Form of Tax Indemnification Agreement

TAX INDEMNITY AND DEBT MAINTENANCE AGREEMENT


This TAX INDEMNITY AND DEBT MAINTENANCE AGREEMENT (this "Agreement"), dated as of_______, 2003, is entered into by and among Ashford Hospitality Trust, Inc. (the "REIT"), Ashford Hospitality Limited Partnership (the "Operating Partnership") and Remington Suites Austin, L.P., Remington Suites Dallas, L.P., Remington Suites Dulles, L.P., Remington Suites Las Vegas, L.P.and Chicago Illinois Hotel Limited Partnership.


RECITALS


A. In connection with the execution and delivery of the Omnibus Agreement, as defined below, the Contributors have agreed to contribute the Initial Properties to the Operating Partnership in exchange for Units in the Operating Partnership.


B. The REIT and the Operating Partnership desire to evidence their agreement regarding amounts that may be payable as a result of certain actions being taken by the Operating Partnership regarding its debt and assets.


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


ARTICLE I
CERTAIN DEFINITIONS


Section 1.1 Definitions.


"Applicable Tax Rate" means, as to any given Taxable Event, the Tax Rate applicable to income having the same character as that arising from such Taxable Event, for example, by way of illustration and not limitation, (i) the Tax Rate applicable to ordinary income, if the Taxable Event gave rise to ordinary income, or (ii) the Tax Rate applicable to long term capital gain, if the Taxable Event gave rise to long term capital gain.


"Agreement" has the meaning specified in the Preamble.


"Code" means the Internal Revenue Code of 1986, as amended, and any replacement to such provisions.


"Contributor" means one of the limited partnerships identified on Exhibit A hereto and each successor or assign whose acquisition of Units was pursuant to a Permitted Disposition.


"Current Tax Excess" means with respect to each Taxable Period and each Taxable Event, an amount equal to the product of (i) the taxable income or gain allocable to or otherwise reportable by a Contributor during such Taxable Period resulting from the


occurrence of the Taxable Event and (ii) the Applicable Tax Rate. For purposes of the foregoing calculation, the taxable income or gain on a taxable sale or taxable disposition of assets of the Operating Partnership will be limited to the amount of any gain or income allocated to a Contributor pursuant to Section 704(c) of the Code (as reduced by any applicable adjustment to the tax basis of the assets of the Operating Partnership with respect to such Contributor pursuant to Section 754 of the Code).


"Damages" means with respect to each calendar year and each Contributor an amount equal to the sum for each Current Tax Excess during such calendar year of the Current Tax Excess divided by the difference of: one minus the related Applicable Tax Rate.


"Disposition" means any sale, assignment, pledge, encumbrance, hypothecation, mortgage, exchange, or any swap agreement or other arrangement that transfers all or a portion of the economic consequences associated with the Units of the Contributor, provided that the following shall not constitute Dispositions: (i) a pledge of all or a portion of the Units of the Contributor to secure bona fide indebtedness that does not exceed sixty percent (60%) of the value of the pledged Units of the Contributor at the time such indebtedness is incurred so long as no foreclosure has occurred; (ii) any pledge of Units to the Operating Partnership; and (iii) a Permitted Disposition.


"Federal Rate" means, with respect to a Taxable Event, the highest marginal federal income tax rate applicable to income having the same character (e.g., ordinary income or long term capital gain) as that arising from such Taxable Event applicable to the Contributor in effect for the Taxable Period in issue, taking into account the deductibility of state income taxes payable at the related State Tax Rate by the affected Contributor, without regard to any limitations on such deduction applicable solely to such Contributor or its owners.


"Initial Properties" means all properties, whether real or personal, whether tangible or intangible, contributed by Contributors to the Operating Partnership pursuant to the Omnibus Option Agreement.


"Omnibus Agreement" means the Omnibus Option Agreement between Ashford Hospitality Limited Partnership, Remington Suites Austin, L.P., Remington Suites Dallas, L.P., Remington Suites Dulles, L.P., Remington Suites Las Vegas, L.P., Chicago Illinois Hotel Limited Partnership and Remington Long Island Hotel, L.P., dated as of May 15, 2003.


"Original Contributor" means one of the partnership Contributors identified on Exhibit A.


"Permitted Disposition" means a disposition to (i) a member of the immediate family or an affiliate of the applicable Contributor, (ii) a charitable organization a contribution to which would be deductible pursuant to Section 170 of the Code, (iii) any partnership, limited liability company or trust, the partners, members or beneficiaries, as applicable, of which are exclusively one or more of the Contributor or members of the


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immediate family or affiliates of the Contributor and/or a charitable organization a contribution to which would be deductible pursuant to Section 170 of the Code, or (iv) a beneficiary, partner, member or shareholder by the trust, partnership, limited liability company or corporation in which such person owns an interest, provided that any such disposition shall not involve a disposition for value (other than the issuance or redemption of an interest in the transferor or a reduction in the transferor's share of liabilities of the Operating Partnership).


"Permitted Transferee" means any Person who acquires Units pursuant to a Permitted Disposition.


"Person" means and includes an individual, a general partnership, limited partnership, a joint venture, a corporation (including a business trust), limited liability company, joint stock company, trust, joint venture or other entity, unincorporated association or a governmental authority.


"Protected Period" means, as to each Original Contributor and its Permitted Transferees the period commencing on the closing date (or the first closing date, if there is more than one closing date) of the contributions of the Initial Properties pursuant to the Omnibus Agreement and ending on the earlier of (i) the tenth anniversary of the closing date (or final closing, if there is more than one closing date) of the contributions pursuant to the Omnibus Agreement or (ii) as to such Original Contributor and its Permitted Transferees, the first date that the Unit Sales Restriction is not satisfied.


"State Tax Rate" means with respect to each Taxable Event the highest marginal state tax rate applicable to income having the same character (e.g., ordinary income or long-term capital gain) as that arising from such Taxable Event applicable to the Contributor in effect for the Taxable Period in issue; and shall be determined with respect to the state in which such income is taxable to the Contributor or its owners having the highest marginal state tax rate, whether such state is the one in which the applicable property is located or the state of residence of the Contributor or its owners subject to the provisions of Section 2.1(g)(iii). Appropriate adjustments shall be made if more than one non-federal income tax applies within a state.


"Taxable Period" means with respect to a Taxable Event the calendar year in which such Taxable Event occurs but if during such calendar year the State Tax Rate or Federal Tax Rate changes, each portion of the calendar year having a different Applicable Tax Rate shall be considered a separate Taxable Period.


"Tax Rate" means with respect to a Taxable Event the sum of (i) the State Tax Rate plus (ii) the Federal Rate.
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