Document:

exv10w1w4

 

Exhibit 10.1.4

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ASHFORD HOSPITALITY LIMITED PARTNERSHIP

DATED: MAY 7, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	 
	ARTICLE I DEFINED TERMS	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED PARTNERS; NAME; PLACE OF
BUSINESS AND REGISTERED AGENT	 	 	11	 
	Section 2.1
	 	CONTINUATION	 	 	11	 
	Section 2.2
	 	CERTIFICATE OF LIMITED PARTNERSHIP; OTHER FILINGS	 	 	11	 
	Section 2.3
	 	ADDITIONAL LIMITED PARTNERS	 	 	12	 
	Section 2.4
	 	NAME, OFFICE AND REGISTERED AGENT	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE III BUSINESS AND TERM OF PARTNERSHIP	 	 	12	 
	Section 3.1
	 	BUSINESS	 	 	12	 
	Section 3.2
	 	TERM	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IV CAPITAL CONTRIBUTIONS	 	 	13	 
	Section 4.1
	 	GENERAL PARTNER	 	 	13	 
	Section 4.2
	 	LIMITED PARTNERS	 	 	13	 
	Section 4.3
	 	ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS	 	 	13	 
	Section 4.4
	 	ADDITIONAL FUNDING	 	 	15	 
	Section 4.5
	 	INTEREST	 	 	15	 
	Section 4.6
	 	RETURN OF CAPITAL	 	 	15	 
	Section 4.7
	 	PERCENTAGE INTEREST	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE V PROFITS, LOSSES AND ACCOUNTING	 	 	16	 
	Section 5.1
	 	ALLOCATION OF PROFITS AND LOSSES	 	 	16	 
	Section 5.2
	 	ACCOUNTING	 	 	17	 
	Section 5.3
	 	PARTNERS’ CAPITAL ACCOUNTS	 	 	18	 
	Section 5.4
	 	SECTION 754 ELECTIONS	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE VI POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF GENERAL PARTNER	 	 	19	 
	Section 6.1
	 	POWERS OF GENERAL PARTNER	 	 	19	 
	Section 6.2
	 	DELEGATION OF AUTHORITY	 	 	22	 
	Section 6.3
	 	DUTIES OF GENERAL PARTNER	 	 	22	 
	Section 6.4
	 	LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION	 	 	23	 
	Section 6.5
	 	COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT	 	 	26	 
	Section 6.6
	 	RELIANCE ON ACT OF GENERAL PARTNER	 	 	26	 
	Section 6.7
	 	OUTSIDE SERVICES; DEALINGS WITH AFFILIATES; OUTSIDE ACTIVITIES	 	 	26	 
	Section 6.8
	 	ADDITIONAL LOANS TO THE PARTNERSHIP	 	 	27	 
	Section 6.9
	 	CONTRIBUTION OF ASSETS	 	 	27	 

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	 	 	 	 	PAGE	 
	 
	ARTICLE VII RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO LIMITED PARTNERS	 	 	28	 
	Section 7.1
	 	RIGHTS OF LIMITED PARTNERS	 	 	28	 
	Section 7.2
	 	PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS	 	 	28	 
	Section 7.3
	 	OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR AFFILIATE	 	 	29	 
	Section 7.4
	 	REDEMPTION RIGHT	 	 	29	 
	Section 7.5
	 	WARRANTIES AND REPRESENTATIONS OF THE LIMITED PARTNERS	 	 	32	 
	Section 7.6
	 	INDEMNIFICATION BY LIMITED PARTNERS	 	 	32	 
	Section 7.7
	 	NOTICE OF SALE OR REFINANCING	 	 	32	 
	Section 7.8
	 	BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE VIII DISTRIBUTIONS AND PAYMENTS TO PARTNERS	 	 	33	 
	Section 8.1
	 	DISTRIBUTIONS OF CASH FLOW	 	 	33	 
	Section 8.2
	 	REIT DISTRIBUTION REQUIREMENTS	 	 	34	 
	Section 8.3
	 	NO RIGHT TO DISTRIBUTIONS IN KIND	 	 	34	 
	Section 8.4
	 	DISPOSITION PROCEEDS	 	 	35	 
	Section 8.5
	 	WITHDRAWALS	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE IX TRANSFERS OF INTERESTS	 	 	35	 
	Section 9.1
	 	GENERAL PARTNER	 	 	35	 
	Section 9.2
	 	ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER	 	 	36	 
	Section 9.3
	 	EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL PARTNER	 	 	37	 
	Section 9.4
	 	REMOVAL OF A GENERAL PARTNER	 	 	37	 
	Section 9.5
	 	RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS	 	 	38	 
	Section 9.6
	 	ADMISSION OF SUBSTITUTE LIMITED PARTNER	 	 	39	 
	Section 9.7
	 	RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS	 	 	40	 
	Section 9.8
	 	EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED PARTNER	 	 	41	 
	Section 9.9
	 	JOINT OWNERSHIP OF INTERESTS	 	 	41	 
	Section 9.10
	 	TRANSFEREES	 	 	41	 
	Section 9.11
	 	ABSOLUTE RESTRICTION	 	 	41	 
	Section 9.12
	 	INVESTMENT REPRESENTATION	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE X TERMINATION OF THE PARTNERSHIP	 	 	42	 
	Section 10.1
	 	TERMINATION	 	 	42	 
	Section 10.2
	 	PAYMENT OF DEBTS	 	 	42	 
	Section 10.3
	 	DEBTS TO PARTNERS	 	 	42	 
	Section 10.4
	 	REMAINING DISTRIBUTION	 	 	42	 
	Section 10.5
	 	RESERVE	 	 	43	 
	Section 10.6
	 	FINAL ACCOUNTING	 	 	43	 

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	 	 	 	 	PAGE	 
	 
	ARTICLE XI AMENDMENTS	 	 	43	 
	Section 11.1
	 	AUTHORITY TO AMEND	 	 	43	 
	Section 11.2
	 	NOTICE OF AMENDMENTS	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE XII POWER OF ATTORNEY	 	 	44	 
	Section 12.1
	 	POWER	 	 	44	 
	Section 12.2
	 	SURVIVAL OF POWER	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE XIII CONSENTS, APPROVALS, VOTING AND MEETINGS	 	 	45	 
	Section 13.1
	 	METHOD OF GIVING CONSENT OR APPROVAL	 	 	45	 
	Section 13.2
	 	MEETINGS OF LIMITED PARTNERS	 	 	46	 
	Section 13.3
	 	OPINION	 	 	46	 
	Section 13.4
	 	SUBMISSIONS TO PARTNERS	 	 	46	 
	 
	 	 	 	 	 	 
	ARTICLE XIV MISCELLANEOUS	 	 	46	 
	Section 14.1
	 	GOVERNING LAW	 	 	46	 
	Section 14.2
	 	AGREEMENT FOR FURTHER EXECUTION	 	 	46	 
	Section 14.3
	 	ENTIRE AGREEMENT	 	 	46	 
	Section 14.4
	 	SEVERABILITY	 	 	47	 
	Section 14.5
	 	NOTICES	 	 	47	 
	Section 14.6
	 	TITLES AND CAPTIONS	 	 	47	 
	Section 14.7
	 	COUNTERPARTS	 	 	47	 
	Section 14.8
	 	PRONOUNS	 	 	47	 
	Section 14.9
	 	SURVIVAL OF RIGHTS	 	 	47	 

	 	 	 	 	 
	EXHIBIT A

	 	—
	 	List of Partners and Initial Contributed Assets
	EXHIBIT B

	 	—
	 	Federal Income Tax Matters
	EXHIBIT C

	 	—
	 	Notice of Exercise of Redemption Right
	EXHIBIT D

	 	—
	 	Designation of Interests Issued to Sea Turtle Inn Limited Partners
	EXHIBIT E

	 	—
	 	[Reserved]
	EXHIBIT F

	 	—
	 	Designation of Terms and Conditions of Series A Preferred
Partnership Units
	EXHIBIT G

	 	—
	 	Designation of Terms and Conditions of Series B-1 Preferred
Partnership Units
	EXHIBIT H

	 	—
	 	[Reserved]
	EXHIBIT I

	 	—
	 	Designation of Interests Issued to FGSB Limited Partners
	EXHIBIT J

	 	—
	 	Designation of Interests Issued to Crystal City Limited Partners
	EXHIBIT K

	 	—
	 	Designation of Terms and Conditions of Series C Preferred
Partnership Units

iii

 

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ASHFORD HOSPITALITY LIMITED PARTNERSHIP

RECITALS:

     Ashford Hospitality Limited Partnership (the “Partnership”) was formed as a limited
partnership under the laws of the State of Delaware by the filing of a Certificate of Limited
Partnership with the Secretary of State of Delaware on May 13, 2003.

     The General Partner and the Original Limited Partner entered into the Agreement of Limited
Partnership as of August 18, 2003, the General Partner and the Limited Partners entered into the
Amended and Restated Agreement of Limited Partnership as of August 29, 2003 which was amended by
the First Amendment to Amended and Restated Agreement of Limited Partnership dated October 16, 2003
and the Second Amendment to Amended and Restated Agreement of Limited Partnership of Ashford
Hospitality Limited Partnership dated April 1, 2004; and

     The General Partner and the Limited Partners (as of such date) entered into the Second Amended
and Restated Agreement of Limited Partnership as of April 6, 2004, which was amended by:

     Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership dated
September 2, 2004;

     Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership dated September 22, 2004;

     Amendment No. 3 to Second Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership dated December 30, 2004;

     Amendment No. 4 to Second Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership dated March 16, 2005;

     Amendment No. 5 to Second Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership dated July 13, 2006; and

     Amendment No. 6 to Second Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership dated April 11, 2007.

 

 

     Pursuant to the provisions of Section 11.1(a) of the Second Amended and Restated Agreement of
Limited Partnership, as amended, the General Partner now desires to amend and restate such
agreement solely for the purpose of clarification to reflect all amendments through the date
hereof, which amendment and restatement will not change the substance thereof.

     NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants between the parties
hereto, and of other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

     Whenever used in this Agreement, the following terms shall have the meanings respectively
assigned to them in this Article I, unless otherwise expressly provided herein or unless the
context otherwise requires:

     “Act” shall mean the Delaware Revised Uniform Limited Partnership Act, 6 Del C. § 17-101, et.
seq., as amended, supplemented or restated from time to time, and any successor to such statute.

     “Additional Funds” has the meaning set forth in Section 4.4 hereof.

     “Additional Limited Partner” shall mean a Person admitted to this Partnership as a Limited
Partner pursuant to and in accordance with Section 2.3(b) of this Agreement.

     “Additional Securities” means any additional REIT Shares (other than REIT Shares issued in
connection with a redemption pursuant to Section 7.4 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or purchase REIT
Shares, as set forth in Section 4.3(a)(ii).

     “Affiliate” of another Person shall mean (a) any Person directly or indirectly owning,
controlling or holding with power to vote ten percent (10%) or more of the outstanding voting
securities of such other Person; (b) any Person ten percent (10%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held with power to vote by such
other Person; (c) any Person directly or indirectly controlling, controlled by, or under common
control with, such other Person; (d) any officer, director, member or partner of such other Person;
and (e) if such other Person is an officer, director, member or partner in a company, the company
for which such Person acts in any such capacity.

     “Agreed Value” shall mean the fair market value of Contributed Property as agreed to by the
contributing partner and the Partnership, using such reasonable method of valuation as they may
adopt.

     “Agreement” shall mean this Third Amended and Restated Agreement of Limited Partnership of
Ashford Hospitality Limited Partnership, as amended from time to time.

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     “Articles of Organization” means the Certificate of Formation of the General Partner filed
with the Secretary of State of the State of Delaware, as amended or restated from time to time.

     “Ashford OP Limited Partner, LLC” means Ashford OP Limited Partner, LLC, a Delaware limited
liability company.

     “Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended, 11 U.S.C. ss.ss.
101 ET SEQ., and as hereafter amended from time to time.

     “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in New York, New York are authorized or required by
law, regulation or executive order to close.

     “Capital Account” shall mean, as to any Partner, the account established and maintained for
such Partner pursuant to Section 5.3 hereof.

     “Capital Contribution” shall mean the amount in cash or the Agreed Value of Contributed
Property contributed by each Partner (or his original predecessor in interest) to the capital of
the Partnership for his interest in the Partnership.

     “Cash Amount” means an amount of cash per Common Partnership Unit equal to the Value on the
Valuation Date of the REIT Common Shares Amount.

     “Cash Flow” shall mean the excess of cash revenues actually received by the Partnership in
respect of Partnership operations for any period, and the amount of any reduction in reserves of
the Partnership, over Operating Expenses for such period. Cash Flow shall not include Disposition
Proceeds.

     “Class B Common Partnership Interest” shall mean an ownership interest in the Partnership,
other than a Preferred Partnership Interest or a Common Partnership Interest, and shall include any
and all benefits to which the holder of such an ownership interest may be entitled as provided in
this Agreement or the Act, together with all obligations of such Person to comply with the terms
and provisions of this Agreement and the Act.

     “Class B Common Partnership Unit” shall mean a fractional, undivided share of the Class B
Common Partnership Interests of all Partners issued hereunder, each of which Class B Common
Partnership Unit shall be treated as a Common Partnership Unit for all purposes of this Agreement
and shall be subject to the same rights, privileges, qualifications, limitations and other
characteristics as a Common Partnership Unit and all references to Class B Common Partnership Units
in this Agreement shall be deemed to be references to Common Partnership Units as well as Class B
Common Partnership Units, except, in each case, (i) in lieu of receiving distributions by the
Partnership to holders of Common Partnership Units, each holder of a Class B Common Partnership
Unit shall be entitled to the payment of the Class B Common Partnership Unit Return; (ii) the Class
B Common Partnership Unit Return shall have priority over the payment of any cash distribution with
respect to a Common Partnership Unit pursuant to Section 8.1(a) of this Agreement (while still
being junior in priority to the payment of any cash distribution

3

 

with respect to a Preferred Unit); and (iii) the Class B Common Partnership Units are
convertible, at the option of the Partnership or any holder of Class B Common Partnership Units, in
whole or in part, from time to time, at any time after July 13, 2016, into an equivalent number of
Common Units.

     “Class B Common Partnership Unit Return” shall mean, as to each Class B Common Partnership
Unit that has not yet then been converted into Common Units: (i) for the period commencing on July
13, 2006 and ending on September 30, 2006 (the “Initial Period”), a cash distribution equal to
$0.16606414; (ii) for the three-year period commencing on October 1, 2006 and ending on the third
anniversary of such date, a cumulative quarterly cash distribution equal to $0.19097376; and (iii)
thereafter, a cumulative quarterly cash distribution equal to $0.20163144.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, and as hereafter amended from
time to time. Reference to any particular provision of the Code shall mean that provision in the
Code at the date hereof and any succeeding provision of the Code.

     “Commission” shall mean the U.S. Securities and Exchange Commission.

     “Common Partnership Interest” shall mean an ownership interest in the Partnership, other than
a Preferred Partnership Interest, and includes any and all benefits to which the holder of such an
ownership interest may be entitled as provided in this Agreement or the Act, together with all
obligations of such Person to comply with the terms and provisions of this Agreement and the Act.

     “Common Partnership Unit” shall mean a fractional, undivided share of the Common Partnership
Interests of all Partners issued hereunder. At all times there shall be maintained an equivalency
of Common Partnership Units and REIT Common Shares, except as otherwise provided herein.

     “Common Percentage Interest” shall mean the percentage ownership interest in the Common
Partnership Units of each Partner, as determined by dividing the Common Partnership Units owned by
a Partner by the total number of Common Partnership Units then outstanding.

     “Common Unit Distribution Period” shall mean any quarter or shorter period with respect to
which a distribution is to be made to the holders of the Common Units.

     “Company” means Ashford Hospitality Trust, Inc., a Maryland corporation.

     “Contributed Property” shall mean a Partner’s interest in property or other consideration
(excluding services and cash) contributed to the Partnership by such Partner.

     “Conversion Factor” shall mean 1.0; provided, however, that in the event the Company (i)
declares or pays a dividend on its outstanding REIT Common Shares in REIT Common Shares or makes a
distribution to all holders of its outstanding REIT

4

 

Common Shares in REIT Common Shares, (ii) subdivides its outstanding REIT Common Shares, or
(iii) combines its outstanding REIT Common Shares into a smaller number of REIT Common Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Common Shares issued and outstanding on the record
date for such dividend, distribution, subdivision or combination (assuming for such purposes that
such dividend, distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Common Shares (determined without the above
assumption) issued and outstanding on the record date for such dividend, distribution, subdivision
or combination. Any adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for such event; PROVIDED,
HOWEVER, that if the General Partner receives a Notice of Redemption after the record date, but
prior to the effective date of such dividend, distribution, subdivision or combination, the
Conversion Factor shall be determined as if the General Partner had received the Notice of
Redemption immediately prior to the record date for such dividend, distribution, subdivision or
combination.

     “Disposition Proceeds” shall mean the excess of the proceeds received by the Partnership from
the sale, exchange or other disposition of all or substantially all of the Partnership’s Property
less any expenses incurred or paid by the Partnership in connection with such transaction.

     “Event of Bankruptcy” shall mean as to any Person the filing of a petition for relief as to
such Person as debtor or bankrupt under the Bankruptcy Code or similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been dismissed within
ninety (90) days of the filing thereof); insolvency of such Person as finally determined by a court
of competent jurisdiction; filing by such Person of a petition or application to accomplish the
same or for the appointment of a receiver or a trustee for such Person or a substantial part of
such Person’s assets; commencement of any proceedings relating to such Person as a debtor under any
other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any
jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by
another, but if such proceeding is commenced by another, only if such Person indicates his approval
of such proceeding, or such proceeding is contested by such Person and has not been finally
dismissed within ninety (90) days.

     “General Partner” shall mean Ashford OP General Partner, LLC and any Person who becomes a
substitute or additional General Partner as provided herein, and any of their successors as General
Partner.

     “General Partnership Interest” shall mean the ownership interest of a General Partner in the
Partnership, provided that the General Partner shall have no interest in profits or losses of the
Partnership with respect to its General Partnership Interest.

     “Government Obligations” shall mean securities that are (i) direct obligations of the United
States of America, for the payment of which its full faith and credit is pledged,

5

 

or (ii) obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, that are not callable or
redeemable at the option of the issuer thereof, and shall also include a depository receipt issued
by a bank or trust as custodian with respect to any such obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.

     “Hotels” means the hotel properties owned by the Partnership, directly or through any other
entity, from time to time.

     “Indemnitee” shall mean (i) any Person made a party to a proceeding by reason of his or her
status as (A) the General Partner or (B) a director, officer, employee or agent of the Partnership
or the General Partner, and (ii) such other Persons (including Affiliates of the General Partner or
the Partnership) as the General Partner may designate from time to time (whether before or after
the event giving rise to potential liability), in its sole and absolute discretion.

     “Initial Contributed Assets” shall mean those properties and asset management and consulting
agreements identified as Initial Contributed Assets on Exhibit A hereto.

     “IRS” shall mean the Internal Revenue Service.

     “Limited Partner” shall mean any Person named as a Limited Partner on Exhibit A attached
hereto and any Person who becomes a Substitute Limited Partner pursuant to Section 9.6 hereof or an
Additional Limited Partner pursuant to Section 2.3(b) hereof, in such Person’s capacity as a
Limited Partner in the Partnership.

     “Limited Partnership Interest” shall mean the ownership interest of a Limited Partner in the
Partnership at any particular time, including the right of such Limited Partner to any and all
benefits to which such Limited Partner may be entitled as provided in this Agreement and in the
Act, together with the obligations of such Limited Partner to comply with all the provisions of
this Agreement and of the Act.

     “Newly Issued Common Unit” shall mean with respect to any Distribution Period, a Common Unit
issued during such Distribution Period, other than to Ashford OP Limited Partner, LLC.

     “Notice of Redemption” shall mean the Notice of Exercise of Redemption Right substantially in
the form attached as Exhibit C hereto.

     “Offering” shall mean the offer and sale by the Company and the purchase by the Underwriters
(as defined in the Prospectus) of REIT Common Shares for sale to the public, consummated August 29,
2003.

6

 

     “Operating Expenses” shall mean (i) all administrative and operating costs and expenses
incurred by the Partnership, (ii) those administrative costs and expenses of the General Partner,
including any salaries or other payments to directors, officers or employees of the General
Partner, and any accounting and legal expense of the General Partner, which expenses, the Partners
have agreed, are expenses of the Partnership and not the General Partner, and (iii) to the extent
not included in clause (ii) above, REIT Expenses; PROVIDED, HOWEVER, that Operating Expenses shall
not include any administrative costs and expenses incurred by the General Partner that are
attributable to Properties or partnership interests in a Subsidiary that are owned by the General
Partner or the Company directly.

     “Original Limited Partner” shall mean Ashford OP Limited Partner, LLC.

     “Partner” shall mean the General Partner or any Limited Partner.

     “Partnership” shall mean Ashford Hospitality Limited Partnership, a Delaware limited
partnership.

     “Partnership Interest” shall mean an ownership interest in the Partnership and includes any
and all benefits to which the holder of such an ownership interest may be entitled as provided in
this Agreement or the Act, together with all obligations of such Person to comply with the terms
and provisions of this Agreement and the Act.

     “Partnership Record Date” shall mean the record date established by the General Partner for
the distribution of Cash Flow pursuant to Section 8.1 hereof, which record date, as to Common
Partnership Units, shall be the corresponding record date established by the Company with respect
to the REIT Common Shares and which record date, as to a series of Preferred Partnership Units,
shall be the corresponding record date established by the Company with respect to the corresponding
series of REIT Preferred Shares.

     “Partnership Unit” means a Common Partnership Unit, a Preferred Partnership Unit or an other
fractional, undivided share of the Partnership Interests that the General Partner has authorized
pursuant to this Agreement. The Partnership Units of the Partners shall be set forth on Exhibit A,
as may be amended from time to time.

     “Person” shall mean any individual, partnership, corporation, limited liability company, trust
or other entity.

     “Preferred Partnership Interest” shall mean an ownership interest in the Partnership evidenced
by a designated series of Preferred Partnership Units, having a preference in payment of
distributions or on liquidation as determined by the General Partner for such series of Preferred
Partnership Units and as set forth in an amendment to this Agreement, and includes all benefits to
which the holder of such an ownership interest may be entitled as provided in this Agreement or the
Act, together with all obligations of such Person to comply with the terms and provisions of this
Agreement and the Act.

7

 

     “Preferred Partnership Unit” shall mean a fractional, undivided share of Preferred Partnership
Interests of all Partners in the specified series issued hereunder.

     “Preferred Percentage Interest” with respect to a series of Preferred Partnership Units, shall
mean the percentage ownership interest in the Preferred Partnership Units of each Partner holding
Preferred Partnership Units of such specified series, as determined by dividing the Preferred
Partnership Units of such series owned by a Partner by the total number of Preferred Partnership
Units of that series then outstanding.

     “Preferred Return” shall mean any payment made or to be made on any Preferred Partnership Unit
corresponding to any dividend paid or to be paid on the related series of preferred shares issued
by the Company, in accordance with Section 4.3 hereof.

     “Property” shall mean any hotel property or other investment in which the Partnership holds an
ownership interest.

     “Prospectus” shall mean the final prospectus, dated August 26, 2003, delivered to purchasers
of REIT Shares in the Offering.

     “Public Offering Price” shall mean the price for REIT shares set forth in the Prospectus.

     “Redeeming Partner” shall have the meaning provided in Section 7.4(a) hereof.

     “Redemption Right” shall have the meaning provided in Section 7.4(a) hereof.

     “REIT” shall mean a real estate investment trust under Sections 856 through 860, inclusive, of
the Code.

     “REIT Common Share” shall mean a share of the common shares of the Company.

     “REIT Common Shares Amount” shall mean a whole number of REIT Common Shares equal to the
product of the number of Common Partnership Units offered for redemption by a Redeeming Partner,
multiplied by the Conversion Factor in effect on the Specified Redemption Date (rounded down to the
nearest whole number in the event such product is not a whole number); provided, however, that in
the event the Company at any time issues to all holders of REIT Common Shares rights, options,
warrants or convertible or exchangeable securities entitling the shareholders to subscribe for or
purchase REIT Common Shares, or any other securities or property (collectively, the “Rights”),
which Rights have not expired pursuant to their terms, then the REIT Common Shares Amount
thereafter shall also include such Rights that a holder of that number of REIT Common Shares would
be entitled to receive.

     “REIT Expenses” means (i) costs and expenses relating to the formation and continuity of
existence of the Company and any Subsidiaries thereof (which Subsidiaries shall, for purposes
hereof, be included within the definition of Company), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees

8

 

payable to any director, officer, or employee of the Company, (ii) costs and expenses relating
to the public offering and registration of securities or private offering of securities by the
Company and all statements, reports, fees and expenses incidental thereto, including underwriting
discounts and selling commissions applicable to any such offering of securities, (iii) costs and
expenses associated with the preparation and filing of any periodic reports by the Company under
federal, state or local laws or regulations, including filings with the Commission, (iv) costs and
expenses associated with compliance by the Company with laws, rules and regulations promulgated by
any regulatory body, including the Commission, and (v) all other operating or administrative costs
of the Company, including, without limitation, insurance premiums, and legal, accounting and
directors’ fees, incurred in the ordinary course of its business on behalf of or in connection with
the Partnership.

     “REIT Preferred Share” shall mean a share of the preferred shares of the Company.

     “REIT Share” shall mean a REIT Common Share or a REIT Preferred Share.

     “Series A Articles Supplementary” shall mean the Articles Supplementary Establishing and
Fixing the Rights and Preferences of a Series of Preferred Stock, designating the rights and
preferences of the 8.55% Series A Cumulative Preferred Stock, filed as part of the Company’s
charter with the State Department of Assessments and Taxation of Maryland, on September 21, 2004.

     “Series A Preferred Partnership Interests” shall mean an ownership interest in the Partnership
evidenced by the Series A Preferred Partnership Units, having a preference in payment of
distributions or on liquidation as set forth in Exhibit F to this Agreement.

     “Series A Preferred Partnership Units” shall mean the series of Preferred Partnership Units
established pursuant to this Agreement, representing a fractional, undivided share of the Series A
Preferred Partnership Interests of all Partners issued under this Agreement.

     “Series A Preferred Stock” shall mean the 8.55% Series A Cumulative Preferred Stock of the
Company, with such preferences, rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption as described in the Series A
Articles Supplementary.

     “Series B-1 Articles Supplementary” shall mean the Articles Supplementary Establishing and
Fixing the Rights and Preferences of a Series of Preferred Stock, designating the rights and
preferences of the Series B-1 Cumulative Convertible Redeemable Preferred Stock, filed as part of
the Company’s charter with the State Department of Assessments and Taxation of Maryland, on
December 29, 2004.

     “Series B-1 Preferred Partnership Interests” shall mean an ownership interest in the
Partnership evidenced by the Series B-1 Preferred Partnership Units, having a preference in payment
of distributions or on liquidation as set forth in Exhibit G to this Agreement.

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     “Series B-1 Preferred Partnership Units” shall mean the series of Preferred Partnership Units
established pursuant to this Agreement, representing a fractional, undivided share of the Series
B-1 Preferred Partnership Interests of all Partners issued under this Agreement.

     “Series B-1 Preferred Stock” shall mean the Series B-1 Cumulative Convertible Redeemable
Preferred Stock of the Company, with such preferences, rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of redemption as described
in the Series B-1 Articles Supplementary.

     “Series C Articles Supplementary” shall mean the Articles Supplementary Establishing and
Fixing the Rights and Preferences of a Series of Preferred Stock, designating the rights and
preferences of the Series C Cumulative Redeemable Preferred Stock, filed as part of the Company’s
charter with the State Department of Assessments and Taxation of Maryland, on April 10, 2007.

     “Series C Preferred Partnership Interests” shall mean an ownership interest in the Partnership
evidenced by the Series C Preferred Partnership Units, having a preference in payment of
distributions or on liquidation as set forth in Exhibit K to this Agreement.

     “Series C Preferred Partnership Units” shall mean the series of Preferred Partnership Units
established pursuant to this Agreement, representing a fractional, undivided share of the Series C
Preferred Partnership Interests of all Partners issued under this Agreement.

     “Series C Preferred Stock” shall mean the Series C Cumulative Redeemable Preferred Stock of
the Company, with such preferences, rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption as described in the Series C
Articles Supplementary.

     “Specified Redemption Date” shall mean, with respect to a given Partner, the tenth (10th)
Business Day after receipt by the General Partner of a Notice of Redemption, provided that no
Specified Redemption Date may occur with respect to any Unit before one year after such Unit is
issued by the Partnership.

     “Subsidiary” shall mean, with respect to any Person, any corporation or other entity of which
a majority of (i) the voting power of the voting equity securities, or (ii) the outstanding equity
interests, are owned, directly or indirectly, by such Person.

     “Substitute General Partner” has the meaning set forth in Section 9.2.

     “Substitute Limited Partner” shall mean any Person admitted to the Partnership as a Limited
Partner pursuant to Section 9.6 hereof.

     “Surviving Partner” has the meaning set forth in Section 9.1(c) hereof.

     “Transaction” has the meaning set forth in Section 9.1(b) hereof.

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     “Transfer” has the meaning set forth in Section 9.5(a) hereof.

     “Valuation Date” shall mean the date of receipt by the General Partner of a Notice of
Redemption or, if such date is not a Business Day, the first Business Day thereafter.

     “Value” shall mean, with respect to a REIT Common Share, the average of the daily market price
for the ten (10) consecutive trading days immediately preceding the Valuation Date. The market
price for each such trading day shall be: (i) if the REIT Common Shares are listed or admitted to
trading on any securities exchange or the NASDAQ National Market System, the closing price, regular
way, on such day, or if no such sale takes place on such day, the average of the closing bid and
asked prices on such day; (ii) if the REIT Common Shares are not listed or admitted to trading on
any securities exchange or the NASDAQ National Market System, the last reported sale price on such
day or, if no sale takes place on such day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated by the General Partner; or (iii) if the
REIT Common Shares are not listed or admitted to trading on any securities exchange or the NASDAQ
National Market System and no such last reported sale price or closing bid and asked prices are
available, the average of the reported high bid and low asked prices on such day, as reported by a
reliable quotation source designated by the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so reported, on the most
recent day (not more than ten (10) days prior to the date in question) for which prices have been
so reported; provided, however, that if there are no bid and asked prices reported during the ten
(10) days prior to the date in question, the Value of the REIT Common Shares shall be determined by
the General Partner acting in good faith on the basis of such quotations and other information as
it considers, in its reasonable judgment, appropriate. In the event the REIT Common Shares Amount
includes rights that a holder of REIT Common Shares would be entitled to receive, and the General
Partner acting in good faith determines that the value of such rights is not reflected in the Value
of the REIT Common Shares determined as aforesaid, then the Value of such rights shall be
determined by the General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

ARTICLE II

PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED PARTNERS;
NAME; PLACE OF BUSINESS AND REGISTERED AGENT

     Section 2.1 CONTINUATION. The Partners hereby agree to continue the Partnership
pursuant to the provisions of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.

     Section 2.2 CERTIFICATE OF LIMITED PARTNERSHIP; OTHER FILINGS.
The General Partner shall prepare (or caused to be prepared), execute, acknowledge, record
and file at the expense of the Partnership, a Certificate of Limited

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Partnership and all requisite
fictitious name statements and notices in such places and jurisdictions as may be required by the
Act or necessary to cause the Partnership to be treated as a limited partnership under, and
otherwise to comply with, the laws of each state or other jurisdiction in which the Partnership
conducts business.

     Section 2.3 ADDITIONAL LIMITED PARTNERS. The General Partner shall in timely fashion
amend this Agreement and, if required by the Act, the Certificate of Limited Partnership filed for
record to reflect the admission pursuant to the terms of this Agreement of a Person as a Limited
Partner.

     Section 2.4 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership shall be
Ashford Hospitality Limited Partnership The principal place of business of the Partnership shall be
at 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254. The General Partner may at any time
change the location of such office, provided the General Partner gives notice to the Partners of
any such change. The name and address of the Partnership’s statutory agent for service of process
on the Partnership in Texas is Ashford OP General Partner LLC, 14185 Dallas Parkway, Suite 1100,
Dallas, Texas 75254. The name and address of the Partnership’s statutory agent for service of
process on the Partnership in Delaware is Corporation Service Company, 2711 Centerville Road, Suite
400, Wilmington, Delaware 19808.

ARTICLE III

BUSINESS AND TERM OF PARTNERSHIP

     Section 3.1 BUSINESS. The purpose and nature of the business of the Partnership is to
conduct any business that may lawfully be conducted by a limited partnership organized pursuant to
the Act; provided, however, that such business shall be limited to and conducted in such a manner
as to permit the Company at all times to be qualified as a REIT under the Code, unless the board of
directors of the Company determines to cease to qualify as a REIT. To consummate the foregoing and
to carry out the obligations of the Partnership in connection therewith or incidental thereto, the
General Partner shall have the authority, in accordance with and subject to the limitations set
forth elsewhere in this Agreement, to make, enter into, perform and carry out any arrangements,
contracts or agreements of every kind for any lawful purpose, without limit as to amount or
otherwise, with any corporation, association, partnership, limited liability company, firm,
trustee, syndicate, individual or any political or governmental division, subdivision or agency,
domestic or foreign, and generally to make and perform agreements and contracts of every kind and
description and to do any and all things necessary or incidental to the foregoing for the
protection and enhancement of the assets of the Partnership.

     Section 3.2 TERM. The Partnership as herein constituted shall continue in perpetuity and shall have perpetual
existence, unless earlier dissolved or terminated pursuant to law or the provisions of this
Agreement.

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ARTICLE IV

CAPITAL CONTRIBUTIONS

     Section 4.1 GENERAL PARTNER. The General Partner has not contributed, and shall not be required to contribute, cash or
other assets to the capital of the Partnership.

     Section 4.2 LIMITED PARTNERS. The Limited Partners have contributed their respective ownership interests in the
Contributed Property to the Partnership as identified on Exhibit A attached hereto. The Agreed
Values of the Limited Partners’ proportionate ownership interest in the Contributed Properties as
of the date of contribution are set forth on Exhibit A attached hereto.

     Section 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL PARTNERSHIP
INTERESTS. Except as provided in this Section 4.3 or in Section 4.4, the Partners shall have no
preemptive or other right or obligation to make any additional Capital Contributions or loans to
the Partnership. The General Partner or Ashford OP Limited Partner, LLC may contribute additional
capital or property to the Partnership, from time to time, and receive additional Partnership
Interests in respect thereof, in the manner contemplated in this Section 4.3.

     (a) ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.

     (i) GENERAL. The General Partner is hereby authorized to cause the Partnership
to issue such additional Partnership Interests in the form of Common Partnership
Units and Preferred Partnership Units for any Partnership purpose at any time or
from time to time, to the Partners or to other Persons for such consideration and
on such terms and conditions as shall be established by the General Partner in its
sole and absolute discretion, all without the approval of any of the Limited
Partners. Any additional Partnership Interest issued thereby may be issued in one
or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to Limited
Partnership Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited Partner,
subject to Delaware law, and all as may be set forth in an Exhibit to this
Agreement, each of which Exhibit shall be incorporated into and become part of this
Agreement upon adoption by the General Partner, including, without limitation, (i)
the allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests; (ii) the right of each such
class or series of Partnership Interests to share in Partnership distributions; (iii) the
rights of each class or series of Partnership Interests upon dissolution and
liquidation of the Partnership and (iv) the right to vote; PROVIDED, HOWEVER, that
no additional Partnership Interests shall be issued to the General Partner or
Ashford OP Limited Partner, LLC unless:

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     (ii) (1) (A) The additional Partnership Interests are issued in connection
with an issuance of REIT Shares of or other interests in the Company, all such that
the economic interests are substantially similar to the designations, preferences
and other rights of the additional Partnership Interests issued to the General
Partner or Ashford OP Limited Partner, LLC by the Partnership in accordance with
this Section 4.3 and (B) the Company shall make, directly or through one or more
Affiliates, a Capital Contribution to the Partnership in an amount equal to the
proceeds raised or other property received by the Company, directly or through one
or more Affiliates, in connection with the issuance of such shares or other
interests in the Company, (2) the additional Partnership Interests are issued in
exchange for property owned by the Company, the General Partner or Ashford OP
Limited Partner, LLC, as the case may be, with a fair market value, as determined
by the General Partner, in good faith, equal to the value of the Partnership
Interests, or (3) the additional Partnership Interests are issued to all Partners
in proportion to their respective Common Percentage Interests or Preferred
Percentage Interests, as applicable.

Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Common Partnership Units or Preferred Partnership Units for less than fair
market value, so long as the General Partner concludes in good faith that such issuance is in the
best interests of the Company and the Partnership.

     (b) UPON ISSUANCE OF ADDITIONAL SECURITIES. After the Offering, the Company shall not
issue any additional REIT Shares (other than REIT Shares issued in connection with a
redemption pursuant to Section 7.4 hereof) or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase REIT Shares
(collectively, “Additional Securities”) other than to all holders of REIT Shares, unless
(A) the General Partner shall cause the Partnership to issue to the Company or its
Affiliates, Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and other
rights, all such that the economic interests are substantially similar to those of the
Additional Securities, and (B) the Company contributes, directly or through one or more
Affiliates, the proceeds or other property received from the issuance of such Additional
Securities and from any exercise of rights contained in such Additional Securities to the
Partnership.

Without limiting the foregoing, the Company may issue Additional Securities for less than fair
market value, and as a result the General Partner is expressly authorized to cause
the Partnership to issue to the Company or its Affiliates corresponding Partnership Interests, so
long as (x) the Company concludes in good faith that such issuance is in the best interests of the
Company and the Partnership, and (y) the Company, directly or through one or

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more Affiliates, contributes all proceeds or other property received from such issuance to the Partnership. For
example, in the event the Company issues REIT Common Shares for a cash purchase price and
contributes, directly or through one or more Affiliates, all of the proceeds of such issuance to
the Partnership as required hereunder, the Company or its Affiliates shall be issued a number of
additional Common Partnership Units equal to the product of (A) the number of such REIT Common
Shares issued by the Company, the proceeds of which were so contributed, multiplied by (B) a
fraction, the numerator of which is 100%, and the denominator of which is the Conversion Factor in
effect on the date of such contribution.

     (c) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF REIT SHARES. In connection
with any and all issuances of REIT Shares, the Company, directly or through one or more
Affiliates, shall contribute all of the proceeds raised in connection with such issuance to
the Partnership as Capital Contributions, PROVIDED THAT if the proceeds actually received
and contributed by the Company or its Affiliates are less than the gross proceeds of such
issuance as a result of any underwriter’s discount or other expenses paid or incurred in
connection with such issuance, then the Company, directly or through one or more
Affiliates, shall be deemed to have made Capital Contributions to the Partnership in the
aggregate amount of the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such offering expenses in connection with the required issuance
of additional Partnership Units to the Company or its Affiliates for such Capital
Contributions pursuant to Section 4.3(a) hereof.

     Section 4.4 ADDITIONAL FUNDING. If the General Partner determines that it is in the best interests of the Partnership to
provide for additional Partnership funds (“Additional Funds”) for any Partnership purpose, the
General Partner may (i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner provide such Additional Funds to the Partnership through loans or
otherwise.

     Section 4.5 INTEREST. No interest shall be paid on the Capital Contribution of any Partner.

     Section 4.6 RETURN OF CAPITAL. Except as expressly provided in this Agreement, no Partner shall be entitled to demand or
receive the return of his Capital Contribution.

     Section 4.7 PERCENTAGE INTEREST. If the number of outstanding Common Partnership Units increases or decreases during a
taxable year, the General Partner shall adjust each holder of Common Partnership Units’ Percentage
Interest, as reflected on Exhibit A, to a percentage equal to the number of Common Partnership
Units held by such Partner divided by the aggregate number of outstanding Common Partnership Units.

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ARTICLE V

PROFITS, LOSSES AND ACCOUNTING

     Section 5.1 ALLOCATION OF PROFITS AND LOSSES. Except as otherwise provided herein or in Exhibit B, profits earned and losses incurred by
the Partnership shall be allocated among the Partners as follows:

     (a) Profits for each year shall be allocated among the Partners, and shall be credited
to the respective Capital Accounts of the Partners, in the following order and priority:

     (i) First, items of gross income to the holders of Preferred Partnership Units
in the amount necessary so that the cumulative amount of gross income allocated to
holders of Preferred Partnership Units pursuant to this Section 5.1(a)(i) is equal
to the cumulative amount of distributions of Preferred Return (as defined, for each
series of Preferred Partnership Units, in the exhibit to this Agreement setting
forth the terms of such Preferred Partnership Units) distributed to holders of
Preferred Partnership Units;

     (ii) Second, to the Partners to the extent of losses, in the proportions and
in the reverse order in which losses were allocated to them pursuant to Section
5.1(b), until the cumulative amounts allocated to each Partner pursuant to this
Section 5.1(a)(ii) are equal to the cumulative losses so allocated to such Partner;

     (iii) Third, to the holders of Class B Common Partnership Units in accordance
with their Common Percentage Interests until the holders of Class B Common
Partnership Units have been allocated an amount equal to the total amount
distributed to such holders pursuant to Section 8.1(a) for such year; and

     (iv) Fourth, any remaining profits shall be allocated to the holders of Common
Partnership Units, other than the holders of Class B Common Partnership Units, in
accordance with their Common Percentage Interests (calculated without giving effect
to the Class B Partnership Units then outstanding).

     (b) Losses for each year shall be allocated among the Partners, and shall be debited
to the respective Capital Accounts of the Partners, in the following order and priority:

     (i) First, to the holders of Common Partnership Units pro rata in accordance
with, and to the extent of, the positive balances in their Adjusted Capital Account
Balances (as defined in Exhibit B hereto) attributable to Common Partnership Units;

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     (ii) Second, to the holders of Preferred Partnership Units pro rata in
accordance with, and to the extent of, the positive balances in their Adjusted
Capital Account Balances (as defined in Exhibit B hereto) attributable to Preferred
Partnership Units; and

     (iii) Thereafter any remaining losses will be allocated to the holders of
Common Partnership Units in accordance with their Common Percentage Interests.

     (c) In the event that the Partnership issues additional Partnership Units pursuant to
the provisions of this Agreement, the General Partner is hereby authorized to make
revisions to this Section 5.1 as it determines are necessary or desirable to reflect the
terms of the issuance of such additional Partnership Units, including, without limitation,
making preferential allocations to certain classes of Partnership Units. For purposes of
determining the income, gain, loss, deduction or any other items allocable to any period,
income, gain, loss, deduction, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any permissible method
under Code Section 706 and the Treasury Regulations thereunder.

     (d) Notwithstanding the provisions of Section 5.1(a) and Section 5.1(b), upon
liquidation of the Partnership or upon redemption of any redeemable Preferred Partnership
Units, items of gross income and/or items of deduction or loss shall be allocated to the
holder of the Preferred Partnership Units and/or the Common Partnership Units, such that
the Capital Accounts attributable to the Preferred Partnership Units equal, after all
allocations of profit and loss are completed, the amount to be distributed to the Preferred
Partnership Units.

     Section 5.2 ACCOUNTING.

     (a) The books of the Partnership shall be kept on the accrual basis and in accordance
with generally accepted accounting principles consistently applied.

     (b) The fiscal year of the Partnership shall be the calendar year.

     (c) The terms “profits” and “losses,” as used herein, shall mean all items of income,
gain, expense or loss as determined utilizing federal income tax accounting principles and
shall also include each Partner’s share of income described in Section 705(a)(1)(B) of the
Code, any expenditures described in Section 705(a)(2)(B) of the Code, any expenditures
described in Section 709(a) of the Code which are not deducted or amortized in accordance
with Section 709(b) of the Code, losses not deductible pursuant to Sections 267(a) and 707(b) of the Code
and adjustments made pursuant to Exhibit B attached hereto.

     (d) The General Partner shall be the Tax Matters Partner of the Partnership within the
meaning of Section 6231(a)(7) of the Code. As Tax Matters Partner, the General Partner
shall have the right and obligation to take all actions authorized and required,
respectively, by the Code for the Tax Matters

17

 

Partner. The General Partner shall have the
right to retain professional assistance in respect of any audit of the Partnership by the
IRS, and all out-of-pocket expenses and fees incurred by the General Partner on behalf of
the Partnership as Tax Matters Partner shall constitute Operating Expenses of the
Partnership. In the event the General Partner receives notice of a final Partnership
adjustment under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period provided
under Section 6226(a) of the Code, a copy of which petition shall be mailed to each Limited
Partner on the date such petition is filed, or (ii) mail a written notice to each Limited
Partner, within such period, that describes the General Partner’s reasons for determining
not to file such a petition.

     (e) Except as specifically provided herein, all elections required or permitted to be
made by the Partnership under the Code shall be made by the General Partner in its sole
discretion.

     (f) Any Partner shall have the right to a private audit of the books and records of
the Partnership, provided such audit is made at the expense of the Partner desiring it, and
it is made during normal business hours.

     Section 5.3 PARTNERS’ CAPITAL ACCOUNTS.

     (a) There shall be maintained a Capital Account for each Partner in accordance with
this Section 5.3 and the principles set forth in Exhibit B attached hereto and made a part
hereof. The amount of cash and the Agreed Value of property contributed to the Partnership
by each Partner, net of liabilities assumed by the Partnership or securing property
contributed by such Partner, shall be credited to its Capital Account, and from time to
time, but not less often than annually, the share of each Partner in profits, losses and
fair market value of distributions shall be credited or charged to its Capital Account. The
determination of Partners’ Capital Accounts, and any adjustments thereto, shall be made
consistent with tax accounting and other principles set forth in Section 704(b) of the Code
and applicable regulations thereunder and Exhibit B attached hereto.

     (b) Except as otherwise specifically provided herein or in a guarantee of a
Partnership liability, signed by a Limited Partner, no Limited Partner shall be required to
make any further contribution to the capital of the Partnership to
restore a loss, to discharge any liability of the Partnership or for any other
purpose, nor shall any Limited Partner personally be liable for any liabilities of the
Partnership or of the General Partner except as provided by law or this Agreement. All
Limited Partners hereby waive their right of contribution which they may have against other
Partners in respect of any payments made by them under any guarantee of Partnership debt.

     (c) Immediately following the transfer of any Partnership Interest, the Capital
Account of the transferee Partner shall be equal to the Capital Account of

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the transferor Partner attributable to the transferred interest, and such Capital Account shall not be
adjusted to reflect any basis adjustment under Section 743 of the Code.

     (d) For purposes of computing the amount of any item of income, gain, deduction or
loss to be reflected in the Partners’ Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination, recognition and
classification for federal income tax purposes, taking into account any adjustments
required pursuant to Section 704(b) of the Code and the applicable regulations thereunder
as more fully described in Exhibit B attached hereto.

     Section 5.4 SECTION 754 ELECTIONS. The General Partner shall elect, pursuant to
Section 754 of the Code, to adjust the basis of
the Partnership’s assets for all transfers of Partnership Interests if such election would benefit
any Partner or the Partnership.

ARTICLE VI

POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF

GENERAL PARTNER

     Section 6.1 POWERS OF GENERAL PARTNER. Notwithstanding any provision of this Agreement to the contrary, the General Partner’s
discretion and authority are subject to the limitations imposed by law, and by the General
Partner’s Articles of Organization and operating agreement. Subject to the foregoing and to other
limitations imposed by this Agreement, the General Partner shall have full, complete and exclusive
discretion to manage and control the business and affairs of the Partnership and make all decisions
affecting the business and assets of the Partnership. Without limiting the generality of the
foregoing (but subject to the restrictions specifically contained in this Agreement), the General
Partner shall have the power and authority to take the following actions on behalf of the
Partnership:

     (a) to acquire, purchase, own, manage, operate, lease and dispose of any real property
and any other property or assets that the General Partner determines are necessary or
appropriate or in the best interests of conducting the business of the Partnership in each
case not inconsistent with the Company’s qualification as a REIT;

     (b) to construct buildings and make other improvements (including renovations) on or
to the properties owned or leased by the Partnership;

     (c) to borrow money for the Partnership, issue evidences of indebtedness in connection
therewith, refinance, guarantee, increase the amount of, modify, amend or change the terms
of, or extend the time for the payment of, any indebtedness or obligation of or to the
Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien
on the Partnership’s assets;

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     (d) to pay, either directly or by reimbursement, for all Operating Expenses to third
parties or to the General Partner (as set forth in this Agreement);

     (e) to lease all or any portion of any of the Partnership’s assets, whether or not the
terms of such leases extend beyond the termination date of the Partnership and whether or
not any portion of the Partnership’s assets so leased are to be occupied by the lessee, or,
in turn, subleased in whole or in part to others, for such consideration and on such terms
as the General Partner may determine;

     (f) to prosecute, defend, arbitrate, or compromise any and all claims or liabilities
in favor of or against the Partnership, on such terms and in such manner as the General
Partner may reasonably determine, and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the Partnership’s assets; provided,
however, that the General Partner may not, without the consent of all of the Partners,
confess a judgment against the Partnership;

     (g) to file applications, communicate, and otherwise deal with any and all
governmental agencies having jurisdiction over, or in any way affecting, the Partnership’s
assets or any other aspect of the Partnership business;

     (h) to make or revoke any election permitted or required of the Partnership by any
taxing authority;

     (i) to maintain such insurance coverage for public liability, fire and casualty, and
any and all other insurance for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or beneficial to the Partnership,
in such amounts and such types as the General Partner shall determine from time to time;

     (j) to determine whether or not to apply any insurance proceeds for any Property to
the restoration of such Property or to distribute the same;

     (k) to retain providers of services of any kind or nature in connection with the
Partnership business and to pay therefor such reasonable remuneration as the General
Partner may deem proper;

     (l) to negotiate and conclude agreements on behalf of the Partnership with respect to
any of the rights, powers and authority conferred upon the General Partner, including,
without limitation, management agreements, franchise agreements, agreements with federal,
state or local liquor licensing agencies and agreements with operators of restaurants and
bars;

     (m) to maintain accurate accounting records and to file promptly all federal, state
and local income tax returns on behalf of the Partnership;

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     (n) to form or acquire an interest in, and contribute property to, any further limited
or general partnerships, joint ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests in, and the contributions of
property to, its Subsidiaries and any other Person in which it has an equity interest from
time to time);

     (o) to distribute Partnership cash or other Partnership assets in accordance with this
Agreement;

     (p) to establish Partnership reserves for working capital, capital expenditures,
contingent liabilities or any other valid Partnership purpose;

     (q) to authorize, issue, sell, redeem or otherwise purchase any Partnership Interests
or any securities (including secured and unsecured debt obligations of the Partnership,
debt obligations of the Partnership convertible into any class or series of Partnership
Interests, or options, rights, warrants or appreciation rights relating to any Partnership
Interests) of the Partnership;

     (r) subject to the provisions of Section 9.1, to merge, consolidate or combine the
Partnership with or into another Person (to the extent permitted by applicable law);

     (s) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” for purposes of
Section 7704 of the Code;

     (t) to issue additional Partnership Interests pursuant to Section 4.3 hereof;

     (u) to pay cash to redeem Partnership Units held by a Limited Partner in connection
with a Limited Partner’s exercise of its Redemption Right under Section 7.4 hereof;

     (v) to amend and restate Exhibit A hereto to reflect accurately at all times the
Capital Contributions, Common Percentage Interests and Preferred Percentage Interests of
the Partners as the same are adjusted from time to time to the extent necessary to reflect
redemptions, Capital Contributions, the issuance of Partnership Units, the admission of any
Additional Limited Partner or any Substitute Limited Partner or otherwise, which amendment
and restatement, notwithstanding anything in this Agreement to the contrary, shall not be deemed an
amendment to this Agreement, as long as the matter or event being reflected in Exhibit A
hereto otherwise is authorized by this Agreement;

     (w) to take whatever action the General Partner deems appropriate to maintain the
economic equivalency of Common Partnership Units and REIT Common Shares and Preferred
Partnership Units and REIT Preferred Shares, respectively; and

21

 

     (x) to take such other action, execute, acknowledge, swear to or deliver such other
documents and instruments, and perform any and all other acts the General Partner deems
necessary or appropriate for the formation, continuation and conduct of the business and
affairs of the Partnership (including, without limitation, all actions consistent with
qualification of the Company as a REIT) and to possess and enjoy all of the rights and
powers of a general partner as provided by the Act.

Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and
perform the above-mentioned agreements and transactions on behalf of the Partnership without any
further act, approval or vote of the Partners, notwithstanding any other provisions of this
Agreement (except as provided in this Section 6.1(r), Section 9.1 or Article XI), the Act or any
applicable law, rule or regulation to the fullest extent permitted under the Act or other
applicable law, rule or regulation. The execution, delivery or performance by the General Partner
or the Partnership of any agreement authorized or permitted under this Agreement shall not
constitute a breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other persons under this Agreement or of any duty stated
or implied by law or equity.

Except as otherwise provided herein, to the extent the duties of the General Partner require
expenditures of funds to be paid to third parties, the General Partner shall not have any
obligations hereunder except to the extent that Partnership funds are reasonably available to it
for the performance of such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual funds for payment to
third parties or to undertake any individual liability or obligation on behalf of the Partnership.

     Section 6.2 DELEGATION OF AUTHORITY. The General Partner may delegate any or all of its powers, rights and obligations hereunder,
and may appoint, employ, contract or otherwise deal with any Person for the transaction of the
business of the Partnership, which Person may, under supervision of the General Partner, perform
any acts or services for the Partnership as the General Partner may approve.

     Section 6.3 DUTIES OF GENERAL PARTNER.

     (a) The General Partner, subject to the limitations contained elsewhere in this
Agreement, shall manage or cause to be managed the affairs of the Partnership in a prudent
and businesslike manner and shall devote sufficient time and effort to the Partnership
affairs.

     (b) In carrying out its obligations, the General Partner shall:

     (i) Render annual reports to all Partners with respect to the operations of
the Partnership;

     (ii) On or before March 31st of every year, mail to all persons who were
Partners at any time during the Partnership’s prior fiscal year an

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annual report of the Partnership, including all necessary tax information, and any other information
regarding the Partnership and its operations during the prior fiscal year deemed by
the General Partner to be material;

     (iii) Maintain complete and accurate records of all business conducted by the
Partnership and complete and accurate books of account (containing such information
as shall be necessary to record allocations and distributions), and make such
records and books of account available for inspection and audit by any Partner or
such Partner’s duly authorized representative (at the sole expense of such Partner)
during regular business hours and at the principal office of the Partnership; and

     (iv) Cause to be filed such certificates and do such other acts as may be
required by law to qualify and maintain the Partnership as a limited partnership
under the laws of the State of Delaware.

     (c) The General Partner shall take such actions as it deems necessary to maintain the
economic equivalency of Common Partnership Units and REIT Common Shares and Preferred
Partnership Units and REIT Preferred Shares, respectively, required by this Agreement.

     Section 6.4 LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION.

     (a) The General Partner shall not be liable for the return of all or any part of the
Capital Contributions of the Limited Partners. Any returns shall be made solely from the
assets of the Partnership according to the terms of this Agreement.

     (b) Notwithstanding anything to the contrary set forth in this Agreement, none of the
General Partner or the Company nor any of their officers, directors, agents or employees
shall be liable or accountable in damages or otherwise to the Partnership, any Partners or
any assignees, or any of their successors or assigns, for any losses sustained, liabilities
incurred or benefits not derived as a result of errors in judgment or mistakes of fact or
law or any act or omission if the General Partner acted in good faith. The General Partner shall not be
responsible for any misconduct or negligence on the part on any agent appointed by it in
good faith pursuant to Section 6.2 hereof. The Limited Partners expressly acknowledge that
the General Partner is acting on behalf of the Partnership, the General Partner, the
General Partner’s members and the Company’s shareholders collectively, and that the General
Partner is under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or their
assignees) in deciding whether to cause the Partnership to take (or decline to take) any
actions. In the event of a conflict between the interests of the members of the General
Partner or shareholders of the Company on one hand and the Limited Partners on the other,
the General Partner shall endeavor in good faith to resolve the conflict in a manner not
adverse to either the shareholders of the Company or the Limited

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Partners; provided, however, that for so long as the Company owns a controlling interest, directly or
indirectly, in the Partnership, any such conflict that cannot be resolved in a manner not
adverse to either the shareholders of the Company or the Limited Partners shall be resolved
in favor of the shareholders of the Company. The General Partner shall not be liable for
monetary damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General Partner has
acted in good faith.

     (c) The Partnership shall indemnify an Indemnitee to the fullest extent permitted by
law and save and hold it harmless from and against, and in respect of, any and all losses,
claims, damages, liabilities (joint or several), expenses (including legal fees and
expenses), judgments, fines, settlements, and other amounts arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership as set forth in this
Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise; provided, however, that this indemnification shall not apply if: (A)
the act or omission of the Indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of active and deliberate
dishonesty; (B) the Indemnitee actually received an improper personal benefit in money,
property or services; or (C) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. The termination of any
proceeding by judgment, order or settlement does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct set forth in this Section 6.4(c).
The termination of any proceeding by conviction or upon a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in this
Section 6.4(c). Any indemnification pursuant to this Section 6.4 shall be made only out of
the assets of the Partnership, and any insurance proceeds from the liability policy
covering the General Partner and any Indemnitee.

     (d) The Partnership may reimburse an Indemnitee for reasonable expenses incurred by an
Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the
standard of conduct necessary for indemnification by the Partnership as authorized in this
Section 6.4 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee
to repay the amount if it shall ultimately be determined that the standard of conduct has
not been met.

     (e) The indemnification provided by this Section 6.4 shall be in addition to any other
rights to which an Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue
as to an Indemnitee who has ceased to serve in such capacity.

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     (f) The Partnership may purchase and maintain insurance on behalf of the Indemnitees,
and such other Persons as the General Partner shall determine, against any liability that
may be asserted against or expenses that may be incurred by such Person in connection with
the Partnership’s activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this Agreement.

     (g) For purposes of this Section 6.4, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the
performance by the Indemnitee of its duties to the Partnership also imposes duties on, or
otherwise involves services by, the Indemnitee to the plan or participants or beneficiaries
of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit
plan pursuant to applicable law shall constitute fines within the meaning of this Section
6.4; and actions taken or omitted by the Indemnitee with respect to an employee benefit
plan in the performance of its duties for a purpose reasonably believed by the Indemnitee
to be in the interest of the participants and beneficiaries of the plan shall be deemed to
be for a purpose which is not opposed to the best interests of the Partnership.

     (h) In no event may an Indemnitee subject the Limited Partners to personal liability
by reason of the indemnification provisions set forth in this Agreement.

     (i) An Indemnitee shall not be denied indemnification in whole or in part under this
Section 6.4 because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the terms of this
Agreement.

     (j) Any amendment, modification or repeal of this Section 6.4 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the General
Partner’s liability to the Partnership and the Limited Partners under this Section 6.4 as
in effect immediately prior to such amendment, modification or repeal with respect to
matters occurring, in whole or in part, prior to such amendment, modification or repeal,
regardless of when claims relating to such matters may arise or be asserted. The provisions of this Section 6.4 are for the
benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.

     (k) Notwithstanding any other provisions of this Agreement or the Act, any action of
the General Partner on behalf of the Partnership or any decision of the General Partner to
refrain from acting on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect the ability of
the Company to continue to qualify as a REIT, or (ii) to prevent the Company from incurring
any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners. Further, any provision of
this Agreement that might jeopardize the Company’s REIT status shall be (i) void

25

 

and of no effect, or (ii) reformed, as necessary, to avoid the Company’s loss of REIT status.

     Section 6.5 COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT.
The General Partner, as such, shall not receive any compensation for services rendered to
the Partnership. Notwithstanding the preceding sentence, the General Partner shall be entitled, in
accordance with the provisions of Section 6.7 below, to pay reasonable compensation to its
Affiliates and other entities in which it may be associated for services performed. The General
Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all REIT Expenses.

     Section 6.6 RELIANCE ON ACT OF GENERAL PARTNER. No financial institution or any other person, firm or corporation dealing with the General
Partner or the Partnership shall be required to ascertain whether the General Partner is acting in
accordance with this Agreement, but such financial institution or such other person, firm or
corporation shall be protected in relying solely upon the assurance of and the execution of any
instrument or instruments by the General Partner.

     Section 6.7 OUTSIDE SERVICES; DEALINGS WITH AFFILIATES; OUTSIDE ACTIVITIES.

     (a) Notwithstanding any provision of this Article VI to the contrary, the General
Partner may employ such agents, accountants, attorneys and others as it shall deem
advisable, including its directors, officers, shareholders, and its Affiliates and entities
with which the General Partner, any Limited Partner or their respective Affiliates may be
associated, the Company’s directors, officers and shareholders, and may pay them reasonable
compensation from Partnership funds for services performed, which compensation shall be
reasonably believed by the General Partner to be comparable to and competitive with fees
charged by unrelated Persons who render comparable services which could reasonably be made
available to the Partnership. The General Partner shall not be liable for the neglect,
omission or wrongdoing of any such Person so long as it appointed such Person in good
faith.

     (b) The Partnership may lend or contribute to its Subsidiaries or other Persons in
which it has an equity investment Partnership funds on terms and conditions established in
the sole and absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.

     (c) The Partnership may transfer assets to joint ventures, other partnerships,
corporations or other business entities in which it is or thereby becomes a participant
upon such terms and subject to such conditions as are consistent with this Agreement and
applicable law.

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     (d) Except as expressly permitted by this Agreement, neither the General Partner nor
any of its Affiliates nor any Limited Partner shall sell, transfer or convey any property
to, or purchase any property from, the Partnership, directly or indirectly, except pursuant
to transactions that are on terms that are fair and reasonable to the Partnership.

     (e) Subject to the Articles of Organization and any agreements entered into by the
General Partner or its Affiliates with the Partnership or a Subsidiary, any officer,
director, employee, agent, trustee, Affiliate or shareholder of the General Partner shall
be entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the Partnership nor
any of the Limited Partners shall have any rights by virtue of this Agreement in any
business ventures of such person.

     (f) In the event the Company exercises its rights under its Articles of Incorporation
to redeem REIT Common Shares, then the General Partner shall cause the Partnership to
purchase from the Company a number of Common Partnership Units determined based on the
application of the Conversion Factor on the same terms as those on which the Company
redeemed such REIT Common Shares.

     Section 6.8 ADDITIONAL LOANS TO THE PARTNERSHIP. If additional funds are required by the Partnership for any purpose relating to the
business of the Partnership or for any of its obligations, expenses, costs, or expenditures,
including operating deficits, the Partnership may borrow such funds as are needed from time to time
from any Person (including, without limitation, the General Partner or any Affiliate of the General
Partner; provided, however, that the terms of any loan from the General Partner or any Affiliate of
the General Partner shall be substantially equivalent to the terms that could be obtained from a
third party on an arm’s-length basis) on such terms as the General Partner and such other Person may agree.

     Section 6.9 CONTRIBUTION OF ASSETS. The Company, directly or through one or more of its Affiliates, shall contribute to the
capital of the Partnership from time to time each asset it owns from time to time during the
existence of the Partnership, but it is not required to so contribute:

     (a) its interests in the General Partner or Ashford OP Limited Partner, LLC;

     (b) its direct or indirect interest in any entity in a chain of entities of which the
Company is the sole beneficial owner, so long as all of the assets or other ownership
interests in the entity in that chain furthest removed from the General Partner are
contributed directly or indirectly to the Partnership; or

     (c) any equity interest in any entity of which the Company is the sole beneficial
owner that is created or used solely by the General Partner in

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connection with any borrowing transaction in whole or in part for the benefit of the Partnership.

ARTICLE VII

RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO

LIMITED PARTNERS

     Section 7.1 RIGHTS OF LIMITED PARTNERS.

     (a) The Partnership may engage the Limited Partners or persons or firms associated
with them for specific purposes and may otherwise deal with such Partners on terms and for
compensation to be agreed upon by any such Partner and the Partnership; provided, however,
that no Limited Partner shall be entitled to participate in the management or control of
the business of the Partnership.

     (b) Each Limited Partner shall be entitled to have the Partnership books kept at the
principal place of business of the Partnership and at all times, during reasonable business
hours and at such Partner’s sole expense, shall be entitled to inspect and copy any of them
and have on demand true and full information of all things affecting the Partnership and a
formal accounting of Partnership affairs whenever circumstances render it just and
reasonable; provided, however, for such period of time as the General Partner determines in
its sole and absolute discretion to be reasonable, the General Partner may keep
confidential from the Limited Partners any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the disclosure of which
the General Partner in good faith believes is not in the best interests of the Partnership or (ii) the Partnership or the General Partner is
required by law or by agreements with unaffiliated third parties to keep confidential.

     (c) No Limited Partner shall be liable for any debts, liabilities, contracts or
obligations of the Partnership. A Limited Partner shall be liable to the Partnership only
to make payments of its Capital Contribution, if any, as and when due hereunder. After its
Capital Contribution is fully paid, no Limited Partner shall, except as otherwise required
by the Act, be required to make any further Capital Contributions or other payments or lend
any funds to the Partnership.

     Section 7.2 PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS. No Limited Partner shall have the right:

     (a) To take part in the control or management of the Partnership business, to transact
business for or on behalf of the Partnership or to sign for or to bind the Partnership,
such powers being vested solely in the General Partner as set forth herein;

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     (b) To have such Partner’s Capital Contributions repaid except to the extent
provided in this Agreement;

     (c) To require partition of Partnership property or to compel any sale or appraisement
of Partnership assets or sale of a deceased Partner’s interests therein, notwithstanding
any provisions of law to the contrary; or

     (d) To sell or assign all or any portion of such Partner’s Limited Partnership
Interest in the Partnership or to constitute the vendee or assignee thereunder a Substitute
Limited Partner, except as provided in Article IX hereof.

     Section 7.3 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR AFFILIATE. No Limited Partner shall at any time, either directly or indirectly, own any shares or other
interest in the General Partner or in any Affiliate thereof if such ownership by itself or in
conjunction with other shares or other interests owned by other Limited Partners would, in the
opinion of counsel for the Partnership, jeopardize the classification of the Partnership as a
partnership or the Company as a REIT for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required to establish
compliance by the Limited Partners with the provisions of this Section 7.3 and the Limited Partners
shall promptly and fully respond to such inquiries.

     Section 7.4 REDEMPTION RIGHT.

     (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements
between the Partnership and one or more Limited Partners, each Limited Partner, other than
Ashford OP Limited Partner, LLC, shall have the right (the “Redemption Right”) to require
the Partnership to redeem on a Specified Redemption Date all or a portion of the Common
Partnership Units held by such Limited Partner at a redemption price equal to and in the
form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one
(1) year (the “Payout Period”) following exercise of a Redemption Right to pay the Cash
Amount to the Limited Partner who is exercising the redemption right (the “Redeeming
Partner”). From and after the Specified Redemption Date, the Cash Amount (or portion
thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner’s
exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i)
the Company’s annual dividend rate on REIT Common Shares for the prior twelve (12) month
period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof)
shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant
to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner)
by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less
than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of
the Common Partnership Units held by such Partner. Neither the Redeeming Partner nor any
permitted or purported assignee of any Limited Partner shall have any right with respect to
any Common Partnership Units so redeemed to receive

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any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported
assignee of any Limited Partner shall have any right, with respect to any Common
Partnership Units so redeemed, to receive any distributions paid after the Specified
Redemption Date. Each Redeeming Partner agrees to provide such representations and related
indemnities regarding good and unencumbered title, and to execute such documents, as the
General Partner may reasonably require in connection with any redemption.

     (b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner
elects to exercise the Redemption Right, the General Partner at the direction of the
Company, directly or indirectly through one or more Affiliates, may, in its sole and
absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to
the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or
(ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the
Company (in its sole and absolute discretion), on the Specified Redemption Date, provided
that the Company may defer payment of the Cash Amount until the end of the Payout Period
described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described
in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to
defer payment of the Cash Amount, further elect at any time before the end of the Payout
Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a
Value equal to such portion of the Cash Amount plus any accrued but unpaid interest
thereon. On any such election, the Company, directly or indirectly through one or more
Affiliates, shall acquire the Common Partnership Units offered for redemption by the
Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of
such Common Partnership Units. Unless the General Partner, as directed by the Company (in
its sole and absolute discretion) shall exercise its right to assume directly and satisfy
the Redemption Right, neither the General Partner nor the Company itself shall have any
obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming
Partner’s exercise of the Redemption Right. In the event the General Partner, as directed
by the Company shall exercise its right to satisfy the Redemption Right in the manner
described in the first sentence of this Section 7.4(b), the Partnership shall have no
obligation to pay any amount to the Redeeming Partner with respect to such Redeeming
Partner’s exercise of the Redemption Right, and each of the Redeeming Partner, the
Partnership, and the Company shall treat the transaction between the Company and the
Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s
Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to
provide such representations and related indemnities regarding good title, and to execute
such documents, as the Company may reasonably require in connection with the issuance of
REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the
delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of
REIT Common Shares as of the close of business on the Specified Redemption Date or on such
later date permitted by this Section 7.4(b)

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that the Company delivers REIT Common Shares in
satisfaction of a deferred payment of the Cash Amount, as the case may be.

Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition
to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of
the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to
satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is
necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common
Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty
(120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to
pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the
earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares
has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by
the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty
(130) days after such Common Partnership Units are presented for redemption. If such shareholder
approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no
later than the end of what the Payout Period would have been had the General Partner, as directed
by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with
interest on such Cash Amount as specified in Section 7.4(a) hereof.

     (c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited
Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common
Shares to such Partner on the Specified Redemption Date (or such later date permitted by
Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be
prohibited under the Articles of Incorporation of the Company, as amended or restated from
time to time. Without limiting the effect of the preceding sentence, no Person shall be
permitted to receive REIT Common Shares if as a result of, and after giving effect to, such
exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of
the Company, as amended or restated from time to time) more than 9.8% of the total number
of issued and outstanding REIT Common Shares, unless waived by the board of directors of
the Company in its sole discretion. To the extent any attempted redemption for REIT Common
Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio.
The Cash Amount shall be paid in such instances, in accordance with the terms set forth in
Section 7.4(a) or 7.4(b).

     (d) Each Limited Partner covenants and agrees with the General Partner that all Common
Partnership Units delivered for redemption shall be delivered to the Partnership, the
Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the
contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the
Partnership shall be under any obligation to acquire Common Partnership Units which are or
may be subject to any liens. Each Limited Partner further

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agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common
Partnership Units to the General Partner, Partnership or the Company, such Limited Partner
shall assume and pay such transfer tax.

     (e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends
regarding restrictions on transfer as the Company in good faith determines to be necessary
or advisable in order to (1) comply with restrictions on transfer under the Securities Act
and applicable state securities laws and (2) protect the ability of the Company to continue
to qualify as a REIT.

     Section 7.5 WARRANTIES AND REPRESENTATIONS OF THE LIMITED PARTNERS. Each Limited Partner contributing Initial Contributed Assets hereby warrants and represents
to and for the benefit of the General Partner and the Partnership that, as of August 29, 2003 such
Limited Partner owned good, valid and marketable title to the ownership interests in the Initial
Contributed Assets being contributed to the capital of the Partnership by such Limited Partner (the
“Ownership Interests”) and that such Ownership Interests were free and clear of all mortgages,
pledges, liens, security interests, encumbrances and restrictions of any nature whatsoever. Each
Limited Partner further warrants and represents to and for the benefit of the General Partner and
the Partnership that such Limited Partner had all necessary power and authority to transfer the
Ownership Interests to the Partnership without the consent or authorization of, or notice to, any
third party, except those third parties from whom such consents or authorizations were obtained.

     Section 7.6 INDEMNIFICATION BY LIMITED PARTNERS. Each Limited Partner contributing Initial Contributed Assets hereby agrees to indemnify the
General Partner and the Partnership and hold the General Partner, its officers and directors and
the Partnership and its partners and each of their respective representatives, successors and
assigns harmless from and against any and all claims, demands, losses, liabilities, damages and
expenses (including reasonable attorneys’ fees) arising out of or in connection with (i) the
inaccuracy of the warranties and representations made by such Limited Partner under Section 7.5
above, or (ii) the ownership of the Ownership Interests by such Limited Partner and any activities,
obligations or liabilities of, or related to, the Initial Contributed Assets to which such
Ownership Interest relates for all periods prior to the date of this Agreement.

     Section 7.7 NOTICE OF SALE OR REFINANCING. The General Partner shall notify the Limited Partners no less than thirty (30) days prior to
any sale, refinancing, reduction (other than scheduled periodic amortization of principal) of debt
or other event that will reduce the amount of any nonrecourse liabilities of the Partnership that a
Limited Partner may include in the tax basis of his or its Partnership Interests.

     Section 7.8 BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES.

     (a) Upon the request of any Limited Partner but subject to the General Partner’s
agreement, which may be withheld in the General Partner’s sole

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discretion, the General Partner may, prior to the end of each calendar year, beginning in 2003, cause accountants
to prepare and provide to the Limited Partners a study analyzing each refinancing,
reduction (other than scheduled periodic amortization of principal) of debt or other event
that occurred during that year that reduced the amount of any nonrecourse liabilities of
the Partnership that a Limited Partner may include in the tax basis of its Partnership
Interests.

     (b) Upon the request of the General Partner, or upon a Limited Partner’s own election
but subject to the General Partner’s agreement, which may be withheld in the General
Partner’s sole discretion, a Limited Partner (the “Initiating Limited Partner”) from time
to time, may, but shall not be required to, guarantee or otherwise provide credit support
for Partnership indebtedness as such Limited Partner may elect; provided, however, that the
Limited Partner shall be entitled to take such action only if the General Partner
determines that any such action would not have a material adverse effect on the tax
position of the General Partner. All Partners are entitled to notice of any such guarantee
or credit support, and shall have the right to provide guarantees or credit support on the
same terms and conditions as the Initiating Limited Partner does, and all Limited Partners
interested in providing such guarantee or credit support shall cooperate with the General
Partner and each other in considering any guarantee or credit support proposal, and the
General Partner will cooperate in permitting or obtaining any consents for such guarantees
or credit support.

ARTICLE VIII

DISTRIBUTIONS AND PAYMENTS TO PARTNERS

     Section 8.1 DISTRIBUTIONS OF CASH FLOW.

     (a) The General Partner shall cause the Partnership to distribute on a quarterly basis
such portion of the Cash Flow of the Partnership as the General Partner shall determine in
its sole discretion. Except as provided in Section 10.4, such distributions shall be made
to the Partners who are Partners on the applicable record date as follows:

first, to the holders of the Preferred Partnership Units, an amount equal
to the unpaid portion of the Preferred Return due to the holders of the
Preferred Partnership Units on the applicable Partnership Record Date, as
determined pursuant to the applicable exhibit hereto setting forth the
terms of such Preferred Partnership Units;

second, to all Partners who are Partners on the applicable Partnership
Record Date and who beneficially own Class B Common Partnership Units, the
Class B Common Partnership Unit Return, including any accrued accumulated
but previously unpaid Class B Common Partnership Return, if any; and

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third, to all Partners who are Partners on the applicable Partnership
Record Date and who beneficially own Common Partnership Units (other than
Class B Common Partnership Units), in accordance with their respective
Common Percentage Interests;

provided, however, if for any Common Unit Distribution
Period, a Newly Issued Common Unit is outstanding on the Partnership
Record Date for such period, there shall not be distributed in respect of
such Newly Issued Common Unit the amount (the “Full Distribution Amount”)
that would otherwise be distributed in respect of such Unit in accordance
with its respective Common Percentage Interest, but rather, the General
Partner shall cause to be distributed with respect to each such Newly
Issued Common Unit an amount equal to the Full Distribution Amount
multiplied by a fraction, the numerator of which equals the number of days
such Newly Issued Common Unit has been outstanding during the Distribution
Period and the denominator of which equals the total number of days in
such Common Unit Distribution Period

Any Cash Flow not distributed to the holders of Units by operation of this
provision shall be retained by the Partnership and applied toward future
distributions or payment of Partnership expenses.

     (b) In no event may a Partner receive a distribution of Cash Flow with respect to a
Partnership Unit if such Partner is entitled to receive a dividend out of the Company’s
share of such Cash Flow with respect to a REIT Share for which all or part of such
Partnership Unit has been exchanged.

     (c) In the event the Partnership issues additional Partnership Units pursuant to the
provisions of this Agreement, the General Partner is hereby authorized to make such
revisions to this Article 8 as it determines are necessary or desirable to reflect the
issuance of such additional Partnership Units, including without limitation, making
preferential distributions to certain classes of Partnership Units.

     Section 8.2 REIT DISTRIBUTION REQUIREMENTS. Unless the General Partner determines that such a distribution would not be in the best
interests of the Partnership, the General Partner shall cause the Partnership to distribute
sufficient amounts to enable the Company (i) to meet its distribution requirement for qualification
as a REIT as set forth in Section 857(a)(1) of the Code, and (ii) to avoid the excise tax imposed
by Section 4981 of the Code.

     Section 8.3 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled to demand property other than cash in connection with any
distribution by the Partnership.

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     Section 8.4 DISPOSITION PROCEEDS. Disposition Proceeds (less reasonable reserves set aside by the General Partner for
reasonably anticipated expenses or needs of the Partnership) shall be distributed to the holders
of Common Partnership Interests in accordance with their respective Common Percentage Interests in
the Partnership.

     Section 8.5 WITHDRAWALS. No Partner shall be entitled to make withdrawals from its Capital Account, or withdraw as a
Limited Partner, except as expressly provided herein.

ARTICLE IX

TRANSFERS OF INTERESTS

     Section 9.1 GENERAL PARTNER.

     (a) Other than to an Affiliate of the General Partner, the General Partner may not
transfer any of its General Partnership Interest or Limited Partnership Interests or
withdraw as General Partner except as provided in Section 9.1(b) or in connection with a
transaction described in Section 9.1(c).

     (b) Except as otherwise provided in Section 6.7 or Section 9.1(c), the General
Partner, the Company or their Subsidiaries shall not engage in any merger, consolidation or
other combination with or into another Person or in any sale of all or substantially all of
its assets, or any reclassification, or recapitalization or change of outstanding REIT
Common Shares (other than a change in par value, or from par value to no par value, or as a
result of a subdivision or combination as described in the definition of “Conversion
Factor”) (each of the foregoing being herein referred to as a “Transaction”), unless the
Transaction also includes a merger of the Partnership or sale of substantially all of the
assets of the Partnership or other transaction as a result of which all Limited Partners will receive for each Common Partnership Unit an amount of cash, securities
or other property equal to the product of the Conversion Factor and the greatest amount of
cash, securities or other property paid to a holder of one REIT Common Share in
consideration of one REIT Common Share as a result of the Transaction; provided, however,
that if, in connection with the Transaction, a purchase, tender or exchange offer shall
have been made to and accepted by the holders of more than fifty percent (50%) of the
outstanding REIT Common Shares, the holders of Common Partnership Units shall receive the
greatest amount of cash, securities or other property which a Limited Partner would have
received had it exercised the Redemption Right and the General Partner at the direction of
the Company had exercised its election to satisfy the Redemption Right by the issuance of
REIT Common Shares immediately prior to the expiration of such purchase, tender or exchange
offer.

     (c) Notwithstanding Section 9.1(b), the General Partner, the Company or their
Subsidiaries may merge into or consolidate with another entity if immediately after such
merger or consolidation (i) substantially all of the assets of

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the successor or surviving
entity (the “Surviving Partner”), other than Partnership Units held by the General Partner,
the Company or their Subsidiaries, are contributed to the Partnership as a Capital
Contribution in exchange for Partnership Units with a fair market value equal to the value
of the assets so contributed as determined by the Surviving Partner in good faith and (ii)
the Surviving Partner or one of its Subsidiaries expressly agrees to assume all obligations
of the General Partner hereunder. Upon such contribution and assumption, the Surviving
Partner shall have the right and duty to amend this Agreement as set forth in this Section
9.1(c). The Surviving Partner shall in good faith arrive at a new method for the
calculation of the Cash Amount and Conversion Factor for a Common Partnership Unit after
any such merger or consolidation so as to approximate the existing method for such
calculation as closely as reasonably possible. Such calculation shall take into account,
among other things, the kind and amount of securities, cash and other property that was
receivable upon such merger or consolidation by a holder of REIT Shares or options,
warrants or other rights relating thereto, and which a holder of Common Partnership Units
could have acquired had such Common Partnership Units been redeemed immediately prior to
such merger or consolidation. Such amendment to this Agreement shall provide for adjustment
to such method of calculation, which shall be as nearly equivalent as may be practicable to
the adjustments provided for with respect to the Conversion Factor. The above provisions of
this Section 9.1(c) shall similarly apply to successive mergers or consolidations permitted
hereunder.

     Section 9.2 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A Person shall be admitted as a Substitute or Additional General Partner of the Partnership
only if the transaction giving rise to such substitution or admission is otherwise permitted under
this Agreement and the following terms and conditions are satisfied:

     (a) the Person to be admitted as a Substitute or Additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this Agreement by
executing a counterpart thereof and such other documents or instruments as may be required
or appropriate in order to effect the admission of such Person as a General Partner, and a
certificate evidencing the admission of such Person as a General Partner shall have been
filed for recordation and all other actions required by the Act in connection with such
admission shall have been performed;

     (b) if the Person to be admitted as a Substitute or Additional General Partner is a
corporation or a partnership, it shall have provided the Partnership with evidence
satisfactory to counsel for the Partnership of such Person’s authority to become a General
Partner and to be bound by the terms and provisions of this Agreement; and

     (c) counsel for the Partnership shall have rendered an opinion (relying on such
opinions from counsel of the state or any other jurisdiction as may be necessary) that the
admission of the Person to be admitted as a Substitute or

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Additional General Partner is in
conformity with the Act and that none of the actions taken in connection with the admission
of such Person as a Substitute or Additional General Partner will cause the termination of
the Partnership under Section 708 of the Code, or will cause it to be classified as other
than a partnership for federal income tax purposes, or will result in the loss of any
Limited Partner’s limited liability status.

     Section 9.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL
PARTNER.

     (a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its
automatic removal pursuant to Section 9.4(a) hereof) or the withdrawal or dissolution of a
General Partner (except that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a
partner in such partnership shall be deemed not to be a dissolution of such General Partner
if the business of such General Partner is continued within ninety (90) days by the
remaining general partners or all remaining members of such partnership), the Partnership
shall be dissolved and terminated unless the Partnership is continued pursuant to Section
9.3(b).

     (b) Following the occurrence of an Event of Bankruptcy as to a General Partner or the
withdrawal or dissolution of a General Partner (except that, if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not be a
dissolution of such General Partner if the business of such General Partner is continued
within ninety (90) days by all remaining general partners or all remaining members of such partnership), persons
holding at least a majority of the Limited Partnership interests, within ninety (90) days
after such occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 3.2 by selecting, subject to Section 9.2 and any
other applicable provisions of this Agreement, a Substitute General Partner by majority
consent of the Limited Partners. If the Limited Partners elect to reconstitute the
Partnership and admit a Substitute General Partner, the relationship between the Partners
and any Person who has acquired an interest of a Partner in the Partnership shall be
governed by this Agreement.

     Section 9.4 REMOVAL OF A GENERAL PARTNER.

     (a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a
General Partner, such General Partner shall be deemed to be removed automatically;
provided, however, that if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a
partner in such partnership shall be deemed not to be a dissolution of the General Partner
if the business of such General Partner

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is continued within ninety (90) days by the remaining general partners or all remaining members of such Partnership.

     (b) If a General Partner has been removed pursuant to this Section 9.4(a) and the
Partnership is not continued pursuant to Section 9.3(b), the partnership shall be
dissolved.

     (c) A General Partner may not be removed by the Limited Partners with or without
cause.

     Section 9.5 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.

     (a) Except as otherwise provided in this Article IX, no Limited Partner may offer,
sell, assign, hypothecate, pledge or otherwise transfer its Limited Partnership Interest,
in whole or in part, whether voluntarily or by operation of law or at judicial sale or
otherwise (collectively, a “Transfer”), without the written consent of the General Partner,
which consent may be withheld in the sole and absolute discretion of the General Partner;
provided, however, the consent required by this Section 9.5(a) shall not be required in the
event of a Transfer on or after the first anniversary of the date of this Agreement by a
Limited Partner that was a limited partner as of the date of this Agreement to any of its
partners. The General Partner may require, as a condition of any Transfer, that the
transferor assume all costs incurred by the Partnership in connection therewith.

     (b) No Limited Partner may effect a Transfer of its Limited Partnership Interest if,
(i) in the opinion of legal counsel for the Partnership, such proposed Transfer would
require the registration of the Limited Partnership Interest under the Securities Act of
1933, as amended, or would otherwise violate any applicable federal or state securities or
“Blue Sky” law (including investment suitability standards) or (ii) the assignee is not an
Accredited Investor within the meaning of Rule 501 of the Securities Act of 1933, as
amended.

     (c) No Transfer by a Limited Partner of its Partnership Units may be made to any
Person if (i) in the opinion of legal counsel for the Partnership, the Transfer would
result in the Partnership’s being treated as an association taxable as a corporation (other
than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii)
such transfer is effectuated through an “established securities market” or a “secondary
market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the
Code, (iii) the Transfer would create a risk that the Company would not be taxed as a REIT
for federal income tax purposes or (iv) assuming the Partnership Units subject to the
Transfer were redeemed for REIT Shares, the redemption would create a risk that the Company
would not be taxed as a REIT for federal income tax purposes.

     (d) Section 9.5(a) shall not prevent any donative Transfer by an individual Limited
Partner to his immediate family members or any trust in which

38

 

the individual or his immediate family members own, collectively, one hundred percent (100%) of the beneficial
interests, provided that the transferor assumes all costs of the Partnership in connection
therewith and any such transferee shall not have the rights of a Substitute Limited Partner
(unless and until admitted as a Substitute Limited Partner pursuant to this Section 9.5 and
Section 9.6 of this Agreement).

     (e) Any Transfer in contravention of any of the provisions of this Article IX shall be
void and ineffectual and shall not be binding upon, or recognized by, the Partnership.

     Section 9.6 ADMISSION OF SUBSTITUTE LIMITED PARTNER.

     (a) Subject to the other provisions of this Article IX (including, without limitation,
the provisions of Section 9.5(a) regarding consent of the General Partner), an assignee of
the Limited Partnership Interest of a Limited Partner (including, without limitation, any
purchaser, transferee, donee, or other recipient of any disposition of such Limited
Partnership Interest) shall be deemed admitted as a Limited Partner of the Partnership only
upon the satisfactory completion of the following:

     (i) the assignee has obtained the prior written consent of the General Partner
as to its admission as a Substitute Limited Partner, which
consent may be given or denied in the exercise of the General Partner’s sole
and absolute discretion; provided, however, that this Section 9.6(a)(i) shall not
apply in the case of assignee resulting from a Transfer by a Limited Partner that
was a partner as of the date of this Agreement to any of its partners;

     (ii) the assignee shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart or an amendment thereof,
including a revised Exhibit A, and such other documents or instruments as the
General Partner may require in order to effect the admission of such Person as a
Limited Partner;

     (iii) to the extent required, an amended certificate of limited partnership
evidencing the admission of such Person as a Limited Partner shall have been
signed, acknowledged and filed for record in accordance with the Act;

     (iv) the assignee shall have delivered a letter containing the representation
and warranty set forth in Section 9.12 and the agreement set forth in Section 9.12;

     (v) if the assignee is a corporation, partnership or trust, the assignee shall
have provided the General Partner with evidence satisfactory to counsel for the
Partnership of the assignee’s authority to

39

 

become a Limited Partner under the terms and provisions of this Agreement;

     (vi) the assignee shall have executed a power of attorney containing the terms
and provisions set forth in Article XII; and

     (vii) the assignee shall have paid all reasonable legal fees of the
Partnership and the General Partner and all filing and publication costs incurred
in connection with its substitution as a Limited Partner.

     (b) For the purpose of allocating profits and losses and distributing cash received by
the Partnership, a Substitute Limited Partner shall be treated as having become, and
appearing in the records of the Partnership as, a Partner upon the filing of the
certificate described in Section 9.6(a)(ii) or, if no such filing is required, the later of
the date specified in the transfer documents, or the date on which the General Partner has
received all necessary instruments of transfer and substitution.

     (c) The General Partner shall as promptly as practicable take all action required to
effectuate the admission of the Person seeking to become a Substitute Limited Partner,
including preparing the documentation required by this Section and making all official
filings and publications.

     Section 9.7 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.

     (a) Subject to the provisions of Sections 9.5 and 9.6 hereof, except as required by
operation of law, the Partnership shall not be obligated for any purposes whatsoever to
recognize the assignment by any Limited Partner of his Partnership Interest until the
Partnership has received notice thereof. If the General Partner, in its sole and absolute
discretion, does not consent (subject to the proviso in Section 9.6(a)(i)) to the admission
of any transferee of any Partnership Interest as a Substitute Limited Partner in connection
with a Transfer permitted by Section 9.5, such transferee shall be considered an assignee
for the purposes of this Agreement. An assignee shall be entitled to all the rights of an
assignee of a limited partnership interest under the Act, including the right to receive
distributions attributable to the Partnership Units assigned, but such assignee shall not
be entitled to effect a consent or vote or effect a Redemption Right with respect to such
Partnership Units on any matter presented to the Limited Partners for approval (such right
to consent or vote or effect a Redemption Right, to the extent provided in this Agreement
or under the Act, fully remaining with the transferor Limited Partner).

     (b) Any Person who is the assignee of all or any portion of a Limited Partner’s
Limited Partnership Interest, but does not become a Substitute Limited Partner and desires
to make a further assignment of such Limited Partnership Interest, shall be subject to all
of the provisions of this Article IX to the same

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     extent and in the same manner as any Limited Partner desiring to make an assignment of its Limited Partnership Interest.

     Section 9.8 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED
PARTNER. The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited
Partner or a final adjudication that a Limited Partner is incompetent (which term shall include,
but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership,
and the business of the Partnership shall continue. If an order for relief in a bankruptcy
proceeding is entered against an individual Limited Partner, the trustee or receiver of his estate
or, if he dies, his executor, administrator or trustee, or, if he is finally adjudicated
incompetent, his committee, guardian or conservator, shall have the rights of such Limited Partner
for the purpose of settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of his Partnership
Interest and to join with the assignee in satisfying conditions precedent to the admission of the
assignee as a Substitute Limited Partner.

     Section 9.9 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be acquired by two (2) individuals as joint tenants with right of
survivorship (but not as tenants in common), provided that such individuals either are married or
are related and share the same home as tenants in common. The written consent or vote of both
owners of any such jointly held Partnership Interest shall be required to constitute the action of the owners of such Partnership Interest; provided,
however, that the written consent of only one (1) joint owner will be required if the Partnership
has been provided with evidence satisfactory to counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state of residence of such
joint owners. Upon the death of one (1) owner of a Partnership Interest held in a joint tenancy
with a right of survivorship, the Partnership Interest shall become owned solely by the survivor as
a Limited Partner and not as an assignee. The Partnership need not recognize the death of one (1)
of the owners of a jointly held Partnership Interest until it shall have received notice of such
death. Upon notice to the General Partner from either owner that the tenancy satisfying the first
sentence of this Section 9.9 has been destroyed, the General Partner shall cause the Partnership
Interest to be divided into two (2) equal Partnership Interests, which shall thereafter be owned
separately by each of the former owners.

     Section 9.10 TRANSFEREES. Any Partnership Interests owned by the Partners and transferred pursuant to this Article IX
shall be and remain subject to all of the provisions of this Agreement.

     Section 9.11 ABSOLUTE RESTRICTION. Notwithstanding any provision of this Agreement to the contrary, the sale or exchange of any
interest in the Partnership will not be permitted if the interest sought to be sold or exchanged,
when added to the total of all other interests sold or exchanged within the period of twelve (12)
consecutive months ending with the proposed date of the sale or exchange, would result in the
termination of the Partnership under Section 708 of the Code, if such termination would materially
and adversely affect the Partnership or any Partner.

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     Section 9.12 INVESTMENT REPRESENTATION. Each Limited Partner hereby represents and warrants to the General Partner and to the Partnership
that the acquisition of his Partnership Interest is made as a principal for his account for
investment purposes only and not with a view to the resale or distribution of such Partnership
Interest. Each Limited Partner agrees that he will not sell, assign or otherwise transfer his
Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at
judicial sale or otherwise, to any Person who does not similarly represent and warrant and
similarly agree not to sell, assign or transfer such Partnership Interest or fraction thereof to
any Person who does not similarly represent, warrant and agree.

ARTICLE X

TERMINATION OF THE PARTNERSHIP

     Section 10.1 TERMINATION. The Partnership shall be dissolved upon (i) an Event of Bankruptcy as to the General Partner
or the dissolution or withdrawal of the General Partner (unless within ninety (90) days thereafter
Limited Partners holding more than fifty percent (50%) of the Limited Partnership Interests in the
Partnership elect to continue the Partnership and to elect one or more persons to serve as the
General Partner or General Partners of the Partnership), (ii) ninety (90) days following the sale
of all or substantially all of the Partnership’s assets (provided that if the Partnership receives
an installment obligation as consideration for such sale or other disposition, the Partnership
shall continue, unless sooner dissolved under the provisions of this Agreement, until such time as
such obligation is paid in full), (iii) the expiration of the term specified in Section 3.2, (iv)
the redemption of all Limited Partnership Interests (other than any of such interests held by the
General Partner or Ashford OP Limited Partner, LLC), or (v) the election by the General Partner
(but only in accordance with and as permitted by applicable law) that the Partnership should be
dissolved. Upon dissolution of the Partnership (unless the business of the Partnership is continued
as set forth above), the General Partner (or its trustee, receiver, successor or legal
representative) shall proceed with the winding up of the Partnership, and its assets shall be
applied and distributed as herein provided.

     Section 10.2 PAYMENT OF DEBTS. The assets shall first be applied to the payment of the liabilities of the Partnership
(other than any loans or advances that may have been made by Partners to the Partnership) and the
expenses of liquidation. A reasonable time shall be allowed for the orderly liquidation of the
assets of the Partnership and the discharge of liabilities to creditors so as to enable the General
Partner to minimize any losses resulting from liquidation.

     Section 10.3 DEBTS TO PARTNERS. The remaining assets shall next be applied to the repayment of any loans made by any Partner
to the Partnership.

     Section 10.4 REMAINING DISTRIBUTION. The remaining assets shall then be distributed first, to the holders of the Preferred
Partnership Units as provided in the exhibit hereto setting forth the terms of such Preferred
Partnership Units, and second, to the holders of the Common Partnership Units in accordance with
their positive Capital

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Account balances, determined after taking into account all Capital Account
adjustments for all prior periods and the Partnership taxable year during which the liquidation
occurs.

     Section 10.5 RESERVE. Notwithstanding the provisions of Sections 10.3 and 10.4, the General Partner may retain
such amount as it deems necessary as a reserve for any contingent liabilities or obligations of the
Partnership, which reserve, after the passage of a reasonable period of time, shall be distributed
pursuant to the provisions of this Article X.

     Section 10.6 FINAL ACCOUNTING. Each of the Partners shall be furnished with a statement examined by the Partnership’s
independent accountants, which shall set forth the assets and liabilities of the Partnership as of
the date of the complete liquidation. Upon the compliance by the General Partner with the foregoing
distribution plan, the Limited Partners shall cease to be such, and the General Partner, as the
sole remaining Partner of the Partnership, shall execute and cause to be filed a Certificate of
Cancellation of the Partnership and any and all other documents necessary with respect to
termination and cancellation of the Partnership.

ARTICLE XI

AMENDMENTS

     Section 11.1 AUTHORITY TO AMEND.

     (a) This Agreement may be amended by the General Partner without the approval of any
other Partner if such amendment (i) is solely for the purpose of clarification or is of an
inconsequential nature and (ii) does not change the substance hereof and the Partnership
has obtained an opinion of counsel to that effect.

     (b) This Agreement may be amended by the General Partner without the approval of any
other Partner if such amendment is to reflect the admission, substitution or withdrawal of
Limited Partners; to reflect the issuance of additional Partnership Interests or to amend
the calculation of the Cash Amount and the Conversion Factor pursuant to a transaction
described in Section 9.1(c).

     (c) This Agreement may be amended by the General Partner without the approval of any
other Partner if such amendment is, in the opinion of counsel for the Partnership, necessary or appropriate to satisfy requirements of the Code with
respect to partnerships or REITs or of any federal or state securities laws or regulations.
Any amendment made pursuant to this Section 11.1(c) may be made effective as of the date of
this Agreement.

     (d) Notwithstanding any contrary provision of this Agreement, any amendment to this
Agreement or other act which would (i) adversely affect the limited liabilities of the
Limited Partners, (ii) impose on the Limited Partners any obligation to make additional
Capital Contributions to the Partnership, (iii) change the method of allocation of profit
and loss as provided in Article V or the distribution provisions of Articles VIII and X
hereof, (iv) seek to impose personal

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liability on the Limited Partners, or (v) affect the
operation of the Conversion Factor of the Redemption Right shall require the consent and
approval of Limited Partners holding more than sixty-six and two-thirds percent (66 2/3%)
of the Common Percentage Interests of the Limited Partners.

     (e) Except as otherwise specifically provided in this Section 11.1, amendments to this
Agreement shall require the approval of the General Partner and Limited Partners holding
more than fifty percent (50%) of the Common Percentage Interests of the Limited Partners.

     Section 11.2 NOTICE OF AMENDMENTS. A copy of any amendment to be approved by the Partners pursuant to Sections 11.1(d) or
11.1(e) shall be mailed in advance to such Partners. Partners shall be notified as to the substance
of any amendment pursuant to Sections 11.1(a), (b) or (c), and upon request shall be furnished a
copy thereof.

ARTICLE XII

POWER OF ATTORNEY

     Section 12.1 POWER. Each of the Limited Partners irrevocably constitutes and appoints the General Partner as
such Limited Partner’s true and lawful attorney in such Limited Partner’s name, place and stead to
make, execute, swear to, acknowledge, deliver and file:

     (a) Any certificates or other instruments which may be required to be filed by the
Partnership under the laws of the State of Delaware or of any other state or jurisdiction
in which the General Partner shall deem it advisable to file;

     (b) Any documents, certificates or other instruments, including, but not limited to,
(i) any and all amendments and modifications of this Agreement or of the instruments
described in Section 12.1(a) which may be required or deemed desirable by the General
Partner to effectuate the provisions of any part of this Agreement, (ii) all instruments
relating to the admission, withdrawal, removal or substitution of any Partner, and (iii) by
way of extension and not limitation, to do all such other things as shall be necessary to continue and to carry on the business
of the Partnership; and

     (c) All documents, certificates or other instruments that may be required to
effectuate the dissolution and termination of the Partnership, to the extent such
dissolution and termination is authorized hereby. The power of attorney granted hereby
shall not constitute a waiver of, or be used to avoid, the rights of the Partners to
approve certain amendments to this Agreement pursuant to Sections 11.1(d) and 11.1(e) or be
used in any other manner inconsistent with the status of the Partnership as a limited
partnership or inconsistent with the provisions of this Agreement. Each such Limited
Partner hereby agrees to be bound by any representation made by the General Partner, acting
in good faith pursuant to such power of attorney; and each such Limited Partner hereby
waives

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any and all defenses which may be available to contest, negate or disaffirm the
action of the General Partner taken in good faith under such power of attorney.

     Section 12.2 SURVIVAL OF POWER. It is expressly intended by each of the Partners that the foregoing power of attorney is
coupled with an interest, is irrevocable and shall survive the death, incompetence, dissolution,
liquidation or adjudication of insanity or bankruptcy or insolvency of each such Partner. The
foregoing power of attorney shall survive the delivery of an assignment by any of the Partners of
such Partner’s entire interest in the Partnership, except that where an assignee of such entire
interest has become a substitute Limited Partner, then the foregoing power of attorney of the
assignor Partner shall survive the delivery of such assignment for the sole purpose of enabling the
General Partner to execute, acknowledge and file any and all instruments necessary to effectuate
such substitution.

ARTICLE XIII

CONSENTS, APPROVALS, VOTING AND MEETINGS

     Section 13.1 METHOD OF GIVING CONSENT OR APPROVAL. Any consent or approval required by this Agreement may be given as follows:

     (a) by a written consent given by the consenting Partner and received by the General
Partner at or prior to the doing of the act or thing for which the consent is solicited,
provided that such consent shall not have been nullified by:

     (i) Notice to the General Partner of such nullification by the consenting
Partner prior to the doing of any act or thing, the doing of which is not subject
to approval at a meeting called pursuant to Section 13.2, or

     (ii) Notice to the General Partner of such nullification by the consenting
Partner prior to the time of any meeting called pursuant to Section 13.2 to
consider the doing of such act or thing, or

     (iii) The negative vote by such consenting Partner at any meeting called
pursuant to Section 13.2 to consider the doing of such act or thing;

     (b) by the affirmative vote by the consenting Partner for the doing of the act or
thing for which the consent is solicited at any meeting called pursuant to Section 13.2 to
consider the doing of such act or thing; or

     (c) by the failure of the Partner to respond or object to a request from the General
Partner for such Partner’s consent within thirty (30) days from its receipt of such request
(or such shorter period of time as the General Partner may indicate in such request in
order to ensure that the General Partner has sufficient time to respond, if required, to
any third party with respect to the subject matter of such request).

45

 

     Section 13.2 MEETINGS OF LIMITED PARTNERS. Any matter requiring the consent or vote of all or any of the Partners may be considered at
a meeting of the Partners held not less than five (5) nor more than sixty (60) days after notice
thereof shall have been given by the General Partner to all Partners. Such notice (i) may be given
by the General Partner, in its discretion, at any time, or (ii) shall be given by the General
Partner within fifteen (15) days after receipt from Limited Partners holding more than fifty
percent (50%) of the Common Percentage Interests of the Limited Partners of a request for such
meeting.

     Section 13.3 OPINION. Except for Consents obtained pursuant to Sections 13.1 or 13.2, no Limited Partner shall
exercise any consent or voting rights unless either (a) at the time of the giving of consent or
casting of any vote by the Partners hereunder, counsel for the Partnership or counsel employed by
the Limited Partners shall have delivered to the Partnership an opinion satisfactory to the
Partners to the effect that such conduct (i) is permitted by the Act, (ii) will not impair the
limited liability of the Limited Partners, and (iii) will not adversely affect the classification
of the Partnership as a partnership for federal income tax purposes, or (b) irrespective of the
delivery or nondelivery of such opinion of counsel, Limited Partners holding more than seventy-five
percent (75%) of the Common Percentage Interests of the Limited Partners determine to exercise
their consent or voting rights.

     Section 13.4 SUBMISSIONS TO PARTNERS. The General Partner shall give the Partners notice of any proposal or other matter required
by any provision of this Agreement, or by law, to be submitted for consideration and approval of
the Partners. Such notice shall include any information required by the relevant provision or by
law.

ARTICLE XIV

MISCELLANEOUS

     Section 14.1 GOVERNING LAW. The Partnership and this Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.

     Section 14.2 AGREEMENT FOR FURTHER EXECUTION. At any time or times upon the request of the General Partner, the Limited Partners hereby
agree to sign, swear to, acknowledge and deliver all further documents and certificates required by
the laws of Delaware, or any other jurisdiction in which the Partnership does, or proposes to do,
business, or which may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act. This Section 14.2 shall not prejudice or affect the rights
of the Limited Partners to approve certain amendments to this Agreement pursuant to Sections
11.1(d) and 11.1(e).

     Section 14.3 ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto contain the entire understanding among the
parties and supersede any prior understandings or agreements among them respecting the within
subject matter. There are no representations, agreements, arrangements or understandings, oral or
written, between or among the parties hereto relating to the subject matter of this Agreement which
are not fully expressed herein.

46

 

     Section 14.4 SEVERABILITY. This Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules and regulations of the jurisdictions in which
the Partnership does business. If any provision of this Agreement, or the application thereof to
any person or circumstance, shall, for any reason and to any extent, be invalid or unenforceable,
the remainder of this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent
permitted by law.

     Section 14.5 NOTICES. Notices to Partners or to the Partnership shall be deemed to have been given when personally
delivered or mailed, by prepaid registered or certified mail, addressed as set forth in Exhibit A
attached hereto, unless a notice of change of address has previously been given in writing by the
addressee to the addressor, in which case such notice shall be addressed to the address set forth
in such notice of change of address.

     Section 14.6 TITLES AND CAPTIONS. All titles and captions are for convenience only, do not form a substantive part of this
Agreement, and shall not restrict or enlarge any substantive provisions of this Agreement.

     Section 14.7 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each one of which shall constitute
an original executed copy of this Agreement.

     Section 14.8 PRONOUNS. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons may require.

     Section 14.9 SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon
and inure to the benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.

47

 

IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and year first above
written.

	 	 	 	 	 
	 	GENERAL PARTNER:

Ashford OP General Partner LLC,
a Delaware limited liability company

 	 
	 	By:  	/S/ DAVID A. BROOKS
 	 
	 	 	David A. Brooks, Vice President 	 
	 	 	 	 

 

	 	 	 	 	 

The undersigned has executed this Agreement not as a Partner of the Partnership but to agree to the
provisions of this Agreement imposing obligations on, granting rights to, the Company.

	 	 	 	 	 
	 	ASHFORD HOSPITALITY TRUST, INC.

 	 
	 	By:  	/S/ MONTGOMERY J. BENNETT
 	 
	 	 	Montgomery J. Bennett, President 	 
	 	 	 	 

 

	 	 	 	 	 

EXHIBIT A

[Begins on Next Page]

 

EXHIBIT B

FEDERAL INCOME TAX MATTERS

For purposes of interpreting and implementing Article V of the Partnership Agreement, the following
rules shall apply and shall be treated as part of the terms of the Partnership Agreement:

A. SPECIAL ALLOCATION PROVISIONS.

     1. For purposes of determining the amount of gain or loss to be allocated pursuant to Article
V of the Partnership Agreement, any basis adjustments permitted pursuant to Section 743 of the Code
shall be disregarded.

     2. When Partnership Interests are transferred during any taxable year, the General Partner
intends to allocate Partnership income, loss, deductions and credits using the closing of the books
method.

     3. Notwithstanding any other provision of the Partnership Agreement, to the extent required
by law, income, gain, loss and deduction attributable to property contributed to the Partnership by
a Partner shall be shared among the Partners so as to take into account any variation between the
basis of the property and the fair market value of the property at the time of contribution in
accordance with the requirements of Section 704(c) of the Code and the applicable regulations
thereunder as more fully described in Part B hereof. Treasury regulations under Section 704(c) of
the Code allow partnerships to use any reasonable method for accounting for Book-Tax Differences
for contributions of property so that a contributing partner receives the tax benefits and burdens
of any built-in gain or loss associated with contributed property. The Operating Partnership shall
account for Book-Tax Differences using a method specifically approved in the regulations, the
traditional method. An allocation of remaining built-in gain under Section 704(c) will be made when
Section 704(c) property is sold.

     4. Notwithstanding any other provision of the Partnership Agreement, in the event the
Partnership is entitled to a deduction for interest imputed under any provision of the Code on any
loan or advance from a Partner (whether such interest is currently deducted, capitalized or
amortized), such deduction shall be allocated solely to such Partner.

     5. Notwithstanding any provision of the Partnership Agreement to the contrary, to the extent
any payments in the nature of fees made to a Partner or reimbursements of expenses to any Partner
are finally determined by the Internal Revenue Service to be distributions to a Partner for federal
income tax purposes, there will be a gross income allocation to such Partner in the amount of such
distribution.

     6. (a) Notwithstanding any provision of the Partnership Agreement to the contrary and subject
to the exceptions set forth in Section 1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a
net decrease in Partnership Minimum Gain during any Partnership fiscal year, each Partner shall be
specially allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner’s share of the net decrease in

Exhibit B — Page 1

 

 

Partnership Minimum Gain determined in accordance with Section 1.704-2(g)(2) of the Treasury
Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Section 1.704-2(f) of the Treasury Regulations.
This paragraph 6(a) is intended to comply with the minimum gain chargeback requirement in such
Section of the Treasury Regulations and shall be interpreted consistently therewith. To the extent
permitted by such Section of the Treasury Regulations and for purposes of this paragraph 6(a) only,
each Partner’s Adjusted Capital Account Balance shall be determined prior to any other allocations
pursuant to Article V of the Partnership Agreement with respect to such fiscal year and without
regard to any net decrease in Partner Minimum Gain during such fiscal year.

     (b) Notwithstanding any provision of the Partnership Agreement to the contrary, except
paragraph 6(a) of this Exhibit and subject to the exceptions set forth in Section 1.704-2(i)(4) of
the Treasury Regulations, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
during any Partnership fiscal year, each Partner who has a share of the Partner Nonrecourse Debt
Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the Treasury Regulations,
shall be specially allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner
Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the Treasury
Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Treasury Regulations.
This paragraph 6(b) is intended to comply with the minimum gain chargeback requirement in such
Section of the Treasury Regulations and shall be interpreted consistently therewith. Solely for
purposes of this paragraph 6(b), each Partner’s Adjusted Capital Account Balance shall be
determined prior to any other allocations pursuant to Article V of the Partnership Agreement with
respect to such fiscal year, other than allocations pursuant to paragraph 6(a) hereof.

     7. Notwithstanding any provision of the Partnership Agreement to the contrary, in the event
any Partners unexpectedly receive any adjustments, allocations or distributions described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such
Partners in an amount and manner sufficient to eliminate the deficits in their Adjusted Capital
Account Balances created by such adjustments, allocations or distributions as quickly as possible.

     8. No loss shall be allocated to any Partner to the extent that such allocation would result
in a deficit in its Adjusted Capital Account Balance while any other Partner continues to have a
positive Adjusted Capital Account Balance; in such event, losses shall first be allocated to any
Partners with positive Adjusted Capital Account Balances, and in proportion to such balances, to
the extent necessary to reduce their positive Adjusted Capital Account Balances to zero. Any excess
shall be allocated to the General Partner.

     9. Any special allocations of items pursuant to this Part A shall be taken into account in
computing subsequent allocations so that the net amount of any items so allocated and the

Exhibit B — Page 2

 

 

profits, losses and all other items allocated to each such Partner pursuant to Article V of
the Partnership Agreement shall, to the extent possible, be equal to the net amount that would have
been allocated to each such Partner pursuant to the provisions of Article V of the Partnership
Agreement if such special allocations had not occurred.

     10. Notwithstanding any provision of the Partnership Agreement to the contrary, Nonrecourse
Deductions for any fiscal year or other period shall be specially allocated to the Partners in the
manner set forth in Section 5.1(b)(iii) of the Partnership Agreement.

     11. Notwithstanding any provision of the Partnership Agreement to the contrary, any Partner
Nonrecourse Deduction for any fiscal year or other period shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which
such Partner Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i) of the
Treasury Regulations.

B. CAPITAL ACCOUNT ADJUSTMENTS AND 704(c) TAX ALLOCATIONS.

     1. For purposes of computing the amount of any item of income, gain, deduction or loss to be
reflected in the Partners’ Capital Accounts, the determination, recognition and classification of
any such item shall be the same as its determination, recognition and classification for federal
income tax purposes; provided, however, that:

     (a) Any income, gain or loss attributable to the taxable disposition of any property shall be
determined by the Partnership as if the adjusted basis of such property as of such date of
disposition was equal in amount to (i) the Agreed Value in the case of the Initial Contributed
Assets or other contributed properties, or (ii) the Carrying Value with respect to property
subsequently purchased.

     (b) The computation of all items of income, gain, loss and deduction shall be made by the
Partnership and, as to those items described in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the
Code, without regard to the fact that such items are not includable in gross income or are neither
currently deductible nor capitalizable for federal income tax purposes.

     2. A transferee of a Partnership Interest will succeed to the Capital Account relating to the
Partnership Interest transferred.

     3. Upon an issuance of additional Partnership Interests, the Capital Accounts of all Partners
(and the Agreed Values of all Partnership properties) shall, immediately prior to such issuance, be
adjusted (consistent with the provisions hereof) upward or downward to reflect any unrealized gain
or unrealized loss attributable to each Partnership property (as if such unrealized gain or
unrealized loss had been recognized upon an actual sale of such property at the fair market value
thereof, immediately prior to such issuance, and had been allocated to the Partners, at such time,
pursuant to Article V of the Partnership Agreement). In determining such unrealized gain or
unrealized loss attributable to the properties, the fair market value of Partnership properties
shall be determined by the General Partner using such reasonable methods of valuation as it may
adopt.

Exhibit B — Page 3

 

 

     4. Immediately prior to the distribution of any Partnership property in liquidation of the
Partnership, the Capital Accounts of all Partners shall be adjusted (consistent with the provisions
hereof and Section 704 of the Code) upward or downward to reflect any unrealized gain or unrealized
loss attributable to the Partnership property (as if such unrealized gain or unrealized loss had
been recognized upon an actual sale of each such property, immediately prior to such distribution,
and had been allocated to the Partners, at such time, pursuant to Article V of the Partnership
Agreement). In determining such unrealized gain or unrealized loss attributable to property, the
fair market value of Partnership property shall be determined by the General Partner using such
reasonable methods of valuation as it may adopt.

     5. In accordance with Section 704(c) of the Code and the regulations thereunder, income,
gain, loss and deduction with respect to any property shall, solely for tax purposes, and not for
Capital Account purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal income tax purposes.

     6. In the event the Agreed Value of any Partnership asset is adjusted as described in
paragraph 3 above, subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Agreed Value in the same manner as under Section 704(c) of the Code and
the regulations thereunder.

     7. Any elections or other decisions relating to such allocations shall be made by the General
Partner in any manner that reasonably reflects the purpose and intention of this Agreement.

     C. DEFINITIONS. For the purposes of this Exhibit, the following terms shall have the meanings
indicated unless the context clearly indicates otherwise:

     “ADJUSTED CAPITAL ACCOUNT BALANCE”: means the balance in the Capital Account of a Partner as
of the end of the relevant fiscal year of the Partnership, after giving effect to the following:
(i) credit to such Capital Account any amounts the Partner is obligated to restore, pursuant to the
terms of this Agreement or otherwise, or is deemed obligated to restore pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations, and (ii) debit
to such capital account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the
Treasury Regulations.

     “AGREED VALUE”: means the net fair market value of Contributed Property as agreed to by the
Contributing Partner and the Partnership (or other property subsequently adjusted to reflect
contributions), using such reasonable method of valuation as they may adopt.

     “CARRYING VALUE”: means the adjusted basis of such property for federal income tax purposes as
of the time of determination.

     “NONRECOURSE DEDUCTIONS”: shall have the meaning set forth in Section 1.704-2(b)(1) of the
Treasury Regulations. The amount of Nonrecourse Deductions for a Partnership fiscal year equals the
excess, if any, of the net increase, if any, in the amount of Partnership Minimum Gain during that
fiscal year over the aggregate amount of any distributions during

Exhibit B — Page 4

 

 

that fiscal year of proceeds of a Nonrecourse Liability, that are allocable to an
increase in Partnership Minimum Gain, determined according to the provisions of Section 1.704-2(c)
of the Treasury Regulations.

     “NONRECOURSE LIABILITY”: shall have the meaning set forth in Section 1.704-2(b)(3) of the
Treasury Regulations.

     “PARTNER NONRECOURSE DEBT MINIMUM GAIN”: means an amount, with respect to each Partner
Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the Treasury Regulations.

     “PARTNER NONRECOURSE DEBT”: shall have the meaning set forth in Section 1.704-2(b)(4) of the
Treasury Regulations.

     “PARTNER NONRECOURSE DEDUCTIONS”: shall have the meaning set forth in Section 1.704-2(i)(2) of
the Treasury Regulations. For any Partnership taxable year, the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt equal the net increase during the year, if
any, in the amount of Partner Nonrecourse Debt Minimum Gain reduced (but not below zero) by
proceeds of the liability that are both attributable to the liability and allocable to an increase
in the Partner Nonrecourse Debt Minimum Gain.

     “PARTNERSHIP AGREEMENT”: shall mean this Amended and Restated Limited Partnership Agreement of
Ashford Hospitality Limited Partnership.

     “PARTNERSHIP MINIMUM GAIN”: shall have the meaning set forth in Sections 1.704-2(b)(2) and
1.704-2(d) of the Treasury Regulations.

For purposes of this Exhibit, all other capitalized terms will have the same definition as in the
Partnership Agreement.

Exhibit B — Page 5

 

 

EXHIBIT C

NOTICE OF EXERCISE OF REDEMPTION RIGHT

The undersigned hereby irrevocably (i) presents for redemption                      Partnership Units (as
defined in the Partnership Agreement defined below) in Ashford Hospitality Limited Partnership, in
accordance with the terms of the Agreement of Limited Partnership of Ashford Hospitality Limited
Partnership (the “Partnership Agreement”), and the Redemption Right (as defined in the Partnership
Agreement) referred to therein, (ii) surrenders such Partnership Units and all right, title and
interest therein, and (iii) directs that the Cash Amount or REIT Shares (both as defined in the
Partnership Agreement) deliverable upon exercise of the Redemption Right be delivered to the
address specified below, and if REIT Shares are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the addresses specified below.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
 	 	 
	Name of Limited Partner:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	(Signature of Limited Partner)	 	 
	 
	 	 	 	 
	 	 	 
	(Street Address)	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	(City State Zip Code)	 	 
	 
	 	 	 	 
	IF REIT Shares are to be issued, issue to:	 	 
	 
	 	 	 	 
	 	 	 
	(Name)
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	(Social Security or Identifying Number)	 	 

Exhibit C — Page 1

 

EXHIBIT D

DESIGNATION OF INTERESTS ISSUED TO SEA TURTLE INN LIMITED PARTNERS

     Pursuant to Section 4.3(a)(i) of the Agreement, the General Partner has caused the Partnership
to issued additional Partnership Interests in the form of 106,675 Common Partnership Units to Huron
Jacksonville Limited Partnership. The Common Partnership Interests issued to Huron Jacksonville
Limited Partnership shall be governed by the terms of the Agreement subject to the following:

	1.	 	Additional Definition:

     “Sea Turtle Inn Limited Partners” means Huron/Jax Investment Limited Partnership, a
Florida limited partnership, PW/Jacksonville Limited Partnership, an Illinois limited
partnership, CN/Jacksonville Limited Partnership, an Illinois limited partnership,
Christopher Q. Stephan, Helmut Horn and Graham Hershman.

	2.	 	Amendment to Section 7.4(b). Section 7.4(b) is amended and by adding the following provision to
the end of Section 7.4(b):

     “Notwithstanding anything in Section 7.4(a) or Section 7.4(b) to the contrary, with
respect to the exercise of a Redemption Right by Huron Jacksonville Limited Partnership or
any of the Sea Turtle Inn Limited Partners, in the event of an election by the Company to
satisfy such Redemption Right by payment of the Cash Amount, then the Payout Period
applicable to such payment shall be no more than 120 days, and the Company may not, after
making such election, pay any portion of such Cash Amount with REIT Common Shares.”

	3.	 	Amendment to Section 9.5

     The consent required by Section 9.5(a) shall not be required in the event of a
Transfer on or after April 1, 2005 by Huron Jacksonville Limited Partnership to any Sea
Turtle Inn Limited Partners.

	4.	 	Amendment to Section 9.6(a)(i)

     Section 9.6(a)(i) shall not apply in the case of an assignee resulting from a Transfer by
Huron Jacksonville Limited Partnership to any Sea Turtle Inn Limited Partners.

	5.	 	Amendment to Exhibit B. The following terms shall be added to Exhibit B:
	 
	D.	 	ALLOCATION OF NONRECOURSE LIABILITIES

     “Effective on the date of acquisition by the Partnership of the Sea Turtle Inn,
Atlantic Beach, Florida, the Nonrecourse Liability allocable to the Sea Turtle

Exhibit D — Page 1

 

Inn, shall be allocated to the Sea Turtle Inn Limited Partners, in the aggregate, for
federal income tax purposes as follows:

     (i) first, as provided in Section 1.752-3(a)(2) of the Treasury Regulations, plus

     (ii) second, as provided in the fifth sentence of Section 1.752-3(a)(3) of the
Treasury Regulations.

     If there is more than one Sea Turtle Inn Limited Partner, the amount of such
Nonrecourse Liability so allocated to the Sea Turtle Inn Limited Partners, in the
aggregate, will be allocated to each, as determined with respect to each Sea Turtle Inn
Limited Partner separately.

     In addition, the remaining Nonrecourse Liabilities of the Partnership not allocated to
any Partner pursuant to Sections 1.752-3(a)(1) or 1.752-3(a)(2) of the Treasury Regulations
or any sentence of Section 1.752-3(a)(3) of the Treasury Regulations other than the first,
from time to time, shall be allocated in accordance with the Common Percentage Interests,
as defined in the Partnership Agreement, owned by the Limited Partners, as provided in the
first sentence of Section 1.752-3(a)(3) of the Treasury Regulations.

     The Sea Turtle Inn Limited Partners and the General Partner shall agree within 60 days
of the date of acquisition of the Sea Turtle Inn by the Partnership as to the amounts in
clause first and clause second and the aggregate amount of Nonrecourse Liability allocable
to the Sea Turtle Inn.”

	6.	 	This Exhibit D is incorporated into and has become a part of the Agreement effective as of April
1, 2004.

Exhibit D — Page 2

 

EXHIBIT E

[Reserved]

Exhibit E — Page 1

 

EXHIBIT F

DESIGNATION OF TERMS AND CONDITIONS OF SERIES A

PREFERRED PARTNERSHIP UNITS

     A. Designation and Number. A series of Preferred Partnership Units, designated as
Series A Preferred Partnership Units, is hereby established. The number of Series A Preferred
Partnership Units shall be 3,000,000.

     B. Rank. The Series A Preferred Partnership Units, with respect to rights to
distributions and payments to Partners, the distribution of assets upon the liquidation,
dissolution or winding up of the Partnership, rank (a) prior or senior to the Common Partnership
Units and all Partnership Units issued by the Partnership (“Junior Units”) the terms of which
specifically provide that such Partnership Units rank junior to the Series A Preferred Partnership
Units; (b) on a parity with all other Partnership Units issued by the Partnership (“Parity Units”)
the terms of which specifically provide that such Partnership Units rank on a parity with the
Series A Preferred Partnership Units; (c) junior to all Partnership Units issued by the Partnership
the terms of which specifically provide that such Partnership Units rank senior to the Series A
Preferred Partnership Units; and (d) junior to all of the Partnership’s existing and future
indebtedness.

     C. Distributions.

     (i) Pursuant to Section 8.1 of the Partnership Agreement but subject to the rights of holders
of any Preferred Partnership Units ranking senior to the Series A Preferred Partnership Units as to
the payment of distributions, Ashford OP Limited Partner, LLC, in its capacity as the holder of the
then outstanding Series A Preferred Partnership Units, shall be entitled to receive, when, as and
if authorized by the General Partner, from the Cash Flow, cumulative quarterly preferential cash
distributions in an amount per Series A Preferred Partnership Unit equal to 8.55% of the $25.00
liquidation preference per annum (equivalent to a fixed annual amount of $2.1375 per Series A
Preferred Partnership Unit) (the “Preferred Return”). Distributions of Preferred Return on the
Series A Preferred Partnership Units shall be cumulative from the date of original issuance which
date is September 22, 2004, whether or not in any distribution period or periods (i) such
distributions shall be authorized by the General Partner, (ii) there shall be funds legally
available for the payment of such distributions or (iii) any agreement prohibits the Partnership’s
payment of such distributions, and such distributions shall be payable quarterly the 15th day of
January, April, July and October of each year (or, if not a Business Day, the next succeeding
Business Day), commencing January 18, 2005. Any distribution of Preferred Return payable on the
Series A Preferred Partnership Units for any partial distribution period will be computed on the
basis of twelve 30-day months and a 360-day year. Distributions of Preferred Return will be
payable in arrears to holders of record as they appear on the records of the Partnership at the
close of business on the last day of each of March, June, September and December, as the case may
be, immediately preceding the applicable distribution payment date, which dates shall be the
Partnership Record Dates for the Series A Preferred Partnership Units. Except for distributions in
liquidation or redemption as provided in Sections D and E, respectively, holders of Series

Exhibit F — Page 1

 

A Preferred Partnership Units will not be entitled to receive any distributions in excess of
cumulative Preferred Returns accrued on the Series A Preferred Partnership Units at the rate
specified in this paragraph. No interest will be paid in respect of any distribution payment or
payments on the Series A Preferred Partnership Units that may be in arrears.

     (ii) When distributions of Preferred Return are not paid in full upon the Series A Preferred
Partnership Units or any other series of Parity Units, or a sum sufficient for such payment is not
set apart, all distributions of Preferred Return authorized by the General Partner upon the Series
A Preferred Partnership Units and any other series of Parity Units shall be authorized by the
General Partner ratably in proportion to the respective amounts of such distributions accumulated,
accrued and unpaid on the Series A Preferred Partnership Units and accumulated, accrued and unpaid
on such Parity Units. Except as set forth in the preceding sentence, unless distributions on the
Series A Preferred Partnership Units equal to the full amount of accumulated, accrued and unpaid
distributions of Preferred Return have been or contemporaneously are authorized by the General
Partner and paid, or authorized by the General Partner and a sum sufficient for the payment thereof
set apart for such payment for all past distribution periods, no distributions (other than
distributions paid in Junior Units or options, warrants or rights to subscribe for or purchase
Junior Units) shall be authorized by the General Partner or paid or set aside for payment by the
Partnership with respect to any class or series of Parity Units. Unless full cumulative
distributions of Preferred Return on the Series A Preferred Partnership Units have been paid or
authorized by the General Partner and set apart for payment for all past distribution periods, no
distributions (other than distributions paid in Junior Units or options, warrants or rights to
subscribe for or purchase Junior Units) shall be authorized by the General Partner or paid or set
apart for payment by the Partnership with respect to any Junior Units, nor shall any Junior Units
or Parity Units be redeemed, purchased or otherwise acquired for any consideration, or any monies
be paid to or made available for a sinking fund for the redemption of any Junior Units or Parity
Units (except by conversion or exchange for Junior Units, or options, warrants or rights to
subscribe for or purchase Junior Units), nor shall any other cash or property be paid or
distributed to or for the benefit of holders of Junior Units or Parity Units. Notwithstanding the
foregoing, the General Partner shall not be prohibited from (i) authorizing or paying or setting
apart for payment any Preferred Return or distribution on any Parity Units or (ii) redeeming,
purchasing or otherwise acquiring any Junior Units or Parity Units, in each case, if such
authorization, payment, redemption, purchase or other acquisition is necessary to maintain the
Company’s qualification as a REIT.

     (iii) No distribution of Preferred Return on the Series A Preferred Partnership Units shall be
authorized by the General Partner or paid or set apart for payment at such time as the terms and
provisions of any agreement of the Partnership, including any agreement of the Partnership relating
to the Partnership’s indebtedness, prohibits such authorization, payment or setting apart for
payment or provides that such authorization, payment or setting apart for payment would constitute
a breach thereof, or a default thereunder, or if such authorization, payment or setting apart for
payment shall be restricted or prohibited by law.

Exhibit F — Page 2

 

     (iv) In determining whether a distribution (other than upon voluntary or involuntary
liquidation, dissolution or winding up of the Partnership) of Preferred Return or in redemption or
otherwise, is permitted, amounts that would be needed, if the Partnership were to be dissolved at
the time of the distribution, to satisfy the liquidation preference of the Series A Preferred
Partnership Units (as provided in Section D below) will not be added to the Partnership’s total
liabilities.

     D. Liquidation Preference.

     (i) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any payment or distribution shall be made to or set apart for the holders of
any Junior Units, Ashford OP Limited Partner, LLC, in its capacity as holder of the Series A
Preferred Partnership Units, shall be entitled to receive a liquidation preference distribution of
$25.00 per Series A Preferred Partnership Unit, plus an amount equal to all accumulated, accrued
and unpaid Preferred Return to the date of final distribution, but Ashford OP Limited Partner, LLC
shall not be entitled to any further payment with respect thereto. If upon any liquidation,
dissolution or winding up of the Partnership, its assets, or proceeds thereof, distributable among
Ashford OP Limited Partner, LLC, in its capacity as the holder of the Series A Preferred
Partnership Units, shall be insufficient to pay in full the above described preferential
distribution and liquidating distributions on any other series of Parity Units, then such assets,
or the proceeds thereof, shall be distributed among Ashford OP Limited Partner, LLC, in its
capacity as the holder of the Series A Preferred Partnership Units, and the holders of any such
other Parity Units ratably in the same proportion as the respective amounts that would be payable
on such Series A Preferred Partnership Units and any such other Parity Units if all amounts payable
thereon were paid in full.

     (ii) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to Ashford OP Limited Partner, LLC, in its capacity as the holder of the
Series A Preferred Partnership Units, holders of the Series A Preferred Partnership Units shall
have no right or claim to any of the remaining assets of the Partnership.

     (iii) None of a consolidation or merger of the Partnership with or into another entity, a
merger of another entity with or into the Partnership, a statutory unit exchange by the Partnership
or a sale, lease or conveyance of all or substantially all of the Partnership’s property or
business shall be considered a liquidation, dissolution or winding up of the affairs of the
Partnership.

     E. Redemption. In connection with the redemption by the Company of any shares of
Series A Preferred Stock in accordance with the provisions of the Articles Supplementary, the
Partnership shall provide cash to Ashford OP Limited Partner, LLC for such purpose which shall be
equal to the redemption price (as set forth in the Articles Supplementary), plus all distributions
of Preferred Return accumulated and unpaid to the Redemption Date (as defined in the Articles
Supplementary), and one Series A Preferred Partnership Unit shall be concurrently redeemed with
respect to each share of Series A Preferred Stock so redeemed by the Company. From and after the
applicable

Exhibit F — Page 3

 

Redemption Date, the Series A Preferred Partnership Units so redeemed shall no longer be
outstanding and all rights hereunder, to distributions or otherwise, with respect to such Series A
Preferred Partnership Units shall cease. Any Series A Preferred Partnership Units so redeemed may
be reissued to Ashford OP Limited Partner, LLC at such time as the Company reissues a corresponding
number of shares of Series A Preferred Stock so redeemed or repurchased, in exchange for the
contribution by the Company, through the Ashford OP Limited Partner, LLC, to the Partnership of the
proceeds from such reissuance.

     F. Voting Rights. Except as required by applicable law, the holder of the Series A
Preferred Partnership Units, as such, shall have no voting rights.

     G. Conversion. The Series A Preferred Partnership Units are not convertible into or
exchangeable for any other property or securities of the Partnership.

     H. Restriction on Ownership. The Series A Preferred Partnership Units shall be owned
and held solely by Ashford OP Limited Partner, LLC.

     I. Allocations. Allocations of the Partnership’s items of income, gain, loss and
deduction shall be allocated pro rata among holders of Series A Preferred Partnership Units in
accordance with Article V of the Partnership Agreement.

Exhibit F — Page 4

 

EXHIBIT G

DESIGNATION OF TERMS AND CONDITIONS OF SERIES B-1

PREFERRED PARTNERSHIP UNITS

     A. Designation and Number. A series of Preferred Partnership Units, designated as
Series B-1 Preferred Partnership Units, is hereby established. The number of Series B 1 Preferred
Partnership Units shall be 7,447,865.

     B. Rank. The Series B-1 Preferred Partnership Units will rank:

     (i) with respect to distribution rights and rights upon liquidation, dissolution or winding up
of the Partnership, prior or senior to any class or series of Common Partnership Units and any
other class or series of Partnership Units now or hereafter issued by the Partnership over which
the Series B-1 Preferred Partnership Units have preference or priority in both (a) the payment of
distributions and (b) the distribution of assets on any liquidation, dissolution or winding up of
the Partnership (“Fully Junior Units”) ;

     (ii) with respect to distribution rights or rights upon liquidation, dissolution or winding up
of the Partnership, prior or senior to any class or series of Common Partnership Units and any
other class or series of Partnership Units now or hereafter issued by the Partnership over which
the Series B-1 Preferred Partnership Units have preference or priority in the payment of
distributions or in the distribution of assets on any liquidation, dissolution or winding up of the
Partnership (“Junior Units”);

     (iii) with respect to distribution rights and rights upon liquidation, dissolution or winding
up of the Partnership, on a parity with any class or series of Partnership Units if, pursuant to
the specific terms of such class or series of Partnership Units, the holders of such class or
series of Partnership Units and the holders of the Series B-1 Preferred Partnership Units are
entitled to the receipt of distributions and of amounts distributable upon liquidation, dissolution
or winding up of the Partnership in proportion to their respective amounts of accrued and unpaid
distributions or liquidation preferences, without preference or priority one over the other
(“Parity Units”), which Parity Preferred Partnership Units shall expressly include the
Partnership’s Series A Preferred Partnership Units and its Series B-2 Preferred Partnership Units;

     (iv) with respect to distribution rights and rights upon liquidation, dissolution or winding
up of the Partnership, junior to any class or series of Partnership Units if, pursuant to the
specific terms of such class or series, the holders of such class or series are entitled to the
receipt of distributions or amounts distributable upon liquidation, dissolution or winding up of
the Partnership in preference or priority to the holders of the Series B-1 Preferred Partnership
Units; and

     (v) junior to all of the existing and future indebtedness of the Partnership.

     C. Distributions. Pursuant to Section 8.1 of the Partnership Agreement but subject to
the rights of holders of any Preferred Partnership Units ranking senior to the

Exhibit G — Page 1

 

Series B-1 Preferred Partnership Units as to the payment of distributions, Ashford OP Limited
Partner, LLC, in its capacity as the holder of the then outstanding Series B-1 Preferred
Partnership Units, shall be entitled to receive, when, as and if authorized by the General Partner,
from the Cash Flow, cumulative quarterly preferential cash distributions consisting of Base
Distributions, Special Distributions, Ratchet Distributions and Default Distributions, if any, each
as defined below (collectively referred to herein as “Distributions” or the “Preferred Return”).
All Distributions shall be cumulative from the issue date whether or not in any Distribution Period
or Distribution Periods (i) such Distributions shall be authorized by the General Partner, (ii)
there shall be funds legally available for the payment of such Distributions or (iii) any agreement
prohibits payment of such Distributions. For purposes of this Exhibit G, the term
“Distribution Period” with respect to any Series B-1 Preferred Partnership Unit shall mean
quarterly distribution periods commencing on January 1, April 1, July 1 and October 1 of each year
and ending on and including the day preceding the first day of the next succeeding Distribution
Period (other than the initial Distribution Period for any Series B-1 Preferred Partnership Unit,
which shall commence on the issue date for such Series B-1 Preferred Partnership Unit and end on
and include the last day of the calendar quarter which includes such issue date).

     (i) Base Distribution. Holders of the Series B-1 Preferred Partnership Units shall be
entitled to receive, when and as authorized by the General Partner, from Cash Flow legally
available for payment, cash distributions at the rate of $0.14 per Series B-1 Preferred Partnership
Unit per quarter (“Base Distribution”). Base Distributions shall be payable quarterly in arrears
on the 15th day after the end of the applicable Distribution Period (on the 15th day of January,
April, July and October of each year), or if such day is not a Business Day, the next succeeding
Business Day, to holders of record on the last day of each of March, June, September and December,
as the case may be, immediately preceding the applicable distribution payment date.

     (ii) Special Distribution. In the event the Partnership declares a special or
extraordinary cash distribution on the Common Units (a “Common Unit Special Distribution”), holders
of the Series B-1 Preferred Partnership Units shall be entitled to receive a special distribution
per Series B-1 Preferred Partnership Unit (a “Special Distribution”) in an amount equal to the
product of (i) any Common Unit Special Distribution and (ii) the number of shares of Common Stock
into which a single Series B 1 Preferred Partnership Unit is convertible as of the record date of
such Common Unit Special Distribution. Any such Common Unit Special Distribution shall be paid to
holders of the Series B-1 Preferred Partnership Units as of the record date for the Common Unit
Special Distribution and shall be paid on the payment date for the Common Unit Special
Distribution. Any such Special Distribution shall be deemed to be a distribution payable to
holders of Series B-1 Preferred Partnership Units for the Distribution Period in which the record
date for the corresponding Common Unit Special Distribution falls, and shall be in addition to and
shall not reduce any Base Distribution, Ratchet Distribution or Default Distribution, if any, for
such Distribution Period.

     (iii) Ratchet Distribution. With respect to each Distribution Period, holders of the
Series B-1 Preferred Partnership Units shall be entitled to a ratchet distribution per

Exhibit G — Page 2

 

Series B-1 Preferred Partnership Unit (a “Ratchet Distribution”) in an amount equal to (i) the
sum of the products of (x) each distribution paid or payable on a Common Unit (excluding Common
Unit Special Distributions), having a record date within the applicable Distribution Period, and
(y) the number of shares of Common Stock into which a Series B-1 Preferred Partnership Unit is
convertible as of the record date for such distribution minus (ii) the Base Distribution of $0.14
per Series B-1 Preferred Partnership Unit. Ratchet Distributions shall be payable quarterly in
arrears on the 15th day after the end of the applicable Distribution Period (on the 15th day of
January, April, July and October of each year), or if such day is not a Business Day, the next
succeeding Business Day, to holders of record on the last day of each of March, June, September and
December, as the case may be, immediately preceding the applicable distribution payment date. Any
such Ratchet Distribution shall be in addition to and shall not reduce any Base Distribution,
Special Distribution or Default Distribution, if any, for the applicable Distribution Period.

     (iv) Default Distribution. For any Distribution Period in which a Covenant Violation
(as defined below) has occurred or is continuing, holders of Series B-1 Preferred Partnership Units
shall be entitled to a default distribution (a “Default Distribution”) in an amount equal to
$.05015 per Series B-1 Preferred Partnership Unit for such Distribution Period. Default
Distributions shall be payable quarterly in arrears on the 15th day after the end of the applicable
Distribution Period (on the 15th day of January, April, July and October of each year), or if such
day is not a Business Day, the next succeeding Business Day, to holders of record on the last day
of each of March, June, September and December, as the case may be, immediately preceding the
applicable distribution payment date. Any such Default Distribution shall be in addition to and
shall not reduce any Base Distribution, Special Distribution or Ratchet Distribution, if any, for
the applicable Distribution Period. A “Covenant Violation” shall mean (i) any breach or
non-performance of any covenant of the Company contained in the Series B Cumulative Convertible
Redeemable Preferred Stock Purchase Agreement, dated as of December 23, 2004 among Security Capital
Preferred Growth Incorporated, the Company and the Partnership, which breach or non-performance
shall remain uncured for more than 120 days after such breach or non-performance has occurred or
(ii) if and whenever the Partnership has failed to pay Distributions on the Series B-1 Preferred
Partnership Units for four quarterly Distribution Periods whether or not such Distribution Periods
are consecutive (which shall, with respect to any such Distribution, mean that any such
Distribution has not been paid in full).

     (v) Nature of Distributions. Base Distributions, Special Distributions, Ratchet
Distributions and Default Distributions shall all be considered to be Distributions on the Series
B-1 Preferred Partnership Units and shall have equal priority to one another and shall be senior in
priority to distributions on any Partnership Units which are Junior Units with respect to the
payment of distributions subject to the terms of this Exhibit G.

     (vi) Accumulated and Unpaid Distributions. Accumulated but unpaid Distributions for
any past quarterly Distribution Periods may be authorized and paid at any time, without reference
to any regularly scheduled quarterly distribution payment date, to holders of record on the date,
not exceeding 50 days preceding such distribution

Exhibit G — Page 3

 

payment date, fixed for the purpose by the General Partner in advance of payment of each
particular Distribution. Any Distribution payment made on Series B-1 Preferred Partnership Units
shall first be credited against the earliest accrued but unpaid Distribution due with respect to
Series B-1 Preferred Partnership Units which remains payable.

     (vii) Initial Distributions and Other Matters. The initial Distribution Period for
any Series B-1 Preferred Partnership Unit will include a partial Base Distribution, Ratchet
Distribution and Default Distribution, if any, for the period from the issue date until the last
day of the calendar quarter which includes such issue date. Ratchet Distributions will be
calculated (but paid in accordance with the immediately preceding sentence) for any such initial
Distribution Period as though the Series B-1 Preferred Partnership Unit had been outstanding for
the entire Distribution Period. The amount of Base Distribution, Ratchet Distribution and Default
Distribution, if any, payable for such initial period on the Series B-1 Preferred Partnership Units
shall be computed by dividing the number of days in such period by 90 and multiplying the result by
the Series B-1 Preferred Partnership Unit Base Distribution, Ratchet Distribution and Default
Distribution, if any. Holders of Series B-1 Preferred Partnership Units shall not be entitled to
any Distributions in excess of cumulative Distributions on the Series B-1 Preferred Partnership
Units. No interest shall be payable in respect of any Distribution payment or payments on the
Series B-1 Preferred Partnership Unit which may be in arrears.

     (viii) Regarding Parity Units. So long as any Series B-1 Preferred Partnership Unit
remains outstanding, no distributions, except as described in the immediately following sentence,
shall be declared or paid or set apart for payment on any class or series of Parity Units for any
period unless full cumulative Distributions have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series
B-1 Preferred Partnership Units for all Distribution Periods ending on or prior to the date of
authorization or payment on such class or series of Parity Units. When Distributions are not paid
in full or a sum sufficient for such payment is not set apart, as aforesaid, all Distributions
authorized upon Series B-1 Preferred Partnership Units and all distributions authorized upon any
other class or series of Parity Units shall be authorized ratably in proportion to the respective
amounts of Distributions accumulated and unpaid on the Series B-1 Preferred Partnership Units and
accumulated and unpaid distributions on such Parity Units.

     (ix) Regarding Junior Units. So long as any Series B-1 Preferred Partnership Unit
remains outstanding, no distributions (other than distributions paid solely in Fully Junior Units,
or options, warrants or rights to subscribe for or purchase, Fully Junior Units) shall be
authorized or paid or set apart for payment or other distribution shall be authorized or made or
set apart for payment upon Junior Units, nor shall any Junior Units be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of Common Units made for
purposes of an employee incentive or benefit plan of the Company or any subsidiary) for any
consideration (or any moneys be paid to or made available for a sinking fund for the redemption of
any Junior Units) by the Partnership or any subsidiaries or controlled Affiliates, directly or
indirectly (except

Exhibit G — Page 4

 

by conversion into or exchange for Fully Junior Units or options, warrants or rights to
subscribe for or purchase Fully Junior Units), unless in each case the full cumulative
distributions on all outstanding Series B-1 Preferred Partnership Units and any other Parity Units
of the Partnership shall have been or contemporaneously are authorized and paid or authorized and a
sum sufficient for the payment thereof set apart for payment for all Distribution Periods ending on
or prior to the date of authorization or payment with respect to the Series B-1 Preferred
Partnership Units and all distribution periods ending on or prior to the date of authorization or
payment with respect to such Parity Units. Subject to the foregoing, and not otherwise, such
distributions may be authorized by the General Partner and authorized and paid on Common Units by
the Partnership from time to time out of any funds legally available therefor, and the Series B-1
Preferred Partnership Units shall not be entitled to participate in any such distributions, whether
payable in cash, stock or otherwise, except as provided in Paragraph C(ii) or (iii) hereof.

     (x) Prohibitions. No distributions on Series B-1 Preferred Partnership Units shall be
authorized by the General Partner or authorized and paid or set apart for payment by the
Partnership at such time as the terms and provisions of any agreement of the Partnership, including
any agreement relating to its indebtedness, prohibits such authorization, payment or setting apart
for payment or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law; provided that no such prohibition or restriction described in this
paragraph (x) shall limit the accrual or accumulation of Distributions as described above in this
Paragraph C.

     (xi) Regarding Accrued and Unpaid Distributions on Series B-2 Preferred Partnership
Units. Upon conversion of Series B-2 Preferred Partnership Units into Series B-1 Preferred
Partnership Units, each Series B-1 Preferred Partnership Unit resulting from the conversion of a
Series B-2 Preferred Partnership Unit pursuant to the terms of the Series B-2 Preferred Partnership
Units shall be deemed to have accrued and unpaid Distributions on such Partnership Unit equal to
the accrued and unpaid distributions, if any, on the applicable Series B-2 Preferred Partnership
Unit immediately prior to conversion.

     D. Liquidation Preference.

     (i) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, subject to the prior preferences and other rights of any series of Units
ranking senior to the Series B-1 Preferred Partnership Units upon liquidation, distribution or
winding up of the Partnership, before any payment or distribution of the assets of the Partnership
(whether capital or surplus) shall be made to or set apart for the holders of Junior Units, the
holders of the Series B-1 Preferred Partnership Units shall be entitled to receive Ten Dollars and
Seven Cents ($10.07) (the “Liquidation Preference”) per Series B-1 Preferred Partnership Unit plus
an amount equal to all accumulated, accrued and unpaid Distributions (whether or not earned or
authorized), if any, thereon to the date of liquidation, dissolution or winding up of the affairs
of the Partnership (any such date, a “Series B-1 Liquidation Date”). The Distribution payable with
respect to the Distribution Period containing the Series B-1

Exhibit G — Page 5

 

Liquidation Date shall be equal to the sum of (x) any Special Distribution determined
pursuant to Paragraph C above with respect to such Distribution Period plus (y) the product of the
Distribution determined pursuant to Paragraph C above for the preceding Distribution Period (but
excluding any Special Distribution for such preceding Distribution Period) times a fraction equal
to the actual number of days elapsed from the end date of the calendar quarter most recently
completed to the relevant Series B-1 Liquidation Date over 90 days. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof,
distributable among the holders of the Series B-1 Preferred Partnership Units shall be insufficient
to pay in full the preferential amount aforesaid and liquidating payments on any other units of any
class or series of Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series B-1 Preferred Partnership Units and any such other Parity Units ratably
in accordance with the respective amounts that would be payable on such Series B-1 Preferred
Partnership Units and any such other Parity Units if all amounts payable thereon were paid in full.
For the purposes of this Paragraph D, (i) a consolidation or merger of the Partnership with one or
more partnerships, real estate investment trusts or other entities, (ii) a sale, lease or
conveyance of all or substantially all of the Partnership’s property or business or (iii) a
statutory unit exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Partnership. Other than as set forth in this Paragraph D(i), the
holders of Series B-1 Preferred Partnership Units shall not be entitled to any additional payment
upon any liquidation, dissolution or winding up of the Partnership.

     (ii) Subject to the rights of the holders of units of any series or class or classes of
Partnership Interest ranking on a parity with or prior to the Series B-1 Preferred Partnership
Units, upon any liquidation, dissolution or winding up of the Partnership, after payment shall have
been made in full to the holders of the Series B-1 Preferred Partnership Units, as provided in this
Paragraph D, the holders of Series B-1 Preferred Partnership Units shall have no other claim to the
remaining assets of the Partnership and any other series or class or classes of Junior Units shall,
subject to the respective terms and provisions (if any) applying thereto, be entitled to receive
any and all assets remaining to be paid or distributed, and the holders of the Series B-1 Preferred
Units shall not be entitled to share therein.

     (iii) Written notice of any such liquidation, dissolution or winding up of the Partnership,
stating the payment date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by first class mail, postage pre-paid, or by
recognized overnight courier, not less than 30 or more than 60 days prior to the payment date
stated therein, to each record holder of the Series B-1 Preferred Partnership Units at the
respective addresses of such holders as the same shall appear on the records of the Partnership.

     E. Redemption. In connection with the redemption by the Company of any shares of
Series B-1 Preferred Stock in accordance with the provisions of the Series B-1 Articles
Supplementary, whether at the option of the Company or at the option of the holder of Series B-1
Preferred Stock, the Partnership shall provide cash to Ashford OP Limited Partner, LLC for such
purpose which shall be equal to the redemption price (as

Exhibit G — Page 6

 

set forth in the Series B-1 Articles Supplementary), plus all distributions of Preferred
Return accumulated and unpaid in an amount equal to any Dividends (as such term is defined in the
Series B-1 Articles Supplementary) accrued and unpaid to the holders of the Series B-1 Preferred
Stock upon such redemption; and one Series B-1 Preferred Partnership Unit shall be concurrently
redeemed with respect to each share of Series B-1 Preferred Stock so redeemed by the Company. From
and after the applicable redemption date, the Series B-1 Preferred Partnership Units so redeemed
shall no longer be outstanding and all rights hereunder, to distributions or otherwise, with
respect to such Series B-1 Preferred Partnership Units shall cease. Any Series B-1 Preferred
Partnership Units so redeemed may be reissued to Ashford OP Limited Partner, LLC at such time as
the Company reissues a corresponding number of shares of Series B-1 Preferred Stock so redeemed or
repurchased, in exchange for the contribution by the Company, through the Ashford OP Limited
Partner, LLC, to the Partnership of the proceeds from such reissuance.

     F. Voting Rights. The holders of the Series B-1 Preferred Partnership Units, as such,
shall have any and all voting rights granted to the Limited Partners in the Agreement to which this
Exhibit G is attached.

     G. Conversion. In connection with the conversion by the Company of any shares of
Series B-1 Preferred Stock into Common Stock in accordance with the provisions of the Series B-1
Articles Supplementary, the Partnership shall convert Series B-1 Preferred Partnership Units into
Common Units and issue such Common Units to Ashford OP Limited Partner, LLC. The number of Common
Units into which the Series B-1 Preferred Partnership Units are convertible shall be equal to the
number of shares of Common Stock into which the Series B-1 Preferred Stock is then being converted,
as set forth in the Series B-1 Articles Supplementary. From and after the applicable Conversion
Date (as such term is defined in the Series B-1 Articles Supplementary), the Series B-1 Preferred
Partnership Units so converted shall no longer be outstanding and all rights hereunder, to
distributions or otherwise, with respect to such Series B-1 Preferred Partnership Units shall
cease. Any Series B-1 Preferred Partnership Units so converted may be reissued to Ashford OP
Limited Partner, LLC at such time as the Company reissues a corresponding number of shares of
Series B-1 Preferred Stock so converted, in exchange for the contribution by the Company, through
the Ashford OP Limited Partner, LLC, to the Partnership of the proceeds from such reissuance.

     H. Restriction on Ownership. The Series B-1 Preferred Partnership Units shall be
owned and held solely by Ashford OP Limited Partner, LLC.

     I. Allocations. Allocations of the Partnership’s items of income, gain, loss and
deduction shall be allocated pro rata among holders of Series B-1 Preferred Partnership Units in
accordance with Article V of the Partnership Agreement.

Exhibit G — Page 7

 

EXHIBIT H

[Reserved]

Exhibit H — Page 1

 

 

EXHIBIT I

DESIGNATION OF INTERESTS ISSUED TO FGSB LIMITED PARTNERS

     Pursuant to Section 4.3(a)(i) of the Third Amended and Restated Agreement of Limited
Partnership of Ashford Hospitality Limited Partnership (the “Agreement”), to which this Exhibit
I is attached, the General Partner has caused the Partnership to issue additional Partnership
Interests in the form of Common Partnership Units in the number and to the respective Persons set
forth below (collectively, the “FGSB Limited Partners”). The Common Partnership Units issued to
the FGSB Limited Partners shall be governed by the terms of the Agreement subject to the following:

	1.	 	Definitions. To the extent the following terms are defined in the Agreement, the
following definitions amend and replace such definitions in their entirety with respect to the
FGSB Limited Partners, any transferees of such FGSB Limited Partners in an FGSB Permitted
Disposal and the Common Partnership Units acquired by such persons on March 16, 2005:

     “Affiliate” means, as to any FGSB Limited Partner, any other Person that is directly
or indirectly (through one or more intermediaries) controlled by, under common control
with, or controlling such Person. For purposes of this definition, “control” shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. A Person shall be deemed to be controlled by another
Person if the other Person (i) with respect to a corporation, owns more than a majority of
the issued and outstanding voting equity interests of such corporation, (ii) with respect
to a partnership, is a general partner of such partnership and (iii) with respect to a
limited liability company, is a managing member or is a member owning more than a majority
of the issued and outstanding voting equity interests of such limited liability company.

     “Beneficial Owner Agreement” means, as to any FGSB Limited Partner, the Beneficial
Owner Agreement executed by such FGSB Limited Partner on March 16, 2005 in favor of the
Company and the Partnership.

Exhibit I — Page 1

 

 

     “FGSB Limited Partners” means:

	 	 	 	 	 
	 	 	Common Partnership
	Name of FGSB Limited Partner	 	Units Issued
	Chartwell Hotel Associates
	 	 	679,644	 
	Fisher 6R Hotel Associates
	 	 	324,333	 
	Fisher 2003 Hotel Refinancing Associates
	 	 	450,075	 
	Martin Edelman
	 	 	92,712	 
	FGT, L.P.
	 	 	1,004,306	 
	George Soros
	 	 	75,346	 
	Tivadar Holdings, LLC
	 	 	694,684	 
	Perthshire L.P.
	 	 	781,571	 
	Southwest Siena L.P.
	 	 	781,571	 
	David Kimichik
	 	 	45,788	 
	David Brooks
	 	 	45,788	 
	Mark Nunneley
	 	 	18,333	 

     “FGSB Permitted Disposal” means a transfer by an FGSB Limited Partner:

     (i) to an Affiliate or direct or indirect equity owner of an FGSB Limited Partner, provided
that such transferee agrees in writing to be bound by all of the terms and conditions of the
Beneficial Owner Agreement;

     (ii) to (a) parents, siblings (by blood or adoption) or lineal descendants (by blood or
adoption) of an FGSB Limited Partner or a transferee under clause (i); (b) a trust, partnership,
corporation, limited liability company or other entity of which an FGSB Limited Partner or a
transferee under clause (i), or an FGSB Limited Partner’s or a transferee’s under clause (i)
parent, sibling (by blood or adoption) or lineal descendant (by blood or adoption) owns all of the
beneficial interests, either directly or indirectly, provided that such transferee agrees in
writing to be bound by all of the terms and conditions of the Beneficial Owner Agreement; or

     (iii) in connection with a pledge, delivery or other grant of a security interest in the Units
held by an FGSB Limited Partner or a transferee under clauses (i) or (ii) for the purpose of
securing a bona fide lending transaction; provided that such security interest is

Exhibit I — Page 2

 

 

expressly subordinate and subject to the terms and conditions of Section 2 of the Beneficial
Owner’s Agreement to which such FGSB Limited Partner or a transferee under clauses (i) or (ii) is a
party and any transferee resulting from any judicial or non-judicial foreclosure on such security
interest and subsequent transfer by such holder of the security interest becomes a party to (and
assumes the FGSB Limited Partner’s or a transferee’s under clauses (i) or (ii) obligations under)
the Beneficial Owner Agreement.

     “Specified Redemption Date” shall mean, with respect to a given FGSB Limited Partner,
the tenth (10th) Business Day after receipt by the General Partner of a Notice of
Redemption, provided that no Specified Redemption Date may occur with respect to any Unit
before six months after such Unit is issued by the Partnership.

	2.	 	Amendments with respect to Section 7.4.

	A.	 	The second sentence of Section 7.4(a) is hereby amended and restated in its entirety as
follows:

The Partnership shall have up to 60 days (the “Payout Period”) following exercise of a
Redemption Right to pay the Cash Amount to the FGSB Limited Partner who is exercising the
Redemption Right (the “Redeeming Partner”).

	B.	 	The second proviso clause in the first sentence of Section 7.4(b) is hereby deleted, such
that the sentence ends with the words “Section 7.4(a)).”

	C.	 	The following sentence is added as a new sentence at the end of Section 7.4(b):

Notwithstanding anything in this Section 7.4(b) to the contrary, with respect to the
exercise of a Redemption Right by a FGSB Limited Partner or any transferee of an FGSB
Limited Partner in an FGSB Permitted Disposal, if there are insufficient REIT Common Shares
authorized by the Company to satisfy a Redemption Right by paying the Redeeming Partner the
REIT Common Shares Amount, the Partnership must satisfy the Redemption Right by paying such
Redeeming Partner the Cash Amount in accordance with the provisions of Sections 7.4(a) and
(b).

	D.	 	The following Section 7.4(f) is hereby added:

(f) Notwithstanding anything to the contrary in this Section 7.4, Persons holding Common
Partnership Units originally issued to FGSB Master LLC shall receive the Cash Amount due,
if any, as a result of the exercise of the Redemption Right from the Partnership, not from
the Company, and such persons and the Partnership recognize and agree that such transaction
is properly treated for federal income tax purposes as a redemption by the Partnership and
not as a sale to the Company.

Exhibit I — Page 3

 

 

	3.	 	Amendment with respect to Section 9.5:

     The consent required by Section 9.5(a) shall not be required in the event of a
FGSB Permitted Disposal.

	4.	 	Amendment with respect to Section 9.6(a)(i):

     Section 9.6(a)(i) shall not apply in the case of an assignee resulting from an
FGSB Permitted Disposal.

	5.	 	Amendment to Exhibit A:

     Exhibit A shall be and is revised as of March 16, 2005 to reflect the Persons and
Common Partnership Units, identified in Item No. 1 above, as well as the agreed values and
percentages attributable thereto.

	6.	 	Amendment to Exhibit B:

     Exhibit B shall be and is revised as of March 16, 2005 to add a new paragraph 8, to
read in its entirety as follows:

8. The amount of Nonrecourse Liabilities allocable to properties contributed to
the Partnership by the FGSB Limited Partner and allocated to Partners holding
Common Partnership Units originally issued to FGSB Master LLC pursuant to Section
1.752-3(a)(3) of the Treasury Regulations shall be in accordance with the fifth
sentence thereof beginning “Additionally, the partnership may first allocate. . .”
(relating to allocation of built-in gain on §704(c) property). To the extent the
Partnership has Nonrecourse Liabilities of the Partnership in excess of those
allocated pursuant to Section 1.752-3(a)(1), (2) of the Treasury Regulations and
the preceding sentence, such excess Nonrecourse Liabilities shall be allocated
among the Partners in accordance with their respective Common Percentage Interests.

	6.	 	This Exhibit I is incorporated into and has become a part of the Agreement effective
as of March 16, 2005.

Exhibit I — Page 4

 

 

EXHIBIT J

DESIGNATION OF INTERESTS ISSUED TO CRYSTAL CITY LIMITED PARTNERS

     Pursuant to Section 4.3(a)(i) of the Third Amended and Restated Agreement of Limited
Partnership of Ashford Hospitality Limited Partnership (the “Agreement”), to which this Exhibit J
is attached, the General Partner has caused the Partnership to issue additional Partnership
Interests in the form of Class B Common Partnership Units in the number and to the respective
Persons set forth below (collectively, the “Crystal City Limited Partners”). The Class B Common
Partnership Units issued to the Crystal City Limited Partners shall be governed by the terms of the
Agreement subject to the following:

	1.	 	Definitions. The following terms are hereby defined as follows for purposes of
Amendment No. 5 to the Agreement with respect to the Crystal City Limited Partners, any
transferees of such Crystal City Limited Partners in a Crystal City Permitted Disposal and the
Class B Common Partnership Units acquired by such persons on July 13, 2006:

     “Crystal City Limited Partners” means:

	 	 	 	 	 
	 	 	Class B Common
	 	 	Partnership
	Name of Crystal City Limited Partner	 	Units Issued
	Lawrence D. Barkman
	 	 	37,343	 
	Arthur A. Birney
	 	 	263	 
	Washington Brick & Terra Cotta Company, L.P., L.L.P.
	 	 	1,848,489	 
	Barbara Fleischman
	 	 	29,875	 
	Lawrence A. Fleischman Non-Exempt Trust
	 	 	29,875	 
	Laura Glassman
	 	 	1,726	 
	Paul Glassman
	 	 	1,726	 
	Kogod Family Holding Group LLC
	 	 	316,263	 
	Arlene R. Kogod
	 	 	145,585	 
	Lauren Sue Kogod
	 	 	56,015	 
	Leslie Susan Kogod
	 	 	56,015	 
	Robert P. Kogod
	 	 	144,980	 
	Stuart Allan Kogod
	 	 	56,015	 
	Robert H. Smith
	 	 	450,249	 
	MC II Associates
	 	 	246,465	 
	Eads, LLC
	 	 	36,818	 
	Eads Associates Limited Partnership
	 	 	357,140	 
	 
	 	 	 	 
	 
	 	 	3,814,842	 
	 
	 	 	 	 

Exhibit J — Page 1

 

 

     “Crystal City Permitted Disposal” means a transfer by a Crystal City Limited Partner of
Class B Common Partnership Units:

     (i) to any Person who, on the date of such proposed transfer is either a partner,
member or shareholder of such Crystal City Limited Partner, provided that such transferee
satisfies all criteria for transfer applicable to such transferee, as set forth in the
Partnership Agreement or that certain Contribution Agreement between the Partnership and
Eads Associates Limited Partnership, dated as of May 18, 2006 and agrees in writing to be
bound by all of the terms and conditions of the Partnership Agreement; or

     (ii) in connection with a pledge, delivery or other grant of a security interest in the
Class B Common Partnership Units held by a Crystal City Limited Partner or a transfer under
clause (i) for the purpose of securing a bona fide lending transaction.

     “Lock-Up Agreement” shall mean the Lock-Up Agreement dated as of July 13, 2006,
executed by the Crystal City Limited Partners in favor of the Company.

     “Lock-Up Period” shall mean (i) a period of one (1) year from the date of this
Amendment with respect to all of the Class B Common Partnership Units issued to the Crystal
City Limited Partners on such date, (ii) for a period of eighteen (18) months from the date
of this Amendment with respect to two-thirds of the Class B Common Partnership Units issued
to each of the Crystal City Limited Partners on such date, and (iii) for a period of
twenty-four (24) months from the date of this Amendment with respect to one-third of the
Class B Common Partnership Units issued to each of the Crystal City Limited Partners on such
date.

	2.	 	Amendment with respect to Section 9.5:

     The consent required by Section 9.5(a) shall not be required in the event of a
Crystal City Permitted Disposal.

	3.	 	Amendment with respect to Section 9.6(a)(i):

     Section 9.6(a)(i) shall not apply in the case of an assignee resulting from a
Crystal City Permitted Disposal.

	4.	 	Amendment to Exhibit A:

     Exhibit A shall be and is revised as of July 13, 2006 to reflect the Crystal City
Limited Partners and their respective ownership of Class B Common Partnership Units, as set
forth in Item No. 1 above, as well as the agreed values and percentages attributable
thereto.

	5.	 	Amendment to Exhibit B: The following sentence is added as the final sentence of
Section A.3. of Exhibit B of the Partnership Agreement:

Notwithstanding the foregoing, the Book-Tax Difference with respect to the
“Property” as defined in the Contribution Agreement between the

Exhibit J — Page 2

 

 

Partnership and Eads Associates Limited Partnership, dated as of May 18,
2006, shall be accounted for as provided in Article 6 of the Tax Protection
Reporting Agreement between the Partnership and Eads Associates Limited
Partnership, dated as of July 13, 2006.

	6.	 	This Exhibit J is incorporated into and has become a part of the Agreement effective
as of July 13, 2006.

Exhibit J — Page 3

 

 

EXHIBIT K

DESIGNATION OF TERMS AND CONDITIONS OF SERIES C

PREFERRED PARTNERSHIP UNITS

     A. Designation and Number. A series of Preferred Partnership Units, designated
as Series C Preferred Partnership Units, is hereby established. The number of Series C
Preferred Partnership Units shall be 8,000,000.

     B. Rank. The Series C Preferred Partnership Units will rank:

     (i) with respect to distribution rights and rights upon liquidation, dissolution or
winding up of the Partnership, prior or senior to any class or series of Common Partnership
Units and any other class or series of Partnership Units now or hereafter issued by the
Partnership over which the Series C Preferred Partnership Units have preference or priority
(A) in the payment of distributions or in the distribution of assets on any liquidation,
dissolution or winding up of the Partnership (“Junior Units”) or (B) in both the payment of
distributions and the distribution of assets on any liquidation, dissolution or winding up
the Partnership (“Fully Junior Units”);

     (ii) with respect to distribution rights and rights upon liquidation, dissolution or
winding up of the Partnership, on a parity with any class or series of the Partnership Units
of the Partnership if, pursuant to the specific terms of such class or series of Partnership
Units, the holders of such class or series of Partnership Units and the holders of the
Series C Preferred Partnership Units are entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per Partnership Unit or liquidation
preferences, without preference or priority one over the other (“Parity Units”), which
Parity Units shall expressly include the Series C Preferred Partnership Units, Series B-1
Preferred Partnership Units and Series B-2 Preferred Partnership Units;

     (iii) with respect to distribution rights and rights upon liquidation, dissolution or
winding up of the Partnership, junior to any class or series of Partnership Units if,
pursuant to the specific terms of such class or series, the holders of such class or series
are entitled to the receipt of distributions or amounts distributable upon liquidation,
dissolution or winding up in preference or priority to the holders of the Series C Preferred
Partnership Units; and

     (iv) junior to all of the existing and future indebtedness of the Partnership.

     C. Distributions.

     (i) Pursuant to Section 8.1 of the Partnership Agreement but subject to the rights of
holders of any Preferred Partnership Units ranking senior to the Series C Preferred
Partnership Units as to the payment of distributions, Ashford OP Limited Partner, LLC, in
its capacity as the holder of the then outstanding Series C Preferred Partnership Units,
shall be entitled to receive, when, as and if authorized by the General Partner, from the
Cash Flow, cumulative quarterly preferential cash distributions at a rate

Exhibit K — Page 1

 

 

(the “Series C Distribution Rate”), expressed as a percentage of the Series C
Liquidation Preference (defined below) per Series C Preferred Partnership Unit per annum
(the “Series C Preferred Return”), determined as follows:

     A. from April 11, 2007 through October 10, 2008, a rate equal to (x)
Three-Month LIBOR (as defined in the Series C Articles Supplementary) plus (y)
2.50%;

     B. after October 10, 2008, a rate equal to (x) Three-Month LIBOR plus (y) the
Applicable Margin (as defined in the Series C Articles Supplementary);

provided that if a Change of Control (as defined in the Series C Articles Supplementary) or
a Delisting (as defined in the Series C Articles Supplementary) occurs, the Series C
Distribution Rate otherwise in effect at such time shall immediately increase by 2.0%.
Distributions of Series C Preferred Return shall be cumulative from April 11, 2007, whether
or not such distributions shall be authorized, whether or not there shall be assets of the
Partnership legally available for the payment of such distributions, whether or not the
terms and provisions of any agreement of the Partnership, including any agreement relating
to its indebtedness, prohibits such authorization or payment or provides that such
authorization or payment would constitute a breach thereof or a default thereunder, and
whether or not the authorization or payment of such distributions shall be restricted or
prohibited by law. Such distributions shall be payable quarterly in arrears the 15th day of
January, April, July and October of each year (or, if not a Business Day, the next
succeeding Business Day), commencing July 15, 2007 (each a “Distribution Payment Date”).
The amount of distributions payable per Series C Preferred Partnership Unit on each
Distribution Date shall be equal to the sum of the daily amounts for each day actually
elapsed during the immediately preceding fiscal quarter, or with respect to the initial
distribution, the period from and including April 11, 2007 through and including June 30,
2007 (each, a “Distribution Period”), which daily amounts shall be computed by dividing (1)
the product of (A) the Series C Distribution Rate in effect for each such day during such
Series C Distribution Period multiplied by (B) the Series C Liquidation Preference of each
outstanding Series C Preferred Partnership Unit by (2) 360. Any distribution payment made
on shares of the Series C Preferred Partnership Units shall first be credited against the
earliest accrued but unpaid distribution due with respect to such Units. The Partnership
shall determine the distribution payable on each Distribution Payment Date in accordance
with the Partnership Agreement, utilizing the Three-Month LIBOR rate used for purposes of
calculating dividend payments to the holders of Series C Preferred Stock pursuant to the
Series C Articles Supplementary. Except for distributions in liquidation or redemption as
provided in Sections D and E, respectively, holders of Series C Preferred Partnership Units
will not be entitled to receive any distributions in excess of cumulative Series C
Preferred Returns accrued on the Series C Preferred Partnership Units at the rate specified
in this paragraph. No interest or sum of money shall be payable in respect of any
distribution payment or payments on the Series C Preferred Partnership Units that may be in
arrears.

Exhibit K — Page 2

 

 

     (ii) So long as any of the Series C Preferred Partnership Units are outstanding, except
as described in the immediately following sentence, no distributions shall be declared or
paid or set apart for payment by the Partnership and no other distribution of cash or other
property shall be declared or made, directly or indirectly, by the Partnership, in each case
with respect to any class or series of Parity Units for any period unless distributions
equal to the full amount of accumulated, accrued and unpaid distributions have been or
contemporaneously are declared and paid on the Series C Preferred Partnership Units, or
declared and a sum sufficient for the payment thereof has been or contemporaneously is set
apart for such payment, in each case for all Distribution Periods terminating on or prior to
the date such distribution is declared, paid, set apart for payment or made, as the case may
be, with respect to such class or series of Parity Units. When distributions on the Series
C Preferred Partnership Units and any class or series of Parity Units are not paid in full
or a sum sufficient for such payment is not set apart, as aforesaid, all distributions
declared upon the Series C Preferred Partnership Units and all distributions declared upon
any other class or series of Parity Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated, accrued and unpaid on the Series C
Preferred Partnership Units and accumulated, accrued and unpaid on such Parity Units (which
shall not include any accrual in respect of unpaid distributions for prior distributions
periods if such Parity Units do not have a cumulative preferred return).

     (iii) So long as any of the Series C Preferred Partnership Units are outstanding, no
distributions (other than distributions paid in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Fully Junior Units) shall be authorized or paid or set
apart for payment by the Partnership and no other distribution of cash or other property
shall be declared or made, directly or indirectly, by the Partnership with respect to any
shares of Junior Units, nor shall any shares of Junior Units be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of Common Units
made for purposes of an employee incentive or benefit plan of the Partnership, its parent or
any subsidiary) for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such Junior Units) directly or indirectly by the
Partnership (except by conversion into or exchange for Fully Junior Units or options,
warrants, or rights to subscribe for or purchase Fully Junior Units), nor shall any other
cash or other property otherwise be paid or distributed to or for the benefit of any holder
of shares of Junior Units in respect thereof, directly or indirectly, by the Partnership
unless, in each case, distributions equal to the full amount of all accumulated, accrued and
unpaid distributions on all outstanding Series C Preferred Partnership Units have been
declared and paid, or such distributions have been declared and a sum sufficient for the
payment thereof has been set apart for such payment, on all outstanding Series C Preferred
Partnership Units for all Distribution Periods ending on or prior to the date such
distribution is declared, paid, set apart for payment or made with respect to such Junior
Units, or the date such Junior Units are redeemed, purchased or otherwise acquired or monies
paid to or made available for any sinking fund for such redemption, or the date any such
cash or other property is paid or distributed to or for the benefit of any holders of Junior
Units in respect thereof, as the case may be. Notwithstanding the foregoing, the
Partnership shall not be prohibited from (i) declaring or paying or setting apart for
payment any distribution on any Parity Units or (ii) redeeming, purchasing or

Exhibit K — Page 3

 

 

otherwise acquiring any Junior Units or Parity Units, in each case, if (but only to the
extent that) such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Company as a REIT.

     (iv) In determining whether a distribution (other than upon voluntary or involuntary
liquidation, dissolution or winding up of the Partnership) of Preferred Return or in
redemption or other acquisition of Units or otherwise, is permitted, amounts that would be
needed, if the Partnership were to be dissolved at the time of the distribution, to satisfy
the liquidation preference of the Series C Preferred Partnership Units (as provided in
Section D below) will not be added to the Partnership’s total liabilities.

     D. Liquidation Preference.

     (i) In the event of any liquidation, dissolution or winding up of the Partnership,
whether voluntary or involuntary, subject to the prior preferences and other rights of any
Partnership Units ranking senior to the Series C Preferred Partnership Units upon
liquidation, distribution or winding up of the Partnership, if any, before any payment or
distribution by the Partnership (whether of capital, surplus or otherwise) shall be made to
or set apart for the holders of Junior Units, the holders of Series C Preferred Partnership
Units shall be entitled to receive Twenty-Five Dollars ($25.00) per Series C Preferred
Partnership Unit (the “Series C Liquidation Preference”), plus an amount equal to all
distributions (whether or not earned or declared) accumulated, accrued and unpaid thereon,
if any, to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. Until the holders of the Series C Preferred Partnership
Units have been paid the Series C Liquidation Preference in full, plus an amount equal to
all distributions (whether or not earned or declared) accumulated, accrued and unpaid
thereon, if any, to the date of final distribution to such holders, no payment will be made
to any holder of Junior Units upon the liquidation, dissolution or winding up of the
Partnership. If, upon any liquidation, dissolution or winding up of the Partnership, the
assets of the Partnership, or proceeds thereof, distributable among the holders of Series C
Preferred Partnership Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of Parity
Units, then such assets, or the proceeds thereof, shall be distributed among the holders of
Series C Preferred Partnership Units and any such other Parity Units ratably in the same
proportion as the respective amounts that would be payable on such Series C Preferred
Partnership Units and any such other Parity Units if all amounts payable thereon were paid
in full. For the purposes of the Series C Preferred Partnership Unit liquidation
preferences, (i) a consolidation or merger of the Partnership with one or more corporations,
real estate investment trusts or other entities, (ii) a sale, lease, conveyance or other
transfer of all or substantially all of the Partnership’s assets, business or properties, or
(iii) a statutory share exchange shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership. Other than as set forth in the
Partnership Agreement, the holders of Series C Preferred Partnership Units shall not be
entitled to any additional payment upon any liquidation, dissolution or winding up of the
Partnership.

Exhibit K — Page 4

 

 

     (ii) Upon any liquidation, dissolution or winding up of the Partnership, after payment
shall have been made in full to the holders of Series C Preferred Partnership Units and any
Parity Units, as provided above, any other series or class or classes of Junior Units shall,
subject to the respective terms thereof, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series C Preferred Partnership Units and
any Parity Units shall not be entitled to share therein. The liquidation preference of the
outstanding Series C Preferred Partnership Units will not be added to the liabilities of the
Partnership for the purpose of determining whether a distribution may be made to holders of
Common Units whose preferential rights upon dissolution of the Partnership are junior to
those of the holders of the Series C Preferred Partnership Units.

     E. Redemption. In connection with the redemption by the Company of any shares
of Series C Preferred Stock in accordance with the provisions of the Series C Articles
Supplementary, the Partnership shall provide cash to Ashford OP Limited Partner, LLC for
such purpose which shall be equal to the redemption price, plus all distributions of Series
C Preferred Return accumulated and unpaid to the redemption date, and one Series C Preferred
Partnership Unit shall be concurrently redeemed with respect to each share of Series C
Preferred Stock so redeemed by the Company. From and after the applicable redemption date,
the Series C Preferred Partnership Units so redeemed shall no longer be outstanding and all
rights hereunder, to distributions or otherwise, with respect to such Series C Preferred
Partnership Units shall cease. Any Series C Preferred Partnership Units so redeemed may be
reissued to Ashford OP Limited Partner, LLC as shares of any series of preferred units;
provided that no reacquired Series C Preferred Partnership Units shall be reissued as Series
C Preferred Partnership Units so long as any Series C Preferred Partnership Units remain
outstanding.

     F. Voting Rights. Except as required by applicable law, the holder of the
Series C Preferred Partnership Units, as such, shall have no voting rights.

     G. Conversion. The Series C Preferred Partnership Units are not convertible
into or exchangeable for any other property or securities of the Partnership.

     H. Restriction on Ownership. The Series C Preferred Partnership Units shall be
owned and held solely by Ashford OP Limited Partner, LLC.

     I. Allocations. Allocations of the Partnership’s items of income, gain, loss
and deduction shall be allocated pro rata among holders of Series C Preferred Partnership
Units in accordance with Article V of the Partnership Agreement.

Exhibit K — Page 5exv10w33w1w1

 

Exhibit 10.33.1.1

Execution Version

AMENDMENT NO. 1

TO THE

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

MS RESORT HOLDINGS LLC,

MS RESORT ACQUISITION LLC,

MS RESORT PURCHASER LLC,

ASHFORD SAPPHIRE ACQUISITION LLC

AND

CNL HOTELS & RESORTS, INC.

DATED AS OF FEBRUARY 21, 2007

 

          THIS AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER, dated as of February 21, 2007 (this
“Amendment”), is entered into by and among MS Resort Holdings LLC, a Delaware limited
liability company (“Parent”), MS Resort Acquisition LLC, a Delaware limited liability
company and a wholly-owned subsidiary of Parent (“Sub”), MS Resort Purchaser LLC, a
Delaware limited liability company and wholly-owned subsidiary of Parent (“Missouri”),
Ashford Sapphire Acquisition LLC, a Delaware limited liability company (“Arizona”), and CNL
Hotels & Resorts, Inc., a Maryland corporation (the “Company”). Parent, Sub, Missouri and
Arizona are hereinafter collectively referred to as the “Buyer Parties”.

W I T N E S S E T H:

          WHEREAS, the Buyer Parties and the Company entered into that certain Agreement and Plan of
Merger, dated as of January 18, 2007, by and among the Buyer Parties and the Company (the
“Merger Agreement”); and

          WHEREAS, the Buyer Parties and the Company desire to amend the Merger Agreement as provided in
this Amendment.

          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

	 	1.	 	Amendment to Section 1.1 of the Merger Agreement. The definition of the
“Company Letter” set forth in Section 1.1 of the Merger Agreement is hereby amended and
restated in its entirety to read as follows:

““Company Letter” means the letter from the Company to the Buyer Parties
dated as of January 18, 2007 as amended by that certain amendment to the Company
Letter, dated as of February 21, 2007, which letter, as amended, relates to this
Agreement and is designated therein as the Company Letter.”

The Buyer Parties and the Company hereby agree that the amendment to the Company Letter,
dated as of February 21, 2007, shall be in the form attached hereto as Exhibit A.

	 	2.	 	Amendment to Section 3.2(b) of the Merger Agreement. The second sentence of
Section 3.2(b) is hereby amended and restated in its entirety as follows:

“Upon surrender of a Certificate (or affidavits of loss in lieu thereof) for
cancellation to the Paying Agent, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required by the Paying Agent
or, in the case of Uncertificated Shares, at or promptly following the receipt by
the Paying Agent of a duly executed letter of transmittal and such other documents
as may be required by the Paying Agent or at such earlier time as the Company (or,
if after the Effective Time, the Surviving Entity) and Parent shall

 

 

instruct the Paying Agent, the holder of such Certificate or Uncertificated Shares
shall be entitled to receive in exchange therefor the amount of cash (after giving
effect to any required Tax withholdings as provided in Section 3.2(g)) equal
to (x) the number of Shares held by such stockholder multiplied by (y) the Per Share
Merger Consideration, and any Certificates surrendered shall forthwith be
cancelled.”

	 	3.	 	WARN Notices. The Company hereby agrees that, on or before February 23, 2007,
the Company shall, at the request of Parent, cause notices in the forms attached hereto as
Exhibit B, Exhibit C and Exhibit D, and any supplemental notices
thereafter as required by WARN, to be provided to the respective parties set forth in
Exhibit B and Exhibit C and to those employees of the Company that Parent
shall identify to the Company in writing. The Company hereby agrees to provide notices in
the form set forth as Exhibit E from time to time upon two (2) Business Days notice
to those employees as Parent shall identify in writing. The Company and the Buyer Parties
acknowledge that any Change resulting from the Company’s compliance with this Section
3 shall be excluded from any determination as to whether a Material Adverse Effect on
the Company has occurred.
	 
	 	4.	 	Consent. Parent hereby consents to the amendment by the Company of each of (a)
the Employment Agreement and (b) the Deferred Share Award Grant Notice for each of Thomas
J. Hutchison, III, John A. Griswold and C. Brian Strickland in the forms attached hereto as
Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit
J and Exhibit K respectively.
	 
	 	5.	 	Employee Bonus Program. The Company and Buyer Parties agree to implement a
bonus program for employees of the Company substantially on the terms and in the amounts
set forth on Exhibit L hereto.
	 
	 	6.	 	Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Merger Agreement.
	 
	 	7.	 	References to the Merger Agreement. After giving effect to this Amendment, each
reference in the Merger Agreement to “this Agreement”, “hereof”, “hereunder” or words of
like import referring to the Merger Agreement shall refer to the Merger Agreement as
amended by this Amendment and all references in the Company Letter to “the Agreement” and
“the Merger Agreement” shall refer to the Merger Agreement as amended by this Amendment.
	 
	 	8.	 	Construction. Except as expressly provided in this Amendment, all references in
the Merger Agreement and the Company Letter to “the date hereof” and “the date of this
Agreement” shall refer to January 18, 2007.
	 
	 	9.	 	Other Miscellaneous Terms. The provisions of Article XI (General Provisions) of
the Merger Agreement shall apply mutatis mutandis to this Amendment, and to the Merger
Agreement as modified by this Amendment, taken together as a single agreement, reflecting
the terms therein as modified hereby.
	 
	 	10.	 	No Further Amendment. Except as expressly amended hereby, the Merger Agreement,
shall remain in full force and effect.

2

 

     IN WITNESS WHEREOF, Parent, Sub, Missouri, Arizona and the Company have caused this Amendment
to be signed by their respective officers thereunto duly authorized all as of the date first
written above.

	 	 	 	 	 
	 	MS RESORT HOLDINGS LLC

 	 
	 	By:  	/s/ Michael Quinn
 	 
	 	 	Name:  	Michael Quinn 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 
	 

	 	MS RESORT ACQUISITION LLC
	 
	 	 
	 

	 	By: MS Resort Holdings LLC, its Managing

       Member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                   /s/ Michael Quinn
 	 
	 	 	Name:  	Michael Quinn 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 
	 

	 	MS RESORT PURCHASER LLC
	 
	 

	 	By: MS Resort Holdings LLC, its Managing

       Member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Michael Quinn
 	 
	 	 	Name:  	Michael Quinn 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	ASHFORD SAPPHIRE ACQUISITION LLC

 	 
	 	By:  	/s/ David A. Brooks
 	 
	 	 	Name:  	David A. Brooks 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	CNL HOTELS & RESORTS, INC.

 	 
	 	/s/ Greerson G. McMullen
 	 
	 	Name:  	Greerson G. McMullen 	 
	 	Title:  	Executive Vice President 	 
	 

3

 

EXHIBIT A

AMENDMENT TO COMPANY LETTER

A-1

 

EXHIBIT B

WARN NOTICE TO MAYOR OF ORLANDO

February __, 2007

VIA OVERNIGHT DELIVERY

Mayor Buddy Dyer

Post Office Box 4990

Orlando, Florida 32802-4990

     Re: CNL Hotels & Resorts, Inc.

Dear Mayor Dyer:

     As you may know, MS Resort Holdings LLC (the “Company”) is currently in the process of
purchasing CNL Hotels & Resorts, Inc. (“CNL”), located at CNL Center II, 420 South Orange Avenue,
Suite 700, Orlando, Florida 32801-3313. It is anticipated that the sale transaction will be
consummated on or about [insert date that is 2 days after the date set for the Company stockholder
vote].

     Pursuant to the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101,
we are notifying you that, as a result of this transaction, certain employees of CNL will be laid
off permanently. The Company expects to announce the initial phase of these terminations to begin
on [insert date that is sixty days from delivery of letter] or, if later, the date on which the
sale transaction is consummated. Subsequent phases of these terminations will likely continue in
approximately 30-day increments and will be completed on or about [May 1, 2008][the first
anniversary of the date on which the sale transaction is consummated]. Bumping rights do not exist
for the affected employees.

     Please see the attached list of job titles of employees who will be affected by the sale
transaction of CNL and the number of affected employees in each job classification.

     The information provided in this notice is based upon the best information available to CNL at
this time. If you have any questions, please do not hesitate to contact me at                      or
by email at                     .

Sincerely,

B-1

 

	 	 	 	 	 
	 	CNL HOTELS & RESORTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2

 

	 	 	 	 	 

EXHIBIT C

WARN NOTICE TO REACT PROGRAM

February __, 2007

VIA OVERNIGHT DELIVERY

Gene Rhodes

Administrator REACT Program

MSC 229

107 E. Madison Street

Tallahassee, Florida 32399-4137

     Re: CNL Hotels & Resorts, Inc.

Dear Mr. Rhodes:

     As you may know, MS Resort Holdings LLC (the “Company”) is currently in the process of
purchasing CNL Hotels & Resorts, Inc. (“CNL”), located at CNL Center II, 420 South Orange Avenue,
Suite 700, Orlando, Florida 32801-3313. It is anticipated that the sale transaction will be
consummated on or about [insert date that is 2 days after the date set for the Company stockholder
vote]

     Pursuant to the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101,
we are notifying you that, as a result of this transaction, certain employees of CNL will be laid
off permanently. The Company expects to announce the initial phase of these terminations to begin
on [insert date that is sixty days from delivery of letter] or, if later, the date on which the
sale transaction is consummated. Subsequent phases of these terminations will likely continue in
approximately 30-day increments and will be completed on or about [May 1, 2008][the first
anniversary of the date on which the sale transaction is consummated]. Bumping rights do not exist
for the affected employees.

     Please see the attached list of job titles of employees who will be affected by the sale
transaction of CNL and the number of affected employees in each job classification.

     The information provided in this notice is based upon the best information available to CNL at
this time. If you have any questions, please do not hesitate to contact me at                      or
by email at                     .

Sincerely,

C-1

 

	 	 	 	 	 
	 	CNL HOTELS & RESORTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

C-2

 

EXHIBIT D

FORM OF NOTICE FOR INITIAL SEPARATION DATE

NOTICE OF MASS LAYOFF TO AFFECTED EMPLOYEES PURSUANT TO WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION (WARN) ACT

For Delivery Via Certified Mail, Return Receipt Requested

	 	 	 	 	 
	To:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

     As you may be aware, MS Resort Holdings LLC (the “Company”) is currently in the process of
purchasing CNL Hotels & Resorts, Inc. (“CNL”), located at CNL Center II, 420 South Orange Avenue,
Suite 700, Orlando, Florida 32801-3313. It is anticipated that the sale transaction will be
consummated on or about [insert date that is 2 days after the date set for the Company stockholder
vote]

     As a result of this sale transaction, it is inevitable that certain employees of CNL will be
laid off permanently. Bumping rights do not exist for the affected employees. The Company expects
to announce the initial phase of these terminations to begin on [insert date that is sixty days
from delivery of letter] or, if later, the date on which the sale transaction is consummated.

     Your anticipated separation date shall be on or about [insert date that is sixty days from
delivery of letter] or, if later, the date on which the sale transaction is consummated.

     This notice is provided to you pursuant to the Worker Adjustment and Retraining Notification
Act (“WARN”), 29 U.S.C. § 2101, and is based upon the best information available to CNL at the
time.

     If you have any questions, please contact me at                      or via email at
                    .

CNL HOTELS & RESORTS, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:
	 	 

D-1

 

EXHIBIT E 

FORM OF NOTICE FOR FUTURE SEPARATION DATE

NOTICE OF MASS LAYOFF TO AFFECTED EMPLOYEES PURSUANT TO WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION (WARN) ACT

For Delivery Via Certified Mail, Return Receipt Requested

	 	 	 	 	 
	To:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

     As you may be aware, MS Resort Holdings LLC (the “Company”) is currently in the process of
purchasing CNL Hotels & Resorts, Inc. (“CNL”), located at CNL Center II, 420 South Orange Avenue,
Suite 700, Orlando, Florida 32801-3313. It is anticipated that the sale transaction will be
consummated on or about [insert date that is 2 days after the date set for the Company stockholder
vote].

     As a result of this sale transaction, it is inevitable that certain employees of CNL will be
laid off permanently. Bumping rights do not exist for the affected employees. The Company expects
to announce the initial phase of these terminations to begin on [insert date that is sixty days
from delivery of letter] or, if later, the date on which the sale transaction is consummated.

     Your anticipated separation date shall be [___] days following the later of [insert date that
is sixty days from delivery of letter] and the consummation of the sale transaction.

     This notice is provided to you pursuant to the Worker Adjustment and Retraining Notification
Act (“WARN”), 29 U.S.C. § 2101, and is based upon the best information available to CNL at the
time.

     If you have any questions, please contact me at                      or via email at
                    .

CNL HOTELS & RESORTS, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	 
	 

	 	Title:
	 	 

E-1

 

EXHIBIT F

AMENDMENT TO EMPLOYMENT AGREEMENT — THOMAS J. HUTCHISON, III

F-1

 

EXHIBIT G

AMENDMENT TO DEFERRED SHARE AWARD

GRANT NOTICE — THOMAS J. HUTCHISON, III

G-1

 

EXHIBIT H

AMENDMENT TO EMPLOYMENT AGREEMENT — JOHN A. GRISWOLD

H-1

 

EXHIBIT I

AMENDMENT TO DEFERRED SHARE AWARD

GRANT NOTICE — JOHN A. GRISWOLD

I-1

 

EXHIBIT J

AMENDMENT TO EMPLOYMENT AGREEMENT — C. BRIAN STRICKLAND

J-1

 

EXHIBIT K

AMENDMENT TO DEFERRED SHARE AWARD

GRANT NOTICE — C. BRIAN STRICKLAND

K-1

 

EXHIBIT L

BONUS PROGRAM

     The Bonus Program will be implemented substantially on the terms set forth in the attached
form of Fact Sheet. The aggregate amount paid to all employees for the “Goodwill Bonus” as
described on the Fact Sheet shall not exceed $7,196,875.

L-1

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