Document:

exv4w22

 

Exhibit 4(b)(ii)

AMENDED AND RESTATED

PURCHASE AND SALE AGREEMENT

by and between

BHR TEXAS, L.P.

INTERCONTINENTAL HOTELS GROUP RESOURCES, INC.

CROWNE PLAZA LAX, LLC

HOLIDAY PACIFIC PARTNERS LIMITED PARTNERSHIP

220 BLOOR STREET HOTEL INC.

STAYBRIDGE MARKHAM, INC.

as Seller,

and

HPT IHG-2 PROPERTIES TRUST

as Buyer

February 9, 2005

 

 

LIST OF SCHEDULES AND EXHIBITS

SCHEDULES

	 	 	 	 	 
	Schedule	 	Document	 	Reference Paragraph
	A

	 	Definitions	 	 
	 
	 	 	 	 
	6.1

	 	Closing Procedure
	 	Paragraph 6.1
	 
	 	 	 	 
	

	 	Seller’s Reps And Warranties	 	 
	 
	 	 	 	 
	8.1(D)

	 	Pending or Threatened Litigation
	 	Paragraph 8.1(D)
	 
	 	 	 	 
	8.1(E)

	 	List of Leases
	 	Paragraph 8.1(E)
	 
	 	 	 	 
	8.1(F)

	 	Conditions Materially Affecting The Property
	 	Paragraph 8.1(F)
	 
	 	 	 	 
	8.1(G)

	 	Conditions Materially Affecting Utilities

And Services
	 	Paragraph 8.1(G)
	 
	 	 	 	 
	8.1(H)

	 	Violation of Laws Relating To Zoning,
Construction, Health And Fire Safety, Etc.
	 	Paragraph 8.1(H)
	 
	 	 	 	 
	8.1(I)

	 	Unpaid (Delinquent) Taxes or Special

Assessments
	 	Paragraph 8.1(I)
	 
	 	 	 	 
	8.1(K-1)

	 	Hazardous Materials
	 	Paragraph 8.1(K-1)
	 
	 	 	 	 
	8.1(M)

	 	Material Defects In Property
	 	Paragraph 8.1(M)
	 
	 	 	 	 
	8.1(N)

	 	Unpaid Taxes
	 	Paragraph 8.1(N)
	 
	 	 	 	 
	8.1(O)

	 	Unobtained Licenses And Permits
	 	Paragraph 8.1(O)
	 
	 	 	 	 
	8.1(R)

	 	Violation Of Laws
	 	Paragraph 8.1(R)
	 
	 	 	 	 
	8.1(T)

	 	Material Defaults With Respect To Permitted

Title Exceptions
	 	Paragraph 8.1(T)
	 
	 	 	 	 
	8.1(W)

	 	Information With Respect To Leases And

Ground Leases
	 	Paragraph 8.1(W)
	 
	 	 	 	 
	8.1(Z)

	 	Toronto InterContinental Hotel Employment

Matters
	 	Paragraph 8.1(Z)

 

 

EXHIBITS

	 	 	 	 	 
	Exhibit	 	Document	 	Reference Paragraph
	A-1

	 	Houston InterContinental Hotel
	 	Schedule A
	 
	 	 	 	 
	A-2

	 	Austin, TX InterContinental Hotel
	 	Schedule A
	 
	 	 	 	 
	A-3

	 	White Plains Crowne Plaza Hotel
	 	Schedule A
	 
	 	 	 	 
	A-4

	 	Redondo Beach Crowne Plaza Hotel
	 	Schedule A
	 
	 	 	 	 
	A-5

	 	Los Angeles Crowne Plaza Hotel
	 	Schedule A
	 
	 	 	 	 
	A-6

	 	Hilton Head Crowne Plaza Hotel
	 	Schedule A
	 
	 	 	 	 
	A-7

	 	Atlanta Airport Holiday Inn Hotel
	 	Schedule A
	 
	 	 	 	 
	A-8

	 	Memphis Holiday Inn Hotel
	 	Schedule A
	 
	 	 	 	 
	A-9

	 	Anaheim Holiday Inn Hotel
	 	Schedule A
	 
	 	 	 	 
	A-10

	 	Anaheim Staybridge Suites Hotel
	 	Schedule A
	 
	 	 	 	 
	A-11

	 	Toronto Staybridge Suites Hotel
	 	Schedule A
	 
	 	 	 	 
	A-12

	 	Toronto InterContinental Hotel
	 	Schedule A
	 
	 	 	 	 
	A-13

	 	General property descriptions, title holder and
allocation of purchase price (for all Hotels)
	 	Schedule A, Paragraph
6.2(R), Paragraph 9.1
	 
	 	 	 	 
	B-1

	 	Special Warranty Deed
	 	Paragraph 6.2(A)
	 
	 	 	 	 
	B-2

	 	Assignment of Ground Lease
	 	Paragraph 6.2(A)
	 
	 	 	 	 
	C-1

	 	Bill of Sale (Hotel)
	 	Paragraph 6.2(B)
	 
	 	 	 	 
	C-2

	 	Bill of Sale (Personal Property)
	 	Paragraph 6.2(B)
	 
	 	 	 	 
	D

	 	Assignment and Assumption of Leases
	 	Paragraph 6.2(C)
	 
	 	 	 	 
	E

	 	Assignment of Contracts, Warranties and Other
Interests
	 	Paragraph 6.2(D)
	 
	 	 	 	 
	F-1

	 	Notice of Sale (to the Tenants)
	 	Paragraph 6.2(E)
	 
	 	 	 	 
	F-2

	 	Notice of Assignment (to service contract
providers)
	 	Paragraph 6.2(E)
	 
	 	 	 	 
	G-1

	 	Non-Foreign Certificate (Domestic)
	 	Paragraph 6.2(F)
	 
	 	 	 	 
	G-2

	 	Non-Foreign Certificate (Canadian)
	 	Paragraph 6.2(F)
	 
	 	 	 	 
	H

	 	Affidavit of Title
	 	Paragraph 6.2(G)
	 
	 	 	 	 
	I

	 	Closing Statement Agreement
	 	Paragraph 6.2(H)
	 
	 	 	 	 
	J

	 	Authority Certificate
	 	Paragraph 6.2(I)
	 
	 	 	 	 
	K

	 	Certificate of Reaffirmation
	 	Paragraph 6.2(J)
	 
	 	 	 	 
	L-1

	 	Tenant Estoppel Certificate
	 	Paragraphs 5.1.9, 6.2(T)

 

 

	 	 	 	 	 
	Exhibit	 	Document	 	Reference Paragraph
	L-2

	 	Landlord Consent and Estoppel Certificate
	 	Paragraph 5.1.9,

Paragraph 6.2(R)
	 
	 	 	 	 
	L-3

	 	Toronto InterContinental Hotel Consent and
Estoppel Certificate
	 	Paragraph 5.1.9,

Paragraph 6.2(R)
	 
	 	 	 	 
	M

	 	IHG Parent Guaranty
	 	Schedules A, 6.2(P),

Schedule A
	 
	 	 	 	 
	N

	 	List of Contracts
	 	Schedule A, Paragraph
8.1(E)
	 
	 	 	 	 
	O

	 	Reserved	 	 
	 
	 	 	 	 
	P

	 	Management Agreement
	 	Schedule A, Paragraph
6.2(N), Paragraph 17
	 
	 	 	 	 
	Q

	 	HPT Guaranty
	 	Paragraph 6.3(F),
Schedule A
	 
	 	 	 	 
	R

	 	Amendment to Management Agreement
	 	Paragraph 10.4.2
	 
	 	 	 	 
	S

	 	IHG Press Releases/Public Announcements
	 	Paragraph 11.2
	 
	 	 	 	 
	T-1

	 	Registrable Form of Transfer of Registered
Owner’s interest in the Staybridge Suites Hotel
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-2

	 	Conveyance of Staybridge Markham, Inc.’s
Beneficial Interest in the Toronto Staybridge
Suites Hotel
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-3

	 	Authorization of Transfer with respect to transfer
of Registered Owner’s interest in the Toronto
Staybridge Suites Hotel by applicable Canadian
Seller
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-4

	 	Registrable Form of Assignment and Assumption
Agreement with respect to the Toronto
InterContinental Hotel Ground Lease
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-5

	 	Conveyance of 220 Bloor Street Hotel Inc.’s
Beneficial Interest under the Toronto
InterContinental Hotel Ground Lease
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-6

	 	Authorization and Direction with respect to
transfer of Registered Tenant’s leasehold interest
in the Toronto InterContinental Hotel Ground Lease
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	T-7

	 	Assignment and Assumption Agreement with respect
to the Toronto InterContinental Hotel Ground
Lease
	 	Paragraph 6.2(A-2)
	 
	 	 	 	 
	U

	 	GST Indemnity
	 	Paragraph 6.3(G)
	 
	 	 	 	 
	V

	 	Ground Leases
	 	Schedule A
	 
	 	 	 	 
	W

	 	Reliance Letter
	 	Paragraph 10.1(D)

 

 

	 	 	 	 	 
	Exhibit	 	Document	 	Reference Paragraph
	X

	 	Third Amendment to Management Agreement –
Staybridge
	 	Paragraph 6.2(S)
	 
	 	 	 	 
	X-1

	 	First Amendment to Management Agreement –
Candlewood
	 	Paragraph 6.2(S)
	 
	 	 	 	 
	Y

	 	Required Work
	 	Paragraph 5.7

 

 

AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT

     THIS AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and
entered into as of February 9, 2005, by and between BHR TEXAS, L.P., a Delaware limited
partnership, INTERCONTINENTAL HOTELS GROUP RESOURCES, INC., a Delaware corporation, CROWNE PLAZA
LAX, LLC, a Georgia limited liability company, HOLIDAY PACIFIC PARTNERS LIMITED PARTNERSHIP, a
Delaware limited partnership, 220 BLOOR STREET HOTEL INC., an Ontario corporation, and STAYBRIDGE
MARKHAM, INC., an Ontario corporation (such parties are referred to individually and collectively,
as the context may require, as “Seller”), and HPT IHG-2 PROPERTIES TRUST, a Maryland real
estate investment trust (“Buyer”).

R E C I T A L S:

     WHEREAS, Seller is the owner (or ground lessee, as applicable) of the following hotels: (i)
InterContinental Hotel in Houston, Texas, (ii) InterContinental Hotel in Austin, Texas, (iii)
Crowne Plaza Hotel in White Plains, New York, (iv) Crowne Plaza Hotel in Redondo Beach, California,
(v) Crowne Plaza Hotel in Los Angeles, California, (vi) Crowne Plaza Hotel in Hilton Head, South
Carolina, (vii) Holiday Inn Hotel in Atlanta, Georgia, (viii) Holiday Inn Hotel in Memphis,
Tennessee, (ix) Holiday Inn Hotel in Anaheim, California, (x) Staybridge Suites Hotel in Anaheim,
California, (xi) Staybridge Suites Hotel in Markham, Ontario, Canada, and (xii) InterContinental
Hotel in Toronto, Ontario, Canada . The land on which the foregoing hotels are located is more
particularly described on Exhibits A-1 through A-12 (collectively, the
“Land”);

     WHEREAS, certain summary information for each aforementioned hotel (individually a
“Hotel” and collectively, the “Hotels”) is set forth on Exhibit A-13;

     WHEREAS, Buyer desires to acquire the Property from Seller for the aggregate purchase price of
Three Hundred Thirty-One Million and No/100 Dollars ($331,000,000.00), subject to the terms and
conditions hereinafter set forth (“Aggregate Purchase Price”) and Seller desires to convey
the Property to Buyer all upon the terms and conditions hereinafter set forth;

     WHEREAS, Seller and Buyer are parties to that certain Purchase and Sale Agreement dated as of
December 17, 2004, as amended as of December 22, 2004, January 14, 2005, January 26, 2005, February
2, 2005 and February 8, 2005 (as amended from time to time, the “Original Agreement”),
pursuant and subject to the terms and conditions of which Buyer has agreed to purchase the Hotels
from Seller;

     WHEREAS, Seller and Buyer desire to amend and restate the Original Agreement as herein
provided; and

     WHEREAS, except as provided herein, Buyer and Seller acknowledge that the Property is to be
conveyed in its entirety, in accordance with the terms hereof and individual Hotels may not be
excluded from this transaction by either party. Except as provided herein, any termination of this
Agreement by Buyer or Seller as provided herein shall be effective as to all the Hotels and all
Property.

 

 

     NOW, THEREFORE, for and in consideration of the promises, covenants, representations and
warranties hereinafter set forth, the sum of Ten Dollars ($10.00) and other good and valuable
consideration in hand paid by Seller to Buyer and by Buyer to Seller upon the execution of this
Agreement, the receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, the parties hereto hereby agree to amend and restate the Original Agreement in its entirety
as follows:

     1. Deadlines and Definitions.

          1.1 Deadlines. Wherever used in this Agreement, the following terms shall have the
meanings set forth below:

          “Closing Deadline” shall mean:

          (a) Subject to the terms of Paragraph 6, February 23, 2005; and

          (b) with respect to any Hotels not purchased at the time of the initial Closing and the
Austin, TX InterContinental Hotel, June 1, 2005 (as such date may be extended pursuant to the terms
hereof).

          “Due Diligence Deadline” shall mean February 9, 2005.

          1.2 Definitions. In addition, wherever used in this Agreement, the terms set forth on
Schedule A shall have the meanings set forth on Schedule A.

     2. Purchase and Sale. Seller agrees to convey, transfer and assign, and Buyer, and/or
its permitted designee, agrees to acquire, accept and assume, the Property, on the terms,
conditions and provisions set forth in this Agreement.

     3. Purchase Price. The Aggregate Purchase Price, subject to the prorations and
credits set forth herein, shall be $331,000,000.00 and shall be due and payable as follows:

          3.1 Reserved.

          3.2 Purchase Price.

          (a) Subject to the terms hereof, including, without limitation, Paragraph 6, on the applicable
Closing Date, Buyer shall pay to Seller the total allocated values of such Hotels as such value is
set forth on Exhibit A-13 that are transferred on such date to Buyer, subject to the
application of the Deposit (to the extent made hereunder) against the Purchase Price (defined
below), and such other credits, prorations and adjustments set forth herein, in cash by federal
reserve bank wire transfer to such account and bank as Seller shall designate in writing to Buyer
at or prior to Closing. The total value of all the Hotels set forth on Exhibit A-13 is
referred to as the “Purchase Price”.

          (b) Buyer shall pay Twenty-Five Million and No/100 Dollars ($25,000,000.00) (“Additional
Purchase Price”) to Seller by federal reserve bank wire transfer to such account and bank as
Seller shall designate in writing to Buyer in installments as follows: (i)

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$10,000,000.00 on December 31, 2005, (ii) $10,000,000.00 on December 31, 2006, (iii)
$5,000,000.00 on December 31, 2007.

          3.3 Purchase Price Allocation.

          (a) The Purchase Price shall be allocated among the Real Property and Personal Property for
tax and financial accounting purposes in accordance with Exhibit A-13. Buyer and Seller
shall file, and shall cause their respective affiliates to file, all tax returns (including amended
returns and claims for refunds) and information reports in a manner consistent with such
Exhibit A-13.

          (b) Each Seller hereby appoints BHR Texas, L.P., acting by or through any one or more of its
duly authorized officers, as their representative (the “Seller Representative”) to act for
them with respect to all matters relating to this Agreement, including without limitation (a)
waiver of one or more of the conditions set forth in Paragraph 10 and (b) the amendment or
modification of this Agreement or any other Closing Document. The appointment of the Seller
Representative is coupled with an interest, is irrevocable and shall not be revoked by, and shall
survive, the liquidation, dissolution or bankruptcy of any Seller. The Purchase Price and such
Additional Purchase Price (after giving effect to all adjustments and allocations as provided for
herein) shall be paid to the Seller Representative or as it may direct on behalf of and for the
benefit of all Sellers. The Seller Representative in turn will remit to each other Seller
hereunder so much thereof as each such other Seller may be entitled. Buyer shall have no
responsibility with respect to the allocation of distribution of the Purchase Price or such
Additional Purchase Price among or to any Seller except for the payment thereof to the Seller
Representative.

     4. Buyer’s Due Diligence and Inspection Rights; Termination Right.

          4.1 Review of Property and Property Documents. Until Closing, and subject to the
terms of Paragraph 4.2, Seller shall provide Buyer and Buyer’s Representatives with access to the
Property and the Property Documents, wherever located, upon reasonable prior notice at reasonable
times during business hours, with the right and license to conduct Due Diligence with respect to
the Property. Subject to Paragraphs 7.3 and 7.4, Buyer covenants and agrees that it will inspect
the Hotels at its sole cost and expense and will not allow any liens to attach against the Hotels
as a result of its Due Diligence. If Buyer or Seller Terminates this Agreement, then upon written
request from Seller, Buyer shall endeavor to deliver promptly to Seller (at no cost to Buyer)
copies of all Buyer’s Diligence Reports in its possession (except for such materials which Buyer
deems confidential or proprietary), but with no liability for the accuracy thereof and no
representation that Seller or any other party may rely thereon. Seller represents that it has not
altered or intentionally withheld any part of the Property Documents delivered to Buyer.

          4.2 Guidelines for Inspection Rights. Buyer’s rights to conduct Due Diligence shall
be subject to the following further requirements: (a) Due Diligence must not unreasonably interfere
with the operation or management of the Hotels or unreasonably disturb the rights of guests or
Tenants; (b) Buyer must provide Seller with at least twenty-four (24) hours prior written notice of
its intent to perform Due Diligence on the Property and Seller shall have the right to have a
representative of Seller present during any such entry upon the Property by

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Buyer or Buyer’s Representatives; (c) Buyer shall not contact any Tenant, Hotel contractor,
Hotel guest, or Hotel employee without Seller’s prior written consent, which consent shall not be
unreasonably withheld or delayed; (d) Seller or its designated representative shall have the right
to pre-approve (which approval shall not be unreasonably withheld or delayed), and be present
during, any physical testing of the Property; (e) Buyer shall immediately return the Property to
the condition existing prior to any tests and inspections; (f) Due Diligence activities may not
unreasonably affect the appearance of the Hotels in any way; and (g) Buyer may not conduct any
invasive sampling, boring, testing, or analysis of soils, surface water or groundwater at the
Property without first having obtained prior written approval of Seller, which approval shall not
be unreasonably withheld or delayed. Prior to such time as Buyer or any of Buyer’s Representatives
enter the Property, Buyer shall (i) obtain policies of general liability insurance which insure
Buyer and Buyer’s Representatives with liability insurance limits of not less than $1,000,000
combined single limit for personal injury and property damage and name Seller as an additional
insured and which are with such insurance companies, provide such additional coverages with
appropriate limits as Seller shall reasonably require, and (ii) provide Seller with certificates of
insurance evidencing that Buyer has obtained the aforementioned policies of insurance.
Notwithstanding any provision in this Agreement to the contrary, except in connection with the
preparation of a so-called “Phase I” environmental report with respect to the Property or the
issuance of a standard “zoning letter” with respect to the Property, Buyer shall not contact any
governmental official or representative regarding hazardous materials on, or the environmental
condition of, the Property, or the status of compliance of the Property with zoning, building code
or similar Laws, without Seller’s prior written consent thereto, which consent shall not be
unreasonably withheld or delayed.

          4.3 Title and Survey Examination. Seller, on or prior to the Effective Date,
delivered to Buyer a copy of Seller’s most recent Survey of the Property and a Title Commitment.

          A. Title and Survey Objections. Buyer shall have until the Due Diligence Deadline to
notify Seller in writing of any Title Objections. If Buyer fails to notify Seller of any Title
Objections on or before such date, then, notwithstanding any other provisions set forth herein,
such failure to notify Seller shall constitute a waiver of such right to object to such matters
existing as of the Effective Date and disclosed in the Title Commitment or Survey. Seller shall
notify Buyer within three (3) Business Days of its receipt of such notice if Seller has elected to
Remove any such Title Objections. If Seller fails to respond within such timeframe, Seller shall
be deemed to have declined to remove such Title Objections (other than Required Removal Items). If
Seller does not covenant in writing to Buyer that Seller will Remove the Title Objections prior to
Closing (other than Required Removal Items), Buyer shall have until the applicable Closing Date to
elect in writing, either to (a) Terminate this Agreement, and thereafter the parties shall have no
further rights or obligations hereunder, except for those which expressly survive any such
termination, or (b) waive its Title Objections (other than Required Removal Items) and proceed with
the transaction pursuant to the remaining terms and conditions of this Agreement. If Buyer fails
to give Seller notice of its election by such time, it shall be deemed to have elected to Terminate
this Agreement. Any such Title Objection so waived by Buyer shall be deemed to constitute a
Permitted Title Exception and the Closing shall occur as herein provided without any reduction of
or credit against the Aggregate Purchase Price.

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          B. Cure of Title Matters. At Closing, if this Agreement is not Terminated as
permitted herein, Seller shall Remove or cause to be Removed any Title Objections to the extent
(and only to the extent) that the same constitute Required Removal Items.

          C. Buyer’s Right To Terminate. If Seller fails to Remove any Title Objection (other
than Required Removal Items) prior to Closing that it has agreed to remove pursuant to subsection
(A) above, then Buyer shall be able to Terminate this Agreement by written notice to Seller on or
prior to the Closing Date and thereafter the parties shall have no further rights or obligations
hereunder except for those which expressly survive any such termination.

          D. Pre-Closing “Gap” Defects. Whether or not Buyer shall have furnished to Seller any
notice of Title Objections before the Due Diligence Deadline, Buyer may at or prior to Closing
notify Seller in writing of any defects in the Title Commitment or Survey appearing in the Title
Commitment or Survey for the first time at any time after the Effective Date. With respect to any
Title Objections set forth in such notice, Buyer shall have the same rights as those which apply to
any notice of defects in title resulting from a notice of title defects by Buyer on or before the
Due Diligence Deadline and Seller shall have the same rights and obligations to cure the same at or
prior to Closing. If necessary, the date for Closing shall be extended by written notice from
Seller to Buyer (by not more than fifteen (15) days) to allow Seller to cure such pre-closing “gap”
defects.

          4.4 As-Is, Where-Is, With All Faults Sale. (a) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT OR ANY DOCUMENTS TO BE EXECUTED AND DELIVERED BY SELLER AT THE CLOSING, SELLER
DISCLAIMS THE MAKING OF ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
PROPERTY OR MATTERS AFFECTING THE PROPERTY, WHETHER MADE BY SELLER, ON ITS BEHALF OR OTHERWISE
INCLUDING, WITHOUT LIMITATION, THE PHYSICAL CONDITION OF THE PROPERTY, TITLE TO OR THE BOUNDARIES
OF THE REAL PROPERTY, PEST CONTROL MATTERS, SOIL CONDITIONS, THE PRESENCE, EXISTENCE OR ABSENCE OF
HAZARDOUS WASTES, TOXIC SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS, COMPLIANCE WITH BUILDING,
HEALTH, SAFETY, LAND USE AND ZONING LAWS, REGULATIONS AND ORDERS, STRUCTURAL AND OTHER ENGINEERING
CHARACTERISTICS, TRAFFIC PATTERNS, MARKET DATA, ECONOMIC CONDITIONS OR PROJECTIONS, THE FITNESS OF
THE PROPERTY FOR USE AS A HOTEL, THE FINANCIAL PERFORMANCE OR POTENTIAL OF THE PROPERTY AND ANY
OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE MARKET AND PHYSICAL ENVIRONMENTS IN WHICH THEY
ARE LOCATED. BUYER ACKNOWLEDGES (I) THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION
OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OR THAT OF THIRD PARTIES WITH RESPECT TO THE
PHYSICAL, ENVIRONMENTAL, FINANCIAL, ECONOMIC AND LEGAL CONDITION OF THE PROPERTY; AND (II) THAT
BUYER IS NOT RELYING UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES OF ANY KIND, OTHER THAN
THOSE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR IN ANY DOCUMENT TO BE EXECUTED AND DELIVERED TO
BUYER AT THE CLOSING, MADE BY SELLER. BUYER FURTHER ACKNOWLEDGES THAT IT HAS NOT RECEIVED FROM OR
ON BEHALF OF SELLER ANY ACCOUNTING, TAX,

- 5 -

 

LEGAL, ARCHITECTURAL, ENGINEERING, PROPERTY MANAGEMENT OR OTHER ADVICE WITH RESPECT TO THIS
TRANSACTION AND IS RELYING SOLELY UPON THE ADVICE OF THIRD PARTY ACCOUNTING, TAX, LEGAL,
ARCHITECTURAL, ENGINEERING, PROPERTY MANAGEMENT AND OTHER ADVISORS. SUBJECT TO THE PROVISIONS OF
THIS AGREEMENT, BUYER SHALL PURCHASE THE PROPERTY IN THEIR “AS IS” CONDITION ON THE CLOSING DATE.

          (b) BUYER ACKNOWLEDGES THAT, TO THE EXTENT REQUIRED TO BE OPERATIVE, THE DISCLAIMERS OF
WARRANTIES CONTAINED IN THIS PARAGRAPH 4.4 ARE “CONSPICUOUS” DISCLAIMERS FOR PURPOSES OF ANY
APPLICABLE LAW, RULE, REGULATION OR ORDER.

          4.5 Termination Right. If Buyer, in its sole and absolute discretion, determines not
to proceed with the Transaction or is not satisfied with any matters relating to the Property,
Buyer may Terminate this Agreement by written notice to Seller at any time on or prior to the Due
Diligence Deadline. If Buyer does not timely exercise such right to Terminate this Agreement, then
Buyer shall be deemed to have accepted the condition of the Property (subject to Seller’s
compliance with the representations, warranties and covenants of this Agreement, and the conditions
set forth in Paragraph 10) and shall thereafter have no right to Terminate this Agreement on
account of such Due Diligence termination right under this Paragraph 4.5. If after the Due
Diligence Deadline Buyer conducts further Due Diligence, Buyer acknowledges and agrees that Buyer
shall have no further right to terminate this Agreement with respect to such further Due Diligence
or otherwise in accordance with this Paragraph 4.5 after the Due Diligence Deadline.

     5. Covenants.

          5.1 Seller’s Covenants: Effective Date to Closing Date. Seller agrees that between
the Effective Date and the Closing Date (or for such other period as otherwise indicated herein):

               5.1.1 No Alteration of Title. Seller shall not transfer or alter or encumber in any
way Seller’s title to the Real Property as it exists as of the Effective Date without written
notice to, and the prior written consent of, Buyer. If Buyer fails to object in writing to any
such proposed instrument within five (5) Business Days after receipt of the aforementioned notice,
Buyer shall be deemed to have approved the proposed instrument. Buyer’s consent shall not be
unreasonably withheld or delayed with respect to any such instrument that is proposed by Seller.

               5.1.2 New Leases and Modifications to Existing Leases. If Seller desires to (i) enter
into any new Lease or Ground Lease, (ii) cancel, modify, amend, extend or renew any existing Lease,
(iii) consent to any assignment or sublease in connection with any Lease or Ground Lease, (iv)
accept any prepayment of rent thereunder (more than thirty (30) days in advance), or (v) take any
other material action with respect to any Lease or Ground Lease, Seller shall deliver to Buyer
written notice of such action, which notice shall contain information regarding the proposed action
that Seller believes is reasonably necessary to enable Buyer to make informed decisions with
respect to the advisability of the proposed action. Seller

- 6 -

 

shall not be entitled to take such action without Buyer’s prior written consent, which consent
will not be unreasonably withheld, conditioned or delayed (and if no response by Buyer is made
within five (5) Business Days after Buyer’s receipt of such request and all documents related
thereto, such consent shall be deemed to have been granted). Seller shall promptly provide Buyer
with true, correct and complete copies of any Lease, modification, or amendment entered into by
Seller. Notwithstanding any provision of this Agreement to the contrary, without any requirement
for notice or consent from Buyer, Seller may, but shall not be obligated to, take any action with
respect to any Lease that the Manager may, without the consent of Owner, take under the Management
Agreement as if it had been in effect in its current form as of the Effective Date.

               5.1.3 Contracts. If Seller desires to (i) enter into any new Contracts, (ii) cancel,
modify, amend, extend or renew any existing Contracts, (iii) waive any default under or accept any
surrender of any Contracts, or (iv) take any other material action with respect to any Contract,
Seller shall deliver to Buyer written notice of such action, which notice shall contain information
regarding the proposed action that Seller believes is reasonably necessary to enable Buyer to make
informed decisions with respect to the advisability of the proposed action. Except for Contracts
that can be terminated, without penalty, upon thirty (30) days (or less) written notice from the
owner of the Property, Seller shall not be entitled to take such action without Buyer’s prior
written consent, which consent will not be unreasonably withheld, conditioned or delayed (and if no
response by Buyer is made within five (5) Business Days after Buyer’s receipt of such request and
all documents related thereto, such consent shall be deemed to have been granted); upon delivery of
such written consent, such Contract or modification thereof shall thereupon be included within the
definition of “Contracts” set forth herein. Seller shall promptly provide Buyer with true, correct
and complete copies of any Contract, modification, or amendment entered into by Seller.
Notwithstanding any provision of this Agreement to the contrary, without any requirement for notice
or consent from Buyer, Seller may, but shall not be obligated to, take any action with respect to
any Contracts that the Manager may, without the consent of Owner, take under the Management
Agreement as if it had been in effect in its current form as of the Effective Date.

               5.1.4 Reserved.

               5.1.5 Tax Appeals. Seller, or Manager on its behalf, shall have the right to continue
and to control the progress of and to make all decisions with respect to any contest of the real
estate taxes and personal property taxes for the Property due and payable during the Closing Tax
Year and all prior Tax Years. Buyer shall have the right to control the progress of and to make
all decisions with respect to any tax contest of the real estate taxes and personal property taxes
for the Property due and payable during all Tax Years subsequent to the Closing Tax Year. All real
estate and personal property tax refunds and credits received after Closing with respect to the
Property for the Closing Tax Year shall be applied in accordance with the terms and provisions of
the Management Agreement. Buyer and Seller agree to cooperate with each other and to execute any
and all documents reasonably requested in furtherance of the foregoing. The provisions of this
Paragraph 5.1.5 shall survive the Closing. Notwithstanding the foregoing, Seller shall not conduct
any such contest unless the requirements applicable to the Manager’s ability to make a similar
contest under the Management Agreement are satisfied as if it had been in effect in its current
form as of the Effective Date.

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               5.1.6 Personal Property. Seller shall not remove any of the Personal Property,
Leases, Contracts or Other Interests from the Real Property nor use any of the Personal Property
prior to the Closing Date except such use thereof as is normal and customary in the operation and
maintenance of the Property.

               5.1.7 Intellectual Property. In the absence of an express assignment of any Leases,
licenses, permits, Contracts, or Other Interests, no Leases, licenses, permits, Contracts, or Other
Interests shall be transferred or assigned to Buyer at Closing. Buyer also acknowledges that
Seller and the Seller Parties are subject to the Management Agreement, retaining all right, title
and interest in and to all their respective intellectual property rights that may be used within or
comprise any part of the Property except as may be specifically licensed to Buyer pursuant to a
separate license agreement with Seller or in accordance with the terms of the Management Agreement.

               5.1.8 Liquor License. The liquor licenses for the Hotels are personal to Seller and
will not be assigned to Buyer except to the extent required by law for the Hotels to continue to
have such licenses. Manager will be responsible for applying for and obtaining any liquor licenses
for the Property from the applicable local and/or provincial and state authorities and otherwise be
liable for and conduct in accordance with applicable law all liquor operations at the Property on
and after the Closing Date in accordance with the terms and provisions of the Management Agreement.

               5.1.9 Tenant Estoppels; Ground Lease Estoppels. Seller shall use reasonable efforts
to obtain from each tenant under the Leases an estoppel certificate duly executed by and delivered
by such tenant in the form of Exhibit L-1 with respect to each of the Leases (the
“Estoppel Certificate”) and as otherwise required pursuant to the terms of such Leases.
Seller shall use reasonable efforts to obtain, and subject to the provisions of Paragraph 6.2(R),
(a) from each ground lessor under the Ground Leases (other than with respect to the Ground Lease
relating to the Toronto InterContinental Hotel) an estoppel certificate duly executed and delivered
by such lessor in the form of Exhibit L-2, and as otherwise required pursuant to the terms
of such Ground Leases; and (b) with respect to the Ground Lease relating to the Toronto
InterContinental Hotel from the ground lessor thereunder a consent and estoppel certificate duly
executed and delivered by such ground lessor in the form of Exhibit L-3, or such other form
satisfactory to Buyer acting reasonably (collectively, the “Ground Lease Estoppel
Certificate”).

               5.1.10 Change in Brands. Seller shall not change, and it shall cause its affiliates
not to change, the Brand (as defined in the Management Agreement) now in effect with respect to any
Hotel.

               5.1.11 Reserved.

               5.1.12 Seller’s Actions. Seller shall use reasonable efforts prior to the applicable
Closing Date to satisfy all of the closing conditions set forth in Paragraphs 10.1 (H) and (I) and
10.4.3 and otherwise cooperate with Buyer to complete any documentation required to effectuate the
matters contained therein.

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          5.2 Seller’s Covenants After the Closing Date. On and after the Closing Date, Seller
agrees that it shall, or cause its affiliates to, do the following:

               5.2.1 Capital Expenditures. On or before the fifth anniversary of the Initial Closing
Date, Seller shall undertake (and/or cause PR Seller to undertake), Capital Replacements (as such
term is used in either the Management Agreement or the PR Lease, as the case may be) equal to or in
excess of $25,000,000 in the aggregate, net of any applicable goods and services tax or any similar
value added tax that is refundable (but not net of any nonrefundable sales taxes), at one or more
of the Hotels (or at the PR Hotel) pursuant to a “scope of work” report prepared by Seller and
delivered to Buyer prior to such expenditures, such work to be determined in Seller’s discretion
and otherwise subject to the Management Agreement and the PR Lease other than the requirement that
such work be set forth in any Capital Replacements Budget (delivered pursuant to the Management
Agreement) or the FF&E Estimate (delivered pursuant to the PR Lease). Any default of Buyer in
funding its obligations under Paragraph 3.2(b) shall suspend Seller’s obligations under this
Paragraph 5.2.1 for so long as such default continues.

               5.2.2 Furniture, Fixture and Equipment Percentage. Seller shall, and shall cause its
affiliates to, comply with Section 5.2(g) of the Management Agreement.

               5.2.3 Reserved.

          5.3 Bulk Sales. Buyer waives compliance by the Canadian Sellers with the provisions
of the Bulk Sales Act (Ontario). The applicable Canadian Sellers shall indemnify and hold Buyer
and its shareholders, directors, officers, employees, agents and representatives harmless of and
from, and will pay for any loss, liability, damage or expense (including legal fees and expenses)
suffered by, imposed upon or asserted against it or any of them as a result of, in respect of,
connected with, or arising out of, under, or pursuant to the failure of the parties to comply with
the Bulk Sales Act (Ontario) in respect of the transaction of purchase and sale contemplated under
this Agreement relating to the Toronto InterContinental Hotel or Toronto Staybridge Suites Hotel,
as applicable.

          5.4 Approvals and Notifications. Each of Buyer and Seller, as applicable, will, as
promptly as practicable after the execution of this Agreement (i) make, or cause to be made, all
such filings and submissions to any Governmental Authority as may be required or desirable (in
Buyer or Seller’s respective discretion) to consummate the purchase and sale of the Property in
accordance with the terms of this Agreement, and (ii) use its commercially reasonable efforts to
take, or cause to be taken, all other actions which are necessary or advisable (in Buyer or
Seller’s respective discretion) in order for Buyer or Seller to fulfill its obligations under this
Agreement. Each of Buyer and Seller will coordinate and cooperate with the other in exchanging
such information and supplying such assistance as may be reasonably requested in connection with
the foregoing including, without limitation, providing copies of notices and information supplied
to or filed with any Governmental Authority (except for notices and information which Buyer or
Seller, as the case may be, acting reasonably, considers highly confidential and sensitive which
may be filed on a confidential basis, but which may be shared with Buyer’s or Seller’s, as the case
may be, outside legal counsel or as otherwise provided in

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Paragraph 11.2 or which constitute Confidential Materials), and all notices and correspondence
received from any Governmental Authority.

          5.5 Reserved.

          5.6 Reserved.

          5.7 Required Work. Seller shall within twenty four (24) months of the initial Closing
Date:

          (a) (i) address the property conditions described as an “immediate need” in the property
condition reports prepared by ATC Associates, Inc. and attached hereto as Exhibit Y, and
(ii) mitigate the effects of moisture related issues within the “mold sensitive” areas identified
in the reports by ATC Associates, Inc., for the Hilton Head Crowne Plaza Hotel, Austin, TX
InterContinental Hotel, the Houston InterContinental Hotel or the PR Hotel;

          (b) Seller agrees to complete, or cause to be completed, all projects actually in process and
identified in the property condition reports prepared by ATC Associates, Inc. for the Hilton Head
Crowne Plaza Hotel, White Plains Crowne Plaza Hotel or the PR Hotel; and

Seller shall be entitled to use the $25,000,000.00 allocated for capital expenditures in
Paragraph 5.2.1 to satisfy its obligations set forth in this Paragraph.

     6. Closing. Subject to the satisfaction (or waiver) of the conditions precedent set
forth in Paragraphs 10.1 and 10.2 with respect to all Hotels, with respect to the Austin, TX
InterContinental Hotel, Paragraph 10.4, and with respect to the Atlanta, Airport Holiday Inn Hotel,
Paragraph 10.5, the time and place of initial Closing shall be held at 9:00 a.m. eastern standard
time at or through the offices of Buyer’s attorneys on the Closing Date specified by Buyer to
Seller on not less than five (5) Business Days’ prior written notice or such other time and
location mutually agreed to by the parties. Buyer shall have the right to extend the Closing
Deadline by exercising the Extension Option (with respect to all Hotels, other than the Austin, TX
InterContinental Hotel). The term, “Extension Option” as used herein shall mean the option of
Buyer to extend the Closing Deadline through March 31, 2005 upon (i) giving the Seller written
notice of the exercise of such option not less than five (5) Business Days prior to the applicable
Closing Deadline, and (ii) posting the Deposit in accordance with the terms of Paragraph 18.

          6.1 Closing Mechanics. Closing shall be conducted through escrow with the Closing
Agent using an escrow procedure mutually acceptable to both Seller and Buyer, or, if either Buyer
or Seller determines in good faith that such an escrow Closing is not practical, through a
so-called “New York style” closing (in which authorized representatives of Seller and Buyer attend
the Closing). Seller and Buyer agree to execute and deliver into escrow on the day prior to the
Closing Date (or, if applicable, execute at a “pre-closing” at 10:00 a.m. eastern standard time on
the last Business Day prior to the Closing Date but not deliver until the “New York style” closing)
all Closing Documents with funding and release to occur on the Closing Date. Upon Closing, Buyer
shall deliver to Seller the total allocated value of the Hotels being purchased on such date (as
such value is set forth on Exhibit A-13 hereof) and the other items

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required of Buyer as elsewhere set forth herein, and Seller shall deliver to Buyer possession
of the Property, subject only to the Permitted Title Exceptions, and the other items required of
Seller as elsewhere set forth herein. Notwithstanding anything contained in this Agreement to the
contrary, including Paragraph 10, Buyer and Seller agree that the initial Closing hereunder and the
consummation of the transaction under the PR Stock Agreement shall occur in accordance with the
procedure set forth in a separate letter agreement duly executed and delivered by each such party
in connection with the initial Closing.

          6.2 Seller’s Deliveries. At Closing, Seller shall deliver or cause to be delivered to
Buyer, or, at Buyer’s direction, the Manager, the following (each of which shall be in form and
substance reasonably satisfactory to Buyer):

          A. Deed or Assignment of Ground Lease. A Special Warranty Deed (or Canadian
equivalent) in the form of Exhibit B-1 for the Real Property owned in fee by Seller (or in
such form as may be customary for use in such jurisdiction and otherwise acceptable to Buyer) and
an Assignment of Ground Lease in the form of Exhibit B-2 for the Real Property leased by
Seller, except the Toronto InterContinental Hotel and the Toronto Staybridge Suites Hotel, for
which the transfer, Assignment of Ground Lease and the related documentation with respect to the
transfer of the legal and beneficial interests in such Real Property shall be in the forms
prescribed in Paragraph 6.2(A-2) herein (or in such form as may be customary for use in such
jurisdiction and otherwise acceptable to Buyer). Buyer shall not receive a Ground Lease Assignment
with respect to the Ground Lease (the “LAX Ground Lease”) relating to the Los Angeles
Crowne Plaza Hotel from Koar International Airport Center Investment Partnership.

          A-2. Transfers and Assignments Regarding Canadian Hotels. With respect to the Toronto
Staybridge Suites Hotel (i) a registrable form of transfer of InterContinental Hotels Group
(Canada) Inc.’s registered legal interest in the subject Real Property to a New Brunswick nominee
corporation to be designated by Buyer (the “Nominee”), in the form of Exhibit T-1;
(ii) a conveyance of Staybridge Markham, Inc.’s beneficial interest in the subject Real Property to
Buyer in the form of Exhibit T-2; and (iii) an Authorization and Direction from Staybridge
Markham, Inc. to InterContinental Hotels Group (Canada) Inc. authorizing the transfer of its legal
interest in the subject Real Property to Buyer in the form of Exhibit T-3. With respect to
the leasehold interest under the Ground Lease of the underlying Real Property comprising the
Toronto InterContinental Hotel (i) a registrable form of Assignment and Assumption Agreement by and
between Inter-Continental Holdings (Canada) Inc. and the Nominee in the form of Exhibit
T-4; (ii) a conveyance of 220 Bloor Street Hotel Inc.’s beneficial interest under the
aforementioned Ground Lease to Buyer in the form of Exhibit T-5; (iii) an Authorization and
Direction from 220 Bloor Street Hotel Inc. to Inter-Continental Holdings (Canada) Inc. authorizing
the assignment of its registrable interest under the Lease to the Nominee in the form of
Exhibit T-6; and (iv) an Assignment and Assumption Agreement among City of Toronto, Buyer,
220 Bloor Street Hotel Inc. and Inter-Continental Holdings (Canada) Inc. as contemplated in the
aforementioned ground lease, in the form of Exhibit T-7 (and Buyer agrees to execute and
deliver all of such documents on Closing each of which shall be substantially in the form attached
hereto or as otherwise satisfactory to Buyer acting reasonably). Each of the foregoing agreements
shall be duly executed and delivered by Seller.

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          B. Bill of Sale. A Bill of Sale for each Hotel and certain Personal Property related
thereto substantially in the forms of Exhibit C-1 and Exhibit C-2, duly executed
and delivered by Seller.

          C. Statutory Declarations. (i) A Statutory Declaration concerning certain PPSA
registrations affecting the Toronto InterContinental Hotel and the Toronto Staybridge Suites Hotel,
duly executed and delivered by an authorized officer of InterContinental Hotels Group (Canada),
Inc.; and (b) a certificate of Inter-Continental Holdings (Canada) Inc. describing certain
transactions occurring in 2004 resulting in 220 Bloor Street Hotel Inc. and Inter-Continental
Holdings (Canada) Inc. holding beneficial and registered legal title to the leasehold interest
under the Ground Lease of the underlying Real Property comprising the Toronto InterContinental
Hotel, duly executed and delivered by InterContinental Holdings (Canada) Inc., each such Statutory
Declaration to be in form and substance satisfactory to Buyer.

          D. Reserved.

          E. Notices of Assignment and Assumption. If applicable, a written notice to the
tenant under a Lease stating that such Lease has been transferred to Buyer, such notice to be in
the form of reasonably agreed to by the parties, duly executed and delivered by Seller (the
“Tenant Notice”).

          F. Withholding and Tax Certificates. For each Seller, regarding all Hotels in the
United States owned by it, a certificate duly executed and delivered by the applicable Seller, in
the form of Exhibit G-1 with respect to Section 1445 of the Code stating whether or not
Seller is a foreign person as defined in said Section 1445 and applicable regulations thereunder,
and regarding all Hotels owned by each Canadian Seller in Canada, a statutory declaration duly
executed and delivered by the applicable Seller in the form of Exhibit G-2 with respect to
Section 116 of the Income Tax Act (Canada) stating whether or not the Canadian Seller is a
non-resident of Canada within the meaning of said Section 116.

          G. Affidavit of Title/Gap Indemnity. An Affidavit of Title for each Hotel duly
executed and delivered by Seller with respect to liens and title matters in substantially the form
of Exhibit H, or in such other form as may be required by the Title Company.

          H. Closing Statement. A Closing Statement Agreement in the form of Exhibit I
attached hereto and incorporated herein by this reference. Seller and Buyer shall authorize and
instruct the Closing Agent to file, as the “reporting person,” Internal Revenue Service Form 1099-B
(“Proceeds from Real Estate, Broker, and Barter Exchange Transactions”), if and as required by
Section 6045(d) of the Code.

          I. Evidence of Authority. For each entity holding title to the Hotels and the
Manager, evidence that Seller and the Manager have the requisite power and authority to execute and
deliver, and perform under, this Agreement and all Closing Documents, consisting of a certificate
of an Assistant Secretary of Seller and/or Manager, as the case may be, and duly executed and
delivered by such Assistant Secretary, with respect to the authority to act on behalf of Seller or
Manager of the individual executing on behalf of Seller or Manager all documents contemplated by
this Agreement, in the form of Exhibit J.

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          J. Reaffirmation. A reaffirmation of the representations, warranties and covenants
set forth herein in the form of Exhibit K duly executed and delivered by Seller.

          K. Transfer Tax Declaration. If applicable, a duly completed real estate transfer tax
declaration or return.

          L. Delivery of Keys and Property Documents. The Property Documents and all keys to
the Property or any portion thereof.

          M. Opinions. One or more written opinions from counsel to Seller in customary form
and substance reasonably satisfactory to Buyer, regarding the authorization, execution, delivery
and enforceability of the (i) Management Agreement, (ii) IHG Parent Guaranty, and (iii) such other
opinions as may be reasonably required by Buyer.

          N. Management Agreement. The Management Agreement in the form attached hereto as
Exhibit P, duly executed and delivered by Manager.

          O. Retail Sales Tax Clearance Certificates. Certificates of payment issued by the
Minister of Revenue of Ontario under Section 6 of the Retail Sales Tax Act (Ontario) to the effect
that all requisite taxes under such Act and similar legislation relating to the Toronto
InterContinental Hotel and the Toronto Staybridge Suites Hotel (other than relating to the
conveyance and transfer of the Hotels to the Buyer) have been paid by the applicable Canadian
Seller.

          P. IHG Parent Guaranty. The IHG Parent Guaranty in the form attached hereto as
Exhibit M, duly executed and delivered by IHG.

          Q. Other Instruments. Such other instruments or documents as may be reasonably
requested by Buyer or the Title Company, or reasonably necessary, to effect or carry out the
purposes of this Agreement, subject to Seller’s prior approval thereof, which approval shall not be
unreasonably withheld or delayed.

          R. Ground Lease Consent and Estoppel. A Ground Lease Estoppel Certificate and Consent
to Assignment of Ground Lease, duly executed by the respective lessor in the form of Exhibit
L-2 with respect to each of the Ground Leases and in the form of Exhibit L-3 with
respect to the Ground Lease relating to the Toronto InterContinental Hotel or in such other form as
Buyer and Seller may agree; and provided however, to the extent that Seller is unable or fails to
deliver a Ground Lease Estoppel Certificate relating to a Property (such Property being referred to
as “GL Property”), Seller shall have the right to delay the transfer of such GL Property to
Buyer through June 1, 2005 in order to satisfy such condition. In the event such Closing with
respect to the GL Property occurs on a date other than the Closing Date, the parties shall agree to
amend the Management Agreement to subject such GL Property to the terms thereof in a manner
consistent with the proposed modifications thereto regarding the addition of the Austin, TX
InterContinental Hotel Property on a date other than the Initial Closing Date. After June 1, 2005,
to the extent that Seller is unable or fails to satisfy the foregoing condition, Buyer, as its sole
remedy, shall have the right to Terminate this Agreement as to such GL

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Property, and to the extent applicable, the Purchase Price hereunder shall be adjusted in
accordance with the allocated value for such Hotel as set forth on Exhibit A-13.

          S. Amendments to Other Management Agreements. The Third Amendment to Management
Agreement dated as of the Initial Closing Date between InterContinental Hotel Group Resources, Inc.
(“Staybridge Manager”) and HPT TRS IHG-1, Inc. (“TRS-1”) in the form attached
hereto as Exhibit X, duly executed and delivered by Staybridge Manager and which amends
that certain Management Agreement, dated as of July 1, 2003 (as amended from time to time), between
Staybridge Manager and TRS-1; and the First Amendment to Management Agreement dated as of the
Initial Closing Date between Staybridge Manager and TRS-1 in the form attached hereto as
Exhibit X-1, duly executed and delivered by Staybridge Manager and which amends that
certain Management Agreement, dated as of October 27, 2003, between Candlewood Manager and TRS-1
(such amendments being collectively referred to as “Other Management Agreement
Amendments”).

          T. Tenant Estoppel Certificates. Tenant Estoppel Certificates from each of the
tenants under the Leases to the extent received by Seller.

          U. Reserved.

          V. Post-Closing Agreement. A Post-Closing Agreement dated the applicable Closing Date
in the form reasonably agreed to by the parties hereto, duly executed by Seller.

          6.3 Buyer’s Deliveries. At the Closing, Buyer shall deliver or cause to be delivered
to Seller the following:

          A. Net Purchase Price. The net Purchase Price due at Closing under this Agreement for
the Hotel or Hotels being transferred on such applicable date.

          B. Opinions. One or more written opinions from counsel to Buyer in customary form and
substance reasonably satisfactory to Seller, regarding the authorization, execution, delivery and
enforceability of the (i) Management Agreement, (ii) HPT Guaranty, and (iii) such other opinions as
may be reasonably required by Seller.

          C. Closing Document Counterparts. Executed counterparts of any of the Closing
Documents described in Paragraph 6.2 which are to be signed by Buyer.

          D. Management Agreement; Amendments to Other Management Agreements. Executed
counterparts of the (a) Management Agreement described in Paragraph 6.2(N) signed by Buyer, and (b)
the Other Management Agreement Amendments described in Paragraph 6.2(S) above, in each case duly
executed and delivered by TRS-1.

          E. Other Instruments. Such other instruments or documents as may be reasonably
requested by Seller or the Title Company, or reasonably necessary, to effect or carry out the
purposes of this Agreement, subject to Buyer’s prior approval thereof, which approval shall not be
unreasonably withheld or delayed.

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          F. HPT Guaranty. The HPT Guaranty in the form attached hereto as Exhibit Q
duly executed and delivered by HPT.

          G. GST Indemnity. The GST certificate and indemnity contemplated by Paragraph 7.5.3
in the form of Exhibit U.

     7. Prorations, Credits and Closing Costs.

          7.1 Proration Items.

          (a) At the Closing, the following adjustments and prorations shall be computed as of 12:01
a.m. (local time at each Property) on the Closing Date (“Apportionment Time”). All items
of revenue, cost and expense with respect to the period prior to the Apportionment Time shall be
for the account of Seller. All revenues attributable to guests of the Hotels for the night prior
to the Closing Date shall be for the account of Seller. All items of revenue, cost and expense of
such Property with respect to the period from and after the Apportionment Time shall be for the
account of Buyer or its designee. All adjustments and prorations shall be on an accrual basis in
accordance with generally accepted accounting principles. Seller or its designee shall be entitled
to receive any refunds of any taxes (real, personal or sales) for any periods prior to Closing,
regardless of when received.

          (b) At the Closing, a fair and reasonable estimated accounting of all adjustments and
prorations shall be performed and agreed to by Seller and Buyer. Subsequent final adjustments and
payments (the “True-up”) shall be made in cash or other immediately available funds as soon
as practicable after the Closing Date for the Property based upon an accounting performed by the
Seller and acceptable to Buyer. In the event the parties have not agreed with respect to the
adjustments required to be made pursuant to this Paragraph 7.1 upon application by any such party,
a certified public accountant reasonably acceptable to the parties hereto shall determine any such
adjustments which have not theretofore been agreed to by the parties hereto. The charges for such
accountant shall be borne equally by the parties to such disputed adjustment. All adjustments to
be made as a result of the final results of the True-up shall be allocated as set forth above to
the party entitled to such adjustment within thirty (30) days after the final determination
thereof. The provisions of Paragraph 7 shall survive the Closing. Notwithstanding anything
contained herein to the contrary, any amounts owed to Seller under this Paragraph 7 shall not be
paid to Seller. Rather all such amounts shall be credited to Manager’s contribution to Initial
Working Capital under the Management Agreement.

          7.2 Closing Statement and Schedules. On or before five (5) days prior to the Closing
Date, Seller shall deliver to Buyer a current schedule of the items and amounts to be prorated or
credited as set forth in this Paragraph 7, and a draft closing statement for the Transaction.

          7.3 Seller’s Closing Costs. Seller shall pay the following: (a) the fees and expenses
of Seller’s attorneys, (b) the costs (including recording costs) of any cure of title defects
required of Seller hereunder, (c) the commission due any broker retained by Seller, (d) one half of
all escrow agent fees (if any are charged in connection with this Transaction), (e) one half of
costs and expenses and premiums in connection with the preparation of the Title Reports

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and the issuance of the Title Policies (including all endorsements reasonably requested by
Buyer), (f) one half of all recording charges due on recordation of any Closing Documents, (g) one
half of the costs and expenses of the Surveyor to prepare the Survey, (h) one half of all of the
costs of transfer, documentary, excise, recording, sales or other nonrefundable taxes or
assessments imposed by virtue of the Transaction, including, without limitation, any Ontario retail
sales tax (“RST”) imposed pursuant to the Retail Sales Tax Act (Ontario) and any Ontario land
transfer tax (“LTT”) imposed pursuant to the Land Transfer Tax Act (Ontario), provided Buyer shall
provide reasonable cooperation to Seller in reducing the total amounts described herein, (i) one
half of the cost and expense of any local counsel mutually retained by Buyer and Seller in any
jurisdiction where a Property is located including counsel located in Texas previously retained by
Buyer prior to the Effective Date with respect to zoning matters and one-half the cost of counsel
retained by the trustee in connection with the industrial revenue bond structure for the Atlanta
Airport Holiday Inn Hotel, (j) one half of the costs and expenses of all environmental and
engineering reports regarding any Property furnished to Buyer and any recommended and/or follow-up
studies required or suggested thereby or as otherwise heretofore requested by Buyer in connection
with its Due Diligence hereunder, and (k) one half of the costs of any zoning reports or related
zoning due diligence studies requested by Buyer in connection with its Due Diligence hereunder.

          7.4 Buyer’s Closing Costs. Buyer shall pay the following: (a) except as otherwise
provided herein, the costs of Buyer’s Due Diligence, (b) one half of the costs and expenses of all
environmental and engineering reports regarding any property furnished to Buyer and any recommended
and/or follow-up studies required or suggested thereby or as otherwise heretofore requested by
Buyer in connection with its Due Diligence hereunder, (c) the fees and expenses of Buyer’s
attorneys, (d) the commission due any broker retained by Buyer, (e) all lenders’ fees related to
any financing to be obtained by Buyer; (f) one half of all recording charges due on recordation of
any Closing Documents, (g) one half of all escrow agent fees (if any are charged in connection with
this Transaction), (h) one half of the costs and expenses from the Title Company to prepare the
title reports, (i) one half of the costs, expenses and premiums for the Title Commitment and Title
Policy (including all endorsements reasonably requested by Buyer), (j) one half of the costs and
expenses of the Surveyor to prepare the Survey, (k) one half of all costs of all transfer,
documentary, excise, recording, sales or other nonrefundable taxes or assessments imposed by virtue
of the Transaction, including, without limitation, any RST imposed pursuant to the Retail Sales Tax
Act (Ontario) and any LTT imposed pursuant to the Land Transfer Tax Act (Ontario), provided that
Seller shall provide reasonable cooperation to Buyer in reducing the total amounts described
herein, (l) one half of the cost and expense of any local counsel mutually retained by Buyer and
Seller in any jurisdiction where a Property is located and counsel located in Texas previously
retained by Buyer prior to the Effective Date with respect to zoning matters, and one half the cost
of counsel retained by the trustee in connection with the industrial revenue bond structure for the
Atlanta Airport Holiday Inn, and (m) one half of the costs of any zoning reports or related zoning
due diligence studies requested by Buyer in connection with its Due Diligence hereunder.

          7.5 Canadian Taxes.

               7.5.1 Payment of RST and LTT. Payments of RST, LTT and other nonrefundable taxes
pursuant to Paragraph 7.3(h) or Paragraph 7.4(k) shall be made by Seller

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and/or Buyer, as applicable, directly to the relevant tax authority (such payments to be
remitted by Buyer’s solicitors, in the case of amounts due upon registration of transfer of the
Toronto Hotels), and Buyer and Seller, as applicable, shall provide evidence thereof satisfactory
to each other.

               7.5.2 Liability for GST. Subject to Paragraphs 7.5.3 and 7.5.4, Buyer shall pay, in
addition to the Purchase Price, all goods and services tax (“GST”) imposed pursuant to the Excise
Tax Act (Canada) that is applicable to the sale and transfer of the Toronto InterContinental Hotel
and Toronto Staybridge Suites Hotel and the other Property relating thereto (the “Canadian
Property”) to the Canadian Seller, if any, on Closing by certified cheque or bank draft, and
Manager shall, pursuant to its obligations under the Management Agreement to contribute amounts to
the Working Capital for the Hotels, provide for the funding of such GST to the extent such GST
relates to property transferred to the Owner (as defined in the Management Agreement).

               7.5.3 Exception for GST on Realty. Buyer shall not be required to pay GST to the
Canadian Seller in accordance with Paragraph 7.5.2 on the sale and transfer of any real property
(namely, the Toronto InterContinental Hotel and Toronto Staybridge Suites Hotel but excluding the
Property relating thereto) if Buyer provides the Canadian Seller on or before the Closing Date with
a certificate of Buyer, in a form reasonably acceptable to the Canadian Seller, confirming among
other things that Buyer is registered for the purposes of the Excise Tax Act (Canada) on the
Closing Date; that Buyer is holding the Canadian Property for its own account and not in trust for
or as agent for another party; and an indemnity whereby Buyer agrees to indemnify and save harmless
the applicable Canadian Seller from and against any and all losses, costs, damages and liabilities
that may be suffered or incurred by the applicable Canadian Seller as a result of Buyer’s failure
to register for the purposes of the GST imposed under the Excise Tax Act (Canada) or Buyer’s
failure to perform its obligations under such Act in connection with the purchase of the Canadian
Property.

               7.5.4 Exception for GST on Personalty. The parties hereto will use their commercially
reasonable efforts in good faith to minimize (or eliminate) any taxes payable under the Excise Tax
Act (Canada) in respect of the Closing by, among other things, making such elections and taking
such steps as may be provided for under that Act (including, for greater certainty, making a joint
election in a timely manner under Section 167 of that Act) if such elections are applicable to the
transactions contemplated herein and as may reasonably be requested by Buyer in connection with the
Closing and acceptable to the Canadian Sellers in their sole discretion, acting reasonably. Should
the parties agree to make the election under Section 167 of the Excise Tax Act, Buyer shall
indemnify and hold Seller harmless in respect of any GST, penalties, interest and other amounts
which may be assessed against Seller as a result of the transaction under this Agreement or any
portion thereof not being eligible for such election or as a result of Buyer’s failure to file the
election within the prescribed time.

     8. Representations and Warranties.

          8.1 Seller’s Representations and Warranties. To induce Buyer to enter into this
Agreement, Seller covenants, represents and warrants to Buyer as follows:

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          A. Seller is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, and has all requisite power and authority under the laws of such
jurisdiction and its respective charter documents to enter into and perform its obligations under
the Closing Documents and to consummate the transactions contemplated thereby. Seller is duly
qualified to transact business in each jurisdiction in which the nature of the business conducted
by it requires such qualification, except where such failure to qualify would not have a material
adverse effect on Seller or the transactions contemplated hereby.

          B. Seller has taken (or will take, prior to the Closing Date) all necessary action to
authorize the execution, delivery and performance of this Agreement and the other Closing Documents
to which it is a party, and upon the execution and delivery of any document to be delivered by
Seller on or prior to the Closing Date, such document shall constitute the valid and binding
obligation and agreement of Seller enforceable against Seller in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application affecting the rights and remedies of creditors and general principles
of equity.

          C. The execution, delivery or performance of the Closing Documents by Seller, and the
compliance with the terms and provisions thereof, will not result in any breach of the terms,
conditions or provisions of, or conflict with or constitute a default under any Contract or
Governing Document by which Seller is bound, or result in the creation of any lien, charge or
encumbrance upon any Property pursuant to the terms of any indenture, mortgage, deed of trust,
note, evidence of indebtedness or any other agreement or instrument by which Seller is bound.

          D. Except as may be set forth on Schedule 8.1(D), to Seller’s Knowledge, no action or
proceeding is pending or threatened, and no investigation looking toward such an action or
proceeding has begun, which (i) questions the validity of this Agreement and the other Closing
Documents or any action taken or to be taken pursuant thereto, (ii) will result in any material
adverse change in the business, operation, affairs or condition of any Property, (iii) may result
in or subject any Property to a material liability, (iv) involves condemnation or eminent domain
proceedings against any material part of Property or (v) is likely to materially and adversely
affect the ability of Seller to perform its obligations hereunder.

          E. Other than (i) the Permitted Title Exceptions, (ii) the documents to be assigned to Buyer
pursuant to the terms hereof, true and complete copies of which have been delivered to Buyer, (iii)
the Leases set forth on Schedule 8.1(E), (iv) the Contracts set forth on Exhibit N,
(v) the Ground Leases; and (vi) agreements and easements with governmental bodies and utility
companies which are reasonably necessary for the development and operation of the Property as
contemplated by this Agreement and the Closing Documents, there are no material agreements, leases,
licenses or occupancy agreements affecting the Property which will be binding on Buyer subsequent
to the Closing Date.

          F. Except as may be set forth in Schedule 8.1(F) or in the written inspection reports
delivered to Buyer in connection herewith, to Seller’s Knowledge, there is no fact or condition
which materially and adversely affects the physical condition of the Property which has not been
set forth in this Agreement, or in the other documents, certificates or statements furnished to or
obtained by Buyer in connection with the transactions contemplated hereby.

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          G. All utilities and services necessary for the use and operation of the Property (including,
without limitation, road access, water, electricity and telephone) are available thereto, and are
of sufficient capacity to meet adequately all needs and requirements necessary for the current use
and operation of the Property. To Seller’s Knowledge, except as may be set forth in Schedule
8.1(G), no fact, condition or proceeding exists which would result in the termination or
impairment of the furnishing of such utilities to the Property.

          H. Except as may be set forth in Schedule 8.1(H), or in the written inspection reports
(including environmental reports) delivered to Buyer in connection herewith, to Seller’s Knowledge
(i) the Property and the use and operation thereof do not violate any material federal, state,
municipal or other governmental statutes, ordinances, by-laws, rules, regulations or any other
legal requirements, including, without limitation, those relating to construction, occupancy,
zoning, adequacy of parking, environmental protection, occupational health and safety or fire
safety applicable thereto; and (ii) there are in effect all material licenses, permits and other
authorizations necessary for the current use, occupancy and operation thereof. To Seller’s
Knowledge, except as may be set forth in Schedule 8.1(H), there is no threatened request,
application, proceeding, plan, study or effort which would materially adversely affect the present
use or zoning of the Property or which would modify or realign any adjacent street or highway.

          I. Except as may be set forth in Schedule 8.1(I), other than the amounts disclosed by
current tax bills, true and correct copies of which have been delivered to Buyer, no taxes or
special assessments of any kind (special, bond or otherwise) are or have been levied with respect
to the Property, or any portion thereof, which are outstanding or unpaid, other than amounts not
yet due and payable, or if due and payable, not yet delinquent (and to the extent any such taxes or
special assessments are due and payable on the Effective Date and prior to the Closing Date, such
amount will be paid at Closing in accordance with Paragraph 7).

          J. Each Seller, other than each Canadian Seller, is not a “foreign person” within the meaning
of Section 1445(f)(3) of the Code.

          K. Each Canadian Seller is not a non-resident of Canada within the meaning of the Income Tax
Act (Canada).

          K-1 Except as may be set forth in Schedule 8.1(K-1), or in the written inspection
reports (including environmental reports) delivered to Buyer in connection herewith, to Seller’s
Knowledge, none of Seller or any other occupant or user of any of the Property, or any portion
thereof, have stored or disposed of (or engaged in the business of storing or disposing of) or have
released or caused the release of any hazardous waste, contaminants, oil, radioactive or other
material on the Property, or any portion thereof, the removal of which is required or the
maintenance of which is prohibited or penalized by any applicable federal, state or local statutes,
laws, ordinances, rules or regulations. To Seller’s Knowledge, except as may be set forth in
Schedule 8.1(K-1), or in the written inspection reports (including environmental reports)
delivered to Buyer in connection herewith, the Property is free from any such hazardous waste,
contaminants, oil, radioactive and other materials, except any such materials maintained in
accordance with applicable law.

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          L. To Seller’s Knowledge, except as contained in the written inspection reports (including
environmental reports) delivered to Buyer in connection herewith, there are no defects or
inadequacies in the Property which, if uncorrected, would result in a termination of insurance
coverage or an increase in the premiums charged therefor.

          M. Except as may be set forth in Schedule 8.1(M), or in the written inspection reports
delivered to Buyer in connection herewith, to Seller’s Knowledge, the Property is in good working
order and repair, mechanically and structurally sound, free from material defects in materials and
workmanship and not subject to any unrepaired casualty.

          N. Except as may be set forth in Schedule 8.1(N), all tax returns for privilege, gross
receipts, excise, sales and use, personal property and franchise taxes required by law to be filed
by Seller with respect to Property prior to the Closing Date will be prepared and duly filed prior
to the Closing (or after Closing with respect to pre-Closing matters) and all taxes, if any, shown
on such returns or otherwise determined to be due, together with any interest or penalties thereon,
will be paid by Seller prior to the Closing, or in a timely manner following Closing.

          O. Except as may be set forth in Schedule 8.1(O), or in the written inspection reports
delivered to Buyer in connection herewith, there are in effect all material licenses (including
liquor licenses, if required), permits and other authorizations necessary for the then current use,
occupancy and operation of the Property.

          P. Seller has good title to the Property free and clear of all Liens other than Permitted
Title Exceptions.

          Q. The Personal Property located at or otherwise used in connection with the Property (i)
complies in all material respects with the applicable Brand Standards (as defined in the Management
Agreement) and (ii) is otherwise at adequate, appropriate levels and at levels that are at least
equal to those found at other similarly-situated Staybridge Suites, Crowne Plaza, Holiday Inn, or
InterContinental, as applicable, hotels.

          R. Except as may be set forth in Schedule 8.1(R), or in the written inspection reports
(including without limitation environmental condition reports and property condition reports from
ATC Associates, Inc.) delivered to Buyer in connection herewith, to Seller’s Knowledge there exists
no violation of any law, regulation, order or requirement issued by any Governmental Authority
against or affecting the Property and Seller has not received any notice or order from any
Governmental Authority requiring any repairs, maintenance or improvements to any Property which
have not been fully performed.

          S. Each Real Property constitutes a separate parcel for purposes of ad valorem real property
taxes, and is not subject to a lien for non-payment of real property taxes relating to any other
property.

          T. Except as may be set forth on Schedule 8.1(T), to Seller’s Knowledge, there exists
no material default on the part of Seller with respect to any Permitted Title Exception, other than
those defaults which can be cured or discharged by the payment of money and for which an allowance
for the payment thereof has been made at Closing.

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          U. Each of the financial statements of IHG heretofore delivered to Buyer have been properly
prepared in accordance with the Accounting Principles (as defined in the Management Agreement), are
true, correct and complete in all material respects and fairly present the consolidated financial
condition of IHG at and as of the dates thereof and the results of its operations for the periods
covered thereby. Each of the financial statements for the Hotels heretofore delivered to Buyer
have been properly prepared in accordance with the Accounting Principles, are true, correct and
complete in all material respects and fairly present the financial condition of the Hotels covered
thereby at and as of the dates thereof and the results of their operations for the periods covered
thereby.

          V. Seller is not a debtor in any voluntary or involuntary proceeding in bankruptcy.

          W. Other than the Leases and Ground Leases listed in Schedule 8.1(W) and the Permitted
Title Exceptions, there are no contracts or agreements with respect to the use or occupancy of the
Property. The copies of the Leases and the Ground Leases heretofore delivered by Seller to Buyer
are true, correct and complete copies thereof; neither the Leases nor the Ground Leases have been
amended except as evidenced by amendments similarly delivered to Buyer and constitute the entire
agreement between Seller and the tenants (or the ground lessor, as applicable) thereunder. Except
as otherwise set forth in Schedule 8.1(W): (i) to Seller’s Knowledge, each of the Leases is
in full force and effect on the terms set forth therein and to Seller’s Knowledge each tenant,
thereunder is legally required to pay all sums and perform all material obligations set forth
therein without concessions, abatements, offsets, defenses or other basis for relief or adjustment;
(ii) to Seller’s Knowledge, each of the Ground Leases is in full force and effect on the terms set
forth therein and the ground lessors thereunder are legally required to perform all material
obligations set forth therein without concessions, defenses or other basis for relief or
adjustment; (iii) no such tenant (or ground lessor with respect to the performance of any
obligations under the Ground Lease, as applicable) has asserted in writing or, to Seller’s
Knowledge, has any defense to, offsets or claims against, rent payable by it or the performance of
its other obligations under its Lease (or Ground Lease, as applicable); (iv) Seller has no
outstanding obligation to provide any such tenant with an allowance to construct, or to construct
at Seller’s expense, any tenant improvements; (v) no such tenant is in arrears in the payment of
any sums or in the performance of any material obligation required of it under its Lease beyond any
applicable grace period, and no such tenant has prepaid any rent or other charges; (vi) to Seller’s
Knowledge no such tenant or ground lessor, as applicable, has filed a petition in bankruptcy or for
the approval of a plan of reorganization or management under the Federal Bankruptcy Code or under
any other similar state law, or made an admission in writing as to the relief therein provided, or
otherwise become the subject of any proceeding under any federal or state bankruptcy or insolvency
law, or has admitted in writing its inability to pay its debts as they become due or made an
assignment for the benefit of creditors, or has petitioned for the appointment of or has had
appointed a receiver, trustee or custodian for any of its property; (vii) no such tenant or ground
lessor, as applicable, has requested in writing a modification of its Lease or Ground Lease,
respectively, or a release of its obligations under its Lease or Ground Lease, respectively, in any
material respect or has given written notice terminating its Lease or Ground Lease, or has been
released of its obligations thereunder in any material respect prior to the normal expiration of
the term thereof; (viii) except as set forth in the Leases, no guarantor has been released or
discharged, voluntarily or involuntarily, or by operation of law, from any

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obligation under or in connection with any Lease or any transaction related thereto; (ix) all
security deposits paid by tenants, are as set forth in Schedule 8.1(W); (x) all lease
commissions due with respect to each of the Leases has been paid, except as otherwise set forth on
Schedule 8.1(W); and (xi) the other information set forth
 in Schedule 8.1(W) is
true, correct and complete in all material respects. No default or breach exists under any Lease
or Ground Lease on the part of Seller. Notwithstanding the above, Seller makes no representation
or warranty hereunder with respect to the LAX Ground Lease.

          X. An appropriate Seller affiliate is a “registrant” under Part IX of the Excise Tax Act
(Canada). 220 Bloor Street Hotel Inc.’s registration number is: 84822 5546 RC0001; Staybridge
Markham, Inc.’s registration number is: 84875 0071 RC 0001.

          Y. The Designated Representatives are the persons (either individually or as a whole) to whom
any condition which would render any of the statements in Paragraph 8.1 untrue, inaccurate or
incorrect in any material respect (without regard to any knowledge qualifier contained in such
statement) should be communicated to, directly or indirectly, by any general manager of a Hotel
that first knows such condition. James Manley is the person to whom any condition which would
render any of the statements in Paragraph 8.1(Z) untrue, inaccurate or incorrect in any material
respect (without regard to any knowledge qualifier contained in such statement) should be
communicated to, directly or indirectly, by any general manager of a Hotel that first knows such
condition.

          Z. Except as set forth in Schedule 8.1(Z), with respect to the Hotels located in
Canada:

               (i) No collective agreement is currently being negotiated by the Canadian Seller or any other
Person in respect of any of the Hotels in Canada or the employees working at any of the Hotels in
Canada and the only collective agreements in force with respect to the employees working at any of
the Hotels in Canada are the Collective Agreements, true, correct and complete copies of which have
been provided to Buyer. To Seller’s (Canada) Knowledge, (i) none of the Hotels in Canada has
committed any breaches of their obligations under the Collective Agreements; (ii) there are no
grievances or arbitration proceedings thereunder; and (iii) there are no written or oral agreements
or course of conduct which modify the terms of the Collective Agreements;

               (ii) Except in respect of the Collective Agreements, no trade union, council of trade unions,
employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to
any of the employees working at any of the Hotels in Canada by way of certification, interim
certification, voluntary recognition, or succession rights, or has applied or, to Seller’s (Canada)
Knowledge, threatened to apply to be certified as the bargaining agent of the employees working at
any of the Hotels in Canada. To Seller’s (Canada) Knowledge, there are no threatened or pending
union organizing activities involving the employees working at any of the Hotels in Canada. There
is no labour strike, dispute, work slowdown or stoppage pending or involving or, to Seller’s
(Canada) Knowledge, threatened against or in relation to any of the Hotels in Canada and no such
event has occurred within the last five (5) years; and

- 22 -

 

               (iii) No trade union has applied to have any of the Hotels in Canada declared a related
employer pursuant to the Labour Relations Act (Ontario).

          AA. The Canadian Seller is not engaged in any activities and does not provide any of the
services of a business described in subsection 14.1(5) of the Investment Canada Act (Canada). The
aggregate value of the Property in Canada, the control of which is being acquired as a result of
the transactions contemplated by this Agreement, calculated in accordance with the Investment
Canada Act (Canada) and the regulations thereunder, is less than CDN$237 million.

          BB. Neither the aggregate value of Canadian Seller’s assets in Canada nor the gross revenues
from sales in or from Canada generated from those assets exceeds the applicable value determined
pursuant to section 110 of the Competition Act (Canada), as amended, and the regulations
thereunder.

          CC. None of this Agreement and the schedules, exhibits and other documents delivered in
connection herewith and therewith, when read together as a whole, and with the documents or
information delivered to Buyer in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading.

          8.2 Reserved.

          8.3 Claims of Breach Prior To Closing. If at or prior to the Closing, to Seller
Knowledge’s any Seller’s Warranty becomes untrue, inaccurate or incorrect in any material respect
(without regard to any materiality or knowledge qualifier contained therein), Seller shall give
Buyer written notice thereof within ten (10) Business Days of obtaining such knowledge (but, in any
event, prior to the Closing). After the Due Diligence Deadline but prior to the Closing, if to
Buyer’s Knowledge any Seller’s Warranty is or becomes untrue, inaccurate or incorrect in any
material respect, Buyer shall give Seller written notice thereof within five (5) Business Days of
obtaining such knowledge (but, in any event, prior to the Closing). In either such event, Seller
shall have the right to cure such misrepresentation or breach and shall be entitled to a reasonable
adjournment of the Closing upon written notice to Buyer (not to exceed fifteen (15) days) to
attempt such cure. Seller shall notify Buyer within three (3) Business Days of its receipt of such
notice if Seller has elected to cure such untrue, inaccurate or incorrect Seller’s Warranty. If
Seller fails to respond within such timeframe, Seller shall be deemed to have declined to cure such
untrue, inaccurate or incorrect Seller’s Warranty.

     If to Buyer’s Knowledge prior to the applicable Closing Date any Seller’s Warranty is or
becomes untrue, inaccurate or incorrect in any material respect as of the date made, and Seller is
unable or unwilling to so cure such misrepresentation or breach, then Buyer, as its sole remedy
shall elect either (a) to waive such misrepresentation or breach and consummate the Transaction
without any reduction of or credit against the Aggregate Purchase Price, or (b) to Terminate this
Agreement by written notice given to Seller on or before the Closing Date, in which event Buyer
shall be entitled to recover from Seller within five (5) days of demand, all of Buyer’s
out-of-pocket costs (including legal fees) incurred with respect to the transactions contemplated
by this Agreement.

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     If Buyer Knows prior to the applicable Closing Date that any Seller’s Warranty becomes untrue,
inaccurate or incorrect in any material respect through no fault of Seller, and Seller is unable or
unwilling to so cure such misrepresentation or breach, then Buyer, as its sole remedy shall elect
either (a) to waive such misrepresentation or breach and consummate the Transaction without any
reduction of or credit against the Aggregate Purchase Price, or (b) to Terminate this Agreement by
written notice given to Seller on or before the Closing Date.

     If any of Seller’s Warranties are untrue, inaccurate or incorrect but are not, in the
aggregate, untrue, inaccurate or incorrect in any material respect, Buyer shall be required to
consummate the Transaction without any reduction of or credit against the Aggregate Purchase Price.
If on the Closing Date, to Buyer’s Knowledge any of Seller’s Warranties are untrue, inaccurate or
incorrect in any material respect and Buyer nevertheless chooses to consummate the Transaction,
Buyer waives any right to seek damages against Seller if such breach would otherwise have allowed
Buyer to terminate this Agreement pursuant to its terms.

     The untruth, inaccuracy or incorrectness of Seller’s Warranties shall be deemed material only
if Buyer’s aggregate damages resulting from the untruth, inaccuracy or incorrectness of all
Seller’s Warranties are reasonably estimated to equal or exceed three hundred thousand dollars
($300,000.00).

          8.4 Survival and Limits On Buyer’s Claims. Seller’s Warranties shall survive the
applicable Closing and not be merged therein for a period of one (1) year and Seller shall only be
liable to Buyer hereunder for a breach of Seller’s Warranties made herein or in any of the
documents executed by Seller at the applicable Closing with respect to which an action has been
commenced by Buyer against Seller on or before one (1) year after the date of the applicable
Closing. Notwithstanding the foregoing, whether or not the Closing occurs, if Buyer is otherwise
entitled to bring an action for damages against Seller, Buyer shall not commence any such action
until its damages are reasonably estimated to aggregate $300,000.00 (such amount being, the
“Damages Threshold”). In determining the amount of the Damages Threshold, Buyer shall be
able to aggregate dollar amounts for actions that it may bring hereunder and for actions that PR
Buyer may bring under the PR Stock Agreement. All covenants set forth in this Agreement, unless
waived by Buyer, shall survive until fully performed. To the extent that Buyer is able to recover
any damages from Seller, it shall be entitled to the entire amount of such damages notwithstanding
the Damages Threshold.

          8.5 Buyer’s Representations and Warranties. Buyer, as of the Effective Date,
represents and warrants to Seller as follows, and as a condition precedent to Seller’s obligation
to consummate the Transaction at Closing pursuant to the terms of this Agreement, the following
representations of Buyer shall be true and correct in all material respects as of the applicable
Closing Date:

          A. Status and Authority of Buyer. Buyer is duly organized and validly existing under
the laws of the jurisdiction of its formation, and has all requisite power and authority under the
laws of such jurisdiction and under its charter documents to enter into and perform its obligations
under the Closing Documents to which it is a party and to consummate the transactions contemplated
thereby. Buyer is (or will be as of the Closing Date) duly qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it

- 24 -

 

requires such qualification, except where such failure to qualify would not have a material
adverse effect on Buyer or the transactions contemplated hereby.

          B. Action of Buyer. Buyer has taken (or will take, prior to the Closing Date) all
necessary action to authorize the execution, delivery and performance of each of the Closing
Documents to which it is a party, and upon the execution and delivery of any document to be
delivered by Buyer on or prior to the Closing Date such document shall constitute valid and binding
obligation and agreement of Buyer enforceable against Buyer in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting the rights and remedies of creditors and general principles of
equity.

          C. No Violations of Agreements. Neither the execution, delivery or performance of the
Closing Documents by Buyer, nor compliance with the terms and provisions thereof, will result in
any breach of the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, or charge upon any property or assets of Buyer
pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness or
any other agreement or instrument by which Buyer is bound.

          D. Litigation. To Buyer’s Knowledge, no action or proceeding is pending or
threatened, and no investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of the Closing Documents or any action taken or to be taken pursuant hereto
or (b) is likely to materially and adversely affect the ability of Buyer to perform its obligations
hereunder.

          E. Bankruptcy. Buyer is not a debtor in any voluntary or involuntary proceeding in
bankruptcy.

          F. Sophisticated Buyer. Buyer is an experienced investor that specializes in the
investment in and ownership of hotel properties in geographically diverse markets. Buyer is a
sophisticated real estate owner and investor with particular experience in the acquisition and
ownership of hotels similar to the Hotels.

          G. GST Registration. On Closing, Buyer will be a “registrant” under Part IX of the
Excise Tax Act (Canada) and prior to Closing shall provide Seller with its GST registration number.

          H. Reporting. John Murray is the person to whom any condition which would render any
of the statements in this Paragraph 8.5 untrue, inaccurate or incorrect in any material respect
(without regard to any knowledge qualifier contained in such statement) should be communicated to,
directly or indirectly, by any senior employee of HPT that first knows such condition.

          8.6 Reserved.

     9. Casualty and Condemnation. Seller shall maintain the property insurance coverage
currently in effect for the Property, or comparable coverage, through the Closing Date. If after
the Effective Date and on or prior to the Closing Date, any portion of the improvements

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is materially damaged or destroyed by fire or other casualty, or there shall be commenced or
instituted against any Property any Condemnation Proceeding, Seller shall promptly (and in no event
more than two (2) Business Days after the occurrence of such casualty or Condemnation Proceeding)
give written notice of such event to Buyer, and the following provisions shall apply
notwithstanding the contrary terms of any applicable Laws with respect to the subject matter of
Paragraph 9:

          9.1 Major Event. If such damage or destruction or Condemnation Proceeding results in
any Hotel or Hotels becoming Unsuitable for Its Permitted Use, as reasonably determined by Buyer or
Seller, (such damage or Condemnation Proceeding shall be referred to as a “Major Event”),
then both Buyer and Seller shall have the right to Terminate this Agreement as to either (a) only
the affected Hotel or Hotels; or (b) if three (3) or more Hotels are rendered Unsuitable for Its
Permitted Use, as to all Hotels hereunder, in each case by written notice to the other party given
no later than ten (10) Business Days after the giving of Seller’s notice of such event, and the
Closing Date shall be extended, if necessary, to provide sufficient time for Buyer or Seller to
make such election. In the case of a Major Event, and so long as neither party has elected to
Terminate this Agreement as to all Hotels, in addition to the foregoing termination right, Seller
or Buyer shall have the option to extend the Closing Date for up to ninety (90) days for either (a)
all Hotels or (b) solely as to the Hotel(s) affected by the Major Event (to allow Seller to
repair/restore the affected Hotel in a manner satisfactory to Buyer) (in which case the Closing for
the unaffected Hotels shall proceed as set forth herein, except the Purchase Price shall be reduced
by the allocated value of the affected Hotel as set forth on Exhibit A-13). To the extent
that Buyer or Seller elects to postpone Closing pursuant to the provisions of this Paragraph, Buyer
shall have the ability to conduct a limited Due Diligence review (such review shall be limited to
the conditions directly related to any restoration and repair of such Hotel) with respect to such
affected Hotel up to and including the date that is ten (10) calendar days prior to the extended
closing date for such Hotel(s) and Buyer shall have the right to Terminate this Agreement solely as
to the Hotel affected by the Major Event only for reasons directly related to any restoration and
repair of such Hotel. To the extent that this Agreement is terminated as to an affected Hotel, the
Purchase Price shall be reduced by the allocated value of such affected Hotel as set forth on
Exhibit A-13.

          9.2 Closing Despite Casualty/Condemnation. If a casualty or Condemnation Proceeding
occurs and neither Buyer nor Seller Terminates this Agreement with respect to the affected Hotel(s)
or all Hotels on account thereof, then at Closing (a) the conveyance of the Property shall be less
such portion of the Property so taken by (or, as applicable, shall be subject to) said Condemnation
Proceeding, without adjustment of the Purchase Price, (b) Seller shall assign to Buyer (without
recourse to Seller) all the rights to all awards or insurance proceeds with respect to such
casualty or Condemnation Proceeding (except for business interruption coverage with respect to
rental payments prior to Closing); (c) Buyer and Seller shall cause Owner and Manager to waive any
of their respective ability to terminate the Management Agreement as to such affected Hotel or
Hotels as a result of such Hotel or Hotels being “Unsuitable for Its Permitted Use” pursuant to the
terms of the Management Agreement; and (d) Seller shall provide a credit at Closing equal to (i)
Seller’s deductible under Seller’s insurance policy, plus all proceeds or awards previously paid to
Seller with respect to such casualty or Condemnation Proceeding, less (ii) an amount equal to the
sum of (A) the costs, expenses and fees, including reasonable attorneys’ fees, expenses and
disbursements, incurred by

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Seller in connection with receiving such proceeds or award, (B) any portion of any
Condemnation Proceeding award that is allocable to loss of use of the Property prior to Closing,
and the proceeds of any rental loss, business interruption or similar insurance to the extent
allocable to the period prior to the Closing Date, and (C) the reasonable and actual costs incurred
by Seller in stabilizing and/or repairing the Property following such casualty or condemnation.

     10. Other Conditions to Closing. The obligation of Buyer and Seller to close the
Transaction shall be further subject to the satisfaction at or prior to Closing of the conditions
precedent set forth in this Paragraph 10.

          10.1 Conditions to Buyer’s Obligations. The conditions precedent to Buyer’s
obligations at Closing referenced above are as follows, any or all of which may be expressly waived
by Buyer in writing, at its sole option.

          A. Representations. Seller’s Warranties, subject to Paragraph 8.3, shall be true and
correct in all material respects on and as of the Closing Date, except as modified in a manner
permitted by the Agreement, as if made on and as of such date except to the extent that they
expressly relate to an earlier date.

          B. Title Policy. At Closing, Buyer shall have received from the Title Company the
Title Policy (or a specimen or proforma policy thereof or “marked” Title Commitment) together with
an irrevocable written obligation of the Title Company to issue a Title Policy in the form of such
specimen or proforma policy.

          C. Seller Compliance. Seller shall have performed all of the covenants, undertakings
and obligations to be performed or complied with by Seller at or prior to the Closing.

          D. Reliance Letters. Seller shall have delivered a reliance letter or letters
addressed to Buyer and its permitted assignees or designees from ATC Associates, Inc. substantially
in the form attached hereto as Exhibit W and as otherwise reasonably acceptable to Buyer.

          E. Sale of Crowne Plaza (Puerto Rico) Inc. Stock. The closing under the PR Stock
Agreement shall simultaneously occur; provided that the provisions of this Paragraph shall not
apply in the event that such closing has not been consummated by reason of PR Buyer’s default
thereunder.

          F. Reserved.

          G. Reserved.

          H. Collective Bargaining Agreements. Buyer shall have received evidence satisfactory
to it that the rights and obligations under that certain (a) Collective Bargaining Agreement dated
as of July 1, 2000 between Bass Hotels and Resorts d/b/a Crowne Plaza Hotel and International Union
of Operating Engineers Local No. 501, AFL-CIO shall have been assigned pursuant to an Assignment
and Assumption Agreement dated the Initial Closing Date from Seller to Manager related to the
Redondo Beach Hotel; and Collective Bargaining

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Agreement dated as of March 1, 2003 between Town Park Hotel Corporation d/b/a Crowne Plaza
Redondo Beach & Marina Hotel and Chauffeurs, Sales Drivers, Beach & Warehousemen and Helpers Union,
Local 572 International Brotherhood of Teamsters, AFL-CIO shall have been assigned pursuant to an
Assignment and Assumption Agreement dated the Initial Closing Date from Seller to Manager related
to the Redondo Beach Hotel; and (b) Collective Bargaining Agreement signed as of May 17, 2004
between Hotel Inter-Continental Toronto and United Steelworkers of America shall have been assigned
pursuant to an Assignment and Assumption Agreement dated the Initial Closing Date from Seller to
Manager relating to the Toronto InterContinental Hotel.

          10.2 Conditions to Seller’s Obligations. The conditions precedent to Seller’s
obligations at Closing referenced above are as follows, any or all of which may be expressly waived
by Seller in writing, at its sole option.

          A. Representations. Buyer’s warranties set forth in Paragraph 8.3, shall be true and
correct in all material respects on and as of the Closing Date, except as modified in a manner
permitted by the Agreement, as if made on and as of such date except to the extent that they
expressly relate to an earlier date.

          B. Buyer Compliance. Buyer shall have performed all of the covenants, undertakings
and obligations to be performed or complied with by Buyer at or prior to the Closing.

          C. Sale of Crowne Plaza (Puerto Rico) Inc. Stock. The closing under the PR Stock
Agreement shall simultaneously occur; provided that the provisions of this Paragraph shall not
apply in the event that such closing has not been consummated by reason of PR Seller’s default
thereunder.

          10.3 Waiver of Conditions. By closing the Transaction as it pertains to those
Hotel(s) being transferred on an applicable Closing Date, Seller and Buyer shall be conclusively
deemed to have waived the benefit of any remaining unfulfilled conditions set forth in Paragraph
10.1 and 10.2, respectively as they apply to such Closing.

          10.4 Additional Austin, InterContinental Closing Conditions. In addition to the
conditions contained in Paragraphs 10.1 and 10.2, the conditions precedent to Seller’s or Buyer’s
obligation to consummate the Closing with respect to the Austin, TX InterContinental Hotel are as
follows, any or all of which may be expressly waived by Buyer or Seller, at their sole option.

               10.4.1 Buyer and Seller shall have consummated the Transaction with respect to those Hotels
being transferred on the Initial Closing Date.

               10.4.2 Manager and Owner shall have executed and delivered an amendment to the Management
Agreement in order to subject the Austin, TX InterContinental Hotel to the terms and provisions
thereof, such amendment to be in the form attached hereto as Exhibit R.

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               10.4.3 Buyer shall have received satisfactory evidence that the annual fee with respect to the
waste water permit affecting the Austin, TX InterContinental Hotel has been paid in full by Seller.

          10.5 Additional Atlanta, Airport Holiday Inn Hotel Closing Conditions. To the extent
that Buyer consents to assume the industrial revenue bond obligations relating to the Atlanta
Airport Holiday Inn Hotel, in addition to the conditions contained in Paragraphs 10.1 and 10.2, the
conditions precedent to Seller’s or Buyer’s obligation to consummate the Closing with respect to
the Atlanta, GA, Holiday Inn Hotel are as follows, any or all of which may be expressly waived by
Buyer or Seller, at their sole option.

               10.5.1 Buyer and Seller shall have received such documentation reasonably required by them
(and applicable Law) to transfer to Buyer (and allow Buyer’s assumption of) certain Industrial
Revenue Bond obligations owed by Seller and related tax benefits running to the benefit of Seller,
in each case relating to the Atlanta, Airport Holiday Inn Hotel, such documentation to be duly
executed and delivered by the appropriate parties thereto and be in form and substance satisfactory
to Buyer and Seller.

    11. Transaction Issues: Brokers, Confidentiality and Indemnity.

          11.1 Brokers. Seller and Buyer expressly acknowledge that Seller’s Broker has acted
as the exclusive broker with respect to the Transaction and with respect to this Agreement. Seller
shall pay any brokerage commission due to Seller’s Broker in accordance with the separate agreement
between Seller and Seller’s Broker. Seller agrees to hold Buyer harmless and indemnify Buyer from
and against any and all Liabilities (including reasonable attorneys’ fees, expenses and
disbursements) suffered or incurred by Buyer as a result of any claims by Seller’s Broker or any
other party claiming to have represented Seller as broker in connection with the Transaction.
Buyer agrees to hold Seller harmless and indemnify Seller from and against any and all Liabilities
(including reasonable attorneys’ fees, expenses and disbursements) suffered or incurred by Seller
as a result of any claims by any other party claiming to have represented Buyer as broker in
connection with the Transaction.

          11.2 Publicity. Except for the Press Releases or Public Announcements the forms of
which are attached hereto as Exhibit S, or if no such forms are attached, such other forms
as are reasonable under the circumstances or as may be required by law or as may be reasonably
necessary, on a confidential basis, to inform any rating agencies, potential sources of financing,
financial analysts, to perform its obligations and duties contained in this Agreement or to receive
legal, accounting and/or tax advice, the parties agree that no party shall, with respect to this
Agreement and the transactions contemplated hereby, contact or conduct negotiations with public
officials, make any public pronouncements, issue press releases or otherwise furnish information
regarding this Agreement or the transactions contemplated hereby to any third party without the
consent of the other party, which consent shall not be unreasonably withheld; provided, however,
that, if such information is required to be disclosed by law, the party so disclosing the
information shall use reasonable efforts to give notice to the other parties as soon as such party
learns that it must make such disclosure.

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     Buyer acknowledges that certain Ground Leases that affect the Hotels require landlord consent
to any assignment of those rights and/or release of Seller from continued liability under such
lease. Buyer hereby consents to Seller’s disclosure to any such landlords of Buyer’s identity and
financial information. Buyer agrees to cooperate (at no material cost and expense) with Seller and
any such landlord and to provide such Buyer financial information as may be reasonably requested by
such landlord in order to consent to the proposed assignment.

          11.3 Indemnity.

               11.3.1 Buyer hereby agrees to indemnify, defend, and hold Seller and each of the other Seller
Parties free and harmless from and against any and all Liabilities (including reasonable attorneys’
fees, expenses and disbursements) arising out of or resulting from (a) the breach of the terms of
Paragraph 11.2 or (b) the entry on the Property and/or the conduct of any Due Diligence by Buyer or
any of Buyer’s Representatives at any time prior to the Closing; provided, however, that Buyer’s
obligations under this clause (b) shall not apply to the mere discovery of a pre-existing
environmental or physical condition at the Property. The foregoing indemnity shall survive the
Closing (and not be merged therein) or any earlier termination of this Agreement.

               11.3.2 From and after Closing, Seller shall indemnify and hold harmless Buyer from and against
any and all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) arising
out of (i) a breach by Seller of any representation, warranty or covenant set forth herein
(however, such indemnity shall not extend beyond the one (1) year survival period set forth in
Paragraph 8.4), (ii) events or contractual obligations, acts, or omissions of Seller that occurred
in connection with the ownership or operation of the Property prior to the Closing Date and during
the ownership of the Property by Seller or any of its affiliates, or (iii) any damage to property
of others or injury to or death of any person or any claims for any debts or obligations occurring
on or about or in connection with the Property or any portion thereof at any time or times prior to
the Closing Date and during the ownership of the Property by Seller or any of its affiliates.

               11.4 Employment Indemnity. The Canadian Seller shall fully indemnify, defend and hold
harmless Buyer and any of its affiliates for, from and against any cost, loss, damage or expense
(including, but not limited to, reasonable attorneys’ fees and disbursements and court costs and
other expenses of litigation, whether or not taxable under local law) related to any action, cause
of action, complaint, application, contract and covenant, whether express or implied, claim and/or
demand for damages, indemnity, costs, interest, loss or injury brought, made or commenced against
Buyer and/or any of its affiliates by (i) any union on behalf of any employee working at any of the
Hotels in Canada or on its own behalf for any reason, (ii) by any employee working at any of the
Hotels in Canada in respect of or arising out of their employment or the termination of their
employment with the Canadian Seller and/or the Manager, or (iii) by any organization or
governmental entity relating in any way to any of the employees working at any of the Hotels in
Canada, it being understood and agreed that the Employment Indemnity described in this Paragraph
11.4 shall be of no force or effect to the extent that the claims described in this Paragraph 11.4,
and in particular, the claims referred to in (i), (ii) or (iii), result or arise due to any acts or
omissions of Buyer or any of its affiliates. The provisions of this Paragraph 11.4 shall survive
the Closing.

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     12. Default At or Prior to Closing.

          12.1 Buyer Default. If Buyer defaults in the observance or performance of its
covenants and obligations hereunder, and such default continues for five (5) Business Days after
the date of receipt of written notice from Seller demanding cure of such default, provided Seller
is not in default, Seller shall be entitled, as its sole and exclusive remedy hereunder, to
Terminate this Agreement by written notice to Buyer of such termination and to receive (x) if such
termination election is made on or prior to the initial Closing, liquidated damages equal to five
percent (5%) of the Purchase Price with respect to the allocated value of all Hotels (taking into
account any reduction to such Purchase Price in accordance with Paragraph 9.1 or otherwise provided
for herein); or (y) if such election is made at any time after the initial Closing, five percent
(5%) of the Purchase Price allocated to the Austin, TX InterContinental Hotel, as full liquidated
damages for such default of Buyer, the parties hereto acknowledging the difficulty of ascertaining
the actual damages in the event of such a default, that it is impossible more precisely to estimate
the damages to be suffered by Seller upon Buyer’s default, that such liquidated damages is intended
not as a penalty, but as full liquidated damages and that such amount constitutes a reasonable good
faith estimate of the potential damages arising therefrom, it being otherwise difficult or
impossible to estimate Seller’s actual damages which would be suffered by Seller in the event of
default by Buyer. Except with respect to any right, obligation or liability which survives Closing
or termination of this Agreement, including any indemnification provisions set forth in this
Agreement, Seller’s right to Terminate this Agreement and receive full liquidated damages, are
Seller’s sole and exclusive remedies in the event of a default hereunder by Buyer, and Seller
hereby waives, relinquishes and releases any and all other rights and remedies (except any that
survive Closing or termination pursuant to the express provisions of this Agreement), including,
but not limited to: (1) any right to sue Buyer for damages or to prove that Seller’s actual damages
exceed the amount of liquidated damages set forth above which is hereby provided Seller as full
liquidated damages, (2) any right to sue Buyer for specific performance, or (3) any other right or
remedy which Seller may otherwise have against Buyer, either at law, or equity or otherwise.
Notwithstanding anything contained herein to the contrary, if Buyer has made the Deposit hereunder
and Seller Terminates this Agreement in accordance with clause (x) of the first sentence hereof,
then Seller shall be able to receive as its sole remedy payment of the Deposit as full liquidated
damages. The provisions of this Paragraph 12.1 shall survive the termination hereof.

          12.2 Seller Default. If Seller defaults in the observance or performance of its
covenants and obligations hereunder, and such default continues for the greater of five (5)
Business Days after the date of receipt of written notice from Buyer demanding cure of such
default, then Buyer shall be entitled either, at Buyer’s option, (i) without waiving the right to
elect the option to Terminate this Agreement, to sue Seller for specific performance of this
Agreement, but only if such suit is filed within one hundred eighty (180) days after the occurrence
of Seller’s alleged default, unless Buyer is legally precluded from bringing such suit pursuant to
bankruptcy law requirements within such one hundred eighty day period or (ii) to Terminate this
Agreement by the delivery to Seller of notice of such termination and Buyer shall be entitled to
all of its out-of pocket costs (including legal fees) incurred in connection with the transactions
contemplated by this Agreement payable within five (5) days of demand; provided however that Buyer
shall not be able to recover any of its out-of-pocket costs (including legal fees) to the extent
Seller fails or is unable to deliver any Ground Lease Estoppel Certificate

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pursuant to Paragraph 6.2 so long as such failure or inability is not due to any fault of
Seller. Buyer’s rights to so Terminate this Agreement or sue for specific performance are Buyer’s
sole and exclusive remedies hereunder in the event of a default hereunder by Seller, and Buyer
hereby waives, relinquishes and releases any and all other rights and remedies (except any that
survive Closing or termination pursuant to the express provisions of this Agreement), including,
but not limited to: (1) any right to sue for damages, or (2) any other right or remedy which Buyer
may otherwise have against Seller either at law, in equity or otherwise. Buyer agrees that its
failure to timely commence an action for specific performance within such the period noted above
shall be deemed a waiver by it of its right to commence an action for specific performance as well
as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of
pendency of action or similar notice against any portion of the Property. The provisions of this
Paragraph 12.2 shall survive the termination hereof.

     13. Notices. All notices, consents, approvals and other communications which may be
or are required to be given by either Seller or Buyer under this Agreement shall be properly given
only if made in writing and sent by (a) hand delivery, or (b) certified mail, return receipt
requested, or (c) a nationally recognized overnight delivery service (such as Federal Express, UPS
Next Day Air or Airborne Express), or (d) telecopying to the telecopy number listed below (provided
that a copy of such notice is also sent within one Business Day to the party by one of the other
methods listed herein), with all postage and delivery charges paid by the sender and addressed to
the Buyer or Seller, as applicable as set forth below, or at such other address (or telecopy
number) as each may request in writing in accordance with the provisions hereof. Such notices
delivered by hand, by telecopy, or overnight delivery service shall be deemed received on the date
of delivery and, if mailed, shall be deemed received upon the earlier of actual receipt or two days
after mailing. Said notice addresses are as follows (and Seller and Buyer shall have the right to
designate changes to their respective notice addresses, effective five (5) days after the delivery
of written notice thereof):

	 	 	 
	If to Seller:

	 	InterContinental Hotels Group

Three Ravinia Drive

Suite 100

Atlanta, Georgia 30346-2121

Attention: Robert Chitty

Telephone No.: (770) 604-5321

Telecopy No.: (770) 604-5075

	 	 	 
	With a copy to:

	 	InterContinental Hotels Group

Three Ravinia Drive

Suite 100

Atlanta, Georgia 30346-2121

Attention: Legal Dept. - Paul Huang

Telephone No.: (770) 604-2644

Telecopy No.: (770) 604-5075

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	With a copy to:

	 	Alston & Bird LLP

1201 West Peachtree Street

Atlanta, GA 30309-3424

Attention: Timothy J. Pakenham

Telephone No.: (404) 881-7755

Telecopy No.: (404) 881-7777

	 	 	 
	If to Buyer:

	 	Hospitality Properties Trust

400 Centre Street

Newton, MA 02458

Attention: John Murray

Telephone No.: (617) 964-8389

Telecopy No.: (617) 969-5730

	 	 	 
	With a copy to:

	 	Sullivan & Worcester LLP

One Post Office Square

Boston, MA 02109

Attention: Warren M. Heilbronner

Telephone No.: (617) 338-2946

Telecopy No.: (617) 338-2880

     14. General Provisions.

          14.1 Execution Necessary. This Agreement shall not be binding upon Seller or Buyer,
respectively, until fully executed and delivered by a proper official of Seller or Buyer,
respectively, and no action taken by either of their representatives shall be deemed an acceptance
of this Agreement until this Agreement has been so executed by them and delivered to each other.

          14.2 Counterparts. This Agreement may be executed in separate counterparts. It shall
be fully executed when each party whose signature is required has signed at least one counterpart
even though no one counterpart contains the signatures of all of the parties to this Agreement.

          14.3 Successors and Assigns. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. Buyer shall not have the right to assign or
delegate any right, duty or obligation of Buyer under this Agreement in whole or in part to any
other party other than its affiliates without the prior written consent of Seller, which consent
Seller may grant or withhold in its sole and absolute discretion, and any such assignment shall be
null and void ab initio. Notwithstanding the foregoing, Buyer shall have the right to cause Seller
to convey the Property or portions thereof to an affiliate of Buyer which is wholly owned by Buyer
or wholly owned by the owners of Buyer, or to an affiliate which is owned, in part, by Buyer and
which is controlled by Buyer as to property, operating and management issues, and which affiliate
shall be designated in writing by Buyer, together with delivery to Seller of evidence reasonably
satisfactory to Seller of the valid legal existence of Buyer’s affiliate, its qualification (if
necessary) to do business in the jurisdiction in which the Property is

- 33 -

 

located and of the authority of Buyer’s affiliate to execute and deliver any and all documents
required of Buyer under the terms of this Agreement, which items shall be received by Seller not
less than three (3) Business Days prior to the Closing Date; notwithstanding the foregoing, the
exercise of such right by Buyer shall not relieve Buyer of any of its obligations and liabilities
hereunder including obligations and liabilities which survive the Closing or the termination of
this Agreement, nor shall any such assignment alter, impair or relieve such affiliate from the
waivers, acknowledgements and agreements of Buyer set forth herein, all of which are binding upon
the affiliate(s) of Buyer. In the event of any permitted designation by Buyer, any affiliate shall
assume any and all obligations and liabilities of Buyer under this Agreement but, notwithstanding
such assumption, Buyer shall continue to be liable hereunder.

          14.4 Governing Law. This Agreement shall be governed by the laws of the State of New
York.

          14.5 Entire Agreement. This Agreement and all the exhibits and schedules referenced
herein and annexed hereto contain the entire agreement of the parties hereto with respect to the
matters contained herein, and no prior agreement or understanding (including without limitation any
letter of intent or similar proposals or correspondence between Buyer and Seller pertaining to any
of the matters connected with this Transaction shall be effective for any purpose. Neither this
Agreement nor any provision hereof may be waived, modified, amended, discharged or terminated
except by an instrument signed by the party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only to the extent set forth
in such instrument.

          14.6 Time is of the Essence. TIME IS OF THE ESSENCE of the Transaction and this
Agreement. If the time period by which any right, option or election provided under this Agreement
must be exercised, or by which any act required hereunder must be performed, or by which the
Closing must be held, expires on a Saturday, Sunday or legal or bank holiday, then such time period
shall be automatically extended through the close of business on the next regularly scheduled
Business Day.

          14.7 Interpretation. The titles, captions and paragraph headings are inserted for
convenience only and are in no way intended to interpret, define, limit or expand the scope or
content of this Agreement or any provision hereof. Even though the defined term for a party
hereunder may be used in the singular in this Agreement such term shall also include any other
person or entity, jointly or severally, included within such definition. If any time period under
this Agreement ends on a day other than a Business Day, then the time period shall be extended
until the next Business Day. This Agreement shall be construed without regard to any presumption
or other rule requiring construction against the party causing this Agreement to be drafted. If
any words or phrases in this Agreement shall have been stricken out or otherwise eliminated,
whether or not any other words or phrases have been added, this Agreement shall be construed as if
the words or phrases so stricken out or otherwise eliminated were never included in this Agreement
and no implication or inference shall be drawn from the fact that said words or phrases were so
stricken out or otherwise eliminated.

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          14.8 Survival. Except as set forth herein, the covenants, agreements, indemnities,
representations and warranties contained herein shall not survive the Closing Date or any
termination of this Agreement.

          14.9 Further Assurances. Each party agrees to execute and deliver to the other such
further documents or instruments as may be reasonable and necessary in furtherance of the
performance of the terms, covenants and conditions of this Agreement; provided, however, that the
execution and delivery of such documents by such party shall not result in any additional liability
or cost to such party.

          14.10 Exclusive Application. Nothing in this Agreement is intended or shall be
construed to confer upon or to give to any person, firm or corporation other than Buyer and Seller
(and their permitted successors or assigns) hereto any right, remedy or claim under or by reason of
this Agreement. Except as set forth herein, all terms and conditions of this Agreement shall be
for the sole and exclusive benefit of the parties hereto and may not be assigned.

          14.11 Partial Invalidity. If all or any portion of any of the provisions of this
Agreement shall be declared invalid by Laws applicable thereto, then the performance of said
offending provision shall be excused by the parties hereto; provided, however, that, if the
performance of such excused provision affects any material aspect of this Transaction, the party
for whose benefit such excused provision was inserted may request that the other party enter into a
modification or separate agreement which sets forth in valid fashion the substance of such
offending provision in a manner which counsel to both parties determine is valid.

          14.12 No Implied Waiver. Unless otherwise expressly provided herein, no waiver by
Seller or Buyer of any provision hereof shall be deemed to have been made unless expressed in
writing and signed by such party. No delay or omission in the exercise of any right or remedy
accruing to Seller or Buyer upon any breach under this Agreement shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by
Seller or Buyer of any breach of any term, covenant or condition herein stated shall not be deemed
to be a waiver of any other breach, or of a subsequent breach of the same or any other term,
covenant or condition herein contained.

          14.13 Rights Cumulative. All rights, powers, options or remedies afforded to Seller
or Buyer either hereunder or by Law shall be cumulative and not alternative, and the exercise of
one right, power, option or remedy shall not bar other rights, powers, options or remedies allowed
herein or by Law, unless expressly provided to the contrary herein.

          14.14 Attorney’s Fees. Should either party employ an attorney or attorneys to enforce
any of the provisions hereof or to protect its interest in any manner arising under this Agreement,
or to recover damages for breach of this Agreement, the non-prevailing party in any action pursued
in a court of competent jurisdiction (the finality of which is not legally contested) agrees to pay
to the prevailing party all reasonable costs, damages and expenses, including attorneys’ fees,
expended or incurred in connection therewith.

          14.15 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY PROCEEDINGS
BROUGHT BY THE OTHER PARTY IN CONNECTION

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WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE TRANSACTION, THIS AGREEMENT,
THE PROPERTY OR THE RELATIONSHIP OF BUYER AND SELLER HEREUNDER. THE PROVISIONS OF THIS SECTION
SHALL SURVIVE THE CLOSING (AND NOT BE MERGED THEREIN) OR ANY EARLIER TERMINATION OF THIS AGREEMENT.

          14.16 Facsimile Signatures. Signatures to this Agreement transmitted by telecopy or
other electronic means shall be valid and effective to bind the party so signing. Each party
agrees to promptly deliver an execution original to this Agreement with its actual signature to the
other party, but a failure to do so shall not affect the enforceability of this Agreement, it being
expressly agreed that each party to this Agreement shall be bound by its own telecopied or
electronic signature and shall accept the telecopied or electronic signature of the other party to
this Agreement.

          14.17 No Recordation. Seller and Buyer each agrees that neither this Agreement nor
any memorandum or notice hereof shall be recorded and Buyer agrees (a) not to file any notice of
pendency or other instrument (other than a judgment) against the Property or any portion thereof in
connection herewith and (b) to indemnify Seller against all Liabilities (including reasonable
attorneys’ fees, expenses and disbursements) incurred by Seller by reason of the filing by Buyer of
such notice of pendency or other instrument. Notwithstanding the foregoing, (a) if the same is
permitted pursuant to applicable Laws, Buyer shall be entitled to record a notice of lis pendens if
Buyer is entitled to seek (and is actually seeking) specific performance of this Agreement by
Seller in accordance with the terms of Paragraph 12.2 hereof, and (b) Buyer shall be entitled to
file a copy of all or a portion of this Agreement (or make specific reference hereto) with the
Securities and Exchange Commission in connection with any of its filings required by Law or
regulation pertaining thereto.

          14.18 Maximum Aggregate Liability. Notwithstanding any provision to the contrary
contained in this Agreement or any documents executed by Seller pursuant hereto or in connection
herewith, the maximum aggregate liability of Seller and the Seller Parties, and the maximum
aggregate amount which may be awarded to and collected by Buyer, in connection with this Agreement
and the PR Stock Agreement for (i) the breach of any of Seller’s Warranties for which a claim is
timely made by Buyer, (ii) any Seller indemnity obligations arising from a breach of Seller’s
Warranties and (iii) any representation of the PR Seller under the PR Stock Agreement which
pursuant to the terms thereof survive only for one year after the closing thereunder shall not
exceed Seller’s Liability Limit. This Paragraph 14.18 is not intended to conflict in any way with
the provisions of the PR Indemnity and to the extent of any conflict with the provisions hereof and
the PR Indemnity, the terms of the PR Indemnity shall control. The provisions of this section
shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.

          14.19 Exhibits and Schedules. All exhibits and schedules referred to in, and attached
to, this Agreement are hereby incorporated herein in full by this reference.

          14.20 Jurisdiction. With respect to any suit, action or proceedings relating to the
Transaction, this Agreement, the Property or the relationship of Buyer and Seller hereunder
(“Proceedings”) each party irrevocably (a) submits to the exclusive jurisdiction of the
Courts of

- 36 -

 

the County of New York, State of New York and the United States District Court for the
Southern District of New York, and (b) waives any objection which it may have at any time to the
laying of venue of any proceedings brought in any such court, waives any claim that such
proceedings have been brought in an inconvenient forum and further waives the right to object, with
respect to such proceedings, that such court does not have jurisdiction over such party. The
provisions of this Paragraph 14.20 shall survive the Closing (and not be merged therein) or any
earlier termination of this Agreement.

          14.21 Interpretation of Agreement after Initial Closing Date. The parties hereto
acknowledge that this Agreement, and the rights and obligations set forth herein, shall remain in
full force and effect after the Initial Closing Date with respect to Seller’s obligation to sell,
and Buyer’s obligation to buy, the Austin, TX InterContinental Hotel and that each will interpret
this Agreement in accordance with that intent.

          14.22 Currency. Each reference herein to any dollar amount is a reference to such
amount of United States dollars (except as set forth in Paragraph 8.1(AA)).

          14.23 SEC Matters. Seller shall cooperate with Buyer or any of its affiliates in
connection with the preparation of any documents to be filed under the Securities Act of 1933, as
amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the
“Securities Exchange Act”) and shall use commercially reasonable efforts to provide such
persons with financial statements and other financial information that Buyer requests relating to
periods prior to the Closing Date and to obtain consents from Seller’s independent accountants in
connection therewith.

          14.24 Planning Act. All of the mutual covenants, conditions, agreements and payments
contained in this Agreement with respect to the Toronto InterContinental Hotel and the Toronto
Staybridge Suites Hotel shall be conditional upon compliance with the Planning Act (Ontario). The
Canadian Sellers covenant with Buyer that the Canadian Sellers shall obtain prior to the Closing
all necessary consents under the Planning Act (Ontario) for the conveyance of the Toronto
InterContinental Hotel and the Toronto Staybridge Suites Hotel to Buyer or its designee and shall
comply with any conditions imposed with respect to any such consent, all at Canadian Sellers’
expense.

          14.25 Management Agreement. Buyer and Seller acknowledge that the Hotels acquired by
Buyer hereunder shall be subject to the Management Agreement (in the form attached hereto and as it
may be modified by the terms hereof and thereof).

     15. Additional Termination Rights. (a) If the Transaction has not occurred on or
prior to December 31, 2005, other than by reason of a default by a party hereto, and unless
mutually extended by the parties hereto, this Agreement shall automatically Terminate and this
Agreement shall be of no force and effect between the parties except for those obligations which
survive such termination. (b) If any condition to the initial Closing is not satisfied or waived
by March 31, 2005 either party, so long as such party is not in default hereunder, may Terminate
this Agreement by written notice to the other party (subject to any rights of such non-defaulting
party hereunder) and this Agreement shall be of no force and effect between the parties except for
those provisions which expressly survive such termination. (c) On or before the applicable

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Closing Date, if the PR Stock Agreement is terminated then this Agreement shall also
Terminate, provided however that if such termination results from (i) a default by PR Seller, then
Buyer shall have all of its rights hereunder against Seller as if Seller was in default hereunder;
or (ii) a default by PR Buyer, then Seller shall have all of its rights hereunder against Buyer as
if Buyer was in default hereunder.

     16. Retention of Hotel Employees. Each of Buyer and Seller acknowledges that an
affiliate of Seller will manage the Hotel in accordance with the Management Agreement described in
Paragraph 17 and that Seller or an affiliate will employ all hotel employees at the Hotel with
Seller or the Manager having the responsibilities relative to the employment of and services of
these employees as set forth in the Management Agreement. Seller and Manager shall continue to
recognize the Collective Agreements and all certifications set out in Schedule 8.1(Z).

     17. On-Going Management of Hotel. Buyer and Seller each acknowledge that Seller is
unwilling to sell the Hotels unless Buyer and Seller’s designated affiliate enter into a long term,
non-terminable hotel Management Agreement for the Property. At Closing, Seller’s designated
affiliate and Buyer shall execute the Management Agreement attached hereto as Exhibit P.

     18. Deposit. As a condition to Buyer exercising the Extension Option, Buyer shall
deposit at the time of making the Extension Option, Twenty Five Million and No/100 Dollars
($25,000,000.00, such amount, together with any interest earned thereon, the “Deposit”), in
immediately available funds, with the Title Company or with an escrow agent mutually satisfactory
to the parties hereto (“Escrow Agent”) on the terms and conditions set forth in this
Paragraph 18. The Deposit shall be held and delivered by Escrow Agent in accordance with the
provisions of this Paragraph 18.

          18.1 Deposit. Escrow Agent shall invest the Deposit in interest-bearing instruments
reasonably satisfactory to both Buyer and Seller, shall not commingle the Deposit with any funds of
Escrow Agent or others, and shall promptly provide Buyer and Seller with confirmation of the
investments made.

          18.2 Delivery at Closing. If the initial Closing occurs, Escrow Agent shall deliver
the Deposit to, or upon the instructions of, Buyer and Seller on the Closing Date to be applied
against that portion of the Purchase Price due on such date.

          18.3 Return or Delivery of Deposit Outside Closing. Escrow Agent shall deliver the
Deposit to Seller or Buyer only upon receipt of a written demand therefor from such party, after
which Escrow Agent shall give written notice to the other party of such demand. Thereafter, (a) if
Escrow Agent does not receive a written objection from the other party to the proposed payment
within ten (10) days after the giving of such notice, then Escrow Agent is hereby authorized to
make such payment, but (b) if Escrow Agent does receive such written objection within such period,
Escrow Agent shall continue to hold such amount until otherwise directed by written instructions
signed by Seller and Buyer or a final judgment of a court.

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          18.4 Stakeholder. The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall not be deemed to be
the agent of either of the parties, and that Escrow Agent shall not be liable to either of the
parties for any action or omission on its part taken or made in good faith, and not in disregard of
this Agreement, but shall be liable for its negligent acts and for any Liabilities (including
reasonable attorneys’ fees, expenses and disbursements) incurred by Seller or Buyer resulting from
Escrow Agent’s mistake of Law or in the performance of its duties hereunder or any other document
executed in connection with the Deposit. Seller and Buyer shall jointly and severally indemnify
and hold Escrow Agent harmless from and against all Liabilities (including reasonable attorneys’
fees, expenses and disbursements) incurred in connection with the performance of Escrow Agent’s
duties hereunder or in any other document executed in connection with the Deposit, except with
respect to actions or omissions taken or made by Escrow Agent in bad faith, in disregard of this
Agreement, such other documents executed in connection with the Deposit or involving negligence on
the part of Escrow Agent.

          18.5 Taxes. The party receiving the Deposit (or the benefit thereof) shall pay any
income taxes on any interest earned on the Deposit. Buyer and Seller agree that, prior to Buyer
making the Deposit, they will report their respective taxpayer identification numbers to Escrow
Agent.

          18.6 Execution by Escrow Agent. To the extent that Buyer makes the Deposit, the
parties hereto shall amend this Agreement to make Escrow Agent a party hereto in order to confirm
Escrow Agent’s agreement to provisions hereof and that it will receive and shall hold the Deposit,
in escrow, and shall disburse the Deposit pursuant to the provisions of this Agreement. Buyer and
Seller shall be free to amend or modify this Agreement without Escrow Agent’s signature as long as
such amendment does not affect Escrow Agent’s liability hereunder.

          18.7 Buyer’s Termination Rights and Return of Deposit. If Buyer elects to Terminate
this Agreement in accordance with (x) Paragraph 8.3, the first sentence of Paragraph 9.1 (to the
extent that this Agreement is terminated) or Paragraph 12.2; or (y) Paragraph 15 (so long as Buyer
is not in default hereunder), Buyer shall be entitled to the return of the Deposit. Under all
other circumstances, the Deposit shall be non-refundable to Buyer. Buyer’s right to receive the
Deposit is in addition to (and not in limitation of) any other right it has hereunder to collect
certain damages, out-of-pocket costs or such other amounts from Seller.

     19. Additional Disclosure Items.

          19.1 Industrial Revenue Bond. With respect to the Atlanta Airport Holiday Inn Hotel,
Buyer acknowledges it is aware of Seller’s obligations with respect to the $20,000,000 in aggregate
principal amount of Development Authority of Clayton County Taxable Economic Development Revenue
Bonds (Bass Resources, Inc. Project), Series 1999 (the “Industrial Revenue Bond”) that
encumber the Hotel. Prior to the Closing Date Seller shall elect to either (i) pay-off the
Industrial Revenue Bond in full and convey the Atlanta Airport Holiday Inn Hotel free and clear of
the lien associated with the Industrial Revenue Bonds, or (ii) require Buyer with Buyer’s consent
to purchase the Atlanta Airport Holiday Inn Hotel subject to the terms of the Industrial Revenue
Bond.

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          19.2 Collective Bargaining Agreement. With respect to the Redondo Beach Crowne Plaza
Hotel and Toronto InterContinental Hotel, Buyer acknowledges that each of the foregoing Hotels is
subject to a collective bargaining agreement. Buyer and Seller agree to cooperate with each other
and the Manager as to any union notices or consents required by such collective bargaining
agreements. In accordance with the terms of the Management Agreement, the Manager will be the
employer responsible for such employees under each collective bargaining agreement.

     20. Limitation of Liability. No advisor, trustee, director, officer, employee,
beneficiary, shareholder, member, partner, participant, representative or agent of Buyer or Seller
shall have any personal liability, directly or indirectly, under or in connection with this
Agreement or any agreement made or entered into pursuant to the provisions of this Agreement, or
any amendment or amendments to any of the foregoing made at any time or times heretofore or
hereafter. In no event shall any of Buyer or Seller be entitled to punitive, consequential or
special damages under this Agreement, and each of Buyer and Seller hereby waives any right to
claim, pursue or collect same. The provisions of this Paragraph 20 shall survive any termination
of this Agreement and the Closing hereunder.

     21. Nonliability of Trustees. THE DECLARATIONS OF TRUST ESTABLISHING BUYER, COPIES OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”), IS DULY FILED WITH THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT, AND SELLER HEREBY
AGREES THAT, THE NAME “HPT IHG-2 PROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF BUYER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, BUYER. ALL PERSONS DEALING WITH BUYER, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF BUYER, FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.

     22. Monies from Seller. To the extent that Seller is obligated under this Agreement
to reimburse Buyer for any of its out-of-pocket costs or to pay Buyer any other amounts hereunder,
then to the extent necessary in Buyer’s judgment to preserve InterContinental Hotels Group
Resources, Inc.’s status as a Code Section 856(d)(9)(A) “eligible independent contractor” at a Code
Section 856(d)(9)(D) “qualified lodging facility” owned or leased by Buyer or its affiliates, all
such amounts shall be paid from those entities comprising Seller other than InterContinental Hotels
Group Resources, Inc.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement under seal as of the day and
year first above written.

	 	 	 	 	 
	 	SELLER:

Holiday Pacific Partners Limited Partnership,

a Delaware limited partnership

 	 
	 	By:  	Holiday Pacific Equity Corporation,
 	 
	 	 	a Delaware corporation, as its general partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	BHR Texas, L.P., a Delaware limited partnership

 	 
	 	By:  	InterContinental Hotels Group Resources, Inc.,
 	 
	 	 	a Delaware corporation, as its general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	InterContinental Hotels Group Resources, Inc.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	220 Bloor Street Hotel Inc.,

an Ontario corporation

 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

[Signature Page To Amended and Restated Purchase and Sale Agreement]

 

 

	 	 	 	 	 
	 	Crowne Plaza LAX, LLC,

a Georgia limited liability company

 	 
	 	By:  	InterContinental Hotels Group Resources, Inc.,
 

a Delaware corporation, as its general partner

	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Staybridge Markham, Inc.,

an Ontario corporation

 	 
	 	By:  	 	 
	 	 	Robert J. Chitty, as its Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	BUYER:

HPT IHG-2 Properties Trust,

a Maryland real estate investment trust

 	 
	 	By:  	 	 
	 	 	Name:  	John G. Murray 	 
	 	 	Title:  	President 	 
	 

[Signature Page to Purchase and Sale Agreement]

 

 

SCHEDULE A

Attached to and made a part of that certain:

Amended and Restated Purchase and Sale Agreement

by and between

BHR TEXAS, L.P.

INTERCONTINENTAL HOTELS GROUP RESOURCES, INC.

CROWNE PLAZA LAX, LLC

HOLIDAY PACIFIC PARTNERS LIMITED PARTNERSHIP

220 BLOOR STREET HOTEL INC.

STAYBRIDGE MARKHAM, INC.

AS SELLER

AND

HPT IHG-2 PROPERTIES TRUST

AS BUYER

(Dated as of February 9, 2005)

     “Agreement” shall mean this Amended and Restated Purchase and Sale Agreement between Seller
and Buyer including all schedules, exhibits and other attachments hereto, and documents
incorporated herein by reference.

     “Anaheim Holiday Inn Hotel” shall mean that certain Holiday Inn Hotel located on that certain
tract or parcel of land in Anaheim, California, more particularly described on Exhibit A-9.

     “Anaheim Staybridge Suites Hotel” shall mean that certain Staybridge Suites Hotel located on
that certain tract or parcel of land in Anaheim, California, more particularly described on
Exhibit A-10.

     “Atlanta Airport Holiday Inn Hotel” shall mean that certain Holiday Inn Hotel located on that
certain tract or parcel of land in Clayton County, Georgia, more particularly described on
Exhibit A-7.

     “Austin, TX InterContinental Hotel” shall mean that certain InterContinental Hotel located on
that certain tract or parcel of land in Austin, Texas, more particularly described on Exhibit
A-2.

     “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which
banking institutions in The Commonwealth of Massachusetts or the State of Georgia are authorized by
law or executive action to close.

     “Buyer” shall mean the buyer referenced in the first paragraph of this Agreement.

 

 

     “Buyer’s Diligence Reports” shall mean the results of any examinations, inspections,
investigations, tests, studies, analyses, appraisals, evaluations and/or investigations prepared by
or for or otherwise obtained by Buyer or Buyer’s Representatives in connection with Buyer’s Due
Diligence.

     “Buyer’s Knowledge” or “Buyer Knows” shall mean the actual (and not the imputed or
constructive) knowledge of John Murray of HPT.

     “Buyer’s Representatives” shall mean Buyer’s officers, employees, agents, advisors,
representatives, attorneys, accountants, consultants, lenders, investors, contractors, architects
and engineers.

     “Canadian Seller” shall mean 220 Bloor Street Hotel Inc. and Staybridge Markham, Inc. and as
owner and ground lessee, respectively, of the Toronto InterContinental Hotel and the Toronto
Staybridge Suites Hotel.

     “Closing” shall mean the consummation and closing of the Transaction.

     “Closing Agent” shall mean the Title Company or such other party as is selected by Buyer and
Seller to fund the Closing in escrow.

     “Closing Date” shall mean as the context so requires, (i) the date on which Buyer acquires
title to the Property in accordance with the terms hereof which date shall be on or before the
Closing Deadline as defined in Paragraph 1.1 of this Agreement except for the Austin, TX
InterContinental Hotel or any other Hotel for which the acquisition by Buyer has been delayed in
accordance with terms of this Agreement; or (ii) with respect to the Austin, TX InterContinental
Hotel, June 1, 2005; or (iii) with respect to any Hotel not acquired on the date pursuant to clause
(i) or (ii) hereof, the date as may be agreed to by the parties in accordance with the terms and
provisions of this Agreement.

     “Closing Deadline” is defined in Paragraph 1.1 of this Agreement.

     “Closing Documents” shall mean the documents and instruments delivered by Buyer and Seller, in
order to consummate the Transaction.

     “Closing Tax Year” shall mean the Tax Year in which the Closing Date occurs.

     “Code” shall mean the United States Internal Revenue Code of 1986 and the Treasury Regulations
promulgated thereunder, each as from time to time amended.

     “Collective Agreements” means the collective agreements in respect of the Hotels in Canada and
all related documents including letters of understanding, letters of intent and other written
communications with bargaining agents for employees working at any of the Hotels in Canada which
impose any obligations upon the Canadian Seller or any of its affiliates, all as listed and
described in Schedule 8.1(Z).

- 2 -

 

     “Condemnation Proceeding” shall mean any proceeding in condemnation, expropriation, eminent
domain or any written request for a conveyance in lieu thereof, or any notice that such proceedings
have been or will be commenced against any portion of the Property.

     “Confidential Materials” shall mean excerpts of any books, computer software, databases,
records or files (whether in a electronic or printed format) that consist of or contain any of the
following: appraisals; budgets; strategic plans for the Property; internal analyses; information
regarding the marketing of the Property for sale; submissions relating to obtaining internal
authorization for the sale of the Property by Seller or any direct or indirect owner of any
beneficial interest in Seller; attorney and accountant work product; attorney-client privileged
documents; internal correspondence of Seller, any direct or indirect owner of any beneficial
interest in Seller, or any of their respective affiliates and correspondence between or among such
parties; or other information or materials in the possession or control of Seller, Seller’s
property manager or any direct or indirect owner of any beneficial interest in Seller which such
party deems proprietary or confidential.

     “Consent to Assignment of Ground Lease” shall mean a consent and assignment to Ground Lease
delivered by the landlord under a Ground Lease to Seller, in form and substance satisfactory to
Buyer.

     “Contracts” shall mean all contracts respecting leasing, management, maintenance or operation
of the Real Property, including, but not limited to, equipment leases, agreements with respect to
building systems, service, construction, and maintenance contracts, but specifically excluding any
license to Seller of computer hardware, software, or system(s) or any other item constituting
Excluded Assets . A summary list of the Contracts (including identity of contract parties and type
of service) is shown on Exhibit N and made a part hereof.

     “Due Diligence” shall mean the investigation by Buyer and Buyer’s Representatives of the
feasibility and desirability of purchasing the Property, including all audits, surveys,
examinations, inspections, investigations, tests, studies, analyses, appraisals, evaluations,
investigations and verifications with respect to the Property, the Property Documents, title
matters, applicable land use and zoning Laws and other Laws applicable to the Property, the
physical condition of the Property, the economic status of the Property, and other information and
documents regarding the Property, including, but not limited to, investigations of the legal and
physical status of the Property by such consultants, engineers, architects and/or entomologists as
Buyer requires, tests and assessments with respect to environmental matters, soil tests, asbestos
analysis, mold analysis, structural review, examination of title to the Property, preparation of a
Survey of the Land, and verification of all information made or to be made available to Buyer with
respect to Property.

     “Due Diligence Deadline” is defined in Paragraph 1.1 of this Agreement.

     “Effective Date” shall mean December 17, 2004, the date of the Original Agreement.

     “Excluded Assets” shall mean, with respect to any Property:

- 3 -

 

     (i) any right, title or interest in the name “Staybridge,” “InterContinental,” Holiday Inn,”
or “Crowne Plaza”, as applicable, hotel and other System Marks (as defined in the Management
Agreement);

     (ii) all licenses and permits necessary for Manager to manage such Property pursuant to the
Management Agreement;

     (iii) all computer software that is the property of Seller or any of its affiliates and for
which Seller or such affiliate is the owner or copyright holder and not a mere licensee;

     (iv) any and all motor vehicles;

     (v) any and all menus, stationery, or other items indicating that such Property is owned by
the Seller;

     (vi) any and all personal property of the employees of the Properties;

     (vii) books, ledger sheets, files and records with respect to the operation of such Property;

     (viii) all contracts relating to such Property or its operations, other then the Contracts,
Leases and the Permitted Title Exceptions;

     (ix) alcoholic beverages inventories; and

     (x) leased two way radios.

     “Governing Documents” shall mean the certificate or articles of incorporation, bylaws,
declaration of trust, formation or governing agreement or other charter documents or organizational
or governing documents or instruments.

     “Governmental Authority” means any U.S. or Canadian federal, provincial or municipal
government or governmental authority or official having jurisdiction over the Property, and
includes any court, board, commission, department, administrative agency or regulatory body
thereof.

     “Ground Lease” shall mean, as the context so requires, each of the ground leases set forth on
Exhibit V.

     “Ground Lease Estoppel Certificate” shall have the meaning assigned to such term in Paragraph
5.1.9 of this Agreement.

     “Hilton Head Crowne Plaza Hotel” shall mean that certain Crowne Plaza Hotel located on that
certain tract or parcel of land in Hilton Head, South Carolina, more particularly described on
Exhibit A-6.

- 4 -

 

     “Hotel” shall mean any individual hotel located on the Land and described on Exhibits A-1
through A-12.

     “Houston InterContinental Hotel” shall mean that certain InterContinental Hotel located on
that certain tract or parcel of land in Houston, Texas, more particularly described on Exhibit
A-1.

     “HPT” shall mean Hospitality Properties Trust, a Maryland real estate investment trust.

     “HPT Guaranty” shall mean the Guaranty Agreement substantially in the form attached hereto as
Exhibit Q made by Hospitality Properties Trust for the benefit of Manager and PR Tenant (as
defined therein), as the same may be amended, restated, supplemented or otherwise modified from
time to time.

     “IHG” shall mean InterContinental Hotels Group, PLC, a United Kingdom corporation.

     “IHG Parent Guaranty” shall mean the Amended and Restated Consolidated Guaranty Agreement
substantially in the form attached hereto on Exhibit M to be made by IHG for the benefit of
HPT, Owner and certain of their affiliates, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

     “Initial Closing Date” shall mean the date on which Buyer acquires title to the Property in
accordance with the terms hereof (other than the Austin, TX InterContinental Hotel or any other
Hotel for which the acquisition by Buyer has been delayed in accordance with the terms of this
Agreement) which date shall be on or before the Closing Deadline.

     “Land” shall mean those certain tracts or parcels of land, more particularly described on
Exhibits A-1 to A-12.

     “Law” shall mean any United States or Canadian federal, state, provincial or local or
municipal law, statute, ordinance, code, order, decrees, or other governmental rule, regulation or
requirement, including common law.

     “Leases” shall mean all leases, subleases, rental agreements and other occupancy agreements
for the use or occupancy of any portion of the Real Property, or improvements located thereon if
any, together with all amendments to, modifications of, renewals and extensions thereof.

     “Lien” shall mean any mortgage, charge, deed of trust, security deed, lien, judgment, pledge,
conditional sales contract, security interest, past-due taxes, past-due assessments, contractor’s
lien, materialmen’s lien, construction lien, judgment or similar encumbrance against the Property
of a monetary nature.

     “Liabilities” shall mean any and all direct or indirect damages, demands, claims, payments,
problems, conditions, obligations, actions or causes of action, assessments, losses, liabilities,
costs and expenses of any kind or nature whatsoever, including, without limitation, penalties,
interest on any amount payable to a third party, lost income and profits, and any legal

- 5 -

 

or other expenses (including, without limitation, reasonable attorneys’ fees and expenses)
reasonably incurred in connection with investigating or defending any claims or actions, whether or
not resulting in any liability. In no event shall “Liabilities” include the right of Seller or
Buyer to collect punitive, consequential, or special damages under this Agreement, and each of
Buyer and Seller waive any right to collect the same.

     “Los Angeles Crowne Plaza Hotel” shall mean that certain Crowne Plaza Hotel located on that
certain tract or parcel of land in Los Angeles, California, more particularly described on
Exhibit A-5.

     “Management Agreement” shall mean that certain agreement for management services between Buyer
and Manager in the form attached hereto as Exhibit P.

     "Manager” shall mean the IHG Management (Maryland) LLC, and any of its permitted successors
and assigns.

     “Memphis Holiday Inn Hotel” shall mean that certain Holiday Inn Hotel located on that certain
tract or parcel of land in Memphis, Tennessee, more particularly described on Exhibit A-8.

     “Other Interests” shall mean the following other interests of Seller in and to the Real
Property, Leases, Contracts, or Personal Property, or pertaining thereto: (a) to the extent that
the same are in effect as of the Closing Date, and not retained by Seller or its affiliates
pursuant to the terms hereof or the Management Agreement or constitute Excluded Assets, any
licenses (but excluding any franchise license rights or liquor licenses), permits and other written
authorizations necessary for the use, operation or ownership of the Real Property, and (b) any
guaranties and warranties in effect with respect to any portion of the Real Property or the
Personal Property as of the Closing Date.

     “Owner” shall mean the Owner under the Management Agreement.

     “Permitted Title Exceptions” shall mean, subject to Buyer’s rights to review and make
objection to the status of title and survey as set forth in this Agreement, and the right of Buyer
to Terminate this Agreement pursuant to Paragraph 4.5 if the Due Diligence is not satisfactory, the
following: (a) the Leases and any new Leases entered into between the Effective Date and the
Closing Date in accordance with the terms of this Agreement; (b) all real estate taxes and
assessments not yet due and payable as of the Closing Date; (c) local, state and federal (if
applicable) zoning and building Laws; (d) the Record Exceptions disclosed by the Title Commitment
and not Removed or required to be Removed as provided for in Paragraph 4 hereof; (e) the state of
facts disclosed by a current Survey of the Land obtained by Buyer and not Removed or required to be
Removed as provided for in Paragraph 4 hereof; and (f) any other matters approved as Permitted
Title Exceptions in writing by Buyer prior to Closing or deemed approved as Permitted Title
Exceptions pursuant to this Agreement.

     “Personal Property” shall mean (a) all Property Documents; (b) all keys and combinations to
all doors, cabinets, safes, enclosures and other locking items or areas on or about

- 6 -

 

the improvements; (c) the food and beverage inventory of the Hotel; and (d) all tangible
personal property, including, but not limited to, all “Inventories”, as such term is defined in the
Uniform System of Accounts, and all other tools, vehicles, supplies, artwork, furniture,
furnishings, machinery, equipment, specialized hotel equipment and other tangible personal
property, in each case, owned or leased by Seller in connection with the ownership, operation or
maintenance of the Hotel, including without limitation all china, glassware, silverware, linens,
towels, curtains, uniforms, works of art, engineering, maintenance, and housekeeping supplies,
draperies, materials and carpeting, used or intended for use, but not for sale, in connection with
the operation of the Hotel, all equipment used in the operation of the kitchen, dining rooms,
lounges, bars, laundry, dry cleaners, lobby, reservation desk and all supplies, merchandise, food
and beverages held for sale in connection with the operation of the Hotel, which are on hand on the
Effective Date; but specifically excluding (i) any Confidential Materials, (ii) any computer
hardware, software, or system that is licensed to Seller, and (iii) any Excluded Assets.

     “PR Buyer” shall mean Buyer.

     “PR Hotel” shall mean that certain InterContinental Hotel located in San Juan, Puerto Rico
and leased by an affiliate of Manager to an affiliate of Owner pursuant to that certain lease
Agreement to be entered pursuant to the terms of the PR Stock Agreement.

     “PR Indemnity” shall mean that certain Indemnity Agreement made by PR Seller and Holiday
Hospitality Franchising, Inc. for the benefit of Buyer.

     “PR Lease” shall mean that certain Lease Agreement to be delivered by HPT IHG PR, Inc., as
landlord, and InterContinental Hotels (Puerto Rico) Inc., as tenant, in accordance with the
transactions described in the PR Stock Agreement.

     “PR Property” shall have the meaning ascribed to the term “Property” in the PR Lease.

     “PR Seller” shall mean Six Continents International Holdings B.V., a Netherlands closed
limited liability company.

     “PR Stock Agreement” shall mean that certain Stock Purchase Agreement pursuant to which an
affiliate of Manager has agreed to sell the stock of the owner of the PR Property to an affiliate
of Owner, as the same may be amended from time to time.

     “Property” shall mean the Real Property, the Leases, the Contracts, the Personal Property and
the Other Interests, but specifically excluding any right to or interest in any liquor license and
intellectual property rights referenced in Paragraph 5 hereto and other items constituting Excluded
Assets.

     “Property Documents” shall mean all books, records and files of Seller and of the Manager for
any Property related thereto (other than those books, records or files containing Confidential
Materials, provided, however that Seller shall make available extracts of non-confidential
information contained in such books, records or files).

     “Purchase Price” is defined in Paragraph 3.2.

- 7 -

 

     “Real Property” shall mean the Land, including, without limitation, (a) the Hotel and any
other buildings located on the Land and all other improvements, (b) all easements and rights-of-way
appurtenant to the Land and other easements, rights-of-way, grants of right, licenses, privileges
or other agreements for the benefit of, belonging to or appurtenant to the Land whether or not
situated upon the Land, including, without limitation, signage rights and parking rights or
agreements, all whether or not specifically referenced on Exhibits A-1 to A-12, (c) all
mineral, oil and gas rights, riparian rights, water rights, sewer rights and other utility rights
allocated to the Land, (d) all right, title and interest, if any, of the owner of the Land in and
to any and all strips and gores of land located on or adjacent to the Land, and (e) all right,
title and interest of the owner of the Land in and to any roads, streets and ways, public or
private, open or proposed, in front of or adjoining all or any part of the Land and serving the
Land.

     “Record Exceptions” shall mean all instruments recorded in the real estate records or land
titles registry of the County or municipality in which the Land is located which affect the status
of title to the Real Property or the Land subject to any leasehold interest evidenced by a Ground
Lease.

     “Redondo Beach Crowne Plaza Hotel” shall mean that certain Crowne Plaza Hotel located on that
certain tract or parcel of land in Redondo Beach, California, more particularly described on
Exhibit A-4.

     “Remove” with respect to any exception to the title of the Real Property, shall mean that
Seller causes the Title Company to remove or affirmatively insure over the same as an exception to
the Title Policy, to the reasonable satisfaction of Buyer, without any additional cost to Buyer,
whether such removal or insurance is made available in consideration of payment, bonding, indemnity
of Seller or otherwise.

     “Required Removal Items” shall mean, collectively, any Title Objections to the extent (and
only to the extent) that the same (a) have not been caused by Buyer or any Buyer’s Representatives,
and (b) are either: (i) Liens evidencing monetary encumbrances (other than liens for general real
estate taxes or assessments not yet due and payable) which can be Removed by payment of liquidated
amounts, (ii) liens or encumbrances (including, but not limited to, monetary liens) created by
Seller after the Effective Date and not consented to by Buyer; or (iii) items which Seller has
agreed to Remove pursuant to Paragraph 4.3 of this Agreement.

     “Seller” shall mean the Seller referenced in the first paragraph of this Agreement.

     “Seller’s Broker” shall mean The Plasencia Group, Inc.

     “Seller’s (Canada) Knowledge” shall mean the actual (and not the imputed or constructive
knowledge) of James P. Manley.

     “Seller’s Liability Limit” shall mean an amount that does not exceed in the aggregate five
percent (5%) of the sum of the total allocated values of all the Hotels set forth on Exhibit
A-13 to this Agreement and the purchase price of the common stock of the PR Seller as set forth
in the PR Stock Agreement, plus $25,000,000.00.

- 8 -

 

     “Seller’s Knowledge” shall mean the actual (and not the imputed or constructive) knowledge of
Robert Chitty, Robert Gunkel, and Thomas Brettschneider (collectively, the “Designated
Representatives”).

     “Seller Parties” shall mean and include, collectively, (a) Seller; (b) its counsel; (c) any
broker retained by Seller; (d) Seller’s property manager; (e) any direct or indirect owner of any
beneficial interest in Seller; (f) any officer, director, employee, or agent of Seller, its
counsel, any Broker retained by Seller, Seller’s property manager or any direct or indirect owner
of any beneficial interest in Seller; and (g) any other entity or individual affiliated or related
in any way to any of the foregoing.

     “Seller’s possession”, “in the Seller’s possession” or words of similar import shall be deemed
to mean to the extent the material or other item referred to by such phrase is located at the Hotel
or in Seller’s corporate headquarters.

     “Seller’s Representatives” shall mean Seller’s officers, employees, agents, advisors,
representatives, attorneys, accountants, consultants, investors, contractors, architects and
engineers.

     “Seller’s Warranties” shall mean Seller’s representations and warranties set forth in this
Agreement and the limited warranty of title set forth in the deed executed by Seller in connection
with Closing, as the same may be modified or waived by Buyer pursuant to this Agreement.

     “Survey” shall mean a survey of the Land obtained by Buyer pursuant to Paragraph 4.

     “Tax Year” shall mean the year period commencing on January 1 of each calendar year and ending
on December 31 of each calendar year.

     “Tenant” shall mean a tenant under a Lease; collectively, all tenants under the Leases are
referred to as the “Tenants”.

     “Terminate” shall mean the termination of this Agreement, by Buyer or Seller as applicable as
set forth in this Agreement, in which event thereafter neither party hereto shall have any further
rights, obligations or liabilities hereunder except to the extent that any right, obligation or
liability set forth in this Agreement expressly survives termination hereof.

     “Title Commitment” shall mean the Commitment of the Title Company to issue the Title Policy
relating to Real Property, as applicable, as the same may be updated from time to time.

     “Title Company” shall mean either Fidelity National Title or such other title company selected
by Buyer.

     “Title Objections” shall mean any defects in title (including any Record Exceptions which are
not acceptable to Buyer) or Survey (including the description of the Land) which may be revealed by
Buyer’s examinations thereof to which Buyer timely objects in accordance with the terms of
Paragraph 4.3.

- 9 -

 

     “Title Policy” shall mean the ALTA Owner’s Policy of Title Insurance (or such other comparable
form of title insurance policy as is available in the jurisdiction in which the Property is
located) issued by the Title Company in the amount of the Purchase Price and in the form of the
Title Commitment, and containing such endorsements as reasonably requested by Buyer.

     “Toronto InterContinental Hotel” shall mean that certain InterContinental Hotel located on
that certain tract or parcel of land in Toronto, Ontario leased pursuant to that certain Ground
Lease dated November 18, 1987 from The Corporation of the City of Toronto, more particularly
described on Exhibit A-12 in which the registered leasehold interest thereof is vested in
Inter-Continental Holdings (Canada) Inc. and the beneficial leasehold interest thereof is vested in
220 Bloor Street Hotel Inc.

     “Toronto Staybridge Suites Hotel” shall mean that certain Staybridge Suites Hotel located on
that certain tract or parcel of land in Markham, Ontario, more particularly described on
Exhibit A-11 the registered owner of which is InterContinental Hotels Group (Canada) Inc.
and the beneficial owner of which is Staybridge Markham, Inc.

     “Transaction” shall mean the purchase and sale transactions occurring on the applicable
Closing Date contemplated by this Agreement.

     “Uniform System of Accounts” shall mean the Uniform System of Accounts for the Lodging
Industry, prepared by The Hotel Association of New York City, Inc., in effect as of the date
hereof.

     “Unsuitable for Its Permitted Use” shall mean with respect to a Hotel, a state or condition
of such Hotel such that (a) following any damage or destruction involving such Hotel, such Hotel
cannot be operated in the good faith judgment of Buyer, Seller or Manager on a commercially
practicable basis and it cannot reasonably be expected to be restored to substantially the same
condition as existed immediately before such damage or destruction and otherwise as required under
Article 15 of the Management Agreement, using only the net proceeds of insurance obtained
in connection therewith and other funds that Seller or Manager elect to provide pursuant to the
terms of Article 15 of the Management Agreement within twelve (12) months following such
damage or destruction or such shorter period of time as to which business interruption insurance is
available to cover amounts to be paid to Owner under the Management Agreement upon the
effectiveness thereof and other costs related to the Hotel following such damage or destruction, or
(b) as the result of a partial taking by a Condemnation Proceeding, such Hotel cannot be operated
in the good faith judgment of Seller, Buyer or Manager on a commercially practicable basis in light
of then existing circumstances.

     “White Plains Crowne Plaza Hotel” shall mean that certain Crowne Plaza Hotel located on that
certain tract or parcel of land in White Plains, New York, more particularly described on
Exhibit A-3.

- 10 -

 

	 	 	 	 	 	 	 	 	 
	1.	 	Deadlines and Definitions.	 	 	2	 
	 	 	1.1	 	Deadlines
	 	 	2	 
	 	 	1.2	 	Definitions
	 	 	2	 
	2.	 	Purchase and Sale	 	 	2	 
	3.	 	Purchase Price	 	 	2	 
	 	 	3.1	 	Reserved.
	 	 	2	 
	 	 	3.2	 	Purchase Price.
	 	 	2	 
	 	 	3.3	 	Purchase Price Allocation.
	 	 	3	 
	4.	 	Buyer’s Due Diligence and Inspection Rights; Termination Right.	 	 	3	 
	 	 	4.1	 	Review of Property and Property Documents
	 	 	3	 
	 	 	4.2	 	Guidelines for Inspection Rights
	 	 	3	 
	 	 	4.3	 	Title and Survey Examination
	 	 	4	 
	 	 	4.4	 	As-Is, Where-Is, With All Faults Sale
	 	 	5	 
	 	 	4.5	 	Termination Right
	 	 	6	 
	5.	 	Covenants.	 	 	6	 
	 	 	5.1	 	Seller’s Covenants: Effective Date to Closing Date
	 	 	6	 
	 	 	5.2	 	Seller’s Covenants After the Closing Date
	 	 	9	 
	 	 	5.3	 	Bulk Sales
	 	 	9	 
	 	 	5.4	 	Approvals and Notifications
	 	 	9	 
	 	 	5.5	 	Reserved.
	 	 	10	 
	 	 	5.6	 	Reserved.
	 	 	10	 
	 	 	5.7	 	Required Work
	 	 	10	 
	6.	 	Closing	 	 	10	 
	 	 	6.1	 	Closing Mechanics
	 	 	10	 
	 	 	6.2	 	Seller’s Deliveries
	 	 	11	 
	 	 	6.3	 	Buyer’s Deliveries
	 	 	14	 
	7.	 	Prorations, Credits and Closing Costs.	 	 	15	 
	 	 	7.1	 	Proration Items.
	 	 	15	 
	 	 	7.2	 	Closing Statement and Schedules
	 	 	15	 
	 	 	7.3	 	Seller’s Closing Costs
	 	 	15	 
	 	 	7.4	 	Buyer’s Closing Costs
	 	 	16	 
	 	 	7.5	 	Canadian Taxes.
	 	 	16	 
	8.	 	Representations and Warranties.	 	 	17	 
	 	 	8.1	 	Seller’s Representations and Warranties
	 	 	17	 
	 	 	8.2	 	Reserved.
	 	 	23	 
	 	 	8.3	 	Claims of Breach Prior To Closing
	 	 	23	 
	 	 	8.4	 	Survival and Limits On Buyer’s Claims
	 	 	24	 
	 	 	8.5	 	Buyer’s Representations and Warranties
	 	 	24	 
	 	 	8.6	 	Reserved.
	 	 	25	 
	9.	 	Casualty and Condemnation	 	 	25	 
	 	 	9.1	 	Major Event
	 	 	26	 
	 	 	9.2	 	Closing Despite Casualty/Condemnation
	 	 	26	 
	10.	 	Other Conditions to Closing	 	 	27	 
	 	 	10.1	 	Conditions to Buyer’s Obligations
	 	 	27	 
	 	 	10.2	 	Conditions to Seller’s Obligations
	 	 	28	 
	 	 	10.3	 	Waiver of Conditions
	 	 	28	 

 

	 	 	 	 	 	 	 	 	 
	 	 	10.4	 	Additional Austin, InterContinental Closing Conditions
	 	 	28	 
	 	 	10.5	 	Additional Atlanta, Airport Holiday Inn Hotel Closing Conditions
	 	 	29	 
	11.	 	Transaction Issues: Brokers, Confidentiality and Indemnity.	 	 	29	 
	 	 	11.1	 	Brokers
	 	 	29	 
	 	 	11.2	 	Publicity
	 	 	29	 
	 	 	11.3	 	Indemnity.
	 	 	30	 
	 	 	11.4	 	Employment Indemnity
	 	 	30	 
	12.	 	Default At or Prior to Closing.	 	 	31	 
	 	 	12.1	 	Buyer Default
	 	 	31	 
	 	 	12.2	 	Seller Default
	 	 	31	 
	13.	 	Notices	 	 	32	 
	14.	 	General Provisions.	 	 	33	 
	 	 	14.1	 	Execution Necessary
	 	 	33	 
	 	 	14.2	 	Counterparts
	 	 	33	 
	 	 	14.3	 	Successors and Assigns
	 	 	33	 
	 	 	14.4	 	Governing Law
	 	 	34	 
	 	 	14.5	 	Entire Agreement
	 	 	34	 
	 	 	14.6	 	Time is of the Essence
	 	 	34	 
	 	 	14.7	 	Interpretation
	 	 	34	 
	 	 	14.8	 	Survival
	 	 	35	 
	 	 	14.9	 	Further Assurances
	 	 	35	 
	 	 	14.10	 	Exclusive Application
	 	 	35	 
	 	 	14.11	 	Partial Invalidity
	 	 	35	 
	 	 	14.12	 	No Implied Waiver
	 	 	35	 
	 	 	14.13	 	Rights Cumulative
	 	 	35	 
	 	 	14.14	 	Attorney’s Fees
	 	 	35	 
	 	 	14.15	 	Waiver of Jury Trial
	 	 	35	 
	 	 	14.16	 	Facsimile Signatures
	 	 	36	 
	 	 	14.17	 	No Recordation
	 	 	36	 
	 	 	14.18	 	Maximum Aggregate Liability
	 	 	36	 
	 	 	14.19	 	Exhibits and Schedules
	 	 	36	 
	 	 	14.20	 	Jurisdiction
	 	 	36	 
	 	 	14.21	 	Interpretation of Agreement after Initial Closing Date
	 	 	37	 
	 	 	14.22	 	Currency
	 	 	37	 
	 	 	14.23	 	SEC Matters
	 	 	37	 
	 	 	14.24	 	Planning Act
	 	 	37	 
	 	 	14.25	 	Management Agreement
	 	 	37	 
	15.	 	Additional Termination Rights	 	 	37	 
	16.	 	Retention of Hotel Employees	 	 	38	 
	17.	 	On-Going Management of Hotel	 	 	38	 
	18.	 	Deposit	 	 	38	 
	 	 	18.1	 	Deposit
	 	 	38	 
	 	 	18.2	 	Delivery at Closing
	 	 	38	 
	 	 	18.3	 	Return or Delivery of Deposit Outside Closing
	 	 	38	 
	 	 	18.4	 	Stakeholder
	 	 	39	 
	 	 	18.5	 	Taxes
	 	 	39	 

 

	 	 	 	 	 	 	 	 	 
	 	 	18.6	 	Execution by Escrow Agent
	 	 	39	 
	 	 	18.7	 	Buyer’s Termination Rights and Return of Deposit
	 	 	39	 
	19.	 	Additional Disclosure Items.	 	 	39	 
	 	 	19.1	 	Industrial Revenue Bond
	 	 	39	 
	 	 	19.2	 	Collective Bargaining Agreement
	 	 	40	 
	20.	 	Limitation of Liability	 	 	40	 
	21.	 	Nonliability of Trustees	 	 	40	 
	22.	 	Monies from Seller	 	 	40exv4w23

 

EXHIBIT 4(b)(iii)

CONFORMED COPY

Dated 22 April 2005

BRITANNIA SOFT DRINKS LIMITED

INTERCONTINENTAL HOTELS GROUP PLC

ALLIED DOMECQ PLC

WHITBREAD GROUP PLC

and

PEPSICO, INC.

BSD IPO AGREEMENT

Linklaters

One Silk Street

London EC2Y8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

Ref Stuart Bedford/David Martin

 

 

Table of Contents

	 	 	 	 	 
	Contents	 	 	 	Page
	1
	 	Interpretation	 	1
	 
	 	 	 	 
	1.1
	 	Definitions	 	1
	 
	 	 	 	 
	1.2
	 	Subordinate Legislation	 	4
	 
	 	 	 	 
	1.3
	 	Modification etc. of Statutes	 	4
	 
	 	 	 	 
	1.4
	 	Interpretation Act 1978	 	4
	 
	 	 	 	 
	1.5
	 	References	 	4
	 
	 	 	 	 
	1.6
	 	Companies Act	 	5
	 
	 	 	 	 
	1.7
	 	Headings and Recitals	 	5
	 
	 	 	 	 
	1.8
	 	BSD Joint Venture Agreement	 	5
	 
	 	 	 	 
	2
	 	PepsiCo’s Rights as Minority BSD Shareholder	 	5
	 
	 	 	 	 
	2.1
	 	Board Representation	 	5
	 
	 	 	 	 
	2.2
	 	Pre-Emption Rights	 	6
	 
	 	 	 	 
	2.3
	 	Provision of information to PepsiCo director	 	6
	 
	 	 	 	 
	3
	 	IPO	 	6
	 
	 	 	 	 
	3.1
	 	Intention to IPO	 	6
	 
	 	 	 	 
	3.2
	 	IPO Commencement Date	 	6
	 
	 	 	 	 
	3.3
	 	IPO Conditions	 	6
	 
	 	 	 	 
	3.4
	 	IPO Period	 	8
	 
	 	 	 	 
	3.5
	 	Participation and Cooperation in the Conduct of the IPO	 	9
	 
	 	 	 	 
	3.6
	 	Entitlement to BSD Shares	 	11
	 
	 	 	 	 
	3.7
	 	Dilutive Events	 	17
	 
	 	 	 	 
	3.8
	 	Illustrative Shareholdings	 	18
	 
	 	 	 	 
	3.9
	 	Transfer of title	 	18

i

 

	 	 	 	 	 
	 
	 	 	 	 
	4
	 	Termination of BSD IPO Agreement	 	18
	 
	 	 	 	 
	4.1
	 	Termination	 	18
	 
	 	 	 	 
	4.2
	 	Effect of Termination	 	18
	 
	 	 	 	 
	5
	 	Termination of BSD Shareholders’ Agreement	 	19
	 
	 	 	 	 
	5.1
	 	Termination Events	 	19
	 
	 	 	 	 
	5.2
	 	Consequences of Termination	 	19
	 
	 	 	 	 
	5.3
	 	PepsiCo Put	 	19
	 
	 	 	 	 
	6
	 	Confidentiality	 	20
	 
	 	 	 	 
	6 1
	 	Definition of Confidential Information	 	20
	 
	 	 	 	 
	6.2
	 	Confidentiality Undertakings	 	21
	 
	 	 	 	 
	6.3
	 	Permitted Disclosure	 	21
	 
	 	 	 	 
	6.4
	 	Notification of Unauthorised Disclosure	 	21
	 
	 	 	 	 
	7
	 	General Provisions	 	21
	 
	 	 	 	 
	7.1
	 	Whole Agreement	 	21
	 
	 	 	 	 
	7.2
	 	Group Interests	 	22
	 
	 	 	 	 
	7.3
	 	Third Party Rights	 	22
	 
	 	 	 	 
	7.4
	 	Variation	 	22
	 
	 	 	 	 
	7.5
	 	Further Assurance	 	22
	 
	 	 	 	 
	7.6
	 	Notices	 	22
	 
	 	 	 	 
	7.7
	 	Appointment of Process Agent	 	23
	 
	 	 	 	 
	7.8
	 	Invalidity	 	24
	 
	 	 	 	 
	7.9
	 	Counterparts	 	24
	 
	 	 	 	 
	7.10
	 	Governing Law and Jurisdiction	 	24
	 
	 	 	 	 
	Schedule 1 Illustrative Shareholdings	 	26

ii

 

This Agreement is made on 22 April 2005 between:

	(1)  	Britannia Soft Drinks Limited registered in England and Wales with company number
47094 having its registered office at Britvic House, Broomfield Road, Chelmsford, Essex,
CM1 1TU (“BSD”);
	 
	(2)  	Intercontinental Hotels Group PLC registered in England and Wales with company
number 4551528 having its registered office at 67 Alma Road, Windsor, Berkshire, SL4
3HD (“IHG”);
	 
	(3)  	Allied Domecq PLC registered in England and Wales with company number 3771147
having its registered office at The Pavilions, Bridgwater Road, Bedminster Down, Bristol,
BS13 8AR (“Allied”);
	 
	(4)  	Whitbread Group PLC registered in England and Wales with company number 29423
having its registered office at CityPoint, 1 Ropemaker Street, London, EC2Y 9HX
(“Whitbread”); and
	 
	(5)  	PepsiCo, Inc., a corporation organised under the laws of the State of North Carolina, with
general offices at 700 Anderson Hill Road, Purchase, New York (“PepsiCo”).

Recitals

	(A)  	PepsiCo and Britvic entered into the EBAs and the FPA on 10 March 2004.
	 
	(B)  	PepsiCo also became a shareholder of BSD on 10 March 2004.
	 
	(C)  	The Parties entered into the Existing BSD IPO Agreement on 10 March 2004 which, inter
alia, set out their agreement as to PepsiCo’s rights as a minority shareholder of BSD and
the terms on which the Parties would agree to proceed with an initial public offering and
stock exchange listing of BSD.
	 
	(D)  	The Parties wish to terminate the Existing BSD IPO Agreement and replace it with this
Agreement.

It is agreed as follows:

	1  	Interpretation
	 
	1.1  	Definitions

In this Agreement (including the Recitals), unless the context otherwise requires:

“Accounts” means the consolidated management accounts of BSD, prepared by BSD on a basis
consistent with the applicable Accounting Policies, for the Financial Conditions Period;

“Accounting Date” means the last day of the Accounting Period which immediately precedes
the first Accounting Period before the Announcement Period;

“Accounting Period” means any of the 4 (or occasionally 5) week periods in respect of which
BSD prepares consolidated management accounts;

“Accounting Policies” means the accounting principles, standards, conventions and practices
used in the preparation of BSD’s audited consolidated accounts for the year ended 2 October
2004; provided that, to the extent that such principles, standards, conventions and
practices are inapplicable or not used in relation to any item(s) to be included in BSD’s
consolidated management accounts for the Financial Conditions Period,

1

 

	   	this definition will include those accounting principles, standards, conventions and
practices which would have been applicable or would have had effect on 2 October 2004 in
relation to such item;
	 
	   	“Admission” means the admission of BSD Shares to listing on the Official List of the UKLA,
and to trading on the London Stock Exchange’s market for listed securities, in connection
with the IPO;
	 
	   	“Agreement” means this Agreement, as it may be amended or supplemented from time to time,
and includes the Schedules hereto;
	 
	   	“Announcement Date” means the date of public announcement by BSD of the firm intention to
implement the IPO;
	 
	   	“Announcement Period” means the Accounting Period in which the Announcement Date falls;
	 
	   	“Associated Company” means, in relation to a Party, any holding company, subsidiary or any
other subsidiaries of any such holding company;
	 
	   	“Base Combined Percentage” means 9 per cent. of the issued BSD Shares from time to time;
	 
	   	“Britvic” means Britvic Soft Drinks Limited, a company registered in England and Wales with
company number 517211, and having its registered office at Britvic House, Broomfield Road,
Chelmsford, Essex, CM1 1TU;
	 
	   	“BSD Board” means the board of directors of BSD, or any successor entity to BSD, from time
to time;
	 
	   	“BSD Joint Venture Agreement” means the joint venture agreement in relation to BSD between,
inter alia, BSD, IHG, Whitbread and Allied dated 10 February 1986, as amended;
	 
	   	“BSD Shares” means ordinary shares of £1 each in the capital of BSD or, following any scheme
of arrangement or reconstruction effected prior to the IPO in accordance with Clause
3.5.2(ii), the ordinary shares in the holding company of Britvic and its subsidiaries and
fellow subsidiaries in which PepsiCo and the Original BSD Shareholders hold shares and
references to a shareholding in BSD or similar expression will be construed accordingly;
	 
	   	“BSD Share Offering” means the IPO and each Subsequent Offering;
	 
	   	“Business Day” means a day on which clearing banks are ordinarily open for business in both
London and New York;
	 
	   	“Code” means the City Code on Takeovers and Mergers, as from time to time in force;
	 
	   	“Confidential Information” has the meaning given in Clause 6.1;
	 
	   	“Dilutive Event” means any subsequent issue of BSD Shares on a non pre-emptive basis by BSD
following the IPO, including, without limitation, as a result of the exercise of employee
share options or an issue of BSD Shares in consideration for an acquisition;
	 
	   	“EBAs” means the two agreements known as the Exclusive Bottling Appointments, both entered
into on 10 March 2004 between PepsiCo and Britvic and Seven-Up International, a division of
the Concentrate Manufacturing Company of Ireland (an Associated Company of PepsiCo) and
Britvic, respectively;

2

 

	   	“Existing BSD IPO Agreement” means the agreement in relation to the potential IPO of BSD
between the Shareholders and BSD dated 10 March 2004;
	 
	   	“Final BSD Share Offering” means the BSD Share Offering following which each Original BSD
Shareholder holds less than 3% of issued BSD Shares;
	 
	   	“Financial Conditions Period” means the period of 13 Accounting Periods ending on the
Accounting Date;
	 
	   	“FPA” means the agreement known as the Franchise Performance Agreement between Pepsi-Cola
International, Cork (an Associated Company of PepsiCo) and Britvic dated 10 March 2004;
	 
	   	“Initial Combined Percentage” means ninety-five per cent. of the issued BSD Shares as at the
date of this Agreement;
	 
	   	“Initial Percentage” means five per cent. of the issued BSD Shares as at the date of this
Agreement;
	 
	   	“IPO” means the initial public offering of BSD Shares (comprising an offer of BSD Shares for
sale by the Original BSD Shareholders and, if so resolved by the BSD Board, an offer of new
BSD Shares for subscription) and Admission of the BSD Shares;
	 
	   	“IPO Board” means the BSD Board comprising the individuals whom the Shareholders agree,
subject to PepsiCo’s rights under Clause 2.1, will be the directors of BSD (or any successor
entity of BSD) at the time, and in the event, of Admission;
	 
	   	“IPO Commencement Date” has the meaning specified in Clause 3.2.1;
	 
	   	“IPO Conditions” means the circumstances specified in Clause 3.3;
	 
	   	“IPO Minimum” means such number of shares as is 50 per cent. of the total issued ordinary
share capital of BSD immediately following the IPO (including any new BSD Shares issued in
connection with the IPO);
	 
	   	“IPO Period” has the meaning specified in Clause 3.4;
	 
	   	“IPO Window” has the meaning specified in Clause 3.3;
	 
	   	“Listing Rules” means the Listing Rules made by the UKLA for the purposes of Part VI of the
Financial Services and Markets Act 2000 (as amended or supplemented from time to time);
	 
	   	“London Stock Exchange” means London Stock Exchange plc;
	 
	   	“Mandatory Offer” has the meaning given in Clause 3.6.8;
	 
	   	“Maximum Percentage” means 25 per cent. of the issued BSD Shares from time to time, plus one
share;
	 
	   	“Official List” means the Official List of the UKLA;
	 
	   	“Original BSD Shareholders” means IHG, Allied and Whitbread;
	 
	   	“Panel” means The Panel on Takeovers and Mergers;
	 
	   	“Parties” means the parties to this Agreement; and “Party” means any one of them;
	 
	   	“Participating Original BSD Shareholder” means any Original BSD Shareholder which is selling
BSD Shares in a BSD Share Offering;

3

 

	   	“Permitted Subsidiary” means, in relation to any Shareholder, any wholly-owned (direct or
indirect) subsidiary of such Shareholder;
	 
	   	“Reporting Accountants” means the accountants engaged, or proposed to be engaged, by BSD to
advise it in connection with the IPO;
	 
	   	“Requisite Number” has the meaning given in Clause 3.6.1(ii);
	 
	   	“SARs” means the Rules Governing Substantial Acquisitions of Shares issued on behalf of the
Panel;
	 
	   	“Shareholders” means the Original BSD Shareholders and PepsiCo;
	 
	   	“Subsequent Offering” means any sale or offering of BSD Shares made by any one or more (as
the case may be) of the Original BSD Shareholders other than a sale made pursuant to Clause
3.6.2(i) and (iii) to (ix);
	 
	   	“Tropicana” means Tropicana United Kingdom Limited, a company registered in England and
Wales with company number 2576034, having its registered office at 1600 Arlington Business
Park, Theale, Reading, RG7 4SA and a wholly owned subsidiary of PepsiCo; and
	 
	   	“UKLA” means the UK Listing Authority or any successor body or authority thereto.

	 
	1.2  	Subordinate Legislation
	 
	   	Any reference to a statutory provision shall include any subordinate legislation made from
time to time under that provision.
	 
	1.3  	Modification etc. of Statutes
	 
	   	References to a statute or statutory provision include that statute or provision as from
time to time modified, re-enacted or consolidated.
	 
	1.4  	Interpretation Act 1978
	 
	   	The Interpretation Act 1978 shall apply in this Agreement in the same way as it applies to
an enactment.
	 
	1.5  	References

	 	1.5.1  	References to “Clauses” and “Schedules” are to clauses and schedules of
this Agreement.
	 
	 	1.5.2  	References to a Shareholder being a “holder” of BSD Shares are to such
Shareholder in its capacity as the direct owner of the shares and, where the context
requires, in its capacity as having an indirect interest through ownership by a
Permitted Subsidiary; and “holding” and “holds” shall, unless the context otherwise
requires, be interpreted accordingly.
	 
	 	1.5.3  	Any phrase introduced by the terms “including”, “include”, “in particular”
or any similar expression shall be construed as illustrative and shall not limit the
sense of the words preceding those terms.
	 
	 	1.5.4  	References to any Shareholder, PepsiCo or any Original BSD Shareholder
include, unless the context otherwise requires, Permitted Subsidiaries of such
Shareholder, PepsiCo or Original BSD Shareholder.

4

 

	 	1.5.5  	References to any agreement include that agreement as amended or restated
from time to time or, in the case of FPA only, any agreement substituted therefor.

	1.6  	Companies Act

	 	1.6.1  	The expressions “holding company” and “subsidiary” shall have the meanings
set out in Section 736 of the Companies Act 1985.
	 
	 	1.6.2  	The expression “equity security” shall have the meaning set out in Section
94 of the Companies Act 1985.

	1.7  	Headings and Recitals
	 
	   	Headings and Recitals in this Agreement are included for convenience only and shall be
ignored in construing this Agreement.
	 
	1.8  	BSD Joint Venture Agreement
	 
	   	Save as provided in Clause 7.2.1, if there is any ambiguity or conflict between the
terms of this Agreement and the terms of the BSD Joint Venture Agreement, the terms of this
Agreement shall prevail.
	 
	2  	PepsiCo’s Rights as Minority BSD Shareholder
	 
	2.1  	Board Representation

	 	2.1.1  	From the date of this Agreement until Admission:

	 	(i)  	PepsiCo shall have the right to appoint a director to the BSD
Board and, for the avoidance of doubt, such right shall apply in relation to
appointments by PepsiCo of a non-executive director to the IPO Board;
	 
	 	(ii)  	any director appointed by PepsiCo pursuant to Clause 2.1.1 may
be removed by PepsiCo and PepsiCo shall be entitled to appoint another director
in his or her place; and
	 
	 	(iii)  	the Original BSD Shareholders shall exercise their rights as
holders of BSD Shares to give effect to the rights of PepsiCo under this Clause
2.1, including taking all such steps as are necessary to ensure that PepsiCo’s
nominee is appointed to or removed from the BSD Board.
	 
	 	(iv)  	if there has been:

	 	(a)  	a non-renewal of the EBAs by PepsiCo;
	 
	 	(b)  	a termination of the EBAs by PepsiCo other than
as a result of Britvic’s breach; or
	 
	 	(c)  	a termination of the EBAs by Britvic as a
result of PepsiCo’s breach,

	 	  	or, if earlier, notice has been given in respect of any of paragraphs (a)
and (b) above, then PepsiCo’s rights, and the Original BSD Shareholders’
obligations, under Clause 2.1.1 shall cease with immediate effect upon the
occurrence of such event or the giving of such notice and PepsiCo shall
immediately prior to such cessation remove any director it has appointed to
the BSD Board (including, for the avoidance of doubt, any appointee to the
IPO Board).

5

 

	 	2.1.2  	At any general meeting of BSD held after Admission at which:

	 	(i)  	a resolution is proposed for the election or re-election (as
the case may be) of a PepsiCo nominee to the BSD Board, each of the Original
BSD Shareholders agrees to exercise any votes it then (directly or indirectly)
holds in favour of the resolution; or
	 
	 	(ii)  	a resolution is proposed for the removal of a PepsiCo nominee,
each of the Original BSD Shareholders agrees to exercise any votes it then
(directly or indirectly) holds against such resolution,

	 	   	unless (in either case) it would not be in the best interests of BSD to do so.

	2.2  	Pre-Emption Rights
	 
	   	Prior to the time of Admission, the Shareholders shall exercise their rights as holders
of BSD Shares so as to procure that BSD shall not allot equity securities which are to be
wholly paid up in cash unless it has first offered such equity securities in accordance with
Section 89 of the Companies Act 1985.
	 
	2.3  	Provision of information to PepsiCo director
	 
	   	BSD shall ensure that the director appointed by PepsiCo is sent notice of, and
documents relating to, any meetings of the BSD Board and, where such director is a member,
any meetings of any committee of the BSD Board at the same time as such notice or such
documents are sent respectively to the other members of the BSD Board or the relevant
committee of the BSD Board. Any such notice or documents shall be circulated in accordance
with the provisions of the Articles.
	 
	3  	IPO
	 
	3.1  	Intention to IPO
	 
	   	The Parties intend to undertake the IPO and this Clause 3 sets out the conditions to
the IPO and the rights and obligations of the parties in relation to the process for
effecting the IPO.
	 
	3.2  	IPO Commencement Date

	 	3.2.1  	The BSD Board may resolve at any time that, subject to satisfaction of the
IPO Conditions, BSD shall proceed with preparations for the IPO. Subject to Clause
3.4.2(iii), the date of such resolution shall be the “IPO Commencement Date”.
	 
	 	3.2.2  	The BSD Board shall notify each Shareholder in writing of a resolution
under Clause 3.2.1 within 5 days of the IPO Commencement Date.

	3.3  	IPO Conditions

	 	3.3.1  	Subject to the remainder of this Clause 3.3 and Clause 3.4, the IPO may
proceed with an Admission date which is within the period between 1 January 2005 and 31
December 2008 (the “IPO Window”).
	 
	 	3.3.2  	The IPO may not proceed if:

	 	(i)  	the number of BSD Shares to be sold by the Original BSD
Shareholders (including any BSD Shares sold to PepsiCo pursuant to Clauses
3.6.1) and

6

 

	 	3.7  	and issued by BSD (in each case) in connection with the IPO would (in
aggregate) be fewer than the IPO Minimum;

	 	(ii)  	PepsiCo has, at any time prior to the Announcement Date, given
a bona fide valid notice of breach pursuant to clause 6(a) of either EBA;
provided that, if PepsiCo has given such a notice, it will be deemed not to be
effective (for the purposes only of this Clause 3.3.2(ii)) if:

	 	(a)  	the specified breach has been remedied within
90 days of receipt of the notice of breach (the “Remedy Period”);
	 
	 	(b)  	in circumstances where the Remedy Period has
not expired as at the Announcement Date, the BSD Board has passed a
resolution confirming that the specified breach will be remedied within
the Remedy Period; or
	 
	 	(c)  	on or before the Announcement Date, PepsiCo has
withdrawn, or agreed to withdraw, such notice.

	 	(iii)  	at the IPO Commencement Date, the FPA has an unexpired term of
less than two calendar years; or
	 
	 	(iv)  	either of the following financial tests has not been satisfied:

	 	(a)  	EBITDA/Interest of BSD shall exceed 5.5x where:

	 	(I)  	“EBITDA” is the profit after
taxation shown in the Accounts with the following charges set out
in the Accounts being added back (or where appropriate deducted):

	 	(A)  	the charge for taxation;
	 
	 	(B)  	net Interest payable/receivable;
	 
	 	(C)  	any amount attributable to amortisation of goodwill or other
intangible assets and the charge for depreciation of tangible fixed
assets including any impairment charge;

	 	   	EBITDA shall be adjusted to negate the effects of the
following items (which shall be derived from the Accounts):

	 	(A)  	any profit or loss resulting from the release of unutilised fair value
provisions;
	 
	 	(B)  	items treated as extraordinary or exceptional items, as determined by
reference to Financial Reporting Standard 3; and

	 	(II)  	“Interest” is the amount shown as
net interest charged or received in the Accounts; and

	 	(b)  	Net Debt/EBITDA shall be less than 2.5x where:

	 	(I)  	“Net Debt” is the net amount of
bank loans, other loans, overdrafts, finance lease payables and
cash (including cash equivalents) and bank balances extracted
from the balance sheet in the Accounts;

7

 

	 	(II)  	“EBITDA” has the meaning given in
Clause 3.3.2(iv)(a)(I),

	 	3.3.3  	BSD shall, as soon as reasonably practicable (but in any event no longer
than 15 Business Days after the Accounting Date), provide to the Shareholders
reasonable evidence in writing (comprising schedules extracting the relevant
information from the BSD management accounts and a confirmation that such schedules
have been prepared on a basis consistent with the Accounting Policies (which shall
hereafter be referred to as the “Financial Conditions Submission”)) that the financial
conditions specified in Clause 3.3.2(iv) have been satisfied (and BSD shall provide
promptly any further evidence or information reasonably requested by any Shareholder in
relation to the satisfaction of the financial conditions). Any Shareholder may, within
5 Business Days of receipt of the Financial Conditions Submission, give written notice
to each of the other Shareholders and BSD that it is not satisfied that the financial
conditions have been met. If no such notice has been given within the specified period,
the financial conditions shall be deemed to have been satisfied for the purposes of
Clause 3.3. If such notice is given (and not withdrawn prior to the end of the
specified period), BSD shall procure that the Reporting Accountants prepare a written
determination as to whether the financial conditions set out in Clause 3.3.2(iv) have
been satisfied. In providing such determination, the Reporting Accountants will be
acting as an expert, not an arbitrator, and, in the absence of manifest error or fraud,
the determination by the Reporting Accountants will be final and binding on the
Parties.

	3.4  	IPO Period

	 	3.4.1  	Subject to the following provisions of this Clause 3.4, the IPO may only
proceed if the date of Admission falls within the period of 12 months from the IPO
Commencement Date (the “IPO Period”).
	 
	 	3.4.2  	If the BSD Board resolves during the IPO Period to discontinue preparations
for the IPO, then that IPO Period shall cease. If the BSD Board subsequently wishes to
resume preparations for the IPO, then:

	 	(i)  	the BSD Board must pass another resolution pursuant to Clause
3.2.1, subject to satisfaction of the IPO Conditions;
	 
	 	(ii)  	notice of such resolution must be given to Shareholders
pursuant to Clause 3.2.2; and
	 
	 	(iii)  	the date of such resolution shall be the IPO Commencement Date
(and any previous IPO Commencement Date shall cease to be relevant for the
purposes of this Agreement) and a new IPO Period shall commence therefrom.

	 	3.4.3  	If the IPO Period expires before the time of Admission and the BSD Board
wishes to continue with preparations for the IPO, then Clauses 3.4.2(i), (ii) and (iii)
shall apply.
	 
	 	3.4.4  	If the BSD Board passes a resolution pursuant to Clause 3.2.1 (including
where such resolution is passed pursuant to Clauses 3.4.2 or 3.4.3) within the 12
months prior to 31 December 2008, then the IPO Period shall be the period from the date
of that resolution to 31 December 2008.

8

 

	3.5  	Participation and Cooperation in the Conduct of the IPO

	 	3.5.1  	For the duration of the IPO Period, each of the Parties shall co-operate
with the other Parties and their respective financial and other advisers to achieve the
IPO in accordance with the Listing Rules, the rules and regulations of the London Stock
Exchange and other applicable laws and regulation.
	 
	 	3.5.2  	For the duration of the IPO Period, and without imposing any obligation to
sell shares in BSD, each of the Shareholders shall, to the extent relevant to such
Shareholder (having regard to its shareholding in BSD, its representation (if any) on
the BSD Board (including, where relevant, the IPO Board) and its role in the process
for implementing the IPO), use all reasonable endeavours to assist BSD in taking all
actions necessary to achieve the IPO including, without limitation, cooperating and
participating as reasonably required to implement, as appropriate, the following
actions:

	 	(i)  	converting BSD into a public limited company;
	 
	 	(ii)  	reorganising the share capital structure of BSD (including,
without limitation, insertion of a new holding company by way of an arrangement
or compromise under Section 425 of the Companies Act 1985) provided that,
following such reorganisation, each Shareholder would have rights as a
shareholder in BSD (or any successor entity to BSD) equivalent to those it had
in BSD prior to the reorganisation. PepsiCo acknowledges and agrees that any
reorganisation undertaken prior to Admission in accordance with this Clause
3.5.2(ii) shall not give rise to any breach of or termination right under the
EBA and that the EBA shall be construed accordingly;
	 
	 	(iii)  	determining the number of BSD Shares to be offered as is
considered appropriate by the sponsoring bank(s) engaged for the IPO;
	 
	 	(iv)  	subject to Clause 2.1, changing the composition of the Board
(such that its composition is appropriate for a company in which the shares are
to be admitted to the Official List and to trading on the London Stock Exchange
(having regard to applicable corporate governance standards)) and procuring
that the director(s) it has nominated enter into appropriate service contracts
or letters of appointment;
	 
	 	(v)  	adopting new articles of association appropriate for a listed
company;
	 
	 	(vi)  	instructing the Reporting Accountants;
	 
	 	(vii)  	meeting the financial reporting requirements set out in the
Listing Rules (for example as to trading history, extracts from audited
accounts of prior years, cash flow and profit forecasts and working capital
report);
	 
	 	(viii)  	establishing or amending employee/executive share option schemes and
obtaining relevant Inland Revenue clearance;
	 
	 	(ix)  	agreeing with the sponsoring bank(s) the sale/subscription
price of the BSD Shares offered for sale and/or subscription in the IPO;
	 
	 	(x)  	carrying out verification of the prospectus and other documents
pertinent to the IPO in respect of which verification is required;

9

 

	 	(xi)  	procuring that its appointee, or appointees, to the BSD Board
provide any confirmations or consents which are reasonably necessary to secure
Admission; and
	 
	 	(xii)  	entering into any agreements (including any lock-up agreement
reasonably required by the sponsoring bank(s)) or executing any other documents
in connection with the IPO as may reasonably be required by the sponsoring
bank(s) or as may be required by any regulatory authority and on terms
reasonably acceptable to each Shareholder who is a party to such an agreement
or document and in a manner or form that does not create a concert party issue
for the purposes of the Code.

	 	3.5.3  	Notwithstanding Clause 2.1 and the Articles, each of the Shareholders shall
be bound to remove forthwith any director it has appointed to the IPO Board from office
if such director (a “Relevant Director”) fails or is unable to co-operate promptly with
the IPO process or fails, is unable or delays either to provide any confirmations or
consents necessary or to sign any documents (including, without limitation, a
responsibility statement) reasonably necessary to secure Admission. The Shareholder who
appointed the Relevant Director shall have the right to appoint a replacement therefor;
provided that:

	 	(i)  	such appointment will not disrupt the timetable for the IPO in
the sole opinion of the sponsoring bank(s) acting reasonably; and
	 
	 	(ii)  	if such replacement director also fails to co-operate (as
aforesaid) and is removed in accordance with this Clause 3.5.3, such
Shareholder shall forego its rights to make a further appointment to the IPO
Board.

	 	3.5.4  	The Original BSD Shareholders acknowledge and agree that the obligations of
co-operation and assistance imposed upon PepsiCo pursuant to Clauses 3.5.1 to 3.5.3
shall not restrict or modify in any way any rights which PepsiCo may have under the
remaining provisions of this Agreement and under the EBAs and the FPA. PepsiCo
undertakes for the duration of the IPO Period that it shall exercise such rights
(including any purported service of a notice of breach of the EBA expressed to be
pursuant to clause 6 thereof) bona fide and for the sole or predominant purpose of
advancing or protecting its legitimate interests under the EBAs and FPA and not for any
other sole or predominant purpose, including without limitation and by way of example
only, for the purpose of:

	 	(i)  	frustrating or delaying either the IPO or the IPO process; or
	 
	 	(ii)  	securing an advantage or a benefit other than an advantage or a
benefit under the EBAs or FPA (or any related agreement) which would or might
accrue to PepsiCo in the ordinary course of events or which may be secured by
PepsiCo by the exercise of its rights thereunder.

	 	3.5.5  	BSD shall use all reasonable endeavours to ensure that any disclosure of
confidential or other commercially sensitive information, whether in the prospectus or
in any announcement or other public document issued by BSD in connection with the IPO,
is no more than is reasonably required in order for BSD, its directors and advisers
(including without limitation the sponsor to BSD) to satisfy their respective
obligations under, or the requirements of:

10

 

	 	(i)  	any applicable laws, rules and regulations, regulatory bodies
or courts of competent jurisdiction (including, for the purposes of the UK, the
Financial Services and Markets Act, the Listing Rules, the UKLA, the rules and
regulations of the London Stock Exchange (or any other stock exchange on which
the BSD Shares are to be listed or quoted) and the rules of the Code); or
	 
	 	(ii)  	any subsequent enquiry or investigation by any governmental,
official or regulatory body which is lawfully entitled to require any such
disclosure.

	3.6  	Entitlement to BSD Shares

	 	3.6.1  	Subject to Clause 3.6.7 and applicable law and regulation (including UKLA’s
decision to grant the application for Admission), the rights and obligations of the
Parties to acquire and dispose of BSD Shares, both upon and after the IPO, are set out
below:

	 	(i)  	subject to paragraphs (ii) to (x) below, PepsiCo shall have the
right to acquire at the time of (or, where applicable, by participation in) the
IPO and each Subsequent Offering such number of BSD Shares as would ensure
that, if PepsiCo exercised its rights in full, PepsiCo’s shareholding in BSD
would increase from the Initial Percentage to the Maximum Percentage whilst the
aggregate shareholding of the Original BSD Shareholders decreases from the
Initial Combined Percentage to the Base Combined Percentage;
	 
	 	(ii)  	subject to paragraphs (iv), (v), (vi), (vii) and (ix) below, in
respect of each BSD Share Offering, PepsiCo shall be entitled to acquire, from
the Participating Original BSD Shareholders, in the proportions established
under Clauses 3.6.3 or 3.6.4 or paragraph (vii) below (as the case may
require), up to such number (the “Requisite Number”) of BSD Shares as would
ensure that, following such BSD Share Offering and acquisition by PepsiCo
(assuming PepsiCo exercises its rights in full), PepsiCo’s shareholding in BSD
will have increased, as a proportion of the difference between the Initial
Percentage and the Maximum Percentage, to the same extent as the aggregate
shareholding of the Original BSD Shareholders has decreased, as a proportion of
the difference between the Initial Combined Percentage and the Base Combined
Percentage;
	 
	 	(iii)  	subject to paragraph (vii), if PepsiCo exercises its rights to
acquire BSD Shares under this Clause 3.6.1, PepsiCo shall acquire and the
Participating Original BSD Shareholders shall sell such BSD Shares and the BSD
Shares so acquired by PepsiCo shall be in addition to any BSD Shares which are
sold by the Participating Original BSD Shareholders in the BSD Share Offering
to persons other than PepsiCo; provided always that, if the Participating
Original BSD Shareholders do not or would not as a result of the sales made or
to be made in the relevant BSD Share Offering hold a sufficient number of
shares to enable PepsiCo to acquire the Requisite Number:

	 	(a)  	in the case of the IPO, PepsiCo shall be
entitled to participate in the IPO to the extent of any shortfall; and

11

 

	 	(b)  	in the case of any Subsequent Offering, the
provisions of paragraph (viii) shall apply.

	 	(iv)  	if PepsiCo elects not to exercise its rights under this Clause
3.6.1 in relation to any BSD Share Offering (or exercises such rights in part
only), PepsiCo shall be treated as if it had exercised its rights in full for
the purposes of determining the Requisite Number for subsequent BSD Share
Offerings pursuant to paragraph (ii) above (and thus shall not be entitled to
make up any shortfall at the time of any Subsequent Offering);
	 
	 	(v)  	if PepsiCo elects not to take up its rights in full under any
offer by way of rights made by BSD, then, notwithstanding any rights that would
otherwise arise under paragraph (ii) above, PepsiCo shall not be entitled to
acquire shares under this Clause 3.6.1 in respect of such offer by way of
rights and, for the purposes of determining the Requisite Number for subsequent
BSD Share Offerings pursuant to paragraph (ii) above, PepsiCo shall be treated
as if it had exercised its rights in full;
	 
	 	(vi)  	if PepsiCo intends to exercise its rights under this Clause
3.6.1 in connection with any BSD Share Offering, it shall provide written
confirmation to the Original BSD Shareholders as to the number (the “Specified
Number”) of BSD Shares it will acquire in relation to such offering :

	 	(a)  	in the case of the IPO, three Business Days
prior to the anticipated date of publication of the relevant
prospectus, and PepsiCo’s confirmation of the Specified Number shall
create a binding obligation on PepsiCo to acquire the Specified Number
of BSD Shares provided that the price per BSD Share is within five per
cent. of the price, or of the upper or lower limit of the price range
notified to PepsiCo by BSD and such price or price range is
subsequently specified in the relevant prospectus provided further
that, if a different price or price range is to be specified in the
relevant prospectus, the Original BSD Shareholders shall notify PepsiCo
forthwith and PepsiCo shall confirm whether or not it wishes to change
the Specified Number; and
	 
	 	(b)  	in the case of any Subsequent Offering, within
three Business Days of the date on which notice of the Subsequent
Offering is given to PepsiCo by any one or more of the Participating
Original BSD Shareholders, and PepsiCo’s confirmation of the Specified
Number shall create a binding obligation on PepsiCo to acquire such BSD
Shares at the price at which the BSD Shares were sold or offered in the
Subsequent Offering; provided that nothing in this Agreement shall
require the Original BSD Shareholders to give prior notice to PepsiCo
of any Subsequent Offering,

	 	   	provided that in the case of the IPO, if the number of BSD Shares sold by
the Original BSD Shareholders in the IPO is less than originally
anticipated, the Requisite Number and the Specified Number shall be reduced
proportionately;

12

 

	 	(vii)  	without prejudice to Clause 3.6.7:

	 	(a)  	when determining the aggregate shareholding the
Original BSD Shareholders would have following any BSD Share Offering
for the purposes of paragraph (ii) above, any Original BSD Shareholder
who would, following such offering, hold 3 per cent. or less of the
then issued BSD Shares will be deemed to hold precisely 3 per cent. of
the then issued BSD Shares; and
	 
	 	(b)  	notwithstanding Clauses 3.6.3 and 3.6.4, if, as
a result of a sale made as part of a BSD Share Offering (or as a result
of a sale to PepsiCo under this Clause 3.6.1), a Participating Original
BSD Shareholder ceases to hold in excess of 3 per cent. of the then
issued BSD Shares (the “Minimum Threshold”), such Participating
Original BSD Shareholder shall (save as otherwise agreed between the
Participating Original BSD Shareholders) sell no further BSD Shares to
PepsiCo unless there is no other Participating Original BSD Shareholder
who holds in excess of the Minimum Threshold;

	 	(viii)  	subject to paragraph (vii)(b), in relation to any Subsequent Offering in
which any one or more of the Participating Original BSD Shareholder(s) do(es)
not hold a sufficient number of BSD Shares to make up its proportion of the
Requisite Number, PepsiCo may seek to acquire the aggregate shortfall in the
Requisite Number of BSD Shares (the “Shortfall Number”):

	 	(a)  	by making an offer to acquire the Shortfall
Number from the other Original BSD Shareholder(s) at the price at which
the BSD Shares were sold or offered in the Subsequent Offering; such
offer to be capable of acceptance in whole or in part within three
Business Days by the other Original BSD Shareholders pro rata to their
holding(s) in BSD at the time of such Subsequent Offering (unless the
other Original BSD Shareholder(s) agree between them to sell the
Requisite Number other than on a pro rata basis); or
	 
	 	(b)  	if, and only if, PepsiCo first makes an offer
in accordance with paragraph (a) above and the number of BSD Shares to
be acquired by PepsiCo pursuant to the offer, at the expiry of the
three Business Day acceptance period referred to in paragraph (a) (the
“Acceptance Date”), is less than the Shortfall Number, by way of market
purchases of BSD Shares for the balance provided that PepsiCo’s right
to make such market purchases shall cease after a period of seven
Business Days from the Acceptance Date or such longer period as is
necessary to enable PepsiCo to acquire such BSD Shares in compliance
with the SARs;

	 	(ix)  	in relation to any Subsequent Offering, if the number of BSD
Shares to be sold or, offered by the relevant Original BSD Shareholder(s)
constitutes less than 1 per cent. (the “Acquisition Threshold”) of the issued
BSD ordinary share capital immediately prior to such Subsequent Offering,
PepsiCo shall have no right to acquire any BSD Shares at the time of such
Subsequent Offering, but the Requisite Number of BSD Shares which PepsiCo would
otherwise have been entitled to acquire under paragraph (ii)

13

 

	 	   	above (the “Rolled-up Shares”) shall be added to the number of BSD Shares
which PepsiCo would otherwise be able to acquire from the relevant Original
BSD Shareholder(s) at the time of the next Subsequent Offering (the “Trigger
Offering”) where the number of shares to be sold or offered would be equal
to or exceed the Acquisition Threshold;
	 
	 	(x)  	all BSD Shares acquired by PepsiCo pursuant to Clause 3.6.1(ix)
from the Original BSD Shareholders as part of a Trigger Offering shall be
acquired at the price at which BSD Shares are sold or issued in the Trigger
Offering;
	 
	 	(xi)  	save as set out in paragraphs (i) to (x) above and Clause
3.7.2, PepsiCo shall not be entitled to acquire BSD Shares (or other equity
securities of BSD) unless:

	 	(a)  	such acquisition is made in connection with or
pursuant to an offer (as defined in the Code) for the ordinary share
capital of BSD made by PepsiCo in accordance with the Code; or
	 
	 	(b)  	such acquisition is made pursuant to a
compromise or arrangement under Section 425 of the Companies Act 1985
providing for the acquisition by PepsiCo of more than 50 per cent. of
the ordinary share capital of BSD; or
	 
	 	(c)  	such acquisition is made as a result of an
allotment to PepsiCo (pro rata to PepsiCo’s holding of BSD Shares prior
to the announcement of the offer) of rights to BSD Shares or other
equity securities of BSD under any offer by way of rights made by BSD
or PepsiCo subsequently taking up such rights; and

	 	(xii)  	from the Announcement Date until the date which is the earlier
of (if applicable) the expiry of the IPO Window without the IPO proceeding to
Admission and termination of this Agreement, and subject to Clause 7.2 (but
notwithstanding any other provision of this Agreement), PepsiCo shall not be
entitled to dispose of BSD Shares or any interest in BSD Shares except by way
of:

	 	(a)  	(i) an acceptance of a general offer for the
ordinary share capital of BSD made in accordance with the Code or (ii)
the provision of an irrevocable undertaking to accept such an offer or
(iii) a sale of BSD Shares to an offeror who has announced a firm
intention to make an offer (whether or not subject to a pre-condition)
for all of the ordinary share capital of BSD under Rule 2.5 of the
Code;
	 
	 	(b)  	any disposal pursuant to a compromise or
arrangement under Section 425 of the Companies Act 1985;
	 
	 	(c)  	any disposal pursuant to scheme of
reconstruction under Section 110 of the Insolvency Act 1986 in relation
to BSD;
	 
	 	(d)  	any disposal of nil paid rights in relation to
new BSD Shares allotted to PepsiCo pursuant to an offer by way of
rights made by BSD; and
	 
	 	(e)  	any disposal made to satisfy a condition to a
waiver granted by the Panel in respect of a requirement on PepsiCo to
make a Mandatory Offer.

14

 

	 	3.6.2  	Subject to Clause 7.2, no Original BSD Shareholder shall dispose of BSD
Shares or any interest in BSD Shares upon or after the IPO except that this restriction
shall not apply to any disposal made by an Original BSD Shareholder:

	 	(i)  	of BSD Shares in connection with the IPO (including any sale of
BSD Shares to PepsiCo at the time of the IPO made pursuant to Clause 3.6.1) in
accordance with Clause 3.6.3;
	 
	 	(ii)  	of BSD Shares in connection with any Subsequent Offering
(including any sale of BSD Shares to PepsiCo at the time of such Subsequent
Offering made pursuant to Clause 3.6.1) in accordance with Clause 3.6.4;
	 
	 	(iii)  	of BSD Shares in connection with any Dilutive Event (pursuant
to an offer made by PepsiCo under Clause 3.7.2(i)) in accordance with Clause
3.6.5;
	 
	 	(iv)  	of BSD Shares to one or both of the other Original BSD
Shareholders in accordance with Clause 3.6.6;
	 
	 	(v)  	of any nil paid rights in relation to new BSD Shares allotted
to such Original BSD Shareholder pursuant to any offer by way of rights made by
BSD;
	 
	 	(vi)  	by way of (i) an acceptance of a general offer for the ordinary
share capital of BSD made in accordance with the Code or (ii) the provision of
an irrevocable undertaking to accept such an offer or (iii) a sale of BSD
Shares to an offeror who has announced a firm intention to make an offer
(whether or not subject to a pre-condition) for all of the ordinary share
capital of BSD under Rule 2.5 of the Code;
	 
	 	(vii)  	of BSD Shares pursuant to a compromise or arrangement under
Section 425 of the Companies Act 1985;
	 
	 	(viii)  	of BSD Shares pursuant to scheme of reconstruction under Section 110 of the
Insolvency Act 1986 in relation to BSD; and
	 
	 	(ix)  	of BSD Shares made to satisfy a condition to a waiver granted
by the Panel in respect of a requirement on such Original BSD Shareholder to
make a Mandatory Offer.

	 	3.6.3  	In relation to disposals of BSD Shares to be made by the Original BSD
Shareholders in connection with the IPO (including any sales to PepsiCo pursuant to
Clause 3.6.1), the Original BSD Shareholders shall consult together and each Original
BSD Shareholder shall confirm whether or not it intends to participate in such
disposals (each Original BSD Shareholder intending to participate being an “IPO
Participant”) and, if there is more than one IPO Participant, each IPO Participant
shall, unless otherwise agreed among them, dispose of their BSD Shares pro rata to
their holdings in BSD prior to IPO.
	 
	 	3.6.4  	In relation to disposals of BSD Shares proposed to be made by any Original
BSD Shareholders in connection with any Subsequent Offering (including any sales made
to PepsiCo pursuant to Clause 3.6.1), all such disposals shall be made only: (a)
following expiry or release by the sponsoring bank(s) of any lock-up agreements entered
into by the Original BSD Shareholders at the time of the IPO; and (b) so as to ensure
an orderly market is maintained in BSD Shares. Without prejudice to the foregoing, in
relation to any Subsequent Offering where an Original

15

 

	 	   	BSD Shareholder is proposing, within any period of 7 days, to dispose of BSD Shares
constituting 1 per cent. or more of the issued ordinary share capital of BSD:

	 	(i)  	such Original BSD Shareholder shall (subject to applicable law
and regulation) notify as soon as is reasonably practicable the other Original
BSD Shareholders of its intention to dispose of any or all of its BSD Shares
and the intended timing of such disposal;
	 
	 	(ii)  	following such notification, the Original BSD Shareholders
shall consult in good faith as soon as reasonably practicable (having regard to
the intended timing of the proposed disposal of BSD Shares) in relation to
their participation in, the structure of and the number of BSD Shares to be
offered or disposed of in such Subsequent Offering; and
	 
	 	(iii)  	where more than one Original BSD Shareholder confirms its
intention to participate in any such Subsequent Offering (“Participating
Shareholders”), such Participating Shareholders shall, unless otherwise agreed
between them, only dispose of their shares simultaneously and through the same
selling agent pro rata to their holdings in BSD immediately prior to such
Subsequent Offering.

	 	3.6.5  	In relation to any offer made to the Original BSD Shareholders by PepsiCo
pursuant to Clause 3.7.2(i), each Original BSD Shareholder shall confirm whether or not
it intends to accept the offer (in whole or in part) in respect of its pro rata share.
If any Original BSD Shareholder confirms it does not intend to accept such offer (or
confirms that it accepts the offer in part only), the other Original BSD Shareholder(s)
shall be entitled to sell further BSD Shares to enable PepsiCo to acquire the balance
(and, if more than one of the other Original BSD Shareholders confirms it intends to
sell further BSD Shares, such sales shall be made on a pro rata basis unless they
otherwise agree).
	 
	 	3.6.6  	If an Original BSD Shareholder wishes to dispose of any BSD Shares to
another Original BSD Shareholder, it shall notify both of the other Original BSD
Shareholders. If, within five Business Days of such notification, each of the other
Original BSD Shareholders confirms an intention to participate in the disposal of such
BSD Shares, they shall, unless they agree otherwise, only be permitted to acquire such
shares pro rata to their holdings in BSD immediately prior to such disposal.
	 
	 	3.6.7  	When an Original BSD Shareholder’s holding of BSD Shares falls to 3 per
cent. or below of the issued BSD Shares (the “Minority BSD Shareholder”), all the
provisions of this Clause 3.6 (other than Clause 3.6.1(vii)(b)) shall cease to apply to
that Minority BSD Shareholder, so that:

	 	(i)  	the Minority BSD Shareholder may not, save as otherwise agreed
between the Original BSD Shareholders, sell any BSD Shares to PepsiCo unless
and until each Original BSD Shareholder has reduced its holding of BSD Shares
to or below the Minimum Threshold of the issued BSD Shares; and
	 
	 	(ii)  	the Minority BSD Shareholder may otherwise dispose of any BSD
Shares held by it to any person other than PepsiCo.

	 	3.6.8  	Notwithstanding any other provision in this Agreement, each party agrees
that it will not make any acquisition of BSD Shares which would give rise to an
obligation of

16

 

	 	   	another party to make an offer for the equity share capital of BSD under Rule 9.1 of
the Code (“Mandatory Offer”). If any Shareholder (the “Acquiring Shareholder”)
acquires (or is treated for the purposes of the Code as having acquired) BSD Shares,
and such acquisition gives rise to a requirement to make a Mandatory Offer, the
following shall apply (without prejudice to any other rights or remedies the other
Shareholders may have in relation to such acquisition):

	 	(i)  	the Acquiring Shareholder shall use all reasonable endeavours
to obtain a waiver from the Panel and shall promptly make all share sales
necessary and take all such other actions as are reasonable to achieve it and,
if no waiver is given, shall have sole responsibility for:

	 	(a)  	making a Mandatory Offer in accordance with the
Code; and
	 
	 	(b)  	making available sufficient cash resources to
satisfy full acceptance of such Mandatory Offer; and

	 	(ii)  	the Acquiring Shareholder shall extend the Mandatory Offer to
the other Shareholders.

	 	3.6.9  	For the purposes of this Clause 3.6:

	 	(i)  	“acquire” includes to purchase, subscribe for, accept an
allotment of, borrow, take options over, take a charge or pledge over or
otherwise acquire any right over or interest in shares or other equity
securities of BSD (and includes an agreement to do any of the foregoing) and
“acquisition” shall be interpreted accordingly; and
	 
	 	(ii)  	“dispose” includes to sell, lend, sell “short”, grant options
over, charge, pledge or otherwise dispose of any rights over or interest in
shares (and includes any agreement to do any of the foregoing) and “disposal”
shall be interpreted accordingly.

	 	3.6.10  	Each Shareholder acknowledges that neither the provisions of this Clause
3.6, nor any other provision of this Agreement, is intended to constitute an
arrangement pursuant to which such Shareholder would be deemed to be acting in concert
with any other Shareholder(s) for the purposes of the Code.

	3.7  	Dilutive Events

	 	3.7.1  	Subject to Clauses 3.7.2 and 3.7.3, on the occurrence of a Dilutive Event
PepsiCo shall be entitled to acquire such number of BSD Shares as would ensure that
PepsiCo’shareholding in the enlarged share capital of BSD would, if PepsiCo exercised
its rights in full, increase, as a proportion of the difference between the Initial
Percentage and the Maximum Percentage, to the same extent in the aggregate shareholding
of the Original BSD Shareholders has decreased, as a proportion of the difference
between the Initial Combined Percentage and the Base Combined Percentage, as a result
of the Dilutive Event (the “Dilutive Acquisition Number”).
	 
	 	3.7.2  	PepsiCo shall be entitled to acquire up to the Dilutive Acquisition Number
of BSD Shares:

	 	(i)  	by making an offer to acquire such BSD Shares from the Original
BSD Shareholder(s) at the closing middle market price for the BSD Shares on

17

 

	 	   	the date immediately preceding the making of such offer; such offer to be
capable of acceptance in whole or in part within three Business Days of
receipt of the offer (the “Acceptance Date”) by the Original BSD
Shareholders pro rata to their holding(s) in BSD immediately following the
Dilutive Event provided that the other Original BSD Shareholder(s) may agree
between them to sell the Dilutive Acquisition Number other than on a pro
rata basis; or
	 
	 	(ii)  	if and only if PepsiCo first makes an offer in accordance with
paragraph (i) above and the number of BSD Shares in respect of which
acceptances have been received by PepsiCo thereunder, is less than the
Dilutive Acquisition Number, be entitled to acquire the balance by way of
market purchases provided that PepsiCo’s right to make such market purchases
shall cease after a period of seven Business Days from the Acceptance Date or
such longer period as is necessary to enable PepsiCo to acquire such BSD Shares
in compliance with the SARs.

	 	3.7.3  	In relation to each Dilutive Event:

	 	(i)  	with respect to the determination of the Dilution Acquisition
Number, the provisions of Clauses 3.6.1(iv) and (v) shall apply mutatis
mutandis; and
	 
	 	(ii)  	the provisions of Clauses 3.6.1(vii) and (ix) shall apply
mutatis mutandis.

	3.8  	Illustrative Shareholdings
	 
	   	For illustrative purposes only, Schedule 1 sets out the relative shareholdings of the
Original BSD Shareholders and PepsiCo as a result of the operation of Clauses 3.6.1(ii) and
(vii) under various scenarios.
	 
	3.9  	Transfer of title
	 
	   	In relation to all transfers of BSD Shares made by the Original BSD Shareholders to
PepsiCo pursuant to Clauses 3.6 and 3.7:

	 	3.9.1  	the full legal and beneficial title to such BSD Shares shall be transferred; and
	 
	 	3.9.2  	such BSD Shares shall be transferred free from all Encumbrances.

	4  	Termination of Existing BSD IPO Agreement
	 
	4.1  	Termination
	 
	   	Notwithstanding the provisions of Clause 5.2 of the Existing BSD IPO Agreement, each of
the Shareholders and PepsiCo agree that the Existing BSD IPO Agreement shall be terminated
upon the signing of this Agreement.
	 
	4.2  	Effect of Termination
	 
	   	Each of the Shareholders and BSD hereby mutually releases and discharges each other
party, with effect from the signing of this Agreement, from all obligations, duties,
liabilities, losses or expenses arising out of or in any way connected with any provisions
of the Existing BSD IPO Agreement.

18

 

	5  	Termination of this Agreement
	 
	5.1  	Termination Events
	 
	   	Subject to Clause 5.2, this Agreement shall terminate:

	 	5.1.1  	if Admission occurs within the IPO Window, on the earlier of:

	 	(i)  	the date of completion of the Final BSD Share Offering; or
	 
	 	(ii)  	three years after the date of Admission (or, if later, 31
December 2008); or

	 	5.1.2  	if Admission does not occur within the IPO Window, on 31 December 2008 or,
if earlier, the date upon which the BSD Board either resolves that it does not intend
to or determines that it is not practicable to proceed with an IPO within the IPO
Window.

	5.2  	Consequences of Termination

	 	5.2.1  	On termination of this Agreement, the provisions of Clause 6
(Confidentiality) and Clause 7 (General Provisions) shall survive termination and, if
termination of this Agreement occurs pursuant to Clause 5.1.2, then Clause 2.1 (Board
Representation) and Clause 5.3 (Put Option) shall also survive termination; provided
that Clause 2.1 shall cease to have effect immediately upon the earlier of:
	 
	 	5.2.2  	PepsiCo holding fewer than [613,664] BSD Shares or such other number as is
equivalent taking into account any consolidation, subdivision, reconstruction or
amalgamation of the BSD share capital;
	 
	 	5.2.3  	PepsiCo ceasing to hold in excess of 2.5 per cent. of the issued BSD
Shares; and
	 
	 	5.2.4  	the occurrence of an event or the giving of a notice of the type referred
to in Clause 2.1.1(iv).

	5.3  	PepsiCo Put

	 	5.3.1  	If there has been:

	 	(i)  	a termination of this Agreement under Clause 5.1.2; and
	 
	 	(ii)  	a termination of the EBAs by Britvic (other than as a result of
PepsiCo’s breach) or a non-renewal of the EBAs by Britvic or a termination of
the EBAs by PepsiCo as a result of Britvic’s breach,

	 	   	PepsiCo shall have the right to sell, and require BSD to buy (the “PepsiCo Put”),
all (but not some only) of the BSD Shares held (directly or indirectly) by it (the
“PepsiCo Shares”) at a price determined in accordance with Clause 5.3.4 below (the
“Put Price”).
	 
	 	5.3.2  	On the satisfaction of the conditions specified in Clauses 5.3.1(i) and
5.3.1(ii), if PepsiCo wishes to sell the PepsiCo Shares, it shall notify BSD, not later
than 5 Business Days following the date on which the later of the two conditions is
satisfied, that it wishes to exercise the PepsiCo Put. Following such notification, the
Put Price shall be determined in accordance with Clause 5.3.4.
	 
	 	5.3.3  	PepsiCo shall notify BSD of the Put Price and, following the notification
of such Put Price, the Original BSD Shareholders shall procure that BSD shall acquire
the

19

 

	 	   	PepsiCo Shares from PepsiCo at the Put Price as soon as reasonably practicable after
such notification.
	 
	 	5.3.4  	The Put Price for the PepsiCo Shares, for the purposes of Clause 5.3.1,
shall mean a price fixed on the basis of a fair market valuation by agreement between
PepsiCo and BSD at the relevant time or, in the absence of such agreement, by an
independent chartered accountant who is to be appointed by agreement between PepsiCo
and BSD (or, failing agreement on such appointment within 7 days of PepsiCo’s
notification that it wishes to exercise the PepsiCo Put, such accountant shall be
appointed upon the nomination of the President of the Institute of Chartered
Accountants in England and Wales). Such accountant shall act as an expert not as an
arbitrator and his decision shall, in the absence of fraud or manifest error, be final
and binding on the Parties. For the purposes of determining such fair market valuation,
the valuation shall reflect any change in value of the PepsiCo Shares resulting from
the termination of this Agreement and the termination or non-renewal of the EBAs.
	 
	 	5.3.5  	For the avoidance of doubt, where there has been:

	 	(i)  	a termination of this Agreement under Clause 5.1.1;
	 
	 	(ii)  	a non-renewal of the EBAs by PepsiCo;
	 
	 	(iii)  	a termination of the EBAs by Britvic as a result of PepsiCo’s
breach; or
	 
	 	(iv)  	a termination of the EBAs by PepsiCo other than as a result of
Britvic’s breach,

	 	   	then PepsiCo shall have no right, pursuant to Clause 5.3.1, to sell its BSD Shares
to BSD.
	 
	 	5.3.6  	In relation to any transfer of BSD Shares made by PepsiCo pursuant to this
Clause 5.3:

	 	(i)  	PepsiCo shall transfer the full legal and beneficial title to
such BSD Shares; and
	 
	 	(ii)  	such BSD Shares shall be transferred free from all Encumbrances.

	6  	Confidentiality
	 
	6.1  	Definition of Confidential Information
	 
	   	For the purpose of this Agreement, Confidential Information:

	 	6.1.1  	includes, but is not limited to, any information and data (of whatever
nature and however recorded or preserved) relating to:

	 	(a)  	the content or existence of this Agreement; and
	 
	 	(b)  	any Party, its business or activities and which is disclosed by
the disclosing Party, its representatives or advisers to a receiving Party, its
representatives or its advisers; and

20

 

	 	6.1.2  	does not include information which:

	 	(a)  	is within or comes into the public domain (other than as a
result of a breach by the receiving Party or its representatives or advisers of
obligations of confidentiality); or
	 
	 	(b)  	a Party obtains from a third party who owes no duty of
confidentiality in respect of such information.

	6.2  	Confidentiality Undertakings
	 
	   	Each Party undertakes severally to the other Parties that it shall (and shall use all
reasonable endeavours to procure that its respective employees and agents shall) keep any
Confidential Information strictly confidential and shall use any Confidential Information
exclusively for the purpose of this Agreement, except as permitted under Clause 6.3 below.
	 
	6.3  	Permitted Disclosure

	 	6.3.1  	Clause 6.2 shall not apply so as to prevent disclosure of Confidential
Information by any Party where:

	 	(a)  	the Party to whom the information is confidential has given
prior written consent to such disclosure;
	 
	 	(b)  	such disclosure is required to be made by any relevant listing
authority or stock exchange (or the rules or regulations of such body), or by
law and/or in accordance with an order of a court of competent jurisdiction or
order of a competent governmental body acting with lawful authority; or
	 
	 	(c)  	the disclosure is made solely for the use of each Party’s
professional advisers under obligations of confidentiality.

	 	6.3.2  	Each of the Parties hereby consents, subject to the following provisions of
this Clause, to the other Parties making a public announcement (in a form agreed to by
all Parties) in relation to the signing of this Agreement, the EBA and the FPA and the
fact that agreement has been reached between them as to the basis on which an IPO may
be effected. The Parties shall consult with a view to agreeing the form of such
announcement provided that, in default of agreement, no Party shall make an
announcement except to the extent that disclosure is required by any relevant listing
authority or stock exchange or by law.

	6.4  	Notification of Unauthorised Disclosure
	 
	   	Each of the Parties shall inform the other Parties as soon as practicable following any
unauthorised disclosure of Confidential Information of which it is or becomes aware.
	 
	7  	General Provisions
	 
	7.1  	Whole Agreement
	 
	   	This Agreement contains the whole agreement between the Parties relating to the subject
matter of this Agreement at the date hereof to the exclusion of any terms implied by law
which may be excluded by contract and supersedes any previous written or oral agreement
between the Parties in relation to the matters dealt with in this Agreement.

21

 

	7.2  	Group Interests

	 	7.2.1  	Without prejudice, in the case of the Original BSD Shareholders, to the
terms of the BSD Joint Venture Agreement, any Shareholder may transfer any or all of
its BSD Shares to a Permitted Subsidiary and any such Permitted Subsidiary may transfer
any or all of the BSD Shares it holds to its Shareholder or another Permitted
Subsidiary of such Shareholder. The Parties acknowledge and IHG and Allied respectively
confirm that the BSD Shares of the IHG Group are held by its Permitted Subsidiary, Six
Continents Investments Limited, and the BSD Shares of the Allied Group are held by its
Permitted Subsidiary, Allied Domecq Overseas (Canada) Limited. The Parties acknowledge,
and PepsiCo confirms, that the Consideration Shares shall be issued to and held by a
Permitted Subsidiary of PepsiCo.
	 
	 	7.2.2  	If at any time any BSD Shares are held by a Permitted Subsidiary of a
Shareholder, such Shareholder shall procure that the Permitted Subsidiary complies with
the terms of this Agreement as if it were subject to the obligations of that
Shareholder and, in the event that such entity is to cease to be a Permitted
Subsidiary, that such Permitted Subsidiary transfers its holding of BSD Shares to the
Shareholder or another Permitted Subsidiary prior to such event occurring.
	 
	 	7.2.3  	Each Party undertakes to procure that its ultimate holding company for the
time being, if not already a party to this Agreement, shall become such a party in
addition to the Party, on such terms as the other Parties reasonably require.

	7.3  	Third Party Rights
	 
	   	A person who is not a party to this Agreement has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce any term of this Agreement, save that this restriction
shall not apply to any Permitted Subsidiary of a Shareholder in respect of any period where
such Permitted Subsidiary is or has been a shareholder of BSD.
	 
	7.4  	Variation
	 
	   	No variation of this Agreement shall be effective unless in writing and signed by or on
behalf of each of the Parties to this Agreement.
	 
	7.5  	Further Assurance
	 
	   	At any time after the date of this Agreement, each Party shall and shall use all reasonable
endeavours to procure that any necessary third party shall execute such documents and do
such acts and things as may be reasonably necessary for the purpose of giving effect to the
provisions of this Agreement.
	 
	7.6  	Notices

	 	7.6.1  	Any notice or other communication in connection with this Agreement shall
be in writing (a “Notice”) and shall be sufficiently given or served if delivered or
sent:

	 	 	 	 	 
	

	 	in the case of BSD to:
	 	Britvic House
	

	 	 	 	Broomfield Road
	

	 	 	 	Chelmsford
	

	 	 	 	Essex, CM1 1TU

22

 

	 	 	 	 	 
	

	 	Fax:
	 	01245 504435
	 
	 	 	 	 
	

	 	Attention:
	 	The Company Secretary
	 
	 	 	 	 
	

	 	in the case of IHG to:
	 	67 Alma Road
	

	 	 	 	Windsor, Berkshire, SL4 3HD
	 
	 	 	 	 
	

	 	Fax:
	 	01753 410101
	 
	 	 	 	 
	

	 	Attention:
	 	The Company Secretary
	 
	 	 	 	 
	

	 	in the case of Allied to:
	 	The Pavilions
	

	 	 	 	Bridgwater Road
	

	 	 	 	Bedminster Down
	

	 	 	 	Bristol, BS13 8AR
	 
	 	 	 	 
	

	 	Fax:
	 	0117 978 5284
	 
	 	 	 	 
	

	 	Attention:
	 	The Company Secretary
	 
	 	 	 	 
	

	 	in the case of Whitbread to:
	 	City Point
	

	 	 	 	1 Ropemaker Street
	

	 	 	 	London, EC2Y 9HX
	 
	 	 	 	 
	

	 	Fax:
	 	0207 806 5457
	 
	 	 	 	 
	

	 	Attention:
	 	The Company Secretary
	 
	 	 	 	 
	

	 	in the case of PepsiCo to:
	 	700 Anderson Hill Road
	

	 	 	 	Purchase
	

	 	 	 	New York 10577
	 
	 	 	 	 
	

	 	Fax:
	 	00 1 194 253 3051
	 
	 	 	 	 
	

	 	Attention:
	 	The General Counsel

	 	•  	or (in any case) to such other address or fax number in the United Kingdom as the
relevant Party may have notified to the others in accordance with this Clause.
	 
	 	7.6.2  	Any Notice may be delivered by hand or sent by fax. Without prejudice to
the foregoing, any Notice shall conclusively be deemed to have been received on the
next Business Day in the place to which it is sent, if sent by fax, or at the time of
delivery, if delivered by hand.

	7.7  	Appointment of Process Agent
	 
	   	PepsiCo irrevocably appoints Wotsits Brands Limited of 1600 Arlington Business Park,
Theale, Reading, Berkshire RG7 4SA as its agent to accept service of process in England in
any legal action or proceedings arising out of or in connection with this Agreement, service
upon whom shall be deemed completed whether or not forwarded to or received by PepsiCo. If
such process agent ceases to be able to act as such or to have an address in England, or if
PepsiCo wishes to replace the process agent, PepsiCo irrevocably agrees to

23

 

	   	appoint a new process agent in England reasonably acceptable to the other parties and to
deliver to the parties within 14 days a copy of a written acceptance of appointment by the
process agent. Nothing in this Agreement shall affect the right to serve process in any
other manner permitted by law.
	 
	7.8  	Invalidity
	 
	   	If any term in this Agreement shall be held to be illegal, invalid or unenforceable, in
whole or in part, under any enactment or rule of law, such term or part shall to that extent
be deemed not to form part of this Agreement, but the legality, validity or enforceability
of the remainder of this Agreement shall not be affected.
	 
	7.9  	Counterparts
	 
	   	This Agreement may be entered into in any number of counterparts, all of which taken
together shall constitute one and the same instrument. Any Party may enter into this
Agreement by executing any such counterpart.
	 
	7.10  	Governing Law and Jurisdiction
	 
	   	This Agreement shall be governed by and construed in accordance with English law and the
Parties irrevocably agree that the courts of England are to have exclusive jurisdiction to
settle any dispute which may arise out of or in connection with this Agreement, save that
the expert determination procedure in Clause 3.3.3 shall apply to determine whether the
financial conditions specified in that Clause have been satisfied.

Executed by the parties on the date set out above.

	 	 	 
	SIGNED for and on behalf of
	 	 
	Britannia Soft Drinks Limited
	 	 
	 
	 	 
	by PAUL STEPHEN MOODY

	 	PAUL STEPHEN MOODY
	 
	 	 
	SIGNED for and on behalf of
	 	 
	InterContinental Hotels Group PLC
	 	 
	 
	 	 
	by RICHARD SOLOMONS

	 	RICHARD SOLOMONS
	 
	 	 
	SIGNED for and on behalf of
	 	 
	Allied Domecq PLC
	 	 
	 
	 	 
	by PHILIP BOWMAN

	 	PHILIP BOWMAN

24

 

	 	 	 
	SIGNED for and on behalf of
	 	 
	Whitbread Group PLC
	 	 
	 
	 	 
	by DAVID RICHARDSON

	 	DAVID RICHARDSON
	 
	 	 
	SIGNED for and on behalf of
	 	 
	PepsiCo Inc.
	 	 
	 
	 	 
	by JOANNE AVERISS

	 	JOANNE AVERISS

25

 

Schedule 1

Illustrative Shareholdings

	1  	Example to demonstrate the application of Clause 3.6.1(ii)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Original BSD	 	 	 	 	 	 	 
	 	 	Shareholders	 	 	PepsiCo	 	 	Aggregate	 
	 	 	%	 	 	%	 	 	%	 
	Starting point
	 	 	95.00	 	 	 	5.00	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Subsequent holdings
(taking into account
both the shares
offered to public and
shares sold to
PepsiCo)
	 	 	50.00	 	 	 	15.47	 	 	 	65.47	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	40.00	 	 	 	17.79	 	 	 	57.79	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	30.00	 	 	 	20.12	 	 	 	50.12	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	20.00	 	 	 	22.44	 	 	 	42.44	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	10.00	 	 	 	24.77	 	 	 	34.77	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	9.00	 	 	 	25.00	 	 	 	34.00	 

	2  	Example to demonstrate the application of Clause 3.6.1(vii)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IHG	 	Allied	 	 	Whitbread	 	 	Total	 	 	PepsiCo	 
	If the Original BSD Shareholders
start at:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10
	 	 	5	 	 	 	5	 	 	 	20	 	 	 	22.44	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	And then move to:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5
	 	 	2.5	 	 	 	2.5	 	 	 	10	 	 	 	n/a	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Deemed position, taking into account the sales to PepsiCo is:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5
	 	 	3	 	 	 	3	 	 	 	11	 	 	 	24.53	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sold as follows:	 	IHG	 	 	Allied	 	 	Whitbread	 	 	Total	 
	PepsiCo
	 	 	1.16	 	 	 	0.47	 	 	 	0.47	 	 	 	2.09	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Public
	 	 	3.84	 	 	 	2.03	 	 	 	2.03	 	 	 	7.91	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	5.00	 	 	 	2.50	 	 	 	2.50	 	 	 	10.00	 

26

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