Document:

EXHIBIT 10.12

 

LICENSING AGREEMENT

 

This LICENSING AGREEMENT (this “Agreement”) dated as of [              ], 2014 (the “Effective Date”) between Ashford Hospitality Advisors LLC, a Delaware limited liability corporation (“Ashford LLC” or “Licensor”), Ashford Hospitality Trust, Inc., a Maryland corporation (“Ashford Trust”) and Ashford Hospitality Limited Partnership (“Ashford Trust OP”) (Ashford Trust and Ashford Trust OP, collectively, referred to as “Licensees”) (each party hereto, a “Party” and collectively, referred to as the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Separation and Distribution Agreement dated as of [                    ], 2014, by and between Ashford Trust, Ashford OP Limited Partner LLC, a Delaware limited liability company, Ashford Trust OP, Ashford Inc., a Delaware corporation, and Ashford LLC (the “Separation and Distribution Agreement”), Ashford Trust, as the sole stockholder of Ashford Inc., will effect a spin-off of Ashford Inc. (the “Spin-Off”) through a distribution to Ashford Trust’s common stockholders, on a pro rata basis, of outstanding shares of common stock of Ashford Inc.  Following the Spin-Off, Ashford Inc. will be an independent and separately traded company, and Ashford LLC will be a subsidiary of Ashford Inc.;

 

WHEREAS, pursuant to the provisions of the Separation and Distribution Agreement and the terms of the Assignment and Assumption Agreement dated the date hereof by and between Ashford Trust, Ashford Trust OP and Ashford LLC, in connection with the Spin-Off, Licensees assigned the ownership of the Licensed Marks (as defined in Section 1.01(a)) to Ashford LLC, and Ashford LLC owns, or has the right to use and sublicense, the Licensed Marks;

 

WHEREAS, Licensees are engaged in the business of investing opportunistically across all segments and at all levels of the capital structure within the hospitality industry that, generally, do not directly compete with Ashford Hospitality Prime, Inc. (the “Licensed Business”); and

 

WHEREAS, subject to the terms and conditions set forth herein, Licensees desire to obtain, and Licensor is willing to grant to Licensees, a license to use the Licensed Marks in connection with the Licensed Business.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and in the Separation and Distribution Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.01.                          Definitions. (a) The following terms, as used herein, have the following meanings:

 

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person. For this purpose “control” of a Person means the possession,

 

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directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, by contract or otherwise.

 

“Applicable Law” means any law, statute, ordinance, code, rule, regulation, order, writ, proclamation, judgment, injunction or decree of any Governmental Authority.

 

“Business Day” means a day other than a Saturday, a Sunday or a day on which banking institutions located in the States of Texas are authorized or obligated by Applicable Law or executive order to close.

 

“Governmental Authority” means any U.S. federal, state, local or non-U.S. court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

 

“Licensed Marks” means the names, trademarks and service marks set forth (and only as set forth) in Exhibit A as may be updated by the Parties in writing from time to time.  For the avoidance of doubt, the Licensed Marks shall not include any name, trademark or service mark that is derivative of those set forth in Exhibit A.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, a union, an unincorporated organization or a governmental department, agency or political subdivision thereof.

 

“Subsidiary” means, with respect to any specified Person, any corporation, partnership, limited liability company, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or that otherwise constitutes control of such corporation or other organization, is directly or indirectly owned or controlled by such specified Person or by any one or more of its subsidiaries, or by such specified Person and one or more of its subsidiaries.

 

(b)                                 Each of the following terms is defined in the Section set forth opposite such term:

 

	
Term
    	
 
    	
Section
    
	
Agreement
    	
 
    	
Preamble
    
	
Ashford   LLC
    	
 
    	
Preamble
    
	
Ashford   Trust
    	
 
    	
Preamble
    
	
Ashford   Trust OP
    	
 
    	
Preamble
    
	
Effective   Date
    	
 
    	
Preamble
    
	
License
    	
 
    	
2.01
    
	
Licensed   Business
    	
 
    	
Recitals
    
	
Licensees
    	
 
    	
Preamble
    
	
Licensor
    	
 
    	
Preamble
    
	
Party   and Parties
    	
 
    	
Preamble
    
	
Separation   and Distribution Agreement
    	
 
    	
Recitals
    
	
Spin-Off
    	
 
    	
Recitals
    
	
Term
    	
 
    	
5.01
    

 

2

 

	
Trademark   Claims
    	
 
    	
4.03
    

 

Section 1.02.                          Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections and Exhibits are to Articles, Sections and Exhibits of this Agreement unless otherwise specified. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the respective meanings given to them in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.

 

ARTICLE 2
 LICENSE

 

Section 2.01.                          Grant of License. Subject to the terms and conditions set forth herein, Licensor hereby grants to Licensees a worldwide, non-exclusive, non-transferable (except as otherwise set forth in Section 6.01), non-sublicensable (except as otherwise set forth in Section 2.02), royalty-free, fully paid-up license to use the Licensed Marks solely in connection with the conduct of the Licensed Business during the Term (the “License”). For the avoidance of doubt, subject to the terms and conditions contained herein, the License shall include the right of Ashford Trust to use “Ashford Hospitality Trust, Inc.” as its corporate name and the right of Ashford Trust OP to use “Ashford Hospitality Limited Partnership” as its partnership name, in each case, during the Term.

 

Section 2.02.                          Sublicense Rights.  The License shall include the right of Licensees to grant sublicenses to their respective wholly-owned Subsidiaries; provided that any such sublicense shall terminate immediately upon the applicable sublicensee ceasing to be a wholly-owned Subsidiary of a Licensee. Any such sublicense shall be subject to terms and conditions that are no less restrictive on the applicable sublicensee’s use of the Licensed Marks than the terms and conditions in this Agreement.

 

ARTICLE 3
 OWNERSHIP AND USE OF LICENSED MARKS

 

Section 3.01.                          Ownership of Licensed Marks; Reservation of Rights. (a) Each Licensee hereby acknowledges that (i) the License is the only license granted to Licensee with respect to the Licensed Marks and (ii) no other licenses whatsoever have been granted, expressly or by implication or estoppel, to Licensee by the provisions of this Agreement or otherwise. Neither this Agreement nor its performance shall confer on Licensee any right with respect to the Licensed Marks other than those rights expressly granted herein, and any and all rights in and to the Licensed Marks not expressly granted to Licensee herein are reserved and retained by

 

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Licensor.  Any use of the Licensed Marks by either Licensee pursuant to the License shall inure to the benefit of Licensor.

 

(b)                                 No Licensee shall (i) challenge the validity or ownership of the Licensed Marks or any other marks of Licensor or its Affiliates or claim adversely or assist in any claim adverse to Licensor concerning any right, title or interest in or to the Licensed Marks, (ii) do or permit any act which may directly or indirectly impair or prejudice Licensor’s title to the Licensed Marks or be detrimental to the reputation and goodwill of Licensor, or (iii) register or attempt to register any trademark, design, company name, trade name, domain name or other source identifier that is derivative of, confusingly similar to or contains any Licensed Mark.

 

Section 3.02.                          Appearance of the Licensed Marks; Quality Control. Each Licensee shall use the Licensed Marks only in the form stipulated by Licensor and shall conform to and observe such standards as Licensor from time to time prescribes, including standards relative to the quality, design, identity, size, position, appearance, marking and color of the Licensed Marks and the manner, disposition and use of the Licensed Marks. The Licensed Business shall be conducted at all times in material compliance with Applicable Law and in a manner consistent with the quality of goods and services provided by Licensor under the Licensed Marks as of immediately prior to the Effective Date. Licensor shall have the right to inspect any written or electronic materials bearing any Licensed Mark.

 

Section 3.03.                          Prosecution and Maintenance. Licensor shall, reasonably promptly following each Licensee’s written request and at Licensor’s sole cost and expense, take all such reasonable actions as such Licensee may reasonably request to prosecute and maintain any registration or application for registration of any Licensed Mark.

 

Section 3.04.                          Third Party Notices. If requested in writing by Licensor, each Licensee shall ensure that any written or electronic materials bearing a Licensed Mark includes a written statement to the effect that such Licensed Mark is used by Licensee under license from Licensor.

 

Section 3.05.                          Fair Use. For the avoidance of doubt, nothing in this Agreement shall restrict or limit any Party’s right to make any use of any term, or trademark or service mark that constitutes fair use under Applicable Law or factual use for historical or reference purposes.

 

ARTICLE 4
 LIABILITY, CLAIMS AND INDEMNIFICATION

 

Section 4.01.                          Disclaimers; Limitation of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE LICENSE IS GRANTED ON AN “AS IS” BASIS WITH NO REPRESENTATIONS OR WARRANTIES, AND EACH PARTY, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY EXCLUDES AND DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE LICENSE, INCLUDING THOSE REGARDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTIES IMPLIED BY ANY COURSE OF DEALING OR TRADE USAGE. NO PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE UNDER ANY LEGAL OR EQUITABLE THEORY FOR ANY DIRECT, INDIRECT,

 

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SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

Section 4.02.                          Infringement of Licensed Marks by Third Party. Each Licensee shall promptly notify Licensor in writing of any unauthorized or improper use by any Person of any Licensed Marks, including in such notice the particulars of such use and any other information that Licensee and its Affiliates may have relating to such use, and reasonably cooperate with Licensor, at such Licensee’s sole cost and expense, in connection with any reasonable action Licensor may take to prevent or halt such use. In the event that Licensor does not take reasonable action to halt any such use related to the Licensed Business within a reasonable period of time following such notice, Licensee may take reasonable action to prevent or halt such use, and Licensor shall reasonably cooperate with Licensee, at Licensee’s sole cost and expense, in connection with any such action of Licensee.

 

Section 4.03.                          Third Party Actions. Each Licensee shall promptly notify Licensor in writing of any allegations, claims or demands (actual or threatened) against Licensee for infringement of any intellectual property rights of third parties by reason of such Licensee’s use of the Licensed Marks (collectively, “Trademark Claims”) and provide all related particulars requested by Licensor. Licensor shall retain exclusive control over the resolution of any Trademark Claim, including the right to agree to an injunction against further use of any Licensed Mark at issue or to otherwise settle such Trademark Claim; provided that such settlement shall not require any payment by a Licensee without such Licensee’s prior written consent.  In the event that Licensor does not take reasonable action to resolve a Trademark Claim within a reasonable period of time following such notice, Licensee may assume exclusive control over such Trademark Claim (but solely to the extent such Trademark Claim relates to allegations, claims or demands (actual or threatened) against such Licensee), including the right to agree to an injunction against further use of any Licensed Mark at issue by Licensee or to otherwise settle such Trademark Claim with respect to Licensee; provided that such settlement shall not bind or apply to Licensor in any manner without Licensor’s prior written consent. Subject to the foregoing and at Licensee’s sole cost and expense, each Party shall provide to the other Party such assistance as such other Party may reasonably request in connection with the defense or settlement of any Trademark Claim.

 

Section 4.04.                          Indemnification. (a)  Each Licensee shall indemnify, defend and hold harmless Licensor, its Affiliates and their respective directors, officers, employees and agents and their respective successors and assigns, from and against any claims, damages, losses, liabilities, fines, penalties and expenses (including reasonable costs of investigation and reasonable attorneys’ fees in connection with any action, suit or proceeding) related to or arising out of the use of the Licensed Marks by any Licensee in violation of this Agreement, any violation of Applicable Law with respect to the Licensed Business, any claims related to the sale or provision of goods or services or use of intellectual property other than the Licensed Marks.

 

(b)                                 Each Licensee shall indemnify, defend and hold harmless Licensor, its Affiliates and their respective directors, officers, employees and agents and their respective successors and assigns, from and against any claims, damages, losses, liabilities, fines, penalties and expenses (including reasonable costs of investigation and reasonable attorneys’ fees in connection with

 

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any action, suit or proceeding) by third parties alleging infringement claims against any Licensee’s use of the Licensed Marks in accordance with the terms and conditions of this Agreement.

 

ARTICLE 5
 TERM AND TERMINATION

 

Section 5.01.                          Term. This Agreement is effective as of the Effective Date and shall continue in full force and effect in perpetuity unless terminated in accordance with Section 5.02 (the “Term”).

 

Section 5.02.                          Termination by Licensor. Licensor may terminate this Agreement at any time immediately upon written notice to Licensee.  Further, this Agreement will terminate immediately if at any time the Licensees cease to retain Licensor or one of its affiliates to perform advisory services for the Licensees.

 

Section 5.03.                          Effect of Termination; Survival. Upon expiration or termination of this Agreement, the License shall immediately terminate without any further action by Licensor, and Licensees and the Subsidiaries of Licensees shall have sixty (60) days from expiration or termination to cease all use of, and cease conducting all business under, any names, service marks or trademarks consisting of or comprising the term “Ashford” or any derivation thereof that might, in the reasonable discretion of Licensor, be likely to cause confusion with Licensor, Licensor’s Affiliates or Licensor’s business, services or goods, including but not limited to a likelihood of confusion that there is an association, affiliation or some other relationship between Licensor or any its Affiliates, on the one hand, and any Licensee or its Subsidiaries, on the other hand.  For the sake of clarity, this section requires that each Licensee and its respective Subsidiaries change their business names, trade names and fictitious names to names that do not contain the term “Ashford” or any other word or words that might, in the reasonable discretion of Licensor, be likely to cause confusion with Licensor, Licensor’s Affiliates or Licensor’s business, services or goods, including but not limited to a likelihood of confusion that there is an association, affiliation or some other relationship between Licensor or any its Affiliates, on the one hand, and Licensee or Licensee’s Subsidiaries, on the other hand. Notwithstanding anything in this Agreement to the contrary, Sections 3.01(a), 4.01, 4.04 and 5.03 and Article 6 shall survive any expiration or termination of this Agreement.

 

ARTICLE 6
 GENERAL

 

Section 6.01.                          Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided that, except as expressly set forth in Section 2.02, Licensees may not assign, delegate or otherwise transfer this Agreement or any of its rights or obligations hereunder without the express prior written consent of Licensor.

 

Section 6.02.                          Notices. All notices, requests, permissions, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) five (5) Business Days following sending by registered or certified mail, postage prepaid, (b)

 

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when sent, if sent by facsimile, (c) when delivered, if delivered personally to the intended recipient, and (d) one (1) Business Day following sending by overnight delivery via a national courier service and, in each case, addressed to a Party at the following address for such Party:

 

If to Licensor:

 

Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

Attention:  Chief Executive Officer

Phone: (972) 490-9600

 

With a copy to:

 

Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Attention: General Counsel

Dallas, TX 75254

Phone: (972) 490-9600

 

If to Licensee:

 

Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 1100

Attention: Chief Executive Officer

Dallas, TX 75254

Phone: (972) 490-9600

 

and

 

Ashford Hospitality Limited Partnership

14185 Dallas Parkway, Suite 1100

Attention: General Partner

Dallas, TX 75254

Phone: (972) 490-9600

 

Section 6.03.                          Specific Performance. The Parties acknowledge that money damages are not an adequate remedy for any violation of this Agreement and that any Party may, in its sole discretion, apply to the courts set forth in Section 6.05 for specific performance, or injunctive or such other relief as such courts may deem just and proper, in order to enforce this Agreement or prevent any violation hereof, and to the extent permitted by Applicable Law, each Party waives the posting of bond and any objection to the imposition of such relief.

 

Section 6.04.                          Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each of the Parties or, in the case of a waiver, by the Party against whom the waiver is to be effective.

 

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(b)                                 No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

Section 6.05.                          Governing Law; Venue. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Texas, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.  The parties hereto agree that venue for any action in connection herewith shall be proper in Dallas County, Texas.  Each Party hereto consents to the jurisdiction of any local, state or federal court situated in any of such locations and waives any objection which it may have pertaining to improper venue or forum non conveniens to the conduct of any proceeding in any such court.

 

Section 6.06.                          Counterparts; Electronic Delivery. This Agreement may be executed in multiple counterparts, each of which when executed shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Execution and delivery of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic means shall be deemed to be, and shall have the same legal effect as, execution by an original signature and delivery in person.

 

Section 6.07.                          No Third Party Beneficiaries. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the Parties and their respective successors and permitted assigns.

 

Section 6.08.                          Entire Agreement. This Agreement and the Exhibit referenced herein, and attached hereto constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both oral and written, among the Parties with respect to the subject matter hereof. For the avoidance of doubt, the Parties acknowledge and agree that the transactions contemplated in connection with the Spin-Off, together with the transactions contemplated by this Agreement, collectively constitute a single and integrated transaction.

 

Section 6.09.                          Severability. If any term or other provision of this Agreement or the Exhibit attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated in connection with the Spin-Off and contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to affect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated in connection with the Spin-Off and contemplated by this Agreement are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

 

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

 

	
 
    	
LICENSOR:
    
	
 
    	
 
    
	
 
    	
ASHFORD   HOSPITALITY ADVISORS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks
    
	
 
    	
 
    	
Chief   Operating Officer and General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
LICENSEES:
    
	
 
    	
 
    
	
 
    	
ASHFORD   HOSPITALITY TRUST, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
David   A. Brooks
    
	
 
    	
 
    	
Chief   Operating Officer and General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ASHFORD   HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By:   Ashford OP General Partner LLC, a Delaware limited liability company, its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks, Vice President
    

 

 

Exhibit A

 

Licensed Marks

 

ASHFORD HOSPITALITY TRUST, INC.

 

ASHFORD HOSPITALITY LIMITED PARTNERSHIP

 

ASHFORD HOSPITALITY TRUST

 

ASHFORD TRUSTEXHIBIT 10.13

 

TAX MATTERS AGREEMENT

 

by and between

 

ASHFORD HOSPITALITY TRUST, INC.

 

ASHFORD HOSPITALITY LIMITED PARTNERSHIP,

 

ASHFORD INC.

 

and

 

ASHFORD HOSPITALITY ADVISORS LLC

 

dated as of

 

[                    , 2014]

 

 

TABLE OF CONTENTS

 

	
ARTICLE I DEFINITIONS
    	
1
    
	
Section   1.1
    	
Definitions
    	
1
    
	
Section   1.2
    	
Interpretation
    	
5
    
	
ARTICLE II TAX MATTERS
    	
6
    
	
Section   2.1
    	
Tax Returns
    	
6
    
	
Section   2.2
    	
Tax Indemnity
    	
7
    
	
Section   2.3
    	
Cooperation
    	
7
    
	
Section   2.4
    	
Transfer Taxes
    	
8
    
	
Section   2.5
    	
Tax Contests
    	
8
    
	
Section   2.6
    	
Carrybacks
    	
8
    
	
Section   2.7
    	
Tax Refunds; Tax Benefits
    	
9
    
	
ARTICLE III TERMINATION
    	
10
    
	
Section   3.1
    	
Termination
    	
10
    
	
Section   3.2
    	
Effect of Termination
    	
10
    
	
ARTICLE IV MISCELLANEOUS
    	
10
    
	
Section   4.1
    	
Further Assurances
    	
10
    
	
Section   4.2
    	
Payment of Expenses
    	
10
    
	
Section   4.3
    	
Amendments and Waivers
    	
11
    
	
Section   4.4
    	
Entire Agreement
    	
11
    
	
Section   4.5
    	
Survival of Agreements
    	
11
    
	
Section   4.6
    	
Third Party Beneficiaries
    	
11
    
	
Section   4.7
    	
Notices
    	
11
    
	
Section   4.8
    	
Counterparts; Electronic   Delivery
    	
12
    
	
Section   4.9
    	
Severability
    	
13
    
	
Section   4.10
    	
Assignability; Binding   Effect
    	
13
    
	
Section   4.11
    	
Governing Law
    	
13
    
	
Section   4.12
    	
Performance
    	
13
    
	
Section   4.13
    	
Title and Headings
    	
13
    

 

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TAX MATTERS AGREEMENT

 

This TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of [                    , 2014] (the “Effective Date”) by and between ASHFORD HOSPITALITY TRUST, INC., a Maryland corporation (“Ashford Trust”), ASHFORD HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership (“Ashford Trust OP”), ASHFORD INC., a Delaware corporation (“Ashford Inc.”), and ASHFORD HOSPITALITY ADVISORS LLC, a Delaware limited liability company and a wholly-owned subsidiary of Ashford Trust OP prior to the separation and distribution (“Ashford LLC”). Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in Section 1.1.

 

RECITALS

 

WHEREAS, the board of directors of Ashford Trust has determined that it is advisable and in the best interests of Ashford Trust and its stockholders to separate its asset management and external advisory services from its hospitality investment business by establishing Ashford Inc. as an independent publicly traded company and to undertake the transactions contemplated by the Separation and Distribution Agreement (as defined herein);

 

WHEREAS, as a result of the transactions contemplated by the Separation and Distribution Agreement, Ashford Inc. and its subsidiaries will cease to be members of the Ashford Trust Group (as defined herein); and

 

WHEREAS, the Parties desire to allocate the Tax responsibilities, liabilities and benefits of transactions that occur on or prior to, and that may occur after, the Distribution Date and to provide for and address certain other Tax matters.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.1                                    Definitions.  As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.1:

 

“Action” means any demand, claim, action, suit, countersuit, arbitration, litigation, inquiry, proceeding or investigation by or before any Taxing Authority or any arbitration or mediation tribunal or authority.

 

“Adjustment Request” means any formal or informal claim or request filed with any Taxing Authority, or with any administrative agency or court, for the adjustment, refund or credit of Taxes, including (a) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (b) any claim for equitable recoupment or other offset and (c) any claim for refund or credit of Taxes previously paid.

 

 

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person. For this purpose “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, by contract or otherwise.  From and after the Distribution Date, Ashford Inc. Group shall be deemed not to be Affiliates of Ashford Trust Group.

 

“Agreement” has the meaning set forth in the preamble to this Agreement [and includes all Exhibits and Schedules attached hereto or delivered pursuant hereto].

 

“Ashford Inc.” has the meaning set forth in the introductory paragraph of this Agreement.

 

“Ashford Inc. Group” means Ashford Inc., Ashford LLC and each of their Affiliates from and after the Effective Time, and any corporation or other entity that may become part of such Group from time to time.  For the avoidance of doubt, from and after the Effective Time the Ashford Inc. Group excludes any entity that is a member of the Ashford Trust Group.

 

“Ashford Trust” has the meaning set forth in the introductory paragraph of this Agreement.

 

“Ashford Trust Group” means Ashford Trust and each of its Affiliates immediately prior to the Effective Time, and any corporation or other entity that may become part of such Group from time to time.  For the avoidance of doubt, from and after the Effective Time the Ashford Trust Group excludes any entity that is a member of the Ashford Inc. Group.

 

“Ashford Trust OP” has the meaning set forth in the introductory paragraph of this Agreement.

 

“Asset” means all rights, properties or other assets, whether real, personal or mixed, tangible or intangible, of any kind, nature and description, whether accrued, contingent or otherwise, and wheresoever situated and whether or not carried or reflected, or required to be carried or reflected, on the books of any Person.

 

“Business Day” means a day other than a Saturday, a Sunday or a day on which banking institutions located in the States of Texas or New York are authorized or obligated by applicable Law or executive order to close.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contract” means any written, oral, implied or other contract, agreement, covenant, lease, license, guaranty, indemnity, representation, warranty, assignment, sales order, purchase order, power of attorney, instrument or other commitment, assurance, undertaking or arrangement that is binding on any Person or entity or any part of its property under applicable Law.

 

“Distribution” means the transactions contemplated by Article IV of the Separation and Distribution Agreement.

 

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“Distribution Date” means the date on which the Distribution occurs, such date to be determined by, or under the authority of, the board of directors of Ashford Trust, in its sole and absolute discretion.

 

“Effective Date” means the date first set forth above in the introductory paragraph of this Agreement.

 

“Effective Time” means the time at which the Distribution is effective on the Distribution Date.

 

“Final Determination” means a determination within the meaning of Section 1313 of the Code or any similar provision of state or local Tax Law.

 

“Governmental Authority” means any U.S. federal, state, local or non-U.S. court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

 

“Group” means either the Ashford Trust Group or the Ashford Inc. Group, as the context requires.

 

“Guarantee” means any guarantee (including guarantees of performance or payment under Contracts, commitments, Liabilities and permits), letter of credit or other credit or credit support arrangement or similar assurance, including surety bonds, bid bonds, advance payment bonds, performance bonds, payment bonds, retention and/or warranty bonds or other bonds or similar instruments.

 

“Indebtedness” of any specified Person means (a) all obligations of such specified Person for borrowed money or arising out of any extension of credit to or for the account of such specified Person (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments), (b) all obligations of such specified Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such specified Person upon which interest charges are customarily paid, (d) all obligations of such specified Person under conditional sale or other title retention agreements relating to Assets purchased by such specified Person, (e) all obligations of such specified Person issued or assumed as the deferred purchase price of property or services, (f) all Liabilities secured by (or for which any Person to which any such Liability is owed has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge or other encumbrance on property owned or acquired by such specified Person (or upon any revenues, income or profits of such specified Person therefrom), whether or not the obligations secured thereby have been assumed by the specified Person or otherwise become Liabilities of the specified Person, (g) all capital lease obligations of such specified Person, (h) all securities or other similar instruments convertible or exchangeable into any of the foregoing, and (i) any Liability of others of a type described in any of the preceding clauses (a) through (h) in respect of which the specified Person has incurred, assumed or acquired a Liability by means of a Guarantee.

 

“Interest Rate” means a rate of interest at three (3) month London Interbank Offer Rate (LIBOR), compounded semiannually or such other rate of interest as agreed to by Ashford Inc. and Ashford Trust OP, from the due date of the payment to the date paid.

 

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“IRS” means the United States Internal Revenue Service.

 

“Law” means any law, statute, ordinance, code, rule, regulation, order, writ, proclamation, judgment, injunction or decree of any Governmental Authority.

 

“Liabilities” means any and all Indebtedness, liabilities and obligations, whether accrued, fixed or contingent, mature or inchoate, known or unknown, reflected on a balance sheet or otherwise, including those arising under any Law, Action or any judgment of any Governmental Authority or any award of any arbitrator of any kind, and those arising under any Contract.

 

“Losses” means any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, interest costs, Taxes, fines and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).

 

“Party” or “Parties” any one of, or collectively, the parties to this Agreement, as set forth in the preamble to this Agreement.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, a union, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

 

“Responsible Company” means, with respect to any Tax Return, the Person having responsibility for preparing and filing such Tax Return under this Agreement.

 

“Separation and Distribution Agreement” means the Separation and Distribution Agreement, as amended from time to time, Ashford Hospitality Trust, Inc., a Maryland corporation, Ashford Hospitality Limited Partnership, a Delaware limited partnership, Ashford Inc., a Delaware corporation, and Ashford Hospitality Advisors LLC, a Delaware limited liability company and a wholly-owned subsidiary of Ashford Trust OP prior to the separation and distribution, dated as of                      , 2014.

 

“Subsidiary” means, with respect to any specified Person, any corporation, partnership, limited liability company, joint venture or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or that otherwise constitutes control of such corporation or other organization, is directly or indirectly owned or controlled by such specified Person or by any one or more of its subsidiaries, or by such specified Person and one or more of its subsidiaries.

 

“Tax Benefit” means any refund, credit or other reduction in otherwise required Tax payments.

 

“Tax Contest” has the meaning set forth in Section 2.5.

 

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“Tax Detriment” means any increase in required Tax payments (or, without duplication, the reduction in any refund or credit).

 

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

“Taxes” means all taxes, charges, fees, duties, levies, imposts or other assessments imposed by any federal, state, local or foreign Taxing Authority, including, but not limited to, income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added and other taxes, and any interest, penalties or additions attributable thereto.

 

“Taxing Authority” means any Governmental Authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

 

Section 1.2                                    Interpretation.  In this Agreement, unless the context clearly indicates otherwise:

 

(a)                                 words used in the singular include the plural and words used in the plural include the singular;

 

(b)                                 the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;

 

(c)                                  the word “or” shall have the inclusive meaning represented by the phrase “and/or”;

 

(d)                                 relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”;

 

(e)                                  accounting terms used herein shall have the meanings historically ascribed to them by Ashford Trust and its Subsidiaries in its and their internal accounting and financial policies and procedures in effect immediately prior to the date of this Agreement;

 

(f)                                   reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

 

(g)                                  reference to any Law means such Law (including any and all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

 

(h)                                 references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the

 

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Distribution and any reference to a third party shall be deemed to mean a Person who is not a Party or an Affiliate of a Party;

 

(i)                                     if there is any conflict between the provisions of this Agreement and the Separation and Distribution Agreement, the provisions of the Separation and Distribution Agreement shall control (but only with respect to the subject matter thereof) unless explicitly stated otherwise therein; and

 

(j)                                    any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be.

 

ARTICLE II
 TAX MATTERS

 

Section 2.1                                    Tax Returns.  The following provisions shall govern the allocation of responsibility and payment of Taxes as between Ashford Trust OP and Ashford Inc. and for certain Tax matters following the Distribution Date:

 

(a)                                 Ashford Trust OP shall prepare or cause to be prepared and file or cause to be filed, subject to the review and reasonable approval of Ashford Inc., all Tax Returns for each member of the Ashford Trust Group that becomes a member of the Ashford Inc. Group as of the Distribution Date for all periods ending on or prior to the Distribution Date that are required to be filed after the Distribution Date.  Ashford Inc. hereby recognizes Ashford Trust OP’s authority to execute and file, on behalf of each such member of the Ashford Trust Group, all such Tax Returns (and agrees to take all action necessary to ensure such authorization in conformity with applicable Law and principles of good governance generally).  To the extent not otherwise paid by Ashford Trust OP to the appropriate Taxing Authority, Ashford Trust OP shall reimburse Ashford Inc. for Taxes of the relevant member of the Ashford Trust Group with respect to all such Tax Returns within five (5) Business Days after payment by Ashford Inc. and/or any member of the Ashford Inc. Group of such Taxes.  All such Tax Returns shall be prepared in a manner that is consistent with the past custom and practice of the applicable member of the Ashford Trust Group, except as required by a change in applicable Law.  The Parties acknowledge that Ashford Trust OP may require the Ashford Inc. Group to prepare any Tax Returns for which Ashford Trust OP is responsible pursuant to this Section 2.1(a).  In such instance, the Ashford Inc. Group shall provide any assistance as may be reasonably requested by Ashford Trust OP with respect to the preparation of such Tax Returns, including the provision of services by employees of the Ashford Inc. Group in preparing such Tax Returns.

 

(b)                                 Ashford Inc. shall prepare or cause to be prepared and file or cause to be filed, subject to the review and reasonable approval of Ashford Trust OP, any Tax Returns of any member of the Ashford Trust Group that becomes a member of the Ashford Inc. Group as of the Distribution Date for Tax periods which begin before the Distribution Date and end after the Distribution Date.  Ashford Trust OP shall pay to Ashford Inc., within five (5) Business Days before the date on which Taxes are to be paid with respect to such periods, an amount equal to the portion of such Taxes which relates to the portion of such Tax period ending on the

 

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Distribution Date.  For purposes of this Section 2.1(b), in the case of any Taxes that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Distribution Date, the portion of such Tax which relates to the portion of such Tax period ending on the Distribution Date shall (x) in the case of any Taxes other than Taxes based upon or related to income, gains or receipts (including sales and use Taxes), or employment or payroll Taxes, be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on the Distribution Date and the denominator of which is the number of days in the entire Tax period, and (y) in the case of any Tax based upon or related to income, gains or receipts (including sales and use Taxes), or employment or payroll Taxes, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Distribution Date.  Any credits relating to a Tax period that begins before and ends after the Distribution Date shall be taken into account as though the relevant Tax period ended on the Distribution Date.  All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with reasonable prior practice of the Ashford Trust Group.

 

(c)                                  Ashford Inc. shall prepare and cause to be prepared and file or cause to be filed all other Tax Returns of the Ashford Inc. Group.

 

(d)                                 In the case of any adjustment pursuant to a Final Determination with respect to any such Tax Return, the Responsible Company shall pay to the applicable Taxing Authority when due any additional Tax due with respect to such Tax Return required to be paid as a result of such adjustment pursuant to a Final Determination. The Responsible Company shall compute the amount attributable to the Ashford Inc. Group in accordance with Article II and Ashford Inc. shall pay to Ashford Trust OP any amount due Ashford Trust OP (or Ashford Trust OP shall pay to Ashford Inc. any amount due to Ashford Inc.) under Article II within 30 days from the later of (i) the date the additional Tax was paid by the Responsible Company or (ii) the date of receipt of a written notice and demand from the Responsible Company for payment of the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. Any payments required under this Section 2.1(d) shall include interest computed at the Interest Rate based on the number of days from the date the additional Tax was paid by the Responsible Company to the date of the payment under this Section 2.1(d).

 

Section 2.2                                    Tax Indemnity.

 

(a)                                 Ashford Trust OP shall be liable for, and shall indemnify and hold harmless the Ashford Inc. Group from and against any Losses attributable to, Taxes that are allocated to Tax periods for which Ashford Trust OP is responsible under Section 2.1.

 

(b)                                 Ashford Inc. shall be liable for, and shall indemnify and hold harmless the Ashford Trust Group from and against any Losses attributable to, Taxes that are allocated to Tax periods for which Ashford Inc. is responsible under Section 2.1.

 

Section 2.3                                    Cooperation.  The Parties agree (i) to retain all books and records with respect to Tax matters pertinent to the members of the Ashford Trust Group that become members of the Ashford Inc. Group as of the Distribution Date and their respective assets or

 

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businesses relating to any taxable period beginning before the Distribution Date until the expiration of the statute of limitations (and, to the extent notified by any member of the Ashford Inc. Group, any extensions thereof) of the respective Tax periods, and to abide by all record retention agreements entered into with any Taxing Authority, and (ii) to give Ashford Inc. reasonable written notice prior to transferring, destroying or discarding any such books and records and, if Ashford Inc. so requests, Ashford Trust OP shall allow Ashford Inc. to take possession of such books and records at Ashford Inc.’s expense.

 

Section 2.4                                    Transfer Taxes.  All sales, use and transfer taxes, bulk transfer taxes, deed taxes, conveyance fees, documentary and recording charges and similar taxes imposed as a result of the transactions contemplated by this Agreement, together with any interest, penalties or additions to such transfer taxes or attributable to any failure to comply with any requirement regarding Tax Returns (“Transfer Taxes”), shall be paid by Ashford Inc.  Ashford Inc. and Ashford Trust OP shall cooperate in filing all necessary Tax Returns under applicable Law with respect to Transfer Taxes.

 

Section 2.5                                    Tax Contests.  Ashford Inc. shall inform Ashford Trust OP of the commencement of any audit, examination or proceeding (“Tax Contest”) relating in whole or in part to Taxes for which any member of the Ashford Inc. Group may be entitled to indemnity from Ashford Trust OP hereunder.  With respect to any Tax Contest for which Ashford Trust OP acknowledges in writing that Ashford Trust OP is liable under this Article II for any and all Losses relating thereto, Ashford Trust OP shall be entitled to control, in good faith, all proceedings taken in connection with such Tax Contest; provided, however, that (x) Ashford Trust OP shall promptly notify Ashford Inc. in writing of its intention to control such Tax Contest, (y) in the case of a Tax Contest relating to Taxes of any member of the Ashford Inc. Group for a Tax period that includes but does not end on the Distribution Date covered in Section 2.1(b), Ashford Trust OP and Ashford Inc. shall jointly control all proceedings taken in connection with any such Tax Contest and (z) if any Tax Contest could reasonably be expected to have an adverse effect on any member of the Ashford Inc. Group in any Tax period beginning after the Distribution Date, the Tax Contest shall not be settled or resolved without Ashford Inc.’s consent, which consent shall not be unreasonably withheld or delayed.  Notwithstanding the foregoing, if notice is given to Ashford Trust OP of the commencement of any Tax Contest and Ashford Trust OP does not, within ten (10) Business Days after Ashford Inc.’s notice is given, give notice to Ashford Inc. of its election to assume the defense thereof (and in connection therewith, acknowledge in writing the indemnification obligation hereunder of Ashford Trust OP), each member of the Ashford Trust Group shall be bound by any determination made in such Tax Contest or any compromise or settlement thereof effected by Ashford Inc.  The failure of Ashford Inc. to give reasonably prompt notice of any Tax Contest shall not release, waive or otherwise affect Ashford Trust OP’s obligation with respect thereto except to the extent that Ashford Trust OP can demonstrate actual loss and prejudice as a result of such failure.  Each member of the Ashford Inc. Group shall use its reasonable efforts to provide Ashford Trust OP with such assistance as may be reasonably requested by Ashford Trust OP in connection with a Tax Contest controlled solely or jointly by Ashford Trust OP.

 

Section 2.6                                    Carrybacks.  Ashford Inc. hereby agrees that, unless Ashford Trust OP consents in writing, no Adjustment Request with respect to any Tax Return for any Tax Period covered by Section 2.1(a) shall be filed.

 

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Section 2.7                                    Tax Refunds; Tax Benefits.

 

(a)                                 Except as set forth below, Ashford Trust OP shall be entitled to any refund (and any interest thereon received from the applicable Taxing Authority) of Taxes for which Ashford Trust OP is liable hereunder, and Ashford Inc. shall be entitled to any refund (and any interest thereon received from the applicable Taxing Authority) of Taxes for which Ashford Inc. is liable hereunder, and a member of a Group receiving a refund to which a member of the other Group is entitled hereunder shall pay over such refund to member of the other Group within 30 days after such refund is received (together with interest computed at the Interest Rate based on the number of days from the date the refund was received to the date the refund was paid over).

 

(b)                                 If as a result of an adjustment pursuant to a Final Determination to any Taxes for which Ashford Trust OP is liable hereunder (or Tax Attribute of a member of the Ashford Trust Group) a member of the Ashford Inc. Group could realize a current or future Tax Benefit that it could not realize but for such adjustment (determined on a with and without basis), or if as a result of an adjustment pursuant to a Final Determination to any Taxes for which Ashford Inc. is liable hereunder (or Tax Attribute of a member of the Ashford Inc. Group) a member of the Ashford Trust Group could realize a current or future Tax Benefit that it could not realize but for such adjustment (determined on a with and without basis), Ashford Inc. or Ashford Trust OP, as the case may be, shall make a payment to either Ashford Trust OP or Ashford Inc., as appropriate, within 30 days following the date of a written notice and demand from Ashford Trust OP or Ashford Inc., as appropriate, for payment of the amount due, accompanied by evidence of such adjustment and describing in reasonable detail the particulars relating thereto. Any payment required under this Section 2.7(b) shall include interest on such payment computed at the Interest Rate based on the number of days from the date of such written notice to the date of payment under this Section 2.7(b).  If Ashford Trust OP or Ashford Inc. disagrees with any such calculation described in this Section 2.7(b), Ashford Trust OP or Ashford Inc. shall so notify the other in writing within 30 days of receiving the written calculation set forth above in this Section 2.7(b). Ashford Trust OP and Ashford Inc. shall endeavor in good faith to resolve such disagreement.

 

(c)                                  If a member of the Ashford Inc. Group actually realizes in cash pursuant to a Final Determination any Tax Detriment as a result of an adjustment pursuant to a Final Determination to any Taxes for which Ashford Trust OP is liable hereunder (or Tax Attribute of a member of the Ashford Trust Group) (in such circumstance, Ashford Trust OP being the “Adjusted Party”) and such Tax Detriment would not have arisen but for such adjustment (determined on a with and without basis), or if a member of the Ashford Trust Group actually realizes in cash pursuant to a Final Determination any Tax Detriment as a result of an adjustment pursuant to a Final Determination to any Taxes for which a Ashford Inc. is liable hereunder (or Tax Attribute of a member of the Ashford Inc. Group) (in such circumstance, Ashford Inc. being the “Adjusted Party”) and such Tax Detriment would not have arisen but for such adjustment (determined on a with and without basis), the Adjusted Party shall make a payment to the other party within 30 days following the later of such actual realization of the Tax Detriment and the Adjusted Party’s actual realization of the corresponding Tax Benefit, in an amount equal to the lesser of such Tax Detriment actually realized in cash and the Tax Benefit, if any, actually realized in cash by the Adjusted Party pursuant to such adjustment (which would not have arisen but for such adjustment), plus interest on such amount computed at the Interest Rate based on the

 

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number of days from the later of the date of such actual realization of the Tax Detriment and the Adjusted Party’s actual realization of the corresponding Tax Benefit to the date of payment of such amount under this Section 2.7(c).  No later than 30 days after a Tax Detriment described in this Section 2.7(c) is actually realized in cash by a member of the Ashford Trust Group or a member of the Ashford Inc. Group, Ashford Trust OP (if a member of the Ashford Trust Group actually realizes such Tax Detriment) or Ashford Inc. (if a member of the Ashford Inc. Group actually realizes such Tax Detriment) shall provide the other company with a written calculation of the amount payable pursuant to this Section 2.7(c). In the event that Ashford Trust OP or Ashford Inc. disagrees with any such calculation described in this Section 2.7(c), Ashford Trust OP or Ashford Inc. shall so notify the other in writing within 30 days of receiving the written calculation set forth above in this Section 2.7(c). Ashford Trust OP and Ashford Inc. shall endeavor in good faith to resolve such disagreement.

 

ARTICLE III
 TERMINATION

 

Section 3.1                                    Termination.  Upon written notice, this Agreement may be terminated at any time prior to the Effective Time by and in the sole discretion of Ashford Trust or Ashford Trust OP without the approval of any other Party.

 

Section 3.2                                    Effect of Termination.  In the event of termination pursuant to Section 3.1, no Party shall have any Liability of any kind to any other Parties.

 

ARTICLE IV
 MISCELLANEOUS

 

Section 4.1                                    Further Assurances.  Subject to the limitations or other provisions of this Agreement, (a) each Party shall, and shall cause the other members of its Group to, use commercially reasonable efforts (subject to, and in accordance with applicable Law) to take promptly, or cause to be taken promptly, all actions, and to do promptly, or cause to be done promptly, and to assist and cooperate with the other Parties in doing, all things reasonably necessary, proper or advisable to consummate and make effective this Agreement and to carry out the intent and purposes of this Agreement, including using commercially reasonable efforts to perform all covenants and agreements herein applicable to such Party or any member of its Group and (b) no Party will, nor will any Party allow any other member of its Group to, without the prior written consent of the other Parties, take any action which would reasonably be expected to prevent or materially impede, interfere with or delay any of the actions contemplated by this Agreement. Without limiting the generality of the foregoing, where the cooperation of third parties, such as lenders, joint venture partners, franchisors, insurers or trustees, would be necessary in order for a Party to completely fulfill its obligations under this Agreement, such Party shall use commercially reasonable efforts to cause such third parties to provide such cooperation.

 

Section 4.2                                    Payment of Expenses.  All costs and expenses incurred and directly related to the obligations set forth for a Party in this Agreement shall be paid by the Party incurring such cost or expense.

 

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Section 4.3                                    Amendments and Waivers.

 

(a)                                 Subject to Section 3.1, this Agreement may not be amended except by an agreement in writing signed by all Parties.

 

(b)                                 Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the Party entitled to the benefit thereof and any such waiver shall be validly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized representative of such Party. No delay or failure in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that any Party would otherwise have.

 

Section 4.4                                    Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior negotiations, agreements, commitments, writings, courses of dealing and understandings with respect to the subject matter hereof.

 

Section 4.5                                    Survival of Agreements.  Except as otherwise expressly contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms.

 

Section 4.6                                    Third Party Beneficiaries.  This Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

Section 4.7                                    Notices. All notices, requests, permissions, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) five (5) Business Days following sending by registered or certified mail, postage prepaid, (b) when sent, if sent by facsimile, (c) when delivered, if delivered personally to the intended recipient, and (d) one (1) Business Day following sending by overnight delivery via a national courier service and, in each case, addressed to a Party at the following address for such Party:

 

(a)                                 The Ashford Trust Group

 

If to Ashford Trust:

 

Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

Attention:  Chief Executive Officer

Phone: (972) 490-9600

 

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If to Ashford Trust OP:

 

Ashford Hospitality Limited Partnership

c/o Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

Attention:  Chief Operating Officer

Phone: (972) 490-9600

 

In each case, with a copy to:

 

Andrews Kurth LLP

1717 Main Street, Suite 1700

Dallas, TX 75201

Attention: Muriel C. McFarling

 

(b)                                 The Ashford Inc. Group

 

If to Ashford Inc.:

 

Ashford Inc.

c/o Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

Attention: Chief Executive Officer

Phone: (972) 490-9600

 

If to Ashford LLC:

 

Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

Attention: Chief Operating Officer

Phone: (972) 490-9600

 

With a copy to:

 

Andrews Kurth LLP

1717 Main Street, Suite 1700

Dallas, TX 75201

Attention: Muriel C. McFarling

 

Section 4.8                                    Counterparts; Electronic Delivery.  This Agreement may be executed in multiple counterparts, each of which when executed shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Execution and delivery of this Agreement or any other documents pursuant to this Agreement by facsimile or

 

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other electronic means shall be deemed to be, and shall have the same legal effect as, execution by an original signature and delivery in person.

 

Section 4.9                                    Severability.  If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

 

Section 4.10                             Assignability; Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns; provided, however, that the rights and obligations of each Party under this Agreement shall not be assignable, in whole or in part, directly or indirectly, whether by operation of law or otherwise, by such Party without the prior written consent of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed) and any attempt to assign any rights or obligations under this Agreement without such consent shall be null and void. Notwithstanding the foregoing, any Party may assign its rights and obligations under this Agreement to any of their respective Affiliates provided that no such assignment shall release such assigning Party from any liability or obligation under this Agreement.

 

Section 4.11                             Governing Law; Venue.  This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Texas, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.  The parties hereto agree that venue for any action in connection herewith shall be proper in Dallas County, Texas.  Each party hereto consents to the jurisdiction of any local, state or federal court situated in any of such locations and waives any objection which it may have pertaining to improper venue or forum non conveniens to the conduct of any proceeding in any such court.

 

Section 4.12                             Performance.  Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.

 

Section 4.13                             Title and Headings.  Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

[Signature Page(s) Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective officers as of the date first set forth above.

 

 

	
 
    	
ASHFORD   HOSPITALITY TRUST, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks, Chief Operating
    
	
 
    	
 
    	
Officer   and General Counsel
    

 

[Signature Page to Tax Matters Agreement]

 

 

	
 
    	
ASHFORD   HOSPITALITY LIMITED PARTNERSHIP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Ashford   OP General Partner LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
David   A. Brooks
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

[Signature Page to Tax Matters Agreement]

 

 

	
 
    	
ASHFORD   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks, Chief Operating
    
	
 
    	
 
    	
Officer   and General Counsel
    

 

[Signature Page to Tax Matters Agreement]

 

 

	
 
    	
ASHFORD   HOSPITALITY ADVISORS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks, Chief Operating
    
	
 
    	
 
    	
Officer   and General Counsel
    

 

[Signature Page to Tax Matters Agreement]

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