Document:

exv10w26w1

 

INVESTMENT PROGRAM AGREEMENT

BETWEEN

PRUDENTIAL INVESTMENT MANAGEMENT, INC.

AND

ASHFORD HOSPITALITY FINANCE, L.P.

as of January 22, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	Section 1.01. Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II PURPOSE
	 	 	5	 
	Section 2.01. Places of Business
	 	 	5	 
	Section 2.02. Purpose
	 	 	5	 
	Section 2.03. Term
	 	 	5	 
	Section 2.04. No Liability to Ashford, PIM or the PIM Investors
	 	 	6	 
	Section 2.05. Other Business Activities of PIM and the PIM Investors
	 	 	6	 
	Section 2.06. Rights of PIM Investors
	 	 	7	 
	Section 2.07. Other Business Activities of Ashford
	 	 	7	 
	 
	 	 	 	 
	ARTICLE III CAPITAL CONTRIBUTIONS
	 	 	7	 
	Section 3.01. Capital Commitments
	 	 	7	 
	Section 3.02. Capital Calls
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV MANAGEMENT; INDEMNIFICATION
	 	 	8	 
	Section 4.01. Management
	 	 	8	 
	Section 4.02. No Assignment
	 	 	8	 
	Section 4.03. Program Representatives
	 	 	9	 
	Section 4.04. Removal of Program Representatives
	 	 	9	 
	Section 4.05. Program Reimbursable Expenses
	 	 	9	 
	Section 4.06. Program Acts
	 	 	9	 
	Section 4.07. Compensation
	 	 	9	 
	Section 4.08. Presentation of Opportunities
	 	 	9	 
	Section 4.09. Indemnification
	 	 	12	 
	Section 4.10. Non-Competition/Exclusivity
	 	 	13	 
	Section 4.11. Management Fee; Workout and Restructuring Fee
	 	 	13	 
	Section 4.12. Sourcing Fees
	 	 	13	 
	Section 4.13. Potential Ashford Spinoff
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V INTENTIONALLY OMITTED
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS
	 	 	14	 
	Section 6.01. Confidentiality
	 	 	14	 
	Section 6.02. Compliance with Law
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PIM AND ASHFORD
	 	 	16	 
	Section 7.01. Representations
	 	 	16	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII DISSOLUTION AND TERMINATION
	 	 	16	 
	Section 8.01. Termination
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	17	 
	Section 9.01. Specific Performance; Other Rights
	 	 	17	 
	Section 9.02. Notices
	 	 	17	 
	Section 9.03. Prior Agreements; Construction; Entire Agreement
	 	 	18	 
	Section 9.04. No Waiver
	 	 	19	 
	Section 9.05. Amendments
	 	 	19	 
	Section 9.06. Severability
	 	 	19	 
	Section 9.07. Counterparts
	 	 	19	 
	Section 9.08. Applicable Law; Jurisdiction
	 	 	19	 
	Section 9.09. Waiver Of Jury Trial
	 	 	19	 
	Section 9.10. Arbitration
	 	 	19	 
	Section 9.11. No Rights of Third Parties
	 	 	20	 
	Section 9.12. Further Assurances
	 	 	20	 
	Section 9.13. Survival
	 	 	20	 
	Section 9.14. Headings
	 	 	20	 
	Section 9.15. No Broker
	 	 	20	 
	Section 9.16. Currency
	 	 	20	 
	Section 9.17. Attorneys’ Fees
	 	 	20	 
	Section 9.18. REOC Compliance
	 	 	20	 

	 	 	 
	Exhibits
	 	 
	 
	 	 
	Exhibit A

	 	Form of Subsidiary Agreement
	 
	 	 
	Exhibit B

	 	Form of Master Venture Agreement
	 
	 	 
	Exhibit C

	 	Investment Criteria
	 
	 	 
	Exhibit D

	 	Preliminary Package Materials
	 
	 	 
	Exhibit E

	 	Form of Preliminary Approval Notice
	 
	 	 
	Exhibit F

	 	Full Package Materials
	 
	 	 
	Exhibit G

	 	Form of Approval Notice
	 
	 	 
	Exhibit H

	 	Qualifying Investments For Purposes of Section 8.01
	 
	 	 
	Exhibit I

	 	Form of Loan Servicing Agreement

-ii-

 

INVESTMENT PROGRAM AGREEMENT

     This INVESTMENT PROGRAM AGREEMENT (the “Agreement”), is made and entered into to be
effective for all purposes as of January 22, 2008, by and between Prudential Investment Management,
Inc., a Delaware corporation (together with its successors and assigns, collectively,
“PIM”) and Ashford Hospitality Finance LP, a Delaware limited partnership
(“Ashford”). All capitalized terms used in this Agreement which are not otherwise defined
have the meanings set forth in Article I.

WITNESSETH:

     WHEREAS, Ashford is presently acquiring, owning, managing, operating, financing, mortgaging,
encumbering, exchanging, selling, repairing, disposing or otherwise dealing with Qualifying
Investments (as such term is defined in Article I hereof);

     WHEREAS, Ashford and PIM have agreed to establish an exclusive investment program (the
“Program”) between one (1) or more investors advised by PREI (as hereinafter defined) or
PIM (each, a “PIM Investor” and collectively the “PIM Investors”) and Ashford.
Under the Program, the PIM Investors will provide in the aggregate up to $300,000,000 in capital to
acquire Investments (as such term is defined in Article I hereof), and Ashford will provide in the
aggregate up to $100,000,000 in capital to acquire such Investments, as more particularly provided
in this Agreement;

     WHEREAS, each PIM Investor and Ashford will form a master joint venture between such PIM
Investor and Ashford (the “Master Venture”), which in turn will form separate limited
liability companies (each, a “Subsidiary”) to acquire Investments; and

     WHEREAS, this Agreement is being entered into by PIM and Ashford to govern the affairs of the
Program; and

     WHEREAS, PIM will perform its obligations under this Agreement through Prudential Real Estate
Investors (“PREI”).

     NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

 

 

     “Accepted Loan Servicing Practices” for each Master Venture Agreement and applicable
Investment, shall have the meaning set forth in such Master Venture Agreement.

     “Acquisition Opportunity” shall have the meaning set forth in
Section 4.08(a) hereof.

     “Active” shall mean, with respect to an Acquisition Opportunity, Qualifying Investment
or Pipeline Transaction, that the PIM Program Representative has not eliminated the Acquisition
Opportunity, Qualifying Investment or Pipeline Transaction from consideration.

     “Affiliate” shall mean, when used with reference to a specified Person, (i) any Person
that directly or indirectly, through one or more intermediaries, Controls or is Controlled by or is
under common Control with the specified Person; (ii) any Person who, from time to time, is a spouse
or immediate relative of a specified Person; or (iii) any Person who, directly or indirectly, is
the beneficial owner of ten percent (10%) or more of any class of equity securities or other
ownership interests of the specified Person, or of which the specified Person is directly or
indirectly the owner of ten percent (10%) or more of any class of equity securities or other
ownership interests.

     “Agreement” shall mean this Investment Program Agreement as originally executed and as
amended, supplemented or restated from time to time.

     “Ashford Capital Commitment” shall have the meaning set forth in Section
3.01(c) hereof.

     “Assets” shall mean the assets and property, whether tangible or intangible and
whether real, personal, or mixed, at any time owned by or held, directly or indirectly, by or for
the benefit of one or more of the Subsidiaries, including any Investments, and all right, title,
and interest, if any, held and owned, directly or indirectly, by a Master Venture, but excluding
any and all rights to the name “Ashford,” and all variations thereof and all associated goodwill,
which shall be deemed the exclusive property of Ashford.

     “Business Day” shall mean each day other than a Saturday, Sunday or any other day on
which banking institutions in the State of New York are authorized or obligated by law or executive
order to be closed.

     “Capital Call”, for a Master Venture Agreement, shall have the meaning set forth in
such Master Venture Agreement.

     “Capital Call Notice”, for a Master Venture Agreement, shall have the meaning set
forth in such Master Venture Agreement.

     “Capital Commitments” shall have the meaning set forth in Section 3.01(c)
hereof.

     “Change in Control” shall mean such time as there is (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), of equity interests representing more than 50% of the

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aggregate ordinary voting power represented by the issued and outstanding equity interests of
Ashford; or (b) occupation of a majority of the seats (other than vacant seats) on the board of
directors of Ashford by Persons who were not directors as of the date of this Agreement, other than
Persons either (i) nominated by the board of directors of Ashford as constituted as of the date of
this Agreement or (ii) appointed by directors so nominated.

     “Code” shall mean the Internal Revenue Code of 1986, as amended (or any corresponding
provision of succeeding law).

     “Control” (including the terms “Controlling,” “Controlled by” and
“under common Control with”) shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     “Duty Breach” shall mean a breach of any material obligation under this Agreement
(including, but not limited to, Sections 4.09, 4.11, or 4.12), any Subsidiary
Agreement or any Master Venture Agreement, which remains uncured for a period of at least thirty
(30) days after receipt of notice of such breach, provided, that if such breach can be cured but is
not reasonably capable of being cured within such thirty (30)-day period, such longer period of
time as is necessary to cure such breach but in no event in excess of a total of seventy-five
(75) days. A failure to make a capital contribution shall not be considered a Duty Breach.

     “Funding Date”, for a Master Venture Agreement, shall have the meaning set forth in
such Master Venture Agreement.

     “including” shall mean “including, without limitation,”.

     “Initial Term” shall have the meaning set forth in Section 2.03 hereof.

     “Investment” shall mean, as applicable, the Closing of a Qualifying Investment by a
Master Venture or a Subsidiary during the term of this Agreement and the Qualifying Investment
thereby acquired.

     “Investment Criteria” has the meaning ascribed to it in Exhibit C hereof.

     “Investment Documents” shall mean the documents evidencing, securing and governing
Investments in form and substance approved by PIM.

     “IRS” shall mean the United States Internal Revenue Service.

     “Loan Servicing Agreement” shall mean, with respect to a Master Venture Agreement,
that certain Loan Servicing Agreement substantially in the form attached to this Agreement as
Exhibit I entered into between the applicable Master Venture and Ashford, as it may be
amended from time to time, and applicable to the Investments held directly or indirectly by such
Master Venture.

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     “Major Uncured Breach”, for a Master Venture Agreement, shall mean (i) a Duty Breach,
or (ii) a Change in Control of Ashford.

     “Master Venture” shall have the meaning set forth in the recitals hereof.

     “Master Venture Agreement” means each Limited Liability Company Agreement,
substantially in the form of Exhibit B to this Agreement, by and between each PIM Investor
and Ashford as each of the foregoing may be amended from time to time.

     “Master Venture Expenses”, for a Master Venture, shall mean the reasonable,
out-of-pocket third party costs of operating such Master Venture as described in the applicable
Master Venture Agreement and referred to therein as the “Company Expenses”.

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

     “PIM Capital Commitment” shall have the meaning set forth in Section 3.01(a)
hereof.

     “PIM Investors” shall mean entities advised by, or otherwise affiliated with, PIM that
have been selected by PIM to acquire Investments directly or indirectly through one or more Master
Ventures.

     “Pipeline Transactions” shall have the meaning set forth in Section 4.08(g)
hereof.

     “Preliminary Approval” shall have the meaning set forth in Section 4.08(c)
hereof.

     “Preliminary Package” shall have the meaning set forth in
Section 4.08(b) hereof.

     “Prime Rate” shall mean the rate of interest published from time to time by The Wall
Street Journal, as the “prime rate.”

     “Program” shall have the meaning set forth in the recitals hereof.

     “Program Counsel” shall mean one or more attorneys (exclusive of internal counsel) or
law firms engaged from time to time by the Program Representatives.

     “Program Representative” shall mean one (1) representative for each of Ashford and PIM
who will review Qualifying Investments, as more particularly provided in Article 4.

     “Program Reimbursable Expenses” shall mean, without duplication, Master Venture
Expenses and the reasonable, out-of-pocket third party costs and expenses of Ashford and PIM
associated with identifying, underwriting, performing due diligence on and negotiating and closing
Qualifying Investments, including costs of travel for PIM and Ashford representatives and such
third parties, in each case for Qualifying Investments that have received Preliminary Approval and
to the extent not otherwise reimbursed to Ashford or PIM, as the case may be, including by a
borrower under a Qualifying Investment; provided, however, that if a Qualifying

4

 

Investment shall not be acquired by a Master Venture or a Subsidiary following Preliminary
Approval of such Qualifying Investment, “Program Reimbursable Expenses” for such Qualifying
Investment shall include only such expenses incurred from and after such time as PIM has granted
its Preliminary Approval of the applicable Qualifying Investment.

     “Proprietary Information” shall have the meaning set forth in
Section 6.01(a) hereof.

     “Qualifying Investment” shall have the meaning set forth in Section 4.08(a)
hereof.

     “Sourcing Fee”, under a Master Venture Agreement, shall have the meaning set forth in
such Master Venture Agreement.

     “Subsidiary” shall have the meaning set forth in the recitals hereof.

     “Subsidiary Agreement” shall mean the limited liability company agreement of a
particular Subsidiary, substantially in the form of Exhibit A to this Agreement, subject to
such changes as will not adversely affect the economic terms of such form but as may be necessary
or desirable for any one (1) or more Investors to address tax or other legal issues applicable to
any of them.

     “Term” shall have the meaning set forth in Section 2.03 hereof.

     “Unfunded Capital Commitment”, for a Master Venture, shall have the meaning set forth
in the applicable Master Venture Agreement.

ARTICLE II

PURPOSE

     Section 2.01. Places of Business. Ashford may locate its place or places of business at
any place or places as Ashford may from time to time determine and identify to PIM. Ashford’s
initial principal place of business shall be at 14185 Dallas Parkway, Suite 1100, Dallas, Texas
75254.

     Section 2.02. Purpose. The principal purposes of the Program shall be to identify
Qualifying Investments for the Master Ventures or their Subsidiaries to acquire, own, manage,
operate, finance, mortgage, encumber, exchange, sell, repair, dispose or otherwise deal with. The
business and purpose of the Program shall be limited to its principal purposes, unless the Program
Representatives otherwise determine by their unanimous vote.

     Section 2.03. Term. The term of this Agreement (the “Term”) commenced on the date hereof and shall continue
until the winding up of each Master Venture and/or Subsidiary and its Investments, but in no event
beyond the twentieth (20th) anniversary of the date hereof, unless this Agreement is
terminated sooner in accordance with the provisions of this Agreement. The initial investment
period under this Agreement will be two (2) years (the “Initial Term”), unless this
Agreement is terminated sooner in accordance with the provisions of this Agreement.

5

 

     Section 2.04. No Liability to Ashford, PIM or the PIM Investors.

          (a) Except as otherwise required by law or the provisions of this Agreement or any Master
Venture Agreement or Subsidiary Agreement, none of Ashford, PIM, any PIM Investor or any Affiliate
of any of the foregoing or any Program Representative, nor any of the Program’s current or former
Affiliates, officers or agents, if any, shall be liable to the Program, any Master Venture or
Subsidiary or to each other for any debts, liabilities or obligations of the Program, whether
arising in contract, tort or otherwise, or for any action taken, or omitted to be taken, in good
faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the
Program and, with respect to any criminal action or proceeding, for any action taken, or omitted to
be taken, with no reasonable cause to believe that the conduct was unlawful, in each case except to
the extent of the applicable party’s adjudicated fraud, gross negligence, willful misconduct,
criminal conduct (unless there was no reasonable cause to believe the criminal action taken or
omitted was unlawful) or to the extent such action taken or omitted to be taken constitutes a
material breach of any provision of this Agreement or other contract between such party and the
Program. Except as expressly set forth herein, none of Ashford, PIM, any PIM Investor or any
Affiliate of any of the foregoing shall have to make any contributions or deliver any letters of
credit, guaranties or other tangible property to any Subsidiary or Master Venture. Nothing in this
Agreement shall be construed to make Ashford or any PIM Investor liable for any losses or debts of
the Program, except to the extent of losses of their respective capital contributions to a
Subsidiary or the Master Venture pursuant to the terms of the applicable Subsidiary Agreement or
Master Venture Agreement.

          (b) No Affiliate or member of any of Ashford, PIM or any PIM Investor shall have personal
liability for the obligations of such person hereunder or otherwise, except as provided herein or
under applicable law or in a written agreement (including this Agreement, any Subsidiary Agreement
or any Master Venture Agreement), the parties to which include such Affiliate.

          (c) Nothing in this Agreement, and, without limiting the generality of the foregoing, in this
Section 2.04, expressed or implied, is intended or shall be construed to give to any
creditor of the Program, any Subsidiary or Master Venture or to any creditor of Ashford, PIM or any
PIM Investor or any creditor of any other Person whatsoever, other than Ashford, PIM and the
Program, any legal or equitable right, remedy or claim under or in respect of this Agreement or any
covenant, condition or provisions herein contained, and such provisions are and shall be held to be
for the sole and exclusive benefit of Ashford, PIM, any PIM Investor and the Program.

     Section 2.05. Other Business Activities of PIM and the PIM Investors. Subject to the
provisions of this Agreement, any Subsidiary Agreement or any Master Venture Agreement, including
the provisions of Section 6.01 hereof, PIM and the PIM Investors and their Affiliates may
have other business interests and may engage in other business ventures of any nature or
description whatsoever, whether presently existing or hereafter created, including, the
acquisition, development, ownership, administration, servicing, leasing, management, operation,
franchising, syndication, financing, refinancing and/or sale of real estate or real estate-related
investments and may compete, directly or indirectly, with the business of the Program. None of

6

 

PIM, the PIM Investors or their Affiliates shall incur any liability to the Program, Ashford, PIM
or any other PIM Investor as a result of the pursuit by such PIM Investor or its Affiliates of such
other business interests and ventures and competitive activity, and neither the Program nor
Ashford, PIM or any other PIM Investor shall have any right to participate in such other business
interests or ventures or to receive or share in any income derived therefrom.

     Section 2.06. Rights of PIM Investors. Ashford hereby acknowledges that each PIM Investor
that executes a Master Venture Agreement with Ashford is a third party beneficiary of all covenants
and obligations of Ashford and its Affiliates to the Program and PIM under this Agreement.

     Section 2.07. Other Business Activities of Ashford. Subject to the provisions of this
Agreement, any Subsidiary Agreement or any Master Venture Agreement, including the provisions of
Section 4.10 hereof, Ashford and its Affiliates may have other business interests and may
engage in other business ventures of any nature or description whatsoever, whether presently
existing or hereafter created, including, the development, ownership, leasing, management,
operation, franchising, syndication, financing, refinancing and/or sale of real estate any of which
may compete, directly or indirectly, with the business of the Program or any Subsidiary or any
member thereof. Neither Ashford nor its Affiliates shall incur any liability to the Program, PIM,
any PIM Investor, any Master Venture, any Subsidiary or any of its members or their Affiliates as a
result of the pursuit by Ashford or any of its Affiliates of such other real estate, business
interests or ventures, except as provided herein or in any Master Venture Agreement or Subsidiary
Agreement, and neither the Program, PIM, any PIM Investor, any Master Venture, any Subsidiary nor
any of its members nor their Affiliates shall have any right to participate in such other real
estate holdings, business interests or ventures or to receive or share in any income derived
therefrom except as provided herein or in any Master Venture Agreement or Subsidiary Agreement.

ARTICLE III

CAPITAL CONTRIBUTIONS

     Section 3.01. Capital Commitments.

          (a) During the Initial Term, PIM shall identify one or more PIM Investors to provide an
aggregate of up to $300 million (as outstanding, the “PIM Capital Commitment”) to acquire
Investments through various Subsidiaries. Each PIM Investor will contribute capital to its Master
Venture and/or applicable Subsidiary in accordance with its Master Venture Agreement and/or the
Subsidiary Agreement of the applicable Subsidiary.

          (b) In lieu of identifying a PIM Investor to fund a Capital Call, PIM, at its sole discretion,
may choose to utilize one or more credit facilities available to it to fund a Capital Call;
provided, however, that the use of such credit facilities shall not require or result in any
security interest, lien or other encumbrance upon the interests of PIM or any PIM Investor in any

7

 

Master Venture or Subsidiary. In the instance that PIM shall utilize a credit facility to fund an
Investment, such monies shall reduce PIM’s Unfunded Capital Commitment.

          (c) Ashford shall provide an aggregate of up to $100 million (the “Ashford Capital
Commitment” and together with the PIM Capital Commitment, the “Capital Commitments”) to
acquire Investments through various Subsidiaries. Ashford will contribute capital to the
applicable Master Venture and/or applicable Subsidiary in accordance with the applicable Master
Venture Agreement and/or the Subsidiary Agreement of the applicable Subsidiary.

          (d) PIM and Ashford shall contribute the capital required for each Investment on a
seventy-five percent (75%), twenty-five percent (25%) basis, respectively, as more particularly
provided in each Master Venture Agreement. Each PIM Investor’s equity shall be in a senior
position, while Ashford’s equity shall be in a first-loss position with respect to each individual
Investment, as more particularly provided in each Master Venture Agreement.

     Section 3.02. Capital Calls.

          (a) The Program Representatives shall make all capital calls on behalf of each Master Venture
and Subsidiary in accordance with the terms of the applicable Subsidiary Agreement and Master
Venture Agreement, each in the form attached hereto as Exhibits A and B respectively.

          (b) None of PIM or the PIM Investors shall be obligated to fund amounts requested by a Capital
Call (x) unless all actions of Ashford and its servicing agents permitted hereunder are materially
consistent with Accepted Loan Servicing Practices at the time of such Capital Call or (y) if, prior
to the Funding Date with respect to such Capital Call Notice, no Major Uncured Breach is in effect
with respect to the applicable Master Venture. Ashford shall not be obligated to fund amounts
requested by a Capital Call if, prior to the Funding Date with respect to such Capital Call Notice,
any Duty Breach by PIM or any PIM Investor is in effect.

ARTICLE IV

MANAGEMENT; INDEMNIFICATION

     Section 4.01. Management. Subject to the other terms of this Agreement and each Master
Venture Agreement, the business and affairs of the Program and of each Master Venture shall be
managed solely and exclusively by the Program Representatives.

     Section 4.02. No Assignment. No party hereto shall have the right, directly or indirectly,
by operation of law or otherwise, to assign, sell, pledge, mortgage, encumber or otherwise transfer
all or any portion of its right, title or interest under this Agreement, except to an entity under
common Control with such party and upon prior written notice to the other party. Any assignment,
sale, pledge, mortgage, encumbrance or other transfer prohibited hereunder shall be null and void.

8

 

     Section 4.03. Program Representatives. Each of PIM and Ashford shall appoint one (1)
person to serve as its Program Representative. PIM initially designates Jim Walker as its Program
Representative, and Ashford initially designates David Brooks as its Program Representative. No
action requiring the consent of both parties hereto or by the Program Representatives shall be
taken under this Agreement without the unanimous consent of the Program Representatives.

     Section 4.04. Removal of Program Representatives. PIM may remove its Program
Representative at any time and designate a replacement therefore upon delivery of written notice to
Ashford. Ashford may remove its Program Representative at any time and designate a replacement
therefore upon delivery of written notice to PIM.

     Section 4.05. Program Reimbursable Expenses. Ashford shall fund or bear all Program
Reimbursable Expenses. PIM shall reimburse Ashford for its pro rata share (based on the relative
Capital Commitments funded by PIM and Ashford) of all Program Reimbursable Expenses. Ashford shall
not be entitled to reimbursement for any other costs or expenses, including any general,
administrative or overhead expenses.

     Section 4.06. Program Acts. When the taking of Program action has been authorized pursuant
to Section 4.01, or as otherwise provided in this Agreement, any duly appointed agent of
the Program may execute any contract or other agreement or document consistent with such authorized
action, in the name and on behalf of the Program.

     Section 4.07. Compensation.

          (a) The Program Representatives shall serve in their capacities without compensation.

          (b) Each of PIM and Ashford shall bear their own costs and expenses associated with
negotiating and entering into this Agreement and each Master Venture Agreement.

          (c) All third party payments made to PIM, a PIM Investor, Ashford or any of their Affiliates
in connection with the business of the Program (exclusive of the fees expressly provided herein and
in Master Venture Agreements) shall be deemed to belong to the Program and shall be paid over by
the receiving party to the Program or applicable Master Venture.

     Section 4.08. Presentation of Opportunities.

          (a) During the Initial Term, the Program shall identify, investigate and analyze opportunities
for the Master Ventures or the Subsidiaries to acquire, own, finance, encumber, dispose of or
and/or otherwise deal with proposed, targeted investments meeting the Investment Criteria (as
reasonably determined by the Ashford Program Representative in good faith), including mezzanine
debt that is secured by a mortgage or a pledge of the ownership interests in the borrowing property
owner and other commercial loan investments (each, an “Acquisition Opportunity”). Each (i)
Acquisition Opportunity that meets the Investment Criteria (as agreed by the PIM Program
Representative in good faith) and (ii) other opportunity that fails

9

 

to meet the Investment Criteria
but for which the Investment Criteria shall have been waived by the PIM Program Representative,
shall be considered a “Qualifying Investment.” Ashford shall be responsible, on behalf of
the Program, for the identification, investigation and analysis of Acquisition Opportunities and
shall present all Acquisition Opportunities to the Program Representatives in accordance with the
terms of this Agreement. All Acquisition Opportunities and Qualifying Investments shall be for the
benefit of, and shall constitute proprietary information of, the Program, so long as they are
Active. Ashford shall comply in all material respects with all applicable laws in connection with
the identification of Acquisition Opportunities and Qualifying Investments and/or the closing of
Investments, including licensing laws.

          (b) Ashford shall present each Acquisition Opportunity to PIM by delivering to PIM all of the
materials set forth on Exhibit D hereto (collectively, a “Preliminary Package”).
Any Acquisition Opportunity that is generated on behalf of the Program by Ashford, or presented to
Ashford or any of its Affiliates, shall be presented by Ashford to the Program Representatives.
Any costs incurred by Ashford in identifying or underwriting, or that are otherwise associated
with, an Acquisition Opportunity, shall remain the sole cost and expense of Ashford and shall not
be considered a Program Reimbursable Expense, unless the applicable
Preliminary Package is approved by the PIM Program Representative as provided in Section
4.08(c).

          (c) The PIM Program Representative shall have five (5) Business Days after receipt by of a
Preliminary Package to determine if PIM wishes to proceed to full underwriting of the applicable
proposed Acquisition Opportunity (such a determination to proceed, “Preliminary Approval”).
If the PIM Program Representative grants Preliminary Approval, the PIM Program Representative
shall deliver to Ashford the Preliminary Approval Notice in the form of Exhibit E hereto,
which shall constitute the agreement of the PIM Program Representative that the proposed
Acquisition Opportunity meets the Investment Criteria or that any failure of the Acquisition
Opportunity to satisfy the Investment Criteria is waived. If the PIM Program Representative elects
not to grant Preliminary Approval or fails to notify Ashford of its response within such five (5)
Business Day period, then the PIM Program Representative shall be deemed to have declined to
proceed to full underwriting of the applicable proposed Acquisition Opportunity, and Ashford shall
have the right to proceed with the proposed Acquisition Opportunity on its own. The PIM Program
Representative shall provide Ashford with the reasons for its affirmative rejection of any proposed
Acquisition Opportunity.

          (d) Following delivery of the Preliminary Approval Notice, Ashford shall as promptly as
reasonably practicable deliver to the PIM Program Representative all of the materials set forth on
Exhibit F hereto (collectively, a “Full Package”). The PIM Program Representative
shall review each Full Package within ten (10) Business Days following receipt thereof. If the PIM
Program Representative elects not to seek or fails to obtain PIM Investment Committee approval of
the applicable proposed Qualifying Investment, or fails to notify Ashford of its response, within
such ten (10) Business Day period, then the PIM Program Representative shall be deemed to have
declined to proceed with respect to the applicable proposed Qualifying Investment, and Ashford
shall have the right to proceed with the proposed Qualifying Investment on its own.
Notwithstanding the foregoing, including the time periods set forth herein, PIM shall

10

 

use
commercially reasonable efforts to cause the PIM Program Representative and the PIM Investment
Committee to act as promptly as practicable in order to comply with time constraints that may be
applicable to specific Acquisition Opportunities. If the PIM Investment Committee approves the
making of an Investment, the PIM Program Representative shall deliver an approval notice in the
form of Exhibit G hereto (the “Approval Notice”) within such ten (10) Business Day
period. Any approval evidenced by an Approval Notice shall be subject to completion by PIM of
satisfactory due diligence and finalization of Investment Documents; provided, however, that
Investment Documents that are substantially in the same form as those previously approved by the
PIM Program Representative shall not require any further approval, except to the extent of any
substantive and material differences from the previously approved forms, but shall be provided to
the PIM Program Representative for confirmation of same no fewer than two (2) business days prior
to acquisition of the applicable Qualifying Investment. Ashford shall cooperate with PIM and
assist PIM in the completion of all due diligence desired by PIM and shall keep PIM informed as to
the status of negotiation and finalization of proposed Investment Documents. Without limiting the
foregoing, Ashford shall provide the PIM Program Representative first and final drafts of the
Investment Documents promptly following their circulation. If all such due diligence is reasonably
satisfactory to PIM and PIM approves the final Investment Documents, then PIM shall so notify
Ashford and shall authorize Ashford, acting on behalf of the Program, to cause the applicable
Qualifying Investment to be acquired by a Master Venture or a Subsidiary on terms consistent with
the PIM Investment Committee’s approval.

          (e) In the event that the PIM Investment Committee does not approve or is deemed not to
approve a proposed Qualifying Investment, then the Preliminary Package, Full Package and the
proposed Qualifying Investment presented therein shall be deemed rejected by the PIM Program
Representative and shall cease to be Active and Ashford shall have the right to proceed with the
proposed Qualifying Investment on its own behalf.

          (f) Intentionally omitted.

          (g) Ashford, on behalf of the Program, will deliver to PIM, periodically, a written report of
potential Acquisition Opportunities in process (the “Pipeline Transactions”). Upon PIM’s
request, Ashford will provide PIM with oral updates as to the identity and status of Pipeline
Transactions. PIM may elect to review any transaction on such report for the purpose of deciding
whether or not to eliminate such transaction from further consideration. Any such transaction that
PIM eliminates from further consideration because it does not fit within the
Investment Criteria shall not qualify as or be deemed a rejected transaction pursuant to
Sections 8.01(c).

          (h) When a Qualifying Investment is approved for acquisition by the PIM Investment Committee,
PIM shall promptly (i) select (A) an existing Master Venture or (B) a new PIM Investor to form a
new Master Venture to consummate the Qualifying Investment and (ii) prepare to provide capital to
the Master Venture, all as more particularly provided in the applicable Master Venture Agreement
and Subsidiary Agreement. When a Qualifying Investment is ready for consummation, Ashford, on
behalf of the Program, shall notify PIM and PIM shall promptly cause the applicable PIM Investor
and Master Venture to (i) form a

11

 

Subsidiary to consummate the Qualifying Investment and
(ii) provide capital to such Subsidiary, all as more particularly provided in the applicable Master
Venture Agreement and Subsidiary Agreement. Such Master Venture or Subsidiary shall also assume
the obligation to reimburse Ashford for all Program Reimbursable Expenses that constitute Master
Venture Expenses in accordance with the terms of the applicable Master Venture Agreement or
Subsidiary Agreement.

          (i) Ashford shall perform its obligations under this Agreement in accordance with Accepted
Loan Servicing Practices.

          (j) Notwithstanding anything contained in this Section 4.08 to the contrary, if
Ashford shall determine, in its sole discretion, that the timing for any specific Acquisition
Opportunity is such that Ashford cannot submit the Acquisition Opportunity to PIM in accordance
with the terms hereof, Ashford shall be entitled to act upon such Acquisition Opportunity on its
own behalf; provided, however, that as soon as practicable following the acquisition of such
Acquisition Opportunity, Ashford shall present such Acquisition Opportunity to PIM on the same
terms as those terms upon with such Acquisition Opportunity was acquired by Ashford (subject to
reimbursement for any “Administration Costs” as defined in any applicable Master Venture
Agreement). In such event, all the other terms of this Section 4.08 shall apply as if such
investment were an Acquisition Opportunity hereunder.

     Section 4.09. Indemnification

          (a) Indemnification of Ashford. PIM, to the fullest extent permitted by applicable
law, shall indemnify, defend and hold Ashford and its Affiliates and their officers, directors,
members and employees harmless from and against any and all losses, claims, damages, expenses,
actions, judgments, suits (including, reasonable attorneys’ fees and disbursements and other
expenses incurred in connection with any amount paid in defense of and/or settlement of any action,
suit or proceeding or any claim asserted or threatened), liabilities, and judgments arising out of,
relating to, or caused by, PIM’s or any PIM Investor’s failure to perform any duty or obligation
arising hereunder, under a Master Venture Agreement or under any Subsidiary Agreement or for any
material misrepresentation or any material breach of the representations, warranties or covenants
hereunder, except to the extent such losses, claims, damages, expenses, liabilities and judgments
are caused by reason of bad faith, willful misconduct, fraud, gross negligence, acting outside
authority hereunder or a Major Uncured Breach by Ashford (or its Affiliates) or failure by Ashford
to materially perform its obligations under Section 4.08 hereof.

          (b) Indemnification of PIM. Ashford, to the fullest extent permitted by applicable
law, shall indemnify, defend and hold PIM and its Affiliates and their officers, directors, members
and employees harmless from and against any and all losses, claims, damages, expenses, actions,
judgments, suits (including, reasonable attorneys’ fees and disbursements and other expenses
incurred in connection with any amount paid in defense of and/or settlement of any action, suit or
proceeding or any claim asserted or threatened), liabilities, and judgments arising out of,
relating to, or caused by, Ashford’s failure to perform any duty or obligation arising hereunder or
for any material misrepresentation or any material

12

 

breach of the representations, warranties or
covenants hereunder, except to the extent such losses, claims, damages, expenses, liabilities and
judgments are caused by reason of bad faith, willful misconduct, fraud, gross negligence, acting
outside authority hereunder or Major Uncured Breach by PIM (or its Affiliates) or failure by PIM
(or its Affiliates) to materially perform its obligations under Section 4.08 hereof.

          (c) Notwithstanding anything to the contrary set forth in this Agreement, Ashford and PIM each
waive (and PIM shall cause each PIM Investor to waive) any and all rights to allege or claim any
punitive, special, speculative and/or consequential damages.

     Section 4.10. Non-Competition/Exclusivity.

As a material inducement for PIM to enter into this Agreement and for the PIM Investors to enter
into the Master Venture Agreement and allow the Subsidiaries to be formed, Ashford covenants and
agrees with PIM and each PIM Investor during the Initial Term and prior to (i) the full funding of
the Ashford Capital Commitment to one or more Master Ventures or Subsidiaries or (ii) termination
of the Program pursuant to Section 8 hereof, that Ashford will not, other than through the
Program, a Master Venture or any Subsidiary, acquire, negotiate, own, administer, service, sell,
dispose of, or otherwise deal, directly or indirectly, with, any Acquisition Opportunities or
Qualifying Investments, in each case so long as they are Active, during the term of this Agreement;
provided, however, that nothing herein shall prevent Ashford from continuing to own, administer,
service, sell, finance, refinance, restructure, dispose of, or otherwise deal, directly or
indirectly, with, any investments or assets (i) owned by Ashford as of the date of this Agreement,
or (ii) acquired by Ashford in compliance with the terms of this Agreement after the date hereof.

     Section 4.11. Management Fee; Workout and Restructuring Fee. Ashford or any of its
Affiliates shall be entitled to receive with respect to each Investment, a Management Fee or a
Workout Fee, each as defined in, and payable in accordance with, the provisions of the applicable
Loan Servicing Agreement.

     Section 4.12. Sourcing Fees. Ashford or any of its Affiliates in connection with the
sourcing of an Investment shall be entitled to receive for its own account the Sourcing Fee (as
defined in and in accordance with the provisions of the Master Venture Agreement) for such
Investment.

     Section 4.13. Potential Ashford Spinoff. If, during the term of this Agreement, Ashford
wishes to assign, sell or otherwise transfer, directly or indirectly, its interests in Investments
or other Assets through a public offering, private placement or similar combination transaction
(each, a “Spinoff”), Ashford shall deliver written notice of its intent to PIM. Such
notice shall include a statement of the complete terms and conditions of the proposed Spinoff.
PIM, acting on behalf of each PIM Investor, shall have the right, by written notice delivered to
Ashford within ten (10) days after receipt of the terms of the Spinoff and such additional
information as is reasonably requested by PIM in connection therewith, to participate in such
Spinoff by assigning, selling or otherwise transferring, directly or indirectly, all or any portion
of its interests in Investments, other Assets, the Master Ventures and/or the Subsidiaries on the

13

 

same terms and conditions on which Ashford participates. Alternatively, PIM, acting on behalf of
each PIM Investor, shall have the right, by written notice delivered to Ashford within ten (10)
days following receipt of the written notice referenced above in this Section and such additional
information as is reasonably requested by PIM in connection therewith, to elect to cause Ashford to
acquire all or any portion of its interests in the applicable Master Ventures and Subsidiaries for
an amount equal to the aggregate unreturned PIM Capital Commitment funded with respect to such
Investments, other Assets, Master Ventures and/or the Subsidiaries, plus all accrued, unpaid return
therein due under the applicable Master Venture Agreements. Any such acquisitions shall be
consummated pursuant to documents and instruments reasonably satisfactory to PIM and Ashford. If
PIM elects to participate in a Spinoff, and believes in good faith that the Spinoff could
materially decrease the value of the PIM Investors’ interests in any Investments, other Assets,
Master Venture and/or Subsidiary due to terms and conditions with respect to fees or any promote
payable to Ashford or any of its Affiliates in connection with the Spinoff or thereafter, or due to
the terms of any override in connection with the Spinoff or thereafter, then PIM may provide
written notice to Ashford within fifteen (15) days after the expiration of the ten (10) day period
referenced above, that it desires an appraiser to determine the decrease in value of such interests
that could result from such Spinoff. Within ten (10) days after the receipt of such request,
Ashford and PIM shall jointly agree on an appraiser to determine the amount, if any, of such
perceived decrease in value. If the appraiser shall determine that there would be a decrease in
value, Ashford shall pay to each applicable PIM Investor an amount equal to such decrease at
closing of the Spinoff as a condition to its authority to consummate such Spinoff. Any decisions
made by PIM under this Section 4.13 shall be binding on all PIM Investors and shall be
applied collectively to all Master Ventures and their underlying Subsidiaries.

ARTICLE V

INTENTIONALLY OMITTED

ARTICLE VI

COVENANTS

     Section 6.01. Confidentiality.

          (a) General. It is expected that PIM and Ashford will disclose to each other during
the term of this Agreement certain information which is confidential or proprietary and which may
include technology, products, trade secrets, processes, programs, technical know-how, customers,
distributors, costs, pricing, business operations and other business information, including the
Pipeline Transactions (“Proprietary Information”). All Proprietary Information owned
solely by one party, any Master Venture or any Subsidiary and disclosed to any other party shall
remain solely the property of the disclosing party, and its confidentiality shall be maintained and
protected by the party to whom the information was disclosed with the same degree of care used to
protect its own Proprietary Information of a similar nature; provided, however, that
(i) Acquisition Opportunities and Qualifying Investments that are Active shall be

14

 

deemed the
property of the Master Ventures or Subsidiaries as determined by PIM in its sole discretion unless
this Agreement has been terminated, (ii) Acquisition Opportunities and Qualifying Investments that
are no longer Active shall be deemed the property of Ashford, and (iii) client lists, financial and
analytical models, processes and procedures utilized or developed by Ashford in connection with the
business of the Program, any Master Venture or any Subsidiary shall be deemed the property of
Ashford, but only to the extent they are different than the client lists, models, processes and
procedures currently used by Affiliates of PIM. No Proprietary Information owned solely by one
party or by the Master Ventures or the Subsidiaries shall be used by the other party except in
furtherance of the terms and provisions of this Agreement. Except to the extent permitted under
this Agreement or as required by law or court order, the parties shall in all circumstances
exercise reasonable care not to allow to be published or disclosed the other party’s or the
Subsidiaries’ or Master Ventures’ Proprietary Information to any third party. Each party shall
advise its employees to whom the other party’s or the Subsidiaries’ or Master Ventures’ Proprietary
Information is disclosed of these obligations of confidentiality.

          (b) The parties agree that the following information shall not constitute Proprietary
Information under this Agreement:

               (i) information available from public sources at any time before or after it is
disclosed to a party hereto by the other party hereto;

               (ii) information obtained from a third party who obtained such information,
directly or indirectly, from a party other than a party to this Agreement; and

               (iii) information independently developed by the party against whom enforcement
of this provision is sought without the use of information provided by the party
seeking such enforcement.

          (c) Notwithstanding any provision of this Agreement to the contrary, any person (and each
employee, representative, or other agent of such person) may disclose to any and all other persons,
without limitation of any kind, (i) the tax treatment and tax structure of any transaction
contemplated or consummated pursuant to this Agreement, (ii) all materials of any kind (including
any opinions or other tax analysis) that are provided to such person relating to the tax treatment
and tax structure of any such transaction and (iii) any information required to be disclosed or
obtained by law or court order.

     Section 6.02. Compliance with Law(a) . Ashford agrees to comply with all laws
applicable to it, including any and all state, federal and local licensing and anti-discrimination
laws, and to inform PIM as to how to cause each Master Venture or Subsidiary to comply with all
applicable licensing laws. Upon the request of the Program Representatives from time to time,
Ashford shall deliver to PIM evidence, which may include legal opinions from one (1) or more
counsel, reasonably satisfactory to PIM of its and each Master Venture’s or Subsidiary’s compliance
with all applicable licensing and similar laws.

15

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF PIM AND ASHFORD

     Section 7.01. Representations. PIM represents and warrants and covenants with Ashford and
Ashford represents and warrants to and covenants with PIM as follows:

          (a) Organization. It is duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation with all requisite power and authority to enter into this
Agreement, to perform its obligations hereunder and to conduct the business of the Program and the
Subsidiaries.

          (b) Enforceability. This Agreement constitutes the legal, valid and binding
obligation of such party enforceable in accordance with its terms.

          (c) Consents and Authority. No consents or approvals are required from any
governmental authority or other Person for it to enter into this Agreement. All action on the part
of such party necessary for the authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by such party, have been duly taken.

          (d) No Conflict. The execution and delivery of this Agreement by it and the
consummation of the transactions contemplated hereby by it do not conflict with or contravene the
provisions of its organizational documents or any agreement or instrument by which it or its
properties or assets are bound or any law, rule, regulation, order or decree to which it or its
properties or assets are subject.

          (e) Advisors. It has been afforded the opportunity to seek and rely upon the advice
of its own attorney, accountant or other professional advisor in connection with the execution of
this Agreement.

ARTICLE VIII

DISSOLUTION AND TERMINATION

     Section 8.01. Termination. This Agreement may be terminated by PIM or Ashford, in their
sole and absolute discretion, with respect to new Acquisition Opportunities upon the occurrence of
any of the following:

          (a) the expiration of the Initial Term as provided in Section 2.03, unless and to the
extent that the Initial Term is extended by mutual agreement of all the parties to this Agreement;

          (b) the unanimous election by PIM and Ashford to terminate the Program;

          (c) PIM does not elect to cause a PIM Investor to acquire, or votes to reject (or is deemed to
have rejected pursuant to Section 4.08(d)) the funding of three (3) or more

16

 

Acquisition
Opportunities or Qualifying Investments within any period of twelve (12) consecutive months, as
more particularly provided in Section 4.08, for a reason other than that a proposed
Acquisition Opportunity does not satisfy the requirements for becoming a Qualifying Investment
pursuant to Section 4.08(a); provided, however, that, the rejection of any one (1) or more
of the Qualifying Investments listed on Exhibit H hereto shall not constitute a rejection
for purposes of this item (c) above;

          (d) at any time on not less than ninety (90) days prior written notice to the other party; or

          (e) upon a Change in Control of Ashford.

Any termination under this Section shall be effective as of the date specified in the written
notice delivered by the terminating party to the other party.

ARTICLE IX

MISCELLANEOUS

     Section 9.01. Specific Performance; Other Rights. The parties recognize that various of
the rights granted under this Agreement are unique and, accordingly, the parties shall, in addition
to such other remedies as may be available to them at law or in equity, have the right to enforce
their rights under this Agreement by actions for injunctive relief and specific performance.

     Section 9.02. Notices. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service or by telecopier and
shall be deemed given when so delivered by hand or, if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service), addressed as follows:

If to Ashford:

c/o Ashford Hospitality Trust

14185 Dallas Parkway

Suite 1100

Dallas, Texas 75254

Attention: Douglas A. Kessler

Telephone: 972-490-9600

Facsimile: 972-980-2705

with simultaneous copies (which shall not constitute notice) to:

c/o Ashford Hospitality Trust

14185 Dallas Parkway

Suite 1100

17

 

Dallas, Texas 75254

Attention: David A. Brooks

Telephone: 972-490-9600

Facsimile: 972-980-2705

and

Akin Gump Strauss Hauer & Feld LLP

1700 Pacific Avenue

Suite 4100

Dallas, TX 75201-4675

Attention: Robert W. Dockery, Esq.

Telephone: (214) 969-4316

Facsimile: (214) 969-4343

If to PIM:

c/o Prudential Investment Management, Inc.

8 Campus Drive

Parsippany, NJ 07054

Attention: Jim Walker

Telephone: (973) 683-1690

Facsimile: (973) 683-1752

And

c/o PREI Law Department

8 Campus Drive

Parsippany, NJ 07054

Attention: Joan N. Hayden, Esq.

Telephone: (973) 683-1772

Facsimile: (973) 683-1788

with a simultaneous copy (which shall not constitute notice) to:

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention: Minta E. Kay, Esq.

Telephone: (617) 570-1877

Facsimile: (617) 523-1231

or to such other address, individual or electronic communication number as may be designated by
notice given by any party to the others.

     Section 9.03. Prior Agreements; Construction; Entire Agreement. This Agreement, including
the Exhibits and other documents referred to herein (which form a part hereof),

18

 

constitutes the
entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior
agreements and understandings between them as to such subject matter and all such prior agreements
and understandings are merged herein and shall not survive the execution and delivery hereof. In
the event of any conflict between the provisions of this Agreement and those of any Master Ventures
Agreement, the provisions of the applicable Master Venture Agreement shall control.

     Section 9.04. No Waiver. The waiver of any breach of any term or condition of this
Agreement shall not operate as a waiver of any other breach of such term or condition or of any
other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver
of such provision or of any other provision hereof.

     Section 9.05. Amendments. This Agreement may not be amended, altered or modified except
(i) upon the unanimous approval of the Program Representatives and (ii) by instrument in writing
and signed by each of PIM and Ashford.

     Section 9.06. Severability. If any provision of this Agreement shall be held or deemed by
a final order of a competent authority to be invalid, inoperative or unenforceable, such
circumstance shall not have the effect of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable, but this Agreement shall be construed as if such
invalid, inoperative or
unenforceable provision had never been contained herein so as to give full force and effect to the
remaining such terms and provisions.

     Section 9.07. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to each of the other
parties.

     Section 9.08. Applicable Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The parties consent to the
exclusive jurisdiction of the United States District Court for the District of New York in
connection with any civil action concerning any controversy, dispute or claim arising out of or
relating to this Agreement, or any other agreement contemplated by, or otherwise with respect to,
this Agreement or the breach hereof, unless such court would not have subject matter jurisdiction
thereof, in which event the parties consent to the jurisdiction of the state courts of the State of
New York. The parties hereby waive and agree not to assert in any litigation concerning this
Agreement the doctrine of forum non-conveniens.

     Section 9.09. Waiver Of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.

     Section 9.10. Arbitration. Any unresolved dispute, question, disagreement, controversy or
claim arising from or relating to this Agreement or breach thereof that is to be settled by
arbitration shall be settled by arbitration in New York, New York, administered by the

19

 

American
Arbitration Association in accordance with its Commercial Arbitration Rules including the Emergency
Interim Relief Procedures, and judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. Except as may be required by law, neither a party nor an
arbitrator may disclose the existence, content or results of any arbitration hereunder without the
prior written consent of all parties.

     Section 9.11. No Rights of Third Parties. Except for the rights of the Persons referenced
in Sections 2.06 and 4.10 hereof, (i) this Agreement is made solely and
specifically between and for the benefit of the parties hereto and their respective members,
successors and assigns subject to the express provisions hereof relating to successors and assigns,
and (ii) no other Person whatsoever shall have any rights, interest, or claims hereunder or be
entitled to any benefits under or on account of this Agreement as a third party beneficiary or
otherwise.

     Section 9.12. Further Assurances. In connection with this Agreement, as well as all transactions contemplated by this Agreement,
PIM and Ashford agree to execute and deliver such additional documents and instruments and to
perform such additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions and conditions of this Agreement, and all such transactions
contemplated hereby.

     Section 9.13. Survival. The covenants contained in this Agreement which, by their terms,
require performance after the expiration or termination of this Agreement shall be enforceable
notwithstanding the expiration or other termination of this Agreement. 

     Section 9.14. Headings. Headings are included solely for convenience of reference and if
there is any conflict between headings and the text of this Agreement, the text shall control.

     Section 9.15. No Broker. Each of PIM and Ashford represent and warrant that it has not
dealt with any broker in connection with this Agreement and agrees to indemnify, defend and hold
harmless each other party hereto and its Affiliates from all claims or damages as a result of this
representation and warranty being false.

     Section 9.16. Currency. Any exchange of funds between PIM and Ashford shall be made in
United States dollars, including, any reimbursement or fees payable to PIM or Ashford. In
addition, all calculations pursuant to this Agreement and any Master Venture Agreement shall be
based on United States dollars.

     Section 9.17. Attorneys’ Fees. Should any litigation be commenced between the parties
hereto or their representatives, or should any party institute any proceeding in a bankruptcy or
similar court which has jurisdiction over any other party hereto or any or all of his or its
property or assets concerning any provision of this Agreement or the rights and duties of any
Person in relation thereto, the party or parties prevailing in such may be granted, a reasonable
sum as and for his or its or their attorneys’ fees and court and other costs in such matter, which
amount shall be determined by the judicial referee, a court in such litigation or in a separate
action brought for that purpose.

     Section 9.18. REOC Compliance. Ashford acknowledges that the ownership interest of PIM
Investor in each Master Venture and, indirectly, each Subsidiary is intended to qualify as

20

 

a “real estate operating company” (“REOC”) within the meaning of U.S. Department of Labor
Regulations published at 29 C.F.R. Section 2510.3-101 (the “Plan Assets Regulation”), but
only to the extent the underlying Assets constitute an investment in real estate that is managed or
developed (within the meaning of the Plan Assets Regulation). With respect to such Assets, Ashford
agrees that it will, at all times, exercise its rights and authority under this Agreement in a
manner that is consistent with the foregoing intentions. Ashford shall not enter into any
agreement delegating to any person management rights with respect to any Investment other than
agreements (i) that are terminable by the Master Venture and/or Subsidiary on not more than one
month’s notice without penalty or cause and (ii) pursuant to which the Master Venture and/or
Subsidiary maintains substantial oversight and approval rights with respect to the delegated
management functions. Any such agreement must provide that it is fully subject to all, and in no
way limits or abrogates any, of PIM’s approval and other rights with respect to the Investment.
Ashford and PIM hereby acknowledge and agree that all rights of PIM in respect of the Master
Venture Agreement, Subsidiary and the Investment shall be exercised and enforced solely by PRISA
III REIT Operating LP. Nothing in the foregoing shall be deemed to limit the rights of the PIM
Program Representative hereunder or under the Master Venture Agreement. In the event the
Investment is owned by an entity that is owned, directly or indirectly, by the Master Venture or a
Subsidiary, PIM shall have the same rights with respect to the Investment as it would have
hereunder were the Investment owned directly by the Master Venture or the Subsidiary, and Ashford
shall take such actions, and/or cause any such entity to take such actions, as are necessary to
achieve the foregoing result.

[Remainder of page intentionally left blank.]

21

 

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first above written.

	 	 	 	 	 
	 	PRUDENTIAL INVESTMENT MANAGEMENT,
 INC., a Delaware
corporation

 	 
	 	By:  	 	 
	 	 	Name:  	James P. Walker 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 	 	 	 	 
	 	 	ASHFORD HOSPITALITY FINANCE LP, a

 Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Ashford Hospitality Finance General 

Partner LLC, a Delaware limited liability 
company,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: David Brooks	 	 
	 

	 	 	 	 	 	Title: Vice President	 	 

Signature Page to Investment Program Agreement

 

 

EXHIBIT A

Form of Subsidiary Agreement

 

 

EXHIBIT B

Form of Master Venture Agreement

 

 

EXHIBIT C

Investment Criteria

 

 

EXHIBIT D

Preliminary Package Materials

 

 

EXHIBIT E

Form of Preliminary Approval Notice

 

 

EXHIBIT F

Full Package Materials

 

 

EXHIBIT G

Form of Approval Notice

	 	 	 	 	 
	 

	 	Sincerely,
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	PIM Program Representative	 	 

 

 

EXHIBIT H

Qualifying Investments For Purposes of Section 8.01exv10w26w2

 

    EXHIBIT 10.26.2

LOAN SERVICING AGREEMENT

Dated as of ____________, 2008

by and between

PIM ASHFORD VENTURE I, LLC

AND

ASHFORD HOSPITALITY SERVICING LLC

 

 

     THIS LOAN SERVICING AGREEMENT (this “Agreement”), dated as of                                         , 2008,
is made and entered into by and between PIM Ashford Venture I, LLC, a Delaware limited liability
company (the “Company”), for itself and on behalf of its Subsidiaries (hereinafter
defined), and Ashford Hospitality Servicing LLC, a Delaware limited liability company (the
“Ashford”). It is anticipated by the parties hereto that Subsidiaries will be added as
parties and signatories to this Agreement as Investments are acquired by the Company.

WITNESSETH:

          WHEREAS, Ashford and Prudential Investment Management, Inc., a Delaware corporation
(“PIM”), are parties to that certain Investment Program Agreement dated of even date
herewith (the “Program Agreement”). Pursuant to the Program Agreement, Ashford and PIM
agreed to establish an exclusive investment program (the “Program”) whereby PIM will
identify one (1) or more investors to invest in Master Ventures (as defined in the Program
Agreement) to make Investments (as defined in the Program Agreement) through such Master Ventures
and Master Venture subsidiaries (the “Subsidiaries”);

          WHEREAS, Ashford and PRISA III Investments, LLC, a Delaware limited liability company (the
“Investor”), have formed the Company pursuant to that certain Limited Liability Company
Agreement of the Company dated as of ___________, 2008 (the “Master Venture Agreement”) to
invest through one or more Subsidiaries in Investments. The Investments that are the subject of
this Agreement on the date hereof are listed on Exhibit A hereto, which exhibit shall be
amended from time to time as additional Investments are acquired;

          WHEREAS, the parties hereto desire to enter into this Agreement to define the relative rights
and powers of the Holders (hereinafter defined) and to provide for the security and administration
of the Investments.

          NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto
mutually agree as follows:

     SECTION 1. DEFINITIONS; CONFLICTS.

          References to a “Section” or the “recitals” are, unless otherwise specified, to a Section or
the recitals of this Agreement. The terms “include(s)” or “including” shall mean “include(s),
without limitation” and “including, without limitation”, respectively. Whenever used in this
Agreement, the following terms shall have the respective meanings set forth below unless the
context clearly requires otherwise. Initially capitalized terms used and not otherwise defined
herein shall have the meanings respectively ascribed to them in the Master Venture Agreement.

          “Agreement” shall mean this Agreement, the exhibits and schedules hereto and all
amendments hereof and supplements hereto.

 

 

          “Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended from time
to time, any successor statute or rule promulgated thereto.

          “Borrower”, for an Investment, shall mean, collectively, the borrowers under such
Investment.

          “Borrower Related Party” shall mean any Affiliate of the Borrower. For avoidance of
doubt, any mezzanine lender shall be considered a Borrower Related Party if any such mezzanine
lender becomes an Affiliate of the Borrower through foreclosure or other conversion of the
collateral for a mezzanine loan in connection with any Property.

          “Borrower Transfer” means a “Transfer,” as defined in the Loan Documents.

          “Business Day” shall mean any day that is not a Saturday or Sunday, and that is not a
legal holiday in New York, New York, nor a day that banking institutions or savings associations in
any of the foregoing cities are closed for business.

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

          “Company” shall have the meaning set forth in the introductory paragraph hereof.

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

          “Event of Default” shall have the meaning set forth in Section 2(i).

          “Holder” shall mean the Company and each of the Subsidiaries that are or become
signatories hereto.

          “Insolvency Proceeding” shall mean any proceeding under Title 11 of the United States
Code (11 U.S.C. Sec. 101 et seq.) or any other insolvency, liquidation, reorganization or other
similar proceeding concerning the Borrower, any action for the dissolution of the Borrower, any
proceeding (judicial or otherwise) concerning the application of the assets of the Borrower, for
the benefit of its creditors, the appointment of or any proceeding seeking the appointment of a
trustee, receiver or other similar custodian for all or any substantial part of the assets of the
Borrower or any other action concerning the adjustment of the debts of the Borrower or the
cessation of business by the Borrower, except following a sale, transfer or other disposition of
all or substantially all of the assets of the Borrower in a transaction permitted under the Loan
Documents; provided, however, that following any such permitted transaction affecting the title to
the Property or the Interests, the Borrower for purposes of this Agreement shall be defined to mean
the successor owners to the Property or the Interests; provided, further, however, that for the
purposes of this definition, in the event that more than one entity comprises the Borrower, the
term “Borrower” shall refer to any such entity.

          “Interests” shall mean the ownership interests in Borrower pledged to Lender pursuant
to the Loan Documents.

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          “Lender” shall mean the holder of legal title to the Loan Documents. Initially, the
Lender for each Investment and for all purposes under the Loan Documents and this Agreement shall
be the Company or the Subsidiary that holds such Investment.

          “Loan”, for each Investment, shall mean the loan made or acquired by Lender and
evidenced and secured by the Loan Documents.

          “Loan Documents”, for each Investment, shall mean those documents evidencing, securing
and guarantying the Loan as identified on Schedule 1 to this Agreement, as updated from
time to time.

          “Management Fee” shall have the meaning assigned to such term in Section 2(i).

          “Person” shall mean any individual, sole proprietorship, corporation, general
partnership, limited partnership, limited liability company or partnership, joint venture,
insurance company, association, joint stock company, bank, trust, estate, unincorporated
organization, any federal, state, county or municipal government (or any agency or political
subdivision thereof), and any other legal entity.

          “Principal Balance”, for each Loan, shall mean, at any time of determination, the
initial principal balance of the Loan thereof, less any payments of principal thereon received by
the Lender.

          “Principal Prepayment”, for each Loan, shall mean any payment of principal made by the
Borrower on the Loan that is received in advance of its scheduled payment date, whether made by
reason of casualty or condemnation or otherwise.

          “Property”, for each Investment, shall mean each parcel of real property that is the
subject of, directly or indirectly, or is secured in connection with, each Investment, whether or
not encumbered by a mortgage.

          “Servicer” shall mean initially Ashford or any replacement Servicer appointed in
accordance with the terms of this Agreement.

          “Servicer Default” is defined in Section 5(c).

          “Workout Fee” shall have the meaning assigned to such term in Section 2(i).

     SECTION 2. ADMINISTRATION OF THE LOAN.

          (a) The Servicer shall service and administer the Loan, as agent for the Holders, in
accordance with the express terms of this Agreement and Accepted Loan Servicing Practices, taking
into account the interests of the Holders with a view to maximizing the realization for all Holders
as a collective whole. The Holders acknowledge that the Servicer is to comply with this Agreement
and the Loan Documents in servicing the Loan and, notwithstanding anything to the contrary
contained herein, shall act at all times at the direction of

3

 

the Company. Servicer shall not be entitled to any servicing fees or other compensation for
its services hereunder except for the Management Fee and the Workout Fee, each as described below
in Section 2(i).

          (b) The Servicer shall:

     (i) provide to the Holders (1) a summary of the current status of principal and
interest payments on the Loan, (2) copies of the Borrower’s current financial statements, to
the extent in the Servicer’s possession, (3) current information, if any, as to the value of
the Property, to the extent in the Servicer’s possession, (4) copies of any default or
acceleration notices sent to the Borrower with respect to the Loan and all material
correspondence related thereto, (5) copies of all notices received or given by Servicer
pursuant to any intercreditor agreement related to the Loan, (6) copies of any written
report prepared by any consultant retained by Servicer, and (7) other information with
respect to the Borrower or the Loan, requested by any Holder, to the extent in the
Servicer’s possession.

     (ii) receive all payments of interest, principal and other sums on account of or with
respect to the Loan;

     (iii) in accordance with the provisions of this Agreement, remit to the Company or to
the applicable Subsidiary all interest, principal and other sums received by or on behalf of
Servicer on account of or with respect to the Loan;

     (iv) notwithstanding anything to the contrary in the Loan Documents, notify each Holder
of the amount of each unfunded disbursement, if any, of the Loan requested by Borrower
(which may be greater than the amount actually disbursed) at least five (5) Business Days
prior to the date of disbursement.

          (c) Except as otherwise expressly provided herein and subject to the terms of the Program
Agreement and the Master Venture Agreement, the Servicer shall have full power and authority to do
or perform any act or thing which in the reasonable judgment of the Servicer is necessary to enable
it to discharge and perform its duties under this Agreement, the Loan Documents (or any other
agreement or agreements entered into in connection therewith), or which in the reasonable judgment
of Servicer is necessary or required to preserve and protect the liens and security interests
created by the Loan Documents and the priority thereof and the collateral for the Loan and the
interest of the Holders, and to do any and all things which it may deem necessary or desirable in
connection with the servicing and administration of the Loan in accordance with the Loan Documents
and the terms hereof, which Servicer reasonably believes will not materially and adversely affect
the value of the Loan, all in accordance with Accepted Loan Servicing Practices. Subject to the
below provisions of this Section 2, the Program Agreement and the Master Venture Agreement, the
Servicer shall have authority to act on behalf of the Lender and the Holders with respect to the
Loan, to transact with the Borrower and to grant or withhold consents or approvals under the Loan
Documents, enforce the Loan Documents and otherwise act on behalf of the Lender and the Holders,
all in accordance with Accepted Loan Servicing Practices. None of the following actions may be
undertaken by the Servicer without the prior written consent of the Company:

4

 

     (i) modify, amend or waive in any respect whatsoever (A) the interest rate, monthly
payment, or other monetary or economic provisions (including with respect to the date or
time upon which any obligations are due) of the Loan, including to defer interest payments;
(B) any provision in the Loan Documents that restricts Borrower from incurring additional
indebtedness; or (C) any other provisions in the Loan Documents other than non-monetary,
non-economic or administrative amendments or modifications which the Servicer believes in
good faith and in accordance with Accepted Loan Servicing Practices will not in any material
and adverse way affect any Holder’s rights under this Agreement, the Loan Documents or the
value of the Property;

     (ii) waive or reduce the amount of any reserves required to be maintained by Borrower,
except as explicitly permitted by the Loan Agreement;

     (iii) modify the principal amount of the Loan;

     (iv) extend or shorten the maturity date of the Loan or any note, other than in
accordance with the express provisions of the Loan Agreement;

     (v) waive, compromise or settle any material claim against Borrower or any or other
Person liable for payment of the Loan in whole or in part or for the observance and
performance by Borrower of any of the terms, covenants, provisions and conditions of the
Loan Documents, or release Borrower or any other Person liable for payment of the Loan in
whole or in part from any obligation or liability under the Loan Documents;

     (vi) approve or consent to a Borrower Transfer;

     (vii) encumber, release, or modify, in whole or in part, any collateral or security
interest held under the Loan Documents other than in accordance with the terms hereof or any
of the express provisions of the Loan Agreement;

     (viii) enforce or refrain from enforcing all of the rights, remedies and privileges
afforded or available to the respective Holders under the terms of the Loan Documents,
including, without limitation, accelerating the Loan (unless such acceleration is automatic
under the Loan Documents), foreclosing on any mortgage or pledge or accepting a deed in lieu
of foreclosure;

     (ix) following a foreclosure of the Mortgage or any pledge or acceptance of a deed in
lieu of foreclosure, approve a recommended course of action for the Property, approve the
property manager and selling agent, and approve the sale price of the Property;

     (x) the approval or adoption of any plan of bankruptcy, reorganization, restructuring
or similar event in an Insolvency Proceeding with respect to the Borrower or any guarantor;

     (xi) any incurrence of additional debt by the Borrower or any mezzanine financing by
any direct or indirect beneficial owner of the Borrower (to the extent that the Lender has
consent rights pursuant to the Loan Documents with respect thereto);

5

 

     (xii) any waiver of the enforcement of any insurance requirements under the Loan
Documents with respect to terrorism, earthquake, flooding, windstorm or political risk;

     (xiii) any material amendment to the special purpose entity provisions in the Loan
Agreement;

     (xiv) the subordination of any mortgage or pledge to any other mortgage or pledge or
other material monetary claim against the Property; or

     (xv) waiver of any material default or Event of Default.

          (d) The Servicer shall have no liability to any other Holder for any action taken, or for
refraining from the taking of any action, in good faith and in accordance with Accepted Loan
Servicing Practices pursuant to this Agreement, and/or the Loan Documents, so long as Servicer is
acting in accordance with Accepted Loan Servicing Practices; provided, however, that the Servicer
will not be protected against any liability which would otherwise be imposed by reason of gross
negligence, a breach of an Accepted Loan Servicing Practice, which breach is not cured within ten
(10) Business Days following notice thereof, willful misfeasance, bad faith or fraud in the
performance of duties or obligations hereunder. Without limiting the generality of the foregoing,
the Servicer, acting on behalf of the Holders in accordance with the terms of this Agreement, may
rely on the advice of legal counsel, accountants and other experts (including those retained by the
Borrower) and upon any written communication or telephone conversation which the Servicer believes
to be genuine and correct or to have been signed, sent or made by the proper Person.

          (e) Notwithstanding any direction to act, or approval or disapproval of, or right to give
direction to or to approve or disapprove an action of the Servicer by any other Holder, as
applicable, in no event shall the Servicer be obligated to take any action that would violate, or
refrain from taking any action necessary to avoid violation of, any applicable law, or be
inconsistent with or violate any provisions of this Agreement.

          (f) Each Holder hereby undertakes and agrees, upon the request of the Servicer, to execute,
verify, deliver and file in a timely manner any proofs of claim, consents, assignments or other
action necessary or appropriate to permit the Servicer to enforce the obligations of Borrower to
the Lender in respect of the Loan, and to vote any claims at any meeting of creditors or for any
plan or with respect to any matter as the Servicer shall direct, subject to the provisions of this
Section 2 and otherwise in accordance with the terms of this Agreement, all in order to preserve
and maintain all claims against Borrower for sums due under the Loan so that the Lender will have
the benefit of such claims as provided in the Loan Documents or under applicable law.

          (g) Servicer shall not, without the consent of the Company, assign its rights or delegate its
duties hereunder unless such assignment is to an Affiliate of Ashford (as defined in the Master
Venture Agreement) and does not constitute a Change in Control (as defined in the Master Venture
Agreement).

6

 

          (h) If title to the Property or any Interests is to be acquired after a foreclosure sale or by
a deed in lieu of foreclosure, title shall be held as directed by the Company. If, at this time,
any Holder is an employee benefit plan subject to Part 4 of Title I of ERISA or to which Section
4975 of the Code applies, or an entity which is deemed to hold assets of such a plan, such limited
liability company (or other special purpose entity) shall be structured and operated in a manner
which, under the ERISA “plan asset regulations,” 29 C.F.R. § 2510.3-101, as modified by Section
3(42) of ERISA, is intended to cause the limited liability company (or other special purpose
entity) either (A) to be a real estate operating company (“REOC”) or (B) to otherwise have
its underlying assets not deemed to be “plan assets” of any employee benefit plan subject to Part 4
of Title I of ERISA or to which Section 4975 of the Code applies, and such limited liability
company (or other special purpose entity) will be required to advise the Holders, as soon as
reasonably possible, of any change or circumstance which could reasonably be expected to affect its
status as a REOC, or to otherwise cause its underlying assets to be deemed to be “plan assets.”

          (i) As full compensation for its services hereunder, Servicer shall be entitled to a
management fee with respect to each Investment, which shall be an annual fee payable in equal
quarterly installments in arrears equal to 0.25% multiplied by the Capital Contribution (as defined
in the Master Venture Agreement) made by the Investor and Ashford (as defined in the Master Venture
Agreement) to acquire such Investment (the “Management Fee”). Notwithstanding the
foregoing to the contrary and except as otherwise provided in Section 5(c) below, with respect to
any Investment that is subject to a default remaining uncured beyond any applicable notice and cure
periods (an “Event of Default”), Servicer shall receive a workout fee in lieu of the
Management Fee with respect to such Investment, which shall be an annual fee payable for such
Investment in the amount of 0.50% of the Capital Contributions made by the Investor and Ashford (as
defined in the Master Venture Agreement) to acquire such Investment (the “Workout Fee”).
Any Workout Fee due hereunder shall be prorated for any partial year (i.e. less than 365 day year)
during the existence of an Event of Default and shall be paid upon the earlier of (i) the cure of
the applicable Event of Default, and (ii) the 365th day following the occurrence of the
applicable Event of Default. Notwithstanding anything to the contrary contained herein, Servicer
shall act at the direction of the Company with respect to all matters relating to each Investment
that is subject to an Event of Default.

     SECTION 3. PAYMENT PROCEDURE.

          If a court of competent jurisdiction orders, at any time that any amount received or collected
in respect of the Loan must, pursuant to any insolvency, bankruptcy, fraudulent conveyance,
preference or similar law, be returned to the Borrower or paid to any Holder or any other Person,
then, notwithstanding any other provision of this Agreement, the Servicer shall not be required to
distribute any portion thereof to any Holder, and all Holders shall promptly on demand repay to the
Servicer the portion thereof which shall have been theretofore distributed to the related Holder,
together with interest thereon at such rate, if any, as the Servicer shall have been required to
pay to the Borrower, the Holders, or such other Person with respect thereto. Each Holder agrees
that if at any time it shall receive from any source whatsoever (other than as a distribution from
the Servicer to which it is entitled hereunder) any payment on account of the Loan in excess of
amounts due such Holder hereunder, it will promptly remit such excess to the Servicer. The
Servicer shall have the right to offset any amounts due hereunder from any Holder

7

 

with respect to the Loan against any future payments due to such Holder from the Loan;
provided, that the obligations of each Holder under this Section 3 are separate and distinct
obligations from one another. The obligations of each Holder under this Section 3 constitute
absolute, unconditional and continuing obligations.

     SECTION 4. LIMITATION ON LIABILITY.

          No Holder shall have any liability to any other Holder hereunder, except with respect to
losses actually suffered due to the gross negligence, willful misconduct or breach of this
Agreement on the part of such Holder.

     SECTION 5. ADDITIONAL UNDERSTANDINGS.

          (a) Notices of Transfer Etc. The Servicer shall notify the Holders promptly if the
Borrower seeks or requests a release of the lien with respect to the Loan or seeks or requests the
Lender’s consent to, or takes any action in connection with or in furtherance of, any Borrower
Transfer, incurring additional indebtedness or a Principal Prepayment of the Loan. If the Borrower
requests consent to a Borrower Transfer or incurring any incur additional indebtedness, the
Servicer shall obtain the prior written consent of the Company prior to the Lender’s granting
consent or agreement thereto (which consent shall be subject to the same standard applicable to the
Lender’s ability to withhold such consent set forth in the Loan Documents).

          (b) Replacement of Servicer. An event of default by Servicer (a “Servicer
Default”) hereunder shall exist in the event that one or more of the following events shall
occur and be continuing beyond any applicable grace or cure periods:

     (i) a decree or order of a court or agency or supervisory authority having jurisdiction
for the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered against Servicer;

     (ii) Servicer shall consent to the appointment of a conservator or receiver or
liquidator or liquidating committee in any insolvency, readjustment of debt, marshalling of
assets and liabilities, voluntary liquidation or similar proceedings of or relating to
Servicer or of or relating to all or substantially all of its property;

     (iii) Servicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations;

     (iv) any failure on the part of Servicer to observe or perform in any material respect
any covenant or agreement on the part of Servicer contained in this Agreement, which remains
unremedied for a period of fifteen (15) Business Days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to Servicer by a
Holder (except that said fifteen (15) Business Day period shall be

8

 

extended for such period of time as shall be reasonably necessary in order to cure such
default as long as Servicer shall be diligently prosecuting such cure to completion and said
extended period would not reasonably be expected to materially impair a Holder’s interest in
the Loan but in no event shall such additional period exceed sixty (60) days); or

     (v) any failure by Servicer to notify the Holders of a default by Borrower under the
Loan Documents within five (5) Business Days after Servicer’s receipt of written notice
thereof.

In the event of a Servicer Default in addition to whatever other rights the Holders may have
hereunder or at law or in equity, the Company, may by notice given to Servicer and the other
Holders terminate all of the rights and obligations of Servicer as servicer of the Loan, and in
such event the Company shall appoint another servicer to perform the obligations of Servicer
pursuant to the terms hereof. In the event of such termination, the Servicer shall cooperate with
the Holders and any such successor servicer in the transition of such servicing obligations,
turning over all Loan Documents in Servicer’s possession (other than, if applicable, those held in
its capacity as a Holder), and such successor servicer shall deliver to each of the Holders a
writing in recordable form whereby it assumes all of the obligations of Servicer hereunder.

          (c) Appointment of Special Servicer. The Holders shall have the right to appoint a
special servicer upon two (2) Business Days written notice to Servicer with respect to any
Investment that is subject to an Event of Default. In the event that a special servicer is
appointed with respect to an Investment, (1) Servicer shall cooperate with the Holders and any
special servicer in the transition of such servicing obligations, including, without limitation,
turning over all Loan Documents in Servicer’s possession with respect to such Investment to such
special servicer or as otherwise directed by the Holders, and (2) Servicer shall not be entitled to
a Workout Fee or Management Fee with respect to such Investment for any period following receipt of
written notice of the appointment of the special servicer.

     SECTION 6. REPRESENTATIONS OF SERVICER.

     With respect to each Loan, Servicer hereby represents and warrants to each of the Holders on
the date of acquisition of such Loan by the Holders:

          (a) if Servicer or any Affiliate (as defined in the Master Venture Agreement) of Servicer
acquired the Loan, Servicer and/or such Affiliate conveying the Loan to the Holders have good title
to, and are the sole holders of the Loan, free and clear of any liens, security interests, claims,
charges or other encumbrances;

          (b) Servicer has not assigned, pledged, transferred or encumbered all or any portion of the
Loan;

          (c) Servicer has no other material agreements with the Borrower under the Loan with respect to
the Loan other than as set forth in the Loan Documents,

          (d) none of the Borrower or any guarantors under the Loan have been released by Servicer from
any obligation under any of the Loan Documents, and no collateral has been

9

 

released by Servicer from the lien of any other security agreement executed in connection with
the Loan;

          (e) the Servicer has acted in accordance with Accepted Loan Servicing Practices in acquiring
the Loan; and

          (f) the Servicer will report the Loan as a purchase of an interest in the Loan under generally
accepted accounting principles.

     SECTION 7. NOT A SECURITY.

          No Investment shall be deemed to be a security within the meaning of the Securities Act of
1933 or the Securities Exchange Act of 1934.

     SECTION 8. EXERCISE OF REMEDIES.

          Each Holder acknowledges that, subject to the terms of this Agreement, (i) each Holder may
exercise or refrain from exercising any rights that such Holder may have hereunder in a manner that
may be adverse to the interests of the other Holder, so long as such actions are in accordance with
the terms of this Agreement, (ii) a Holder shall have no liability whatsoever to the other Holder
as a result of such Holder’s exercise of such rights or any omission by such Holder to exercise
such rights, except as expressly provided herein or for acts or omissions that are taken or omitted
to be taken by such Holder that constitute the gross negligence or willful misconduct of such
Holder or a breach of this Agreement, and (iii) the Servicer shall service and administer the Loan
on behalf of the Holders in accordance with the terms of this Agreement, taking into account the
interests of the Holders and in accordance with Accepted Loan Servicing Practices.

     SECTION 9. SEVERABILITY.

          Wherever possible, each provision of this Agreement shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable laws, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

     SECTION 10. NO PLEDGE OR LOAN; CHARACTERIZATION.

          This Agreement shall not be deemed to represent a pledge of any interest in the Loan by any
Holder to any other Holder, or a loan from any Holder to any other Holder. No Holder shall have
any interest in any property taken as security for the Loan. The Holders acknowledge and agree
that the Loan represents a single “claim” under Section 101 of the Bankruptcy Code, and that no
Holder would be a separate creditor of the Borrower under the Bankruptcy Code. The obligations of
the Holders under this Agreement are separate and distinct and no such Holder shall be liable for
defaults by the other.

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     SECTION 11. GOVERNING LAW; WAIVER OF JURY TRIAL.

          THIS AGREEMENT AND THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.

     SECTION 12. MODIFICATIONS.

          This Agreement shall not be modified, cancelled or terminated except by an instrument in
writing signed by the parties hereto. The party seeking modification of this Agreement shall be
solely responsible for any and all expenses that may arise in order to modify this Agreement.

     SECTION 13. SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES.

          This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; provided that no successors or assigns of any Holder shall have
any liability for a breach of a representation or warranty set forth in this Agreement or any side
agreement (but the liability of the Holder that made such representation shall survive). Except as
provided in the preceding sentence, none of the provisions of this Agreement shall be for the
benefit of or enforceable by any Person not a party hereto or a successor or assign of a party
hereto.

     SECTION 14. COUNTERPARTS.

          This Agreement may be executed in any number of counterparts and all of such counterparts
shall together constitute one and the same instrument. This Agreement may be executed by
signature(s) transmitted by facsimile or PDF provided that original signature pages follow.

     SECTION 15. CAPTIONS.

          The titles and headings of the paragraphs of this Agreement have been inserted for convenience
of reference only and are not intended to summarize or otherwise describe the subject matter of the
paragraphs and shall not be given any consideration in the construction of this Agreement.

     SECTION 16. NOTICES.

          All notices required hereunder shall be given by (a) telephone (confirmed in writing if the
sender on the same day sends a confirming copy of such notice by reputable overnight delivery
service (charges prepaid)) or shall be in writing and personally delivered, (b) facsimile
transmission or e-mail if the sender on the same day sends a confirming copy of such notice by
reputable overnight delivery service (charges prepaid), (c) reputable overnight delivery

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service (charges prepaid) or (d) certified United States mail, postage prepaid return receipt
requested, and addressed to the respective parties at their addresses set forth in the Master
Venture Agreement, or at such other address as any party shall hereafter inform the other party by
written notice given as aforesaid. All written notices so given shall be deemed effective upon
receipt or, if mailed, upon the earlier to occur of receipt or the expiration of the fourth (4th)
day following the date of mailing.

     SECTION 17. REGISTRATION OF TRANSFERS.

          The Lender or the Servicer on its behalf, as agent for the Holders, shall maintain a register
for the recording of the names and addresses of the Holders, the name and address of each Holder’s
agent for service of process (the “Register”). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Servicer and the Holders
may treat each person or entity whose name is recorded in the Register as a Holder hereunder for
all purposes of this Agreement. The Register shall be available for inspection and copying by any
Holder during normal business hours upon reasonable prior notice to the Servicer.

12

 

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

	 	 	 	 	 
	 	PIM ASHFORD VENTURE I, LLC, a Delaware limited liability company

 	 
	 	By:  	PRISA III Investments, a Delaware limited liability company  	 
	 
	 	 	 
	 	By:  	PRISA III REIT Operating LP, a Delaware limited
partnership, its sole member
 	 
	 
	 	 	 
	 	By:  	 PRISA III OP GP, LLC, a Delaware limited
liability company, its general partner
 	 
	 
	 	 	 
	 	By:  	 PRISA III Fund LP, a Delaware limited 
partnership, its manager
 	 
	 
	 	 	 
	 	By:  	 PRISA III Fund GP, LLC, a Delaware
limited liability company, its general
partner
 	 
	 
	 	 	 
	 	By:  	PRISA III Fund PIM, LLC, a Delaware
limited liability company, its sole
member
 	 
	 
	 	 	 
	 	By:  	Prudential Investment Management, Inc., a Delaware
corporation, its sole member
 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	James P. Walker 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	Ashford Hospitality Finance LP, a Delaware limited partnership
 	 
	 
	 	 	 
	 	By:  	Ashford Hospitality Finance General Partner LLC, a Delaware limited liability company, its
general partner
 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	David Brooks 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Loan Servicing Agreement

 

 

	 	 	 	 	 
	 	ASHFORD HOSPITALITY SERVICING LLC, a Delaware limited liability
company

 	 
	 	By:  	 	 
	 	 	Name:  	David Brooks 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Loan Servicing Agreement

 

 

SCHEDULE 1

LOAN DOCUMENTS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]