Exhibit 10.3


 


SUBORDINATION
AND NON-DISTURBANCE AGREEMENT


 


THIS SUBORDINATION AND
NON-DISTURBANCE AGREEMENT (this “Agreement”) is made as of the 15th day of January, 2021, by and among (i) OAKTREE
FUND ADMINISTRATION, LLC, a Delaware limited liability company, as the Administrative Agent and collateral agent on behalf of the
Lenders, “Agent”); (ii) ASHFORD INC., a Nevada corporation (“AINC”), (iii) ASHFORD HOSPITALITY
ADVISORS LLC, a Delaware limited liability company (together with AINC, “Advisor”), (iv) Ashford
Hospitality Trust, Inc., a Maryland corporation (“Parent”), (v) Ashford
Hospitality Limited Partnership, a Delaware limited partnership (“Borrower”), (vi) Ashford
TRS Corporation, a Delaware corporation (“TRS” and, collectively with Parent, Borrower, and any other
Affiliate of a Borrower Party that is or becomes party to an AINC Agreement (as defined below), the “Borrower Parties”)),
(vii) Remington Lodging & Hospitality, LLC, a Delaware limited liability company
(“Remington”), (viii) Premier Project Management, LLC, a Maryland
limited liability company (“Premier”) and (ix) LISMORE CAPITAL II LLC, a Delaware limited liability company
(“Lismore” and, collectively with Advisor, Remington, Premier, and any other Affiliate of an AINC Party that
is or becomes party to an AINC Agreement, the “AINC Parties”). For purposes of this Agreement, the term “Affiliate”
means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified; “Control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise; and “Controlled” has a meaning correlative thereto; provided
that Advisor shall not Control or be deemed to Control Borrower or Parent by reason of the Advisory Agreement.


 


RECITALS:


 


A.      This
Agreement is being made pursuant to the terms of that certain Credit Agreement, dated as of January 15, 2021 (the “Credit
Agreement”), by and among Parent, Borrower, Agent and the lenders party thereto from time to time (the “Lenders”).
Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement.


 


B.       Advisor,
Parent, Borrower and TRS are parties to the Advisory Agreement.


 


C.       Parent,
Borrower, TRS and certain of their Affiliates and Remington and certain of its Affiliates are parties to the Remington Management
Agreement.


 


D.       Parent,
Borrower, TRS and certain of their Affiliates and Premier are parties to the Premier Project Management Agreement.


 


E.       Parent
and Lismore are parties to the Lismore Contract.


 


F.       Borrower,
Parent and certain of its Affiliates and AINC and certain of its Affiliates are parties to, or may hereafter become parties
to in accordance with the Credit Agreement, additional agreements for the provision of goods and services (such agreements,
together with the Advisory Agreement, the Remington Management Agreement, the Premier Project Management Agreement and the
Lismore Contract, the “AINC Agreements”).


 






     


     


    

 


G.       The
Lenders require as a condition to the making of the Loans that the AINC Parties subordinate their respective interests in the AINC
Agreements to the Obligations under the Credit Agreement, subject to the terms and conditions contained herein.


 


AGREEMENT:


 


For good and valuable
consideration the parties hereto agree as follows:


 


1.       Subordination
of AINC Agreements. Subject to Section 4, all payments on account of any fees, indebtedness, liabilities, or other
obligations of any Borrower Party under the AINC Agreements to the extent not permitted to be paid pursuant to Section 7.17
of the Credit Agreement (the “Subordinated Obligations”) shall be subordinate, inferior and junior, in right
of payment and exercise of remedies, to the payment in full in cash of the Obligations under the Credit Agreement (the “Senior
Obligations”). The provisions of Section 7.17 of the Credit Agreement are hereby incorporated by reference as though
fully set forth herein.


 


2.       Subordination
Upon Any Distribution of Assets. Subject to Section 4, as to each AINC Party, in the event of any payment or distribution
of assets of any Borrower Party of any kind or character, whether in cash, property, or securities, upon the dissolution, winding
up, or total or partial liquidation or reorganization, readjustment, arrangement, or similar proceeding relating to such Borrower
Party or its property, whether voluntary or involuntary, or in an Insolvency Proceeding, or upon any other marshaling or composition
of the assets and liabilities of such Borrower Party, or otherwise (such events, collectively, “Insolvency Events”):
(a) all amounts then due and payable on account of the Senior Obligations (other than contingent indemnification obligations) shall
first be paid in full in cash before any payment, reduction, or discharge of Subordinated Obligations, whether in cash, property,
or securities, including on account of the purchase, redemption, or other acquisition of Subordinated Obligations, as a result
of any collection, sale, or other disposition of collateral, or by setoff, exchange, or in any other manner, for or on account
of the Subordinated Obligations (any such payment, a “Subordinated Obligations Payment”) is made; and (b) to
the extent permitted by applicable law, any Subordinated Obligations Payment to which the AINC Parties would be entitled except
for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors,
or other liquidating agent making such payment or distribution directly to the Agent (or its designee) for the benefit of the Agent
and the Lenders for application to the payment of the Senior Obligations in accordance with clause (a), after giving effect
to any concurrent payment or distribution or provision therefor to the Agent and the Lenders in respect of such Senior Obligations.


 


3.       Subordination
of Remedies. As long as any Senior Obligations shall remain outstanding and unpaid, no AINC Party shall, without the prior
written consent of the Agent:


 


(a)      accelerate,
make demand, or otherwise make due and payable prior to the original due date thereof any Subordinated Obligations or bring
suit or institute any other actions or proceedings to enforce its rights or interests in respect of the obligations of any
other Borrower Party owing to such AINC Party in respect of such obligations;


 






     


     


    

 


(b)      exercise
any rights under or with respect to guaranties of the Subordinated Obligations or in respect of any collateral securing the Subordinated
Obligations, if any;


 


(c)      exercise
any rights to set-offs or counterclaims in respect of any indebtedness, liabilities, or obligations of such Borrower Party to such
AINC Party against any of the Subordinated Obligations; or


 


(d)      commence,
or cause to be commenced, or join with any creditor other than the Agent and the Lenders in commencing, any Insolvency Proceeding
or receivership proceeding against any Borrower Party.


 


4.       Termination.
At such time as the Senior Obligations are paid in full (other than contingent indemnification obligations), this Agreement and
all of Agent’s right, title and interest hereunder shall automatically terminate.


 


5.        Non-Disturbance
of AINC Agreements.


 


(a)      Foreclosure
Proceedings. Neither Agent nor any successor in interest to Agent will name any AINC Parties as a party in any Foreclosure
action or proceeding unless such joinder is necessary to foreclose the lien of the Pledge Agreement or Security Agreement, but
only to foreclose the related lien and not to terminate any AINC Agreements. For purposes of the foregoing, “Foreclosure”
means any exercise of the remedies available to Agent under the Loan Documents following an Event of Default, which results in
a transfer of title to, or direct or indirect possession or control of, Parent, Borrower or any property owned by Parent or Borrower
(whether directly or indirectly), or the Pledged Equity pledged to Agent pursuant to the Pledge Agreement. The term “Foreclosure”
includes: (i) a transfer by judicial or non-judicial foreclosure; (ii) a transfer by deed or assignment in lieu of foreclosure;
(iii) the appointment by a court of a receiver to assume possession or control of the applicable real property; (iv) a
transfer of either ownership or control of Parent or Borrower, direct or indirect in either case, by exercise of a pledge or otherwise;
(v) a transfer resulting from an order entered in any bankruptcy proceeding or a transfer approved by a court in such a proceeding
(including, but not limited to, a sale pursuant to Section 363 or Section 1123(a)(5) of the U.S. Bankruptcy Code) (an
 “Insolvency Proceeding”); or (vi) a transfer through any similar judicial or non-judicial exercise of the
remedies held by the holder of the Pledge Agreement.


 


(b)      Assumption
of AINC Agreements. In the event of an Event of Default or Foreclosure, (i) Agent and its successors and assigns
will recognize the rights of AINC Parties under the AINC Agreements; (ii) Agent will not terminate the AINC Agreements
or disturb AINC Parties in its or their rights under the AINC Agreements (in each case except as contemplated therein); and
(iii) any party acquiring the property of Parent, Borrower, TRS or any applicable Affiliates thereof pursuant to a
Foreclosure will assume, or ratify, all obligations of Parent, Borrower, TRS or such Affiliates (as applicable) under the
applicable AINC Agreements that arise after such date (other than obligations arising under amendments or modifications to
the AINC Agreements that are expressly prohibited by the Credit Agreement) and (from and after such date) the AINC Parties
shall look only to the estate and interest, if any, of such party in such property for the satisfaction of any remedies of
the AINC Parties under the applicable AINC Agreements. Except as otherwise expressly provided herein, the Agent and the
Lenders shall not have any duty, liability or obligation to any of the AINC Parties under or in respect of any of the AINC
Agreements.


 






     


     


    

 


(c)      No
Change in Control. Each of the parties hereto agree that neither (i) the exercise of Agent’s remedies under the Loan
Documents (including obtaining title to the Pledged Equity pursuant to the Pledge Agreement) nor (ii) the receipt by any Lender
of any Warrants or Common Stock pursuant to the Credit Agreement, shall constitute a “Company Change of Control” (as
defined in the Advisory Agreement) or any similar terms contained in any other AINC Agreements, and no party hereto shall be entitled
to terminate the Advisory Agreement on account of the same.


 


(d)      Execution
of New Advisory Agreement. If, at the time the Agent or any Lender acquires title to, or possession or control of, any property
owned by Parent or Borrower (whether directly or indirectly), or the Pledged Equity pledged to Agent pursuant to the Pledge Agreement,
any AINC Agreement has been terminated due to a court ruling in any Insolvency Proceeding, then promptly upon an AINC Party’s
request, such AINC Party and the Agent or such Lender, as applicable, shall enter into a new agreement on the same terms and conditions
as the terminated AINC Agreement (the “New AINC Agreement”), which New AINC Agreement will end on the date the
term of the terminated AINC Agreement would have expired, subject to applicable extension rights, but for such termination or loss
of right.


 


6.       GOVERNING
LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND SHALL IN
ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.


 


7.       Notices.
All notices required or permitted hereunder shall be given and shall become effective as provided in the Credit Agreement, except
that notices to any AINC Party shall be addressed as follows:


 


c/o Ashford Inc.

14185 Dallas Parkway, STE 1100

Dallas, Texas 75254

Attention: Jeremy Welter and Robert Haiman

Email: jwelter@ashfordinc.com and rhaiman@ashfordinc.com

Telephone: (972) 778-9252 and (972) 778-9312

Fax: (972) 490-9605 and (972) 392-1929 


 


with a copy to:


 


Cadwalader, Wickersham & Taft LLP

200 Liberty Street

New York, NY 10281


Attn: Richard M. Brand;
          Gregory P. Patti, Jr.


 






     


     


    

 


8.       No
Oral Change. This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged
or terminated orally or by any act or failure to act on the part of AINC Parties, Parent, Borrower, TRS, Agent or any Lender, but
only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.


 


9.       Liability.
This Agreement shall be binding upon and inure to the benefit of AINC Parties, Parent, Borrower, TRS and Agent and their respective
successors and assigns forever. Each of the Lenders is an express third-party beneficiary of this Agreement.


 


10.     Inapplicable
Provisions. If any term, covenant or condition of this Agreement is held to be invalid, illegal or unenforceable in any respect,
(i) the validity, legality and enforceability of the remaining terms, covenants and conditions of this Agreement shall not
be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the invalid, illegal
or unenforceable term, covenant or condition with a valid, legal and unenforceable term, covenant or condition the economic effect
of which comes as close as possible to that of the invalid, illegal or unenforceable term, covenant or condition.


 


11.      Headings,
etc. The headings and captions of various paragraphs of this Agreement are for convenience of reference only and are not to
be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.


 


12.      Additional
Parties. In the event that additional AINC Parties or additional Borrower Parties become party to AINC Agreements, the AINC
Parties and/or the Borrower Parties, as applicable, party to this Agreement at such time agree reasonably promptly to cause such
additional AINC Parties and/or Borrower Parties, as applicable, to become party to and agree to be bound by this Agreement pursuant
to joinder documentation reasonably acceptable to the Agent.


 


13.      Duplicate
Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed
an original instrument and all of which together shall constitute a single agreement. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile or other electronic imaging means (e.g., “pdf” or “tif”)
shall be effective as delivery of a manually executed counterpart of this Agreement.


 


14.      Number
and Gender. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.


 


[NO FURTHER TEXT ON THIS PAGE]


 






     


     


    

 


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


 


	 	PARENT:
	 	 
	 	ASHFORD HOSPITALITY TRUST,
    INC., a

    Maryland corporation
	 	 
	 	By:	/s/
    J. Robison Hays III
	 	 	Name: J. Robison Hays III
	 	 	Title: CEO
	 	 
	 	BORROWER:
	 	 
	 	ASHFORD HOSPITALITY LIMITED

    PARTNERSHIP, a Delaware limited partnership
	 	 
	 	By: Ashford OP General Partner
    LLC, a Delaware limited liability company, its general partner
	 	 
	 	By:	/s/ J.
    Robison Hays III
	 	 	Name: J. Robison Hays III
	 	 	Title: CEO
	 	 
	 	TRS:
	 	 
	 	ASHFORD TRS CORPORATION,
    a Delaware corporation
	 	 
	 	By:	/s/ Deric
    Eubanks
	 	 	Name: Deric Eubanks
	 	 	Title: President
	 	 
	 	ADVISOR:
	 	 
	 	ASHFORD INC., a Delaware
    corporation
	 	 
	 	By:	/s/ Jeremy
    Welter
	 	 	Name: Jeremy Welter
	 	 	Title: President




 






     


     


    

 


	 	ASHFORD HOSPITALITY ADVISORS
    LLC, a

    Delaware limited liability company
	 	 
	 	By:	/s/
    Jeremy Welter
	 	 	Name: Jeremy Welter
	 	 	Title: CEO
	 	 
	 	REMINGTON:
	 	 
	 	REMINGTON LODGING &
    HOSPITALITY,

    LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Sloan
    Dean
	 	 	Name: Sloan Dean
	 	 	Title: CEO
	 	 
	 	PREMIER:
	 	 
	 	PREMIER PROJECT MANAGEMENT,
    LLC, a

    Maryland limited liability company
	 	 
	 	By:	/s/ Hector
    Sanchez
	 	 	Name: Hector Sanchez
	 	 	Title: CEO
	 	 
	 	LISMORE:
	 	 
	 	LISMORE CAPITAL II LLC,
    a Delaware limited

    liability company
	 	 
	 	By:	/s/ Deric
    Eubanks
	 	 	Name: Deric Eubanks
	 	 	Title: President




 









     


     


    

 


	 	AGENT:
	 	 
	 	OAKTREE FUND ADMINISTRATION,
    LLC, a

    Delaware limited liability company
	 	 
	 	By: Oaktree Capital Management,
    L.P., its Managing Member
	 	 
	 	By:	/s/
    Henry Orren
	 	 	Name: Henry Orren
	 	 	Title: Vice President
	 	 
	 	By:	/s/ Brian
    Price
	 	 	Name: Brian Price
	 	 	Title: Senior Vice President