Exhibit 10.1

EXECUTION VERSION

STOCKHOLDERS AGREEMENT

BETWEEN

EMPIRE STATE REALTY TRUST, INC.

AND

Q REIT HOLDING LLC

Dated as of August 23, 2016

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1 DEFINED TERMS

     1   

Section 1.1

 

Defined Terms

     1   

Section 1.2

 

Table of Defined Terms

     4   

ARTICLE 2 TOP UP RIGHTS

     5   

Section 2.1

 

Large Issuance Top Up Right

     5   

Section 2.2

 

Quarterly Top Up Right

     6   

Section 2.3

 

Additional Top Up Right Terms

     7   

ARTICLE 3 TRANSFER RESTRICTIONS; ORDINARY COURSE

     9   

Section 3.1

 

Transfer Restrictions

     9   

Section 3.2

 

Transfer to Affiliates

     9   

Section 3.3

 

Ordinary Course

     9   

Section 3.4

 

QH Obligations

     10   

ARTICLE 4 VOTING AGREEMENT

     10   

Section 4.1

 

Voting Arrangements

     10   

Section 4.2

 

Irrevocable Proxy Coupled With Interest

     11   

ARTICLE 5 RIGHT OF FIRST OFFER; ACCESS TO ADVICE AND EXPERTISE

     11   

Section 5.1

 

Right of First Offer

     11   

ARTICLE 6 TAX-RELATED PROVISIONS

     14   

Section 6.1

 

Representations of the Company

     14   

Section 6.2

 

FIRPTA Capital Gains

     15   

Section 6.3

 

Notice of Tax Claims

     16   

Section 6.4

 

Procedural Matters

     16   

Section 6.5

 

Domestically Controlled Status

     17   

Section 6.6

 

Additional Tax-Related Provisions

     17   

Section 6.7

 

No Tax Representations

     18   

ARTICLE 7 GENERAL PROVISIONS

     18   

Section 7.1

 

Termination

     18   

Section 7.2

 

Notifications

     18   

Section 7.3

 

Material Compliance

     18   

Section 7.4

 

Stockholder Group Representative

     19   

Section 7.5

 

Subsidiary Obligations

     20   

Section 7.6

 

Governing Law; Arbitration

     20   

Section 7.7

 

Counterparts

     21   

Section 7.8

 

Headings

     21   

Section 7.9

 

Severability

     21   

Section 7.10

 

Entire Agreement; Amendments; Waiver

     21   

Section 7.11

 

Notices

     21   

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Section 7.12

 

Successors and Assigns

     22   

Section 7.13

 

No Third Party Beneficiaries

     22   

Section 7.14

 

Further Assurances

     22   

Section 7.15

 

Specific Performance

     22   

Section 7.16

 

Costs and Expenses

     23   

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STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT (as the same may be amended, modified or
supplemented from time to time, this “Agreement”), dated as of August 23, 2016,
is made and entered into by and among Empire State Realty Trust, Inc., a
Maryland corporation (the “Company”), Q REIT Holding LLC, a Qatar Financial
Centre limited liability company (the “Stockholder”), and Qatar Holding LLC, a
Qatar Financial Centre limited liability company (“QH”) (solely for the purpose
of Section 3.4 hereof).

WHEREAS, concurrently with the execution of this Agreement, the Stockholder and
the Company are entering into a Securities Purchase Agreement (the “Securities
Purchase Agreement”) pursuant to which, among other things, the Company has
agreed to issue and sell to the Stockholder, and the Stockholder has agreed to
purchase from the Company, that aggregate number of shares of the Company’s
Class A common stock, par value $0.01 per share (the “Class A Common Stock”),
set forth opposite the Stockholder’s name in column (3) on Schedule 1 hereto
(the “Purchased Shares”), upon the terms and conditions set forth therein;

WHEREAS, the Stockholder and the Company are also entering into a Registration
Rights Agreement, an Ownership Limitation Waiver and related Purchaser
Representation Letter, each of even date herewith (such agreements and
documents, together with the Securities Purchase Agreement, the “Related
Documents”); and

WHEREAS, in connection with the Related Documents, the Company and the
Stockholder are entering into this Agreement to provide certain rights and
obligations on the terms and subject to the conditions set forth herein.

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

ARTICLE 1

DEFINED TERMS

Section 1.1 Defined Terms. The following definitions shall be for all purposes,
unless otherwise clearly indicated to the contrary, applied to the terms used in
this Agreement.

“Affiliate” means, with respect to any specified Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with such Person.

“Board” means the Board of Directors of the Company.

“Business Day” means any day except a day on which commercial banks in Doha,
Qatar are authorized or required by law to be closed.

“Closing” shall have the meaning given to such term in the Securities Purchase
Agreement.

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“Closing Date” shall have the meaning given to such term in the Securities
Purchase Agreement.

“Company Securities” means (i) Equity Securities, (ii) Convertible Company
Securities, (iii) Voting Securities, (iv) any preferred equity or debt
securities and instruments of the Company, the Operating Partnership or any of
their subsidiaries, and (v) any options, warrants or rights to acquire any of
the foregoing. For the avoidance of doubt, “Company Securities” shall include
any securities exposure which is held in derivative form.

“Convertible Company Securities” means any Company Securities (other than Equity
Securities) that provide the holder a right to acquire Equity Securities of the
Company or the Operating Partnership, including options, warrants and debt or
preferred securities that are convertible into or exchangeable for any Equity
Securities.

“Equity Securities” means any common equity securities of the Company or the
Operating Partnership, irrespective of voting interests, that entitle its holder
to receive common dividends and distributions as and when declared and paid by
the Board and/or the Operating Partnership (including where subject to
applicable vesting or earning), which as of the date of this Agreement consist
of Class A Common Stock, Class B Common Stock, OP units and LTIP units.

“fully diluted” or “fully diluted economic interests” means (irrespective of the
meaning of such term(s) under United States generally accepted accounting
principles) as determined inclusive of all outstanding Equity Securities.

“Group Owner” means the governmental authority of the State of Qatar established
by Emiri Decree No. 22 of 2005.

“Initial Ownership Percentage” means 9.9% of the fully diluted economic
interests of the Company.

“LTIP units” means long term incentive units of partnership interest in the
Operating Partnership.

“Minimum Ownership Percentage” means 5.0% of the fully diluted economic
interests in the Company (excluding from the denominator any Net New Securities
issued in the current or prior calendar quarter for which corresponding
Quarterly Top Up Shares remain subject to potential acquisition by the
Stockholder pursuant to the Quarterly Top Up Right described in Section 2.2);
provided, that to the extent (i) the Stockholder Group is unable to purchase
additional Class A Common Stock without violating the terms of the Ownership
Limitation Waiver (the “Prohibited Shares”), and (ii) the Stockholder Group has
owned, at all times prior to such inability, Class A Common Stock in an amount
at least equal to the Minimum Ownership Percentage (either through the exercise
(in full or in part) by the Stockholder of Top Up Rights under this Agreement
or, in lieu of any Top Up Right, otherwise through the acquisition of Class A
Common Stock in public transactions or otherwise from third parties effected
contemporaneous with the time for exercise of such Top Up Right), then the
Stockholder Group’s ownership of Class A Common Stock shall be computed for
purposes of this sentence as if the Stockholder Group owned the Prohibited
Shares.

 

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“New Equity Securities” means any Equity Securities that the Company or the
Operating Partnership issues or sells at any time or from time to time following
the Closing Date, except for any Equity Securities issued upon conversion,
exchange or exercise of other Equity Securities (including Class B Common Stock,
OP units and LTIP units).

“NYSE” means the New York Stock Exchange.

“Operating Partnership” means Empire State Realty OP, L.P., a Delaware limited
partnership.

“OP units” means common units of limited partnership interests in the Operating
Partnership.

“Ownership” means, with respect to any security, the ownership of such security
by any “Beneficial Owner,” as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that, in calculating the beneficial ownership of
any particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” will be deemed to have beneficial ownership of all
securities that such “person” has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Own,” “Owned” and “Owner”
shall have correlative meaning.

“Ownership Limitation Waiver” means that certain Agreement Regarding Waiver of
Ownership Limit between the Company and the Stockholder of even date hereof
pursuant to which the Company granted to the Stockholder Group a limited waiver
from the ownership limitation provisions set forth in
Section 7.2.1(a)(i)(1)-(2) of the Company’s Articles of Amendment and
Restatement.

“Person” means a natural person or any legal, commercial or governmental entity,
such as, but not limited to, a corporation, general partnership, joint venture,
limited partnership, limited liability company, limited liability partnership,
trust, business association, group acting in concert, or other legal personal
representative, regulatory body or agency, government or governmental agency,
authority or entity however designated or constituted.

“Registration Rights Agreement” means that certain Registration Rights
Agreement, of even date herewith, by and between the Company and the
Stockholder.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended (or any
successor regulation).

“Stockholder Group” means, collectively, Group Owner and each of its directly or
indirectly wholly owned subsidiaries (including the Stockholder) over which
Group Owner exercises control with respect to the acquisition and disposition of
assets or, with respect to assets that are voting securities, the voting of
those securities.

 

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“Transfer” means (i) any direct or indirect offer, sale, lease, assignment,
encumbrance, pledge, grant of a security interest, hypothecation, disposition or
other transfer (by operation of law or otherwise), either voluntary or
involuntary, or entry into any contract, option or other arrangement or
understanding with respect to any offer, sale, lease, assignment, encumbrance,
pledge, hypothecation, disposition or other transfer (by operation of law or
otherwise), of any security or interest in any security or (ii) in respect of
any security or interest in any security, to enter into any swap or any other
agreement, transaction or series of transactions that hedges or transfers, in
whole or in part, directly or indirectly, the economic consequences of ownership
of such security or interest in such security, whether any such swap, agreement,
transaction or series of transaction is to be settled by delivery of securities,
in cash or otherwise. “Transferred,” “Transferor” and “Transferee” and similar
expressions shall have corresponding meanings.

“Voting Securities” means Class A Common Stock, Class B Common Stock and all
other securities of the Company or its subsidiaries entitled to vote on any
matter coming before the stockholders of the Company for a vote from time to
time (whether at a meeting or by written consent), disregarding the effect of
Section 4.1(a).

Section 1.2 Table of Defined Terms. Terms that are not defined in Section 1.1
have the respective meanings set forth in the following Sections:

 

DEFINED TERM

  

SECTION NO.

Agreement    Preamble Applicable Investment    Section 6.2(a) Class A Common
Stock    Recitals Code    Section 5.1(e) Company    Preamble Excess Voting
Securities    4.1(a) FIRPTA Capital Gain Dividends    Section 6.2(a) Investment
Opportunity    Section 5.1(a) Joint Venture    Section 5.1(a) Large Issuance   
2.1(a) Large Issuance Exercise Notice    2.1(b) Large Issuance Notice    2.1(b)
Large Issuance Top Up Right    2.1(a) Material Compliance    Section 7.3
Materially Different    Section 5.1(f) Net New Securities    2.2(b) Purchased
Shares    Recitals QH    Preamble Quarterly Top Up Exercise Notice    2.2(d)
Quarterly Top Up Notice    2.2(b) Quarterly Top Up Right    2.2(a) Quarterly Top
Up Shares    2.2(b) Related Documents    Recitals ROFO Notice    Section 5.1(b)

 

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DEFINED TERM

  

SECTION NO.

ROFO Reply Notice    Section 5.1(c) ROFO Right    Section 5.1(a) Securities
Purchase Agreement    Recitals Stockholder    Preamble Stockholder
Representative    Section 7.4(a) Tax Claim    Section 6.3 Top Up Right    2.2(a)
Top Up Shares    2.3(d)

ARTICLE 2

TOP UP RIGHTS

Section 2.1 Large Issuance Top Up Right.

(a) Large Issuance Top Up Right. For so long as the Stockholder Group
continuously Owns at least the Minimum Ownership Percentage and is in Material
Compliance, then in connection with each issuance of New Equity Securities with
an aggregate value equal to or in excess of $1.0 million (a “Large Issuance”),
the Stockholder shall have the right (in accordance with this Section 2.1), but
not the obligation, to purchase from the Company, and the Company shall have the
obligation to sell to the Stockholder, following the closing of the Large
Issuance, that number of shares of Class A Common Stock equal to the Initial
Ownership Percentage multiplied by the number of New Equity Securities issued in
the Large Issuance (such right, the “Large Issuance Top Up Right”).

(b) Procedures. The Company will give the Stockholder written notice (a “Large
Issuance Notice”) of its intention to issue New Equity Securities in a Large
Issuance as soon as practicable, but in no event later than the time
authorization for such Large Issuance is granted by the Board. The Large
Issuance Notice shall describe the price (or range of prices), anticipated
amount of securities, timing and other material terms of the Large Issuance, as
well as the number of shares of Class A Common Stock that the Stockholder is
entitled to purchase pursuant to the Large Issuance Top Up Right. The
Stockholder will have ten (10) Business Days from the date of the Large Issuance
Notice to advise the Company in writing (a “Large Issuance Exercise Notice”)
that it intends to exercise its Large Issuance Top Up Right and acquire the
applicable number of shares of Class A Common Stock. Subject to Section 2.3
below, a Large Issuance Top Up Right may be exercised, in whole or in part. If
the Stockholder delivers a Large Issuance Exercise Notice with respect to a
Large Issuance, then closing for the Stockholder’s Large Issuance Top Up Right
will be contingent upon, and will take place simultaneously with, or as soon as
practicable after, the closing of such Large Issuance. Failure by the
Stockholder to deliver a Large Issuance Exercise Notice within ten (10) Business
Days from the date of delivery of the Large Issuance Notice shall be deemed a
waiver of the Stockholder’s Large Issuance Top Up Right with respect to such
Large Issuance. The Stockholder agrees that it will, and will cause each member
of the Stockholder Group to, (i) maintain the confidentiality of any information
included in any Large Issuance Notice delivered by the Company unless otherwise
required by

 

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law or subpoena and (ii) after receiving written notice thereof, not effect any
acquisition or disposition of any Company Securities until the public
announcement of the Large Issuance referenced in the Large Issuance Notice
(other than the acquisition of Class A Common Stock pursuant to the Large
Issuance Top Up Right).

(c) The per-share purchase price for the Class A Common Stock issued by the
Company pursuant to the Large Issuance Top Up Right shall equal (i) in the case
of issuances pursuant to the Company’s equity compensation plans, the average
closing price of the Class A Common Stock as reported by the NYSE during the
five (5) consecutive trading days immediately preceding the delivery by the
Company of the Large Issuance Notice, and (ii) in the case of all other
issuances, the per-share or per-unit purchase price, consideration or implied
value paid by investors for the New Equity Securities being issued in the Large
Issuance (in each case, disregarding any underwriting, placement agent or other
fees and commissions borne by the Company in connection with such Large
Issuance).

(d) For the avoidance of doubt, the Company shall not be obligated to consummate
any proposed Large Issuance, nor be liable to the Stockholder if the Company
fails to consummate any proposed Large Issuance for whatever reason.

Section 2.2 Quarterly Top Up Right.

(a) Quarterly Top Up Right. For so long as the Stockholder Group continuously
Owns at least the Minimum Ownership Percentage and is in Material Compliance,
the Stockholder shall have the right (in accordance with this Section 2.2), but
not the obligation, to purchase from the Company, and the Company shall have the
obligation to sell to the Stockholder, in each calendar quarter following the
Closing, an aggregate number of shares of Class A Common Stock equal to the
Quarterly Top Up Shares (defined below) for the prior quarter (such right, the
“Quarterly Top Up Right”). The Large Issuance Top Up Right and the Quarterly Top
Up Right are sometimes referred to herein collectively as the “Top Up Right.”

(b) Quarterly Top Up Notice. Within thirty (30) days after the end of each
calendar quarter following the Closing, and until the expiration of the
Quarterly Top Up Right as provided in Section 2.2(a) above, the Company shall
provide to the Stockholder a notice (each, a “Quarterly Top Up Notice”)
disclosing the aggregate number of New Equity Securities issued by the Company
in such calendar quarter (exclusive of any New Equity Securities issued in a
Large Issuance during such calendar quarter), less (i) any New Equity Securities
reacquired by the Company during such calendar quarter (including any OP units
reacquired by the Company for cash in connection with the redemption of such OP
units in accordance with their terms), (ii) any shares of unvested restricted
stock or LTIP units originally issued pursuant to an Equity Incentive Plan that
are forfeited or repurchased by the Company during such quarter, and (iii) any
other adjustments necessary in order to provide an accurate reflection of the
changes in capitalization during such calendar quarter (such number, less the
items described in clauses (i), (ii) and (iii), being referred to as the “Net
New Securities” for such quarter); provided, however, that the Net New
Securities for the calendar quarter ended September 30, 2016 shall equal the
number of Net New Securities issued by the Company for the period beginning on
the Closing Date and ending on September 30, 2016. The “Quarterly Top Up Shares”
for a given calendar quarter shall equal that number of shares of Class A Common
Stock equal to (i) the Initial Ownership Percentage, multiplied by (ii) 110.90%
of the Net New Securities issued during such calendar quarter.

 

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(c) Certificate from Stockholder. In order to assist the Company in calculating
the number of Quarterly Top Up Shares that the Stockholder will have the option
to purchase in any given calendar quarter, the Company shall notify the
Stockholder, at the end of any given calendar quarter, of the aggregate number
of shares of Class A Common Stock reflected on the books and records of the
Company’s transfer agent as held by the Stockholder Group as at the end of such
calendar quarter, and the Stockholder shall, within ten (10) Business Days
following receipt of such notice, provide the Company with a certificate stating
the number of shares of Class A Common Stock (calculated on a fully diluted
basis) that the Stockholder Group Owned as of the end of such calendar quarter.

(d) Quarterly Top Up Exercise Notice. Within ten (10) Business Days after the
Stockholder receives a Quarterly Top Up Notice from the Company, the
Stockholder, if it so elects, shall provide the Company with written notice
(each, a “Quarterly Top Up Exercise Notice”) that it is exercising the Quarterly
Top Up Right for the applicable quarter. Subject to Section 3.3 below, a
Quarterly Top Up Right may be exercised, in whole or in part.

(e) Issuance of Common Stock. Subject to the terms and conditions hereof,
closings of the sale and issuance of the Class A Common Stock to be purchased by
the Stockholder each quarter under this Agreement shall occur on the tenth
(10th) Business Day following the Stockholder’s delivery of a Quarterly Top Up
Exercise Notice to the Company or such other day as is agreed by the parties
hereto.

(f) Purchase Price. The per-share purchase price for the Class A Common Stock
issued by the Company pursuant to the Quarterly Top Up Right in a given quarter
shall be included in the Quarterly Top Up Notice and shall equal (i) in the case
of issuances pursuant to the Company’s equity compensation plans, the average
closing price of the Class A Common Stock as reported by the NYSE during the
five (5) consecutive trading days immediately preceding such issuances, and
(ii) in the case of all other issuances, the weighted average per-share or
per-unit purchase price, consideration or implied value paid by investors for
the New Equity Securities issued (in each case, disregarding any underwriting,
placement agent or other fees and commissions borne by the Company).

Section 2.3 Additional Top Up Right Terms.

(a) Ownership Limitation. Notwithstanding anything in this Article 2 to the
contrary, in the event the exercise of a Top Up Right hereunder would cause the
Stockholder Group’s Ownership of Class A Common Stock (giving effect to
purchases under the Top Up Right) to violate the terms of the Ownership
Limitation Waiver, then the number of shares of Class A Common Stock specified
in the relevant Large Issuance Notice or Quarterly Top Up Notice, as applicable,
shall automatically be deemed reduced to that number of shares of Class A Common
Stock that the Stockholder could acquire without causing the Stockholder Group
to violate the terms of the Ownership Limitation Waiver.

 

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(b) Stockholder Group. Notwithstanding anything herein to the contrary, the
Stockholder shall be entitled to exercise Top Up Rights pursuant to this Article
2 in its own capacity as well as on behalf of another member of the Stockholder
Group, in which case references in this Section 2.3 to the Stockholder shall be
deemed to be references to such other member of the Stockholder Group, unless
the context otherwise requires. For the avoidance of doubt and notwithstanding
anything herein to the contrary, in no event shall the Stockholder Group,
collectively, have the right to exercise Top Up Rights to acquire Top Up Shares
in an amount that is, in the aggregate, in excess of the number of Top Up Shares
to which the Stockholder would be entitled to acquire hereunder individually in
connection with any given Top Up Right.

(c) Other Exceptions. Notwithstanding anything in this Article 2 to the
contrary, no Top Up Right shall apply to issuances of New Equity Securities with
respect to which the Company reasonably determines in good faith that the
exercise of such Top Up Right would violate applicable law or would require the
Company to obtain stockholder approval pursuant to applicable rules and
regulations of the NYSE and the SEC.

(d) Delivery of Shares. At each closing for any shares of Class A Common Stock
acquired by the Stockholder pursuant to a Top Up Right hereunder (collectively,
“Top Up Shares”), the Company will, or will cause its transfer agent to,
electronically transfer the Top Up Shares to be sold at such closing to the
Stockholder against payment by or on behalf of the Stockholder of the aggregate
purchase price for the shares as provided herein by wire transfer to an account
designated by the Company, or by such other means as shall be mutually agreeable
to the Stockholder and the Company. Each closing shall take place at the offices
of the Company or by mail or email facilities or such other place or means as
the Company and the Stockholder may agree, subject to the delivery by the
Stockholder of customary investor closing certificates and other documents for
private placements of this nature.

(e) Securities Law Matters. The Stockholder understands and agrees that any Top
Up Shares acquired by it hereunder are being offered and issued to it in
reliance upon the exemption from securities registration afforded by
Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated
thereunder. No U.S. federal or state agency or any other government or
governmental agency has passed or will pass on, or made or will make any
recommendation or endorsement of, the Top Up Shares or the fairness or
suitability of an investment in the Top Up Shares. The Stockholder is and will
be an “accredited investor”, as that term is defined in Rule 501(a) of
Regulation D under the Securities Act, at any time it acquires Top Up Shares
hereunder. The Stockholder understands that its investment in the Top Up Shares
involves a high degree of risk, and the Stockholder is able to afford a complete
loss of such investment. The Stockholder has or will seek such accounting, legal
and tax advice as necessary to make an informed investment decision with respect
to its acquisition of the Top Up Shares. The Stockholder will subscribe for the
Top Up Shares for its own account for investment and not with a view toward, or
for resale in connection with, the public sale or distribution thereof. The
Stockholder understands that the Top Up Shares will be “restricted securities”
under applicable U.S. federal securities laws and that the Securities Act and
the rules and regulations promulgated thereunder provide in substance that the
Stockholder may dispose of the Top Up Shares only pursuant to an effective
registration statement under the Securities Act or an exemption therefrom, and
the Stockholder understands that, except as provided in the

 

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Registration Rights Agreement, the Company has no obligation or intention to
register the offer and resale of any of the Top Up Shares, or to take action so
as to permit sales pursuant to the Securities Act (including Rule 144
thereunder). Consequently, the Stockholder understands that the Stockholder may
bear the economic risks of its investment in the Top Up Shares for an indefinite
period of time. The Stockholder understands that the certificates or other
instruments representing any Top Up Shares may bear legends as required by the
Company’s charter documents, the Securities Purchase Agreement, the Securities
Act and the “blue sky” laws of any state as reasonably determined by the Company
(and a stop-transfer order may be placed against transfer of such share
certificates). Each of the Company and the Stockholder acknowledge that it may
have reporting obligations under applicable law with respect to the exercise of
Top Up Rights hereunder.

ARTICLE 3

TRANSFER RESTRICTIONS; ORDINARY COURSE

Section 3.1 Transfer Restrictions. The Stockholder shall not Transfer any
portion of the Purchased Shares until the sixth-month anniversary of the
Closing. Beginning on the sixth-month anniversary of the Closing until the
one-year anniversary of the Closing, the Stockholder shall not Transfer more
than half of the Purchased Shares. Following the one year anniversary of the
Closing, all of the Purchased Shares shall be Transferable without restriction
hereunder.

Section 3.2 Transfer to Affiliates. Notwithstanding anything in this Agreement
or the Related Documents to the contrary, the Stockholder shall be entitled to
transfer any or all of the Purchased Shares to any member of the Stockholder
Group without restriction and, subject to the terms of Section 7.4 below, such
member shall be entitled to exercise the rights of the Stockholder with respect
such Purchased Shares hereunder, provided that any such transferee becomes a
party to and assumes the obligations of the Stockholder under this Agreement and
the Related Documents with respect to such Purchased Shares without relieving
the Stockholder of its obligations hereunder or thereunder.

Section 3.3 Ordinary Course. The Stockholder hereby agrees that until the date
on which the Stockholder Group Owns less than (i) 9.8% of the Class A Common
Stock of the Company and (ii) the Minimum Ownership Percentage, the Stockholder
will, and will cause each member of the Stockholder Group to:

(a) acquire and hold the shares of Class A Common Stock and any other Company
Securities that it then Owns in the ordinary course of business and not with the
purpose nor with the effect of changing or influencing the control of the
Company, nor in connection with or as a participant in any transaction having
such purpose or effect;

(b) not acquire any Company Securities if the aggregate amount of Company
Securities the Stockholder Group would then Own would exceed the Initial
Ownership Percentage or any other ownership threshold applicable to the
Stockholder Group under the Related Documents;

 

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(c) not acquire, agree to acquire or propose to acquire, in any manner, directly
or indirectly, any subsidiary, asset or property of the Company with a value,
individually or in the aggregate, in excess of $50 million, other than as
otherwise may be agreed by the Company in advance; and

(d) not engage in or effect, directly or indirectly, or cause any other Person
to engage or effect, directly or indirectly, any short sales or similar
transactions with respect to the Class A Common Stock or any other Equity
Security (to the extent clearly identifiable as Equity Securities);

provided, that in the event the Company publicly announces a definitive
agreement to be acquired by a third party or the Board otherwise publicly
announces an intention to sell the Company to a third party, then, subject in
all respects to the provisions of the Ownership Limitation Waiver, no member of
the Stockholder Group shall be restricted hereunder from making an offer to the
Board to acquire the Company as a result of the provisions set forth in
Section 3.3(a), Section 3.3(b) or Section 3.3(c).

Section 3.4 QH Obligations. QH hereby agrees that in the case of the
obligations, liabilities or commitments created by or on behalf of any member of
the Stockholder Group pursuant to any of Section 3.3, Section 4.1,
Section 5.1(k), Section 6.6(b) and/or Section 7.4 of this Agreement, QH will,
and/or will cause such member of the Stockholder Group to, perform, honor or pay
any such obligation, liability or commitment in accordance with the terms of
this Agreement.

ARTICLE 4

VOTING AGREEMENT

Section 4.1 Voting Arrangements.

(a) From and after the date of this Agreement, on any matter coming before the
stockholders of the Company for a vote from time to time (whether at a meeting
or by written consent), the Stockholder Group may vote at its discretion up to
that number of Voting Securities that represents up to a maximum of 9.90% of the
total votes entitled to be cast on such matter, irrespective of whether the
Stockholder Group owns Voting Securities in excess of such amount on the
relevant record date. With respect to any Voting Securities held by the
Stockholder Group in excess of 9.90% of the total votes entitled to be cast on
any matter coming before the stockholders of the Company for a vote from time to
time (whether at a meeting or by written consent) (any such Voting Securities,
“Excess Voting Securities”), the Stockholder Group shall vote such Excess Voting
Securities (to the extent not already voted by the Board as proxy in accordance
with Section 4.2), and such vote shall in any event be counted as if cast, in
the same manner and proportion as the votes cast by the holders of Voting
Securities other than the Stockholder Group.

(b) Notwithstanding Section 4.1(a) above, the Stockholder Group shall vote all
Voting Securities Owned by it that are not Excess Voting Securities in favor of
the election of each member of any slate of director nominees recommended by the
Board.

 

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(c) For the avoidance of doubt, if subsequent to the date of this Agreement any
Voting Securities are (i) acquired by the Stockholder Group from the Company
pursuant to the Top Up Rights, (ii) acquired by the Stockholder Group in the
open market or otherwise, or (iii) issued by the Company to the Stockholder
Group by reason of a stock dividend, stock split, consolidation,
reclassification or similar transaction, then such Voting Securities shall be
subject to the voting arrangements described in this Article 4.

(d) In furtherance of this Section 4.1, the Stockholder shall be, and shall
cause each member of the Stockholder Group to be, present in person or
represented by proxy at all meetings of stockholders to the extent necessary so
that all Voting Securities of the Company as to which they are entitled to vote
shall be counted as present for the purpose of determining the presence of a
quorum at such meeting; provided, however, that the Stockholder, or any member
of the Stockholder Group, shall not be required to be present or represented by
proxy in the event a quorum would be satisfied in the absence of such
Stockholder or member of the Stockholder Group.

(e) Notwithstanding any provision in this Agreement to the contrary, in the
event of a breach by any member of the Stockholder Group of the voting
arrangements described in this Article 4, the Company shall be entitled to seek
an injunction enjoining any such breach and requiring specific performance.

Section 4.2 Irrevocable Proxy Coupled With Interest.

(a) The Stockholder hereby irrevocably designates and appoints the Board as the
Stockholder’s sole and exclusive attorney-in-fact and proxy, with full power of
substitution and re-substitution, for and in the Stockholder’s name, to vote and
exercise all voting and related rights (to the fullest extent the Stockholder is
entitled to do so) with respect to the Excess Voting Securities in the same
manner and proportion as the votes cast by the holders of Voting Securities
other than the Stockholder, on any matter coming before the stockholders of the
Company for a vote from time to time (whether at a meeting or by written
consent).

(b) The irrevocable proxy and power of attorney granted by the Stockholder
pursuant to this Section 4.2 is intended to be and shall be irrevocable to the
full extent permitted by the Maryland General Corporation Law and is coupled
with an interest sufficient in law to support an irrevocable power.

(c) For the avoidance of doubt, the Transfer of any Voting Securities by the
Stockholder pursuant to Section 3.2 hereof shall be subject to such transferee
providing its irrevocable proxy to the Company as provided in this Section 4.2.

ARTICLE 5

RIGHT OF FIRST OFFER; ACCESS TO ADVICE AND EXPERTISE

Section 5.1 Right of First Offer.

(a) So long as the Stockholder Group is in Material Compliance, the Stockholder
shall have a right of first offer (a “ROFO Right”) to invest with the Company as
a

 

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joint venture partner on all future real estate asset investments and/or mergers
and acquisitions initiated by the Company (including individual properties,
portfolios, or real estate companies) (each, an “Investment Opportunity”) for
which the Company proposes to seek or otherwise include a joint venture partner.
The Company shall present such Investment Opportunity to the Stockholder in
accordance with the terms of this Article 5 and, upon the Stockholder’s
election, the Company and the Stockholder shall work in good faith to conclude
the joint venture agreement on the terms of the ROFO Notice described below
(each, a “Joint Venture”) for the purpose of acquiring, owning, developing,
managing and otherwise dealing with the applicable Investment Opportunity. The
Company or its subsidiary will act as the general partner or manager of such
ventures.

(b) For any potential Investment Opportunity subject to the ROFO Right, the
Company will provide the Stockholder with a written notice (a “ROFO Notice”)
consisting of an outline of the proposed Investment Opportunity, including the
material economic, structural and legal terms being proposed (if known), and if
requested, will provide the Stockholder (including its representatives and
advisors) with access to any and all due diligence materials and other
information about the proposed Investment Opportunity in the Company’s
possession or to which the Company has access (to the extent the Company is
legally permitted to provide such access), all of which will be subject to
confidentiality obligations from the Stockholder (and its representatives and
advisors) to the Company.

(c) The Stockholder will then have five (5) Business Days to reply by written
notice (a “ROFO Reply Notice”) to the Company of its agreement to participate in
the Investment Opportunity on the terms proposed, which ROFO Reply Notice will
constitute the Stockholder’s and the Company’s irrevocable commitment to proceed
promptly to conclude definitive documentation with respect to the Investment
Opportunity and the formation of the Joint Venture on the terms proposed in the
ROFO Notice, it being agreed that if the Stockholder and the Company,
negotiating in good faith, do not agree on definitive documentation within the
time which the Company reasonably determines is required to undertake the
Investment Opportunity, then the Stockholder will be deemed to have declined to
participate in the proposed Investment Opportunity.

(d) At the time the Stockholder submits a ROFO Reply Notice in accordance with
Section 5.1(c), the Stockholder may choose to limit its participation in any
proposed Joint Venture such that the Stockholder’s ownership will not exceed a
49% fully diluted interest (including the Stockholder’s deemed ownership through
ownership of the Company’s Class A Common Stock). At its discretion, the Company
may choose to offer one or more other potential partners the opportunity to
co-invest with the Company alongside the Stockholder to the extent of any
remaining interests in the Joint Venture; provided, that the economic terms
offered to such co-investors are not Materially Different (as defined below)
than the economic terms offered to the Stockholder.

(e) The Company shall use commercially reasonable efforts to structure any Joint
Venture in a manner that takes into account the tax considerations of the
Stockholder, including, to the extent practicable, organizing such Joint Venture
as a “domestically controlled qualified investment entity”, as defined in
Section 897(h)(4)(B) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the Treasury regulations promulgated thereunder. Neither

 

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party will be obligated to enter into any Joint Venture in connection with an
Investment Opportunity with the other party, other than on mutually agreed terms
in accordance with the procedures herein, and, in all cases, subject to tax,
legal, regulatory and other due diligence.

(f) If (i) the Stockholder declines to participate in the proposed Investment
Opportunity, (ii) the Stockholder does not submit a ROFO Reply Notice within the
time period specified in Section 5.1(c) above, or (iii) after the Stockholder
submits a ROFO Reply Notice, the Stockholder and the Company do not conclude
definitive documentation within the time which the Company reasonably determines
is required to undertake the Investment Opportunity, then the Company may
proceed with third parties on such terms and conditions as the Company deems
appropriate in its sole discretion; provided, that if the economic terms that
the Company presents or intends to present to third parties with respect to such
Investment Opportunity are, taken as a whole, Materially Different from those
economic terms initially proposed to the Stockholder, then the Company must
resubmit a ROFO Notice to the Stockholder. For purposes of this Section 5.1,
“Materially Different” economic terms means that, with respect to a third party
investor, the overall transaction cost per unit of interest in the Investment
Opportunity offered to such third party investor by the Company is less than
97.5% of the cost proposed to the Stockholder in the ROFO Notice.

(g) Expiration of ROFO Right.

(i) If the Stockholder and the Company shall not have consummated a Joint
Venture transaction hereunder by the date that is the fifth (5th) anniversary of
the Closing, then the ROFO Right shall terminate on such date, unless the
Stockholder and the Company shall mutually agree otherwise;

(ii) If the Stockholder and the Company shall have consummated a Joint Venture
transaction hereunder by the date that is the fifth (5th) anniversary of the
Closing, then the ROFO Right shall be extended for a further thirty (30) months
from such date; and

(iii) If the Stockholder and the Company shall have consummated a further Joint
Venture transaction hereunder during such thirty (30) month extension period (if
any), then the ROFO Right shall be extended for a further thirty (30) months
from the end of such initial extension period, following which the ROFO Right
shall terminate.

(h) Subject to any mutual agreement otherwise, each party shall bear its own
costs and expenses with respect to the negotiation relating to a proposed
Investment Opportunity.

(i) The ROFO Right shall apply only if the Company decides, in its sole and
absolute discretion, to seek a joint venture partner on a particular Investment
Opportunity. The ROFO Right shall not restrict the Company from pursuing,
engaging in or acquiring any Investment Opportunity independently if the Company
decides, in its sole and absolute discretion, not to seek a joint venture
partner on such Investment Opportunity, or from pursuing, engaging in or
acquiring an Investment Opportunity with a joint venture partner other than the
Stockholder during any period of time that the exclusivity provisions described
herein are not in

 

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effect or as otherwise permitted by this Article 5. For the avoidance of doubt,
the Company may invest in, and the ROFO Right shall not apply to, any joint
venture of any kind brought to the Company by a third party, and the Company
shall be required to offer the Stockholder the opportunity to invest in such
joint venture only if the Company decides, in its sole and absolute discretion,
to seek a joint venture partner to share in its portion of such third party
Investment Opportunity.

(j) Notwithstanding anything herein to the contrary and subject to Section 7.4
hereof, the Stockholder shall be entitled to invest in any Joint Venture for
which it is eligible to invest pursuant to this Article 5 in its own capacity as
well as through any member of the Stockholder Group, in which case it shall be
deemed to be a Joint Venture between the Stockholder and the Company for all
purposes of this Agreement; provided, for the avoidance of doubt, that nothing
herein shall be deemed to give rise to more than one ROFO Right in any given
instance, in such aggregate amount(s) and pursuant to such terms as would be
applicable hereunder to the Stockholder individually.

(k) The Stockholder shall, and shall cause each member of the Stockholder Group
and each of their respective officers, employees, partners, directors, managers,
trustees and advisors to, (i) hold in confidence and trust any confidential
and/or non-public information provided or attributable to, or learned by them,
in connection with the ROFO Right, and (ii) not use any such confidential and/or
non-public information for any purpose other than in connection with the ROFO
Right, in each case unless otherwise required by law.

Section 5.2 For so long as the Stockholder Group maintains a fully diluted
economic interest in the Company equal to the Initial Ownership Percentage
(calculated assuming the full exercise and consummation of any pending Top Up
Rights) and is in Material Compliance, the Company or one of its subsidiaries
shall, upon reasonable request and advance notice, provide the Stockholder such
advice and expertise as the Company may reasonably possess as same relates to
current and future owned and managed real estate in New York City, New York, and
other markets; provided, that neither the Company nor any of its subsidiaries
shall be obligated to provide the Stockholder with any confidential or
proprietary information, or provide advice or expertise if providing such advice
or expertise presents a conflict of interest for the Company or the Company
otherwise determines that providing such advice or expertise would conflict with
any pre-existing obligations, agreements, fiduciary obligations or other
commitments of or applicable to the Company or would violate applicable law.

ARTICLE 6

TAX-RELATED PROVISIONS

Section 6.1 Representations of the Company.

(a) The Company generally runs its business with the intent of generating the
best returns for its investors over a long horizon.

(b) Since the effective date of its formation, the Company’s business model has
at all times included generating returns in the nature of operating income and
capital appreciation with a goal of generating the best returns for its
investors, and the Company’s current intention is to continue to run its
business in such a manner.

 

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(c) The Company has no current intention to dispose of any assets that would
generate capital gain dividends to its investors.

(d) The Board and senior management of the Company recognize, and seek to
fulfill at all times, their responsibilities to all investors in all matters,
including without limitation capital transactions, operation and disposition of
assets, and payment of dividends.

Section 6.2 FIRPTA Capital Gains.

(a) Indemnity. In the event that the Company declares and pays dividends on the
Class A Common Stock attributable to capital gain from the sale or exchange by
the Company of United States real property interests within the meaning of
Section 897(c) of the Code (the portion of such dividends that are so
attributable, “FIRPTA Capital Gain Dividends”), then the Company shall be
obligated to indemnify the Stockholder in an amount equal to any applicable U.S.
federal and state income and branch profits tax actually paid by the Stockholder
on account of such FIRPTA Capital Gain Dividends paid in respect of the
Purchased Shares and any Top Up Shares; provided, that such indemnity obligation
shall be applicable only to the extent (i) FIRPTA Capital Gain Dividends paid to
the Stockholder in any one calendar year exceed 2.0% of the sum of (A) the
Stockholder’s initial investment in the Class A Common Stock plus (B) the
Stockholder’s total investment in any Top Up Shares purchased (such amount, the
“Applicable Investment”), or (ii) FIRPTA Capital Gain Dividends paid to the
Stockholder in the aggregate exceed 10.0% of the Stockholder’s Applicable
Investment when combined with all prior FIRPTA Capital Gain Dividends paid by
the Company to the Stockholder in respect of the then cumulative amount of the
Stockholder’s Applicable Investment. For purposes of this Section 6.2, the
Stockholder’s investment in Purchased Shares shall mean the total amount paid by
the Stockholder with respect to the acquisition of the Purchased Shares, and the
Stockholder’s “total investment in any Top Up Shares purchased” shall be the
total amount paid by the Stockholder with respect to the acquisition of Top Up
Shares. For the avoidance of doubt, in no event shall the Company be obligated
to indemnify the Stockholder for any penalties or interest paid by the
Stockholder in connection with the Stockholder’s failure to timely pay any tax
obligation.

(b) Additional Payment. If an indemnity amount is owed by the Company to the
Stockholder under Section 6.2(a) above, then the amount paid by the Company to
the Stockholder in respect of that claim shall be determined by taking into
account the Stockholder’s percentage ownership of the Company on a fully diluted
basis on the date the dividend is paid such that the payment to the Stockholder
shall be increased to the extent necessary to ensure that the Stockholder does
not effectively participate in paying the indemnity amount. For example, if the
Stockholder then holds a 9.9% fully diluted interest in the Company on the date
the dividend is paid and an indemnity payment of $100 is due to the Stockholder
under Section 7.1(a) above, then the Company will pay the Stockholder
approximately $110.99 such that the Stockholder receives $100 net of its
percentage ownership interest in the Company.

(c) Exclusions. For the avoidance of doubt, FIRPTA Capital Gain Dividends paid
on shares of Class A Common Stock acquired by the Stockholder in open market
purchases

 

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or otherwise not purchased from the Company will not be subject to the indemnity
in Section 6.2(a) above and will not count towards the indemnity thresholds
described in Section 6.2(a) above. Likewise, FIRPTA Capital Gain Dividends,
“effectively connected income” within the meaning of Section 864(c) of the Code,
or any other income paid or allocated to the Stockholder in its capacity as an
investor in any Joint Venture will not be covered by the indemnity obligation
described in Section 6.2(a) above.

(d) Termination. Notwithstanding the foregoing, the Company’s indemnification
obligations provided in this Section 6.2 shall terminate and have no further
force and effect beginning one (1) year following the date on which the sum of
Purchased Shares and Top Up Shares (if any) then owned by Stockholder falls
below 10.0% of the outstanding common shares of the Company; provided that if
such percentage falls below 10% solely due to the issuance of additional
securities by the Company that are subject to Top Up Rights, then the
obligations provided in Section 6.2 shall not terminate to the extent the
Stockholder delivers a Quarterly Top Up Exercise Notice and timely closes on its
acquisition of Top Up Shares in an amount such that the sum of the Purchased
Shares and Top Up Shares exceeds 10%.

Section 6.3 Notice of Tax Claims. If the Stockholder receives notice of any
claim, demand, assessment (including a notice of proposed assessment) or other
assertion with respect to U.S. federal or state income or branch profits tax
that could give rise to an indemnity claim by the Stockholder under Section
6.2(a) above (a “Tax Claim”), then the Stockholder shall promptly notify the
Company of such Tax Claim. The parties shall cooperate in good faith to resolve
any such Tax Claims and/or to otherwise minimize any potential indemnity
obligations in connection therewith. The Stockholder shall keep the Company
reasonably informed of the progress of such Tax Claim. As a condition of the
Company’s liability under Section 6.2(a), the Company shall have the right to
consent in advance to any settlement or agreement proposed to be made or entered
into by the Stockholder with respect to a Tax Claim (such consent not to be
unreasonably withheld).

Section 6.4 Procedural Matters.

(a) The Stockholder shall provide to the Company notice of any claim for
indemnification under Section 6.2(a) within sixty (60) Business Days after the
first date on which it becomes entitled to make such claim. Such notice shall
include a description of the indemnification claim and a detailed calculation of
the amount claimed.

(b) The Company shall make the claimed payment to the Stockholder within thirty
(30) Business Days after receiving such notice, unless the Company reasonably
disputes its liability for, or the amount of, such payment within such time
period. The Company and the Stockholder shall attempt in good faith to resolve
any disagreement regarding such payment. If the parties are unable to resolve
such dispute prior to the date that is forty (40) Business Days following
delivery by the Stockholder to the Company of the notice of such payment, the
Company and the Stockholder shall retain the services of an accounting firm
having a national reputation that is acceptable to the parties to resolve the
dispute, with such resolution being final and binding upon the parties. The
costs of such accounting firm shall be borne by the parties in the inverse
proportion as to which they succeed on the merits of the dispute.

 

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(c) A failure by the Stockholder to give notice as provided in Section 6.4(a)
shall not relieve the Company’s indemnification obligations under Section 6.1(a)
above, except to the extent that the Company shall have been actually prejudiced
by such failure.

Section 6.5 Domestically Controlled Status.

(a) For so long as both (A) the Stockholder continues to Own any substantial
portion of its initial investment in the Class A Common Stock and the
Stockholder Group is in Material Compliance and (B) the Stockholder’s ownership
of Class A Common Stock purchased from the Company would not be excluded from
the definition of a U.S. real property interest under Section 897(c)(3), as
modified by Section 897(k), of the Code, the Company shall:

(i) use its commercially reasonable efforts to comply with the Code, Treasury
regulations, revenue procedures, notices or other guidance adopted after the
date hereof by the Internal Revenue Service or United States Treasury so as to
qualify as a “domestically controlled qualified investment entity” as defined in
Section 897(h)(4)(B) of the Code and the Treasury regulations promulgated
thereunder, including, without limitation:

(A) not issuing or selling shares of common stock to a foreign Person in a
private transaction (excluding, for the avoidance of doubt, a bona fide,
underwritten public offering), and

(B) not waiving the ownership limitation set forth in
Section 7.2.1(a)(i)(1)-(2) of the Company’s Articles of Amendment and
Restatement for any foreign Person,

which would in either case result in the Company no longer qualifying as a
“domestically controlled qualified investment entity,” applying the rules of
Section 897(h)(4)(E) of the Code and any Treasury regulations, administrative
guidance or court rulings thereunder, for purposes of making such determination,
which the parties hereto agree, absent a change in law, rule or regulation
pursuant to such Code Section, shall require the Company to investigate only
persons holding 5% or more of the Class A shares during the relevant testing
period.

Section 6.6 Additional Tax-Related Provisions.

(a) Requirement to Mitigate. At the reasonable request of the Company and its
representatives, the Stockholder shall consider such actions suggested by the
Company to mitigate (i) any actual or potential tax liabilities which may form
the basis of an indemnification claim under Section 6.2 and (ii) any actual or
potential impediment to the Company’s ability to maintain and monitor its status
as a “domestically controlled qualified investment entity” in connection with
the covenant in Section 6.5, including, in each case, structuring and holding
its investment in the Company in a tax efficient manner; provided, that the
Stockholder in its sole discretion may determine whether it can undertake any
such mitigation efforts and shall have no obligation to disclose to the Company
the details as to why any suggested mitigation efforts cannot be undertaken.

 

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(b) Exclusive Remedy. The parties hereto agree and acknowledge that the
provisions of this Article 6 (including the indemnity provided in Section 6.2
and the covenant provided in Section 6.5) constitute the sole and exclusive
agreement and understanding between the parties with respect to tax protection,
tax indemnities and the taxation of the Stockholder and each member of the
Stockholder Group (other than as specifically set forth in the Securities
Purchase Agreement) in connection with the Stockholder’s purchase, sale or
ownership of Company Securities and the transactions contemplated by this
Agreement and the Related Documents. Neither the Stockholder nor any other
member of the Stockholder Group shall have any claim against the Company or its
Affiliates for damages in connection with tax protection, tax indemnities and
the taxation of the Stockholder or any other member of the Stockholder Group,
including but not limited to any consequential, indirect, punitive or other
similar damages, nor may the Stockholder or any other member of the Stockholder
Group seek any equitable remedies such as specific performance, in connection
with tax protection, tax indemnities and the taxation of the Stockholder or any
other member of the Stockholder Group, other than as specifically set forth in
this Article 6 and in the Securities Purchase Agreement.

Section 6.7 No Tax Representations. Other than as specifically set forth herein
and in the Related Documents, the Company makes no representation or warranty to
the Stockholder about any U.S. federal, state, local or foreign tax law, nor any
representation or warranty regarding the tax consequences of being a stockholder
in the Company or in regards to any of the transactions contemplated by this
Agreement or the Related Documents.

ARTICLE 7

GENERAL PROVISIONS

Section 7.1 Termination. This Agreement shall automatically terminate at the
later of (i) such time as each of the Stockholder’s rights hereunder have
terminated pursuant to their terms and (ii) the date on which the Stockholder
Group Owns less than 9.8% of the Class A Common Stock of the Company. Upon such
termination, no party shall have any further obligations or liabilities
hereunder; provided that such termination shall not relieve any party from
liability for any breach of this Agreement prior to such termination.

Section 7.2 Notifications.

(a) The Stockholder shall promptly, but in any case within ten (10) Business
Days, notify the Company in writing if the Stockholder Group ceases to own, in
the aggregate, the Minimum Ownership Percentage.

(b) Upon request, the Stockholder shall, within ten (10) Business Days of such
request, provide the Company in writing with details of its Ownership of Equity
Securities and other Company Securities, as well as any certifications and other
information as may be reasonably requested by the Company in order to confirm
the parties’ rights pursuant to this Agreement.

Section 7.3 Material Compliance. For all purposes of this Agreement, the term
“Material Compliance” by the Stockholder Group shall mean that the Stockholder
Group, and

 

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each member thereof, is in material compliance with its respective obligations
and commitments under this Agreement; provided that (a) in the event that the
Company determines that the Stockholder Group, or any member thereof, is in
default of any of its respective obligations and commitments set forth in this
Agreement, the Company shall promptly provide written notice (which may be in
the form of facsimile or email transmission) of such default to the Stockholder,
and (b) in the event that the Stockholder Group, or any member thereof,
determines that it is in default of any of its respective obligations and
commitments set forth in this Agreement, the Stockholder shall promptly provide
written notice (which may be in the form of facsimile or email transmission) of
such default to the Company; and provided, further that, except in the case of a
default of the Stockholder’s and/or the Stockholder Group’s obligations and
commitments under Article 3 or Article 4 hereof (for which no cure period will
apply), the Stockholder Group, or the applicable member thereof, shall have
thirty (30) days following the earlier of the Stockholder’s receipt of written
notice pursuant to clause (a) or the Company’s receipt of written notice
pursuant to clause (b) to cure such default, in which case the Stockholder Group
shall be deemed, during such thirty (30)-day period, to be in “Material
Compliance” hereunder.

Section 7.4 Stockholder Group Representative.

(a) The Stockholder and any and all members of the Stockholder Group who at any
time and from time to time become party to this Agreement pursuant to
Section 3.2 hereby irrevocably appoint the Stockholder to act as a
representative for the benefit of the Stockholder Group, as the exclusive agent
and attorney-in-fact to act on behalf of the Stockholder Group, in connection
with and to facilitate the matters contemplated by this Agreement and the
Related Documents, which shall include the power and authority:

(i) to execute and deliver any notices, documents or instruments required to be
delivered hereunder by the Stockholder or the Stockholder Group;

(ii) to delegate Top Up Rights and ROFO Rights to one or more members of the
Stockholder Group pursuant to Section 2.3(b) and Section 5.1(j) hereunder.

(iii) to enforce and protect the rights and interests of the Stockholder Group
arising out of or under or in any manner relating to this Agreement and the
Related Documents, and to take any and all actions which the Stockholder
believes are necessary or appropriate under this Agreement for and on behalf of
the Stockholder Group, including asserting or pursuing or defending any claim,
action, proceeding or investigation by or against any member of the Stockholder
Group; and

(iv) to make, execute, amend, waive (in whole or in part), acknowledge and
deliver all such other agreements, documents, instruments or other writings,
and, in general, to do any and all things and to take any and all actions that
are necessary or proper or convenient in connection with or to carry out the
matters contemplated by this Agreement;

 

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provided, however, that to the extent that (i) the Stockholder transfers Class A
Common Stock of the Company to other members of the Stockholder Group and
(ii) the Stockholder no longer holds any Class A Common Stock of the Company,
the Stockholder shall be entitled to resign as representative and agent and
attorney-in-fact, and, to the extent the Stockholder resigns, the Stockholder
and all members of the Stockholder Group shall appoint any other member of the
Stockholder Group to which Class A Common Stock of the Company shall have been
transferred to act as a representative for the benefit of the Stockholder Group
and as the exclusive agent and attorney-in-fact to act on behalf of the
Stockholder Group, in connection with and to facilitate the matters contemplated
by this Agreement and the Related Documents (the Stockholder or any other member
of the Stockholder Group acting in such capacity, the “Stockholder
Representative”). The Stockholder shall provide the Company with written notice
specifying the name, address and facsimile number of any new Stockholder
Representative at least five (5) days prior to the effectiveness of the
appointment of the new Stockholder Representative, and Schedule I of this
Agreement shall be amended as appropriate to reflect the information contained
in such notice. The new Stockholder Representative, when so duly appointed,
shall, unless the context requires otherwise, be considered the “Stockholder”
for all purposes of this Agreement, including with respect to any notices or
other communications by, to or with the Company or its Affiliates in connection
with this Agreement and the Related Documents.

(b) The Company shall have the right to rely upon all actions taken or omitted
to be taken by the Stockholder pursuant to this Agreement and the Related
Documents, all of which actions or omissions shall be legally binding upon the
members of the Stockholder Group.

(c) The grant of authority provided for herein is coupled with an interest and
shall survive the bankruptcy or liquidation of the Stockholder.

Section 7.5 Subsidiary Obligations. In the case of any obligation, liability or
commitment of the Company created by this Agreement that would generally apply
to or be understood as an obligation, liability or commitment of the Operating
Partnership or other subsidiaries, the Company agrees in its capacity as general
partner of the Operating Partnership or in its applicable capacity with respect
of such other subsidiaries, to cause the Operating Partnership or such other
subsidiaries to perform, honor or pay any such obligation, liability or
commitment in accordance with the terms of this Agreement.

Section 7.6 Governing Law; Arbitration. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and shall be construed and interpreted in accordance with, the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdiction other than the State of New York. Any action or proceedings brought
by a party to recover damages in respect of any disagreement or dispute in
connection with this Agreement shall be submitted to and finally settled by
arbitration in accordance with the rules and procedures of the American
Arbitration Association, through its International Centre for Dispute Resolution
before a panel of three arbitrators selected in accordance with such rules. The
site of any such arbitration shall be Manhattan, New York, New York or such
other place as the Company and the Stockholder shall agree at the time, and the
proceedings shall be conducted in the English language. Any such arbitration
award obtained pursuant to this clause shall be final

 

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and binding on the parties. The parties undertake to carry out any award without
delay, and the parties agree that judgment upon any such award may be entered by
any court having jurisdiction over the matter or the relevant party or its
assets. Notwithstanding the foregoing, the request by either party for
injunctive relief or specific performance shall not be subject to arbitration
and may be adjudicated only by the courts of the State of New York located in
Manhattan, New York, New York, or the United States District Court of the
Southern District of New York.

Section 7.7 Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided, that a signature delivered by
facsimile, email pdf or other electronic form shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original.

Section 7.8 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

Section 7.9 Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

Section 7.10 Entire Agreement; Amendments; Waiver. This Agreement and the
Related Documents supersede all other prior oral or written agreements between
the Stockholder, the Company, their affiliates and persons or entities acting on
their behalf with respect to the matters discussed herein, and this Agreement
and the Related Documents contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor the Stockholder makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Stockholder. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought.

Section 7.11 Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

If to the Company:

Empire State Realty Trust, Inc.

111 West 33rd Street, 12th Floor

New York, New York 10120

Attention: Thomas N. Keltner Jr. and Bart S. Goldstein

Facsimile: 212-986-7679

 

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with a copy (for informational purposes only) to:

Goodwin Procter LLP

The New York Times Building

620 Eighth Avenue

New York, New York 10018

Attention: Yoel Kranz

Facsimile: 212-813-8831

If to the Stockholder or any of its transferees under Section 3.2 hereof, to its
address and facsimile number set forth on Schedule 1 hereto, with copies (for
informational purposes) to the Stockholder’s legal representatives as set forth
on Schedule 1 hereto or to such other address for any of them as the Stockholder
has specified by written notice given to the Company five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively. The Stockholder hereby appoints QIA Advisory (USA) Inc., 9 West
57th Street, 34th Floor, New York, NY 10019 as its agent for the service of
process in the United States.

Section 7.12 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective permitted successors
and assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Stockholder. The
Stockholder shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Company, in which event such
assignee shall be deemed to be the Stockholder hereunder with respect to such
assigned rights and obligations; provided, however, that nothing in this
Section 7.12 shall restrict the Stockholder’s ability to Transfer shares of
Class A Common Stock to another member of the Stockholder Group pursuant to
Section 3.2 hereof.

Section 7.13 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

Section 7.14 Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

Section 7.15 Specific Performance. In addition to the right to specific
performance granted to the Company in Section 4.1(e) above, the parties
acknowledge and agree that in the

 

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event of a breach or threatened breach of its covenants hereunder, the harm
suffered would not be compensable by monetary damages alone and, accordingly, in
addition to other available legal or equitable remedies, each non-breaching
party shall be entitled to apply for an injunction or specific performance with
respect to such breach or threatened breach, without proof of actual damages
(and without the requirement of posting a bond, undertaking or other security),
and the Stockholder and the Company agree not to plead sufficiency of damages as
a defense in such circumstances.

Section 7.16 Costs and Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby will be paid by the
party incurring such costs and expenses, whether or not any of the transactions
contemplated hereby are consummated.

[Remainder of page intentionally left blank]

 

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

 

EMPIRE STATE REALTY TRUST, INC. By:  

/s/ David A. Karp

Name:   David A. Karp Title:   Executive Vice President and Chief Financial
Officer Q REIT HOLDING LLC By:  

/s/ Ahmad Al-Khanji

Name:   Ahmad Al-Khanji Title:   Director QATAR HOLDING LLC (solely for the
purpose of Section 3.4 hereof) By:  

/s/ Abdulla Bin Mohammed Bin Saud Al-Thani

Name:   Abdulla Bin Mohammed Bin Saud Al-Thani Title:   Chairman & CEO

 

[Signature Page to Stockholders Agreement]

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SCHEDULE 1

 

(1)

 

(2)

 

(3)

 

(4)

Stockholder

 

Address, Facsimile

Number and

Jurisdiction

 

Number of

Purchased

Shares

 

Legal Representative’s

Address and Email

Q REIT Holding LLC  

Ooredoo Tower, Diplomatic Area Street West Bay, Doha P.O. Box 23224, Qatar

Facsimile: 974 4459 5990

  29,610,854  

White & Case LLP

1155 Avenue of

the Americas

New York, New York 10036

Attention: Oliver Brahmst

Email: obrahmst@whitecase.com