Exhibit 10.3

AGREEMENT OF PURCHASE AND SALE

between

BRE/PRIME MEZZ 2 L.L.C., as SELLER

and

LODGE HOLDCO III L.L.C., as BUYER

Dated as of April 8, 2014

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TABLE OF CONTENTS

 

        Page   ARTICLE I DEFINITIONS     1   

SECTION 1.1.

  Defined Terms     1    ARTICLE II SALE, PURCHASE PRICE AND CLOSING     6   

SECTION 2.1.

  Sale of Interests     6   

SECTION 2.2.

  Purchase Price     7   

SECTION 2.3.

  The Closing     7    ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER     8   

SECTION 3.1.

  General Seller Representations and Warranties     8   

SECTION 3.2.

  Representations and Warranties of Seller as to the Properties and the
Interests     9   

SECTION 3.3.

  Covenants of Seller Prior to Closing     11    ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF BUYER     11   

SECTION 4.1.

  Representations and Warranties of Buyer     11    ARTICLE V CONDITIONS
PRECEDENT TO CLOSING     13   

SECTION 5.1.

  Conditions Precedent to Seller’s Obligations     13   

SECTION 5.2.

  Conditions to Buyer’s Obligations     14   

SECTION 5.3.

  Waiver of Conditions Precedent     14    ARTICLE VI CLOSING DELIVERIES     15
  

SECTION 6.1.

  Buyer Closing Deliveries     15   

SECTION 6.2.

  Seller Closing Deliveries     15    ARTICLE VII RELEASE     16   

SECTION 7.1.

  DISCLAIMER     16   

SECTION 7.2.

  EXAMINATION; NO CONTINGENCIES     16   

 

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SECTION 7.3.

  MUTUAL RELEASE OF CLAIMS      19   

SECTION 7.4.

  SHARE CONSIDERATION NOT REGISTERED      22    ARTICLE VIII Transaction costs
     22   

SECTION 8.1.

  Transaction Costs      22    ARTICLE IX ADJUSTMENTS      23   

SECTION 9.1.

  Taxes and Assessments      23   

SECTION 9.2.

  Water and Sewer Charges      23   

SECTION 9.3.

  Utility Charges      23   

SECTION 9.4.

  Miscellaneous Revenues      23   

SECTION 9.5.

  Cash and Cash Reserves      24   

SECTION 9.6.

  Insurance      24   

SECTION 9.7.

  Accounts Receivable      24   

SECTION 9.8.

  Accounts Payable      24   

SECTION 9.9.

  Bookings; Booking Deposits      25   

SECTION 9.10.

  Sales, General Excise, Room and Occupancy Taxes      25   

SECTION 9.11.

  Fixed Rents and Additional Rents      25   

SECTION 9.12.

  Contracts      26   

SECTION 9.13.

  Ground Rent      27   

SECTION 9.14.

  Other      27   

SECTION 9.15.

  Re-Adjustment      27    ARTICLE X INDEMNIFICATION      27   

SECTION 10.1.

  Indemnification by Seller      27   

SECTION 10.2.

  Indemnification by Buyer      27   

SECTION 10.3.

  Limitations on Indemnification      28   

SECTION 10.4.

  Survival      28   

 

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SECTION 10.5.

  Notification      28   

SECTION 10.6.

  Indemnification as Sole Remedy      28    ARTICLE XI TAX CERTIORARI
PROCEEDINGS      29   

SECTION 11.1.

  Application of Refunds or Savings      29   

SECTION 11.2.

  Survival      29    ARTICLE XII MISCELLANEOUS      29   

SECTION 12.1.

  Exculpation      29   

SECTION 12.2.

  Brokers      30   

SECTION 12.3.

  Confidentiality; No Press Release; IRS Reporting Requirements      30   

SECTION 12.4.

  Intentionally Omitted      31   

SECTION 12.5.

  Successors and Assigns; No Third-Party Beneficiaries      31   

SECTION 12.6.

  Assignment      31   

SECTION 12.7.

  Further Assurances      31   

SECTION 12.8.

  Notices      31   

SECTION 12.9.

  Entire Agreement      32   

SECTION 12.10.

  Amendments      32   

SECTION 12.11.

  No Waiver      32   

SECTION 12.12.

  Governing Law      32   

SECTION 12.13.

  Submission to Jurisdiction      32   

SECTION 12.14.

  Severability      33   

SECTION 12.15.

  Section Headings      33   

SECTION 12.16.

  Counterparts      33   

SECTION 12.17.

  Acceptance of Interest Assignment      33   

SECTION 12.18.

  Construction      33   

SECTION 12.19.

  Recordation      33   

 

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SECTION 12.20.

  Time is of the Essence      34   

SECTION 12.21.

  Schedules      34   

SECTION 12.22.

  Waiver of Jury Trial      34   

SECTION 12.23.

  No Solicitation      34   

 

Schedules        Schedule 1.1   -      Ground Leases Schedule 2.2(a)   -     
Purchase Price Allocations Schedule 10.1   -      Remaining Prime Properties
Exhibits        Exhibit A   -      Prime Mezz Properties Exhibit B   -     
Prime Wellesley Properties Exhibit C   -      Interest Assignment Exhibit D   -
     WIH Indemnity Agreement Exhibit E   -      Registration Rights Agreement
Exhibit F   -      FIRPTA Affidavit

 

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AGREEMENT OF PURCHASE AND SALE

AGREEMENT OF PURCHASE AND SALE, made as of the 8th day of April, 2014 between
BRE/Prime Mezz 2 L.L.C., a Delaware limited liability company (“Seller”) and
Lodge Holdco III L.L.C., a Delaware limited liability company (“Buyer”).

Background

A. Seller is the sole member of BRE/Prime Mezz L.L.C. (the “Company”), which is
or shall be immediately prior to Closing (i) the owner of the fee interest in or
the holder of the ground leased interest in those certain properties more
particularly described on Exhibit A (the “Prime Mezz Properties”) and (ii) the
sole member of BRE/Wellesley Properties L.L.C. (“Prime Wellesley”), which is the
owner of the fee interest in those properties more particularly described on
Exhibit B attached hereto (the “Prime Wellesley Properties”; together with the
Prime Mezz Properties, collectively, the “Land”, together with the buildings and
other improvements located on the Land (the “Improvements”), collectively, the
“Properties”).

B. Immediately prior to the transaction transferring the Interests (defined
below), Seller will cause the Company to transfer its indirect interests in the
Remaining Prime Properties to Seller.

C. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
100% of the limited liability company interests in the Company (the
“Interests”), on the terms and conditions hereinafter set forth.

AGREEMENT

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

ARTICLE I

DEFINITIONS

SECTION 1.1. Defined Terms. The capitalized terms used herein will have the
following meanings.

“Accounts Payable” shall mean all accrued amounts owed by the Designated
Companies, or on behalf of the Designated Companies, as of the Cut-Off Time and
arising out of the ownership and operation of the Properties; provided, however,
the term Accounts Payable does not include Booking Deposits.

“Accounts Receivable” shall mean all accrued amounts owed to the Designated
Companies, or on behalf of the Designated Companies, as of the Cut-Off Time and
arising out of the ownership or operation of the Properties, whether or not past
due and whether or not a bill or

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statement has been presented to the Person owing such amount, including the
following: room, food and beverage charges; telephone or telecopy charges; valet
charges; charges for other services or merchandise; charges for banquets,
meeting rooms, catering and the like; sales, use and occupancy taxes due from
the consumers of goods and services; amounts owed from credit card companies
pursuant to signed credit card receipts, whether or not such credit card
receipts have been delivered by the Designated Companies to the applicable
credit card companies; and deposits or prepayments made by or held for the
account of the Designated Companies (including any utility deposits, and any
deposits or prepayments made by a property for the account of the Designated
Companies).

“Additional Rent” shall have the meaning assigned thereto in Section 9.11(a).

“Agreement” shall mean this Agreement of Purchase and Sale, together with the
exhibits and schedules attached hereto, as the same may be amended, restated,
supplemented or otherwise modified.

“Anti-Money Laundering and Anti-Terrorism Laws” shall have the meaning assigned
thereto in Section 3.1(g)(i).

“Basket Limitation” shall mean an amount equal to $100,000.

“Booking Deposit” shall mean all room reservation deposits, public function,
banquet, food and beverage deposits and other deposits or fees for Bookings.

“Bookings” shall mean all bookings and reservations for guest, conference and
banquet rooms or other facilities, if applicable, at the Properties.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks are authorized or required by law to be closed in the city of New
York, New York.

“Buyer” shall have the meaning assigned thereto in the Preamble to this
Agreement.

“Buyer-Related Entities” shall have the meaning assigned thereto in
Section 10.1.

“Buyer Releasees” shall have the meaning assigned thereto in Section 7.3(b).

“Cap Limitation” shall mean an amount equal to $7,500,000.

“Claim Notice” shall have the meaning assigned thereto in Section 10.5.

“Claims” shall have the meaning assigned thereto in Section 7.3(a).

“Closing” shall have the meaning assigned thereto in Section 2.3(a).

“Closing Date” shall have the meaning assigned thereto in Section 2.3(a).

 

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“Closing Documents” shall mean any certificate, assignment, instrument or other
document delivered pursuant to this Agreement.

“Closing Statement” shall have the meaning assigned thereto in Section 6.1(b).

“Company” shall have the meaning assigned thereto in “Background” paragraph A.

“Condition of the Properties” shall have the meaning assigned thereto in
Section 7.2(B).

“Contracts” shall mean all contracts pertaining to the operation of the
Properties, but excluding the Space Leases.

“Cut-Off Time” shall have the meaning assigned thereto in Article IX.

“Designated Companies” shall mean individually or collectively, as the context
requires, the Company and Prime Wellesley.

“Effective Date” shall mean the date of this Agreement.

“Environmental Laws” shall mean any applicable laws which regulate or control
(i) Hazardous Materials, pollution, contamination, noise, radiation, water,
soil, sediment, air or other environmental media, or (ii) an actual or potential
spill, leak, emission, discharge, release or disposal of any Hazardous Materials
or other materials, substances or waste into water, soil, sediment, air or any
other environmental media, including, without limitation, (A) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et
seq., (B) the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.,
(C) the Federal Water Pollution Control Act, 33 U.S.C. § 2601 et seq., (D) the
Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., (E) the Clean Water Act,
33 U.S.C. § 1251 et seq., (F) the Clean Air Act, 42 U.S.C. § 7401 et seq.,
(G) the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., and
(H) the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. and similar
state and local applicable law, as amended from time to time, and all
regulations, rules and guidance issued pursuant thereto.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder

“Excluded Assets” shall mean any proprietary or confidential materials
(including any materials relating to the background or financial condition of a
present or prior direct or indirect partner or member of Seller), the internal
books and records of Seller and any software not used exclusively in the
day-to-day operation of the Properties.

“Escrow Agent” shall have the meaning assigned thereto in Section 2.2(a).

“Executive Order” shall have the meaning assigned thereto in Section 3.1(g)(i).

“Fixed Rents” shall have the meaning assigned thereto in Section 9.11(a).

 

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“Governmental Authority” shall mean any federal, state or local government or
other political subdivision thereof, including, without limitation, any agency
or entity exercising executive, legislative, judicial, regulatory or
administrative governmental powers or functions, in each case to the extent the
same has jurisdiction over the Person or property in question.

“Government List” shall mean any of (i) the two lists maintained by the United
States Department of Commerce (Denied Persons and Entities), (ii) the list
maintained by the United States Department of Treasury (Specially Designated
Nationals and Blocked Persons), and (iii) the two lists maintained by the United
States Department of State (Terrorist Organizations and Debarred Parties).

“Ground Leases” shall mean those ground leases more particularly described on
Schedule 1.1 attached hereto.

“Guest Ledger” shall mean any and all charges accrued to the open accounts of
any guests or customers at the Properties as of the Cut-Off Time for the use and
occupancy of any guest, conference, meeting or banquet rooms or other facilities
at the Properties, any restaurant, bar or banquet services, or any other goods
or services provided to such guests or customers by or on behalf of the
Designated Companies (or a property manager on behalf of the Designated
Companies).

“Hazardous Materials” shall have the meaning assigned thereto in subparagraph
7.2(B)(I).

“Improvements” shall have the meaning assigned thereto in “Background” paragraph
A.

“Indemnification Claim” shall have the meaning assigned thereto in Section 10.5.

“Indemnified Party” shall have the meaning assigned thereto in Section 10.5.

“Indemnifying Party” shall have the meaning assigned thereto in Section 10.5.

“Interest Assignment” shall have the meaning assigned thereto in Section 6.1(a).

“Interests” shall have the meaning assigned thereto in “Background” paragraph B.

“Interest-Related Rights” shall have the meaning assigned thereto in
Section 2.1(b).

“IRS” shall mean the Internal Revenue Service.

“IRS Reporting Requirements” shall have the meaning assigned thereto in
Section 12.3(c).

“La Quinta” shall have the meaning assigned thereto in Section 2.2(a).

“Land” shall have the meaning assigned thereto in “Background” paragraph A.

 

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“Losses” shall have the meaning assigned thereto in Section 10.1.

“Permitted Exceptions” shall mean (i) liens for current real estate taxes which
are not yet due and payable or are due and payable but not yet delinquent,
(ii) customary easements and encumbrances which are non-monetary and
(iii) discrepancies, conflicts in boundary lines, shortages in area,
encroachments and any state of facts which a survey of the applicable Property
would disclose or which are shown on the public records and which could
materially and adversely affect the current use and operation of a Property.

“Person” shall mean a natural person, partnership, limited partnership, limited
liability company, corporation, trust, estate, association, unincorporated
association or other entity.

“Prime Mezz Properties” shall have the meaning assigned thereto in “Background”
paragraph A.

“Prime Wellesley” shall have the meaning assigned thereto in “Background”
paragraph A.

“Prime Wellesley Properties” shall have the meaning assigned thereto in
“Background” paragraph A.

“Properties” shall have the meaning assigned thereto in “Background” paragraph
A.

“Purchase Price” shall have the meaning assigned thereto in Section 2.2(a).

“Registration Rights Agreement” shall have the meaning assigned thereto in
subsection 6.1(d).

“Rents” shall have the meaning assigned thereto in Section 9.11(a).

“Reporting Person” shall have the meaning assigned thereto in Section 12.3(c).

“SEC” shall mean the Securities and Exchange Commission.

“Securities Act” shall mean the U.S. Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

“Seller” shall have the meaning assigned thereto in the Preamble to this
Agreement.

“Seller-Related Entities” shall have the meaning assigned thereto in
Section 10.2.

“Seller Releasees” shall have the meaning assigned thereto in Section 7.3(a).

“Space Leases” shall mean any a lease with a third party for any portion of the
Properties in effect as of the Effective Date or entered into after the
Effective Date in accordance with the terms of this Agreement.

 

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“Survival Period” shall have the meaning assigned thereto in Section 10.4.

“Taxes” shall mean any and all fees (including, without limitation,
documentation, recording, license and registration fees), taxes (including,
without limitation, net income, alternative, unitary, alternative minimum,
minimum franchise, value added, ad valorem, income, receipts, capital, excise,
sales, use, leasing, fuel, excess profits, turnover, occupation, property
(including personal, real, tangible and intangible property taxes), transfer,
recording and deed stamp and excise taxes, levies, imposts, duties, charges,
fees, assessments, or withholdings of any nature whatsoever, general or special,
ordinary or extraordinary, and any transaction privileges or similar taxes)
imposed by or on behalf of a Governmental Authority, together with any and all
penalties, fines, additions to tax and interest thereon, whether disputed or
not.

“Violations” shall mean all violations of applicable law now or hereafter issued
or noted, including any open building permits and any fines or penalties
associated with the foregoing.

ARTICLE II

SALE, PURCHASE PRICE AND CLOSING

SECTION 2.1. Sale of Interests.

(a) On the Closing Date and pursuant to the terms and subject to the conditions
set forth in this Agreement, Seller shall sell to Buyer, and Buyer shall
purchase from Seller, the Interests, free and clear of all liens, encumbrances,
pledges, security interests, charges of any kind and interests in favor of any
Person.

(b) The transfer of the Interests shall include the transfer of all
Interest-Related Rights (as defined below) and accordingly, whether or not
specifically stated in this Agreement, all references herein to the Interests
shall be deemed to be references to the Interests and the Interest-Related
Rights, taken as a whole. For purposes of this Agreement, “Interest-Related
Rights” shall mean all of Seller’s limited liability company interest in, to and
under the Company including, without limitation, all of Seller’s right, title
and interest in, to and under all (i) distributions after the Closing Date of
profits and income of the Company, (ii) capital distributions after the Closing
Date from the Company, (iii) distributions after the Closing Date of cash flow
by the Company, (iv) property of the Company to which Seller now or in the
future may be entitled, (v) other claims which Seller now has or may in the
future acquire against the Company and its property, (vi) proceeds of any
liquidation upon the dissolution of the Company and winding up of its affairs,
(vii) other rights of Seller to receive any distributions or other payments of
any kind whatsoever from or in respect of the Company or in any way derived from
the Properties or from the ownership or operation thereof after the Closing
Date, whether any of the above distributions consist of money or property, and
(viii) all other rights, benefits and obligations of Seller as a member in the
Company including, without limitation, rights to reports and accounting
information; provided, however that the Interest-Related Rights shall not
include the proceeds of the sale of the Interests contemplated hereby.

 

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SECTION 2.2. Purchase Price.

(a) The consideration for the purchase of the Interests shall be an amount equal
to $161,677,335.00 (the “Purchase Price”), which shall consist of (i) cash in an
amount equal to $76,851,503.00 (the “Cash Consideration”), (ii) a whole number
of shares (the “Share Consideration”) of newly-issued Common Stock, par value of
$0.01 per share, (the “Shares”) of La Quinta Holdings Inc., a Delaware
corporation (“La Quinta”) equal to $73,920,832.00 (the valuation of the Shares
is based on the price offered to the public in the initial public offering of
the Shares) and (iii) the cancellation, as of the Closing Date, of the
$10,905,000.00 accrued and unpaid receivable payable by Seller or its affiliates
to Buyer or its affiliates, including LQ Management L.L.C., through December 31,
2013. The Purchase Price shall be allocated among the Properties as shown on
Schedule 2.2(a).

(b) At the Closing, (A) Buyer shall deposit with Chicago Title Insurance
Company, a Nebraska corporation, as escrow agent (the “Escrow Agent”) by wire
transfer of immediately available funds, an amount equal to the Cash
Consideration, and (B) Buyer shall cause La Quinta to register the Share
Consideration in the name of Seller or its designee by book entry in an account
or accounts designated by Seller, free and clear of all liens (other than those
imposed by La Quinta’s organizational documents and federal and state securities
laws); provided, however, that the Share Consideration shall be proportionately
adjusted to reflect any share splits, combination of shares, stock dividends,
recapitalizations, reorganizations or reclassifications with respect to the
Common Stock of La Quinta or any transaction in which the Common Stock is
converted into other securities or cash, in each case, occurring between the
date of this Agreement and the Closing Date.

(c) No adjustment shall be made to the Purchase Price except as explicitly set
forth in this Agreement. Such adjustments shall be added to or deducted from the
Cash Consideration as applicable.

(d) Following the Closing, Seller and Buyer shall agree on an allocation of the
Company’s assets for purposes of section 1060 of the Internal Revenue Code. Each
of Seller and Buyer shall prepare their income tax returns consistent with such
allocation.

SECTION 2.3. The Closing.

(a) The closing of the sale and purchase of the Interests (the “Closing”) shall
take place on the earlier of (i) April 14, 2014 or (ii) the tenth day following
the Effective Date (the “Closing Date”). TIME BEING OF THE ESSENCE WITH RESPECT
TO BUYER’S AND SELLER’S OBLIGATIONS UNDER THIS AGREEMENT.

(b) The Closing shall be held on the Closing Date at 9:30 A.M. (New York time)
or at such other time as mutually agreed upon by Seller and Buyer. There shall
be no requirement that Seller and Buyer physically attend the Closing, and all
funds and documents to be delivered at the Closing shall be delivered to the
Escrow Agent unless the parties hereto mutually agree otherwise. Buyer and
Seller hereby authorize their respective attorneys to execute and deliver to the
Escrow Agent any additional or supplementary instructions as may be necessary or
convenient to implement the terms of this Agreement and facilitate the closing
of the transactions contemplated hereby, provided, however, that such
instructions are consistent with and merely supplement this Agreement and shall
not in any way modify, amend or supersede this Agreement.

 

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ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

SECTION 3.1. General Seller Representations and Warranties. Seller hereby
represents and warrants to Buyer:

(a) Formation; Existence. It is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware.

(b) Power and Authority. It has all requisite power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions provided for in this
Agreement have been duly authorized by all necessary action on its part. This
Agreement has been duly executed and delivered by Seller and constitutes
Seller’s legal, valid and binding obligation, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights and by general principles of equity (whether applied in a
proceeding at law or in equity).

(c) No Consents. Other than such consents and approvals as have been made or
obtained, the execution and delivery of this Agreement and the performance and
consummation of the transactions contemplated hereby will not require any
filing, consent or approval under Seller’s organizational or governing
documents, or any other contract, agreement or instrument to which Seller is a
party.

(d) No Conflicts. The execution, delivery and compliance with, and performance
of the terms and provisions of, this Agreement, and the sale of the Interests,
will not (i) conflict with or result in any violation of its organizational
documents, (ii) conflict with or result in any violation of any provision of any
bond, note or other instrument of indebtedness, contract, indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
Seller is a party in its individual capacity, or (iii) violate any existing term
or provision of any order, writ, judgment, injunction, decree, statute, law,
rule or regulation applicable to Seller or its assets or properties.

(e) Foreign Person. It is not a “foreign person” as defined in Internal Revenue
Code Section 1445 and the regulations issued thereunder.

(f) Bankruptcy. Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller’s creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller’s assets, which remains pending or (iv) suffered the attachment or other
judicial seizure of all, or substantially all of Seller’s assets, which remains
pending.

 

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(g) Anti-Terrorism Law.

(i) None of Seller or, to Seller’s knowledge, its affiliates, is in violation of
any laws relating to terrorism, money laundering or the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Action of 2001, Public Law 107-56, as amended, and Executive
Order No. 13224 (Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism) (the “Executive Order”)
(collectively, the “Anti-Money Laundering and Anti-Terrorism Laws”).

(ii) None of Seller or, to Seller’s knowledge, its affiliates, is acting,
directly or indirectly, on behalf of terrorists, terrorist organizations or
narcotics traffickers, including those persons or entities that appear on the
Annex to the Executive Order, or are included on any relevant lists maintained
by the Office of Foreign Assets Control of U.S. Department of Treasury, U.S.
Department of State, or other U.S. government agencies, all as may be amended
from time to time.

(iii) Neither Seller, nor any person controlling or controlled by Seller, is a
country, territory, individual or entity named on a Government List, and the
monies used in connection with this Agreement and amounts committed with respect
thereto, were not and are not derived from any activities that contravene any
applicable anti-money laundering or anti-bribery laws and regulations (including
funds being derived from any person, entity, country or territory on a
Government List or engaged in any unlawful activity defined under Title 18 of
the United States Code, Section 1956(c)(7)).

(h) Knowledge and Experience. It has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its investment in La Quinta and is able to bear such risks, and has obtained, in
its judgment, sufficient information to evaluate the merits and risks of such
investment. It has evaluated the risks of investing in La Quinta, understands
there are substantial risks of loss incidental to the acquisition of the Share
Consideration and has determined that it is a suitable investment for such
Seller.

SECTION 3.2. Representations and Warranties of Seller as to the Properties and
the Interests. Other than as disclosed by Seller to Buyer and subject to matters
of public record relating to or in connection with the Properties, Seller hereby
represents and warrants to Buyer as follows:

(a) Condemnation. As of the Effective Date, there are no pending condemnations
or similar proceedings affecting the Properties, and to Seller’s knowledge, no
such action is threatened in writing or contemplated.

(b) Litigation. As of the Effective Date, there are no litigations, actions,
suits, arbitrations, orders, decrees, claims, writs, injunctions, government
investigations, proceedings pending or, to Seller’s knowledge, threatened in
writing against Seller, the Company or Prime Wellesley or affecting Seller, the
Company, Prime Wellesley or the Properties, including any tax reassessment
proceedings. Neither Seller nor, to Seller’s knowledge, the Company or Prime
Wellesley is a party to or subject to the provision of any judgment, order,
writ, injunction, decree or award of any Governmental Authority which would
affect the ability of Seller to perform its obligations hereunder.

 

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(c) Environmental Matters. As of the Effective Date, neither Seller nor, to
Seller’s knowledge, the Company nor Prime Wellesley has received any written
notice from any Governmental Authority of a violation of any applicable
Environmental Laws with respect to the Properties, which have not been cured.

(d) Employment Matters. Neither the Company nor Prime Wellesley has any
employees or is a party to any collective bargaining agreements.

(e) Title to Interests. The Interests represent a 100% of the limited liability
company interests in the Company. The Interests are, and as of the Closing will
be, wholly-owned legally and beneficially by Seller, free and clear of all
liens, encumbrances, pledges, security interests and charges of any kind. There
is no outstanding right, subscription, warrant, call, unsatisfied preemptive
right, option or other agreement of any kind to purchase, dispose of or encumber
all or any portion of the Interests.

(f) Subsidiaries. As of the Closing Date, (i) the Company will not have any
subsidiaries and will not hold interests in any other Person other than Prime
Wellesley and (ii) Prime Wellesley will not have any subsidiaries and will not
hold interests in any Person.

(g) Organization of the Company and Prime Wellesley. The Company is a Delaware
limited liability company duly organized under the laws of the State of
Delaware. The Company is qualified to transact business and in good standing as
a foreign limited liability company in each state in which the Prime Mezz
Properties are located. Prime Wellesley is a Delaware limited liability company
duly organized and validly existing and in good standing under the laws of the
State of Delaware. Prime Wellesley is qualified to transact business and in good
standing as a foreign limited liability company in each state in which the Prime
Wellesley Properties are located.

(h) Tax Certiorari Proceedings. Neither the Company nor Prime Wellesley has not
filed any tax reduction proceedings which are currently pending.

(i) Unsecured Indebtedness. To Seller’s knowledge, there is no unsecured
indebtedness with respect to the Properties or the Company other than
(i) indebtedness or trade payables incurred in the ordinary course of business
or (ii) indebtedness with respect to any Contract.

(j) Financial and Operating Statements. Seller has furnished Buyer with true,
correct and complete copies of the unaudited annual financial statements for the
Properties for the years ended December 31, 2013 and December 31, 2012.

(k) Ground Leases. No Ground Lease has been amended, modified or supplemented.
Each Ground Lease contains the entire agreement between the ground lessor and
ground lessee named therein. Neither the ground lessee, nor to Seller’s
knowledge the ground lessor, is in default in the performance of its material
obligations under any Ground Lease. To Seller’s knowledge, each Ground Lease is
in full force and effect in accordance with its terms. A

 

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true and complete copy of each Ground Lease has been delivered to Buyer. The
Company is (or shall be immediately prior to the Closing) the sole owner of the
leasehold interest in the Ground Leases and owns (or will own immediately prior
to Closing) each leasehold estate free and clear of all liens other than the
Permitted Exceptions.

SECTION 3.3. Covenants of Seller Prior to Closing. From and after the Effective
Date until the Closing Date or earlier termination of this Agreement Seller
shall, or shall cause its agents or the Designated Companies to:

(a) maintain, or shall cause to be maintained, the Properties in substantially
the condition existing as of the Effective Date, except for ordinary wear and
tear, casualty or condemnation;

(b) operate and maintain the Properties in a manner generally consistent with
the manner in which Seller or its subsidiaries have operated the Properties
prior to the Effective Date;

(c) perform, or cause their agents to perform, all obligations of tenant or
lessee under the Ground Leases;

(d) not enter into any amendment or modification of any limited liability
company agreement of any Designated Company without Buyer’s prior written
consent, which consent may be granted or withheld in Buyer’s sole discretion;

(e) not create, incur or suffer to exist any deed of trust, lien, pledge or
other encumbrance in any way affecting any portion of any Property without the
prior written consent of Buyer, which consent may be granted or withheld in
Buyer’s sole discretion;

(f) continue to pay or cause to be paid all Taxes, water and sewer charges,
utilities and obligations under the Contracts;

(g) not transfer, sell or otherwise dispose of the Properties or any item of the
Designated Companies’ personal property without the prior written consent of
Buyer, except for the use and consumption of inventory and other supplies, and
the replacement of worn out, obsolete and defective tools, equipment and
appliances, in the ordinary course of business; and

(h) not amend, supplement, terminate or otherwise modify any of the Ground
Leases without the prior written consent of Buyer, which consent may be granted
or withheld in Buyer’s sole discretion.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

SECTION 4.1. Representations and Warranties of Buyer. Buyer hereby represents
and warrants to Seller as follows:

(a) Formation; Existence. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of Delaware.

 

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(b) Power; Authority. Buyer has all requisite power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement, the purchase of the Interests and the consummation of the
transactions provided for herein have been duly authorized by all necessary
action on the part of Buyer. This Agreement has been duly executed and delivered
by Buyer and constitutes the legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights and by general principles
of equity (whether applied in a proceeding at law or in equity).

(c) No Consents. No consent, license, approval, order, permit or authorization
of, or registration, filing or declaration with, any court, administrative
agency or commission or other Governmental Authority or instrumentality,
domestic or foreign, is required to be obtained or made in connection with the
execution, delivery and performance of this Agreement or any of the transactions
required or contemplated hereby, except for a listing application to be filed
with the New York Stock Exchange and for filings to be made under the Securities
Act or the Exchange Act.

(d) No Conflicts. The execution, delivery and compliance with, and performance
of the terms and provisions of, this Agreement, and the purchase of the
Interests, will not (i) conflict with or result in any violation of its
organizational documents, (ii) conflict with or result in any violation of any
provision of any bond, note or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which Buyer is a party in its individual capacity, (iii) violate
any existing term or provision of any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to Buyer or its assets or properties
or (iv) result in the creation or imposition of any lien, charge or encumbrance
upon the Share Consideration.

(e) Bankruptcy. Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Buyer’s creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer’s assets, which remains pending or (iv) suffered the attachment or other
judicial seizure of all, or substantially all of Buyer’s assets, which remains
pending.

(f) Anti-Terrorism Law.

(i) None of Buyer or, to Buyer’s knowledge, its affiliates, is in violation of
the Anti-Money Laundering and Anti-Terrorism Laws.

(ii) None of Buyer or, to Buyer’s knowledge, its affiliates, is acting, directly
or indirectly, on behalf of terrorists, terrorist organizations or narcotics
traffickers, including those persons or entities that appear on the Annex to the
Executive Order, or are included on any relevant lists maintained by the Office
of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of
State, or other U.S. government agencies, all as may be amended from time to
time.

 

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(iii) Neither Buyer, nor any person controlling or controlled by Buyer, is a
country, territory, individual or entity named on a Government List, and the
monies used in connection with this Agreement and amounts committed with respect
thereto, were not and are not derived from any activities that contravene any
applicable anti-money laundering or anti-bribery laws and regulations (including
funds being derived from any person, entity, country or territory on a
Government List or engaged in any unlawful activity defined under Title 18 of
the United States Code, Section 1956(c)(7)).

(g) Capitalization.

(i) The Share Consideration has been duly authorized and, when issued and
delivered pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, and free and clear of any preemptive rights, all liens and any
other restrictions (other than restrictions imposed by La Quinta’s
organizational documents and federal and state securities laws, and restrictions
imposed on the Share Consideration as set forth in the Registration Rights
Agreement). Assuming the accuracy of the representations and warranties of
Seller set forth in subsections 3.1(g) and 3.1(h), the issuance and delivery of
the Share Consideration is exempt from the registration requirements of the
Securities Act and of applicable state securities and “blue sky” laws, and
neither La Quinta nor any authorized representative or agent acting on La
Quinta’s behalf has taken or will take any action hereafter that would cause the
loss of such exemption. As of the date of this Agreement, La Quinta is eligible
to register the Share Consideration for resale by Seller using Form S-3
promulgated under the Securities Act.

(ii) As of the date of this Agreement, there is no outstanding indebtedness for
borrowed money of La Quinta or its subsidiaries in excess of $50,000,000 in
principal amount, other than indebtedness reflected in the registration
statement on Form S-1 (File No. 333-193860) filed on February 10, 2014, as
amended.

(iii) Buyer does not have a “poison pill” or similar stockholder rights plan.

ARTICLE V

CONDITIONS PRECEDENT TO CLOSING

SECTION 5.1. Conditions Precedent to Seller’s Obligations. The obligation of
Seller to consummate the transfer of the Interests to Buyer on the Closing Date
is subject to the satisfaction (or waiver by Seller) as of the Closing of the
following conditions:

(a) Each of the representations and warranties made by Buyer in this Agreement
shall be true and correct in all material respects as of the Closing Date.

 

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(b) Buyer shall have performed and complied in all material respects with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by Buyer prior to or by the Closing Date.

(c) No order or injunction of any court or administrative agency of competent
jurisdiction nor any statute, rule, regulation or executive order promulgated by
any Governmental Authority of competent jurisdiction shall be in effect as of
the Closing which restrains or prohibits the transfer of the Interests or the
consummation of any other transaction contemplated hereby.

(d) No action, suit or other proceeding shall be pending which shall have been
brought by a person or entity to restrain, prohibit or change in any material
respect the transactions contemplated under this Agreement.

(e) Buyer shall have delivered to Seller all of the documents required to be
delivered by Buyer under Section 6.1.

(f) Seller shall have received the Purchase Price in accordance with Section 2.2
and all other amounts due to Seller hereunder, as may be adjusted or prorated
pursuant to this Agreement.

SECTION 5.2. Conditions to Buyer’s Obligations. The obligation of Buyer to
purchase and pay for the Interests is subject to the satisfaction (or waiver by
Buyer) as of the Closing of the following conditions:

(a) Each of the representations and warranties made by Seller in this Agreement
shall be true and correct in all material respects as of the Closing Date.

(b) Seller shall have performed and complied in all material respects with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by Seller prior to or by the Closing Date.

(c) No order or injunction of any court or administrative agency of competent
jurisdiction nor any statute, rule, regulation or executive order promulgated by
any Governmental Authority of competent jurisdiction shall be in effect as of
the Closing which restrains or prohibits the transfer of the Interests or the
consummation of any other transaction contemplated hereby.

(d) Seller shall have delivered to Buyer all of the documents required to be
delivered by Seller under Section 6.2.

(d) The Properties shall be free and clear of all mortgages and encumbrances
other than the Permitted Exceptions.

SECTION 5.3. Waiver of Conditions Precedent. The Closing shall constitute
conclusive evidence that Seller and Buyer have respectively waived any
conditions which are not satisfied as of the Closing.

 

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ARTICLE VI

CLOSING DELIVERIES

SECTION 6.1. Buyer Closing Deliveries. Buyer shall deliver the following
documents at Closing:

(a) an assignment and assumption of Interests (the “Interest Assignment”) duly
executed by Buyer in substantially the form of Exhibit C attached hereto;

(b) an indemnity agreement in favor of WIH Hotels L.L.C. duly executed by Buyer
in substantially the form of Exhibit D attached hereto;

(c) the Registration Rights and Lock-Up Agreement attached hereto as Exhibit E
(the “Registration Rights Agreement”), duly executed by Buyer; and

(d) a closing statement prepared and approved by Seller and Buyer with respect
to each Property, consistent with the terms of this Agreement (the “Closing
Statement”) duly executed by Buyer.

SECTION 6.2. Seller Closing Deliveries. Seller shall deliver the following
documents at Closing:

(a) the Interest Assignment with respect to the Interests, duly executed by
Seller;

(b) an affidavit that Seller is not a “foreign person” within the meaning of the
Foreign Investment in Real Property Tax Act of 1980, as amended, in
substantially the form of Exhibit F attached hereto;

(c) to the extent in Seller’s or property manager’s possession, copies of the
Space Leases which delivery may be satisfied by delivery of the on-site property
management office at the applicable Property;

(d) to the extent in Seller’s possession and to the extent such items are not
Excluded Assets, (a) books and records relating to the management of the
Properties, (b) to the extent assignable, permits and warranties relating to the
Properties, (c) keys and access cards for the Properties, (d) plans,
specifications and operating manuals relating to the Properties and € any
original letter of credit (if any) relating to any Space Lease; and

(e) the Registration Rights Agreement, duly executed by Seller.

(f) the Closing Statement duly executed by Seller.

 

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ARTICLE VII

RELEASE

SECTION 7.1. DISCLAIMER. ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT
TO THE INTERESTS OR THE PROPERTIES IS SOLELY FOR BUYER’S CONVENIENCE AND WAS OR
WILL BE OBTAINED FROM A VARIETY OF SOURCES. SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO (AND EXPRESSLY
DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION EXCEPT AS SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS.
SELLER SHALL NOT BE LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION OR ANY
FAILURE TO INVESTIGATE THE INTERESTS OR THE PROPERTIES NOR SHALL SELLER BE BOUND
IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS,
ENVIRONMENTAL ASSESSMENT REPORTS OR OTHER INFORMATION PERTAINING TO THE
INTERESTS OR THE PROPERTIES OR THE OPERATION THEREOF, FURNISHED BY SELLER, ITS
REPRESENTATIVES OR OTHER PERSON OR ENTITY ACTING ON SELLER’S BEHALF EXCEPT AS
SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS.

SECTION 7.2. EXAMINATION; NO CONTINGENCIES.

(A) IN ENTERING INTO THIS AGREEMENT, BUYER HAS NOT BEEN INDUCED BY AND HAS NOT
RELIED UPON ANY WRITTEN OR ORAL REPRESENTATIONS, WARRANTIES OR STATEMENTS,
WHETHER EXPRESS OR IMPLIED, MADE BY SELLER, OR ANY PARTNER OF SELLER, OR ANY
AFFILIATE, AGENT, EMPLOYEE, OR OTHER REPRESENTATIVE OF ANY OF THE FOREGOING OR
BY ANY BROKER OR ANY OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER
WITH RESPECT TO THE INTERESTS OR THE PROPERTIES, THE CONDITION OF THE PROPERTIES
OR ANY OTHER MATTER AFFECTING OR RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREBY, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE CLOSING
DOCUMENTS. BUYER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL NOT BE SUBJECT TO ANY
CONTINGENCIES, DILIGENCE OR CONDITIONS EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR THE CLOSING DOCUMENTS. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE DOCUMENTS EXECUTED AND
DELIVERED BY SELLER AT CLOSING, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF LAW, WITH
RESPECT TO THE INTERESTS, THE COMPANY, PRIME WELLESLEY OR THE PROPERTIES OR THE
CONDITION OF THE PROPERTIES. BUYER AGREES THAT THE INTERESTS WILL BE SOLD AND
CONVEYED TO (AND ACCEPTED BY) BUYER AT THE CLOSING AND WITH THE THEN EXISTING
CONDITION OF THE PROPERTIES, AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT ANY

 

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WRITTEN OR VERBAL REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR
IMPLIED OR ARISING BY OPERATION OF LAW, OTHER THAN AS EXPRESSLY SET FORTH IN
THIS AGREEMENT OR IN THE DOCUMENTS EXECUTED AND DELIVERED BY SELLER AT CLOSING.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS SET FORTH IN THIS
AGREEMENT OR IN THE DOCUMENTS EXECUTED AND DELIVERED BY SELLER AT CLOSING, THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE WITHOUT STATUTORY, EXPRESS OR
IMPLIED WARRANTY, REPRESENTATION, AGREEMENT, STATEMENT OR EXPRESSION OF OPINION
OF OR WITH RESPECT TO THE CONDITION OF THE PROPERTIES OR THE INTERESTS OR ANY
ASPECT THEREOF, INCLUDING, WITHOUT LIMITATION, (I) ANY AND ALL STATUTORY,
EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES RELATED TO THE SUITABILITY FOR
HABITATION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, (II) ANY
STATUTORY, EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES CREATED BY ANY
AFFIRMATION OF FACT OR PROMISE, BY ANY DESCRIPTION OF THE INTERESTS OR THE
PROPERTIES OR BY OPERATION OF LAW, AND (III) ALL OTHER STATUTORY, EXPRESS OR
IMPLIED REPRESENTATIONS OR WARRANTIES BY SELLER WHATSOEVER. BUYER ACKNOWLEDGES
THAT BUYER HAS KNOWLEDGE AND EXPERTISE IN FINANCIAL AND BUSINESS MATTERS THAT
ENABLE BUYER TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.

(B) FOR PURPOSES OF THIS AGREEMENT, THE TERM “CONDITION OF THE PROPERTIES” MEANS
THE FOLLOWING MATTERS:

(I) PHYSICAL CONDITION OF THE PROPERTIES. THE QUALITY, NATURE AND ADEQUACY OF
THE PHYSICAL CONDITION OF THE PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE
QUALITY OF THE DESIGN, LABOR AND MATERIALS USED TO CONSTRUCT THE IMPROVEMENTS
INCLUDED IN THE PROPERTIES; THE CONDITION OF STRUCTURAL ELEMENTS, FOUNDATIONS,
ROOFS, GLASS, MECHANICAL, PLUMBING, ELECTRICAL, HVAC, SEWAGE, AND UTILITY
COMPONENTS AND SYSTEMS; THE CAPACITY OR AVAILABILITY OF SEWER, WATER, OR OTHER
UTILITIES; THE GEOLOGY, FLORA, FAUNA, SOILS, SUBSURFACE CONDITIONS, GROUNDWATER,
LANDSCAPING, AND IRRIGATION OF OR WITH RESPECT TO THE PROPERTIES, THE LOCATION
OF THE PROPERTIES IN OR NEAR ANY SPECIAL TAXING DISTRICT, FLOOD HAZARD ZONE,
WETLANDS AREA, PROTECTED HABITAT, GEOLOGICAL FAULT OR SUBSIDENCE ZONE, HAZARDOUS
WASTE DISPOSAL OR CLEAN-UP SITE, OR OTHER SPECIAL AREA, THE EXISTENCE, LOCATION,
OR CONDITION OF INGRESS, EGRESS, ACCESS, AND PARKING; THE CONDITION OF THE
PERSONAL PROPERTY AND ANY FIXTURES; AND THE PRESENCE OF ANY ASBESTOS OR OTHER
HAZARDOUS MATERIALS, DANGEROUS, OR TOXIC SUBSTANCE, MATERIAL OR WASTE IN, ON,
UNDER OR ABOUT THE PROPERTIES AND

 

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THE IMPROVEMENTS LOCATED THEREON. “HAZARDOUS MATERIALS” MEANS (A) THOSE
SUBSTANCES INCLUDED WITHIN THE DEFINITIONS OF ANY ONE OR MORE OF THE TERMS
“HAZARDOUS SUBSTANCES,” “TOXIC POLLUTANTS”, “HAZARDOUS MATERIALS”, “TOXIC
SUBSTANCES”, AND “HAZARDOUS WASTE” IN THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT, 42 U.S.C. § 9601 ET SEQ. (AS AMENDED), THE
HAZARDOUS MATERIALS TRANSPORTATION ACT, AS AMENDED, 49 U.S.C. SECTIONS 1801 ET
SEQ., THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976 AS AMENDED, 42 U.S.C.
SECTION 6901 ET SEQ., SECTION 311 OF THE CLEAN WATER ACT, 15 U.S.C. § 2601 ET
SEQ., 33 U.S.C. § 1251 ET SEQ., 42 U.S.C. 7401 ET SEQ., AND THE REGULATIONS AND
PUBLICATIONS ISSUED UNDER ANY SUCH LAWS, (B) PETROLEUM, RADON GAS, LEAD BASED
PAINT, ASBESTOS OR ASBESTOS CONTAINING MATERIAL AND POLYCHLORINATED BIPHENYLS
AND (C) MOLD OR WATER CONDITIONS WHICH MAY EXIST AT THE PROPERTIES OR OTHER
SUBSTANCES, WASTES OR MATERIALS LISTED OR DEFINED BY ANY STATE OR LOCAL
STATUTES, REGULATIONS AND ORDINANCES PERTAINING TO THE PROTECTION OF HUMAN
HEALTH AND THE ENVIRONMENT.

(II) ADEQUACY OF THE PROPERTIES. THE ECONOMIC FEASIBILITY, CASH FLOW AND
EXPENSES OF THE PROPERTIES, AND HABITABILITY, MERCHANTABILITY, FITNESS,
SUITABILITY AND ADEQUACY OF THE PROPERTIES FOR ANY PARTICULAR USE OR PURPOSE.

(III) LEGAL COMPLIANCE OF THE PROPERTIES. THE COMPLIANCE OR NON-COMPLIANCE OF
SELLER OR THE OPERATION OF THE PROPERTIES OR ANY PART THEREOF IN ACCORDANCE
WITH, AND THE CONTENTS OF, (I) ALL CODES, LAWS, ORDINANCES, REGULATIONS,
AGREEMENTS, LICENSES, PERMITS, APPROVALS AND APPLICATIONS OF OR WITH ANY
GOVERNMENTAL AUTHORITIES ASSERTING JURISDICTION OVER THE PROPERTIES, INCLUDING,
WITHOUT LIMITATION, THOSE RELATING TO ZONING, BUILDING, PUBLIC WORKS, PARKING,
FIRE AND POLICE ACCESS, HANDICAP ACCESS, LIFE SAFETY, SUBDIVISION AND
SUBDIVISION SALES, AND HAZARDOUS MATERIALS, DANGEROUS, AND TOXIC SUBSTANCES,
MATERIALS, CONDITIONS OR WASTE, INCLUDING, WITHOUT LIMITATION, THE PRESENCE OF
HAZARDOUS MATERIALS IN, ON, UNDER OR ABOUT THE PROPERTIES THAT WOULD CAUSE STATE
OR FEDERAL AGENCIES TO ORDER A CLEAN UP OF ANY PROPERTY UNDER ANY APPLICABLE
LEGAL REQUIREMENTS AND (II) ALL AGREEMENTS, COVENANTS, CONDITIONS, RESTRICTIONS
(PUBLIC OR PRIVATE), CONDOMINIUM PLANS, DEVELOPMENT AGREEMENTS, SITE PLANS,
BUILDING PERMITS, BUILDING RULES, AND OTHER INSTRUMENTS AND DOCUMENTS GOVERNING
OR AFFECTING THE USE, MANAGEMENT, AND OPERATION OF ANY PROPERTY.

 

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(IV) MATTERS DISCLOSED IN THE SCHEDULES. THOSE MATTERS REFERRED TO IN THIS
AGREEMENT AND THE DOCUMENTS LISTED ON THE SCHEDULES ATTACHED HERETO.

(V) INSURANCE. THE AVAILABILITY, COST, TERMS AND COVERAGE OF LIABILITY, HAZARD,
COMPREHENSIVE AND ANY OTHER INSURANCE OF OR WITH RESPECT TO THE PROPERTIES.

(VI) CONDITION OF TITLE. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT TO THE
CONTRARY, THE CONDITION OF TITLE TO THE PROPERTIES, INCLUDING, WITHOUT
LIMITATION, VESTING, LEGAL DESCRIPTION, MATTERS AFFECTING TITLE, TITLE DEFECTS,
LIENS, ENCUMBRANCES, BOUNDARIES, ENCROACHMENTS, MINERAL RIGHTS, OPTIONS,
EASEMENTS, AND ACCESS; VIOLATIONS OF RESTRICTIVE COVENANTS, ZONING ORDINANCES,
SETBACK LINES, OR DEVELOPMENT AGREEMENTS; THE AVAILABILITY, COST, AND COVERAGE
OF TITLE INSURANCE; LEASES, RENTAL AGREEMENTS, OCCUPANCY AGREEMENTS, RIGHTS OF
PARTIES IN POSSESSION OF, USING, OR OCCUPYING THE PROPERTIES; AND STANDBY FEES,
TAXES, BONDS AND ASSESSMENTS.

SECTION 7.3. MUTUAL RELEASE OF CLAIMS.

(A) BUYER ON BEHALF OF ITS SUCCESSORS AND ASSIGNS HEREBY AGREES THAT SELLER, AND
EACH OF THEIR PARTNERS, MEMBERS, TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES, PROPERTY MANAGERS, ASSET MANAGERS, AGENTS, ATTORNEYS,
AFFILIATES AND RELATED ENTITIES, HEIRS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY,
THE “SELLER RELEASEES”) SHALL BE, AND ARE HEREBY, FULLY AND FOREVER RELEASED AND
DISCHARGED FROM ANY AND ALL LIABILITIES, LOSSES, CLAIMS (INCLUDING THIRD PARTY
CLAIMS), DEMANDS, DAMAGES (OF ANY NATURE WHATSOEVER), CAUSES OF ACTION, COSTS,
PENALTIES, FINES, JUDGMENTS, REASONABLY ATTORNEYS’ FEES, CONSULTANTS’ FEES AND
COSTS AND EXPERTS’ FEES (COLLECTIVELY, THE “CLAIMS”) WITH RESPECT TO ANY AND ALL
CLAIMS, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN,
THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE SALE
CONSIDERATION, INTERESTS OR THE PROPERTIES INCLUDING, WITHOUT LIMITATION, THE
COMPANY, PRIME WELLESLEY, SELLER’S OR SELLER’S AFFILIATE’S ROLE AS A PARTNER,
MEMBER, MANAGER OR PROPERTY MANAGER OF THE COMPANY, PRIME WELLESLEY OR THE
PROPERTIES, THE PHYSICAL, ENVIRONMENTAL AND STRUCTURAL CONDITION OF THE
PROPERTIES OR ANY LAW OR REGULATION APPLICABLE THERETO, INCLUDING, WITHOUT
LIMITATION, ANY CLAIM OR MATTER (REGARDLESS

 

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OF WHEN IT FIRST APPEARED) RELATING TO OR ARISING FROM (A) THE PRESENCE OF ANY
ENVIRONMENTAL PROBLEMS, OR THE USE, PRESENCE, STORAGE, RELEASE, DISCHARGE, OR
MIGRATION OF HAZARDOUS MATERIALS ON, IN, UNDER OR AROUND THE PROPERTIES
REGARDLESS OF WHEN SUCH HAZARDOUS MATERIALS WERE FIRST INTRODUCED IN, ON OR
ABOUT THE PROPERTIES, (B) ANY PATENT OR LATENT DEFECTS OR DEFICIENCIES WITH
RESPECT TO THE PROPERTIES, (C) ANY AND ALL MATTERS RELATED TO THE PROPERTIES OR
ANY PORTION THEREOF, INCLUDING WITHOUT LIMITATION, THE CONDITION AND/OR
OPERATION OF THE PROPERTIES AND EACH PART THEREOF, (D) ANY AND ALL MATTERS
RELATED TO THE CURRENT OR FUTURE ZONING OR USE OF THE PROPERTIES, (E) THE
PRESENCE, RELEASE AND/OR REMEDIATION OF ASBESTOS AND ASBESTOS CONTAINING
MATERIALS IN, ON OR ABOUT THE PROPERTIES REGARDLESS OF WHEN SUCH ASBESTOS AND
ASBESTOS CONTAINING MATERIALS WERE FIRST INTRODUCED IN, ON OR ABOUT THE
PROPERTIES OR (F) ANY MATTERS RELATING TO SELLER’S DIRECT OR INDIRECT INTEREST
IN THE COMPANY OR PRIME WELLESLEY; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL
SELLER RELEASEES BE RELEASED FROM ANY CLAIMS ARISING PURSUANT TO THE PROVISIONS
OF THIS AGREEMENT OR SELLER’S OBLIGATIONS, IF ANY, UNDER THE CLOSING DOCUMENTS.
BUYER HEREBY WAIVES AND AGREES NOT TO COMMENCE ANY ACTION, LEGAL PROCEEDING,
CAUSE OF ACTION OR SUITS IN LAW OR EQUITY, OF WHATEVER KIND OR NATURE,
INCLUDING, BUT NOT LIMITED TO, A PRIVATE RIGHT OF ACTION UNDER THE FEDERAL
SUPERFUND LAWS, 42 U.S.C. SECTIONS 9601 ET SEQ. AND SIMILAR STATE ENVIRONMENTAL
LAWS (AS SUCH LAWS AND STATUTES MAY BE AMENDED, SUPPLEMENTED OR REPLACED FROM
TIME TO TIME), DIRECTLY OR INDIRECTLY, AGAINST THE SELLER RELEASEES OR THEIR
AGENTS IN CONNECTION WITH CLAIMS DESCRIBED ABOVE.

(B) SELLER ON BEHALF OF ITS SUCCESSORS AND ASSIGNS HEREBY AGREES THAT BUYER, AND
EACH OF THEIR PARTNERS, MEMBERS, TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES, PROPERTY MANAGERS, ASSET MANAGERS, AGENTS, ATTORNEYS,
AFFILIATES AND RELATED ENTITIES, HEIRS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY,
THE “BUYER RELEASEES”) SHALL BE, AND ARE HEREBY, FULLY AND FOREVER RELEASED AND
DISCHARGED FROM ANY AND ALL CLAIMS WITH RESPECT TO ANY AND ALL CLAIMS, WHETHER
DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THAT MAY ARISE ON
ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE SALE CONSIDERATION, INTERESTS OR
THE PROPERTIES INCLUDING, WITHOUT LIMITATION, THE COMPANY, PRIME WELLESLEY,
BUYER’S OR BUYER’S AFFILIATE’S ROLE AS A PARTNER, MEMBER, MANAGER OR PROPERTY
MANAGER OF THE COMPANY, PRIME WELLESLEY OR THE PROPERTIES, THE PHYSICAL,
ENVIRONMENTAL AND STRUCTURAL CONDITION OF THE PROPERTIES OR ANY LAW OR
REGULATION APPLICABLE THERETO, INCLUDING, WITHOUT LIMITATION, ANY CLAIM OR
MATTER (REGARDLESS

 

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OF WHEN IT FIRST APPEARED) RELATING TO OR ARISING FROM (A) THE PRESENCE OF ANY
ENVIRONMENTAL PROBLEMS, OR THE USE, PRESENCE, STORAGE, RELEASE, DISCHARGE, OR
MIGRATION OF HAZARDOUS MATERIALS ON, IN, UNDER OR AROUND THE PROPERTIES
REGARDLESS OF WHEN SUCH HAZARDOUS MATERIALS WERE FIRST INTRODUCED IN, ON OR
ABOUT THE PROPERTIES, (B) ANY PATENT OR LATENT DEFECTS OR DEFICIENCIES WITH
RESPECT TO THE PROPERTIES, (C) ANY AND ALL MATTERS RELATED TO THE PROPERTIES OR
ANY PORTION THEREOF, INCLUDING WITHOUT LIMITATION, THE CONDITION AND/OR
OPERATION OF THE PROPERTIES AND EACH PART THEREOF, (D) ANY AND ALL MATTERS
RELATED TO THE CURRENT OR FUTURE ZONING OR USE OF THE PROPERTIES, (E) THE
PRESENCE, RELEASE AND/OR REMEDIATION OF ASBESTOS AND ASBESTOS CONTAINING
MATERIALS IN, ON OR ABOUT THE PROPERTIES REGARDLESS OF WHEN SUCH ASBESTOS AND
ASBESTOS CONTAINING MATERIALS WERE FIRST INTRODUCED IN, ON OR ABOUT THE
PROPERTIES OR (F) ANY MATTERS RELATING TO BUYER’S DIRECT OR INDIRECT INTEREST IN
THE COMPANY OR PRIME WELLESLEY; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL BUYER
RELEASEES BE RELEASED FROM ANY CLAIMS ARISING PURSUANT TO THE PROVISIONS OF THIS
AGREEMENT OR BUYER’S OBLIGATIONS, IF ANY, UNDER THE CLOSING DOCUMENTS. SELLER
HEREBY WAIVES AND AGREES NOT TO COMMENCE ANY ACTION, LEGAL PROCEEDING, CAUSE OF
ACTION OR SUITS IN LAW OR EQUITY, OF WHATEVER KIND OR NATURE, INCLUDING, BUT NOT
LIMITED TO, A PRIVATE RIGHT OF ACTION UNDER THE FEDERAL SUPERFUND LAWS, 42
U.S.C. SECTIONS 9601 ET SEQ. AND SIMILAR STATE ENVIRONMENTAL LAWS (AS SUCH LAWS
AND STATUTES MAY BE AMENDED, SUPPLEMENTED OR REPLACED FROM TIME TO TIME),
DIRECTLY OR INDIRECTLY, AGAINST THE BUYER RELEASEES OR THEIR AGENTS IN
CONNECTION WITH CLAIMS DESCRIBED ABOVE.

(C) IN THIS CONNECTION AND TO THE GREATEST EXTENT PERMITTED BY LAW, BUYER AND
SELLER HEREBY AGREE THAT EACH PARTY REALIZES AND ACKNOWLEDGES THAT FACTUAL
MATTERS NOW KNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CAUSES OF
ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGE, COSTS, LOSSES AND
EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND EACH
PARTY FURTHER AGREES THAT THE WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED
AND AGREED UPON IN LIGHT OF THAT REALIZATION AND THAT EACH PARTY NEVERTHELESS
HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT THE OTHER PARTY FROM ANY SUCH
UNKNOWN CLAIMS, DEBTS, AND CONTROVERSIES WHICH MIGHT IN ANY WAY BE INCLUDED AS A
MATERIAL PORTION OF THE CONSIDERATION EXCHANGED BY THE PARTIES HERETO FOR THE
PARTIES MUTUAL PERFORMANCE HEREUNDER.

 

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(D) THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS
EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE RELATING TO UNKNOWN AND
UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.

(E) EACH PARTY HAS GIVEN THE OTHER PARTY MATERIAL CONCESSIONS REGARDING THIS
TRANSACTION IN EXCHANGE FOR AGREEING TO THE PROVISIONS OF THIS SECTION 7.3. THE
PROVISIONS OF THIS SECTION 7.3 SHALL SURVIVE THE CLOSING AND SHALL NOT BE DEEMED
MERGED INTO ANY INSTRUMENT OR CONVEYANCE DELIVERED AT THE CLOSING.

SECTION 7.4. SHARE CONSIDERATION NOT REGISTERED. BUYER AND SELLER EACH
ACKNOWLEDGE THAT THE SHARE CONSIDERATION IS NOT REGISTERED UNDER THE SECURITIES
ACT OR ANY STATE SECURITIES LAWS, AND THAT THE SHARE CONSIDERATION MAY NOT BE
TRANSFERRED OR SOLD EXCEPT PURSUANT TO THE REGISTRATION PROVISIONS OF THE
SECURITIES ACT OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM AND SUBJECT TO
STATE SECURITIES LAWS AND REGULATIONS, AS APPLICABLE.

ARTICLE VIII

TRANSACTION COSTS

SECTION 8.1. Transaction Costs.

(a) Buyer and Seller agree to comply with all statutorily required real estate
transfer tax laws applicable to the sale of the Interests, if any. At Closing,
any acquisition-related costs (including, without limitation, state, county and
local real estate transfer taxes) will be allocated between and paid by Buyer
and Seller in accordance with local custom. Seller and Buyer shall pay their
respective shares of prorations as hereinafter provided. Except as otherwise
expressly provided in this Agreement, each party shall pay the fees of its own
attorneys, accountants and other professionals.

(b) Each party to this Agreement shall indemnify the other parties and their
respective successors and assigns from and against any and all loss, damage,
cost, charge, liability or expense (including court costs and reasonable
attorneys’ fees) which such other party may sustain or incur as a result of the
failure of either party to timely pay any of the aforementioned Taxes, fees or
other charges for which it has assumed responsibility under this Section. The
provisions of this Section 9.1 shall survive the Closing or the termination of
this Agreement.

 

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ARTICLE IX

ADJUSTMENTS

Unless otherwise provided below, the following are to be adjusted and prorated
between Seller and Buyer as of 11:59 P.M. on the day that is three Business Days
preceding the Closing (the “Cut-Off Time”), based upon a 365 day year, with
Buyer being deemed to be the owner of the Interests during the entire day of the
Closing Date and being entitled to receive all income with respect to the
Interests, and being obligated to pay all expenses related to the Interests,
with respect to the Closing Date.

SECTION 9.1. Taxes and Assessments. All non-delinquent real estate and personal
property taxes and assessments with respect to the Properties for the current
year shall be prorated between Seller and Buyer as of the Closing Date (on the
basis of the actual number of days elapsed over the applicable period). Seller
shall be responsible for the payment of any real estate and personal property
taxes that are delinquent before Closing. In no event shall Seller be charged
with or be responsible for any increase in the taxes on the Properties resulting
from the sale of the Interests contemplated by this Agreement, any change in use
of the Properties or Land on or after the Closing Date, or from any improvements
made or leases entered into on or after the Closing Date. If any assessments on
the Properties or Land are payable in installments, then the installment
allocable to the current period shall be prorated (with Buyer being allocated
the obligation to pay any installments due on or after the Closing Date).

SECTION 9.2. Water and Sewer Charges. Water rates, water meter charges, sewer
rents and vault charges, if any (other than any such charges, rates or rents
which are payable by tenants of the Properties pursuant to such tenants’ Space
Leases, for which no adjustment shall be made), shall be adjusted and prorated
on the basis of the fiscal period for which assessed. If there is a water meter,
or meters, on the Properties, Seller agrees that it shall at the Closing furnish
a reading of same to a date not more than 30 days prior to the Closing and the
unfixed meter charges and the unfixed sewer rent thereon for the time
intervening from the date of the last reading shall be apportioned on the basis
of such last reading, and shall be appropriately readjusted after the Closing on
the basis of the next subsequent bills. Unmetered water charges shall be
apportioned on the basis of the charges therefor for the same period of the
preceding calendar year, but applying the current rate thereto.

SECTION 9.3. Utility Charges. Seller shall be entitled to receive a credit as of
the Closing Date to recover any and all deposits held by any utility company
with respect to the Properties as of the Closing Date to the extent not conveyed
with the Designated Companies. All charges for utilities shall be prorated
outside of the escrow contemplated herein within 60 days after the Closing Date.

SECTION 9.4. Miscellaneous Revenues. Revenues, if any, arising out of telephone
booths, vending machines, or other income-producing agreements with respect to
the Properties shall be adjusted and prorated between Buyer and Seller as of the
Closing.

 

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SECTION 9.5. Cash and Cash Reserves. At Closing, in addition to the payment of
the Purchase Price, Buyer shall deliver to Seller in immediately available funds
all cash or cash equivalents then held by the Company or Prime Wellesley (other
than any security deposits held by the Company or Prime Wellesley).

SECTION 9.6. Insurance. All insurance premiums relating to the Designated
Company’s insurance shall be adjusted and prorated between Buyer and Seller as
of the Closing.

SECTION 9.7. Accounts Receivable.

(a) Guest Ledger. All revenues received or to be received from transient guests
on account of room rents, facilities occupied and the use of the Property
(including without limitation parking areas, mini-bar sales, phone and other
communication charges and the like) for the period prior to but excluding the
Cut-Off Time shall belong to Seller. At Closing, Seller shall receive a credit
in an amount equal to: (i) all amounts charged to the Guest Ledger for all room
nights up to (but not including) the night during which the Cut-Off Time occurs,
and (ii) one half ( 1⁄2) of all amounts charged to the Guest Ledger for the room
night which includes the Cut-Off Time. For the period beginning on the day
immediately following the Cut-Off Time, such revenues collected from the Guest
Ledger shall belong to Buyer and Buyer shall be entitled to retain all deposits
made and amounts collected with respect to such Guest Ledger. For the period
beginning on the day immediately following the Cut-Off Time, revenues collected
from the Guest Ledger shall belong to Buyer. In the event that an amount less
than the total amount due from a guest is collected and such guest continued in
occupancy after the Cut-Off Time, such amount shall be pro-rated over the period
of such guest’s stay. The provisions of this subsection 9.7(a) will survive the
Closing for 180 days.

(b) Accounts Receivable (Other than Guest Ledger).

(i) At Closing, all Accounts Receivable (other than in respect of the Guest
Ledger which is addressed in subsection 9.7(a) above) shall belong to Buyer and
Buyer shall have the sole right to collect and retain all amounts collected with
respect to such Accounts Receivable. At Closing, Seller shall receive a credit
in an amount equal to the sum of: (I) 100% of all Accounts Receivable that are
30 days or less past due as of the Closing Date; (II) 90% of all Accounts
Receivable that are 31-60 days past due as of the Closing Date and (III) 80% of
all Accounts Receivable that are more than 61 days past due as of the Closing
Date.

(ii) The Accounts Receivable addressed in this subsection 9.7(b) shall not
include the Guest Ledger, which is addressed in subsection 9.7(a).

SECTION 9.8. Accounts Payable. Seller shall be responsible for all Accounts
Payable to the extent attributable to the period preceding the Cut-Off Time.
Buyer shall be charged with any prepaid Accounts Payable to the extent those
Accounts Payable will benefit the Assets for the period after the Cut-Off Time.
From and after the Closing Date, Buyer shall be responsible for paying when due
all other accounts payable arising out of the operation of the Properties from
and after the Cut-Off Time.

 

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SECTION 9.9. Bookings; Booking Deposits. At the Closing, Buyer shall assume all
of the obligations of Seller under the Bookings as of the Cut-Off Time,
including obligations with respect to any prepaid amounts and deposits under the
Booking Deposits not earned as of the Cut-Off Time, and Buyer shall receive a
credit against the Purchase Price at the Closing in an amount equal to all such
amounts to the extent not held by the Designated Companies (and, therefore,
Seller shall have the right to retain any amounts relating to such items on
deposit in Seller’s accounts). All prepaid amounts under the Booking Deposits
for which Buyer has received credit as of the Cut-Off Time shall be the
obligation of Buyer after the Closing.

SECTION 9.10. Sales, General Excise, Room and Occupancy Taxes. Seller shall pay
all sales taxes, general excise taxes and room occupancy, hotel, resort, and use
taxes due and payable with respect to the Properties for the period prior to the
Cut-Off Time, and Buyer shall pay all sales taxes, general excise taxes, room
occupancy, hotel, resort, and use taxes due and payable with respect to the
Properties for the periods on and after the Cut-Off Time (except as provided in
Section 8.1). Seller, on the one hand, and Buyer, on the other hand, shall each
pay fifty percent (50%) of all sales taxes, general excise taxes, room occupancy
and use taxes due and payable with respect to the Properties for the night
commencing prior to and ending on the day on which the Cut-Off Time occurs
(except as provided in Section 8.1). Seller shall be entitled to receive any
rebates or refunds on such taxes paid by Seller prior to Closing.

SECTION 9.11. Fixed Rents and Additional Rents.

(a) Fixed rents (collectively, “Fixed Rents”) and Additional Rents (as
hereinafter defined; Fixed Rents and Additional Rents being together referred to
herein as “Rents”) paid or payable by tenants under the Space Leases in
connection with their occupancy of the Properties shall be adjusted and prorated
on an if, as and when collected basis. Any Rents collected by Buyer or Seller
after the Closing from any tenant who owes Rents for periods prior to the
Closing, shall be applied (i) first, in payment of Rents owed by such tenant for
the month in which the Closing occurs, (ii) second, in payment of current Rents
at the time of receipt, (iii) third, to delinquent Rents, if any, which became
due after the Closing and (iv) fourth, then to delinquent Rents, if any, which
became due prior to the Closing. Each such amount, less any costs of collection
(including reasonable counsel fees) reasonably allocable thereto, shall be
adjusted and prorated as provided above, and the party who receives such amount
shall promptly pay over to the other party the portion thereof to which it is so
entitled. For the purposes of this provision, the term “Additional Rent” shall
mean amounts payable under any Space Lease for (i) the payment of additional
rent based upon a percentage of the tenant’s business during a specified annual
or other period (sometimes referred to as “percentage rent”), (ii) so-called
common area maintenance or “CAM” charges, (iii) so-called “escalation rent” or
additional rent based upon increases in real estate taxes or operating expenses
or labor costs or cost of living or porter’s wages or otherwise and (iv) any
general excise taxes collected from the tenants.

(b) Buyer shall bill tenants who owe Rents for periods prior to the Closing on a
monthly basis following the Closing, but shall not be obligated to take any
other action to collect such Rents or to engage a collection agency or take
legal action to collect such amount. Notwithstanding the foregoing, if Buyer
shall be unable to collect such past due

 

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Rents and any such tenant is no longer at the Properties, Seller shall have the
right to pursue such tenant to collect such delinquencies (including, without
limitation, the prosecution of one or more lawsuits, but Seller shall not take
any action to evict any such tenant or terminate any such Space Lease). Seller
shall furnish to Buyer all information relating to the period prior to the
Closing that is reasonably necessary for the billing of such Rent and Buyer will
deliver to Seller, concurrently with the delivery to tenants, copies of all
statements relating to Rent for a period prior to the Closing. Buyer shall bill
tenants for Rents for accounting periods prior to the Closing in accordance with
and on the basis of such information furnished by Seller. The obligations of
Buyer under this paragraph (b) shall survive for three months after Closing.

(c) To the extent that any portion of Additional Rent is required to be paid
monthly by tenants on account of estimated amounts for any calendar year (or, if
applicable, any lease year or tax year or any other applicable accounting
period), and at the end of such calendar year (or lease year, tax year or other
applicable accounting period, as the case may be), such estimated amounts are to
be recalculated based upon the actual expenses, taxes and other relevant factors
for that calendar (lease or tax) year or other applicable accounting period,
with the appropriate adjustments being made with such tenants, then such portion
of the Additional Rent shall be prorated between Seller and Buyer at the Closing
based on such estimated payments actually paid by tenants (i.e., with Seller
entitled to provisionally retain all monthly or other periodic installments of
such amounts paid by tenants with respect to periods prior to the calendar month
or other applicable installment period in which the Closing occurs (on a
pro-rata basis for any partial months), Seller to pay to Buyer at the Closing
all monthly or other periodic installments of such amounts theretofore received
by Seller with respect to periods following the calendar month or other
applicable installment period in which the Closing occurs and Seller and Buyer
to apportion as of the Closing all monthly or other periodic installments of
such amounts paid by tenants with respect to the calendar month or other
applicable installment period in which the Closing occurs). At the time(s) of
final calculation and collection from (or refund to) each tenant of the amounts
in reconciliation of actual Additional Rent for a period for which estimated
amounts paid by such tenant have been prorated, there shall be a re-proration
between Seller and Buyer in accordance with paragraph (a), (b) and (c) of this
Section 9.11.

(d) Until the sooner of (x) three months after Closing and (y) such time as all
amounts required to be paid to Seller by Buyer pursuant to this Section 9.11
shall have been paid in full, Buyer shall furnish to Seller, upon Seller’s
reasonable request, a reporting of rents which have been collected by Buyer
after the Closing with respect to Space Leases with delinquent Rents as of the
Closing.

SECTION 9.12. Contracts. Charges and payments under all Contracts shall be
adjusted and prorated between Buyer and Seller as of the Closing. There shall be
no proration as of the Closing for any management agreements for the Properties
with LQ Management L.L.C.; provided, however, any accrued and unpaid amounts
under such management agreements from January 1, 2014 through the Closing shall
be subject to the reproration provisions of Section 9.15.

SECTION 9.13. Ground Rent. All rent and other payments and charges due under the
Ground Leases with respect to the year in which the Closing occurs shall be
adjusted and prorated between Buyer and Seller as of the Closing.

 

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SECTION 9.14. Other. If applicable, the Purchase Price shall be adjusted at
Closing to reflect the adjustment of any other item which, under the explicit
terms of this Agreement, is to be apportioned at Closing. Any other items of
operating income or operating expense that are customarily apportioned between
the parties in real estate closings of comparable commercial properties in the
metropolitan area where such Property is located, shall be prorated as
applicable.

SECTION 9.15. Re-Adjustment. In the event any prorations or apportionments made
under this Article IX shall prove to be incorrect for any reason, then any party
shall be entitled to an adjustment to correct the same. Any item that cannot be
finally prorated because of the unavailability of information, shall be
tentatively prorated on the basis of the best data then available and reprorated
when the information is available. Notwithstanding anything to the contrary set
forth herein, all reprorations contemplated by this Agreement shall be completed
within one year after Closing (subject to extension solely as necessary due to
the unavailability of final information but in no event to exceed two years
after Closing). The obligations of Seller and Buyer under this Article IX shall
survive the Closing for two years.

ARTICLE X

INDEMNIFICATION

SECTION 10.1. Indemnification by Seller. Following the Closing and subject to
Sections 10.3 and 10.4, Seller shall indemnify and hold Buyer, its member,
partners, shareholders, officers, directors, employees, representatives and
agents of each of the foregoing (collectively, “Buyer-Related Entities”)
harmless from and against any and all costs, fees, expenses, damages,
deficiencies, interest and penalties (including, without limitation, reasonable
attorneys’ fees and disbursements) suffered or incurred by any such indemnified
party in connection with any and all losses, liabilities, claims, damages and
expenses (“Losses”) to the extent (a) relating to those properties more
particularly described on Schedule 10.1 attached hereto or such other properties
previously owned by the Designated Companies and not otherwise a “Property”,
(b) relating to any act or omission with respect to any Ground Lease occurring
or arising prior to the Closing Date or (c) caused by (i) any breach of any
representation or warranty of Seller contained in this Agreement or in any
Closing Document, or (ii) any breach of any covenant of Seller which survives
the Closing contained in this Agreement or in any Closing Document. The
indemnification obligation of Seller contained in Section 10.1 shall survive the
Closing.

SECTION 10.2. Indemnification by Buyer. Following the Closing and subject to
Sections 10.3 and 10.4, Buyer shall indemnify and hold Seller, its members,
partners, shareholders, officers, directors, employees, representatives and
agents of each of the foregoing (collectively, “Seller-Related Entities”)
harmless from any and all Losses to the extent caused by (a) any breach of any
representation or warranty by Buyer contained in this Agreement or in any
Closing Document or (b) any breach of any covenant of Buyer which survives the
Closing contained in this Agreement or in any Closing Document.

 

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SECTION 10.3. Limitations on Indemnification. Notwithstanding the foregoing
provisions of Section 10.1, solely with respect to the indemnification
obligation of Seller set forth in Section 10.1(c) and the indemnification
obligations of Buyer set forth in Section 10.2, (a) Seller or Buyer, as
applicable, shall not be required to indemnify Buyer or any Buyer-Related
Entities or Seller or any Seller-Related Entities, as applicable, under this
Agreement unless the aggregate of all amounts for which an indemnity would
otherwise be payable by Seller or Buyer, as applicable under Section 10.1(c) or
Section 10.2, as applicable, exceeds the Basket Limitation and (b) in no event
shall the liability of Seller or Buyer, as applicable, with respect to the
indemnification provided for in Section 10.1(c) or Section 10.2, as applicable,
exceed in the aggregate the Cap Limitation (provided that Seller’s and Buyer’s
obligations under Article IX with respect to prorations and adjustments,
Seller’s and Buyer’s obligations for transaction costs under Section 8.1,
Seller’s indemnity obligations under Section 10.1(a) and Section 10.1(b) and
Seller’s and Buyer’s obligations under Section 12.2 with respect to brokers
shall not be subject to the Basket Limitation or the Cap Limitation). In no
event shall Buyer be entitled to seek or obtain consequential, special, punitive
or exemplary damages against Seller. In no event shall Seller be entitled to
seek or obtain consequential, special, punitive or exemplary damages against
Buyer.

SECTION 10.4. Survival. Except for the representations and warranties contained
in Section 3.1 which shall survive indefinitely, the representations, warranties
and covenants contained in this Agreement and the Closing Documents shall
survive for a period of 12 months after the Closing unless a longer or shorter
survival period is expressly provided for in this Agreement (the “Survival
Period”).

SECTION 10.5. Notification. In the event that any indemnified party
(“Indemnified Party”) obtains actual and not implied or imputed knowledge of any
claim or demand for which an indemnifying party (an “Indemnifying Party”) may
have liability to such Indemnified Party hereunder (an “Indemnification Claim”),
such Indemnified Party shall promptly, but in no event more than 30 days
following such Indemnified Party’s having become aware of such Indemnification
Claim, notify the Indemnifying Party in writing of such Indemnification Claim,
the amount or the estimated amount of damages sought thereunder to the extent
then ascertainable (which estimate shall not be conclusive of the final amount
of such Indemnification Claim), any other remedy sought thereunder, any relevant
time constraints relating thereto and, to the extent practicable, any other
material details pertaining thereto (a “Claim Notice”); provided, that no delay
on the part of the Indemnified Party in giving any such notice of a
Indemnification Claim shall relieve the Indemnifying Party of any
indemnification obligations hereunder except to the extent that the Indemnifying
Party is prejudiced by such delay.

SECTION 10.6. Indemnification as Sole Remedy. If the Closing has occurred, the
sole and exclusive remedy available to a party in the event of a breach by the
other party to this Agreement of any representation, warranty, covenant or other
provision of this Agreement or any Closing Document which survives the Closing
shall be the indemnifications provided for under this Article X. Notwithstanding
the foregoing, this Article X shall not apply to or otherwise affect any claims
relating to brokerage commissions pursuant to Section 12.2, the parties’
obligations and rights under Section 9.13 or to the extent Seller or Buyer has
been found to have committed fraud by a court of competent jurisdiction pursuant
to a final, non-appealable decision.

 

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ARTICLE XI

TAX CERTIORARI PROCEEDINGS

SECTION 11.1. Application of Refunds or Savings. Any refunds or savings in the
payment of taxes resulting from tax reduction proceedings applicable to taxes
payable during the period prior to the date of the Closing shall belong to and
be the property of Seller, and any refunds or savings in the payment of taxes
applicable to taxes payable from and after the date of the Closing shall belong
to and be the property of Company; provided, however, that if any such refund
creates an obligation to reimburse any tenants under Space Leases for any rents
or Additional Rent paid or to be paid, that portion of such refund equal to the
amount of such required reimbursement (after deduction of allocable expenses as
may be provided in the Space Lease to such tenant) shall, at Seller’s election,
either (a) be paid to the Company and the Company shall disburse the same to
such tenants or (b) be paid by Seller directly to the tenants entitled thereto.
All attorneys’ fees and other expenses incurred in obtaining such refunds or
savings shall be apportioned between Seller and Buyer in proportion to the gross
amount of such refunds or savings payable to Seller and the Company,
respectively (without regard to any amounts reimbursable to tenants); provided,
however, that neither Seller nor Buyer shall have any liability for any such
fees or expenses in excess of the refund or savings paid to such party unless
such party initiated such proceeding.

SECTION 11.2. Survival. The provisions of this Article XI shall survive the
Closing.

ARTICLE XII

MISCELLANEOUS

SECTION 12.1. Exculpation. (a) Notwithstanding anything to the contrary
contained herein, Seller’s shareholders, partners, members, the partners or
members of such partners or members, the shareholders of such partners or
members, and the trustees, officers, directors, employees, agents and security
holders of Seller and the partners or members of Seller assume no personal
liability for any obligations entered into on behalf of Seller and its
individual assets shall not be subject to any claims of any person relating to
such obligations. The foregoing shall govern any direct and indirect obligations
of Seller under this Agreement.

(b) Notwithstanding anything to the contrary contained herein, Buyer’s
shareholders, partners, members, the partners or members of such partners or
members, the shareholders of such partners or members, and the trustees,
officers, directors, employees, agents and security holders of Buyer and the
partners or members of Buyer assume no personal liability for any obligations
entered into on behalf of Buyer and its individual assets shall not be subject
to any claims of any person relating to such obligations. The foregoing shall
govern any direct and indirect obligations of Buyer under this Agreement.

 

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SECTION 12.2. Brokers.

(a) Seller represents and warrants to Buyer that it has dealt with no broker,
salesman, finder or consultant with respect to this Agreement or the
transactions contemplated hereby. Seller agrees to indemnify, protect, defend
and hold Buyer harmless from and against all claims, losses, damages,
liabilities, costs, expenses (including reasonable attorneys’ fees and
disbursements) and charges resulting from Seller’s breach of the foregoing
representation in this Section 12.2(a). The provisions of this Section 12.2(a)
shall survive the Closing or any termination of this Agreement.

(b) Buyer represents and warrants to Seller that it has dealt with no broker,
salesman, finder or consultant with respect to this Agreement or the
transactions contemplated hereby. Buyer agrees to indemnify, protect, defend and
hold Seller harmless from and against all claims, losses, damages, liabilities,
costs, expenses (including reasonable attorneys’ fees and disbursements) and
charges resulting from Buyer’s breach of the foregoing representations in this
Section 12.2(b). The provisions of this Section 12.2(b) shall survive the
Closing or any termination of this Agreement.

SECTION 12.3. Confidentiality; No Press Release; IRS Reporting Requirements.

(a) Buyer and Seller, and each of their respective affiliates, shall hold as
confidential all information disclosed in connection with the transaction
contemplated hereby and concerning each other, the Properties, this Agreement
and the transactions contemplated hereby and shall not release any such
information to third parties without the prior written consent of the other
parties hereto, except (i) any information which was previously or is hereafter
publicly disclosed (other than in violation of this Agreement or other
confidentiality agreements to which affiliates of Buyer are parties), (ii) to
their partners, advisers, underwriters, analysts, employees, affiliates,
officers, directors, consultants, lenders, accountants, legal counsel, title
companies or other advisors of any of the foregoing, provided that they are
advised as to the confidential nature of such information and are instructed to
maintain such confidentiality and (iii) to comply with any law, rule or
regulation. The foregoing shall constitute a modification of any prior
confidentiality agreement that may have been entered into by the parties. The
provisions of this Section 12.3 shall survive any termination of this Agreement.

(b) Seller or Buyer may not issue a press release with respect to this Agreement
and the transactions contemplated hereby.

(c) For the purpose of complying with any information reporting requirements or
other rules and regulations of the IRS that are or may become applicable as a
result of or in connection with the transaction contemplated by this Agreement,
including, but not limited to, any requirements set forth in proposed Income Tax
Regulation Section 1.6045-4 and any final or successor version thereof
(collectively, the “IRS Reporting Requirements”), Seller and Buyer hereby
designate and appoint Buyer to act as the “Reporting Person” (as that term is
defined in the IRS Reporting Requirements) to be responsible for complying with
any IRS Reporting Requirements. Buyer hereby acknowledges and accepts such
designation and appointment and

 

30

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agrees to fully comply with any IRS Reporting Requirements that are or may
become applicable as a result of or in connection with the transaction
contemplated by this Agreement. Seller and Buyer hereby agree to comply with any
provisions of the IRS Reporting Requirements that are not identified therein as
the responsibility of the Reporting Person, including, but not limited to, the
requirement that Seller and Buyer each retain an original counterpart of this
Agreement for at least four years following the calendar year of the Closing.

SECTION 12.4. Intentionally Omitted.

SECTION 12.5. Successors and Assigns; No Third-Party Beneficiaries. The
stipulations, terms, covenants and agreements contained in this Agreement shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective permitted successors and assigns (including any successor entity
after a public offering of stock, merger, consolidation, purchase or other
similar transaction involving a party hereto) and nothing herein expressed or
implied shall give or be construed to give to any person or entity, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.

SECTION 12.6. Assignment. This Agreement may not be assigned by Buyer without
the prior written consent of Seller. Notwithstanding the foregoing, Buyer may
designate one or more affiliates that are majority owned and controlled by Buyer
to which the Interests will be assigned at the Closing without obtaining
Seller’s prior written consent, provided that Buyer will continue to remain
primarily liable under this Agreement notwithstanding any such designation.

SECTION 12.7. Further Assurances. From time to time, as and when requested by
any party hereto, the other party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement or to effectuate the assignment of the Interests
to Buyer. The provisions of this Section 12.7 shall survive Closing.

SECTION 12.8. Notices. All notices, demands or requests made pursuant to, under
or by virtue of this Agreement must be in writing and shall be (i) personally
delivered, (ii) delivered by express mail, Federal Express or other comparable
overnight courier service, (iii) telecopied, with telephone or written
confirmation within one Business Day (iv) mailed to the party to which the
notice, demand or request is being made by certified or registered mail, postage
prepaid, return receipt requested, or (v) sent by electronic mail, with
telephone or written confirmation within one Business Day, as follows:

 

  (a) To Seller:

c/o Blackstone Real Estate Partners IV L.P.

345 Park Avenue

41st Floor

New York, New York 10154

Attention: William J. Stein and Judy Turchin

Facsimile: (212) 583-5726

Telephone: (212) 583-5849 and (212) 583-5748

 

31

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  (b) To Buyer:

c/o LQ Management L.L.C.

909 Hidden Ridge, Suite 600

Irving, Texas 75038

Attention: Mark M. Chloupek

Facsimile: (214) 492-6500

Telephone: (214) 492-6990

All notices (i) shall be deemed to have been given on the date that the same
shall have been delivered in accordance with the provisions of this Section and
(ii) may be given either by a party or by such party’s attorneys. Any party may,
from time to time, specify as its address for purposes of this Agreement any
other address upon the giving of three days’ prior notice thereof to the other
parties.

SECTION 12.9. Entire Agreement. This Agreement, along with the Exhibits and
Schedules hereto contains all of the terms agreed upon between the parties
hereto with respect to the subject matter hereof, and all understandings and
agreements heretofore had or made among the parties hereto are merged in this
Agreement which alone fully and completely expresses the agreement of the
parties hereto.

SECTION 12.10. Amendments. This Agreement may not be amended, modified,
supplemented or terminated, nor may any of the obligations of Seller or Buyer
hereunder be waived, except by written agreement executed by the party or
parties to be charged. The provisions of this Section 12.10 shall survive the
Closing or any termination of this Agreement.

SECTION 12.11. No Waiver. No waiver by either party of any failure or refusal by
the other party to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply. The
provisions of this Section 12.11 shall survive the Closing or any termination of
this Agreement.

SECTION 12.12. Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with, the laws of the State of
New York. The provisions of this Section 12.12 shall survive the Closing or any
termination of this Agreement.

SECTION 12.13. Submission to Jurisdiction. Buyer and Seller each irrevocably
submits to the jurisdiction of the federal and state courts of the State of New
York for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Buyer and Seller each
further agree that service of any process, summons, notice or document by U.S.
registered mail to such party’s respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Buyer and Seller each irrevocably
and unconditionally waive trial by jury

 

32

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and 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 contemplated hereby in the federal and state courts of the State of
New York, and hereby further irrevocably and unconditionally waive and agree 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. The
provisions of this Section 12.13 shall survive the Closing or any termination of
this Agreement.

SECTION 12.14. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law. The provisions of this Section 12.14 shall survive the
Closing or any termination of this Agreement.

SECTION 12.15. Section Headings. The headings of the various Sections of this
Agreement have been inserted only for purposes of convenience, are not part of
this Agreement and shall not be deemed in any manner to modify, explain, expand
or restrict any of the provisions of this Agreement.

SECTION 12.16. Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile signatures, which taken together still constitute
collectively one agreement. In making proof of this Agreement it shall not be
necessary to produce or account for more than one such counterpart with each
party’s counterpart or facsimile signature.

SECTION 12.17. Acceptance of Interest Assignment. The acceptance of the Interest
Assignment by Buyer shall be deemed full compliance by Seller of all of Seller’s
obligations under this Agreement except for those obligations of Seller which
are specifically stated to survive the delivery of the Interest Assignment or
the Closing hereunder.

SECTION 12.18. Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.

SECTION 12.19. Recordation. Neither this Agreement nor any memorandum or notice
of this Agreement may be recorded by any party hereto without the prior written
consent of the other party hereto. The provisions of this Section shall survive
the Closing or any termination of this Agreement. In furtherance of the
foregoing, Buyer hereby indemnifies Seller from and against any and all
liabilities, damages, losses, costs or expenses (including without limitation
attorneys’ fees and expenses) arising out of a breach of this Section 13.19. For
the avoidance of doubt, nothing in this Section 12.19 shall limit the ability of
Buyer to file any pleadings in connection with Buyer’s exercising its remedy of
specific performance pursuant to the terms of this Agreement. The provisions of
this Section 12.19 shall survive the Closing or any termination of this
Agreement.

 

33

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SECTION 12.20. Time is of the Essence. Seller and Buyer agree that time is of
the essence with respect to the obligations of Seller and Buyer under this
Agreement. The provisions of this Section 12.20 shall survive the Closing or any
termination of this Agreement.

SECTION 12.21. Schedules. Seller and Buyer agree that disclosure of any fact or
item on any schedule attached to this Agreement shall, should the existence of
such fact or item be relevant to any other schedule, be deemed to be disclosed
with respect to that other schedule so long as the relevance of such disclosure
to such other section is reasonably apparent.

SECTION 12.22. Waiver of Jury Trial. Seller and Buyer hereby irrevocably waive
trial by jury in any action, proceeding or counterclaim brought by one party
against another party on any matter arising out of or in any way connected with
this Agreement. The provisions of this Section 12.22 shall survive the Closing
or any termination of this Agreement.

SECTION 12.23. No Solicitation. From the Effective Date until the Closing or the
earlier termination of this Agreement, neither Seller nor any party acting for
or on behalf of Seller shall (a) directly or indirectly solicit, initiate any
discussions or negotiations with, or enter into any agreement with, any person
or group of persons (other than Buyer or its representatives) concerning the
purchase or sale of the Interests, or (b) actively assist, facilitate or
encourage any effort or attempt by any person (other than Buyer or its
representatives) to do or seek to do any of the foregoing.

 

34

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the day and year first above written.

 

SELLER: BRE/PRIME MEZZ 2 L.L.C., a Delaware limited liability company

By:

 

/s/ Glenn Alba

Name:   Glenn Alba Title:   Vice President

[signatures continue on the following page]

 

35

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

BUYER: LODGE HOLDCO III L.L.C., a Delaware limited liability company By:  

/s/ Mark Chloupek

Name:   Mark Chloupek Title:   Vice President

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

Schedule 1.1

Ground Leases

 

1. Agreement dated December 28, 1971 by and between Grace A. Andersen, Milton J.
Levitt and The Chase Manhattan Bank, N.A. as Trustees under Article Nineteenth
of the Will P. Aldrich, as lessor, and Prime Equities, Inc., as tenant, as
affected by that certain Letter Agreement dated December 28, 1971, as amended
August 10, 1973, as assigned pursuant to that certain Assignment of Leases dated
June 1, 1994, as affected by that certain Agreement dated June 1, 1994 by and
between Clifton R.I. Limited Partnership and Prime Hospitality Corp.

 

2. Agreement dated June 29, 1973, by and between Sterling Publishing Co., as
landlord, and Prime Management Company, Inc., as tenant, as amended by that
certain First Amendment to Lease dated June 2, 1975 by and between Arkman, Inc.,
as landlord, and Prime Management Company, Inc., as tenant, as further amended
by that certain Agreement dated March 14, 1983 by and between Arkman, Inc., as
landlord, and Prime Motor Inns, Inc., as tenant, as further amended by that
certain Third Amendment to Lease Agreement dated May 9, 2005 by and between
Arkman, Inc., as landlord, and Prime Hospitality Corporation, as tenant, as
assigned pursuant to that certain Assignment of Lease dated April 11, 2006 by
and between WIH Hotels L.L.C., as assignor, and BRE/Prime Properties L.L.C., as
assignee, as further assigned pursuant to that certain Assignment of Lease dated
May 10, 2011 by and between BRE/Prime Properties L.L.C., as assignor, and
BRE/Prime Mezz L.L.C., as assignee.

 

3. Amended and Restated Lease, dated April 11, 2006, by and between Fairfield
Motor Lodge Associates, as landlord, and BRE/Prime Properties L.L.C., as tenant.

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

4. Schedule 2.2(a)

Purchase Price Allocations

 

PROPERTY

   PURCHASE PRICE ALLOCATION  

La Quinta Inn – Coral Springs

   $ [             ] 

La Quinta Inn – Deerfield

   $ [             ] 

La Quinta Inn – Sunrise

   $ [             ] 

La Quinta Inn – Miami Lakes

   $ [             ] 

La Quinta Inn – Naples

   $ [             ] 

La Quinta Inn – Plantation

   $ [             ] 

La Quinta Inn – Sarasota

   $ [             ] 

La Quinta Inn – Wayne

   $ [             ] 

La Quinta Inn – West Palm Beach

   $ [             ] 

La Quinta Inn – Ft. Lauderdale

   $ [             ] 

La Quinta Inn – Clifton

   $ [             ] 

La Quinta Inn – Elmsford

   $ [             ] 

La Quinta Inn – Armonk

   $ [             ] 

La Quinta Inn – Fairfield

   $ [             ] 

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

Schedule 10.1

Remaining Prime Properties

 

PROPERTY

  

ADDRESS

Hasbrouck Heights Hilton

   650 Terrace Ave, Hasbrouck Heights Meadowlands, New Jersey

Saratoga Springs Hilton

   534 Broadway, Saratoga Springs, New York

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

Exhibit A

Prime Mezz Properties

 

PROPERTY

  

ADDRESS

La Quinta Inn – Clifton    265 Route 3 East, Clifton, New Jersey La Quinta Inn –
Fairfield    38 Two Bridges Road, Fairfield, New Jersey La Quinta Inn – Elmsford
   540 Saw Mill River Road, Elmsford, New York La Quinta Inn – Armonk    94
Business Park Drive, Armonk, New York

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

Exhibit B

Prime Wellesley Properties

 

PROPERTY

  

ADDRESS

La Quinta Inn – Coral Springs    3100 N. University Drive, Coral Springs,
Florida La Quinta Inn – Deerfield    100 Southwest 12th Avenue, Deerfield Beach,
Florida La Quinta Inn – Sunrise    13600 NW 2nd Street, Sunrise, Florida La
Quinta Inn – Miami Lakes    7925 NW 154th Street, Miami, Florida La Quinta Inn –
Naples    1555 5th Avenue South, Naples, Florida La Quinta Inn – Plantation   
7901 S.W. 6th Street, Plantation, Florida La Quinta Inn – Sarasota    1803 N.
Tamiami Trail, Sarasota, Florida La Quinta Inn – Wayne    1850 RT 23 North,
Wayne, New Jersey La Quinta Inn – West Palm Beach    1910 Palm Beach Lakes
Boulevard, West Palm Beach, Florida La Quinta Inn – Ft. Lauderdale    5070 North
State Road 7, Fort Lauderdale, Florida

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

Exhibit C

Interest Assignment

THIS ASSIGNMENT OF INTERESTS (this “Assignment”), dated as of             ,
2014, is entered into by and between BRE/Prime Mezz 2 L.L.C., a Delaware limited
liability company (“Assignor”) and Lodge Holdco III L.L.C., a Delaware limited
liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignor is a sole member of BRE/Prime Mezz L.L.C., a Delaware limited
liability company (the “Company”);

WHEREAS, Assignor is the owner of 100% of the limited liability company
interests in the Company (the “Interest”);

WHEREAS, Assignor and Assignee are parties to that certain Agreement of Purchase
and Sale (the “Purchase Agreement”), dated as of             , 2014, relating to
the purchase and sale of the Interest;

WHEREAS, Assignor desires to (i) assign, transfer and convey all of Assignor’s
right, title and interest in and to the Interest and all Interest-Related Rights
(as defined in the Purchase Agreement) to Assignee and (ii) withdraw from the
Company as a member of the Company; and

WHEREAS, Assignee desires to acquire the Interest.

NOW, THEREFORE, the undersigned, in consideration of the Interest, covenants and
agreement contained herein, and for other good and valuable consideration, do
hereby agree as follows:

 

  1. Assignment. For value received, the receipt and sufficiency of which are
hereby acknowledged, upon the execution of this Assignment by the parties
hereto, Assignor does hereby assign, transfer and convey the Interest and all
Interest-Related Rights to Assignee, free and clear of all liens, claims,
encumbrances, options and rights of any kind.

 

  2. Assumption. Assignee hereby assumes and agrees to be bound by all of the
covenants, obligations, liabilities, and burdens of Assignor with respect to the
Interest and as a member of the Company.

 

  3. Withdrawal. Immediately following the assignment described in Section 1 of
this Assignment, Assignor shall and does hereby withdraw from the Company as a
member of the Company, and shall thereupon cease to be a member of the Company,
and shall thereupon cease to have or exercise any right or power as a member of
the Company.

 

  4. Continuation of the Company. The assignment of the Interest and the
withdrawal of Assignor as a member of the Company shall not dissolve the Company
and the business of the Company shall continue.

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

  5. Consideration. Assignee has paid good and valuable consideration to
Assignor for the Interest.

 

  6. Binding Effect. This Assignment shall be binding upon, and shall inure to
the benefit of the parties hereto and their respective successors and assigns.

 

  7. Execution in Counterparts. This Assignment may be (a) executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument and (b) by telecopy or other facsimile
signature (which shall be deemed an original for all purposes).

 

  8. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Delaware.

[signature page follows]

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly
executed under seal as of the day and year first-above written.

 

ASSIGNOR: BRE/PRIME MEZZ 2 L.L.C., a Delaware limited liability company By:  

 

Name:   Title:   ASSIGNEE: LODGE HOLDCO III L.L.C., a Delaware limited liability
company By:  

 

Name:   Title:  

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

Exhibit D

WIH Indemnity Agreement

INDEMNITY AGREEMENT

This Indemnity Agreement (this “Agreement”) is made this [            ], 2014,
by and between Lodge Holdco III L.L.C., a Delaware limited liability company
(“Indemnitor”) and WIH Hotels L.L.C., a Delaware limited liability company
(“Indemnitee”).

W I T N E S S E T H:

WHEREAS, contemporaneously with the execution of this Agreement, BRE/Prime Mezz
2 L.L.C., an indirect wholly owned subsidiary of Indemnitee (“Seller”), will
sell all of limited liability company interests in BRE/Prime Mezz L.L.C. (“Prime
Mezz”) to Indemnitor pursuant to that certain Agreement of Purchase and Sale
dated as of [            ], 2014 by and among Seller and Indemnitor (the
“Purchase Agreement”) (such sale, the “Transaction”);

WHEREAS, Indemnitee was the ground lessee under that certain Agreement dated
December 28, 1971 by and between Grace A. Andersen, Milton J. Levitt and The
Chase Manhattan Bank, N.A. as Trustees under Article Nineteenth of the Will P.
Aldrich, as lessor, and Prime Equities, Inc., as tenant, as affected by that
certain Letter Agreement dated December 28, 1971, as amended August 10, 1973, as
assigned pursuant to that certain Assignment of Leases dated June 1, 1994, as
affected by that certain Agreement dated June 1, 1994 by and between Clifton
R.I. Limited Partnership and Prime Hospitality Corp. (collectively, the “Clifton
Ground Lease”) and immediately prior to the consummation of the Transaction
assigned all of its interests in the Clifton Ground Lease to Prime Mezz;

WHEREAS, in order to induce the ground lessor under that certain Agreement dated
June 29, 1973, by and between Sterling Publishing Co., as landlord, and Prime
Management Company, Inc., as tenant, as amended by that certain First Amendment
to Lease dated June 2, 1975 by and between Arkman, Inc., as landlord, and Prime
Management Company, Inc., as tenant, as further amended by that certain
Agreement dated March 14, 1983 by and between Arkman, Inc., as landlord, and
Prime Motor Inns, Inc., as tenant, as further amended by that certain Third
Amendment to Lease Agreement dated May 9, 2005 by and between Arkman, Inc., as
landlord, and Prime Hospitality Corporation, as tenant, as assigned pursuant to
that certain Assignment of Lease dated April 11, 2006 by and between WIH Hotels
L.L.C., as assignor, and BRE/Prime Properties L.L.C., as assignee, as further
assigned pursuant to that certain Assignment of Lease dated May 10, 2011 by and
between BRE/Prime properties L.L.C., as assignor, and BRE/Prime Mezz L.L.C., as
assignee (collectively, the “Armonk Ground Lease”) to enter into the Armonk
Ground Lease, Indemnitee’s predecessor-in-interest entered into that certain
Lease Guaranty dated June 28, 1973 by Prime Equities Inc. (the “Armonk
Guaranty”; together with the Clifton Ground Lease, collectively, the “Ground
Lease Documents”);

WHEREAS, in consideration for Indemnitee agreeing to authorize the Transaction
on the Closing Date without the release of Indemnitee from its obligations under
the Ground Lease Documents from and after the Closing Date (as defined in the
Purchase Agreement), Indemnitor has agreed to indemnify and reimburse Indemnitee
for certain liabilities and obligations as described in this Agreement that
Indemnitee incurs under or in connection with the Ground Lease Documents; and

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

WHEREAS, capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Purchase Agreement.

NOW, THEREFORE, Indemnitee and Indemnitor hereby agree as follows:

1. Indemnitor shall indemnify, reimburse and save and hold Indemnitee and its
subsidiaries, affiliates, members and partners, and the partners shareholders,
officers, directors, employees, representatives and agents of each of the
foregoing (collectively, the “Indemnified Parties”) harmless from, against, for
and in respect of each of the following to the extent they arise after the date
hereof:

a. any and all liabilities and obligations incurred by Indemnitee relating to or
arising under the Ground Lease Documents, including without limitation damages,
losses, fees, costs or expenses sustained or incurred by, and any other amounts
owing by, any Indemnified Party under the Ground Lease Documents;

b. any and all demands, claims, actions, proceedings or causes of action which
may be asserted against any Indemnified Party at any time and from time to time
relating to or arising under the Ground Lease Documents;

c. any and all costs and expenses (including, without limitation, reasonable
attorneys’ fees) incurred by any Indemnified Party in connection with (i) any
action, suit, proceeding, demand, assessment or judgment incident to any of the
matters indemnified against in this Section, (ii) any investigation of any of
the foregoing or (iii) enforcement of this Agreement.

2. Indemnitor shall promptly (and in any event within ten (10) Business Days)
reimburse Indemnitee for any amounts paid by Indemnitee for which it is entitled
to indemnification hereunder upon receipt of written notice from Indemnitee
setting forth in reasonable detail the nature and amount of such payment.

3. The obligations of Indemnitor hereunder are absolute and unconditional, and
shall not be subject to any set-off, counterclaim or recoupment whatsoever, and
Indemnitor’s obligations hereunder shall be binding on Indemnitor regardless of
(i) the validity, legality or enforceability of the Ground Lease Documents;
(ii) any amendment of or waiver under the Ground Lease Documents; or (iii) the
bankruptcy, insolvency, reorganization of, or the appointment of a trustee or
receiver for, any party to the Ground Lease Documents.

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

4. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the others. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs and
permitted assigns.

5. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

6. This Agreement and the documents referred to herein contain the entire
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties, conveyances or
undertakings other than those expressly set forth herein. This Agreement
supersedes any prior agreements and understandings between the parties with
respect to the subject matter; provided that, nothing contained herein shall be
deemed to amend, modify or restrict the indemnification obligations of
Indemnitor pursuant to the Purchase Agreement.

7. All notices, demands, requests or other communications that may be or are
required to be given, served or sent by any party to any other party pursuant to
this Agreement shall be in writing and shall be transmitted in the manner
required by the Purchase Agreement.

8. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.

9. Any and all legal actions and proceedings by a party hereto concerning,
relating to, or arising out of this Agreement or its enforcement shall be
submitted to the exclusive jurisdiction of United States federal courts sitting
in New York City, New York or any New York State court sitting in New York City,
New York. Each of the parties hereto hereby consents and submits to the
jurisdiction of the aforesaid courts and waives and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or its
enforcement brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such party, that venue before any such court is improper, that
any such court is an inconvenient forum, or that such legal action or proceeding
should be transferred from any such court for any other reason.

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

10. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT.

(Signature page follows)

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

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

 

INDEMNITOR: LODGE HOLDCO III L.L.C., a Delaware limited liability company By:  

 

Name:   Title:   INDEMNITEE: WIH HOTELS L.L.C., a Delaware limited liability
company By:  

 

Name:   Title:  

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

Exhibit F

Registration Rights Agreement

[attached]

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

 

REGISTRATION RIGHTS AGREEMENT

by and among

LA QUINTA HOLDINGS INC.

and

the other parties hereto

Dated as of [            ], 2014

 

 

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

TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1   

SECTION 1.1

 

Certain Definitions

     1   

SECTION 1.2

 

Other Definitional Provisions; Interpretation

     4   

ARTICLE II REGISTRATION RIGHTS

     5   

SECTION 2.1

 

Piggyback Rights

     5   

SECTION 2.2

 

Demand Registration

     7   

SECTION 2.3

 

Registration Procedures

     9   

SECTION 2.4

 

Other Registration-Related Matters

     12   

ARTICLE III INDEMNIFICATION

     14   

SECTION 3.1

 

Indemnification by the Company

     14   

SECTION 3.2

 

Indemnification by the Holders and Underwriters

     15   

SECTION 3.3

 

Notices of Claims, Etc.

     16   

SECTION 3.4

 

Contribution

     16   

SECTION 3.5

 

Other Indemnification

     17   

SECTION 3.6

 

Non-Exclusivity

     17   

ARTICLE IV OTHER

     17   

SECTION 4.1

 

Notices

     17   

SECTION 4.2

 

Assignment

     18   

SECTION 4.3

 

Amendments; Waiver

     18   

SECTION 4.4

 

Third Parties

     18   

SECTION 4.5

 

Governing Law

     18   

SECTION 4.6

 

Jurisdiction

     18   

SECTION 4.7

 

MUTUAL WAIVER OF JURY TRIAL

     19   

 

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SECTION 4.8

 

Specific Performance

     19   

SECTION 4.9

 

Entire Agreement

     19   

SECTION 4.10

 

Severability

     19   

SECTION 4.11

 

Counterparts

     19   

SECTION 4.12

 

Effectiveness

     19   

 

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is dated as of
[            ], 2014 and is by and among La Quinta Holdings Inc., a Delaware
corporation (the “Company”), and Blackstone (as defined below).

RECITALS

WHEREAS, the Company is currently contemplating an underwritten initial public
offering (“IPO”) of shares of its Common Stock (as defined below); and

WHEREAS, the Company desires to grant registration rights to Blackstone on the
terms and conditions set out in this Agreement.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 Certain Definitions. As used in this Agreement:

“Affiliate” has the meaning ascribed thereto in Rule 12b-2 promulgated under the
Exchange Act, as in effect on the date hereof.

“Agreement” has the meaning set forth in the preamble.

“Blackstone” means the entities listed on the signature pages hereto under the
heading “Blackstone.”

“Blackstone Entities” means the entities comprising Blackstone, their respective
Affiliates and the successors and permitted assigns of the entities and their
respective Affiliates.

“Board” means the board of directors of the Company.

“Business Day” means a day other than a Saturday, Sunday, federal or New York
State holiday or other day on which commercial banks in New York City are
authorized or required by law to close.

“Closing Date” means the date of completion of the IPO.

“Company” has the meaning set forth in the preamble.

“Common Stock” means the shares of common stock, par value $0.01 per share, of
the Company, and any other capital stock of the Company into which such common
stock is reclassified or reconstituted.

“Control” (including its correlative meanings, “Controlled by” and “under common
Control with”) means possession, directly or indirectly, of the power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise) of a Person.

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“Demand Party” has the meaning set forth in Section 2.2(a).

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as the same may be amended
from time to time.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Holder” means each entity comprising Blackstone that is a holder of Registrable
Securities or Securities exercisable, exchangeable or convertible into
Registrable Securities or any Transferee of such Person to whom registration
rights are assigned pursuant to Section 4.2.

“Indemnified Party” and Indemnified Parties” have the meanings set forth in
Section 3.1.

“IPO” has the meaning set forth in the recitals.

“Law” means any statute, law, regulation, ordinance, rule, injunction, order,
decree, governmental approval, directive, requirement, or other governmental
restriction or any similar form of decision of, or determination by, or any
interpretation or administration of any of the foregoing by, any Governmental
Authority.

“Lockup Period” has the meaning set forth in Section 2.4(d)(i).

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, a
cooperative, an unincorporated organization, or other form of business
organization, whether or not regarded as a legal entity under applicable Law, or
any Governmental Authority or any department, agency or political subdivision
thereof.

“Public Offering” means a public offering of equity securities of the Company or
any successor thereto or any Subsidiary of the Company pursuant to a
registration statement declared effective under the Securities Act.

“Registrable Securities” means all shares of Common Stock and any Securities
into which the Common Stock may be converted or exchanged pursuant to any
merger, consolidation, sale of all or any part of its assets, corporate
conversion or other extraordinary transaction of the Company held by a Holder
(whether now held or hereafter acquired, and including any such Securities
received by a Holder upon the conversion or exchange of, or pursuant to such a
transaction with respect to, other Securities held by such Holder). As to any
Registrable Securities, such Securities will cease to be Registrable Securities
when:

 

  (a) a registration statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of
pursuant to such effective registration statement;

 

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  (b) such Registrable Securities shall have been sold pursuant to Rule 144 or
145 (or any similar provision then in effect) under the Securities Act;

 

  (c) such Registrable Securities may be sold pursuant to Rule 144 or 145 (or
any similar provision then in effect) without limitation thereunder on volume or
manner of sale, unless such Registrable Securities are held by a Holder that
beneficially owns 5% or more of the then outstanding shares of Common Stock; or

 

  (d) such Registrable Securities cease to be outstanding.

“Registration Expenses” means any and all expenses incurred in connection with
the performance of or compliance with this Agreement, including:

 

  (a) all SEC, stock exchange, or FINRA registration and filing fees (including,
if applicable, the fees and expenses of any “qualified independent underwriter,”
as such term is defined in Rule 5121 of FINRA, and of its counsel);

 

  (b) all fees and expenses of complying with securities or blue sky Laws
(including fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities);

 

  (c) all printing, messenger and delivery expenses;

 

  (d) all fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange or FINRA and all rating agency
fees;

 

  (e) the reasonable fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
and/or “cold comfort” letters required by or incident to such performance and
compliance;

 

  (f) any fees and disbursements of underwriters customarily paid by the issuers
or sellers of Securities, including liability insurance if the Company so
desires or if the underwriters so require, and the reasonable fees and expenses
of any special experts retained in connection with the requested registration,
but excluding underwriting discounts and commissions and transfer taxes, if any;

 

  (g) the reasonable fees and out-of-pocket expenses of not more than one law
firm (as selected by the Holders of a majority of the Registrable Securities
included in such registration) incurred by all the Holders in connection with
the registration;

 

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  (h) the costs and expenses of the Company relating to analyst and investor
presentations or any “road show” undertaken in connection with the registration
and/or marketing of the Registrable Securities (including the reasonable
out-of-pocket expenses of the Holders); and

 

  (i) any other fees and disbursements customarily paid by the issuers of
securities.

“SEC” means the U.S. Securities and Exchange Commission or any successor agency.

“Securities” means capital stock, limited partnership interests, limited
liability company interests, beneficial interests, warrants, options, notes,
bonds, debentures, and other securities, equity interests, ownership interests
and similar obligations of every kind and nature of any Person.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as the same may be amended from
time to time.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which:
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, representatives or trustees thereof is at the time owned
or Controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof; or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the total voting power of stock (or equivalent ownership interest) of the
limited liability company, partnership, association or other business entity is
at the time owned or Controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or Control the managing director or general partner of such limited
liability company, partnership, association or other business entity.

“Transfer” (including its correlative meanings, “Transferor”, “Transferee” and
“Transferred”) shall mean, with respect to any security, directly or indirectly,
to sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a
security interest in, offer, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of any economic, voting or other rights in
or to such security. When used as a noun, “Transfer” shall have such correlative
meaning as the context may require.

SECTION 1.2 Other Definitional Provisions; Interpretation.

(a) The words “hereof,” “herein,” and “hereunder” and words of similar import
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, and references in this Agreement to a
designated “Article” or “Section” refer to an Article or Section of this
Agreement unless otherwise specified.

 

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(b) The headings in this Agreement are included for convenience of reference
only and do not limit or otherwise affect the meaning or interpretation of this
Agreement.

(c) The meanings given to terms defined herein are equally applicable to both
the singular and plural forms of such terms.

ARTICLE II

REGISTRATION RIGHTS

SECTION 2.1 Piggyback Rights.

(a) If at any time following expiration of the Lockup Period (or, if earlier,
such time as any Holder exercises a demand right pursuant to Section 2.2(a)) the
Company proposes to register Securities for public sale (whether proposed to be
offered for sale by the Company or by any other Person) under the Securities Act
(other than a registration on Form S-4 or S-8, or any successor or other forms
promulgated for similar purposes) in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities Act, it will,
at each such time following expiration of the Lockup Period (or if earlier, such
time as any Holder exercises a demand right pursuant to Section 2.2(a)), give
prompt written notice (which notice shall specify the intended method or methods
of disposition) to the Holders of its intention to do so and of such Holder’s
rights under this Section 2.1. Upon the written request of any Holder made
within fifteen (15) days after the receipt of any such notice (which request
shall specify the number of Registrable Securities intended to be disposed of by
such Holder), the Company will use its reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Holders have so requested to be registered; provided that: (i) if, at any time
after giving written notice of its intention to register any Securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
proceed with the proposed registration of the Securities to be sold by it, the
Company may, at its election, give written notice of such determination to the
Holders and, thereupon, the Company shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses incurred in connection
therewith) without prejudice to the rights of any Holder to request that such
registration be effected as a registration under Section 2.2(a); and (ii) if
such registration involves an underwritten offering, the Holders of Registrable
Securities requesting to be included in the registration must, upon the written
request of the Company, sell their Registrable Securities to the underwriters on
the same terms and conditions as apply to the other Securities being sold
through underwriters under such registration, with, in the case of a combined
primary and secondary offering, only such differences, including any with
respect to representations and warranties, indemnification and liability
insurance, as may be customary or appropriate in combined primary and secondary
offerings.

(b) Expenses. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this
Section 2.1.

 

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(c) Priority in Piggyback Registrations. If a registration pursuant to this
Section 2.1 involves an underwritten offering and the managing underwriter
advises the Company in writing (a copy of which shall be provided to the
Holders) that, in its opinion, the number of Registrable Securities and other
Securities requested to be included in such registration exceeds the number
which can be sold in such offering, so as to be likely to have a material and
adverse effect on the price, timing or distribution of the Securities offered in
such offering, then the Company will include in such registration: (i) first,
the Securities the Company proposes to sell for its own account; and
(ii) second, such number of Registrable Securities requested to be included in
such registration which, in the opinion of such managing underwriter, can be
sold without having the material and adverse effect referred to above, which
number of Registrable Securities shall be allocated pro rata among all such
requesting Holders of Registrable Securities on the basis of the relative number
of securities requested to be included in such registration by each such Holder.
Any other selling holders of the Company’s Securities (other than transferees to
whom a Holder has assigned its rights under this Agreement) will be included in
an underwritten offering only with the consent of Holders holding a majority of
the shares being sold in such offering.

(d) Excluded Transactions. The Company shall not be obligated to effect any
registration of Registrable Securities under this Section 2.1 incidental to the
registration of any of its Securities in connection with:

(i) the IPO;

(ii) a registration statement filed to cover issuances under employee benefits
plans or dividend reinvestment plans; or

(iii) any registration statement relating solely to the acquisition or merger
after the date hereof by the Company or any of its Subsidiaries of or with any
other businesses.

(e) Plan of Distribution, Underwriters and Counsel. If a registration pursuant
to this Section 2.1 involves an underwritten offering, the Holders of a majority
of the Registrable Securities included in such underwritten offering shall have
the right to (i) determine the plan of distribution, (ii) select the investment
banker or bankers and managers to administer the offering, including the lead
managing underwriter (provided that such investment banker or bankers and
managers shall be reasonably satisfactory to the Company) and (iii) select
counsel for the selling Holders.

(f) Shelf Takedowns. In connection with any shelf takedown (whether pursuant to
Section 2.2(f) or at the initiative of the Company), the Holders may exercise
“piggyback” rights in the manner described in this Agreement to have included in
such takedown Registrable Securities held by them that are registered on such
shelf registration statement.

 

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SECTION 2.2 Demand Registration.

(a) General. At any time, upon the written request of any Holder (the “Demand
Party”) requesting that the Company effect the registration under the Securities
Act of Registrable Securities and specifying the amount and intended method of
disposition thereof (including, but not limited to, an underwritten public
offering), the Company will (i) promptly give written notice of such requested
registration to the other Holders and other holders of Securities entitled to
notice of such registration, if any, and (ii) as expeditiously as possible, use
its reasonable best efforts to file a registration statement to effect the
registration under the Securities Act of:

(i) such Registrable Securities which the Company has been so requested to
register by the Demand Party in accordance with the intended method of
disposition thereof; and

(ii) the Registrable Securities of other Holders which the Company has been
requested to register by written request given to the Company within fifteen
(15) days after the giving of such written notice by the Company.

Notwithstanding the foregoing, the Company shall not be obligated to file a
registration statement relating to any registration request under this
Section 2.2(a):

(x) within a period of one hundred eighty (180) days (or such lesser period as
the managing underwriters in an underwritten offering may permit) after the date
of the final prospectus relating to any registration request under this
Section 2.2(a) or relating to any registration referred to in Section 2.1; or

(y) if, in the good faith judgment of a majority of the disinterested members of
the Board, the Company is in possession of material non-public information the
disclosure of which would be materially adverse to the Company and would not
otherwise be required under Law, in which case the filing of the registration
statement may be delayed until the earlier of the second Business Day after such
conditions shall have ceased to exist and the 60th day after receipt by the
Company of the written request from a Demand Party to register Registrable
Securities under this Section 2.2(a); provided that the Company shall not effect
such a delay more than two times in any twelve (12) month period.

(b) Form. Each registration statement prepared at the request of a Demand Party
shall be effected on such form as reasonably requested by the Demand Party,
including by a shelf registration pursuant to Rule 415 under the Securities Act
on a Form S-3 (or any successor rule or form thereto) if so requested by the
Demand Party and if the Company is then eligible to effect a shelf registration
and use such form for such disposition.

(c) Expenses. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this
Section 2.2.

(d) Plan of Distribution, Underwriters and Counsel. If a requested registration
pursuant to this Section 2.2 involves an underwritten offering, the Holders of a
majority of the Registrable Securities included in such underwritten offering
shall have

 

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the right to (i) determine the plan of distribution, (ii) select the investment
banker or bankers and managers to administer the offering, including the lead
managing underwriter (provided that such investment banker or bankers and
managers shall be reasonably satisfactory to the Company) and (iii) select
counsel for the selling Holders.

(e) Priority in Demand Registrations. If a requested registration pursuant to
this Section 2.2 involves an underwritten offering and the managing underwriter
advises the Company in writing (a copy of which shall be provided to the
Holders) that, in its opinion, the number of Registrable Securities requested to
be included in such registration (including Securities of the Company which are
not Registrable Securities) exceeds the number which can be sold in such
offering, so as to be likely to have a material and adverse effect on the price,
timing or distribution of the Securities offered in such offering, then the
number of such Registrable Securities to be included in such registration shall
be allocated pro rata among the Demand Party and all other parties that have
requested that their Registrable Securities be sold pursuant to Section 2.1(a),
if any, on the basis of the relative number of securities requested to be
included in such registration by each such Holder. Any other selling holders of
the Company’s Securities (other than transferees to whom a Holder has assigned
its rights under this Agreement) will be included in an underwritten offering
only with the consent of Holders holding a majority of the shares being sold in
such offering.

(f) Shelf Takedowns. Upon the written request of the Demand Party at any time
and from time to time, the Company will facilitate in the manner described in
this Agreement a “takedown” of the Demand Party’s Registrable Securities off of
an effective shelf registration statement. Upon the written request of the
Demand Party, the Company will file and seek the effectiveness of a
post-effective amendment to an existing shelf registration statement or a
prospectus supplement in order to register up to the number of the Demand
Party’s Registrable Securities previously taken down off of such shelf by the
Demand Party and not yet “reloaded” onto such shelf registration statement.

(g) Additional Rights. Except as expressly provided in this Agreement, the
Company shall not grant to any Person the right to request or require the
Company to register any equity Securities of the Company, or any Securities
convertible, exchangeable or exercisable for or into such Securities, or amend
any grant of such a right, without the prior written consent of the Holders
holding a majority of the Registrable Securities subject to this Agreement. In
the event the Company engages in a merger or consolidation in which the shares
of Common Stock are converted into Securities of another company, appropriate
arrangements will be made so that the registration rights provided under this
Agreement continue to be provided to Holders by the issuer of such Securities.
To the extent such new issuer, or any other company acquired by the Company in a
merger or consolidation, was bound by registration rights that would conflict
with the provisions of this Agreement, the Company will use its reasonable best
efforts to modify any such “inherited” registration rights so as not to
interfere in any material respects with the rights provided under this
Agreement, unless otherwise agreed by Holders then holding a majority of
Registrable Securities.

 

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SECTION 2.3 Registration Procedures. If and whenever the Company is required to
file a registration statement with respect to, or to use its reasonable best
efforts to effect or cause the registration of, any Registrable Securities under
the Securities Act as provided in this Agreement, the Company will as
expeditiously as possible:

(a) promptly prepare and file with the SEC a registration statement on an
appropriate form with respect to such Registrable Securities and use its
reasonable best efforts to cause such registration statement to become
effective; provided, however, that the Company may discontinue any registration
of Securities which it has initiated for its own account at any time prior to
the effective date of the registration statement relating thereto (and, in such
event, the Company shall pay the Registration Expenses incurred in connection
therewith); and provided, further, that before filing a registration statement
or prospectus, or any amendments or supplements thereto, the Company will
(i) furnish to counsel for the sellers of Registrable Securities covered by such
registration statement copies of all documents proposed to be filed, which
documents will be subject to the review of such counsel, (ii) fairly consider
such reasonable changes in any such documents prior to or after the filing
thereof as the counsel to the sellers of Registrable Securities being sold may
request, and (iii) make such of the representatives of the Company as shall be
reasonably requested by the sellers of the Registrable Securities being sold
available for discussion of such documents;

(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period not in
excess of two (2) years (which period shall not be applicable in the case of a
shelf registration effected pursuant to a request under Section 2.2(b)) and to
comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement; provided that before filing a registration statement or prospectus,
or any amendments or supplements thereto, the Company will (i) furnish to
counsel for the sellers of Registrable Securities covered by such registration
statement copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel, (ii) fairly consider such reasonable
changes in any such documents prior to or after the filing thereof as the
counsel to the sellers of Registrable Securities being sold may request, and
(iii) make such of the representatives of the Company as shall be reasonably
requested by the sellers of the Registrable Securities being sold available for
discussion of such documents;

(c) furnish to each seller of such Registrable Securities such number of copies
of such registration statement and of each amendment and supplement thereto (in
each case including all exhibits filed therewith, including any documents
incorporated by reference), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and summary
prospectus), in conformity with the requirements of the Securities Act, and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities by such seller;

 

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(d) use its reasonable best efforts to register or qualify such Registrable
Securities covered by such registration in such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller;

(e) use its reasonable best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;

(f) notify each seller of any such Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company’s becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;

(g) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its Security holders, as
soon as reasonably practicable (but not more than eighteen (18) months) after
the effective date of the registration statement, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;

(h) (i) use its reasonable best efforts to list such Registrable Securities on
any securities exchange on which other Securities of the Company are then listed
if such Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange; and (ii) use its reasonable
best efforts to provide a transfer agent and registrar for such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;

(i) enter into such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other Persons in addition to, or in substitution for the
indemnification provisions hereof, and take such other actions as sellers of a
majority of such Registrable Securities or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities;

(j) obtain a “cold comfort” letter or letters from the Company’s independent
public accountants in customary form and covering matters of the type
customarily covered by “cold comfort” letters as the seller or sellers of a
majority of such Registrable Securities shall reasonably request;

 

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(k) make available for inspection by any seller of such Registrable Securities
covered by such registration statement, by any underwriter participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company’s
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;

(l) notify counsel for the Holders of Registrable Securities included in such
registration statement and the managing underwriter or agent, immediately, and
confirm the notice in writing: (i) when the registration statement, or any
post-effective amendment to the registration statement, shall have become
effective, or any supplement to the prospectus or any amendment to any
prospectus shall have been filed; (ii) of the receipt of any comments from the
SEC; (iii) of any request of the SEC to amend the registration statement or
amend or supplement the prospectus or for additional information; and (iv) of
the issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes;

(m) provide each Holder of Registrable Securities included in such registration
statement reasonable opportunity to comment on the registration statement, any
post-effective amendments to the registration statement, any supplement to the
prospectus or any amendment to any prospectus;

(n) make every reasonable effort to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;

(o) if requested by the managing underwriter or agent or any Holder of
Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;

 

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(p) cooperate with the Holders of Registrable Securities covered by the
registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Securities to be sold under the registration
statement, and enable such Securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or the Holders may
request;

(q) use its reasonable best efforts to make available the executive officers of
the Company to participate with the Holders of Registrable Securities and any
underwriters in any “road shows” that may be reasonably requested by the Holders
in connection with distribution of Registrable Securities;

(r) obtain for delivery to the Holders of Registrable Securities being
registered and to the underwriter or agent an opinion or opinions and “negative
assurance” letters from counsel for the Company in customary form and in form,
substance and scope reasonably satisfactory to such Holders, underwriters or
agents and their counsel; and

(s) cooperate with each seller of Registrable Securities and each underwriter or
agent participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with
FINRA.

SECTION 2.4 Other Registration-Related Matters.

(a) The Company may require any Person that is Transferring Securities in a
Public Offering pursuant to Sections 2.1 or 2.2 to furnish to the Company in
writing such information regarding such Person and pertinent to the disclosure
requirements relating to the registration and the distribution of the
Registrable Securities which are included in such Public Offering as the Company
may from time to time reasonably request in writing.

(b) Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.3(f), it will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until its receipt of
the copies of the amended or supplemented prospectus contemplated by
Section 2.3(f) and, if so directed by the Company, each Holder will deliver to
the Company or destroy (at the Company’s expense) all copies, other than
permanent file copies then in their possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company gives any such notice, the period for which the Company will
be required to keep the registration statement effective will be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 2.3(f) to and including the date when each
seller of Registrable Securities covered by such registration statement has
received the copies of the supplemented or amended prospectus contemplated by
Section 2.3(f).

(c) Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.3(l)(iv), it will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration

 

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statement covering such Registrable Securities until the lifting of such stop
order, other order or suspension or the termination of such proceedings and, if
so directed by the Company, each Holder will deliver to the Company or destroy
(at the Company’s expense) all copies, other than permanent file copies then in
its possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice. In the event the Company gives any such
notice, the period for which the Company will be required to keep the
registration statement effective will be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 2.3(l)(iv) to and including the date when such stop order, other order
or suspension is lifted or such proceedings are terminated.

(d) (i) Each Holder (x) hereby agrees, with respect to the Registrable
Securities owned by such Holder, to be bound by any and all restrictions on the
sale, disposition, distribution, hedging or other Transfer of any interest in
Registrable Securities imposed on Blackstone and/or its Affiliates in connection
with the IPO by the underwriters managing such offering for the duration of the
term of such restriction (the period in which such sale, disposition,
distribution, hedging or other Transfer of any interest is restricted, the
“Lockup Period”) and (y) will, in connection with a Public Offering of the
Company’s equity Securities (whether for the Company’s account or for the
account of any Holder or Holders, or both), upon the request of the Company or
of the underwriters managing any underwritten offering of the Company’s
Securities, agree in writing not to effect any sale, disposition or distribution
of Registrable Securities (other than those included in the Public Offering)
without the prior written consent of the managing underwriter for such period of
time commencing seven (7) days before and ending one hundred eighty (180) days
(or such earlier date as the managing underwriter shall agree) after the date of
the final prospectus relating to such offering; provided that the Company shall
cause all directors and executive officers of the Company, Holders of more than
5% of the Registrable Securities and all other Persons with registration rights
with respect to the Company’s Securities (whether or not pursuant to this
Agreement) to enter into agreements similar to those contained in this
Section 2.4(d)(i) (without regard to this proviso); and (ii) the Company and its
Subsidiaries will, in connection with an underwritten Public Offering of the
Company’s Securities in respect of which Registrable Securities are included,
upon the request of the underwriters managing such offering, agree in writing
not to effect any sale, disposition or distribution of equity Securities of the
Company (other than those included in such Public Offering, offered pursuant to
Section 2.2(f), offered on Form S-8, issuable upon conversion of Securities or
upon the exercise of options, or the grant of options in the ordinary course of
business pursuant to then-existing management equity plans or equity-based
employee benefit plans, in each case outstanding on the date a notice is given
by the Company pursuant to Section 2.1(a) or a request is made pursuant to
Section 2.2(a), as the case may be), without the prior written consent of the
managing underwriter, for such period of time commencing seven (7) days before
and ending one hundred eighty (180) days (or such earlier date as the managing
underwriter shall agree) after the date of the final prospectus relating to such
sale.

 

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(e) With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of Securities of
the Company to the public without registration after such time as a public
market exists for Registrable Securities, the Company agrees:

(i) to make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times after the
effective date of the first registration under the Securities Act filed by the
Company for an offering of its Securities to the public;

(ii) to use its commercially reasonable efforts to then file with the SEC in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and

(iii) so long as a Holder owns any Registrable Securities, to furnish to such
Holder promptly upon request: (A) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time after ninety
(90) days after the effective date of the first registration statement filed by
the Company for an offering of its Securities to the public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); (B) a copy of the most recent annual or quarterly
report of the Company; and (C) such other reports and documents of the Company
as such Holder may reasonably request in availing itself or himself of any rule
or regulation of the SEC allowing such Holder to sell any such Securities
without registration.

(f) Counsel to represent Holders of Registrable Securities shall be selected by
the Holders of at least a majority of the Registrable Securities included in the
relevant registration.

(g) Each of the parties hereto agrees that the registration rights provided to
the Holders herein are not intended to, and shall not be deemed to, override or
limit any other restrictions on Transfer to which any such Holder may otherwise
be subject.

ARTICLE III

INDEMNIFICATION

SECTION 3.1 Indemnification by the Company. In the event of any registration of
any Securities of the Company under the Securities Act pursuant to Section 2.1
or 2.2, the Company hereby indemnifies and agrees to hold harmless, to the
fullest extent permitted by Law, each Holder who sells Registrable Securities
covered by such registration statement, each Affiliate of such Holder and their
respective directors and officers or general and limited partners (and the
directors, officers, employees, Affiliates and controlling Persons of any of the
foregoing), each other Person who participates as an underwriter in the offering
or sale of such Securities and each other Person, if any, who controls such
Holder or any such underwriter within the meaning of the Securities Act (each,
and “Indemnified Party” and collectively, the “Indemnified Parties”), against
any and all losses, claims, damages or liabilities, joint or several, and
reasonable and documented expenses to which such Indemnified Party may become
subject

 

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under the Securities Act, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof,
whether or not such Indemnified Party is a party thereto) arise out of or are
based upon: (a) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such Securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, any “written communication” (as defined in Rule
405 under the Securities Act) that constitutes an offer to sell or solicitation
of an offer to buy the shares of Common Stock (each such communication by the
Company or its agents and representatives (other than any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act
or Rule 134 under the Securities Act) an “Issuer Free Writing Prospectus”) or
any “issuer information” filed or required to be filed pursuant to Rule 433(d)
under the Securities Act, or any amendment or supplement thereto, or any
document incorporated by reference therein, or any other such disclosure
document (including reports and other documents filed under the Exchange Act and
any document incorporated by reference therein) or related document or report;
(b) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in the case of a prospectus, in the light of the circumstances when they were
made; or (c) any violation or alleged violation by the Company or any of its
Subsidiaries of any federal, state, foreign or common law rule or regulation
applicable to the Company or any of its Subsidiaries and relating to action or
inaction in connection with any such registration, disclosure document or
related document or report, and the Company will reimburse such Indemnified
Party for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided that the Company will not be liable to any Indemnified
Party in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, in any such preliminary,
final or summary prospectus, or any amendment or supplement thereto in reliance
upon and in conformity with written information with respect to such Indemnified
Party furnished to the Company by such Indemnified Party expressly for use in
the preparation thereof. Such indemnity will remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any
Indemnified Party and will survive the Transfer of such Securities by such
Holder or any termination of this Agreement.

SECTION 3.2 Indemnification by the Holders and Underwriters. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 2.1 or 2.2, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holder of such Registrable Securities or any prospective underwriter to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 3.1) the Company, all other Holders or any prospective
underwriter, as the case may be, and any of their respective Affiliates,
directors, officers and controlling Persons, with respect to any untrue
statement in or omission from such registration statement, any preliminary,
final or summary prospectus contained therein, any Issuer Free Writing
Prospectus or any “issuer information” filed or required to be filed pursuant to
Rule 433(d) under the Securities Act, or any amendment or supplement, if such
untrue statement or omission was made in reliance upon and in conformity with
written information with respect to such Holder or underwriter furnished to the
Company by such Holder or underwriter expressly for use in the preparation of
such registration statement, preliminary, final or summary prospectus or
amendment or supplement, or

 

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a document incorporated by reference into any of the foregoing. Such indemnity
will remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the Holders, or any of their respective
Affiliates, directors, officers or controlling Persons and will survive the
Transfer of such Securities by such Holder. In no event shall the liability of
any selling Holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds actually received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.

SECTION 3.3 Notices of Claims, Etc. Promptly after receipt by an Indemnified
Party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Article III, such Indemnified Party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided that the failure of the
Indemnified Party to give notice as provided herein will not relieve the
indemnifying party of its obligations under Section 3.1 or 3.2, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an Indemnified Party,
unless in such Indemnified Party’s reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party will be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel selected by the Holders of
at least a majority of the Registrable Securities included in the relevant
registration, and after notice from the indemnifying party to such Indemnified
Party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such Indemnified Party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. If, in such Indemnified Party’s
reasonable judgment, having common counsel would result in a conflict of
interest between the interests of such indemnified and indemnifying parties,
then such Indemnified Party may employ separate counsel reasonably acceptable to
the indemnifying party to represent or defend such Indemnified Party in such
action, it being understood, however, that the indemnifying party will not be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such Indemnified Parties (and not more than one
separate firm of local counsel at any time for all such Indemnified Parties) in
such action. No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect of such claim or litigation.

SECTION 3.4 Contribution. If the indemnification provided for hereunder from the
indemnifying party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein for
reasons other than those described in the proviso in the first sentence of
Section 3.1, then the indemnifying party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and Indemnified Parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and Indemnified Parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a

 

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material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
Indemnified Parties, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party under this Section 3.4 as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding. In no event shall the liability
of any selling Holder of Registrable Securities hereunder be greater in amount
than the dollar amount of the proceeds actually received by such Holder upon the
sale of the Registrable Securities giving rise to such contribution obligation.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 3.4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

SECTION 3.5 Other Indemnification. Indemnification similar to that specified in
this Article III (with appropriate modifications) shall be given by the Company
and each seller of Registrable Securities with respect to any required
registration or other qualification of Securities under any Law or with any
Governmental Authority other than as required by the Securities Act.

SECTION 3.6 Non-Exclusivity. The obligations of the parties under this Article
III will be in addition to any liability which any party may otherwise have to
any other party.

ARTICLE IV

OTHER

SECTION 4.1 Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party hereto shall be in writing
and shall be deemed given (a) when delivered personally, (b) five (5) Business
Days after being sent by certified or registered mail, postage prepaid, return
receipt requested, (c) one (1) Business Day after being sent by Federal Express
or other nationally recognized overnight courier, or (d) if transmitted by
facsimile, if confirmed within 24 hours thereafter by a signed original sent in
the manner provided in clause (a), (b) or (c) to parties at the following
addresses (or at such other address for a party as shall be specified by prior
written notice from such party):

if to the Company:

La Quinta Holdings Inc.

909 Hidden Ridge, Suite 600

Irving, Texas 75038

Attention: General Counsel

Fax: (214) 492-6500

 

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if to Blackstone:

The Blackstone Group L.P.

345 Park Avenue

New York, NY 10154

Attention: Tyler S. Henritze

Fax: (212) 583-5191

SECTION 4.2 Assignment. Neither the Company nor any Holder shall assign all or
any part of this Agreement without the prior written consent of the Company and
Blackstone; provided, however, that any Blackstone Entity may assign its rights
and obligations under this Agreement in whole or in part to any of its
Affiliates. Except as otherwise provided herein, this Agreement will inure to
the benefit of and be binding on the parties hereto and their respective
successors and permitted assigns.

SECTION 4.3 Amendments; Waiver. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the Company and the
Holders holding a majority of the Registrable Securities subject to this
Agreement; provided that no such amendment, supplement or other modification
shall adversely affect the economic interests of any Holder hereunder
disproportionately to other Holders without the written consent of such Holder.
No waiver by any party of any of the provisions hereof will be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party,
will be deemed to constitute a waiver by the party taking such action of
compliance with any covenants or agreements contained herein. The waiver by any
party hereto of a breach of any provision of this Agreement will not operate or
be construed as a waiver of any subsequent breach.

SECTION 4.4 Third Parties. This Agreement does not create any rights, claims or
benefits inuring to any person that is not a party hereto nor create or
establish any third party beneficiary hereto.

SECTION 4.5 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.

SECTION 4.6 Jurisdiction. The Delaware Court of Chancery and any state appellate
court therefrom within the State of Delaware (or, if the Delaware Court of
Chancery declines to accept jurisdiction over a particular matter, any state or
federal court within the State of Delaware) shall have exclusive jurisdiction
over the parties with respect to any dispute or controversy between them arising
under or in connection with this agreement and, by execution and delivery of
this agreement, each of the parties to this Agreement submits to the exclusive
jurisdiction of those courts, including but not limited to the in personam and
subject matter jurisdiction of those courts, waives any objections to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds, consents to
service of process by mail (in accordance with the notice provisions of this
Agreement) or any other manner permitted by Law, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement.

 

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SECTION 4.7 MUTUAL WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT.

SECTION 4.8 Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement by any of them, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. Each party accordingly agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate and that
the parties, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement.

SECTION 4.9 Entire Agreement. This Agreement sets forth the entire understanding
of the parties hereto with respect to the subject matter hereof. There are no
agreements, representations, warranties, covenants or undertakings with respect
to the subject matter hereof other than those expressly set forth herein. This
Agreement supersedes all other prior agreements and understandings between the
parties with respect to such subject matter.

SECTION 4.10 Severability. If one or more of the provisions, paragraphs, words,
clauses, phrases or sentences contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other respect and of the
remaining provisions, paragraphs, words, clauses, phrases or sentences hereof
shall not be in any way impaired, it being intended that all rights, powers and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by Law.

SECTION 4.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
together will be deemed to be one and the same instrument.

SECTION 4.12 Effectiveness.

This Agreement shall become effective, as to any Holder, as of the date signed
by the Company and countersigned by such Holder.

[Remainder of Page Intentionally Left Blank]

 

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

 

LA QUINTA HOLDINGS INC.

By:

 

 

Name:

 

Title:

 

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BLACKSTONE:   BLACKSTONE REAL ESTATE PARTNERS IV L.P.   BLACKSTONE REAL ESTATE
PARTNERS IV.F L.P.   BLACKSTONE REAL ESTATE PARTNERS IV.TE.2 L.P.   BLACKSTONE
REAL ESTATE PARTNERS (DC) IV.TE.1 L.P.   BLACKSTONE REAL ESTATE PARTNERS (DC)
IV.TE.2 L.P.   BLACKSTONE REAL ESTATE PARTNERS (DC) IV.TE.3-A L.P.   By:  
Blackstone Real Estate Associates IV L.P., its General Partner   By:   BREA IV
L.L.C., its General Partner   By:  

 

  Name:     Title:   Authorized Signatory   BREP IV.F-LQ L.P.   By:   Blackstone
Real Estate Partners IV.F L.P., its General Partner   By:   Blackstone Real
Estate Associates IV L.P., its General Partner   By:   BREA IV L.L.C., its
General Partner   By:  

 

  Name:     Title:   Authorized Signatory   BLACKSTONE REAL ESTATE PARTNERS V
L.P.   BLACKSTONE REAL ESTATE PARTNERS V.F L.P.

[Signature Page to Registration Rights Agreement]

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BLACKSTONE REAL ESTATE PARTNERS V.TE.1 L.P. BLACKSTONE REAL ESTATE PARTNERS
V.TE.2 L.P. BLACKSTONE REAL ESTATE PARTNERS (AIV) V L.P. By:   Blackstone Real
Estate Associates V L.P., its General Partner By:   BREA V L.L.C., its General
Partner By:  

 

Name:   Title:   Authorized Signatory BREP V.F-LQ L.P. By:   Blackstone Real
Estate Partners V.F L.P., its General Partner By:   Blackstone Real Estate
Associates V L.P., its General Partner By:   BREA V L.L.C., its General Partner
By:  

 

Name:   Title:   Authorized Signatory

[Signature Page to Registration Rights Agreement]

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BLACKSTONE REAL ESTATE HOLDINGS IV L.P. By:   BREP IV Side-by-Side GP L.L.C.,
its General Partner By:  

 

Name:   Title:   Authorized Signatory BLACKSTONE REAL ESTATE HOLDINGS V L.P. By:
  BREP V Side-by-Side GP L.L.C., its General Partner By:  

 

Name:   Title:   Authorized Signatory BREP/PRIME MEZZ 2 L.L.C. By:  

 

Name:   Title:   Authorized Signatory

[Signature Page to Registration Rights Agreement]

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Exhibit F

FIRPTA Affidavit

FORM OF FIRPTA CERTIFICATE

Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”),
provides that a transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person. For U.S. tax purposes (including
Section 1445), the person treated as the owner of a disregarded entity (which
has legal title to a U.S. real property interest under local law) for federal
income tax purposes will be the transferor of the property and not the
disregarded entity. Because BRE/Prime Mezz 2 L.L.C., a Delaware limited
liability company (“Transferor”), is a disregarded entity the assets of which
are treated for federal income tax purposes as indirectly owned by WIH Hotels
L.L.C., a Delaware limited liability company (“Tax Owner”), Tax Owner is the
transferor of the property for U.S. tax purposes. To inform Lodge Holdco III
L.L.C., a Delaware limited liability company, a disregarded entity (as defined
below) of La Quinta Holdings Inc., a Delaware corporation (“Transferee”) that
withholding of tax is not required upon disposition of a U.S. real property
interest by Transferor, which is a disregarded entity for U.S. federal income
tax purposes) the undersigned hereby certifies the following on behalf of the
Tax Owner:

(a) Tax Owner is not a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in the Code and Treasury
Regulations);

(b) Transferor is a disregarded entity as defined in Treasury Regulations
Section 1.1445-2(b)(2)(iii), the assets of which are, for such purposes, treated
as owned by Tax Owner.

(c) The U.S. employer identification number of Tax Owner is             .

(d) Tax Owner has an address at                                 .

This certification is given to Transferee with respect to the transfer of the
Assets as such term is defined in that certain Agreement of Purchase and Sale
dated as of             , 2014, among Transferor and Transferee, for the purpose
of establishing and documenting the nonforeign affidavit exemption to the
withholding requirement of Section 1445 of the Code.

Transferor understands that this certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment or both.

[Signature Page Follows]

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Under penalty of perjury, I declare that I have examined this certification and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have the authority to sign this document on behalf of Tax
Owner .

            , 2014

 

WIH HOTELS L.L.C., a Delaware limited liability company By:  

 

Name:   Title: