

 

Registration No./Serial No.

Argentina

 

 

 

 

 

 

LA QUINTA

 

1,656,347

 

 

 

 

 

 

 

LA QUINTA INN & DESIGN

 

1,656,565

Bahamas

 

 

 

 

 

 

LA QUINTA

 

17,113

Belize

 

 

 

 

 

 

LA QUINTA

 

7147

Bermuda

 

 

 

 

 

 

LA QUINTA

 

26748

Bolivia

 

 

 

 

 

 

LA QUINTA

 

62104-C

Brazil

 

 

 

 

 

 

LA QUINTA

 

817936351

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

817936360

Canada

 

 

 

 

 

 

LA QUINTA

 

TMA364525

 

 

 

 

 

 

 

TELQUIK

 

111398200

 

 

 

 

 

 

 

LQ LA QUINTA INN & SUITES & DESIGN

 

111008400

 

 

 

 

 

 

 

RETURNS

 

111398100

 

 

 

 

 

 

 

LA QUINTA INN & DESIGN

 

111008500

Chile

 

 

 

 

 

 

LA QUINTA

 

443.212

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

443.213

 

A-1

--------------------------------------------------------------------------------

 

Colombia

 

 

 

 

 

 

LA QUINTA

 

190254

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

190253

Costa Rica

 

 

 

 

 

 

LA QUINTA

 

 

Ecuador

 

 

 

 

 

 

LA QUINTA

 

178-96

European Community

 

 

 

 

 

 

LA QUINTA

 

002393205

Guatemala

 

 

 

 

 

 

LA QUINTA

 

8806-94

India

 

 

 

 

 

 

LA QUINTA

 

677305

Indonesia

 

 

 

 

 

 

LA QUINTA

 

372248

Jamaica

 

 

 

 

 

 

LA QUINTA

 

28,596

Mexico

 

 

 

 

 

 

LA QUINTA

 

335462

 

 

 

 

 

 

 

LA QUINTA

 

328,919

 

 

 

 

 

 

 

TELQUIK

 

484,558

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

485,952

Netherlands Antilles

 

 

 

 

 

 

LA QUINTA

 

18493

Nicaragua

 

 

 

 

 

 

LA QUINTA

 

30,237 CC

Panama

 

 

 

 

 

 

LA QUINTA

 

74714

 

A-2

--------------------------------------------------------------------------------

 

United Kingdom

 

 

 

 

 

 

LA QUINTA

 

1348734

United States

 

 

 

 

 

 

LA QUINTA

 

1,080,641

 

 

 

 

 

 

 

TELQUIK

 

1,078,158

 

 

 

 

 

 

 

TEL QUIK (STYLIZED)

 

1,022,257

 

 

 

 

 

 

 

LA QUINTA INN & CABALLERO DESIGN

 

1,199,980

 

 

 

 

 

 

 

LA QUINTA (STYLIZED)

 

875,802

 

 

 

 

 

 

 

CABCLUB

 

1,411,799

 

 

 

 

 

 

 

LA QUINTA MOTOR INNS & DESIGN

 

1,393,579

 

 

 

 

 

 

 

LA QUINTA MOTOR INNS & BUILDING DESIGN

 

1,393,578

 

 

 

 

 

 

 

CABCLUB & DESIGN

 

1,411,800

 

 

 

 

 

 

 

LA QUINTA BRAIN TRUST

 

1,429,660

 

 

 

 

 

 

 

KING PLUS

 

1,623,015

 

 

 

 

 

 

 

KEENTA

 

1,563,984

 

 

 

 

 

 

 

RETURNS

 

1,572,636

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

1,841,032

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN (WITH COLOR)

 

1,823,440

 

 

 

 

 

 

 

FIRST LIGHT

 

2,076,246

 

 

 

 

 

 

 

GOLD MEDAL

 

2,061,347

 

 

 

 

 

 

 

LQ LA QUINTA INN & SUITES & DESIGN

 

2,298,693

 

 

 

 

 

 

 

LQ LA QUINTA INN & SUITES AND DESIGN (COLOR)

 

2,300,509

 

 

 

 

 

 

 

AN OASIS FROM THE WORLD

 

2,365,000

 

 

 

 

 

 

A-3

--------------------------------------------------------------------------------

 

 

 

CAFÉ QUINTA

 

76/029,804

 

 

 

 

 

 

 

LA QUINTA ELINK

 

76/269,141

 

 

 

 

 

 

 

WE’RE JUST YOUR STYLE

 

76/037,806

Venezuela

 

 

 

 

 

 

LA QUINTA

 

S.003310

 

 

 

 

 

 

 

LA QUINTA INN & WINDOW DESIGN

 

S.003002

 

 

 

 

 

State — Hawaii

 

 

 

 

 

 

LA QUINTA & CABALLERO DESIGN

 

21389

State — Texas

 

 

 

 

 

 

TEL-QUIK

 

31656

 

 

 

 

 

 

 

LA QUINTA

 

46649

 

A-4

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