Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NO. 3

TO

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ASHFORD HOSPITALITY LIMITED PARTNERSHIP 

March 21, 2008

     This Amendment No. 3 to Third Amended and Restated Agreement of Limited Partnership of Ashford
Hospitality Limited Partnership (this “Amendment”) is made as of the date first set forth above by
Ashford OP General Partner, LLC, a Delaware limited liability company, as general partner (the
“General Partner”) of Ashford Hospitality Limited Partnership, a Delaware limited partnership (the
“Partnership”), pursuant to the authority granted to the General Partner in the Third Amended and
Restated Agreement of Limited Partnership of Ashford Hospitality Limited Partnership, dated as of
May 7, 2007, as amended by Amendment No. 1 to the Third Amended and Restated Agreement of Limited
Partnership of Ashford Hospitality Limited Partnership, dated as of July 18, 2007, and Amendment
No. 2 to the Third Amended and Restated Agreement of Limited Partnership, dated as of February 6,
2008 (as so amended, the “Partnership Agreement”), for the purpose of issuing additional
Partnership Units in the form of Long Term Incentive Units (“LTIP Units”). Capitalized terms used
and not defined herein shall have the meanings set forth in the Partnership Agreement.

     WHEREAS, Section 11.1(b) of the Partnership Agreement permits the General Partner, without the
consent of the Limited Partners, to amend the Partnership Agreement for the purpose of setting
forth and reflecting in the Partnership Agreement the admission, substitution or withdrawal of
Limited Partners or the issuance of additional Partnership Interests pursuant to Section 4.3(a) of
the Partnership Agreement;

     WHEREAS, the General Partner desires to so amend the Partnership Agreement as of the date
first set forth above;

     WHEREAS, pursuant to the Ashford Hospitality Trust, Inc. Amended and Restated 2003 Stock
Incentive Plan, as amended and/or one or more successor or additional equity incentive plans or
programs that the Company may adopt after the date hereof, as amended (each individually and all of
them collectively, as the context requires, the “Plan”), the Company and the General Partner
resolved to grant to executives of the Company and its subsidiaries, including the Partnership,
Other Stock-Based Awards (as defined in the Plan), which include the issuance to such executives of
a Partnership Interest having the rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption and conversion set forth
herein, such Partnership Interest to be expressed as a number of Partnership Units to be referred
to as Long Term Incentive Units (“LTIP Units”); and

     WHEREAS, the issuance of LTIP Units is permitted by Section 4.3(a) of the Partnership
Agreement.

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     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the General Partner
has set forth in this Amendment pursuant to its authority under Sections 4.3(a) and 6.1(t) of the
Partnership Agreement the following description of the rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of redemption and
conversion of a class and series of Partnership Interest which shall be referred to as “LTIP
Units”:

     1. Article I of the Partnership Agreement is hereby amended to add the following definitions:

     “Adjustment Event” shall have the meaning set forth in Section 4.3(d)
hereof.

     “Capital Account Limitation” shall have the meaning set forth in Section
7.9(b) hereof.

     “Common Partnership Unit Distribution” shall have the meaning set forth in
Section 4.3(d) hereof.

     “Common Partnership Unit Economic Balance” shall have the meaning set forth
in Section 5.5 hereof.

     “Constituent Person” shall have the meaning set forth in Section 7.9(f)
hereof.

     “Conversion Date” shall have the meaning set forth in Section 7.9(b)
hereof.

     “Conversion Notice” shall have the meaning set forth in Section 7.9(b)
hereof.

     “Conversion Right” shall have the meaning set forth in Section 7.9(a)
hereof.

     “Distribution Payment Date” shall mean the dates upon which the General
Partner makes distributions in accordance with Section 8.1 hereof.

     “Economic Capital Account Balance” shall have the meaning set forth in
Section 5.5 hereof.

     “Forced Conversion” shall have the meaning set forth in Section 7.9(c)
hereof.

     “Forced Conversion Notice” shall have the meaning set forth in
Section 7.9(c) hereof.

     “Full Distribution Amount” shall have the meaning set forth in
Section 8.1(a) hereof.

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     “Ineligible Unit” shall have the meaning set forth in Section 5.5 hereof.

     “LTIP Unit” shall mean a Partnership Unit that is designated as an LTIP
Unit and which has the rights, preferences and other privileges designated in
Sections 4.3(d) and 4.3(e) hereof and elsewhere in the Partnership Agreement in
respect of LTIP Unitholders. The allocation of LTIP Units among the Partners
shall be set forth on Exhibit A, as may be amended from time to time.

     “LTIP Unitholder” shall mean a Partner that holds LTIP Units.

     “Target Balance” shall have the meaning set forth in Section 5.5(a) hereof.

     “Unit Transaction” shall have the meaning set forth in Section 7.9(f)
hereof.

     “Unvested Incentive Units” shall have the meaning set forth in Section
4.3(e)(i) hereof.

     “Vested LTIP Units” shall have the meaning set forth in Section 4.3(e)(i)
hereof.

     “Vesting Agreement” shall mean each or any, as the context implies, Long
Term Incentive Plan (LTIP) Vesting Agreement entered into by a LTIP Unitholder
upon acceptance of an award of LTIP Units under the Plan (as such agreement may
be amended, modified or supplemented from time to time).

     2. Article I is hereby amended to amend and restate the following definitions in their
entirety as follows:

     “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, subject to Sections 4.3(d) and 4.3(e) which
treat LTIP Units as Common Partnership Units for this purpose.

     “Partnership Unit” shall mean a Common Partnership Unit, a Preferred
Partnership Unit, an LTIP 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.

     3. Article I is hereby amended by adding the following paragraph to the end thereof:

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     For purposes of this Agreement, the term “Common Partnership Unit” includes the
term “Common Unit”, the term “Preferred Partnership Unit” includes the term “Preferred
Unit”, and the term “Partnership Unit” includes the term “Unit.”

     4. The following subsections (d) and (e) shall be appended to Section 4.3 of the Partnership
Agreement:

     (d) LTIP UNITS. The General Partner may from time to time issue LTIP
Units to Persons who provide services to the Partnership, for such consideration
as the General Partner may determine to be appropriate, and admit such Persons
as Limited Partners. The Capital Accounts of such LTIP Unitholders shall be
credited with the amount of their respective Capital Contributions pursuant to
Section 5.3. Except to the extent a Capital Contribution is made with respect
to an LTIP Unit, an LTIP Unit is intended to qualify as a “profits interest” in
the Partnership. Subject to the provisions of Sections 4.3(d) and 4.3(e) and
the special provisions of Sections 5.5, 7.9 and 7.10, LTIP Units shall be
treated as Common Partnership Units, with all of the rights, privileges and
obligations attendant thereto. For purposes of computing the Common Percentage
Interests, holders of LTIP Units shall be treated as Common Partnership
Unitholders and LTIP Units shall be treated as Common Partnership Units. In
particular, the Partnership shall comply with the following procedures:

     (i) If an Adjustment Event (as defined below) occurs, then the
General Partner shall make a corresponding adjustment to the LTIP
Units to maintain a one-for-one conversion and economic equivalence
ratio between Common Partnership Units and LTIP Units. The
following shall be “Adjustment Events”: (A) the Partnership makes a
distribution on all outstanding Common Partnership Units in
Partnership Units, (B) the Partnership subdivides the outstanding
Common Partnership Units into a greater number of units or combines
the outstanding Common Partnership Units into a smaller number of
units, or (C) the Partnership issues any Partnership Units in
exchange for its outstanding Common Partnership Units by way of a
reclassification or recapitalization of its Common Partnership
Units. If more than one Adjustment Event occurs, the adjustment to
the LTIP Units need be made only once using a single formula that
takes into account each and every Adjustment Event as if all
Adjustment Events occurred simultaneously. For the avoidance of
doubt, the following shall not be Adjustment Events: (x) the
issuance of Partnership Units in a financing, reorganization,
acquisition or other similar business transaction, (y) the issuance
of Partnership Units pursuant to any employee benefit or
compensation plan or distribution reinvestment plan, or (z) the
issuance of any Partnership Units to Ashford OP Limited
Partner, LLC in respect of a capital contribution to the Partnership
of

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proceeds from the sale of securities by the Company. If the
Partnership takes an action affecting the Common Partnership Units
other than actions specifically described above as “Adjustment
Events” and in the opinion of the General Partner such action would
require an adjustment to the LTIP Units to maintain the one-to-one
correspondence described above, the General Partner shall have the
right to make such adjustment to the LTIP Units, to the extent
permitted by law and by the Plan, in such manner and at such time as
the General Partner, in its sole discretion, may determine to be
appropriate under the circumstances. If an adjustment is made to
the LTIP Units as herein provided the Partnership shall promptly
file in the books and records of the Partnership an officer’s
certificate setting forth such adjustment and a brief statement of
the facts requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustment absent
manifest error. Promptly after filing of such certificate, the
Partnership shall mail a notice to each LTIP Unitholder setting
forth the adjustment to his or her LTIP Units and the effective date
of such adjustment; and

     (ii) Subject to the provisions of Section 10.4, the LTIP
Unitholders shall, in respect of each Distribution Payment Date,
when, as and if authorized and declared by the General Partner out
of assets legally available for that purpose, be entitled to receive
distributions in an amount per LTIP Unit equal to the distributions
per Common Partnership Unit (the “Common Partnership Unit
Distribution”), paid to holders of record on the same Partnership
Record Date established by the General Partner with respect to such
Distribution Payment Date. The term “Newly Issued Common Unit”
shall be deemed to include LTIP Units issued during a Distribution
Period and Section 8.1(a) shall apply in full to LTIP Units. During
any Distribution Period, so long as any LTIP Units are outstanding,
except upon liquidation of the Partnership and as provided in the
following sentence and Section 10.4, no distributions (whether in
cash or in kind) shall be authorized, declared or paid on Common
Partnership Units, unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP
Units for such Distribution Period.

     The LTIP Units shall rank pari passu with the Common Partnership Units as
to the payment of regular and special periodic or other distributions and
distribution of assets upon liquidation, dissolution or winding up, provided
upon liquidation the amount distributed with respect to a LTIP Unit shall be
limited to the related Capital Account balance as provided by
Section 10.4. As to the payment of distributions and as to distribution of
assets upon liquidation, dissolution or winding up, any class or series of
Partnership Units or Partnership Interests which by its terms specifies that it

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shall rank junior to, on a parity with, or senior to the Common Partnership
Units shall also rank junior to, or pari passu with, or senior to, as the case
may be, the LTIP Units. Subject to the terms of any Vesting Agreement, a LTIP
Unitholder shall be entitled to transfer his or her LTIP Units to the same
extent, and subject to the same restrictions as holders of Common Partnership
Units are entitled to transfer their Common Partnership Units pursuant to
Article IX.

     (e) LTIP Units shall be subject to the following special provisions:

     (i) VESTING AGREEMENTS. LTIP Units may, in the sole
discretion of the General Partner, be issued subject to vesting,
forfeiture and additional restrictions on transfer pursuant to the
terms of a Vesting Agreement. The terms of any Vesting Agreement
may be modified by the General Partner from time to time in its sole
discretion, subject to any restrictions on amendment imposed by the
relevant Vesting Agreement or by the Plan, if applicable. LTIP
Units that have vested under the terms of a Vesting Agreement are
referred to as “Vested LTIP Units”; all other LTIP Units shall be
treated as “Unvested Incentive Units.”

     (ii) FORFEITURE. Unless otherwise specified in the Vesting
Agreement, upon the occurrence of any event specified in a Vesting
Agreement as resulting in the right of the Partnership to repurchase
LTIP Units at a specified purchase price or some other forfeiture of
any LTIP Units, then if the Partnership exercises such right to
repurchase or forfeiture in accordance with the applicable Vesting
Agreement, then the relevant LTIP Units shall immediately, and
without any further action, be treated as cancelled and no longer
outstanding for any purpose. Unless otherwise specified in the
Vesting Agreement, no consideration or other payment shall be due
with respect to any LTIP Units that have been forfeited, other than
any distributions declared with respect to a Partnership Record Date
prior to the effective date of the forfeiture. In connection with
any repurchase or forfeiture of LTIP Units, the balance of the
portion of the Capital Account of the LTIP Unitholder that is
attributable to all of his or her LTIP Units shall be reduced by the
amount, if any, by which it exceeds the Target Balance contemplated
by Section 5.5, calculated with respect to the LTIP Unitholder’s
remaining LTIP Units, if any, with such reduction being accomplished
by an allocation of gross deductions or losses to the applicable
LTIP Unitholder.

     (iii) ALLOCATIONS. LTIP Units shall generally be treated as
Common Partnership Units for purposes of Article V, but LTIP
Unitholders shall also be entitled to certain special allocations of
gain under Section 5.5.

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     (iv) REDEMPTION. The Redemption Right provided to Limited
Partners under Section 7.4 shall not apply with respect to LTIP
Units unless and until they are converted to Common Partnership
Units as provided in clause (vi) below and Section 7.9.

     (v) LEGEND. Any certificate evidencing an LTIP Unit shall
bear an appropriate legend indicating that additional terms,
conditions and restrictions on transfer, including without
limitation any Vesting Agreement, apply to the LTIP Unit.

     (vi) CONVERSION TO COMMON PARTNERSHIP UNITS. Vested LTIP
Units are eligible to be converted into Common Partnership Units
under Section 7.9.

     (vii) VOTING. LTIP Units shall have the voting rights
provided in Section 7.10.

     (viii) ISSUANCE. An LTIP Unit shall be considered issued to an
LTIP Unitholder upon the later to occur of: (i) execution of a
counterpart signature page to this Agreement, unless such Person is
already a Limited Partner, (ii) execution by such LTIP Unitholder
and the Partnership of a Vesting Agreement with respect to such LTIP
Unit, if applicable, and (iii) payment to the Partnership of the
Capital Contribution, if any, provided for in the related Vesting
Agreement.

     5. The following Section 5.5 shall be appended to Article V of the Partnership Agreement:

     Section 5.5 SPECIAL ALLOCATION OF GAIN TO LTIP UNITHOLDERS. Notwithstanding
the provisions of Section 5.1 above, but subject to the prior allocation of income, gain,
deduction and loss under the terms of the Agreement in respect of any class of Partnership
Interests ranking senior to the LTIP Units with respect to return of capital or any
preferential or priority return, any net capital gains realized in connection with the
actual or hypothetical sale of all or substantially all of the assets of the Partnership,
including but not limited to net capital gain realized in connection with an adjustment to
the Agreed Value of Partnership assets under Section 704(b) of the Code, shall first be
allocated to the LTIP Unitholders until the Economic Capital Account Balances of such
Limited Partners, to the extent attributable to their ownership of LTIP Units, are equal to
(i) the Common Partnership Unit Economic Balance, multiplied by (ii) the number of their
LTIP Units. For this purpose, the “Economic Capital Account Balances” of the LTIP
Unitholders will be equal to their Capital Account balances, plus the amount of
their shares of any Partner Minimum Gain or Partnership Minimum Gain, in either case to
the extent attributable to their ownership of LTIP Units. Similarly, the “Common
Partnership Unit Economic Balance” shall mean (i) the Capital Account Balance of Ashford OP
Limited Partner, LLC, plus the amount of Ashford OP Limited Partner, LLC’s share of any
Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent

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attributable
to Ashford OP Limited Partner, LLC’s ownership of Common Partnership Units and computed on a
hypothetical basis after taking into account all allocations under Article V through the
date on which any allocation is made under this Section 5.5, divided by (ii) the number of
Ashford OP Limited Partner, LLC’s Partnership Common Partnership Units (with respect to each
holder, the “Target Balance”). Any such allocations shall be made among the LTIP
Unitholders in proportion to the amounts required to be allocated to each under this Section
5.5, provided, however, that no amounts will be allocated with respect to
any particular LTIP Unit (each, an “Ineligible Unit”) until all special allocations
pursuant to Part A of Exhibit B with respect to such LTIP Unit have been reversed to the
extent required by paragraph 9 of Part A of Exhibit B. If, notwithstanding the foregoing,
not all LTIP Units (including Ineligible Units) are fully booked up, an LTIP Unitholder may
determine how net capital gains shall be allocated among such LTIP Unitholder’s LTIP Units
(other than Ineligible Units); provided, however, if such LTIP Unitholder does not make such
a determination, net capital gains shall generally be allocated so that the Economic Capital
Account Balance of the maximum amount of Vested LTIP Units held by such LTIP Unitholder is
equal to the Common Partnership Unit Economic Balance on a per Unit basis; provided,
further, that such net capital gains may only be allocated to LTIP Units that are held by
such LTIP Member on the date of the allocation under this Section 5.5. The parties agree
that the intent of this Section 5.5 is to make the Capital Account balances of the LTIP
Unitholders with respect to their LTIP Units economically equivalent to the Capital Account
balance of Ashford OP Limited Partner, LLC (on a per-Partnership Unit basis) with respect to
its Common Partnership Units.

     6. The following Section 7.9 shall be appended to Article VII of the Partnership Agreement.

     Section 7.9 CONVERSION OF LTIP UNITS.

     (a) An LTIP Unitholder shall have the right (the “Conversion Right”), at
his or her option, at any time to convert all or a portion of his or her Vested
LTIP Units into Common Partnership Units; provided, however, that a holder may
not exercise the Conversion Right for less than one thousand (1,000) Vested LTIP
Units or, if such holder holds less than one thousand Vested LTIP Units, all of
the Vested LTIP Units held by such holder. LTIP Unitholders shall not have the
right to convert Unvested Incentive Units into Common Partnership Units until
they become Vested LTIP Units; provided, however, that when a LTIP Unitholder is
notified of the expected occurrence of an event that will cause his or her
Unvested Incentive Units to become Vested LTIP Units, such LTIP Unitholder may
give the Partnership a Conversion Notice conditioned upon and effective as of
the time of vesting and such Conversion Notice, unless subsequently revoked by
the LTIP
Unitholder, shall be accepted by the Partnership subject to such condition.
The General Partner shall have the right at any time to cause a conversion of
Vested LTIP Units into Common Partnership Units. In all cases, the conversion of
any LTIP Units into Common Partnership Units shall be subject to the conditions
and procedures set forth in this Section 7.9.

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     (b) A holder of Vested LTIP Units may convert such LTIP Units into an
equal number of fully paid and non-assessable Common Partnership Units, giving
effect to all adjustments (if any) made pursuant to Sections 4.3(d), 4.3(e) and
5.5. Notwithstanding the foregoing, in no event may a holder of Vested LTIP
Units convert a number of Vested LTIP Units that exceeds (x) the Economic
Capital Account Balance of such LTIP Unitholder, to the extent attributable to
its ownership of LTIP Units, divided by (y) the Common Partnership Unit Economic
Balance, in each case as determined as of the effective date of conversion (the
“Capital Account Limitation”).

     In order to exercise his or her Conversion Right, a LTIP Unitholder shall
deliver a notice (a “Conversion Notice”) in the form attached as Exhibit M (with
a copy to the General Partner) not less than 10 nor more than 60 days prior to a
date (the “Conversion Date”) specified in such Conversion Notice; provided,
however, that if the General Partner has not given to the LTIP Unitholders
notice of a proposed or upcoming Unit Transaction (as defined below) at least
thirty (30) days prior to the effective date of such Unit Transaction, then LTIP
Unitholders shall have the right to deliver a Conversion Notice until the
earlier of (x) the tenth (10th) day after such notice from the General Partner
of a Unit Transaction or (y) the third business day immediately preceding the
effective date of such Unit Transaction. A Conversion Notice shall be provided
in the manner provided in Section 14.5. Each LTIP Unitholder covenants and
agrees with the Partnership that all Vested LTIP Units to be converted pursuant
to this Section 7.9 shall be free and clear of all liens. Notwithstanding
anything herein to the contrary, a holder of LTIP Units may deliver a Redemption
Notice pursuant to Section 7.4 of the Partnership Agreement relating to those
Common Partnership Units that will be issued to such holder upon conversion of
such LTIP Units into Common Partnership Units in advance of the Conversion Date;
provided, however, that the redemption of such Common Partnership Units by the
Partnership shall in no event take place until after the Conversion Date. For
clarity, it is noted that the objective of this paragraph is to put a LTIP
Unitholder in a position where, if he or she so wishes, the Common Partnership
Units into which his or her Vested LTIP Units will be converted can be redeemed
by the Partnership simultaneously with such conversion, with the further
consequence that, if the General Partner elects to assume the Partnership’s
redemption obligation with respect to such Common Partnership Units under
Section 7.4(b) of the Partnership Agreement by delivering to such holder REIT
Common Shares rather than cash, then such holder can have such REIT Common
Shares issued to him or her simultaneously with the conversion of his or her
Vested LTIP Units into Common Partnership Units.
The General Partner shall cooperate with a LTIP Unitholder to coordinate
the timing of the different events described in the foregoing sentence.

     (c) The Partnership, at any time at the election of the General Partner,
may cause any number of Vested LTIP Units held by a LTIP Unitholder to be
converted (a “Forced Conversion”) into an equal number of Common

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Partnership
Units, giving effect to all adjustments (if any) made pursuant to Sections
4.3(d), 4.3(e) and 5.5; provided, however, that the Partnership may not cause a
Forced Conversion of any LTIP Units that would not at the time be eligible for
conversion at the option of such LTIP Unitholder pursuant to Section 7.9(b). In
order to exercise its right of Forced Conversion, the Partnership shall deliver
a notice (a “Forced Conversion Notice”) in the form attached as Exhibit N to the
applicable LTIP Unitholder not less than 10 nor more than 60 days prior to the
Conversion Date specified in such Forced Conversion Notice. A Forced Conversion
Notice shall be provided in the manner provided in Section 14.5.

     (d) A conversion of Vested LTIP Units for which the holder thereof has
given a Conversion Notice or the Partnership has given a Forced Conversion
Notice shall occur automatically after the close of business on the applicable
Conversion Date without any action on the part of such LTIP Unitholder, as of
which time such LTIP Unitholder shall be credited on the books and records of
the Partnership with the issuance as of the opening of business on the next day
of the number of Common Partnership Units issuable upon such conversion. After
the conversion of LTIP Units as aforesaid, the Partnership shall deliver to such
LTIP Unitholder, upon his or her written request, a certificate of the General
Partner certifying the number of Common Partnership Units and remaining LTIP
Units, if any, held by such person immediately after such conversion. The
assignee of any Limited Partner pursuant to Article IX hereof may exercise the
rights of such Limited Partner pursuant to this Section 7.9 and such Limited
Partner shall be bound by the exercise of such rights by the assignee.

     (e) For purposes of making future allocations under Section 5.5 and
applying the Capital Account Limitation, the portion of the Economic Capital
Account Balance of the applicable LTIP Unitholder that is treated as
attributable to his or her LTIP Units shall be reduced, as of the date of
conversion, by the product of the number of LTIP Units converted and the Common
Partnership Unit Economic Balance.

     (f) If the Partnership, the General Partner or the Company shall be a
party to any transaction (including without limitation a merger, consolidation,
unit exchange, self tender offer for all or substantially all Common Partnership
Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership’s assets, but excluding any transaction
which constitutes an Adjustment Event) in each case as a result of which Common
Partnership Units shall be exchanged for or converted into the
right, or the holders of such Partnership Units shall otherwise be
entitled, to receive cash, securities or other property or any combination
thereof (each of the foregoing being referred to herein as a “Unit
Transaction”), then the General Partner shall, immediately prior to the Unit
Transaction, exercise its right to cause a Forced Conversion with respect to the
maximum number of LTIP Units then eligible for conversion, taking into account
any allocations that

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occur in connection with the Unit Transaction or that would
occur in connection with the Unit Transaction if the assets of the Partnership
were sold at the Unit Transaction price or, if applicable, at a value determined
by the General Partner in good faith using the value attributed to the
Partnership Units in the context of the Unit Transaction (in which case the
Conversion Date shall be the effective date of the Unit Transaction).

     In anticipation of such Forced Conversion and the consummation of the Unit
Transaction, the Partnership shall use commercially reasonable efforts to cause
each LTIP Unitholder to be afforded the right to receive in connection with such
Unit Transaction in consideration for the Common Partnership Units into which
his or her LTIP Units will be converted the same kind and amount of cash,
securities and other property (or any combination thereof) receivable upon the
consummation of such Unit Transaction by a holder of the same number of Common
Partnership Units, assuming such holder of Common Partnership Units is not a
Person with which the Partnership consolidated or into which the Partnership
merged or which merged into the Partnership or to which such sale or transfer
was made, as the case may be (a “Constituent Person”), or an Affiliate of a
Constituent Person. In the event that holders of Common Partnership Units have
the opportunity to elect the form or type of consideration to be received upon
consummation of the Unit Transaction, prior to such Unit Transaction the General
Partner shall give prompt written notice to each LTIP Unitholder of such
election, and shall use commercially reasonable efforts to afford the LTIP
Unitholders the right to elect, by written notice to the General Partner, the
form or type of consideration to be received upon conversion of each LTIP Unit
held by such holder into Common Partnership Units in connection with such Unit
Transaction. If a LTIP Unitholder fails to make such an election, such holder
(and any of its transferees) shall receive upon conversion of each LTIP Unit
held him or her (or by any of his or her transferees) the same kind and amount
of consideration that a holder of a Common Partnership Unit would receive if
such Common Partnership Unit holder failed to make such an election.

     Subject to the rights of the Partnership, the General Partner and the
Company, under any Vesting Agreement and the Plan, the Partnership shall use
commercially reasonable effort to cause the terms of any Unit Transaction to be
consistent with the provisions of this Section 7.9(f) and to enter into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of any LTIP Unitholders whose LTIP Units will not be converted into
Common Partnership Units in connection with the Unit Transaction that will (i)
contain provisions enabling the holders of LTIP Units that remain
outstanding after such Unit Transaction to convert their LTIP Units into
securities as comparable as reasonably possible under the circumstances to the
Common Partnership Units and (ii) preserve as far as reasonably possible under
the circumstances the distribution, special allocation, conversion, and other
rights set forth in the Partnership Agreement for the benefit of the LTIP
Unitholders.

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     7. The following Section 7.10 shall be appended to Article VII of the Partnership Agreement:

     Section 7.10 VOTING RIGHTS OF LTIP UNITS. LTIP Unitholders shall
(a) have those voting rights required from time to time by applicable law, if
any, (b) have the same voting rights as a holder of Common Partnership Units,
with the LTIP Units voting as a single class with the Common Partnership Units
and having one vote per LTIP Unit; and (c) have the additional voting rights
that are expressly set forth below. So long as any LTIP Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least a majority of the LTIP Units outstanding at the time, given
in person or by proxy, either in writing or at a meeting (voting separately as a
class), amend, alter or repeal, whether by merger, consolidation or otherwise,
the provisions of the Partnership Agreement applicable to LTIP Units so as to
materially and adversely affect any right, privilege or voting power of the LTIP
Units or the LTIP Unitholders as such, unless such amendment, alteration, or
repeal affects equally, ratably and proportionately the rights, privileges and
voting powers of the holders of Common Partnership Units; but subject, in any
event, to the following provisions:

     (a) With respect to any Unit Transaction, so long as the LTIP
Units are treated in accordance with Section 7.9(f) hereof, the
consummation of such Unit Transaction shall not be deemed to
materially and adversely affect such rights, preferences, privileges
or voting powers of the LTIP Units or the LTIP Unitholders as such;
and

     (b) Any creation or issuance of any Partnership Units or of any
class or series of Partnership Interest including without limitation
additional Common Partnership Units, LTIP Units or Preferred
Partnership Units, whether ranking senior to, junior to, or on a
parity with the LTIP Units with respect to distributions and the
distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers of the LTIP Units or the
LTIP Unitholders as such.

     The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be
required will be effected, all outstanding LTIP Units shall have been
converted into Common Partnership Units.

     8. The Partnership Agreement is amended to incorporate Exhibit M and Exhibit N as Exhibit M
and Exhibit N thereto and to replace Exhibit A thereto with a revised Exhibit A to reflect the
issuance of the LTIP Units from time to time.

12

 

     9. Except as modified herein, all terms and conditions of the Partnership Agreement shall
remain in full force and effect, which terms and conditions the General Partner hereby ratifies and
confirms.

     10. This Amendment shall be construed and enforced in accordance with and governed by the laws
of the State of Delaware, without regard to conflicts of law.

     11. If any provision of this Amendment 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.

13

 

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first set
forth above.

	 	 	 	 	 
	 	ASHFORD OP GENERAL PARTNER, LLC, a 

Delaware limited liability company, as General 

Partner of Ashford Hospitality Limited Partnership

 	 
	 	By:  	 	 
	 	 	David A. Brooks, Vice President 	 
	 	 	 	 
	 

 

 

Exhibit M

to Amendment No. 3 to Third Amended and Restated Agreement of Limited Partnership

of Ashford Hospitality Limited Partnership

NOTICE OF ELECTION BY PARTNER TO CONVERT

LTIP UNITS INTO COMMON PARTNERSHIP UNITS

     The undersigned LTIP Unitholder hereby irrevocably (i) elects to convert the number of LTIP
Units in Ashford Hospitality Limited Partnership (the “Partnership”) set forth below into Common
Partnership Units in accordance with the terms of the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended; and (ii) directs that any cash in lieu of
Common Partnership Units that may be deliverable upon such conversion be delivered to the address
specified below. The undersigned hereby represents, warrants, and certifies that the undersigned
(a) has title to such LTIP Units, free and clear of the rights or interests of any other person or
entity other than the Partnership; (b) has the full right, power, and authority to cause the
conversion of such LTIP Units as provided herein; and (c) has obtained the consent or approval of
all persons or entities, if any, having the right to consent or approve such conversion.

	 	 	 	 	 	 	 	 	 
	Name of LTIP Unitholder:
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	(Please Print: Exact Name as Registered with Partnership)
	 
	 	 	 	 	 	 	 	 
	Number of LTIP Units to be Converted:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date of this Notice:
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	(Signature of Limited Partner: Sign Exact Name as Registered with Partnership)
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	(Street Address)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	(City)

	 	 	 	 	 	(State)
	 	(Zip Code)
	 
	 	 	 	 	 	 	 	 
	Signature Guaranteed by:
	 	 	 	 	 	 	 	 
	 	 	 

Exhibit M– Page 1

 

 

Exhibit N

to Amendment No. 3 to Third Amended and Restated Agreement of Limited Partnership

of Ashford Hospitality Limited Partnership

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION

OF LTIP UNITS INTO COMMON PARTNERSHIP UNITS

     Ashford Hospitality Limited Partnership (the “Partnership”) hereby irrevocably (i) elects to
cause the number of LTIP Units held by the LTIP Unitholder set forth below to be converted into
Common Partnership Units in accordance with the terms of the Third Amended and Restated Agreement
of Limited Partnership of the Partnership, as amended

	 	 	 	 	 	 	 	 	 
	Name of LTIP Unitholder:
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	(Please Print: Exact Name as Registered with Partnership)
	 
	 	 	 	 	 	 	 	 
	Number of LTIP Units to be Converted:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	      Date of this Notice:
	 	 	 	 	 	 	 	 
	 	 	 	 	 

Exhibit N– Page 1exv10w2

 

Exhibit 10.2

NON-COMPETE/SERVICES AGREEMENT

     THIS NON-COMPETE/SERVICES AGREEMENT (the “Agreement”), dated March 21, 2008, effective as of
January 1, 2008, is between ASHFORD HOSPITALITY TRUST, INC., a corporation organized under the laws
of the State of Maryland and having its principal place of business at Dallas, Texas (hereinafter,
the “REIT”), ASHFORD HOSPITALITY LIMITED PARTNERSHIP, a limited partnership organized under the
laws of the State of Delaware and having its principal place of business at Dallas, Texas (the
Operating Partnership”), and ARCHIE BENNETT, JR., an individual residing in Dallas, Texas (the
“Director”).

RECITALS:

     A. The REIT and the Operating Partnership (collectively, the “Company”) desire that the
Director serve in the capacities and on the terms and conditions set out below; and

     B. The Director and the Company have previously entered into a Non-Compete/Services Agreement
dated as of August 29, 2003 (the “Previous Agreement”); and

     C. The Director and the Company desire to amend and restate the Previous Agreement in order to
make changes to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), as well as certain other changes.

     NOW, THEREFORE, the Company and the Director, in consideration of the respective covenants set
out below, hereby agree as follows:

     1. DIRECTORSHIP.

     (a) SERVICE. During the Term (defined below), the Director shall serve as Chairman of the
Board of Directors of the REIT (the “Board”). At the Company’s request, the Director shall serve
the Company’s subsidiaries and affiliates in other offices and capacities in addition to the
foregoing. If the

Director, during the Term, serves in any one or more of such additional capacities, the Director’s
fee shall not be increased beyond that provided in Sections 3 or 4 below. Further, if the
Director’s service in one or more of such additional capacities is terminated, the Director’s
compensation provided herein shall not be reduced for so long as the Director otherwise remains on
the Board of Directors of the Company and subject to the terms of this Agreement.

     (b) RESPONSIBILITIES. The Director’s principal duties and responsibilities shall be those
duties and responsibilities customary for the Chairman of the Board of Directors and consistent
with the duties and responsibilities performed by the Chairman for the Company prior to the
Effective Date. The Director will be responsible for and have authority over customary duties and
responsibilities of a Chairman of the Board and such other duties reasonably directed by the Board.
The Director shall serve in the best interest of the Company and its Shareholders.

     (c) EXTENT OF SERVICES. Except for (i) the time reasonably required to perform the Director’s
duties and responsibilities as Chairman of the Board and an officer of Remington Hotel Corporation
(“RHC”), Remington Management LP (“Remington Management”), Remington Lodging &

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Hospitality, L.P. (“Remington Lodging”) and their affiliates (so long as such duties do not
materially interfere with the performance of the Director’s duties hereunder), and (ii) illnesses,
the Director shall, consistent with the Chairman’s prior practices, devote his working time and
attention and his best efforts to the performance of his duties and responsibilities under this
Agreement. However, the Director may (so long as the following do not materially interfere with the
performance of the Director’s duties hereunder) (i) make any passive investments where he is not
obligated or required to, and shall not in fact, devote material managerial efforts (provided that
the Director may make and continue investments in accordance with the terms of that certain Mutual
Exclusivity Agreement, herein so called, among RHC, Remington Lodging and their affiliates (herein
collectively called the “Remington Affiliates”), and the Company and its affiliates dated August
29, 2003, (ii) participate in charitable, academic or community activities or in trade or
professional organizations, (iii) hold directorships in charitable or non-profit organizations,
(iv) subject to Board approval (which approval shall not be unreasonably withheld or withdrawn),
hold directorships in other companies, except only that the Board shall have the right to limit
such services as a director or such participation whenever the Board shall reasonably believe that
the time spent on such activities infringes in any material respect upon the time required by the
Director for the performance of his duties under this Agreement or is otherwise incompatible with
those duties, or (v) hold directorships in private companies owned by the Director (or Montgomery
J. Bennett) consistent with the Mutual Exclusivity Agreement. Further it is agreed that to the
extent any such activities have been conducted by the Director prior to August 29, 2003, the
continued reasonable conduct of such activities (or reasonable activities similar in nature and
scope thereto) subsequent to the Effective Date shall not, subject to the conditions and
limitations of the Mutual Exclusivity Agreement, thereafter be deemed to interfere with the
performance of the Director’s responsibilities to the Board and to the Company and its
Shareholders; provided, that no such activity that violates the non-competition provisions herein
shall be permitted.

     2. TERM. This Agreement shall be effective as of January 1, 2008 (the “Effective Date”) and
shall continue for a Term ending on the earlier of the end of the Director’s then current term if
he is not re-nominated and elected to serve as a director and December 31, 2008 (the “Initial
Termination Date”) unless it is sooner terminated pursuant to Section 6; provided, however, that if
the Director continues to be re-nominated and elected, this Agreement shall be automatically
extended for one additional year on the Initial Termination Date and on each subsequent anniversary
of the Initial Termination Date, unless the Company or the Director elect not to extend the Term of
this Agreement by notifying the other party in writing of such election not less than one hundred
twenty (120) days prior to the expiration of the then current Term. For purposes of this Agreement,
“Term” shall mean the actual duration of the Director’s service hereunder, taking into account any
extension pursuant to this Section 2 or early termination of service pursuant to Section 6 or this
Section 2.

     3. FEE. The Company shall pay the Director a fee which shall be payable once a month
(“Director’s Fee”). Commencing as of the Effective Date, the Director’s Fee shall be THREE HUNDRED
THOUSAND DOLLARS ($300,000.00) per year, provided that, at the election of the Board, the Company
may pay $25,000.00 of the annual Director’s Fee in shares of common stock of the REIT. The Board or
a Compensation Committee duly appointed by the Board (the “Compensation Committee”) shall
thereafter review the Director’s Fee annually to determine within its sole discretion whether and
to what extent the Director’s Fee may be increased (for the purposes of this Agreement, the term
“Director’s Fee” shall mean the amount established and adjusted from time to time pursuant to this
Section 3).

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     4. INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Term, to the extent permitted by law,
the Director shall be entitled to participate in all other short- and long-term incentive plans,
stock and option plans, long term incentive partnership (“LTIP”) plans, practices, policies and
other programs, and all savings and retirement plans, practices, polices and programs, in each case
that may be allowed from time to time by the Company’s Compensation Committee; provided, however,
that the Director may not participate in any qualified employee pension benefit plan.

     5. EXPENSE REIMBURSEMENTS/D&O INSURANCE.

     (a) EXPENSES. The Director will be entitled to reimbursement of all reasonable expenses,
including, without limitation, business class airfare and other travel expenses for board meetings,
committee meetings and corporate business, telephone and facsimile expenses, and expenses for
part-time secretarial support incurred by the Director in connection with the business of the Board
and the Company, promptly upon the presentation by the Director of appropriate documentation. The
Company shall maintain an office at the Company’s headquarters for the Director and shall provide
administrative support to the Director at such office.

     (b) D&O INSURANCE COVERAGE. During and for a period three (3) years after the Term, the
Director shall be entitled to director and officer insurance coverage for his acts and omissions
while a director of the Company on a basis no less favorable to him than the coverage provided
current officers or directors.

     6. TERMINATION. The services of the Director and this Agreement (except as otherwise provided
herein) shall terminate upon the occurrence of any of the following:

     (a) DEATH OR DISABILITY. Immediately upon death or Disability of the Director. As used in this
Agreement, “Disability” shall mean an inability to perform the essential functions of his duties,
with or without reasonable accommodation, for a period of 90 consecutive days or a total of 180
days, during any 365-day period, in either case as a result of incapacity due to mental or physical
illness which is determined to be total and permanent. A determination of Disability shall be made
by a physician satisfactory to both the Director and the Company, provided that if the Director
(or his guardian) and the Company do not agree on a physician, the Director (or his guardian) and
the Company shall each select a physician and these two together shall select a third physician,
whose determination as to Disability shall be binding on all parties. The appointment of one or
more individuals to carry out the service of the Director during a period of the Director’s
inability to perform such service and pending a determination of Disability shall not be considered
a breach of this Agreement by the Company.

     (b) FOR CAUSE. At the election of the Company, for Cause, immediately upon written notice by
the Company to the Director unless the Director fully corrects the circumstances constituting Cause
within the cure periods provided below, if applicable. For purposes of this Agreement, “Cause” for
termination shall be deemed to exist solely in the event of the following:

          (i) The conviction of the Director of, or the entry of a plea of guilty or nolo contendere by
the Director to, a felony (exclusive of a conviction, plea of guilty or nolo contendere arising
solely under a statutory provision imposing criminal liability upon the Director on a PER SE basis
due to the services provided under this Agreement by the Director, so long as any act or omission
of the Director with

-3-

 

respect to such matter was not taken or omitted in contravention of any applicable policy or
directive of the Board);

          (ii) willful breach of duty of loyalty which is materially detrimental to the Company which is
not cured to the reasonable satisfaction of the Board within fifteen (15) days following written
warning to the Director from the Board describing the alleged circumstances;

          (iii) willful failure to perform or adhere to explicitly stated directives of the Board which
continues for fifteen (15) days after written warning to the Director that it will be deemed a
basis for a “For Cause” termination;

          (iv) gross negligence or willful misconduct in the performance of the Director’s duties (which
is not cured by the Director within thirty (30) days after written warning from the Board);

          (v) the Director’s willful commission of an act of dishonesty resulting in economic or
financial injury to the Company or willful commission of fraud; or

          (vi) the Director’s chronic absence from Board or committee meetings for reasons other than
illness.

     For purposes of this Section, no act, or failure to act, on the Director’s part will be deemed
“willful” unless done, or omitted to be done, by the Director not in good faith and without a
reasonable belief that the Director’s act, or failure to act, was in the best interest of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advise of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Director in good faith and in the best interests
of the Company. The cessation of the services to be provided by the Director shall not be deemed to
be for Cause until there shall have been delivered to the Director a copy of a resolution duly
adopted by the affirmative vote of not less than 2/3rds of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice is provided to the
Director and the Director is given an opportunity, together with counsel for the Director, to be
heard before the Board), finding that, in the good faith opinion of the Board, the Director is
guilty of any of the conduct described in this Section 6(b), and specified in the particulars
thereof in detail; provided that neither the Director nor any family member of the Director shall
vote on such resolution nor shall they be counted in determining the “Entire Membership” of the
Board.

     (c) WITHOUT CAUSE OR GOOD REASON. At the election of the Company, without Cause, and at the
election of the Director, without Good Reason, in either case upon sixty (60) days’ prior written
notice to the Director or to the Company, as the case may be. Provided, however, that if the
Director gives notice, without Good Reason, the Company may waive all or a portion of the sixty
(60) days’ written notice and accelerate the effective Date of Termination.

     (d) FOR GOOD REASON. At the election of the Director, for Good Reason, which is not cured by
the Company within thirty (30) days after written notice from the Director to the Company setting
forth a description of the circumstances constituting Good Reason. For purposes of this Agreement,
“Good
Reason” shall mean any of the following actions, omissions or events occurring without the
Director’s prior written consent:

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          (i) The assignment to the Director of any duties, responsibilities, or reporting requirements
inconsistent with his service as Chairman of the Board of Directors of the Company, or any material
diminishment, on a cumulative basis, of the Director’s overall duties, responsibilities, or status;

          (ii) a reduction by the Company in the annual Director’s Fee;

          (iii) any material breach by the Company of any provision of this Agreement; or

          (iv) Montgomery J. Bennett is removed without Cause in his capacity as President, Chief
Executive Officer and/or director on the Board, as the term “Cause” is defined in that certain
Employment Agreement (the “MJB Employment Agreement”) dated on or about the Effective Date (as
amended or renewed and restated), the Company fails to renew the MJB Employment Agreement, or
Montgomery J. Bennett leaves for “Good Reason” as defined in the MJB Employment Agreement.

     (e) NOTICE OF TERMINATION. Any termination by the Company for Cause, or by the Director for
Good Reason, shall be communicated by Notice of Termination to the other parties hereto given in
accordance with Section 16(a) of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Director’s services under the
provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (provided that the date specified
shall not be more than thirty (30) days after the giving of the notice). The failure by the
Director or the Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of the Director or the
Company, respectively, hereunder or preclude the Director or the Company, respectively, from
asserting such fact or circumstance in enforcing the Director’s or the Company’s rights hereunder.

     (f) DATE OF TERMINATION. “Date of Termination” means (i) if the Director’s services are
terminated by the Company for Cause, or by the Director for Good Reason, the date of receipt of the
Notice of Termination or any later date specified in the notice (provided that the date specified
shall not be more than thirty (30) days after the giving of the notice), as the case may be, (ii)
if the Director’s services are terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the Director of such
termination or such later date specified in such notice, (iii) if the Director’s services are
terminated by the Director without Good Reason, the Date of Termination shall be the date on which
the Director notifies the Company of such termination or such later date specified in such notice,
unless otherwise agreed by the Company and the Director, and (iv) if the Director’s services are
terminated by reason of death or Disability or non-renewal of this Agreement, the Date of
Termination shall be the date of death or Disability of the Director or the Agreement’s non-renewal
date, as the case may be.

     7. EFFECTS OF TERMINATION.

     (a) TERMINATION FOR DEATH OR DISABILITY FOR DEATH/DISABILITY; BY THE
COMPANY WITHOUT CAUSE; OR NON-RENEWAL BY THE COMPANY. If the services of the Director should
terminate by reason of (i) death of the Director or Disability, (ii) termination by the Company for
any reason (other than Cause) or the failure of the Company to re-nominate and elect the

-5-

 

Director to serve as Chairman of the Board, or (iii) the Company’s failure to renew this Agreement,
then all compensation and benefits for the Director shall be as follows:

          (i) The Director shall be paid, in a single lump sum payment within thirty (30) days after the
Date of Termination, the aggregate amount of (A) the Director’s earned but unpaid Director’s Fee
through the Date of Termination, and reimbursement of all expenses through the Date of Termination
as required pursuant to Section 5(a) hereof (the “Accrued Obligations”), and (B) one (the
“Severance Multiple”) Times the annual Director’s Fee in effect on the Date of Termination (the
“Severance Payment”).

          (ii) Any annual performance shares, restricted shares, LTIP units or options awarded under
Section 4 hereof shall immediately vest. Without limiting the foregoing, it is agreed that if the
Director’s services are terminated pursuant to this Section 7(a), all outstanding stock options,
restricted stock, LTIP units and other equity awards granted to the Director under any of the
Company’s equity incentive plans (or awards substituted therefore covering the securities of a
successor company) shall become immediately vested and exercisable in full.

     (b) TERMINATION BY THE DIRECTOR WITH GOOD REASON. In the event that the Director’s services
are terminated by the Director with Good Reason, the Company will pay the Director the same Accrued
Obligations and accelerated vesting, all as provided in Sections 7(a)(i) and (ii) above at the
times as provided in such sections. In addition, the Director shall be entitled to a Severance
Payment determined and paid in accordance with Section 7(a)(i) above; PROVIDED, HOWEVER, the
Severance Multiple shall be two (2). Without limiting the foregoing, it is agreed that if the
Director’s services are

terminated pursuant to this Section 7(b), all outstanding stock options, restricted stock, LTIP
units and other equity awards granted to the Director under any of the Company’s equity incentive
plans (or awards substituted therefore covering the securities of a successor company) shall become
immediately vested and exercisable in full.

     (c) TERMINATION BY DIRECTOR WITHOUT GOOD REASON. If the Director’s
services are terminated by the Director without Good Reason including a resignation by the Director
without Good Reason and including an election not to renew this Agreement by the Director, the
Company will pay the Director the Accrued Obligations as provided in Section 7(a)(i) above but the
Director shall not be entitled to the Severance Payment and accelerated vesting set forth in
Sections 7(a)(i) and (ii) hereof. In addition, in consideration for the Director’s agreement for
honoring the non-compete and non-solicitation covenants in Section 10 hereof for a period of one
(1) year following the Date of Termination resulting from this Section 7(c), the Company shall pay
the Director a non-compete payment (the “Non-Compete Payment”) equal to the Severance Payment
determined with a Severance Multiple equal to one (1). The Non-Compete Payment shall be paid
monthly over the one-year non-compete period in equal monthly installments of one-twelfth (1/12th)
of the Non-Compete Payment, provided, however, that the timing of such Non-Compete payments are
subject to Section 7(g) hereof.

     (d) TERMINATION BY THE COMPANY FOR CAUSE. If the Director’s service is terminated by the
Company for Cause, the Company will pay the Director the Accrued Obligations as provided in Section
7(a)(i) above but the Director shall not be entitled to the Severance Payment and accelerated
vesting set forth in Sections 7(a)(i) and (ii) hereof.

-6-

 

     (e) TERMINATION OF AUTHORITY. Immediately upon the Date of Termination or upon the expiration
of this Agreement, notwithstanding anything else to the contrary contained herein or otherwise, the
Director will resign (and shall be deemed to have resigned) his directorship and stop serving as
Chairman of the Board, and shall be without any of the authority or responsibility for such
position.

     (f) RELEASE OF CLAIMS. As conditions of Director’s entitlement to the Severance Payment,
Non-Compete Payment and benefits provided by this Agreement, the Director shall be required to
execute and honor the terms of a waiver and release of claims against the Company substantially in
the form attached hereto as Exhibit “A” (as may be modified consistent with the purposes of such
waiver and release to reflect changes in law following the date hereof) (the “Release”) within the
applicable time period provided in the Release (the “Applicable Release Period”) and shall forfeit
all payments hereunder if it is not so timely executed; provided, however, that in any case where
the first and last days of the Applicable Release Period are in two separate taxable years, any
payments required to be made to the Director that are treated as deferred compensation for purposes
of Code Section 409A shall be made in the later taxable year, promptly following the conclusion of
the Applicable Release Period.

     (g) CODE SECTION 409A AND TERMINATION PAYMENTS.  All payments provided under Sections 7 and 8
hereof shall be subject to this Section 7(g). Notwithstanding anything herein to the contrary, to
the extent that the Board reasonably determines, in its sole discretion, that any payment or
benefit to be provided under this Agreement to or for the benefit of the Director would be subject
to the additional tax imposed under Section 409A(a)(1)(B) of the Code or a successor or comparable
provision, the commencement of such payments and/or benefits shall be delayed until the earlier of
(i) the date that is six months following the Date of Termination or (ii) the date of the
Director’s death (such date is referred to herein as the “ Distribution Date “), provided, if at
such time the Director is a “specified employee” of the Company (as defined in Treasury Regulation
Section 1.409A-1(i)) and if amounts payable under this Agreement are on account of an “involuntary
separation from service” (as defined in Treasury Regulation Section 1.409A-1(m)), the Director
shall receive payments during the six-month period immediately following the Date of Termination
equal to the lesser of (x) the amount payable under this Agreement, as the case may be, or (y) two
times the compensation limit in effect under Code Section 401(a)(17) for the calendar year in which
the Termination Date occurs (with any amounts that otherwise would have been payable under this
Agreement during such six-month period being paid on the first regular payroll date following the
six-month anniversary of the Date of Termination).   Finally, for the purposes of this Agreement,
amounts payable under this Agreement shall be deemed not to be a “deferral of compensation” subject
to Section 409A to the extent provided in the exceptions in Treasury Regulation Sections
1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception
under subparagraph (iii)) and other applicable provisions of Treasury Regulation Section 1.409A-1
through A-6. 

     8. CHANGE OF CONTROL.

     (a) CHANGE OF CONTROL. For purposes of this Agreement, a “Change of Control” will be deemed to
have taken place upon the occurrence of any of the following events:

          (i) any “person” (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and as modified in Section 13(d) and 14(d) of the Exchange Act) other
than (A) the Company or any of its subsidiaries, (B) any employee benefit plan of the Company or
any of its subsidiaries, (C) any Remington Affiliate, (D) a company owned, directly or indirectly,
by stockholders

-7-

 

of the Company in substantially the same proportions as their ownership of the Company, or (E) an
underwriter temporarily holding securities pursuant to an offering of such securities, becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the shares of voting stock of the Company
then outstanding;

          (ii) the consummation of any merger, organization, business combination or consolidation of
the Company or one of its subsidiaries with or into any other company, other than a merger,
reorganization, business combination or consolidation which would result in the holders of the
voting securities of the Company outstanding immediately prior thereto holding securities which
represent immediately after such merger, reorganization, business combination or consolidation more
than 50% of the combined voting power of the voting securities of the Company or the surviving
company or the parent of such surviving company;

          (iii) the consummation of the sale or disposition by the Company of all or substantially all
of the Company’s assets, other than a sale or disposition if the holders of the voting securities
of the Company outstanding immediately prior thereto hold securities immediately thereafter which
represent more than 50% of the combined voting power of the voting securities of the acquiror, or
parent of the acquiror, of such assets; or the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or

          (iv) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election to the Board was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an
election contest with respect to the election or removal of directors or other solicitation of
proxies or consents by or on behalf of a person other than the Board.

     (b) CERTAIN BENEFITS UPON A CHANGE OF CONTROL. If a Change in Control
occurs during the Term and the Director’s service is terminated by the Company without Cause or by
the Director for any reason on or before the one (1) year anniversary of the effective date of the
Change in Control, then the Director shall be entitled to the Accrued Obligations, such other
benefits as may be provided in this Agreement and accelerated vesting, all as provided in Sections
7(a)(i) and (ii) above at the times as provided in such sections. In addition, the Director shall
be entitled to a Severance Payment determined and paid in accordance with Section 7(a)(i) above;
PROVIDED, HOWEVER, the Severance Multiple shall be two (2). Without limiting the foregoing, it is
agreed that if the Director’s service is terminated pursuant to this Section 8(b), all outstanding
stock options, restricted stock, LTIP units and other equity awards granted to the Director under
any of the Company’s equity incentive plans (or awards substituted therefore covering the
securities of a successor company) shall become immediately vested and exercisable in full. All
payments under this Section 8(b) are subject to the restrictions set forth in Section 7(g) and may
be withheld in order to satisfy the requirements of Section 409A of the Internal Revenue Code.

-8-

 

     (c) EXCISE TAX.

          (i) In the event that any payment or benefit received or to be received by the Director in
connection with a Change of Control or the termination of the Director’s service (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change of Control or any person affiliated with the Company or
such person) (all such payments and benefits being hereinafter called “Total Payments”) will be
subject (in whole or part) to the excise tax (the “Excise Tax”) imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), then, subject to the provisions of Section
8(c)(ii) hereof, the Company will pay to the Director an additional amount (the “Gross-Up Payment”)
such that the net amount retained by the Director, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income tax and Excise Tax upon the payment provided for
by this Section 8(c)(i), will be equal to the Total Payments. For purposes of determining the
amount of the Gross-Up Payment, the Director will be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Director’s residence on such date, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and local taxes.

          (ii) In the event that, after giving effect to any redeterminations described in Section
8(c)(iv) hereof, a reduction in the Total Payments to the largest amount that would result in no
portion of the Total Payments being subject to the Excise Tax (after taking into account any
reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement) would produce a net amount (after deduction of the net amount of federal,
state and local income tax on such reduced Total Payments) that would be greater than the net
amount of unreduced Total Payments (after deduction of the net amount of federal, state and local
income tax and the amount of Excise Tax to which the Director would be subject in respect of such
Total Payments), then Section 8(c)(i) hereof will not apply and the Total Payments will be so
reduced.

          (iii) The determination of whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax will be made by the Company’s independent auditors. The Company
will provide the Director with its calculation of the amounts referred to in this Section 8(c) and
such supporting materials as are reasonably necessary for the Director to evaluate the Company’s
calculations. If the Director disputes the Company’s calculations (in whole or in part), the
reasonable opinion of the Company’s independent auditors with respect to the matter in dispute will
prevail.

          (iv) In the event that (A) the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of payment of the Total Payments and (B) after
giving effect to such redetermination, the Total Payments are reduced pursuant to Section 8(c)(ii)
hereof, the Director will repay to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the Director to the
extent that such repayment results in a reduction in the Excise Tax and/or a federal, state or
local income tax deduction) plus interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that (X) the Excise Tax is determined to exceed the
amount taken into account hereunder at the time of the termination of the Director’s service
(including by reason of any payment the existence or amount of which cannot be

-9-

 

determined at the time of the Gross-Up Payment) and (Y) after giving effect to such
redetermination, the Total Payments are not reduced pursuant to Section 8(c)(ii) hereof, the
Company will make an additional Gross-Up Payment in respect of such excess and in respect of any
portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up
Payment (plus any taxes payable by the Director with respect to such excess and such portion) at
the time that the amount of such excess is finally determined. The Company shall also reimburse
the Director for any expenses (including interest and penalties) incurred in any such additional
Gross-Up redetermination to the extent permitted under Section 409A. (All reimbursements of
expenses incurred in connection with such additional Gross-Up redetermination shall be made within
thirty (30) days after the Director incurs such expense, the amounts reimbursed in a tax year will
not affect such expenses eligible for reimbursement in any other tax year, and such reimbursement
period shall be effective so long as the applicable statute of limitations for such Gross-Up
redetermination is open. Such reimbursements are intended to comply with Treasury Regulation
Section 1.409A-3(i)(1)(iv)(A)).

          (v) The Director shall notify the Company in writing of any claim that, if successful, would
require the payment by the Company of a Gross-Up Payment or might entitle the Company to the refund
of all or part of any previous Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Director is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the date on which such
claim is required to be paid. The Director shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which he gives such notice to the Company. If the
Company notifies the Director in writing prior to the expiration of such period that it desires to
contest such claim, the Director shall: (i) give the Company any information reasonably requested
by the Company relating to such claim; (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney jointly
selected by the Director and the Company; (iii) cooperate with the Company in good faith in order
to effectively contest such claim; and (iv) permit the Company to participate in any proceedings
relating to such claim. The Company shall reimburse the Director for all costs and expenses
(including legal fees and additional interest and penalties to the extent permitted under 409A)
incurred in connection with such contest. All reimbursements of such expenses shall be made within
thirty (30) days after the Director incurs such expense, the amounts reimbursed in a tax year will
not affect such expenses eligible for reimbursement in any other tax year, and such reimbursement
period shall be effective so long as the applicable statute of limitations for such claim is open.
Such reimbursements are intended to comply with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A).

          (vi) Without limitation on the foregoing, the Company shall control all audits and proceedings
taken in connection with any claim, audit or proceeding involving Excise Taxes or Gross-Up Payments
and, at its sole option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of any such claim, audit or
proceeding and may, at its sole option, either direct the Director to pay the tax claimed and sue
for a refund or contest the tax in any permissible manner, and the Director agrees to prosecute
such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; PROVIDED,
HOWEVER, that if the Company directs the Director to pay such tax and sue for a refund, the Company
shall reimburse the Director within thirty (30) days after the Director pays such taxes (including
interest or penalties with respect thereto to the extent permitted under 409A). All reimbursements
of such expenses shall be made within thirty (30) days after the Director incurs such expense, the
amounts reimbursed in a tax year will not affect such expense eligible for reimbursement in any

-10-

 

other tax year, and such reimbursement period shall be effective so long as the applicable statute
of limitations for such claim is open. Such reimbursements are intended to comply with Treasury
Regulation Section 1.409A-3(i)(1)(iv)(A). The Company’s control of the contest shall be limited to
issues with respect to which such a Gross-Up Payment would be payable or refundable hereunder and
the Director shall be entitled to settle or contest, as the case may be, any other issue.

          (vii) To the extent that a Gross-Up Payment is determined to be payable pursuant to this
Section 8(c), such payment must be made by the end of the taxable year immediate following the
taxable year in which the taxes described above are remitted to the taxing authority.

     9. CONFIDENTIAL INFORMATION. The Director recognizes and acknowledges that the Director has
and will have access to confidential and proprietary information of the Company which constitute
valuable, special, and unique assets of the Company. The term “Confidential Information” as used in
this Agreement shall mean all proprietary information which is known only to the Director, the
Company, the Remington Affiliates with respect to a Remington Transaction (as defined in the Mutual
Exclusivity Agreement), other employees of the Company, or others in a confidential relationship
with the Company, and relating to the Company’s business (including, without limitation,
information regarding clients, customers, pricing policies, methods of operation, proprietary
company programs, sales, acquisitions, products, profits, costs, conditions (financial or other),
cash flows, key personnel, formulae, product applications, technical processes, and trade secrets,
as such information may exist from time to time, which the Director acquired or obtained by virtue
of work performed for the Company, or which the Director may acquire or may have acquired knowledge
of during the performance of said work.

     The Director acknowledges that the Company has put in place certain policies and practices to
keep such Confidential Information secret, including disclosing the information only on a
need-to-know basis. The Director further acknowledges that the Confidential Information has been
developed or acquired by the Company through the expenditure of substantial time, effort, and money
and provides the Company with an advantage over competitors who do not know such Confidential
Information. Finally, the Director acknowledges that such Confidential Information, if revealed to
or used for the benefit of the Company’s competitors or in a manner contrary to the Company’s
interests, would cause extensive and immeasurable harm to the Company and to the Company’s
competitive position.

     The Director shall not, during the Term or at any time thereafter, use for personal gain or
detrimentally to the Company all or part of the Confidential Information, or disclose or make
available all or any part of the Confidential Information to any person, firm, corporation,
association, or any other entity for any reason or purpose whatsoever, directly or indirectly,
except as may be required for the benefit of the Company pursuant to his service hereunder, unless
and until such Confidential Information becomes publicly available other than as a consequence of
the breach by the Director of his confidentiality obligations hereunder. Notwithstanding the
foregoing, The Director shall not be restricted from disclosing or using Confidential Information
that: (i) is or becomes generally available to the public other than as a result of an unauthorized
disclosure by the Director or his agent; (ii) becomes available to the Director in a manner that is
not in contravention of applicable law from a source (other than the Company or its affiliated
entities or one of its or their officers, employees, agents or representatives) that is not known
by the Director, after reasonable investigation, to be bound by a confidential relationship with
the Company or its affiliated entities or by a confidentiality or other similar agreement; or (iii)
is required to be disclosed by law, court order or other legal process: provided, however, that in
the event disclosure is required by law, court order or legal

-11-

 

process, the Director shall provide the Company, if legally permissible, with prompt notice of such
requirement as set forth below in this Section 9.

     The Director acknowledges that the Confidential Information shall remain at all times the
exclusive property of the Company, and no license is granted. In the event of the termination of
his service, whether Without or For Cause or Good Reason whether by the Company or the Director, or
within seven (7) business days of the Company’s request under any other circumstances, the Director
shall deliver to the Company all Confidential Information, in any form whatsoever, including
electronic formats, and shall not take with him any Confidential Information or any reproductions
(in whole or in part) or extracts of any items relating to the Confidential Information. The
Company acknowledges that prior to his service with the Company, the Director has lawfully acquired
extensive knowledge of the industries in which the Company engages in business including, without
limitation, markets, valuation methods, and techniques, capital markets, investor relationships and
similar items, and that the provisions of this Section 9 are not intended to restrict the
Director’s use of such previously acquired knowledge.

     In the event that the Director receives a request or is required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or similar process) to
disclose all or any part of the Confidential Information, the Director agrees, if legally
permissible, to (a) promptly notify the Company of the existence, terms and circumstances
surrounding such request or requirement, (b) consult with the Company on the advisability of taking
legally available steps to resist or narrow such request or requirement and (c) assist the Company
in seeking a protective order or other appropriate remedy; provided, however, that the Director
shall not be required to take any action in violation of applicable laws. In the event that such
protective order or other remedy is not obtained or that the Company waives compliance with the
provisions hereof, the Director shall not be liable for such disclosure unless disclosure to any
such tribunal was caused by or resulted from a previous disclosure by the Director not permitted by
this Agreement.

     10. NON-COMPETITION, NONSOLICITATION AND NON-INTERFERENCE.

     (a) NON-COMPETITION. During the Term and any Non-Compete Period (hereinafter defined), the
Director will not, directly or indirectly, either as a principal, agent, employee, employer,
stockholder, partner, or director engage in any “Competitive Business”; PROVIDED, HOWEVER, the
foregoing shall not prohibit or limit the Director’s right to (i) pursue investments, transactions
or businesses allowed pursuant to the terms of the Mutual Exclusivity Agreement, (ii) continue the
Director’s ownership, investment, management and operation of the Remington Affiliates consistent
with the terms of the Mutual Exclusivity Agreement, (iii) continue the Director’s ownership,
investment, management and operation of all existing investments of the Director and the Remington
Affiliates as of the Effective Date consistent with the terms of the Mutual Exclusivity Agreement,
and (iv) remain an officer and/or director of all Remington Affiliates consistent with the terms of
the Mutual Exclusivity Agreement.

     For purposes of this Section 10(a), “Competitive Business” means acquiring, investing in or
with respect to, owning, leasing, managing or developing hotel properties in the United States or
originating or acquiring loans in respect of hotel properties in the United States where the
Director has duties or performs services that are the same or similar to those services actually
performed by the Director for the Company.

     For purposes of this Section 10(a), the “Non-Compete Period” shall mean:

-12-

 

          (i) in the case of a termination of the Director’s service as a result of Disability, or a
termination by the Director without Good Reason (including, without limitation, a resignation by
the Director without Good Reason or an election not to renew by the Director), a period during the
Term and ending one (1) year after the Date of Termination;

          (ii) in the case of a termination of the Director’s services as a result of a termination by
the Company for Cause, a period during the Term and ending one (1) year after the Date of
Termination;

          (iii) in the case of a termination of the Director’s services as a result of (i) a Change in
Control, (ii) a termination by the Director for Good Reason, or (iii) a termination by the Company
for any reason other than Cause, only during the Term; or

          (iv) notwithstanding the foregoing, in all cases the Non-Compete Period shall terminate
effective on the termination of the REIT Exclusivity Rights (as defined in the Mutual Exclusivity
Agreement) by Remington Lodging as a result of a Remington Termination Event (and provided further
that upon such termination of the Non-Compete Period, the outstanding Non-Compete Payment shall be
paid by the Company within five (5) days of such termination to the Director).

     The Director acknowledges that the services provided by the Director are of a special, unique,
and extraordinary nature. The Director further acknowledges that his work and experience with the
Company will enhance his value to a Competitive Business, and that the nature of the Confidential
Information to which the Director has immediate access and will continue to have access during the
course of his employment makes it difficult, if not impossible, for him to engage in any
Competitive Business or work in any capacity similar to the Director’s duties or services with the
Company without disclosing or utilizing the Confidential Information. The Director further
acknowledges that his work and experience with the Company places him in a position of trust with
the Company.

     (b) NON-SOLICITATION. The Director covenants and agrees that (i) during the Term, and (ii)
during the period ending on the first anniversary of his Date of Termination, he shall not, without
the prior written consent of the Company, directly or indirectly, whether for his own account or on
behalf of any person, firm, corporation, partnership, association or other entity or enterprise,
solicit, recruit, hire or cause to be hired any employees of the Company or any of its affiliates,
or any person who was an employee of the Company during the six months preceding the Director’s
Date of Termination, or solicit or encourage any employee of the Company or any of its affiliates
to leave the employment of the Company or any of such affiliates, as applicable.

     (c) NON-INTERFERENCE WITH COMPANY OPPORTUNITIES. The Director understands and agrees that all
business opportunities with which he is involved during his employment with the Company constitute
valuable assets of the Company and its affiliated entities, and may not be converted to Director’s
own use or converted by Director for the use of any person, firm, corporation, partnership,
association or other entity or enterprise. Accordingly, Director agrees that during the Term and
thereafter, Director shall not, directly or indirectly, whether for his own account or on behalf of
any person, firm, corporation, partnership, association or other entity or enterprise, interfere
with, solicit, pursue, or in any manner make use of any such business opportunities.

-13-

 

     (d) REASONABLE RESTRAINTS. The Director agrees that restraints imposed upon him pursuant to
this Section are necessary for the reasonable and proper protection of the Company and its
subsidiaries and affiliates, and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The parties further agree that, in the event
that any provision of this Section shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large a geographic area or
too great a range of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.

     11. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Director’s
continuing or future participation in any plan, program, policy or practice provided by the Company
and for which the Director may qualify, and on the terms under which he qualifies nor shall
anything herein limit or otherwise affect such rights as the Director may have under any contract
or agreement with the Company. Amounts which are vested benefits or which the Director is otherwise
entitled to receive under any plan, policy, practice or program of or any contract agreement with
the Company at or
subsequent to the Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by this Agreement.
Notwithstanding anything in this Agreement or any such plan, policy, practice or program noted
above to the contrary, the timing of all payments pursuant to this Agreement or any such plan,
policy, practice or program shall be subject to the timing rules specified in Section 7(g) of this
Agreement.

     12. FULL SETTLEMENT. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against the
Director or others. In no event shall the Director be obligated to take any action by way of
mitigation of the amounts payable to the Director under any of the provisions of this Agreement and
except as expressly provided, such amounts shall not be reduced. The Company agrees to pay as
incurred (within 30 days
following the Company’s receipt of an invoice from the Director), to the full extent permitted by
law, all reasonable legal fees and expenses which the Director or his beneficiaries may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the Company, the Director
or others of the validity or enforceability of, or liability under, any provision of this Agreement
or any guarantee of performance thereof (including as a result of any contest by the Director or
his beneficiaries about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(a) of the Code to the extent permitted by 409A. The
preceding sentence shall not apply with respect to any such contest if the court having
jurisdiction over such contest determines that the Director’s claim in such contest is frivolous or
maintained in bad faith. This reimbursement obligation shall remain in effect following the
Director’s termination of service for the applicable statute of limitations period relating to any
such claims, and the amount of reimbursements hereunder during any tax year shall not affect the
expenses eligible for reimbursement in any other tax year. Such reimbursements are intended to
comply with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A).

     13. DISPUTES.

     (a) EQUITABLE RELIEF. The Director acknowledges and agrees that upon any breach by the
Director of his obligations under Sections 9 or 10 hereof, the Company will have no adequate remedy
at law, and accordingly will be entitled to specific performance and other appropriate injunctive
and equitable
relief.

-14-

 

     (b) ARBITRATION. Excluding only requests for equitable relief by the Company under Section
13(a) of this Agreement, in the event that there is any claim or dispute arising out of or relating
to this Agreement, or the breach thereof, and the parties hereto shall not have resolved such claim
or dispute
within 60 days after written notice from one party to the other setting forth the nature of such
claim or dispute, then such claim or dispute shall be settled exclusively by binding arbitration in
Dallas, Texas in accordance with the Commercial Arbitration Rules of the American Arbitration
Association by an
arbitrator mutually agreed upon by the parties hereto or, in the absence of such agreement, by an
arbitrator selected according to such Rules. Notwithstanding the foregoing, if either the Company
or the Director shall request, such arbitration shall be conducted by a panel of three arbitrators,
one selected by the Company, one selected by the Director and the third selected by agreement of
the first two, or, in the absence of such agreement, in accordance with such Rules. Neither party
shall have the right to claim or recover punitive
damages. Judgment upon the award rendered by such arbitrator(s) shall be entered in any Court
having jurisdiction thereof upon the application of either party.

     14. INDEMNIFICATION. The Company will indemnify the Director, to the maximum extent permitted
by applicable law, against all costs, charges and expenses incurred or sustained by the Director,
including the cost of legal counsel selected and retained by the Director in connection with any
action, suit or proceeding to which the Director may be made a party by reason of the Director
being or having been a director of the Company or any subsidiary or affiliate of the Company.

     15. COOPERATION IN FUTURE MATTERS. The Director hereby agrees that, for a period of one (1)
year following termination of his directorship, he shall cooperate with the Company’s reasonable
requests relating to matters that pertain to the Director’s service as Chairman of the Board by the
Company,
including, without limitation, providing information or limited consultation as to such matters,
participating in legal proceedings, investigations or audits on behalf of the Company, or otherwise
making himself reasonably available to the Company for other related purposes. Any such cooperation
shall be performed at
times scheduled taking into consideration the Director’s other commitments, including business and
family matters, and the Director shall be compensated at a reasonable hourly or PER DIEM rate to be
agreed by the parties to the extent such cooperation is required on more than an occasional and
limited basis. The Director shall not be required to perform such cooperation to the extent it
conflicts with any requirements of exclusivity of services for an employer or otherwise, nor in any
manner that in the good faith belief of the Director would conflict with his rights under or
ability to enforce this Agreement.

     16. GENERAL.

     (a) NOTICES. All notices and other communications hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if delivered personally or if sent
by overnight courier or by certified mail, return receipt requested, postage prepaid or sent by
written telecommunication or telecopy, to the relevant address set forth below, or to such other
address as the recipient of such notice or communication shall have specified to the other party
hereto in accordance with this Section 17(a).

-15-

 

	 	 	 	 	 	 	 
	 

	 	If to the Company, to:
	 	Ashford Hospitality Trust

14185 Dallas Parkway, Suite 1100

Dallas, Texas 75254
Attn: Board of Directors	 	 
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 1100

Dallas, Texas 75254

Attn: Chief Legal Officer	 	 
	 
	 	 	 	 	 	 
	 	 	If to the Director, at his last residence shown on the records of the Company,	 	 
	 
	 	 	 	 	 	 
	 

	 	with a copy to:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 

Any such notice shall be effective (i) if delivered personally, when received, (ii) if sent by
overnight courier, when receipted for, and (iii) if mailed, two (2) days after being mailed as
described above.

     (b) SEVERABILITY. If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired.

     (c) WAIVERS. No delay or omission by either party hereto in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall any single or partial
exercise of any such right, power or privilege preclude any further exercise thereof or the
exercise of any other right, power or privilege.

     (d) COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument. In
making proof of this Agreement, it shall not be necessary to produce or account for more than one
such counterpart.

     (e) ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Company’s
successors and the Director’s personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. This Agreement shall not be assignable by the Director, it
being understood and agreed that this is a contract for the Director’s personal services. This
Agreement shall not be assignable by the Company except in connection with a transaction involving
the succession by a third party to all or substantially all of the Company’s business and/or assets
(whether direct or indirect and whether by purchase, merger, consolidation, liquidation or
otherwise), in which case such successor shall assume this Agreement and expressly agree to perform
this Agreement in the same manner and to the same extent as the Company would be required to
perform it in the absence of a succession. For all purposes under this Agreement, the term
“Company” shall include any successor to the Company’s business and/or assets that executes and
delivers the assumption agreement described in the immediately preceding sentence or that becomes
bound by this Agreement by operation of law.

-16-

 

     (f) ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties,
supersedes all prior agreements and understandings, whether written or oral, relating to the
subject matter hereof and may not be amended except by a written instrument hereafter signed by the
Director and a duly
authorized representative of the Board.

     (g) GOVERNING LAW. This Agreement and the performance hereof shall be construed and governed
in accordance with the laws of the State of Texas, without giving effect to principles of conflicts
of law. Jurisdiction and venue shall be solely in the federal or state courts of Dallas County,
Texas. This provision should not be read as a waiver of any right to removal to federal court in
Dallas County.

     (h) CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rule of strict construction will be applied
against any party. The headings of sections of this Agreement are for convenience of reference only
and shall not affect its meaning or construction.

     (i) PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH. Any amounts due hereunder after the
Director’s death shall be paid to the Director’s designated beneficiary or beneficiaries, whether
received as a designated beneficiary or by will or the laws of descent and distribution. The
Director may designate a beneficiary or beneficiaries for all purposes of this Agreement, and may
change at any time such designation, by notice to the Company making specific reference to this
Agreement. If no designated beneficiary survives the Director or the Director fails to designate a
beneficiary for purposes of this Agreement prior to his death, all amounts thereafter due hereunder
shall be paid, as and when payable, to his spouse, if she survives the Director, and otherwise to
his estate.

     (j) CONSULTATION WITH COUNSEL. The Director acknowledges that he has had a full and complete
opportunity to consult with counsel or other advisers of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has not made any
representations or warranties to the Director concerning the terms, enforceability and implications
of this Agreement other than as are reflected in this Agreement.

     (k) WITHHOLDING. Any payments provided for in this Agreement shall be paid net of any
applicable tax withholding required under federal, state or local law.

     (l) NON-DISPARAGEMENT. The Director agrees that, during the Term and thereafter (including
following the Director’s termination of services for any reason) he will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, or take any action which may, directly or indirectly, disparage the Company, its
affiliates, or its their respective officers, directors, employees, advisors, businesses or
reputations. The Company agrees that, during the Term and thereafter (including following the
Director’s termination of services for any reason) the Company will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, or take any action which may directly or indirectly, disparage the Director or his
business or reputation. Notwithstanding the foregoing, nothing in this Agreement shall preclude
either the Director or the Company from making truthful statements or disclosures that are required
by applicable law, regulation, or legal process.

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     (m) CODE SECTION 409A. It is the intention of the parties to this Agreement that no payment
or entitlement pursuant to this Agreement will give rise to any adverse tax consequences to the
Director under Section 409A of the Code.  The Agreement shall be interpreted to that end and,
consistent with that objective and notwithstanding any provision herein to the contrary, the
Company may unilaterally take any action it deems necessary or desirable to amend any provision
herein to avoid the application of or excise tax under Section 409A.  Further, no effect shall be
given to any provision herein in a manner that reasonably could be expected to give rise to adverse
tax consequences under that provision. 

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused
this Agreement to be duly executed under seal as of the date first above written.

	 	 	 	 	 	 	 	 	 
	 	 	REIT:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ASHFORD HOSPITALITY TRUST, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	OPERATING PARTNERSHIP:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ASHFORD HOSPITALITY LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Ashford OP General Partner, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DIRECTOR:	 	 
	 

	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	ARCHIE BENNETT, JR.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:
	 	 	 	 	 	 

-19-

 

EXHIBIT “A”

RELEASE AND WAIVER

     THIS
RELEASE AND WAIVER (the “Termination Release”) is made as of the ___ day of
                    ,
200___ by ARCHIE BENNETT, JR. (the “Director”).

     WHEREAS, the Director, Ashford Hospitality Trust, Inc. (the “REIT”), and Ashford Hospitality
Limited Partnership (the “Operating Partnership”) have entered into a Non-Compete/Services
Agreement (the “Agreement”) dated as of March 21, 2008, effective as of January 1, 2008 and
providing certain compensation and severance amounts upon the Director not serving as Chairman of
the Board of Directors of the REIT (the “Board”); and

     WHEREAS, the Director has agreed, pursuant to the terms of the Agreement, to execute a release
and waiver in the form set forth in this Termination Release in consideration of the REIT and the
Operating Partnership (collectively, the “Company”) agreement to provide the Director’s Fee and
severance amounts upon the Director not serving as Chairman of the Board as set out in the
Agreement; and

     WHEREAS, the Company and the Director desire to settle all rights, duties and obligations
between them, including without limitation all such rights, duties, and obligations arising under
the Agreement or otherwise out of the Director’s service as Chairman of the Board of the Company;

     NOW THEREFORE, intending to be legally bound and for good and valid consideration the
sufficiency of which is hereby acknowledged, the Director agrees as follows:

     1. RELEASE. (a) The Director knowingly and voluntarily releases, acquits, covenants not to sue
and forever discharges the Company, and its respective owners, parents, stockholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives, divisions and
subsidiaries (collectively, the “Releasees”) from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, damages, causes of action, suits, rights, costs,
losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected,
foreseen or unforeseen, matured or unmatured, against them which the Director or any of his heirs,
executors, administrators, successors and assigns ever had, now has or at any time hereafter may
have, own or hold by reason of any matter, fact, or cause whatsoever from the beginning of time up
to and including the date of this Termination Release, including without limitation all claims
arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of
1993, the Employee Retirement Income Security Act of 1974, Texas Labor Code Section 21.001, et seq.
(Texas Employment Discrimination); Texas Labor Code Section 61.001, et seq. (Texas Pay Day Act);
Texas Labor Code Section 62.002, et seq. (Texas Minimum Wage Act); Texas Labor Code Section
201.001, et seq. (Texas Unemployment Compensation Act); Texas Labor Code Section 401.001, et seq.,
specifically Section 451.001 formerly codified as Article 8307c of the Revised Civil Statutes
(Texas Workers’ Compensation Act and Discrimination Issues); and Texas Genetic Information and
Testing Law, each as amended, or any other

federal, state or local laws, rules, regulations, ordinances, judicial decisions or public policies
now or hereafter recognized.

-20-

 

     (a) The Director represents that he has not filed or permitted to be filed against any of the
Releasees, any complaints, charges or lawsuits and covenants and agrees that he will not seek or be
entitled to any personal recovery in any court or before any governmental agency, arbitrator or
self-regulatory body
against any of the Releasees arising out of any matters set forth in Section 1(a) hereof. Nothing
herein shall prevent the Director from seeking to enforce his rights under the Agreement. The
Director does not hereby waive or release his rights to any benefits under the Company’s employee
benefit plans to which he is or will be entitled pursuant to the terms of such plans in the
ordinary course.

     3. NON-SOLICITATION. The Director covenants and agrees he shall not, without the prior
written consent of the Company, for a period ending one (1) year from the Date of Termination,
directly or indirectly, whether for his own account or on behalf of any person, firm, corporation,
partnership, association or other entity or enterprise, solicit, recruit, hire or cause to be hired
any employees of the Company or any of its affiliates, or any person who was an employee of the
Company during the six months preceding the Director’s Date of Termination (as defined in the
Agreement), or solicit or encourage any employee of the Company or any of its affiliates to leave
the employment of the Company or any of such affiliates, as applicable.

     4. NON-INTERFERENCE WITH COMPANY OPPORTUNITIES. The Director understands and agrees that all
business opportunities with which he is involved during his employment with the Company constitute
valuable assets of the Company and its affiliated entities, and may not be converted to Director’s
own use or converted by Director for the use of any person, firm, corporation, partnership,
association or other entity or enterprise. Accordingly, Director agrees he shall not, directly or
indirectly, whether for his own account or on behalf of any person, firm, corporation, partnership,
association or other entity or enterprise, interfere with, solicit, pursue, or in any manner make
use of any such business opportunities.

     5. ACKNOWLEDGMENT. The Company has advised the Director to consult with
an attorney of his choosing prior to signing this Termination Release and the Director hereby
represents to the Company that he has been offered an opportunity to consult with an attorney prior
to signing this Termination Release. The Company has also advised the Director that Director has up
to twenty-one days to consider and sign the Release and Waiver and up to seven days after signing
in which to revoke acceptance by giving notice to                      at                      by personal
delivery or by mail postmarked no later than the seventh day after the Director signs the Release
and Waiver.

     IN WITNESS WHEREOF, the Director has executed this Termination Release under seal as of the
day and year first above written.

	 	 	 
	 

	 

	 	 
	 

	 	ARCHIE BENNETT, JR.

-21-

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