Document:

Exhibit 10.2

 

EXECUTION VERSION

 

MERGER AND REGISTRATION RIGHTS AGREEMENT

 

Dated as of August 8, 2018

 

By and among

 

ASHFORD INC.,

 

ASHFORD HOLDING CORP.

 

and

 

ASHFORD MERGER SUB INC.

 

and, solely for purposes of Article V hereof,

 

ARCHIE BENNETT, JR.,

 

MJB INVESTMENTS, LP

 

and

 

MARK A. SHARKEY

 

 

TABLE OF CONTENTS

 

	
ARTICLE I   THE MERGER
    	
2
    
	
Section 1.1
    	
Merger and New Holdco   Common Stock
    	
2
    
	
Section 1.2
    	
Closing
    	
2
    
	
Section 1.3
    	
Effective Time
    	
2
    
	
Section 1.4
    	
Name of Surviving   Corporation
    	
3
    
	
Section 1.5
    	
Effect of the Merger
    	
3
    
	
Section 1.6
    	
Governing Documents
    	
3
    
	
Section 1.7
    	
Officers and Directors
    	
3
    
	
Section 1.8
    	
Effect on Capital Stock
    	
3
    
	
Section 1.9
    	
Dissenter’s Rights
    	
4
    
	
Section 1.10
    	
No Required Surrender   of Stock Certificates
    	
4
    
	
Section 1.11
    	
Dividends
    	
5
    
	
Section 1.12
    	
Stock Transfer Books
    	
5
    
	
Section 1.13
    	
Plan of Reorganization
    	
5
    
	
Section 1.14
    	
Successor Issuer
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE II   ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER
    	
6
    
	
Section 2.1
    	
Assumption of AINC Plan   and Outstanding Stock Options and Obligations under the AINC Plan
    	
6
    
	
Section 2.2
    	
Assignment and   Assumption of Agreements
    	
7
    
	
Section 2.3
    	
Reservation of Shares
    	
7
    
	
Section 2.4
    	
Registration Statement;   Prospectus/Proxy Statement
    	
7
    
	
Section 2.5
    	
Meeting of AINC   Stockholders; Board Recommendation
    	
8
    
	
Section 2.6
    	
Listing of New Holdco   Common Stock
    	
8
    
	
Section 2.7
    	
Section 16 Matters
    	
8
    
	
Section 2.8
    	
[Other Employee Benefit   Plans and Arrangements
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE III   CONDITIONS TO CLOSING
    	
8
    
	
Section 3.1
    	
Conditions to   Obligations of Merger Sub
    	
8
    
	
Section 3.2
    	
Conditions to   Obligation of AINC
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   ADDITIONAL COVENANTS
    	
10
    
	
Section 4.1
    	
Expenses
    	
10
    
	
Section 4.2
    	
Activities of New   Holdco and Merger Sub
    	
10
    
	
 
    	
 
    
	
ARTICLE V   REGISTRATION RIGHTS
    	
10
    
	
Section 5.1
    	
Resale Registration
    	
10
    
	
Section 5.2
    	
Obligations of New   Holdco
    	
11
    
	
Section 5.3
    	
Delay Rights
    	
12
    
	
Section 5.4
    	
Cooperation by Holders
    	
12
    
	
Section 5.5
    	
Expenses
    	
12
    
	
Section 5.6
    	
Termination of   Purchaser’s Rights
    	
12
    
	
Section 5.7
    	
Certain Definitions
    	
12
    

 

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ARTICLE VI   AMENDMENT AND TERMINATION
    	
13
    
	
Section 6.1
    	
Amendment
    	
13
    
	
Section 6.2
    	
Termination
    	
13
    
	
 
    	
 
    
	
ARTICLE VII   MISCELLANEOUS
    	
13
    
	
Section 7.1
    	
Descriptive Headings
    	
13
    
	
Section 7.2
    	
Counterparts
    	
13
    
	
Section 7.3
    	
Successors and Assigns
    	
13
    
	
Section 7.4
    	
Severability
    	
13
    
	
Section 7.5
    	
Applicable Law
    	
14
    
	
Section 7.6
    	
Third Party   Beneficiaries
    	
14
    

 

ii

 

MERGER AND REGISTRATION RIGHTS AGREEMENT dated as of August 8, 2018 (this “Agreement”), by and among Ashford Inc., a Maryland corporation (“AINC”), Ashford Holding Corp., a Maryland corporation (“New Holdco”), and Ashford Merger Sub Inc., a Maryland corporation (“Merger Sub” and, together with AINC and New Holdco, the “Merger Parties”), and, solely for the purposes of Article V hereof, Archie Bennett, Jr., MJB Investments, LP and Mark A. Sharkey (collectively, the “Investors”).

 

R E C I T A L S:

 

WHEREAS, AINC is the sole stockholder of New Holdco and New Holdco is the sole stockholder of Merger Sub;

 

WHEREAS, in conjunction with the consummation of the transactions contemplated by the Combination Agreement, dated as of April 6, 2018, among Archie Bennett, Jr., Monty J. Bennett, Remington Holdings, L.P., Remington Holdings GP, LLC, Project Management LLC, MJB Investments, LP, Mark A. Sharkey, AINC, New Holdco and Merger Sub (the “Combination Agreement”), among other things, Merger Sub will merge with and into AINC (the “Merger”), and as a result of such Merger, each share of the common stock, par value $0.01 per share, of AINC (“AINC Common Stock”) outstanding immediately prior to the Effective Time (as defined herein) will be converted into one share of common stock, par value $0.01 per share, of New Holdco (“New Holdco Common Stock”), each share of common stock, par value $0.01 per share, of Merger Sub (“Merger Sub Common Stock”) outstanding immediately prior to the Effective Time will be converted into one share of AINC Common Stock and the shares of New Holdco Common Stock outstanding immediately prior to the Effective Time will be cancelled;

 

WHEREAS, the board of directors of AINC has approved the merger of Merger Sub with and into AINC in accordance with the terms of this Agreement and the Combination Agreement, with AINC to be the surviving entity in the Merger and to become a wholly-owned subsidiary of New Holdco  and the outstanding shares of AINC Common Stock to be converted into shares of New Holdco Common Stock;

 

WHEREAS, stockholder approval of the Merger is not required under Maryland law pursuant to Section 3-106.2 of the Corporations and Associations Articles of the Annotated Code of Maryland;

 

WHEREAS, in accordance with the Combination Agreement, the issuance of shares of the voting preferred stock, par value $25.00 per share, of New Holdco (the “Series B Preferred Stock”) immediately following the effectiveness of the Merger, the issuance of the shares of common stock, par value $0.01 per share, of New Holdco into which the shares of Series B Preferred Stock will be convertible, the potential changes in control of AINC resulting from the issuance of such shares of Series B Preferred Stock and the issuance of a portion of such shares of Series B Preferred Stock to affiliates of AINC and New Holdco must be approved by the affirmative vote of the holders of a majority of the shares of AINC Common Stock present, in person or by proxy, at a meeting of the stockholders of AINC held prior to the effective time of the Merger and voting on the actions described above (collectively, the “Preferred Stock Issuance Actions”); and

 

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WHEREAS, it is intended that, for U.S. federal income tax purposes (and, where applicable, state and local tax purposes): (i) the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement together with the Combination Agreement shall constitute a “plan of reorganization” within the meaning of the Code and the Treasury regulations promulgated thereunder; and (ii) the exchange of PM LLC Transferred Securities (as defined in the Combination Agreement) for Series B Preferred Stock pursuant to the PM Contribution Agreement (as defined in the Combination Agreement) and the Combination Agreement (the “PM Exchange”), together with the exchange of AINC Common Stock for New Holdco Common Stock pursuant to the Merger, qualify as an exchange under Section 351 of the Code, and the Combination Agreement, the PM Contribution Agreement and this Agreement will together be taken as a single plan of exchange under Section 351 of the Code.

 

NOW THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

THE MERGER

 

Section 1.1            Merger and New Holdco Common Stock.  In accordance with the provisions of (i) this Agreement, (ii) the Articles of Merger (as defined below) and (iii) the Maryland General Corporation Law (the “MGCL), at the Effective Time (as defined below), Merger Sub shall be merged with and into AINC, the separate existence of Merger Sub shall cease, and AINC shall continue as the surviving corporation under the laws of the State of Maryland.

 

Section 1.2            Closing.  Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) shall take place at such time, date and place as the parties may agree, but in no event prior to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions set forth in Section 3.1 hereof.

 

Section 1.3            Effective Time and Execution.  Subject to the terms and conditions of this Agreement, at the Closing, the parties hereto shall cause the Articles of Merger with respect to the Merger (the “Articles of Merger”) to be filed with the Maryland State Department of Assessments and Taxation in the manner provided under Section 3-109 of the MGCL.  The Merger shall become effective at the effective time set forth in the Articles of Merger as filed with and accepted for record by the Maryland State Department of Assessments and Taxation (the “Effective Time”).  The Effective Time shall occur after the execution and delivery of the PM Contribution Agreement, but prior to the consummation of the PM Exchange.  AINC, as it will exist from and after the Effective Time, is herein sometimes referred to as the “Surviving Corporation.”  The day on which the Effective Time occurs is hereinafter sometimes referred to as the “Effective Date. “ The Parties acknowledge that this Agreement was executed (a) simultaneously with the execution of the Investor Rights Agreement, the PM Contribution Agreement, and the Cost Sharing Agreement (each, as defined in the Combination Agreement), (b) simultaneously with the filing for record with the Maryland State Department of Assessments

 

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and Taxation of the Articles of Merger (with a delayed effective time, as specified therein), (c) simultaneously with the filing for record with the Maryland State Department of Assessments and Taxation of the New Holdco Preferred Stock Articles Supplementary (as defined in the Combination Agreement) (with an effective time, as specified therein, after the Effective Time), and (d) prior to the Effective Time.

 

Section 1.4            Name of Surviving Corporation.  The name of the Surviving Corporation of the Merger shall be “Ashford OAINC Inc.”

 

Section 1.5            Effect of the Merger.

 

(a)           The Merger shall, from and after the Effective Time, have the effects provided for in the MGCL.

 

(b)           Without limitation of paragraph (a) above, at the Effective Time, (i) all of the rights, privileges, powers and franchises and all property (real, personal and mixed) of Merger Sub shall automatically vest in the Surviving Corporation, (ii) all debts, liabilities and duties of Merger Sub shall automatically attach to and become the responsibility of the Surviving Corporation, (iii) all corporate acts, plans, policies, contracts, approvals and authorizations of Merger Sub and the sole stockholder of Merger Sub, all committees elected or appointed by the sole stockholder of Merger Sub and all officers and agents of Merger Sub, that were valid and effective immediately prior to the Effective Time shall be taken for all purposes as the acts, plans, policies, contracts, approvals and authorizations of the Surviving Corporation and shall be effective and binding on the Surviving Corporation as the same were with respect to Merger Sub, (iv) any action or proceeding, whether civil, criminal or administrative, pending by or against Merger Sub may be prosecuted as if the Merger had not taken place or the Surviving Corporation may be substituted for Merger Sub in any such action or proceeding and (v) any employees of Merger Sub at the Effective Time shall become employees of the Surviving Corporation.

 

Section 1.6            Governing Documents.  At and after the Effective Time, the articles of incorporation of AINC, as in effect immediately prior to the Effective Time (the “Charter”), shall be the charter of the Surviving Corporation unless and until amended in accordance with the MGCL and the Charter subsequently to the Effective Time.  At and after the Effective Time, the bylaws of AINC, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation (the “Surviving Corporation Bylaws”) unless and until amended in accordance with the MGCL and the Charter subsequent to the Effective Time.

 

Section 1.7            Officers and Directors.  The persons serving as officers and directors of AINC immediately prior to the Effective Time shall be the officers and directors of the Surviving Corporation until changed in accordance with the Surviving Corporation Bylaws and applicable law subsequently to the Effective Time.

 

Section 1.8            Effect on Capital Stock.  At the Effective Time, by virtue of the Merger and without any action on the part of AINC, New Holdco or Merger Sub:

 

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(a)           AINC Common Stock.  Each share of AINC Common Stock issued and outstanding immediately prior to the Effective Time shall automatically convert, on a one-for-one basis, into one share of New Holdco Common Stock.

 

(b)           Merger Sub Common Stock.  Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall automatically convert, on a one-for-one basis, into one share of AINC Common Stock.

 

(c)           New Holdco Common Stock.  Each share of New Holdco Common Stock issued and outstanding immediately prior to the Effective Time shall, by virtue of this Agreement, automatically be cancelled for no consideration and cease to be issued or outstanding.

 

Section 1.9            Dissenter’s Rights.  In accordance with the provisions of Section 3-602(c)(2)(ii) of the MGCL, no dissenter’s rights will be available to the stockholders of AINC.

 

Section 1.10          No Required Surrender of Stock Certificates.

 

(a)           At and after the Effective Time: (i) where no physical certificate representing the shares of AINC Common Stock has been issued in the name of a holder of shares of AINC Common Stock issued and outstanding immediately prior to the Effective Time, a “book-entry” (i.e., a computerized or manual entry) shall be made in the stockholder records of New Holdco to evidence the issuance to such holder of the number of uncertificated shares of New Holdco Common Stock into which such shares of AINC Common Stock have been converted pursuant to Section 1.8 and New Holdco shall cause each stockholder holding New Holdco Common Stock in book entry form to be provided such information as shall be required by or necessary to comply with Maryland law; (ii) each certificate which, immediately prior to the Effective Time, represented outstanding shares of AINC Common Stock (an “AINC Certificate”) shall be deemed for all purposes to evidence ownership of, and to represent, the number of shares of New Holdco Common Stock into which the shares of AINC Common Stock represented by such AINC Certificate immediately prior to the Effective Time have been converted pursuant to Section 1.8.

 

(b)           The registered holder of any AINC Certificate outstanding immediately prior to the Effective Time, as such holder appears in the books and records of AINC, or of the transfer agent in respect of the shares of AINC Common Stock, immediately prior to the Effective Time, shall, until such AINC Certificate is surrendered for transfer or exchange, have and be entitled to exercise any voting and other rights with respect to, and to receive any dividends or other distributions on, the shares of New Holdco Common Stock into which the shares of AINC Common Stock represented by any such AINC Certificate have been converted pursuant to Section 1.8, subject to the provisions of the MGCL.

 

(c)           Within a reasonable period of time following the Effective Time, New Holdco shall mail, or shall cause to be mailed, to the persons who were registered holders of AINC Certificates immediately prior to the Effective Time, a letter of transmittal, in

 

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customary form, containing instructions for use in effecting the surrender of such AINC Certificates, if the holder so chooses, in exchange for a certificate (a “New Holdco Certificate”), or uncertificated shares in book-entry form, representing the number of shares of New Holdco Common Stock into which the shares of AINC Common Stock represented by such AINC Certificate have been converted pursuant to Section 1.8.

 

(d)           If any AINC Certificate shall have been lost, stolen or destroyed, New Holdco may, in its discretion and as a condition to the issuance of any New Holdco Certificate or uncertificated shares of New Holdco Common Stock in book-entry form, require the owner of such lost, stolen or destroyed AINC Certificate to post a bond, in such reasonable and customary amount as New Holdco may direct, as indemnity against any claim that may be made against New Holdco or the Surviving Corporation with respect to such AINC Certificate.

 

(e)           If any New Holdco Certificate is to be issued in a name other than that in which the AINC Certificate surrendered for exchange is registered, such exchange shall be conditioned upon: (i) the AINC Certificate so surrendered being properly endorsed or otherwise in proper form for transfer; and (ii) the person requesting such exchange either paying any transfer or other taxes required by reason of the issuance of the New Holdco Certificate in a name other than that of the registered holder of the AINC Certificate surrendered, or establishing to the satisfaction of New Holdco, or the transfer agent in respect of the New Holdco Common Stock, that such tax has been paid or is not applicable.

 

(f)            Each New Holdco Certificate shall comply with all requirements set forth in New Holdco’s charter or bylaws and applicable law with respect to notice of certain restrictions on ownership and transferability.

 

(g)           AINC and New Holdco expect that the New Holdco Certificates delivered to former AINC stockholders will reflect the change of New Holdco’s name to “Ashford Inc.”

 

Section 1.11          Dividends.  At the Effective Time and by operation of the Merger, AINC’s obligations with respect to any dividends or other distributions to the stockholders of AINC that have been declared by AINC, but not paid prior to the Effective Time, will be assumed by New Holdco in accordance with the terms of the declaration.

 

Section 1.12          Stock Transfer Books.  At the Effective Time, the stock transfer books of AINC shall be closed and thereafter there shall be no further registration of transfers of shares of AINC Common Stock theretofore outstanding on the records of AINC.

 

Section 1.13          Plan of Reorganization and Plan of Exchange.  This Agreement, together with the Combination Agreement, is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g), and this Agreement, the Combination Agreement and the PM Contribution Agreement together are intended to constitute a single plan of exchange under Section 351 of the Code.  Each party hereto shall use commercially reasonable efforts to cause the Merger to qualify, and will not take any actions or cause any

 

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actions to be taken which would prevent the Merger from qualifying, as a reorganization within the meaning of Section 368(a) of the Code.  Each party hereto shall use commercially reasonable efforts to cause the Merger and the PM Exchange collectively to qualify, and will not knowingly take any actions or cause any actions to be taken which would prevent the Merger and the PM Exchange collectively from qualifying, as an exchange under Section 351 of the Code.

 

Section 1.14                             Successor Issuer.  It is the intent of the parties hereto that New Holdco be deemed a “successor issuer” of AINC in accordance with Rule 12g-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) solely for purposes of the Exchange Act, and in accordance with Rule 414 under the Securities Act of 1933, as amended (the “Securities Act”) solely for purposes of the Securities Act.  At or after the Effective Time, New Holdco shall file: (i) an appropriate report on Form 8-K describing the Merger; and (ii) appropriate amendments to any registration statements of AINC on Form S-8 in accordance with Section 2.2.

 

ARTICLE II

 

ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER

 

Section 2.1                                    Assumption of AINC Plan and Outstanding Stock Options and Obligations under the AINC Plan.  At the Effective Time, New Holdco shall assume the rights and obligations of AINC under the Ashford Inc. 2014 Incentive Plan (including all amendments or modifications thereto, the “AINC Plan”) and the rights and obligations of AINC under: (i) all unexercised and unexpired options to purchase shares of AINC Common Stock (“AINC Options”) that are then outstanding under the AINC Plan immediately prior to the Effective Time; (ii) all obligations to issue shares of AINC Common Stock under the deferred compensation obligations assumed by AINC in connection with its spin-off from Ashford Hospitality Trust, Inc. in 2014 (the “AINC Deferred Compensation Obligations”); and (iii) the remaining unallocated reserve of shares of AINC Common Stock issuable under the AINC Plan.  At the Effective Time, the reserve of shares of AINC Common Stock under the AINC Plan, whether allocated to existing AINC Options or existing AINC Deferred Compensation Obligations or unallocated at that time, shall be converted on a one-share-for-one-share basis into a reserve of shares of New Holdco Common Stock, and each AINC Option and each AINC Deferred Compensation Obligation assumed by New Holdco shall continue to have, and be subject to, the same terms and conditions as set forth in the AINC Plan, the AINC Options and the AINC Deferred Compensation Obligations and the agreement(s) evidencing each of the AINC Options and the AINC Deferred Compensation Obligations as in effect immediately prior to the Effective Time (including, without limitation, the vesting schedule and applicable issuance dates (without acceleration thereof by virtue of the Merger and the transactions contemplated hereby or by the Combination Agreement), the per share exercise price of the AINC Options, the expiration date of the AINC Options and other applicable termination provisions and the tax withholding procedures), except that from and after the Effective Time: (i) each AINC Option will be exercisable (or will become exercisable in accordance with its terms) for that number of shares of New Holdco Common Stock equal to the number of shares of AINC Common Stock that were subject to each such AINC Option immediately prior to the Effective Time and any applicable exercise price shall be payable to New Holdco; and (ii) each AINC Deferred Compensation Obligation may be settled for that number of shares of New Holdco Common

 

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Stock equal to the number of shares of AINC Common Stock for which such AINC Deferred Compensation Obligation could be settled.

 

Section 2.2                                    Assignment and Assumption of Agreements.  Effective as of the Effective Time, AINC hereby assigns and delegates to New Holdco, and New Holdco hereby assumes and agrees to perform, all rights and obligations of AINC pursuant to the AINC Plan, under each option agreement relating to AINC Stock Options outstanding under the AINC Plan immediately prior to the Effective Time and under each AINC Deferred Compensation Obligation outstanding immediately prior to the Effective Time.  Effective as of the Effective Time, New Holdco shall become the successor issuer of securities under the AINC Plan in accordance with Rule 12g-3 under the Exchange Act solely for purposes of the Exchange Act and in accordance with Rule 414 under the Securities Act solely for purposes of the Securities Act and shall, as soon as practicable following the Effective Time, file a post-effective amendment to each existing registration statement on Form S-8 covering the AINC Plan, pursuant to which New Holdco as successor to AINC shall expressly adopt such registration statements on Form S-8 as its own in accordance with Rule 414 under the Securities Act.

 

Section 2.3                                    Reservation of Shares.  On or prior to the Effective Time, New Holdco shall reserve sufficient shares of New Holdco Common Stock to provide for the issuance of New Holdco Common Stock upon the exercise or other settlement of all AINC Options and AINC Deferred Compensation Obligations and to cover any additional shares of New Holdco Common Stock that may become issuable under future awards made with respect to the remaining share reserve under the assumed AINC Plan that is, in accordance with the foregoing provisions of this Agreement, converted into a reserve of shares of New Holdco Common Stock.

 

Section 2.4                                    Registration Statement; Prospectus/Proxy Statement.  In connection with the Stockholders’ Meeting (as defined below), New Holdco has prepared and filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (together with all amendments thereto, the “Registration Statement”) in connection with the registration under the Securities Act of the shares of New Holdco Common Stock to be issued to the stockholders of AINC pursuant to the Merger.  The Registration Statement shall, at such time as it is declared effective by order of the SEC, include: (i) a prospectus for the issuance of shares of New Holdco Common Stock in the Merger; and (ii) a proxy statement relating to the Stockholders’ Meeting (such prospectus and proxy statement collectively, together with any amendments or supplements thereto, the “Prospectus/Proxy Statement”).  Each of New Holdco and AINC shall use its reasonable best efforts to cause the Registration Statement to become effective and the Prospectus/Proxy Statement to be cleared by the SEC as promptly as practicable, and, prior to the effective date of the Registration Statement, New Holdco shall take all actions reasonably required under any applicable federal securities laws or state blue sky laws in connection with the issuance of shares of New Holdco Common Stock pursuant to the Merger.  As promptly as reasonably practicable after the Registration Statement shall have become effective and the Prospectus/Proxy Statement shall have been cleared by the SEC, AINC shall mail or cause to be mailed or otherwise make available in accordance with the Securities Act and the Exchange Act, the Prospectus/Proxy Statement to its stockholders; provided, however, that the parties shall consult and cooperate with each other in determining the appropriate time for mailing or otherwise making available to AINC’s  stockholders the Prospectus/Proxy Statement in light of the date set for the Stockholders’ Meeting.

 

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Section 2.5                                    Meeting of AINC Stockholders; Board Recommendation.  AINC shall take all action necessary in accordance with the MGCL and its governing documents to call, hold and convene a meeting of its stockholders to consider the approval of the Preferred Stock Issuance Actions (the “Stockholders’ Meeting”).  AINC shall use its reasonable best efforts to solicit from its stockholders proxies in favor of the approval of the Preferred Stock Issuance Actions.  AINC may adjourn or postpone the Stockholders’ Meeting: (i) to the extent necessary to ensure that any necessary supplement or amendment to the Prospectus/Proxy Statement is provided to its stockholders in advance of any vote on the Preferred Stock Issuance Actions or (ii) if as of the time for which the Stockholders’ Meeting is originally scheduled (as set forth in the Prospectus/Proxy Statement) insufficient shares of AINC Common Stock are voting in favor of the approval of the Preferred Stock Issuance Actions or represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such Stockholders’ Meeting.

 

Section 2.6                                    Listing of New Holdco Common Stock.  AINC and New Holdco shall use their reasonable best efforts to obtain, at or before the Effective Time, confirmation of listing on the NYSE American LLC stock exchange (the “NYSE American”) of the New Holdco Common Stock issuable pursuant to the Merger.

 

Section 2.7                                    Section 16 Matters.  Prior to the Effective Time, the Boards of Directors of AINC and New Holdco or an appropriate committee of non-employee directors (as such term is defined for purposes of Rule 16b-3 promulgated under the Exchange Act) shall adopt resolutions consistent with the interpretive guidance of the SEC so that the disposition by any officer or director of AINC or New Holdco who is a covered person for purposes of Section 16(a) of the Exchange Act of shares of AINC Common Stock (or derivative securities) and the receipt of shares of New Holdco Common Stock (or derivative securities) in exchange therefor by virtue of this Agreement and the Merger will be an exempt transaction for purposes of Section 16(b) of the Exchange Act.

 

Section 2.8                                    Other Employee Benefit Plans and Arrangements.  Effective as of the Effective Time: (i) AINC transfers, assigns and delegates to New Holdco, and New Holdco hereby assumes, each of AINC’s other employee benefit plans and arrangements and all rights and obligations of AINC thereunder, if any, by AINC to New Holdco prior to the Effective Time; and (ii) New Holdco hereby assumes and agrees to perform the obligations of AINC thereunder upon the same terms and conditions as set forth in each such designated plan and arrangement as in effect at the Effective Time.

 

ARTICLE III

 

CONDITIONS TO CLOSING

 

Section 3.1                                    Conditions to Obligations of Merger Sub.  The obligations of Merger Sub to perform this Agreement are subject to the satisfaction or waiver, prior to the proposed Effective Time, of each of the following conditions:

 

(a)                                 AINC shall have performed all agreements, covenants and obligations required to be performed, complied with or discharged by it under this Agreement and the Combination Agreement prior to or as of the Effective Time.

 

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(b)                                 All actions necessary to authorize the execution, delivery and performance of this Agreement and the Combination Agreement by AINC and the enforceability of this Agreement and the Combination Agreement against AINC shall have been duly and validly taken.

 

Section 3.2                                    Conditions to Obligations of New Holdco.  The obligations of New Holdco to perform this Agreement are subject to the satisfaction or waiver, prior to the proposed Effective Time, of the following conditions:

 

(a)                                 Each of AINC and Merger Sub shall have performed all agreements, covenants and obligations required to be performed, complied with or discharged by it under this Agreement and the Combination Agreement prior to or as of the Effective Time.

 

(b)                                 All actions necessary to authorize the execution, delivery and performance of this Agreement and the Combination Agreement by each of AINC and Merger Sub and the enforceability of this Agreement and the Combination Agreement against each of AINC and Merger Sub shall have been duly and validly taken.

 

(c)                                  The Preferred Stock Issuance Actions shall have been approved by the affirmative vote of the holders of a majority of the shares of AINC Common Stock present, in person or by proxy, at the Stockholders’ Meeting and voting on the Preferred Stock Issuance Actions at the Stockholders’ Meeting.

 

(d)                                 Immediately prior to the Effective Time, the shares of New Holdco Common Stock to be issued in the Merger shall be approved to be listed for trading on the NYSE American upon issuance.

 

Section 3.3                                    Conditions to Obligations of AINC.  The obligations of AINC to perform this Agreement are subject to the satisfaction or waiver, prior to the proposed Effective Time, of the following conditions:

 

(a)                                 Each of New Holdco and Merger Sub shall have performed all agreements, covenants and obligations required to be performed, complied with or discharged by it under this Agreement and the Combination Agreement prior to or as of the Effective Time.

 

(b)                                 All actions necessary to authorize the execution, delivery and performance of this Agreement and the Combination Agreement by Merger Sub and the enforceability of this Agreement and the Combination Agreement against Merger Sub shall have been duly and validly taken.

 

(c)                                  The Preferred Stock Issuance Actions shall have been approved by the affirmative vote of the holders of a majority of the shares of AINC Common Stock present, in person or by proxy, at the Stockholders’ Meeting and voting on the Preferred Stock Issuance Actions at the Stockholders’ Meeting.

 

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(d)                                 Immediately prior to the Effective Time, the shares of New Holdco Common Stock to be issued in the Merger shall be approved to be listed for trading on the NYSE American upon issuance.

 

ARTICLE IV

 

ADDITIONAL COVENANTS

 

Section 4.1                                    Expenses.  AINC and New Holdco shall pay all of their own expenses in connection with the transactions contemplated by this Agreement.

 

Section 4.2                                    Activities of New Holdco and Merger Sub.  Prior to the Effective Time, New Holdco and Merger Sub shall not conduct any business activities and shall not conduct any other activities except in connection with the transactions contemplated by this Agreement, the Transaction Documents (as defined in the Combination Agreement) or the Combination Agreement.

 

ARTICLE V

 

REGISTRATION RIGHTS

 

Section 5.1                                    Resale Registration.  No later than 120 days following the Effective Time, New Holdco shall prepare and file a registration statement under the Securities Act to permit the public resale of Registrable Securities (as defined below) then outstanding from time to time as permitted by Rule 415 of the Securities Act with respect to all of the Registrable Securities (the “Resale Registration Statement”).  The Resale Registration Statement filed pursuant to this Agreement shall be on such appropriate registration form of the SEC as shall be selected by New Holdco so long as it permits the continuous offering of the Registrable Securities pursuant to Rule 415 of the Securities Act or such other rule as is then applicable.  New Holdco shall use its commercially reasonable efforts to cause the Resale Registration Statement to become effective on or as soon as practicable after the filing thereof.  Any Resale Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders (as defined below) of any and all Registrable Securities covered by such Resale Registration Statement.  New Holdco shall use its commercially reasonable efforts to cause the Resale Registration Statement filed pursuant to this Agreement to be effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities by the Holders until all Registrable Securities covered by such Resale Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”).  The Resale Registration Statement when effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Resale Registration Statement, in the light of the circumstances /under which a statement is made).

 

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Section 5.2                                    Obligations of New Holdco.  Whenever required under this Article V to effect the registration of any Registrable Securities, New Holdco will, as expeditiously as possible:

 

(a)                                 prepare and file with the SEC such amendments and supplements to the Resale Registration Statement and the prospectus used in connection with such Resale Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Resale Registration Statement;

 

(b)                                 furnish to the Holders such numbers of copies of a prospectus including a preliminary prospectus, in conformity with the requirements of the Securities Act with respect to the disposition of all securities covered by the Resale Registration Statement;

 

(c)                                  use its best efforts to register and qualify the Registrable Securities covered by the Resale Registration Statement under such other securities or Blue Sky laws of such jurisdictions as reasonably requested by the Holders of Registrable Securities; provided that New Holdco will not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless New Holdco is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(d)                                 cause the Registrable Securities registered for resale to be listed on a national securities exchange or trading system and each securities exchange and trading system on which similar securities issued by AINC are then listed;

 

(e)                                  provide a transfer agent and a registrar for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(f)                                   if requested by the Holders of a majority of the Registrable Securities, retain one or more nationally-recognized investment banking firms to act as underwriter for the offering, and enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all such customary actions as the Holders of a majority of the Registrable Securities or the managing underwriter of such offering request in order to expedite or facilitate the disposition of the all such Registrable Securities (including, without limitation, making appropriate officers of New Holdco available to participate in “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)); and

 

(g)                                  use its best efforts to furnish, on the date on which such Registrable Securities are sold to any underwriter: (i) an opinion, dated such date, of the counsel representing New Holdco for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any; and (ii) a “comfort letter” dated such date, from the independent certified public accountants of New Holdco, in form and substance as is customarily

 

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given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any.

 

Section 5.3                                    Delay Rights.  Notwithstanding anything to the contrary contained herein, New Holdco may, upon written notice to all Holders whose Registrable Securities are included in the Resale Registration Statement, suspend such Holder’s use of any prospectus which is a part of the Resale Registration Statement (a “Blackout Period”) (in which event the Holder shall discontinue sales of the Registrable Securities pursuant to the Resale Registration Statement) if New Holdco is contemplating or has experienced a material non-public event, the disclosure of which at such time, in the good faith judgment of New Holdco, would materially adversely affect New Holdco or, as to each Holder that is subject to the securities trading policies of New Holdco applicable to insiders of New Holdco, during any period in which insiders of New Holdco are not permitted to trade in securities of New Holdco under the securities trading policies of New Holdco applicable to insiders of New Holdco. Upon disclosure of such information or the termination of the condition or expiration of such period described above, New Holdco shall provide prompt notice to the Holders whose Registrable Securities are included in the Resale Registration Statement, and shall promptly terminate any suspension of sales it has put into effect.  Any such Blackout Period will be no longer than 60 days in the aggregate in any 365-day period and New Holdco will not utilize this right more than once in any twelve -month period.

 

Section 5.4                                    Cooperation by Holders.  New Holdco shall have no obligation to include in the Resale Registration Statement Registrable Securities of a Holder who has failed to timely furnish upon written request timely delivered to such Holder such information that New Holdco determines, after consultation with counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

 

Section 5.5                                    Expenses.  New Holdco will pay all reasonable expenses incurred pursuant to this Article V with respect to the registration of the Registrable Securities as determined in good faith; provided that New Holdco shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights under this this Article V.

 

Section 5.6                                    Termination of Purchaser’s Rights.  A Holder’s rights under this Agreement shall terminate upon the termination of the Effectiveness Period.

 

Section 5.7                                    Certain Definitions.  For purposes of this Article V, the following capitalized terms have the definitions set forth below:

 

(a)                                 “Converted Common Stock” means shares of New Holdco Common Stock issuable upon conversion of the Series B Preferred Stock.

 

(b)                                 “Holder” means any “Covered Investor” as such term is defined in that certain Investor Rights Agreement, dated as of August 8, 2018, by and among New Holdco, Archie Bennett, Jr,. MJB Investments, LP and Mark A. Sharkey.

 

(c)                                  “Registrable Securities” means: (i) the Series B Preferred Stock; (ii) any Converted Common Stock; and (iii) any shares of capital stock issued in respect of the Series B Preferred Stock or any Converted Common Stock in the event of any

 

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recapitalization, reclassification, merger, consolidation or similar transaction or event; provided that any such Registrable Security will cease to be a Registrable Security when (a) a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 under the Securities Act (“Rule 144”) (or any similar provision then in force) under the Securities Act; (c) such Registrable Security is held by New Holdco or one of its subsidiaries or Affiliates (other than the Investors); or (d) such Registrable Security becomes eligible for resale in accordance with Rule 144 without volume or holding period limitations and, in the event New Holdco is not in compliance with the requirements of Rule 144(c) promulgated under the Securities Act, without the need for current public information.

 

ARTICLE VI

 

AMENDMENT AND TERMINATION

 

Section 6.1                                    Amendment.  This Agreement may be amended or supplemented in any manner and from time to time prior to the Effective Time by a written instrument duly executed and delivered by all of the parties hereto.

 

Section 6.2                                    Termination.  This Agreement may be terminated and the Merger abandoned at any time prior to the Effective Time by action taken by the Board of Directors of AINC or the sole stockholder of Merger Sub for any reason whatsoever, such termination to be effected by giving written notice to the other parties hereto.  In the event of the termination and abandonment of this Agreement, this Agreement shall become void and have no effect, without any liability on the part of any party or its directors, managers, officers, stockholders, members or partners.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.1                                    Descriptive Headings.  Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement.

 

Section 7.2                                    Counterparts.  For the convenience of the parties, any number of counterparts of this Agreement may be executed by one or more parties hereto and each such executed counterpart shall be, and shall be deemed to be, an original instrument.

 

Section 7.3                                    Successors and Assigns.  This Agreement may not be assigned by a party without the written consent of the other parties hereto.  This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the successors and assigns of the parties hereto.

 

Section 7.4                                    Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any

 

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such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 7.5                                    Applicable Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland.

 

Section 7.6                                    Third Party Beneficiaries.  Any Holder, even if not a party to this Agreement, shall be deemed an express third party beneficiary of the provisions contained in Article V hereof with full rights to enforce and access such obligations directly in their own respective name and on their own respective behalf.

 

(Remainder of the page intentionally left blank)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written.

 

	
 
    	
ASHFORD INC.,
    
	
 
    	
a Maryland corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Deric S. Eubanks
    
	
 
    	
Name:
    	
Deric   S. Eubanks
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
ASHFORD MERGER SUB INC.
    
	
 
    	
a Maryland corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Deric S. Eubanks
    
	
 
    	
Name:
    	
Deric   S. Eubanks
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
ASHFORD HOLDING CORP.
    
	
 
    	
a Maryland corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Deric S. Eubanks
    
	
 
    	
Name:
    	
Deric   S. Eubanks
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
Solely for the purposes   of Article V hereof:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Archie   Bennett, Jr.
    
	
 
    	
Archie   Bennett, Jr.
    
	
 
    	
 
    
	
 
    	
MJB INVESTMENTS, LP
    
	
 
    	
By: MJB Investments GP,   LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Monty J. Bennett
    
	
 
    	
 
    	
Name: Monty J. Bennett
    
	
 
    	
 
    	
Title: Sole Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Mark A. Sharkey
    
	
 
    	
Mark A. SharkeyExhibit 10.3

 

ASHFORD INC.

AMENDED AND RESTATED MUTUAL EXCLUSIVITY AGREEMENT

 

THIS ASHFORD INC. AMENDED AND RESTATED MUTUAL EXCLUSIVITY AGREEMENT (this “Agreement”) is entered as of the 8th day of August, 2018 by and among ASHFORD HOSPITALITY ADVISORS LLC, a Delaware limited liability corporation (“Ashford LLC”), ASHFORD INC., a Maryland corporation (“Ashford Inc.”), and REMINGTON LODGING & HOSPITALITY, LLC, a Delaware limited liability company (“Manager”), and is consented and agreed to by MONTY J. BENNETT as a Remington Affiliate.

 

THE PARTIES HERETO ENTER THIS AGREEMENT on the basis of the following facts, understandings and intentions:

 

A.                                    Prior to the date hereof, the Remington Parties have been actively engaged in various aspects of acquisition, management and operation of Hotel Properties as well as providing certain project management services.

 

B.                                    The Remington Parties plan to continue to engage in various aspects of acquisition, management and operation of Hotel Properties.

 

C.                                    Ashford Inc. provides asset management and external advisory services to other entities, initially within the hospitality industry, and Ashford Inc. may, in the future, undertake to acquire, develop, invest in, or purchase Hotel Properties on behalf of itself or Future Clients.

 

D.                                    Prior to the date hereof, Manager was a party to that certain Ashford Inc. Mutual Exclusivity Agreement, dated November 12, 2014, by and among Ashford LLC, Ashford Inc. and Manager, as consented and agreed to by Monty J. Bennett (the “Existing Agreement”).

 

E.                                     Concurrently with the execution of this Agreement, Manager and Project Management LLC are executing that certain PM Formation Agreement, dated as of the date hereof, by and among Manager, Project Management LLC and certain other parties (the “PM Formation Agreement”), pursuant to which the Project Management Business (within the meaning of the PM Formation Agreement) conducted by Manager and certain of its affiliates is being transferred to Project Management LLC.

 

F.                                      It is desired that the Existing Agreement be split into this Agreement and a separate agreement with respect to the Project Management Business (without materially altering the collective terms thereof) solely in order to effect the transfer of the Project Management Business to Project Management LLC.

 

G.                                    In accordance with the foregoing, the Ashford Inc. Parties desire to benefit from the property management experience of the Remington Parties and have agreed to engage Manager in connection with certain investment opportunities (subject to an Independent Director Election); provided, the Remington Parties agree to grant to each Future Client of the Ashford Inc. Parties a simultaneous first right of refusal with respect to any Remington Transaction that any of the Remington Parties source or identify that satisfy the Initial Investment Guidelines of such Future Client, as identified in the applicable advisory agreement between such Future Client and an

 

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Ashford Party, subject to any prior rights granted by the Remington Parties to other entities, including Braemar and Ashford Trust.

 

H.                                   This Agreement amends and restates in its entirety the Existing Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Definitions.  All terms used in this Agreement but not defined herein shall have the meanings as set forth on Exhibit A attached hereto and incorporated herein for all purposes (applicable to both the singular and plural forms of the terms defined).

 

2.                                      Term of Agreement.  This Agreement shall be deemed to have commenced as of November 12, 2014 and shall terminate ten (10) years thereafter (the “Initial Term”), unless earlier terminated in whole or in part (with respect to the Remington Exclusivity Rights or the Ashford Inc. Exclusivity Rights, or both, as applicable), due to (a) an Event of Default under this Agreement and the non-defaulting party elects to terminate this Agreement, (b) the occurrence of a Remington Termination Event, or (c) the occurrence of an Ashford Inc. Termination Event (the events in subparagraphs (a) through (c) herein each called, a “Termination Event”).  Notwithstanding the foregoing, the Initial Term shall automatically be extended at the expiration of the Initial Term (with respect to the Remington Exclusivity Rights or the Ashford Inc. Exclusivity Rights, or both, as applicable), on the same terms and conditions contained herein, for each of five (5) successive periods of ten (10) Fiscal Years each; provided, however, that at the time of the expiration of the Initial Term or extension term, as applicable, a Termination Event with respect to the entirety of this Agreement does not then exist. The Initial Term as extended by any extension terms, if any, shall herein be called the “Term.”  Upon the occurrence of a Termination Event (except where such Termination Event is due to an Event of Default by any of the Remington Parties under this Agreement), the Remington Parties shall be entitled to receive the Reimbursement Amount payable under this Agreement.  Subject to Section 9(b) below, upon termination of the entirety of this Agreement, the Remington Parties and the Ashford Inc. Parties shall have no further obligations to one another pursuant to this Agreement, except for any indemnification obligations contained herein, which shall survive such termination.  Any termination of this Agreement in whole or in part shall not terminate any existing management agreements (including any project management addendums thereto) and/or development agreements or any other agreements executed between the parties hereto that are then continuing and in full force and effect.

 

3.                                      Early Termination Events.

 

(a)                                 Remington Termination Event.  Upon the occurrence of any of the following events, the Remington Parties acting through Manager may, at their election exercised in their sole and absolute discretion and upon written notice to the Ashford Inc. Parties, terminate the Ashford Inc. Exclusivity Rights:

 

(i)                                     Monty J. Bennett (1) is removed as chief executive officer or chairman of the board of directors of Ashford Inc., (2) is not re-appointed as chief executive officer or

 

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chairman of the board of directors of Ashford Inc., or (3) resigns as chief executive officer or chairman of the board of directors of Ashford Inc.; or

 

(ii)                                  If the Ashford Inc. Parties terminate the Remington Exclusivity Rights based upon an Ashford Inc. Termination Event.

 

Upon the Ashford Inc. Parties’ receipt of written notice of termination of the Ashford Inc. Exclusivity Rights from the Remington Parties, the Ashford Inc. Exclusivity Rights set forth in this Agreement shall terminate; however, all other terms and provisions of this Agreement shall remain in full force and effect, including the Remington Exclusivity Rights, until this Agreement expires or is otherwise terminated as permitted under this Agreement.

 

(b)                                 Ashford Inc. Termination Event.  Upon the occurrence of any of the following events, the Ashford Inc. Parties may, at their election exercised in their sole and absolute discretion and upon written notice to the Remington Parties, terminate the Remington Exclusivity Rights:

 

(i)                                     The Manager fails to qualify as an “Eligible Independent Contractor;”

 

(ii)                                  Any one of the Remington Parties ceases to be controlled by Archie Bennett, Jr. and/or Monty J. Bennett and/or their respective family partnership or trusts, the sole members of which are at all times lineal descendants of Archie Bennett, Jr. or Monty J. Bennett (including step children) and spouses of any of the foregoing, with “control” meaning (a) the possession, directly or indirectly, of a majority of the capital stock and voting power of such Remington Parties, or (b) the power to direct or cause the direction of the management and policies of the Remington Parties in the capacity of chief executive officer, president, chairman, or other similar capacity where either is actively engaged and/or involved in providing such direction or control and spends substantial time managing the Remington Parties; or

 

(iii)                               If the Remington Parties terminate the Ashford Inc. Exclusivity Rights by reason of a Remington Termination Event.

 

Upon the Remington Parties’ receipt of written notice of termination of the Remington Exclusivity Rights from the Ashford Inc. Parties, the Remington Exclusivity Rights set forth in this Agreement shall terminate; however, all other terms and provisions of this Agreement shall remain in full force and effect, including the Ashford Inc. Exclusivity Rights, until this Agreement expires or is otherwise terminated as permitted under this Agreement.

 

4.                                      Ashford Inc. Exclusivity Rights.

 

(a)                                 Remington Transaction.  If any of the Remington Affiliates identifies an opportunity to develop and construct, acquire all or a portion of, or invest in, a Hotel Property that meets the Initial Investment Guidelines of any Future Client or the proposed initial investment guidelines of a new platform or entity to be created by, or spun-off from, Ashford Inc. (herein each called, a “Remington Transaction”), the Remington Parties on behalf of themselves and their Affiliates, hereby grant to the Ashford Parties the simultaneous first right of refusal to negotiate the purchase and assumption of such Remington Transaction on behalf of themselves or such

 

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Future Client.  The Remington Affiliates agree not to pursue any such opportunity (except as provided in this Section 4) and acknowledge that each such opportunity will belong to the Ashford Inc. Parties, to be pursued on behalf of themselves or the Future Client (the “Ashford Inc. Exclusivity Rights”).  The Ashford Inc. Exclusivity Rights shall not apply to any Excluded Remington Transactions or any investment in a Hotel Property that does not meet the Initial Investment Guidelines of a Future Client.  With respect to opportunities that satisfy the Initial Investment Guidelines of any Future Client, the exclusivity rights or right of first refusal granted to Ashford Trust pursuant to the Ashford Trust Mutual Exclusivity Agreement (the “Ashford Trust Exclusivity Rights”) and the exclusivity rights or right of first refusal granted to Braemar pursuant to the Braemar Mutual Exclusivity Agreement (the “Braemar Exclusivity Rights”) shall be superior to any Ashford Inc. Exclusivity Rights, unless otherwise waived.

 

If a Future Client materially modifies its Initial Investment Guidelines without the written consent of Manager (on behalf of the Remington Parties), which such consent may be withheld in its sole and absolute discretion and may further be subject to the consent of the Ashford Inc. Parties, the Remington Parties will have no obligation to present or offer a Remington Transaction to the Ashford Inc. Parties on behalf of such Future Client, at any time thereafter, regardless of any subsequent modifications by such Future Client to its Investment Guidelines.  For purposes hereof, a “material” modification of the Initial Investment Guidelines of a Future Client shall mean any modification of the Initial Investment Guidelines which cause the Future Client’s Investment Guidelines to be competitive with Ashford Trust’s Investment Guidelines or Braemar’s Investment Guidelines without the express written consent of Ashford Trust or Braemar, as applicable.  Instead, the Remington Parties, subject to the superior rights of the Braemar Parties, the Ashford Trust Parties or any other Person with which any of the Remington Parties may have a right of first offer agreement or similar agreement, shall use their reasonable discretion to determine how to allocate such Remington Transaction.  The Ashford Inc. Parties acknowledge the terms and conditions of the Braemar Mutual Exclusivity Agreement and the Ashford Trust Mutual Exclusivity Agreement, and further acknowledge that the Braemar Parties and the Ashford Trust Parties, unless otherwise waived, will have superior rights to Remington Transactions pursuant to the terms of the Braemar Mutual Exclusivity Agreement and the Ashford Trust Mutual Exclusivity Agreement, respectively.  Further, the Ashford Inc. Parties acknowledge that if Future Clients materially modify their Initial Investment Guidelines without the written consent of Manager, such Future Clients will not be entitled to preferential treatment with respect to Remington Transactions. Notwithstanding the foregoing, if any Future Client materially modifies its Initial Investment Guidelines without the consent of Manager, the Remington Exclusivity Rights provided herein shall remain in full force and effect.

 

(b)                                 Remington Notice. In connection with each Remington Transaction, the Remington Parties on behalf of the Remington Affiliates shall deliver to the Ashford Inc. Parties, with a copy to the Independent Directors, a written notice (the “Remington Notice”) in reasonable detail sufficient to describe the material terms of the Remington Transaction, including without limitation, as applicable, a description of the nature of the transaction (acquisition, development, or other investment), description and location of the asset, name of franchisor, inspection period, timing for closing, earnest money requirements, closing costs, an accounting of the Reimbursement Amount in reasonable detail, and to the extent available and in the possession of the Remington Parties, copies of any letters of intent, purchase and sale agreements, or development agreements, as applicable (the “Ashford Inc. Transaction Documents”).  Such

 

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Remington Notice shall be delivered to the Ashford Inc. Parties (with a copy to the Independent Directors), as soon as reasonably practical after the opportunity of the Remington Transaction is identified for any of the Remington Affiliates.

 

(c)                                  Ashford Inc. ROFR.  The Ashford Inc. Parties shall have the right, through any of the Ashford Inc. Affiliates or on behalf of any Future Client, with such right being simultaneous as between such Ashford Inc. Affiliates and Future Clients, to accept or decline such Remington Transaction (the “Ashford Inc. ROFR”) by giving written notice (the “Ashford Inc. ROFR Notice”) to the Remington Parties at any time on or before ten (10) business days from its receipt of a Remington Notice (the “Ashford Inc. ROFR Period”).

 

(d)                                 Acceptance of Remington Transaction.  Any acceptance of the Remington Transaction by the Ashford Inc. Parties shall be in accordance with the following terms and conditions:

 

(i)                                     Upon delivery of an Ashford Inc. ROFR Notice accepting the Remington Transaction, the Ashford Inc. Parties (through any of the Ashford Inc. Affiliates or on behalf of any Future Client) shall assume (and the applicable Remington Affiliate shall assign) any applicable Ashford Inc. Transaction Documents containing materially the same terms and conditions as set forth in the Remington Notice within ten (10) business days of the receipt by the Remington Parties of the Ashford Inc. ROFR Notice;

 

(ii)                                  The Ashford Inc. Parties (through any of the Ashford Inc. Affiliates or on behalf of any Future Client) shall pay the Reimbursement Amount to the applicable Remington Affiliate;

 

(iii)                               The Ashford Inc. Parties (through any of the Ashford Inc. Affiliates or on behalf of any Future Client) shall pursue the Remington Transaction in accordance with the applicable Ashford Inc. Transaction Documents with commercially reasonable diligence; and

 

(iv)                              If the Remington Transaction involves the management and operation of a Hotel Property, the applicable Ashford Inc. Affiliate or Future Client assuming the Remington Transaction shall engage Manager (to the extent any Ashford Inc. Affiliate has the right and/or controls the right to do so), and Manager agrees to accept such engagement, to perform such services and execute the documents as described in Section 5(b) below, provided Independent Director Disapproval has not been received.

 

(e)                                  Rejection or Lapse of Ashford Inc. ROFR; Failure to Close.  If the Ashford Inc. Parties fail to deliver an Ashford Inc. ROFR Notice within the Ashford Inc. ROFR Period or reject or decline to purchase and assume the Remington Transaction, or the applicable Ashford Inc. Affiliate fails to timely prepare and execute the proper Ashford Inc. Transaction Documents with respect to the Remington Transaction, then the Ashford Inc. ROFR shall lapse.  The Ashford Inc. Parties acknowledge that pursuant to the terms of the Braemar Mutual Exclusivity Agreement and the Ashford Trust Mutual Exclusivity Agreement, if the Ashford Inc. ROFR lapses, the Braemar

 

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Parties or the Ashford Trust Parties, as applicable, may exercise their rights to assume or acquire the Remington Transaction, provided such Remington Transaction satisfies the Investment Guidelines of such entity.  Further, the applicable Remington Affiliate shall be entitled, subject to the Braemar Exclusivity Rights and the Ashford Trust Exclusivity Rights, to proceed with the Remington Transaction described in the Remington Notice on materially the same terms and conditions as outlined therein within the time period established therein and in accordance with the underlying Ashford Inc. Transaction Documents, subject to reasonable extensions of the closing date.  If the terms and conditions of the Remington Transaction materially change, then the Remington Parties hereby grant (on behalf of themselves and the applicable Remington Affiliate) to the Ashford Inc. Parties the exclusive first right of refusal to purchase and assume the rights and obligations of the applicable Remington Affiliate with respect to such Remington Transaction, on behalf of Ashford Inc. or any Future Client, on the changed terms and conditions and in connection therewith shall deliver to the Ashford Inc. Parties a new Remington Notice (subject to the same time requirements for review and exercise as set forth in this Agreement).

 

(f)                                   Additional Information.  During the Ashford Inc. ROFR Period with respect to each Remington Transaction and the related Hotel Property, the Remington Parties shall deliver to the Ashford Inc. Parties upon the written request of the Ashford Inc. Parties, from time to time and to the extent available, (i) any and all documents, correspondence and reports, including, without limitation, due diligence information (including, property condition reports, surveys, environmental reports), information and documents bearing on contracts, litigation, title and lien information and such other reasonable due diligence matters; (ii) any notices of non-compliance with applicable laws bearing on such Hotel Property; (iii) monthly or quarterly financial information with respect to such Hotel Property showing hotel revenues and hotel operating expenses; and (iv) such other information relating to the Hotel Property or the Remington Transaction as reasonably requested by the Ashford Inc. Parties.

 

(g)                                  No Additional Fees.  Reimbursement to the Remington Parties of the Reimbursement Amount shall be the sole payment to the applicable Remington Affiliate with regard to a Remington Transaction.  The Remington Parties shall not receive any finder’s fee, brokerage fee, development fee, or other commissions or compensation with regard to any Remington Transaction.

 

5.                                      Remington Exclusivity Rights.

 

(a)                                 Ashford Inc. Transaction; Ashford Inc. Notice.  If any of the Ashford Inc. Affiliates or Future Clients acquires or invests in a Hotel Property, and such Ashford Inc. Affiliate has the right and/or controls the right to direct the management of such Hotel Property (herein each called, an “Ashford Inc. Transaction”), the Ashford Inc. Parties hereby agree (on behalf of themselves, the applicable Ashford Inc. Affiliate or the applicable Future Client) to engage Manager or an Affiliate of Manager (so long as such Affiliate constitutes an Eligible Independent Contractor if required by the Future Client, and there has not been an Independent Director Disapproval), to provide, and Manager agrees to then provide or cause such Affiliate to provide,  such management services in connection with such Ashford Inc. Transaction (the “Remington Exclusivity Rights”) and in connection therewith shall deliver to the Remington Parties, a written notice (the “Ashford Inc. Notice”) which describes such Ashford Inc. Transaction and the management services to be provided by Manager, including, the description and location of the

 

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asset and name of the franchisor.  The Ashford Inc. Parties may engage a third party and not Manager or an Affiliate of Manager to provide any or all of the foregoing services in connection with the Ashford Inc. Transaction if the Ashford Inc. Transaction has received Independent Director Disapproval.

 

(b)                                 Remington Transaction Documents.

 

(i)                                     Master Management Agreement. In the event that an Ashford Inc. Transaction (for which Manager has been engaged) relates to the management and operation of a Hotel Property, the terms and conditions of the management and operation, including the amount of any management and incentive fees, shall be either pursuant to the terms and conditions of the Master Management Agreement (and the Master Management Agreement shall be amended accordingly, if necessary, to include such Hotel Property), or pursuant to a management agreement with Manager or a subsidiary of Manager substantially in form of the Master Management Agreement.

 

6.                                      Excepted Transactions.  Notwithstanding anything contained in this Agreement to the contrary, the Ashford Inc. Parties’ rights under Section 4 do not extend to the Excluded Remington Transactions and the Remington Parties’ rights under Section 4(d)(iv) or Section 5 do not extend to the Excluded Ashford Inc. Transactions.  Each party hereto agrees to give written notice to the other party of any Excluded Ashford Inc. Transaction or Excluded Remington Transaction, as applicable, describing said transaction with reasonable detail.

 

7.                                      Future Spin-Off by the Ashford Inc. Parties.  If the Ashford Inc. Parties elect to sponsor, spin-off, carve-out, split-off or otherwise consummate or create a new entity or platform, or a transfer of a division or subset of assets for the purpose of forming a joint venture, a newly created private platform or a new publicly traded company to hold such division or subset of assets constituting a distinct asset type and/or investment guidelines (collectively, a “Spin-Off Company”), the Ashford Inc. Parties and Remington Parties agree that such Spin-Off Company shall enter into a mutual exclusivity agreement containing substantially the same material terms set forth in this Agreement.

 

8.                                      Indemnity.

 

(a)                                 Remington Parties’ Indemnity. Except as set forth in Section 8(b) below, the Remington Parties shall indemnify and hold the Ashford Inc. Affiliates (and each of their respective agents, principals, shareholders, partners, members, officers, directors, attorneys and employees) harmless from and against all liabilities, losses, claims, damages, costs and expenses (including, but not limited to, reasonable attorneys’ fees and expenses) that may be incurred by or asserted against any such party and that arise from (i) the fraud, willful misconduct or gross negligence of any of the Remington Affiliates (other than any Ashford Inc. Affiliate), (ii) the breach by the Remington Affiliates of any provision of this Agreement, or (iii) the breach by the Remington Affiliates of any Ashford Inc. Transaction Documents first occurring prior to the date of the assumption of same by any of the Ashford Inc. Affiliates or Future Clients.  The Ashford

 

7

 

Inc. Parties shall promptly provide the Remington Parties with written notice of any claim or suit brought against any of them by a third party which might result in such indemnification.

 

(b)                                 Ashford Inc. Parties’ Indemnity.  Except as set forth in Section 8(a) herein above, the Ashford Inc. Parties shall indemnify and hold the Remington Affiliates (and their respective agents, principals, shareholders, partners, members, officers, directors, attorneys and employees) harmless from and against all liabilities, losses, claims, damages, costs and expenses (including, but not limited to, reasonable attorneys’ fees and expenses) that may be incurred by or asserted against any such party and that arise from (i) the fraud, willful misconduct or gross negligence of the Ashford Inc. Affiliates (other than any Remington Affiliate), or (ii) the breach by the Ashford Inc. Affiliates of any provision of this Agreement (other than any Remington Affiliate).  The Remington Parties shall promptly provide the Ashford Inc. Parties with written notice of any claim or suit brought against any of them by a third party which might result in such indemnification.

 

(c)                                  Indemnification Procedure. Any party obligated to indemnify the other party under this Agreement (the “Indemnifying Party”) shall have the right, by written notice to the indemnified party, to assume the defense of any claim with respect to which the indemnified party is entitled to indemnification hereunder.  If the Indemnifying Party gives such written notice, (i) such defense shall be conducted by counsel selected by the Indemnifying Party and approved by the indemnified party, such approval not to be unreasonably withheld or delayed (provided, however, that the indemnified party’s approval shall not be required with respect to counsel designated by the Indemnifying Party’s insurer); (ii) so long as the Indemnifying Party is conducting such defense with reasonable diligence, the Indemnifying Party shall have the right to control said defense and shall not be required to pay the fees or disbursements of any counsel engaged by the indemnified party for services rendered after the Indemnifying Party has given the written notice provided for above to the indemnified party, except if there is a conflict of interest between the parties with respect to such claim or defense; and (iii) the Indemnifying Party shall have the right, without the consent of the indemnified party, to settle such claim, provided that such settlement involves only the payment of money, the Indemnifying Party pays all amounts due in connection with or by reason of such settlement and, as part thereof, the indemnified party is unconditionally released from all liability in respect of such claim.  The indemnified party shall have the right to participate in the defense of such claim being defended by the Indemnifying Party at the expense of the indemnified party, but the Indemnifying Party shall have the right to control such defense (other than in the event of a conflict of interest between the parties with respect to such claim or defense).  In no event shall (i) the indemnified party settle any claim without the consent of the Indemnifying Party so long as the Indemnifying Party is conducting the defense thereof in accordance with this Agreement; or (ii) if a claim is covered by the Indemnifying Party’s liability insurance, take or omit to take any action which would cause the insurer not to defend such claim or to disclaim liability in respect thereof.

 

9.                                      Events of Default; Consequences; Remedies.

 

(a)                                 Events of Default.  The following shall constitute events of default (each an “Event of Default”):

 

8

 

(i)                                     The filing of a voluntary petition in bankruptcy or insolvency or a petition for reorganization under any bankruptcy law by any of the Remington Parties or the Ashford Inc. Parties;

 

(ii)                                  The consent to any involuntary petition in bankruptcy or the failure to vacate, within ninety (90) days from the date of entry thereof, any order approving an involuntary petition by any of the Remington Parties or the Ashford Inc. Parties;

 

(iii)                               The entering of an order, judgment or decree by any court of competent jurisdiction, on the application of a creditor, adjudicating any of the Remington Parties or the Ashford Inc. Parties as bankrupt or insolvent, or approving a petition seeking reorganization or appointing a receiver, trustee, or liquidator of all or a substantial part of such party’s assets, and such order, judgment or decree continues unstayed and in effect for any period of ninety (90) days or more;

 

(iv)                              The appointment of a receiver for all or any substantial portion of the property of any of the Remington Parties or the Ashford Inc. Parties;

 

(v)                                 The failure of any of the Ashford Inc. Parties to make any payment required to be made in accordance with the terms of this Agreement within thirty (30) days after receipt of written notice from the Remington Parties specifying said default with reasonable specificity as to when such payment is due and payable; or

 

(vi)                              The failure of any of the Remington Parties or the Ashford Inc. Parties to perform, keep or fulfill any of the other covenants, undertakings, obligations or conditions set forth in this Agreement, and the continuance of such default for a period of thirty (30) days after written notice of said failure; provided, however, if such default cannot be cured within such thirty (30) day period and the Remington Parties or the Ashford Inc. Parties, as the case may be, commences to cure such default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended so long as it shall require the Remington Parties or the Ashford Inc. Parties, as the case may be, in the exercise of due diligence to cure such default, it being agreed that no such extension shall be for a period in excess of one hundred twenty (120) days.

 

(b)                                 Consequence of Default.  Upon the occurrence of any Event of Default, the non-defaulting party may, at its election, give the defaulting party written notice of intention to terminate this Agreement (after the expiration of any applicable grace or cure period provided in Section 9(a) above), and upon the expiration of thirty (30) days from the date of such notice, this Agreement shall terminate and the non-defaulting party shall be entitled to pursue any and all rights and remedies available, at law or in equity, to the non-defaulting party under this Agreement (including any indemnity obligations which shall survive this Agreement) or under applicable law.

 

10.                               Non-Solicitation. Upon the occurrence of a Termination Event, and for a period of two years from the date of such termination, Ashford Inc. (or any of its Affiliates) shall not solicit for employment, employ or otherwise retain (directly or indirectly) any employee of the Manager

 

9

 

(or any of its Affiliates) without the prior written consent of Manager, which consent may be granted, withheld or conditioned in Manager’s sole and absolute discretion.

 

11.                               Miscellaneous.

 

(a)                                 Notices.  All notices and other communications required or permitted hereunder shall be in writing, shall be deemed duly given upon actual receipt and shall be delivered (i) in person, (ii) by registered or certified mail (air mail if addressed to an address outside of the country in which mailed), postage prepaid, return receipt requested, or (iii) by facsimile or other generally accepted means of electronic transmission (provided that a copy of any notice delivered pursuant to this clause (iii) shall also be sent pursuant to clause (ii), addressed as follows (or to such other addresses as may be specified by like notice to the other parties):

 

To the Remington Parties:                                                                                                   Remington Lodging & Hospitality, LLC
 14185 Dallas Parkway
 Suite 1150

Dallas, Texas 75254
 Attn:    Mr. Monty J. Bennett

 

with a copy to:                                                                                                                                                               Remington Lodging & Hospitality, LLC
 14185 Dallas Parkway
 Suite 1150
 Dallas, Texas 75254
 Attn:    Legal Department

 

To the Ashford Inc. Parties:                                                                                           Ashford Inc.
 Ashford Hospitality Advisors LLC

14185 Dallas Parkway
 Suite 1100

Dallas, Texas 75254
 Attn:    President

 

with a copy to:                                                                                                                                                               Ashford Inc.
 14185 Dallas Parkway
 Suite 1100
 Dallas, Texas 75254
 Attn:    Legal Department

 

with a copy to:                                                                                                                                                               Ashford Inc.
 14185 Dallas Parkway
 Suite 1100
 Dallas, Texas 75254
 Attn:    Independent Directors

 

(b)                                 Amendments.  No amendment, modification or supplement to this Agreement shall be binding on any of the parties hereto unless it is in writing and signed by the parties in

 

10

 

interest at the time of the modification, and further provided any such modification is approved by a majority of the Independent Directors.

 

(c)                                  Successors and Assigns.  Neither this Agreement nor any rights or obligations hereunder shall be assignable by a party to this Agreement without the prior, express written consent of each of the other parties; provided, however, Manager shall have the right, without such consent, to assign its interest in this Agreement to any Manager Affiliate Entity.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns.

 

(d)                                 No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the parties to this Agreement and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claims or action or other right in excess of those existing without reference to this Agreement.

 

(e)                                  Titles and Headings.  Titles and headings to paragraphs and sections in this Agreement are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

(f)                                   Maximum Legal Enforceability; Time of Essence.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.  Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Without prejudice to any rights or remedies otherwise available to any party to this Agreement, each party hereto acknowledges that damages would not be an adequate remedy for any breach of the provisions of this Agreement and agrees that the obligations of the parties hereunder shall be specifically enforceable.  Time shall be of the essence as to each and every provision of this Agreement.

 

(g)                                  Further Assurances.  The parties to this Agreement will execute and deliver or cause the execution and delivery of such further instruments and documents and will take such other actions as any other party to the Agreement may reasonably request in order to effectuate the purpose of this Agreement and to carry out the terms hereof.

 

(h)                                 Complete Agreement; Construction.  This Agreement, and the other agreements and documents referred to herein, shall constitute the entire agreement between the parties with respect to the subject matter thereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

 

(i)                                     Governing Law.  This Agreement and its interpretation, validity and performance shall be governed by the laws of the State of Texas, without regard to its conflicts of interest principles.  In the event any court of law of appropriate judicial authority shall hold or declare that the law of another jurisdiction is applicable, this Agreement shall remain enforceable under the laws of the appropriate jurisdiction.

 

[Signature Pages to Follow]

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first written above.

 

	
 
    	
 
    	
ASHFORD   INC.:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ASHFORD   INC., a Maryland corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Deric Eubanks
    
	
 
    	
 
    	
Name:
    	
Deric   S. Eubanks
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ASHFORD   LLC:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ASHFORD   HOSPITALITY ADVISORS, LLC,
    
	
 
    	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Deric Eubanks
    
	
 
    	
 
    	
Name:   
    	
Deric   Eubanks
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
MANAGER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
REMINGTON   LODGING & HOSPITALITY, LLC
    
	
 
    	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Monty J. Bennett
    
	
 
    	
 
    	
 
    	
Monty   J. Bennett
    
	
 
    	
 
    	
 
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
CONSENTED   AND AGREED
    	
 
    	
 
    
	
TO   THIS 8TH DAY OF
    	
 
    	
 
    
	
AUGUST,   2018
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Monty J. Bennett
    	
 
    	
 
    
	
MONTY   J. BENNETT
    	
 
    	
 
    

 

[Signature page to Mutual Exclusivity Agreement]

 

 

EXHIBIT A

 

DEFINITIONS

 

“ADR” shall mean average daily rate and is calculated by dividing total number of rooms sold in a given period.

 

“Affiliate” means with respect to a person, any person directly or indirectly controlling, controlled by or under common control with such person.  The term “person” means and includes any natural person, corporation, partnership, association, limited liability company or any other legal entity.

 

“Ashford Inc.” means Ashford Inc., a Maryland corporation.

 

“Ashford Inc. Affiliates” shall mean the Ashford Inc. Parties and their Affiliates.

 

“Ashford Inc. Exclusivity Rights” shall have the meaning as set forth in Section 4(a).

 

“Ashford Inc. ROFR” shall have the meaning as described in Section 4(c).

 

“Ashford Inc. ROFR Notice” shall have the meaning as described in Section 4(c).

 

“Ashford Inc. ROFR Period” shall have the meaning as described in Section 4(c).

 

“Ashford Inc. Parties” shall mean Ashford Inc. and Ashford LLC.

 

“Ashford Inc. Termination Event” shall mean the events described in Section 3(b).

 

“Ashford Inc. Transaction” shall have the meaning as set forth in Section 5(a).

 

“Ashford Inc. Transaction Documents” shall have the meaning as set forth in Section 4(b).

 

“Ashford LLC” means Ashford Hospitality Advisors LLC, a Delaware limited liability company.

 

“Ashford Trust” shall mean Ashford Hospitality Trust, Inc., a Maryland corporation.

 

“Ashford Trust Exclusivity Rights” shall have the meaning as set forth in Section 4(a).

 

“Ashford Trust’s Investment Guidelines” shall mean all segments of the hospitality industry (including direct, joint venture and debt investments in hotels, condo-hotels, time-shares and all other hospitality related assets), with RevPAR criteria less than two (2) times the then current U.S. average RevPAR.

 

“Ashford Trust Mutual Exclusivity Agreement” shall mean that certain Amended and Restated Mutual Exclusivity Agreement dated as of the date hereof, by and among Ashford Trust OP, Ashford Trust, Remington Lodging & Hospitality, LLC, and Monty J. Bennett, as may be amended or modified.

 

 

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

 

“Ashford Trust Parties” shall collectively mean Ashford Trust and Ashford Trust OP.

 

“Braemar” shall mean Braemar Hotels & Resorts Inc., a Maryland corporation.

 

“Braemar Exclusivity Rights” shall have the meaning as set forth in Section 4(a).

 

“Braemar Mutual Exclusivity Agreement” shall mean that certain Amended and Restated Braemar Mutual Exclusivity Agreement dated as of the date hereof, by and among Braemar, Braemar OP,  and Remington Lodging & Hospitality, LLC, consented and agreed to by Monty J. Bennett, as may be amended or modified.

 

“Braemar’s Investment Guidelines” shall mean:

 

(i)                                     full service and urban select service hotels with trailing twelve (12) month average RevPAR or anticipated twelve (12) month average RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined with reference to the most current Smith Travel Research reports, generally in the 20 most populous metropolitan statistical areas, as estimated by the United States Census Bureau and delineated by the U.S. Office of Management and Budget;

 

(ii)                                  upscale, upper-upscale and luxury hotels meeting the RevPAR criteria set forth in clause (i) above and situated in markets that may be generally recognized as resort markets; and

 

(iii)                               international hospitality assets predominantly focused in areas that are general destinations or in close proximity to major transportation hubs or business centers, such that the area serves as a significant entry or departure point to a foreign country or region of a foreign country for business or leisure travelers and meet the RevPAR criteria set forth in clause (i) above (after any applicable currency conversion to U.S. dollars).

 

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

 

“Braemar Parties” shall collectively mean Braemar and Braemar OP.

 

“Eligible Independent Contractor” shall have the same meaning given such term in Section 856(d)(9) of the Internal Revenue Code of 1986, as amended.

 

“Event of Default” shall have the meaning as set forth in Section 9.

 

“Excluded Ashford Inc. Transactions” shall mean an Ashford Inc. Transaction with respect to which there has been an Independent Director Election.

 

“Excluded Remington Transactions” shall mean the following excluded transactions of the Remington Affiliates:

 

(a)                                 Existing hotel investments made by one or more of the Remington Affiliates with any of their Existing Investors;

 

 

(b)                                 Existing bona fide arm’s length third party management arrangements (or arrangements for other services) with parties other than the Ashford Inc. Affiliates pursuant to which one or more of the Remington Affiliates provide customary hotel management and other similar services; and

 

(c)                                  Like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended, made by any of the Existing Investors pursuant to contractual obligations existing as of the date of this Agreement provided that Manager provides ten (10) days prior notice to Ashford Inc. of said transaction.

 

“Existing Investors” shall mean the existing joint venture partners, investors or property owners of the Remington Affiliates as listed on Exhibit C attached hereto.

 

“Fiscal Year” shall mean the twelve (12) month calendar year ending December 31, except that the first Fiscal Year and last Fiscal Year of the Term of this Agreement may not be full calendar years.

 

“Future Client” shall mean any entity, other that Braemar or Ashford Trust, that is advised by the Ashford Inc. Parties.

 

“Hotel” shall have the meaning given such term in the Master Management Agreement.

 

“Hotel Property” means any Property that is used in whole or in part for hotel purposes, including, without limitation, any motels, motor inns, or hotels and the like (full service, select service, extended stay or otherwise), whether in fee or leasehold, together with any improvements and fixtures now or hereafter located thereon, all rights, privileges and easements appurtenant thereto, and all tangible and intangible personal property used in connection therewith.

 

“Indemnifying Party” shall have the meaning as set forth in Section 8(c).

 

“Independent Director Disapproval” shall mean either of the following:

 

1)                                     The Independent Directors upon a unanimous vote, have at any time elected not to engage Manager; or

 

2)                                     A majority of the Independent Directors have elected not to engage Manager based upon a determination in their reasonable business judgment that either:

 

A)                                   Special circumstances exist such that it would be in the best interest of Ashford Inc. or the Future Client, as applicable, not to engage Manager with respect to a particular Hotel Property; or

 

B)                                   Based on the prior performance of Manager, another manager or could perform the management or other duties in question materially better than Manager for a particular Hotel Property.

 

“Independent Director Election” shall mean a choice by the Independent Directors to exercise their Independent Director Disapproval rights.

 

 

“Independent Directors” shall mean those directors of Ashford Inc. who are “independent” within the meaning of the rules of the New York Stock Exchange as in effect on the date hereof.

 

“Initial Term” shall have the meaning as set forth in Section 2.

 

“Initial Investment Guidelines” shall mean the original Investment Guidelines of any Future Client, as set forth in the applicable advisory agreement between such Future Client and an Ashford Party, as of the effective date of such agreement.

 

“Investment Guidelines” shall have the same meaning herein as given such term in the applicable advisory agreement between a Future Client and an Ashford Party.

 

“Manager” means Remington Lodging and Hospitality, LLC, a Delaware limited liability company.

 

“Manager Affiliate Entity” shall have the meaning given such term in the Master Management Agreement.

 

“Master Management Agreement” means that certain Ashford Inc. Hotel Master Management Agreement to be executed between Manager, or a subsidiary or Affiliate of the Manager, as the property manager, and Ashford Inc. or its Future Clients (or their respective designees), as the owner in interest of the Hotel Properties subject of such agreement, substantially in the form of the Master Management Agreement attached hereto as Exhibit D.

 

“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

 

“Property” means any real property or any interest therein.

 

“Reimbursement Amount” shall mean the total of all actual out of pocket and third party costs and expenses paid by and to be reimbursed to the Remington Affiliates that were necessary and/or appropriate in connection with the Remington Transaction, including all earnest money deposits.  The Reimbursement Amount shall be calculated by the Remington Parties and set forth in a certificate delivered to the Ashford Inc. Parties and certified as true and correct by the Remington Parties.  The Reimbursement Amount shall not include any finder’s fee, brokerage fee, development fee, or other compensation paid to the Remington Affiliates.

 

“Remington Affiliate” shall mean the Remington Parties and their Affiliates.

 

“Remington Exclusivity Rights” shall have the meaning as set forth in Section 5(a).

 

“Remington Notice” shall have the meaning as set forth in Section 4(b).

 

“Remington Parties” shall mean Remington Holdings, LP and Manager.

 

“Remington Termination Event” shall mean the events described in Section 3(a).

 

“Remington Transaction” shall have the meaning as set forth in Section 4(a)

 

 

“RevPAR” shall mean revenue per available room and is calculated by multiplying ADR by the average daily occupancy.

 

“Term” shall have the meaning as set forth in Section 2.

 

“Termination Event” shall have the meaning as set forth in Section 2.

 

 

EXHIBIT B

 

DEVELOPMENT AGREEMENT

 

 

EXHIBIT C

 

EXISTING INVESTORS

 

None

 

 

EXHIBIT D

 

MASTER MANAGEMENT AGREEMENT

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