Document:

Exhibit 10.6

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of [            ], 2014, by and between Ashford Inc., a Delaware corporation (the “Company” or the “Indemnitor”) and [                                    ] (the “Indemnitee”).

 

WHEREAS, the Indemnitee is an officer and a member of the Board of Directors of the Company and in such capacities is performing a valuable service for the Company;

 

WHEREAS, Delaware law permits the Company to enter into contracts with its officers or members of its Board of Directors with respect to indemnification of, and advancement of expenses to, such persons;

 

WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) provide that the Company shall indemnify and advance expenses to its directors and officers to the maximum extent permitted by Delaware law in effect from time to time;

 

WHEREAS, the Amended and Restated Bylaws of the Company (the “Bylaws”) provide that each director and officer of the Company shall be indemnified by the Company to the maximum extent permitted by Delaware law in effect from time to time and shall be entitled to advancement of expenses consistent with Delaware law; and

 

WHEREAS, to induce the Indemnitee to provide services to the Company as an officer and a member of the Board of Directors, and to provide the Indemnitee with specific contractual assurance that indemnification will be available to the Indemnitee regardless of, among other things, any amendment to or revocation of the Charter or the Bylaws, or any acquisition transaction relating to the Company, the Indemnitor desires to provide the Indemnitee with protection against personal liability as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Indemnitor and the Indemnitee hereby agree as follows:

 

1.                                      DEFINITIONS

 

For purposes of this Agreement:

 

(A)                               “Change of Control” is when the following have occurred and are continuing:

 

·                  the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of the Company’s securities entitling that person to exercise more than 50% of the total voting power of all shares of the Company entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether

 

 

such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

 

·                  following the closing of any transaction referred to in the bullet point above, neither the Company nor the acquiring or surviving entity has a class of common securities (or ADRs representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE Amex, NASDAQ or another national securities exchange or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE Amex or NASDAQ.

 

(B)                               “Corporate Status” describes the status of a person who is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, partner (limited or general), member, employee or agent of any other foreign or domestic corporation, partnership, joint venture, limited liability company, trust, other enterprise (whether conducted for profit or not for profit) or employee benefit plan. The Company shall be deemed to have requested the Indemnitee to serve an employee benefit plan where the performance of the Indemnitee’s duties to the Company also imposes or imposed duties on, or otherwise involves or involved services by, the Indemnitee to the plan or participants or beneficiaries of the plan.

 

(C)                               “Determination” means a determination that either (x) indemnification of Indemnitee is proper in connection with the Proceeding because the Indemnitee has acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, to have had no reasonable cause to believe the Indemnitee’s conduct was unlawful (a “Favorable Determination”) or (y) indemnification of Indemnitee is not proper in connection with the Proceeding because the Indemnitee has not met the applicable standard of conduct (an “Adverse Determination”).

 

(D)                               “Disinterested Director” means a director who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(E)                                “Expenses” shall include all reasonable attorneys’ and paralegals’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.  Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 8(E) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise.  The parties agree that for the purposes of any advancement of Expenses for which

 

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Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable in the good faith judgment of such counsel shall be presumed conclusively to be reasonable.

 

(F)                                 “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any formal or informal internal investigation to which the Indemnitee is made a party by reason of the Corporate Status of the Indemnitee), administrative hearing, or any other proceeding, including appeals therefrom, whether civil, criminal, administrative, or investigative.

 

(G)                               “Special Legal Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently is, or in the past two years has been, retained to represent (i) the Indemnitor or the Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

 

2.                                      INDEMNIFICATION

 

The Indemnitee shall be entitled to the rights of indemnification provided in this paragraph 2 and under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders or resolution of the Board of Directors or otherwise if, by reason of such Indemnitee’s Corporate Status, such Indemnitee is, or is threatened to be made, a party to any threatened, pending, or contemplated Proceeding, including a Proceeding by or in the right of the Company.  Unless prohibited by paragraph 13 hereof and subject to the other provisions of this Agreement, the Indemnitee shall be indemnified hereunder, to the maximum extent permitted by Delaware law in effect from time to time, against judgments, penalties, fines and settlements and Expenses actually incurred by or on behalf of such Indemnitee in connection with such Proceeding or any claim, issue or matter therein; provided, however, that if such Proceeding was initiated by or in the right of the Company, indemnification may not be made in respect of such Proceeding if the Indemnitee shall have been finally adjudged to be liable to the Company unless and only to the extent that the court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.  For purposes of this paragraph 2, excise taxes assessed on the Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.

 

3.                                      INDEMNIFICATION FOR EXPENSES IN CERTAIN CIRCUMSTANCES

 

(A)                               Without limiting the effect of any other provision of this Agreement (including the Indemnitee’s rights to indemnification under paragraph 2 and advancement of expenses under paragraph 4), without regard to whether the Indemnitee is entitled to indemnification under paragraph 2 and without regard to the provisions of paragraph 6 hereof, to the extent that the Indemnitee is successful, on the merits or otherwise, in any Proceeding to which the Indemnitee is a party by reason of such Indemnitee’s Corporate Status, such Indemnitee shall be indemnified against

 

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all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection therewith.

 

(B)                               If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues, or matters in such Proceeding, the Indemnitor shall indemnify the Indemnitee against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with each successfully resolved claim, issue or matter to the fullest extent permitted by law.

 

(C)                               For purposes of this paragraph 3 and without limitation, the termination of any claim, issue or matter in such Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

4.                                      ADVANCEMENT OF EXPENSES

 

Notwithstanding anything in this Agreement to the contrary, but subject to paragraph 13 hereof, if the Indemnitee is or was or becomes a party to or is otherwise involved in any Proceeding (including as a witness), or is or was threatened to be made a party to or a participant (including as a witness) in any such Proceeding, by reason of the Indemnitee’s Corporate Status, or by reason of (or arising in part out of) any actual or alleged event or occurrence related to the Indemnitee’s Corporate Status, or by reason of any actual or alleged act or omission on the part of the Indemnitee taken or omitted in or relating to the Indemnitee’s Corporate Status, then the Indemnitor shall advance all Expenses incurred by the Indemnitee in connection with any such Proceeding within thirty (30) days after the receipt by the Indemnitor of a statement from the Indemnitee requesting such advance; provided that, such statement shall reasonably evidence the Expenses incurred by the Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that Indemnitee is not entitled to be indemnified pursuant to this Agreement.  The undertaking required by the immediately preceding sentence need not be secured and shall be accepted without reference to financial ability to make the repayment.

 

5.                                      WITNESS EXPENSES

 

Notwithstanding any other provision of this Agreement, to the fullest extent permitted by law and to the extent that the Indemnitee is, by reason of such Indemnitee’s Corporate Status, a witness (or is required to respond to discovery requests) or otherwise asked to participate for any reason in any Proceeding to which such Indemnitee is not a party, Indemnitor shall pay all Expenses actually and reasonably incurred by Indemnitee in connection therewith.

 

6.                                      DETERMINATION OF ENTITLEMENT TO AND AUTHORIZATION OF INDEMNIFICATION

 

(A)                               To obtain indemnification under this Agreement, the Indemnitee shall submit to the Indemnitor a written request, including therewith such documentation and information reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.

 

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(B)                               The Indemnitor agrees that the Indemnitee shall be indemnified to the fullest extent permitted by law.  Upon written request for indemnification pursuant to paragraph 6(A), a Determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case.  Any Determination shall be made within sixty (60) days after receipt of Indemnitee’s written request for indemnification pursuant to Section 6(A) and such Determination shall be made (i) by a majority vote of the Disinterested Directors, even though less than a quorum, (ii) by a committee of such Disinterested Directors designed by majority vote of the Disinterested Directors, even though less than a quorum or (iii) if there are no Disinterested Directors or if requested by Indemnitee, in Indemnitee’s sole discretion, by Special Legal Counsel in a written opinion. If a Favorable Determination is made, payment to the Indemnitee shall be made within fifteen (15) business days after such Determination.  If the person, persons or entity empowered to determine whether Indemnitee is entitled to indemnification shall not have made a Determination within sixty (60) days after receipt by the Indemnitor of the request therefor, a Favorable Determination shall, to the fullest extent not prohibited by law, be deemed to have been made, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the Determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(B) shall not apply if the Determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(E).

 

(C)                               The Indemnitor shall be bound by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is made, or if for any other reason the Indemnitor does not make timely indemnification payments or advancement of Expenses required by this Agreement, the Indemnitee shall have the right to commence a Proceeding before a court of competent jurisdiction to challenge such Adverse Determination and/or to require the Indemnitor to make such payments or advancement of expenses (and the Indemnitor shall have the right to defend their position in such Proceeding and to appeal any adverse judgment in such Proceeding). The Indemnitee shall be entitled to have such Expenses advanced by the Indemnitor in accordance with paragraph 4 of this Agreement and applicable law.  If the Indemnitee fails to challenge an Adverse Determination within ninety (90) business days, or if Indemnitee challenges an Adverse Determination and such Adverse Determination has been upheld by a final judgment of a court of competent jurisdiction from which no appeal can be taken, then, to the extent and only to the extent required by such Adverse Determination or final judgment, the Indemnitor shall not be obligated to indemnify the Indemnitee under this Agreement.

 

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(D)                               The Indemnitee shall cooperate with the person or entity making such Determination with respect to the Indemnitee’s entitlement to indemnification, including providing upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination.  Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating shall be borne by the Indemnitor (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Indemnitor hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.

 

(E)                                In the event the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(B) hereof, the Special Counsel shall be selected by Indemnitee and Indemnitee shall give a written notice to the Company advising it of the identity of the Special Counsel so selected.  The Indemnitor may, within seven (7) days after such written notice of selection shall have been given, deliver to the Indemnitee a written objection to such selection.  Such objection may be asserted only on the grounds that the Special Legal Counsel so selected does not meet the requirements of “Special Legal Counsel” as defined in paragraph 1 of this Agreement.  If such written objection is made, the Special Legal Counsel so selected may not serve as Special Legal Counsel until a court has determined that such objection is without merit or until such objection is withdrawn.  If, within twenty (20) days after submission by the Indemnitee of a written request for indemnification pursuant to Section 6(A) hereof, no Special Legal Counsel shall have been selected or, if selected, shall have been objected to, either the Indemnitor or the Indemnitee may petition a court for resolution of any objection which shall have been made by the Indemnitor or the Indemnitee to the other’s selection of Special Legal Counsel and/or for the appointment as Special Legal Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Special Legal Counsel under Section 6(B) hereof.  The Indemnitor shall pay all reasonable fees and expenses of Special Legal Counsel incurred in connection with acting pursuant to Section 6(B) hereof, and all reasonable fees and expenses incident to the selection of such Special Legal Counsel pursuant to this Section 6(D).  In the event that a determination of entitlement to indemnification is to be made by Special Legal Counsel and such determination shall not have been made and delivered in a written opinion within ninety (90) days after the receipt by the Indemnitor of the Indemnitee’s request in accordance with Section 6(A), upon the due commencement of any judicial proceeding in accordance with Section 8(A) of this Agreement, Special Legal Counsel shall be discharged and relieved of any further responsibility in such capacity.

 

7.                                      PRESUMPTIONS

 

(A)                               It shall be presumed that the Indemnitee is entitled to indemnification under this Agreement (notwithstanding any Adverse Determination), and the Indemnitor or

 

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any other person or entity challenging such right shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its Disinterested Directors or Special Counsel) to have made a Favorable Determination prior to the commencement of any action pursuant to this Agreement nor an Adverse Determination, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(B)                               The termination of any Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

 

8.                                      REMEDIES

 

(A)                               Subject to Section 8(E), in the event that:  (i) an Adverse Determination is made, or (ii) advancement of reasonable Expenses is not timely made pursuant to this Agreement, or (iii) payment of indemnification due the Indemnitee under this Agreement is not timely made, the Indemnitee shall be entitled to an adjudication in an appropriate court of competent jurisdiction of such Indemnitee’s entitlement to such indemnification or advancement of Expenses.

 

(B)                               In the event that an Adverse Determination shall have been made pursuant to Section 6(B) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this paragraph 8 shall be conducted in all respects as a de novo trial, or arbitration, on the merits. The fact that an Adverse Determination has been made earlier pursuant to paragraph 6 of this Agreement that the Indemnitee was not entitled to indemnification shall not be taken into account in any judicial proceeding commenced pursuant to this paragraph 8 and the (i) Indemnitee shall not be prejudiced in any way by reason of that Adverse Determination and (ii) the Indemnitor shall have the burden of proving that the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(C)                               If a Favorable Determination shall have been made or deemed to have been made pursuant to Section 6(B) of this Agreement that the Indemnitee is entitled to indemnification, the Indemnitor shall be bound by such Determination in any judicial proceeding or arbitration commenced pursuant to this paragraph 8, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(D)                               The Indemnitor shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding commenced pursuant to this paragraph 8

 

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that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Indemnitor is bound by all the provisions of this Agreement.

 

(E)                                In the event that the Indemnitee, pursuant to this paragraph 8, seeks a judicial adjudication of such Indemnitee’s rights under, or to recover damages for breach of, this Agreement, if successful on the merits or otherwise as to all or less than all claims, issues or matters in such judicial adjudication, the Indemnitee shall be entitled to recover from the Indemnitor, and shall be indemnified by the Indemnitor against, any and all reasonable Expenses actually incurred by such Indemnitee in connection with each successfully resolved claim, issue or matter.

 

(F)                                 Notwithstanding anything in this Agreement to the contrary, no Determination as to entitlement of the Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

9.                                      NOTIFICATION AND DEFENSE OF CLAIMS

 

The Indemnitee agrees promptly to notify the Indemnitor in writing upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder, but the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability that the Indemnitor may have to Indemnitee under this Agreement unless the Indemnitor can establish that such omission to notify resulted in actual and material prejudice to which it cannot be reversed or otherwise eliminated without any material negative effect on the Indemnitor.  With respect to any such Proceeding as to which Indemnitee notifies the Indemnitor of the commencement thereof:

 

(A)                               The Indemnitor will be entitled to participate therein at its own expense.

 

(B)                               Except as otherwise provided below, the Indemnitor will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee.  After notice from the Indemnitor to Indemnitee of the Indemnitor’s election to assume the defense thereof, the Indemnitor will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but the fees and disbursements of such counsel incurred after notice from the Indemnitor of the Indemnitor’s assumption of the defense thereof shall be at the expense of Indemnitee unless (a) the employment of counsel by the Indemnitee has been authorized by the Indemnitor, (b) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense of such action, (c) such Proceeding seeks penalties or other relief against the Indemnitee with respect to which the Indemnitor could not provide monetary indemnification to the Indemnitee (such as injunctive relief or incarceration) or (d) the Indemnitor shall not in fact have employed counsel to

 

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assume the defense of such action, in each of which cases the fees and disbursements of counsel shall be at the expense of the Indemnitor.  The Indemnitor shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Indemnitor, or as to which the Indemnitee shall have reached the conclusion specified in clause (b) above, or which involves penalties or other relief against the Indemnitee of the type referred to in clause (c) above.

 

(C)                               The Indemnitor shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Indemnitor’s written consent.  The Indemnitor shall not settle any action or claim in any manner that would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent.  Neither the Indemnitor nor Indemnitee will unreasonably withhold or delay consent to any proposed settlement.

 

10.                               NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION

 

(A)                               The rights of indemnification and to receive advancement of reasonable Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders, a resolution of the Board of Directors or otherwise, except that any payments otherwise required to be made by the Indemnitor hereunder shall be offset by any and all amounts received by the Indemnitee from any other indemnitor or under one or more liability insurance policies maintained by an indemnitor or otherwise and shall not be duplicative of any other payments received by an Indemnitee from the Indemnitor in respect of the matter giving rise to the indemnity hereunder; provided, however, that if indemnification rights are provided by an Additional Indemnitor as defined in Section 17(B) hereof, such Section shall govern.  No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to the Indemnitee with respect to any action taken or omitted by the Indemnitee prior to such amendment, alteration or repeal.

 

(B)                               To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors and officers of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available and upon any Change of Control the Company shall use commercially reasonable efforts to obtain or arrange for continuation and/or “tail” coverage for the Indemnitee to the maximum extent obtainable at such time.

 

(C)                               Except as otherwise provided in Section 17(B) hereof, in the event of any payment under this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all actions necessary to secure such rights, including execution of such documents as are necessary to enable the Indemnitor to bring suit to enforce such rights.

 

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(D)                               Except as otherwise provided in Section 17(B) hereof, the Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement, or otherwise.

 

(E)                                If Ashford Hospitality Trust, Inc. (“Ashford Trust”) (or any member or other affiliate thereof other than the Indemnitor) pays or causes to be paid, for any reason, any amounts with respect to any Proceeding in which the Indemnitee may be indemnified or entitled to indemnification hereunder or under any other indemnification agreement with the Indemnitee (whether pursuant to contract, by-laws, charter or other organizational documents) or otherwise in its capacity as a stockholder of the Company, then (x) Ashford Trust (or such affiliate, as the case may be) shall be fully subrogated to all rights of the Indemnitee with respect to such payment and (y) the Indemnitor shall fully indemnify, reimburse and hold harmless Ashford Trust (or such other affiliates) for all such payments actually made by Ashford Trust (or such other affiliates).

 

11.                               CONTINUATION OF INDEMNITY

 

(A)                               All agreements and obligations of the Indemnitor contained herein shall continue during the period the Indemnitee is an officer or a member of the Board of Directors of the Company and shall continue thereafter so long as the Indemnitee shall be subject to any threatened, pending or completed Proceeding by reason of such Indemnitee’s Corporate Status and during the period of statute of limitations for any act or omission occurring during the Indemnitee’s term of Corporate Status.  This Agreement shall be binding upon the Indemnitor and its respective successors and assigns and shall inure to the benefit of the Indemnitee and such Indemnitee’s heirs, executors and administrators.

 

(B)                               The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

12.                               SEVERABILITY

 

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or

 

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unenforceable) shall be construed so as to give effect to the intent manifested by the provisions held invalid, illegal or unenforceable.

 

13.                               EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES

 

Notwithstanding any other provisions of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of reasonable Expenses under this Agreement with respect to any Proceeding (i) initiated by such Indemnitee against the Indemnitor other than a proceeding commenced pursuant to paragraph 8 hereof unless the Board of Directors authorized the Proceeding (or any part of any Proceeding) prior to its initiation or the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (ii) for an accounting of profits arising from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act, rules and regulations promulgated thereunder, or any similar provisions of any federal, state or local statute or common law, (iii) for any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), (iv) for any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board of Directors or the compensation committee of the Board of Directors, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act or (v) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision.

 

14.                               HEADINGS

 

The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

15.                               MODIFICATION AND WAIVER

 

No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

16.                               NOTICES

 

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand or by a nationally recognized overnight delivery service and received by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with

 

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postage prepaid, on the third business day after the date on which it is so mailed, if so delivered or mailed, as the case may be, to the following addresses:

 

If to the Indemnitee, to the address set forth in the records of the Company.

 

If to the Indemnitor, to:

 

Ashford Inc.

14185 Dallas Parkway

Suite 1100

Dallas, TX 75254

Attention:  General Counsel

 

or to such other address as may have been furnished to the Indemnitee by the Indemnitor or to the Indemnitor by the Indemnitee, as the case may be.

 

17.                               CONTRIBUTION

 

(A)                               To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, penalties, fines and settlements and Expenses actually incurred by or on behalf of an Indemnitee, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

(B)                               The Company acknowledges and agrees that as between the Company and any other entity that has provided indemnification rights in respect of Indemnitee’s service as a director of the Company at the request of such entity (an “Additional Indemnitor”), the Company shall be primarily liable to Indemnitee as set forth in this Agreement for any indemnification claim (including, without limitation, any claim for advancement of Expenses) by Indemnitee in respect of any Proceeding for which Indemnitee is entitled to indemnification hereunder.  In the event the Additional Indemnitor is liable to any extent to Indemnitee by virtue of indemnification rights provided by the Additional Indemnitor to Indemnitee in respect of Indemnitee’s service on the Board of Directors at the request of the Additional Indemnitor and Indemnitee is also entitled to indemnification under this Agreement (including, without limitation, for advancement of Expenses) as a result of any Proceeding, the Company shall pay, in the first instance, the entire amount of any indemnification claim (including, without limitation, any claim for advancement of Expenses) brought by the Indemnitee against the Company under this Agreement (including, without limitation, any claim for advancement of

 

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Expenses) without requiring the Additional Indemnitor to contribute to such payment, and the Company hereby waives and relinquishes to the fullest extent permitted by law any right of contribution, subrogation or any other right of recovery of any kind it may have against the Additional Indemnitor in respect thereof.  The Company further agrees that no advancement or payment by the Additional Indemnitor on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Additional Indemnitor shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company.  Without limiting the generality of the foregoing, the Company hereby acknowledges that certain of its Directors, including the Directors affiliated with Ashford Trust (the “Specified Directors”), may have certain rights to indemnification and advancement of expenses provided by Ashford Trust and certain of its affiliates (collectively, the “Ashford Trust Indemnitors”), which shall constitute Additional Indemnitors for purposes of this paragraph.  To the extent the Indemnitee is a Specified Director, the Company hereby agrees and acknowledges that with respect to matters for which it is required to provide indemnity pursuant to the terms of this Agreement, (i) it shall be the indemnitor of first resort with respect to the Indemnitee (i.e., its obligations to the Indemnitee are primary and any obligation of the Ashford Trust Indemnitors to advance expenses or to provide indemnification for expenses or liabilities incurred by the Indemnitee are secondary), (ii) it shall advance the full amount of expenses incurred and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by the Indemnitee to the extent required by the terms of this Agreement (or any other agreement between the Company and the Indemnitee), without regard to any rights the Specified Directors may have against the Ashford Trust Indemnitors and (iii) to the fullest extent permitted by law it irrevocably waives, relinquishes and releases the Ashford Trust Indemnitors from any and all claims against the Ashford Trust Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof related to the Company’s obligations set forth in clauses (i) and (ii) in this sentence.  The Company further agrees that no advancement or payment by the Ashford Trust Indemnitors on behalf of the Indemnitee with respect to any claim for which the Indemnitee has sought indemnification from the Company shall affect the foregoing and the Ashford Trust Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company.

 

18.                               GOVERNING LAW

 

The parties agree that this Agreement, all claims or causes of action arising hereunder and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without application of the conflict of laws principles thereof.  The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court of Chancery of the State of

 

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Delaware (the “Court of Chancery”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) agree that service of process by mail to the address set forth in Section 16 will be deemed to the fullest extent permitted by law to be personal service within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Court of Chancery, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Court of Chancery has been brought in an improper or inconvenient forum.

 

19.                               NO ASSIGNMENTS

 

The Indemnitee may not assign its rights or delegate obligations under this Agreement without the prior written consent of the Indemnitor.  Any assignment or delegation in violation of this paragraph 19 shall be null and void.

 

20.                               NO THIRD PARTY RIGHTS

 

Except for the rights of an Additional Indemnitor under paragraph 17(B) hereof and except for Ashford Trust, who is expressly made a third party beneficiary of paragraph 10(E) hereof: (a) nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement; and (b) this Agreement and all of its provisions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

 

21.                               COUNTERPARTS

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute an agreement binding on all of the parties hereto.

 

[Signature page follows]

 

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

 

	
 
    	
ASHFORD   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David   A. Brooks, Chief Operating Officer and General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEMNITEE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[                                      ]Exhibit 10.7

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT, dated as of [                 ], 2014, is entered into by Ashford Inc., a Delaware corporation (“Ashford Inc.”) for the benefit of the holders of common units in Ashford Hospitality Advisors LLC, a Delaware limited liability company (“Ashford LLC”) whose names are set forth on Exhibit A attached hereto (the “Ashford LLC Unit Holders”).

 

RECITALS

 

WHEREAS, in connection with the separation and distribution of Ashford Inc. (the “Transaction”) from Ashford Hospitality Trust, Inc., a Maryland Corporation (“Ashford Trust”), Ashford Hospitality Limited Partner (“Ashford Trust OP”) distributed all of the Ashford LLC Common Units pro rata to its limited partners, in accordance with the provisions of Ashford Trust OP’s partnership agreement, and each limited partner of Ashford Trust OP has been admitted as a member of Ashford LLC; and

 

WHEREAS, Ashford Inc. has issued shares of its common stock, par value $0.01 per share (the “Common Stock”), in exchange for Ashford LLC Common Units pursuant to a prospectus that is part of a registration statement on Form S-4  (Registration No. 333-197191) filed with the SEC, pursuant to which each holder of Ashford LLC Common Units (other than Ashford Trust) was given the option to exchange up to 99% of its Ashford LLC Common Units for shares of Common Stock, in even multiples of 55 (the “Exchange Offer”);

 

WHEREAS, pursuant to the Operating Agreement (as defined below), Ashford LLC Common Units owned by the Ashford LLC Unit Holders following the consummation of the Exchange Offer will be redeemable for cash or, at the option of Ashford Inc., for shares of Common Stock, upon the terms and subject to the conditions contained in the Operating Agreement; and

 

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

 

ARTICLE I

DEFINITIONS

 

Section 1.1            Definitions.  In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

 

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

 

“Agreement” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

 

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

 

“Charter” means the Amended and Restated Certificate of Incorporation of Ashford Inc. as filed with the Secretary of State of the State of Delaware on                      , 2014, as the same may be amended, modified or restated from time to time.

 

“Commission” means the Securities and Exchange Commission.

 

“Confidential Information” means Confidential Information as defined in Section 2.13(c).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exchangeable Ashford LLC Common Units” means Ashford LLC Common Units that may be redeemable for cash or, at the sole and absolute discretion of Ashford Inc., exchangeable for shares of Common Stock pursuant to Section 7.3 of the Operating Agreement.

 

“Holder” means any Initial Holder who is the record or beneficial owner of any Registrable Security or any assignee or transferee of such Initial Holder (including assignments or transfers of Registrable Securities to such assignees or transferees as a result of the foreclosure on any loans secured by such Registrable Securities) (x) to the extent permitted under the Operating Agreement or the Charter, as applicable, and (y) provided such assignee or transferee agrees in writing to be bound by all the provisions hereof, unless such owner, assignee or transferee acquires such Registrable Security in a public distribution pursuant to a registration statement under the Securities Act or pursuant to transactions exempt from registration under the Securities Act where securities sold in such transaction may be resold without subsequent registration under the Securities Act.

 

“Immediate Family” of any individual means such individual’s estate and heirs or current spouse, or former spouse, parents, parents-in-law, children (whether natural or adoptive or by marriage), siblings and grandchildren and any trust or estate, all of the beneficiaries of which consist of such individual or any of the foregoing.

 

“Initial Holder” means (i) the Ashford LLC Unit Holders, (ii) any partner, member or stockholder of the Ashford LLC Unit Holder, (iii) any Affiliate of any such partner, member or stockholder, and (iv) the Immediate Family of any of the foregoing.

 

“Issuer Shelf Registration Statement” has the meaning set forth in Section 2.1(b).

 

“Notice and Questionnaire” means a written notice, substantially in the form attached as Exhibit B, delivered by a Holder to Ashford Inc. (i) notifying Ashford Inc. of such Holder’s desire to include Registrable Securities held by it in a Resale Shelf Registration Statement, (ii) containing all information about such Holder required to be included in such registration 

 

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statement in accordance with applicable law, including Item 507 of Regulation S-K promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto, and (iii) pursuant to which such Holder agrees to be bound by the terms and conditions hereof.

 

“Operating Agreement” means the Amended and Restated Operating Agreement of Ashford LLC, dated as of                     , 2014, as the same may be amended, modified or restated from time to time.

 

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Primary Shares” has the meaning set forth in Section 2.1(b) of this Agreement.

 

“Registrable Securities” means shares of Common Stock at any time owned, either of record or beneficially, by any Holder which are issuable or issued upon exchange of Exchangeable Ashford LLC Common Units issued in connection with the Transaction and any additional shares of Common Stock issued as a dividend, distribution or exchange for, or in respect of such shares until:

 

(i) a Registration Statement covering such shares has been declared effective by the Commission and such shares have been disposed of pursuant to such effective Registration Statement or such shares (other than Restricted Shares) were issued pursuant to an effective Registration Statement;

 

(ii) such shares have been distributed to the common stockholders of Ashford Trust in a distribution exempt from Registration;

 

(iii) such shares have been publicly sold under Rule 144 and such shares are no longer Restricted Shares; or

 

(iv) such securities have been sold by a Holder in a transaction in which such Holder’s rights under this Agreement are not, or cannot be, assigned;

 

provided, however, that “Registrable Securities” for purposes of the indemnification obligations contained in Section 2.9 shall mean all shares that are Registered on the applicable Shelf Registration, notwithstanding that such shares may not otherwise be “Registrable Securities.”

 

“Resale Shelf Registration” shall have the meaning set forth in Section 2.1(a).

 

“Resale Shelf Registration Statement” shall have the meaning set forth in Section 2.1(a).

 

“Restricted Shares” means shares of Common Stock issued under an Issuer Registration Statement which if sold by the holder thereof would constitute “restricted securities” as defined under Rule 144.

 

“Rule 144” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

 

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“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a Resale Shelf Registration Statement under the Securities Act.

 

“Shelf Registration Statement” means a Resale Shelf Registration Statement or an Issuer Shelf Registration Statement, as applicable.

 

“Suspension Notice” means any written notice delivered by the Company pursuant to Section 2.9 with respect to the suspension of rights under a Resale Shelf Registration Statement or any prospectus contained therein.

 

ARTICLE II

REGISTRATION RIGHTS

 

Section 2.1            Shelf Registration.

 

(a)           Resale Shelf Registration.  Subject to Section 2.9, Ashford Inc. shall prepare and file not later than 54 weeks after the consummation date of the Transaction, a “shelf” registration statement with respect to the resale of the Registrable Securities (“Resale Shelf Registration”) by the Holders thereof on an appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (the “Resale Shelf Registration Statement”) and permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution elected by the Holders and set forth in the Resale Shelf Registration Statement.  Ashford Inc. shall use its commercially reasonable efforts to cause the Resale Shelf Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof, and, subject to Sections 2.1(c) and 2.9, to keep such Resale Shelf Registration Statement continuously effective for a period ending when all shares of Common Stock covered by the Resale Shelf Registration Statement are no longer Registrable Securities.  In addition, if the Resale Shelf Registration Statement is not on Form S-3 (or any similar or successor form) and during the period that the Resale Shelf Registration Statement is effective Ashford Inc. becomes eligible to use Form S-3 (or any similar or successor form), Ashford Inc. shall be entitled to amend the Resale Shelf Registration Statement so that it becomes a registration statement on Form S-3 (or any similar or successor form); provided, however, that the Company shall use its best efforts to have such amendment declared effective as soon as practicable after filing.

 

At the time the Resale Shelf Registration Statement is declared effective, each Holder that has delivered a duly completed and executed Notice and Questionnaire to the Company on or prior to the date ten (10) Business Days prior to such time of effectiveness shall be named as a selling securityholder in the Resale Shelf Registration Statement and the related prospectus in such a manner as to permit such Holder to deliver such prospectus to purchasers of Registrable Securities in accordance with applicable law.  If required by applicable law, subject to the terms and conditions hereof, after effectiveness of the Resale Shelf Registration Statement, Ashford Inc. shall file a supplement to such prospectus or amendment to the Resale Shelf Registration Statement not less than once a quarter as necessary to name as selling securityholders therein any 

 

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Holders that provide to Ashford Inc. a duly completed and executed Notice and Questionnaire and shall use commercially reasonable efforts to cause any post-effective amendment to such Resale Shelf Registration Statement filed for such purpose to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof.

 

(b)           Issuance Shelf Registration.  Ashford Inc. may, at its option, satisfy its obligation to prepare and file a Resale Shelf Registration Statement pursuant to Section 2.1(a) with respect to shares of Common Stock issuable upon exchange of Exchangeable Ashford LLC Common Units received in connection with the Transaction by preparing and filing with the Commission a registration statement on an appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (an “Issuer Shelf Registration Statement”) providing for the issuance by Ashford Inc., from time to time, to the Holders of such Exchangeable Ashford LLC Common Units shares of Common Stock registered under the Securities Act (the “Primary Shares”) in lieu of Ashford LLC’s obligation to pay cash for such Exchangeable Ashford LLC Common Units.  Ashford Inc. shall use its commercially reasonable efforts to cause the Issuer Shelf Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after filing thereof.  Ashford Inc. shall use commercially reasonable efforts, subject to Sections 2.1(c) and 2.9, to keep the Issuer Shelf Registration Statement continuously effective for a period (the “Effectiveness Period”) expiring on the date all of the shares of Common Stock covered by such Issuer Shelf Registration Statement have been issued by the Company pursuant thereto.  In addition, if the Issuer Shelf Registration Statement is not on Form S-3 (or any similar or successor form) and during the period that the Issuer Shelf Registration Statement is effective Ashford Inc. becomes eligible to use Form S-3 (or any similar or successor form), Ashford Inc. shall be entitled to amend the Issuer Shelf Registration Statement so that it becomes a registration statement on Form S-3 (or any similar or successor form); provided, however, that Ashford Inc. shall use its best efforts to have such amendment declared effective as soon as practicable after filing.  If Ashford Inc. shall exercise its rights under this Section 2.1(b), Holders (other than Holders of Restricted Shares) shall have no right to have shares of Common Stock issued or issuable upon exchange of Exchangeable Ashford LLC Common Units included in a Resale Shelf Registration Statement pursuant to Section 2.1(a).

 

(c)           Continuous Effectiveness.  Ashford Inc. shall prepare and file such additional registration statements as necessary and use its commercially reasonable efforts to cause such registration statements to be declared effective by the Commission so that a shelf registration statement remains continuously effective, subject to Section 2.9, with respect to resales of Registrable Securities as and for the periods required under Section 2.1(a) or (b), as applicable, such subsequent registration statements, if any, shall constitute a Issuer Shelf Registration Statement or a Resale Shelf Registration Statement, as the case may be, hereunder.

 

(d)           Selling Holders Become Party to Agreement.  Each Holder acknowledges that by participating in its registration rights pursuant to this Agreement, such Holder will be deemed a party to this Agreement and will be bound by its terms, notwithstanding such Holder’s failure to deliver a Notice and Questionnaire; provided, that any Holder that has not delivered a duly completed and executed Notice and Questionnaire shall not be entitled to be named as a Selling Holder in, or have the Registrable Securities held by it covered by, a Resale Shelf Registration Statement.

 

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Section 2.2            Registration Procedures; Filings; Information.  Subject to Section 2.9 hereof, in connection with any Resale Shelf Registration Statement under Section 2.1(a), Ashford Inc. will use its commercially reasonable efforts to effect the registration of the Registrable Securities covered thereby in accordance with the intended method of disposition thereof as quickly as reasonably practicable, and in connection with any Issuer Shelf Registration Statement under Section 2.1(b), the Company will use its commercially reasonable efforts to effect the registration of the Primary Shares as quickly as reasonably practicable.  In connection with any Shelf Registration Statement:

 

(a)           Ashford Inc. will, if requested, prior to filing a Resale Shelf Registration Statement or prospectus or any amendment or supplement thereto, furnish to each Selling Holder of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter furnish to such Selling Holder such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder may reasonably request to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

 

(b)           After the filing of the Resale Shelf Registration Statement, Ashford Inc. will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

 

(c)           Ashford Inc. will use its commercially reasonable efforts to (i) register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdictions in the United States (where an exemption does not apply) as any Selling Holder reasonably (in light of such Selling Holder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of Ashford Inc. and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that Ashford Inc. will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (c), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(d)           Ashford Inc. will immediately notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) Ashford Inc.’s receipt of any notification of the suspension of the qualification of any Registrable Securities covered by a Resale Shelf Registration Statement for sale in any jurisdiction; or (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to each Selling Holder any such supplement or amendment.

 

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(e)           Ashford Inc. will otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering a period of 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder (or any successor rule or regulation hereafter adopted by the Commission).

 

(f)            Ashford Inc. will use its commercially reasonable efforts to cause all Registrable Securities covered by such Resale Shelf Registration Statement or Primary Shares covered by such Issuer Shelf Registration Statement to be listed on each securities exchange on which similar securities issued by Ashford Inc. are then listed.

 

(g)           In addition to the Notice and Questionnaire, Ashford Inc. may require each Selling Holder of Registrable Securities to promptly furnish in writing to Ashford Inc. such information regarding such Selling Holder, the Registrable Securities held by it and the intended method of distribution of the Registrable Securities as Ashford Inc. may from time to time reasonably request and such other information as may be legally required in connection with such registration.  No Holder may include Registrable Securities in any registration statement pursuant to this Agreement unless and until such Holder has furnished to Ashford Inc. such information.  Each Holder further agrees to furnish as soon as reasonably practicable to Ashford Inc. all information required to be disclosed to make information previously furnished to Ashford Inc. by such Holder not materially misleading.

 

(h)           Each Selling Holder agrees that, upon receipt of any notice from Ashford Inc. of the happening of any event of the kind described in Section 2.2(b) or 2.2(d) or upon receipt of a Suspension Notice, such Selling Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Selling Holder’s receipt of written notice from Ashford Inc. that such disposition may be made and, in the case of clause (ii) of Section 2.2(d) or, if applicable, Section 2.9, copies of any supplemented or amended prospectus contemplated by clause (ii) of Section 2.2(d) or, if applicable, prepared under Section 2.9, and, if so directed by Ashford Inc., such Selling Holder will deliver to Ashford Inc. all copies, other than permanent file copies then in such Selling Holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.  Each Selling Holder of Registrable Securities agrees that it will immediately notify Ashford Inc. at any time when a prospectus relating to the registration of such Registrable Securities is required to be delivered under the Securities Act of the happening of an event as a result of which information previously furnished by such Selling Holder to Ashford Inc. in writing for inclusion in such prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made.

 

Section 2.3            Registration Expenses.  In connection with any registration statement required to be filed hereunder, Ashford Inc. shall pay the following registration expenses incurred in connection with the registration hereunder (the “Registration Expenses”): (i) all fees and expenses of compliance with securities or “blue sky” laws (including registration and filing fees and reasonable fees and disbursements of counsel in connection with blue sky qualifications 

 

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of the Registrable Securities); (ii) printing expenses; (iii) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties); (iv) the fees and expenses incurred in connection with the listing of the Registrable Securities; (v) reasonable fees and disbursements of counsel for Ashford Inc. and customary fees and expenses for independent certified public accountants retained by Ashford Inc.; and (vi) the reasonable fees and expenses of any special experts retained by Ashford Inc. in connection with such registration.  Ashford Inc. shall have no obligation to pay any fees, discounts or commissions attributable to the sale of Registrable Securities, any out-of-pocket expenses of the Holders (or the agents who manage their accounts), or any transfer taxes relating to the registration or sale of the Registrable Securities.

 

Section 2.4            Indemnification by Ashford Inc..  Ashford Inc. agrees to indemnify and hold harmless each Selling Holder of Registrable Securities, its officers, directors and agents, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if Ashford Inc. shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or that arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission included in reliance upon and in conformity with information furnished in writing to Ashford Inc. by such Selling Holder or on such Selling Holder’s behalf expressly for inclusion therein.  The indemnity provided for in this Section 2.4 shall remain in full force and effect regardless of any investigation made by or on behalf of any Selling Holder.

 

Section 2.5            Indemnification by Holders of Registrable Securities.  Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless Ashford Inc., its officers, directors and agents (including, without limitation, the underwriters with respect to an underwritten offering) and each Person, if any, who controls Ashford Inc. within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from Ashford Inc. to such Selling Holder, but only with respect to information relating to such Selling Holder included in reliance upon and in conformity with information furnished in writing by such Selling Holder or on such Selling Holder’s behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus.  In case any action or proceeding shall be brought against Ashford Inc. or its officers, directors or agents or any such controlling person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder shall have the rights and duties given to Ashford Inc., and Ashford Inc. or its officers, directors or agents or such controlling person shall have the rights and duties given to such Selling Holder, by Section 2.4.  The obligations of any Selling Holder pursuant to this Section 2.5 will be limited to an amount equal to the net proceeds to such Selling Holder (after deducting any discounts and commissions) from the disposition pursuant to such registration.

 

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Section 2.6                                   Conduct of Indemnification Proceedings.  In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 2.4 or 2.5, such person (an “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Party to give such notice will not relieve such Indemnifying Party of any obligations under this Article II, except to the extent such Indemnifying Party is materially prejudiced by such failure.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.4 hereof, the Selling Holders which owned a majority of the Registrable Securities sold under the applicable registration statement and (ii) in the case of Persons indemnified pursuant to Section 2.5, Ashford Inc.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party to reimburse the Indemnified Party for fees and expenses of counsel as contemplated by the third sentence of this paragraph, the Indemnifying Party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than thirty (30) Business Days after receipt by such Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

Section 2.7                                   Contribution.  If the indemnification provided for in Section 2.4 or 2.5 hereof is unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of Ashford Inc. and each Selling Holder in connection 

 

9

 

with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative fault of Ashford Inc. on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

Ashford Inc. and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 2.7, no Selling Holder shall be required to contribute any amount in excess of the amount by which the net proceeds from the sale of the securities of such Selling Holder to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Selling Holder’s obligations to contribute pursuant to this Section 2.7 are several in the proportion the net proceeds of the offering received by such Selling Holder bear to the total net proceeds of the offering received by all the Selling Holders and not joint.

 

Section 2.8                                   Rule 144.  Ashford Inc. covenants that it will (a) make and keep public information regarding Ashford Inc. available as those terms are defined in Rule 144, (b) file in a timely manner any reports and documents required to be filed by it under the Securities Act and the Exchange Act, (c) furnish to any Holder forthwith upon request (i) a written statement by Ashford Inc. as to its compliance with the reporting requirements of Rule 144 (at any time more than 90 days after the completion of the Transaction), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), and (ii) a copy of the most recent annual or quarterly report of Ashford Inc. and such other reports and documents so filed by Ashford Inc., and (d) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

 

Section 2.9                                   Suspension of Use of Registration Statement.

 

(a)                                  If the Board of Directors of Ashford Inc. determines in its good faith judgment that the filing of a Resale Shelf Registration Statement under Section 2.1(a) or the use of any related prospectus would be materially detrimental to Ashford Inc. because such action would require the disclosure of material information that Ashford Inc. has a bona fide business purpose for preserving as confidential or the disclosure of which would impede Ashford Inc.’s ability to consummate a significant transaction (“Confidential Information”), and that Ashford Inc. is not 

 

10

 

otherwise required by applicable securities laws or regulations to disclose, upon written notice of such determination by Ashford Inc. to the Holders, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to a Resale Shelf Registration Statement or to require Ashford Inc. to take action with respect to the registration or sale of any Registrable Securities pursuant to a Resale Shelf Registration Statement shall be suspended until the earlier of (i) the date upon which Ashford Inc. notifies the Holders in writing that suspension of such rights for the grounds set forth in this Section 2.9(a) is no longer necessary and (ii) one-hundred eighty (180) days; provided, however, no such 180-day period shall be successive with respect to the same Confidential Information.  Ashford Inc. agrees to give the notice under (i) above as promptly as practicable following the date that such suspension of rights is no longer necessary.

 

If all reports required to be filed by Ashford Inc. pursuant to the Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by Ashford Inc. has occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X promulgated under the Securities Act or any successor rule, upon written notice thereof by Ashford Inc. to the Holders, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to a Resale Shelf Registration Statement or to require Ashford Inc. to take action with respect to the registration or sale of any Registrable Securities pursuant to a Resale Shelf Registration Statement shall be suspended until the date on which Ashford Inc. has filed such reports or obtained and filed the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in the Resale Shelf Registration Statement, and Ashford Inc. shall notify the Holders as promptly as practicable when such suspension is no longer required.

 

Section 2.10                            Additional Shares.  Ashford Inc., at its option, may register under a Shelf Registration Statement and any filings with any state securities commissions filed pursuant to this Agreement, any number of unissued shares of Common Stock or any shares of Common Stock owned by any other stockholder or stockholders of the Company.

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1                                   Remedies.  In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement.  Ashford Inc. agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Section 3.2                                   Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of Ashford Inc. and the Holders of a majority of the Registrable Securities (with Holders of Exchangeable Ashford LLC Common Units deemed to be Holders, for purposes of this Section, of the number of shares of Common Stock into which such Exchangeable Ashford LLC Common Units would be exchangeable for as of the date on which consent is requested); provided, however, that the effect of any such amendment will be that the consenting Holders 

 

11

 

will not be treated more favorably than all other Holders (without regard to any differences in effect that such amendment or waiver may have on the Holders due to the differing amounts of Registrable Shares held by such Holders).  No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

 

Section 3.3                                   Notices.  All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)             if to any Holder, initially to the address indicated in such Holder’s Notice and Questionnaire or, if no Notice and Questionnaire has been delivered, to such other address as any Holder shall have specified in writing; and

 

(ii)          if to Ashford Inc., to 14185 Dallas Parkway, Suite 1100, Dallas, TX 25254, Attention: Chief Legal Officer, or to such other address as Ashford Inc. may hereafter specify in writing.

 

All such notices and communications shall be deemed to have been duly given: (A) at the time delivered by hand, if personally delivered; (B) when received if deposited in the mail, postage prepaid; (C) when answered back, if telexed; (D) when receipt acknowledged, if telecopied; and (E) on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

 

Section 3.4                                   Successors and Assigns.

 

This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties.  Any Holder may assign its rights under this Agreement without the consent of Ashford Inc. in connection with a transfer of such Holder’s Ashford LLC Common Units or Registrable Securities; provided, that the Holder satisfies all applicable transfer provisions for the Ashford LLC Common Units or Registrable Securities, as applicable, and notifies Ashford Inc. of such proposed transfer and assignment and the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement.

 

Section 3.5                                   Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

 

Section 3.6                                   Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without regard to the choice of law provisions thereof.

 

Section 3.7                                   Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other 

 

12

 

respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 3.8                                   Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by Ashford Inc. with respect to the Registrable Securities.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.9                                   Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.10                            No Third Party Beneficiaries.  Nothing express or implied herein is intended or shall be construed to confer upon any person or entity, other than the parties hereto and their respective successors and assigns, any rights, remedies or other benefits under or by reason of this Agreement.

 

Section 3.11                            Termination.  The obligations of the parties hereunder shall terminate (i) with respect to a Holder when it no longer holds Registrable Securities, and (ii) with respect to Ashford Inc. upon the end of the Effectiveness Period with respect to any Issuer Shelf Registration Statement and when there are no longer any Registrable Securities with respect to any Resale Shelf Registration Statement; except, in each case, for any obligations under Sections 2.1(c), 2.3, 2.4, 2.5, 2.6 and 2.7 and Article III that, by their terms, are intended to survive for a specific period of time.

 

 

[Signature Page Follows]

 

13

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above.

 

 

	
 
    	
ASHFORD   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   David A. Brooks
    
	
 
    	
Title:   Chief Operating Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
14185   Dallas Parkway, Suite 1100
    
	
 
    	
Dallas,   TX  75254
    

 

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
ASHFORD LLC UNIT HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    

 

 

 

[Signature Page to Registration Rights Agreement]

 

 

 

Exhibit A

 

Monty Bennett

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Dartmore, LP

c/o Monty Bennett

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

MJB Investments, LP

c/o Monty Bennett

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

Reserve, LP IV

c/o Monty Bennett

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

Reserve, LP III

c/o Monty Bennett

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

Archie Bennett Jr.

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

1080 Partners LP

c/o Archie Bennett Jr.

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

3 MB Associates

Attn: Martin Edelman

75 E. 55th St., 9th Fl.

New York, NY 10022

 

Ashford Financial Corporation

14185 Dallas Parkway, Suite 1150

Dallas, TX 75254

 

Helmut Horn

1110 Jorie Blvd, Suite 350

Oak Brook, IL 60523

 

 

Graham Hershman

522 N. Oak

Hinsdale, IL 60521

 

Emily Landau

c/o Neal Black of Fisher Brothers

299 Park Avenue

New York, NY 10171

 

Martin Edelman

75 E. 55th St, 8th Fl

New York, NY 10022

 

FGT, L.P.

One Embarcadero Ctr, Ste 1350

San Francisco, CA 94111

 

David Kimichik

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

David Brooks

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Mark Nunneley

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Doug Kessler

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Rob Hayes

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Pia Ackerman

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Deric Eubanks

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Jeremy Welter

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

 

Milissa Foshee

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Ben Ansell

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Kamal Jafarnia

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Michael Murphy

14185 Dallas Parkway, Suite 1100

Dallas, TX 75254

 

Lawrence D. Barkman

1625 Wyatts Ridge Road

Crownsville, MD 21032

 

Arthur A. Birney

888 17th St. NW, Suite 202

Washington, DC 20006

 

Washington Brick & Terra Cotta Company, L.P., L.L.P.

3168 Braverton St, Suite 400

Edgewater, MD 21037

 

Barbara Fleischman

870 United Nations Plaza, Apt 37C

New York, NY 10017

 

Laura Glassman

1300 Crystal Drive, Suite 804S

Arlington, VA 22202

 

Paul Glassman

3102 Gransville Ave

Los Angeles, CA 90066

 

Kogod Family Holding Group LLC

2345 Crystal Drive

Arlington, VA 22202

 

Arlene R. Kogod

2345 Crystal Drive

Arlington, VA 22202

 

 

Lauren Sue Kogod

2345 Crystal Drive

Arlington, VA 22202

 

Leslie Susan Kogod

2345 Crystal Drive

Arlington, VA 22202

 

Robert P. Kogod

2345 Crystal Drive

Arlington, VA 22202

 

Stuart Allan Kogod

2345 Crystal Drive

Arlington, VA 22202

 

Clarice Smith Marital Deduction Trust

2345 Crystal Drive

Arlington, VA 22202

 

MC II Associates

2345 Crystal Drive

Arlington, VA 22202

 

 

Exhibit B

Form of Notice and Questionnaire

 

The undersigned beneficial holder of shares of common stock, par value $.01 per share (“Common Stock”), of Ashford Inc. (the “Company”) and/or common units of membership interests of Ashford Hospitality Advisors LLC (“Ashford LLC”) convertible into shares of Common Stock (any such Common Stock, the “Registrable Securities”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) one or more registration statements (collectively, the “Resale Shelf Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”), dated                  , 2014, by the Company for the benefit of the holders of common units in Ashford LLC whose names are set forth on Exhibit A attached thereto. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Registration Rights Agreement.

 

Each beneficial owner of Registrable Securities is entitled to the benefits of the Registration Rights Agreement. In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling security holder in the related prospectus, deliver a prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification provisions as described below). To be included in the Resale Shelf Registration Statement, this Notice and Questionnaire must be completed, executed and delivered to the Company at the address set forth herein on or prior to the tenth business day before the effectiveness of the Resale Shelf Registration Statement. We will give notice of the filing and effectiveness of the initial Resale Shelf Registration Statement by issuing a press release and by mailing a notice to the holders at their addresses set forth in the register of the registrar.

 

Beneficial owners that do not complete this Notice and Questionnaire and deliver it to the Company as provided below will not be named as selling security holders in the prospectus and therefore will not be permitted to sell any Registrable Securities pursuant to the Resale Shelf Registration Statement. Beneficial owners are encouraged to complete and deliver this Notice and Questionnaire prior to the effectiveness of the initial Resale Shelf Registration Statement so that such beneficial owners may be named as selling security holders in the related prospectus at the time of effectiveness. Upon receipt of a completed Notice and Questionnaire from a beneficial owner following the effectiveness of the initial Resale Shelf Registration Statement, in accordance with the Registration Rights Agreement, the Company will file such amendments to the initial Resale Shelf Registration Statement or additional shelf registration statements or supplements to the related prospectus as are necessary to permit such holder to deliver such prospectus to purchasers of Registrable Securities.

 

Certain legal consequences arise from being named as selling security holders in the Resale Shelf Registration Statement and the related prospectus. Accordingly, holders and

 

 

beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling security holder in the Resale Shelf Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial owner (the “Selling Security Holder”) of Registrable Securities hereby elects to include in the prospectus forming a part of the Resale Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3). The undersigned, by signing and returning this Notice and Questionnaire, understands that it will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement.

 

Pursuant to the Registration Rights Agreement, the undersigned has agreed to indemnify and hold harmless the Company and its directors, officers and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against certain losses arising in connection with statements concerning the undersigned made in the Resale Shelf Registration Statement or the related prospectus in reliance upon the information provided in this Notice and Questionnaire.

 

The undersigned hereby provides the following information to the Company and represents and warrants to the Company that such information is accurate and complete:

 

 

 

QUESTIONNAIRE

 

1.              (a)                                 Full Legal Name of Selling Security Holder:

 

(b)                                 Full Legal Name of registered holder (if not the same as (a) above) through which Registrable Securities listed in Item (3) below are held:

 

(c)                                  Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in Item (3) below are held:

 

(d)                                  List below the individual or individuals who exercise voting and/or dispositive powers with respect to the Registrable Securities listed in Item (3) below:

 

2.              Address for Notices to Selling Security Holder:

 

Telephone:

 

Fax:

 

E-mail address:

 

Contact Person:

 

3.              Beneficial Ownership of Registrable Securities:

 

Type of Registrable Securities beneficially owned, and number of shares of Common Stock and/or Ashford LLC Common Units, as the case may be, beneficially owned:

 

 

4.              Beneficial Ownership of Securities of the Company Owned by the Selling Security Holder:

 

Except as set forth below in this Item (4), the undersigned is not the beneficial or registered owner of any securities of the Company, other than the Registrable Securities listed above in Item (3).

 

Type and amount of other securities beneficially owned by the Selling Security Holder:

 

5.              Relationship with the Company

 

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

6.              Plan of Distribution

 

Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item (3) pursuant to the Resale Shelf Registration Statement only as follows and will not be offering any of such Registrable Securities pursuant to an agreement, arrangement or understanding entered into with a broker or dealer prior to the effective date of the Resale Shelf Registration Statement. Such Registrable Securities may be sold from time to time directly by the undersigned or, alternatively, through broker-dealers or agents. If the Registrable Securities are sold through broker-dealers, the Selling Security Holder will be responsible for discounts or commissions or agent’s commissions. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions)

 

(i)                                     on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale;

 

(ii)                                  in the over-the-counter market;

 

(iii)                               in transactions otherwise than on such exchanges or services or in the over-the-counter market; or

 

(iv)                              through the writing of options.

 

In connection with sales of the Registrable Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of

 

 

the Registrable Securities and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.

 

State any exceptions here:

 

Note:  In no event may such method(s) of distribution take the form of an underwritten offering of the Registrable Securities.

 

 

ACKNOWLEDGEMENTS

 

The undersigned acknowledges that it understands its obligation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations), in connection with any offering of Registrable Securities pursuant to the Registration Rights Agreement. The undersigned agrees that neither it nor any person acting on its behalf will engage in any transaction in violation of such provisions.

 

The Selling Security Holder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons set forth therein. Pursuant to the Registration Rights Agreement, Ashford Inc. has agreed under certain circumstances to indemnify the Selling Security Holders against certain liabilities.

 

In accordance with the undersigned’s obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Resale Shelf Registration Statement, the undersigned agrees to promptly notify Ashford Inc. of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Resale Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below.

 

In the event that the undersigned transfers all or any portion of the Registrable Securities listed in Item 3 above after the date on which such information is provided to Ashford Inc., the undersigned agrees to notify the transferee(s) at the time of transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement.

 

By signing this Notice and Questionnaire, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Resale Shelf Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Resale Shelf Registration Statement and the related prospectus.

 

Once this Notice and Questionnaire is executed by the Selling Security Holder and received by the Company, the terms of this Notice and Questionnaire and the representations and warranties contained herein shall be binding on, shall insure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the Selling Security Holder with respect to the Registrable Securities beneficially owned by such Selling Security Holder and listed in Item 3 above.

 

This Notice and Questionnaire shall be governed by, and construed in accordance with, the laws of the State of Texas.

 

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

	
 
    	
Holder:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
 
    

 

 

Please return the completed and executed Notice and Questionnaire to:

 

Ashford Inc.

14185 Dallas Parkway, Suite 1100

Dallas, TX  75254

Tel: (972) 490-9600

Attention:  Chief Legal Officer

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