Ashford Hospitality Prime, Inc. (Form: 8-K, Received: 12/10/2015 16:38:04)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): December 4, 2015

ASHFORD HOSPITALITY PRIME, INC.

(Exact name of registrant as specified in its charter)




MARYLAND	001-35972	46-2488594
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)




14185 Dallas Parkway, Suite 1100
Dallas, Texas		75254
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (972) 490-9600

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14-a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On December 4, 2015, Ashford Hospitality Prime, Inc. (the “Company”) entered into an agreement to exchange its 5.50% Series A Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) for an equal number of shares of its 5.50% Series B Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), as further described below under Item 3.03 (the “Exchange”). The terms and conditions of the Series B Preferred Stock are substantially similar to the Series A Preferred Stock for which it is being exchanged, except that, in contemplation of a public offering of the Series B Preferred Stock (the “Public Offering”) either pursuant to the terms of the Series B Registration Rights Agreement or the Preemptive Rights Agreement (each as defined below), the Series B Preferred Stock contains certain customary anti-dilution provisions.

Termination of Registration Rights Agreement (Series A Preferred Stock)

On December 4, 2015, in connection with the Exchange, the Company, together with Ashford Hospitality Prime Limited Partnership (the “Operating Partnership”) and Ashford Hospitality Advisors LLC (the “Advisor”), entered into a Termination of Registration Rights Agreement (the “Termination Agreement”) with MLV & Co. LLC. Pursuant to the Termination Agreement, the parties thereto agreed to terminate that certain Registration Rights Agreement, dated June 9, 2015, by and among the Company, the Operating Partnership, the Advisor and MLV & Co., LLC, the initial purchaser, for the benefit of the holders of the Series A Preferred Stock.

The foregoing summary description of the material terms of the Termination Agreement is not complete and is qualified in its entirety by reference to the full text of the Termination Agreement, which is included as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Registration Rights Agreement (Series B Preferred Stock)

On December 4, 2015, in connection with the Exchange, the Company, together with the Operating Partnership and the Advisor, entered into a registration rights agreement (the “Series B Preferred Stock Registration Rights Agreement”) for the benefit of certain holders of the Series B Preferred Stock. Pursuant to the terms of the Series B Preferred Stock Registration Rights Agreement, the Company has agreed to use its commercially reasonable efforts to prepare, file and have be declared effective by February 28, 2016 a registration statement with the SEC for the purpose of registering the resale of (i) the Series B Preferred Stock and (ii) the underlying shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) into which the shares of Series B Preferred Stock are convertible.

The foregoing summary description of the material terms of the Series B Preferred Stock Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Series B Preferred Stock Registration Rights Agreement, which is included as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Preemptive Rights Agreement

On December 4, 2015, in connection with the Exchange, the Company entered into an agreement (the “Preemptive Rights Agreement”) with certain investors in the Series B Preferred Stock (the “Series B Investors”) granting the Series B Investors certain preemptive rights in the Series B Preferred Stock. Pursuant to the Preemptive Rights Agreement, the Company, subject to certain exceptions, granted to the Series B Investors the right to purchase each of such Series B Investor’s pro rata share of any offering of the Series B Preferred Stock, for the account of the Company, including the Public Offering (a “Qualified Offering”). Each of the Series B Investor’s pro rata share of a Qualified Offering is equal to the product of (x) 20% and (y) the ratio of (i) the number of shares of the Company’s Series B Preferred Stock which is owned of record by such Series B Investor, or owned beneficially by such Series B Investor through a custodian or nominee holding on behalf of the Series B Investor, immediately prior to the issuance of such shares of Series B Preferred Stock to (ii) the total number of shares of the Company’s outstanding Series B Preferred Stock immediately prior to such issuance following a Qualified Offering; provided that such future issuance has an aggregate offering amount of at least $50 million. Pursuant to the Preemptive Rights Agreement, the Company also committed to use commercially reasonable efforts to apply to list the Series B Preferred Stock on a “national securities exchange” registered with the SEC under Section 6 of the Securities Exchange Act of 1934, as amended, by February 28, 2016, in conjunction with the Public Offering. These preemptive rights terminate upon the date of the final prospectus pertaining to such Public Offering.

The foregoing summary description of the material terms of the Preemptive Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Preemptive Rights Agreement, which is included as Exhibit 4.3 to this Current Report on Form 8-K and is incorporated by reference herein.

ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT

The information set forth above under Item 1.01 in this Current Report on Form 8-K is hereby incorporated by reference in this Item 1.02.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

The information set forth above under Item 1.01 and below under Item 3.03 and 5.03 in this Current Report on Form 8-K is hereby incorporated by reference in this Item 3.02.

ITEM 3.03 MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS

Exchange and Cancellation of Series A Preferred Stock

On December 4, 2015, the Company, together with the Operating Partnership and the Advisor, entered into an exchange agreement (the “Exchange Agreement”) with certain accredited investors holding all 2,600,000 shares of the Company’s outstanding Series A Preferred Stock, issued on June 11, 2015 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the terms of the Exchange Agreement, the Company agreed to exchange the Series A Preferred Stock for an equivalent number of shares of the Series B Preferred Stock. Upon consummation of the exchange, the Series A Preferred Stock was automatically cancelled and in accordance with the charter reverted to the status of authorized but unissued shares of undesignated preferred stock.

The Series B Preferred Stock was issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting the exchange.

Designation of Series B Preferred Stock

On December 4, 2015, the Company filed articles supplementary (the “Articles Supplementary”) to its charter with the Maryland State Department of Assessments and Taxation (the “Maryland Department”), establishing the rights, preferences, privileges, qualifications, restrictions and limitations of a new series of its preferred stock designated as “5.50% Series B Cumulative Convertible Preferred Stock,” par value $0.01 per share.

The terms and conditions of the Series B Preferred Stock are substantially similar to the Series A Preferred Stock for which it is being exchanged, except that, in contemplation of the Public Offering, either pursuant to the terms of the Series B Registration Rights Agreement or the Preemptive Rights Agreement, the Series B Preferred Stock contains certain customary anti-dilution provisions. The terms and conditions of the Series A Preferred Stock are described under Item 5.03 of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on June 12, 2015 and are incorporated herein by reference.

The foregoing description of the terms of the Series B Preferred Stock is qualified in its entirety by reference to the full text of the Articles Supplementary, which are included as Exhibit 3.1 to this Current Report on Form 8-K and are incorporated by reference herein.

ITEM 5.03 AMENDMENTS TO CERTIFICATE OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR

The information set forth under Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference. On December 4, 2015, the Company filed the Articles Supplementary with the Maryland Department, which became effective upon the acceptance of the Articles Supplementary for record by the Maryland Department, supplementing the Company’s charter by establishing the newly authorized Series B Preferred Stock of the Company consisting of 2,600,000 authorized shares. The terms and conditions of the Series B Preferred Stock are substantially similar to the Series A Preferred Stock for which it is being exchanged, except that, in contemplation of the Public Offering, either pursuant to the terms of the Series B Registration Rights Agreement or the Preemptive Rights Agreement, the Series B Preferred Stock contains certain customary anti-dilution provisions.

The terms and conditions of the Series A Preferred Stock are described under Item 5.03 of the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2015 and incorporated herein by reference. The foregoing description of the terms of the Series B Preferred Stock is qualified in its entirety by reference to the full text of the Articles Supplementary, which are included as Exhibit 3.1 to this Current Report on Form 8-K and are incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits



Exhibit Number		Description

3.1		Articles Supplementary for 5.50% Series B Cumulative Convertible Preferred Stock of Ashford Hospitality Prime, Inc., accepted for record and certified by the Maryland State Department of Assessments and Taxation on December 4, 2015
4.1		Termination of Registration Rights Agreement, dated December 4, 2015, by and among the Company, the Operating Partnership, the Advisor and MLV & Co. LLC
4.2		Registration Rights Agreement, dated December 4, 2015, by and among the Company, the Operating Partnership, the Advisor and certain holders of the Series B Preferred Stock
4.3		Preemptive Rights Agreement, dated as of December 4, 2015, by and among the Company and the Series B Investors

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 10, 2015



	ASHFORD HOSPITALITY PRIME, INC.

	By:		/s/ DAVID A. BROOKS
			David A. Brooks
			Chief Operating Officer and General Counsel

EXHIBIT 3.1

ASHFORD HOSPITALITY PRIME, INC.

ARTICLES SUPPLEMENTARY ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF A SERIES OF PREFERRED STOCK

Ashford Hospitality Prime, Inc., a Maryland corporation (the “Company”), having its principal office in Baltimore City, Maryland certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST : Under a power contained in Section 2-208 of the Maryland General Corporation Law and Article V of the Company’s Articles of Amendment and Restatement (as amended or supplemented through the date hereof) (the “Charter”), the Board of Directors of the Company (the “Board”) and a duly authorized committee thereof, classified 2,600,000 shares of the unissued preferred stock, par value $0.01 per share, of the Company (“Preferred Stock”) as 5.50% Series B Cumulative Convertible Preferred Stock, with the following preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption. Capitalized terms used and not otherwise defined herein have the meanings set forth in the Charter.

1. Designation and Number. A series of Preferred Stock of the Company, designated the “5.50% Series B Cumulative Convertible Preferred Stock” (the “Series B Preferred Stock”) is hereby established. The par value of the Series B Preferred Stock is $0.01 per share, and the liquidation preference is $25.00 per share. The number of shares of Series B Preferred Stock shall be 2,600,000.

2. Rank. The Series B Preferred Stock, with respect to dividend rights and rights upon the liquidation, winding-up or dissolution of the Company, ranks: (i) senior to all classes or series of our Common Stock and to all other equity securities issued by us other than equity securities referred to in clauses (ii) and (iii); (ii) junior to all equity securities whose terms specifically provide that those equity securities rank senior to the Series B Preferred Stock with respect to rights to the payment of dividends or the distribution of our assets upon liquidation, dissolution or winding up; and (iii) on parity with all other equity securities issued by us whose terms provide that those equity securities rank on parity with the Series B Preferred Stock with respect to rights to the payment of dividends or the distribution of our assets upon liquidation, dissolution or winding up. The term “equity securities” does not include convertible debt securities, which will rank senior to the Series B Preferred Stock.

3. Definitions. The following terms, used but not otherwise defined herein, have the following meanings:

(a) “Business day” means any day other than a Saturday or Sunday or other day on which commercial banks in New York City are generally authorized or required by law or executive order to close. If a dividend payment date is not a business day, payment will be made on the next succeeding business day, without any interest or other payment in lieu of interest accruing with respect to this delay.

(b) “Change of Control” is deemed to occur when, after the original issuance of the Series B Preferred Stock, the following have occurred and are continuing:

•

the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and


•	following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American depositary receipts representing such securities) listed on a National Exchange.

(c) “Change of Control Conversion Date” is the date the Series B Preferred Stock is to be converted, which will be a business day selected by us that is no fewer than five days nor more than 10 days after the notice period described in Section 9(b)(vii) to the holders of Series B Preferred Stock.

(d) “Closing Bid Price” means, for purposes of Section 8, (i) if the Common Stock is listed on a National Exchange, the last sale price quoted for the sale of a share of the Common Stock on such National Exchange on each trading day, or, if such National Exchange begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security at or immediately prior to 4:00 p.m., New York City time, or (ii) if the Common Stock is not then listed for trading on a National Exchange, the average of the last quoted bid prices for a share of Common Stock in the over-the-counter market as reported by Pink OTC Markets Inc. or similar organization. If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as determined in the business judgment of the Board.

(e) “Common Stock Price” is (i) if the consideration to be received in the Change of Control by the holders of our Common Stock is solely cash, the amount of cash consideration per share of our Common Stock or (ii) if the consideration to be received in the Change of Control by holders of our Common Stock is other than solely cash (x) the average of the closing sale prices per share of our Common Stock (or, if no closing sale price is reported, the average of the closing bid and ask prices per share or, if more than one in either case, the average of the average closing bid and the average closing ask prices per share) for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred as reported on the National Exchange on which our Common Stock is then traded, or (y) the average of the last quoted bid prices for our Common Stock in the over-the-counter market as reported by Pink OTC Markets Inc. or similar organization for the ten consecutive trading days immediately preceding,

but not including, the date on which such Change of Control occurred, if our Common Stock is not then listed for trading on a National Exchange.

(f) “Correction Event” means the payment in full of all dividends accumulated on the Series B Preferred Stock for all past dividend periods and the then current dividend period (or the declaration of such dividends provided that a sum sufficient for the payment thereof is set aside for such payment).

(g) “REIT” means real estate investment trust under the Internal Revenue Code of 1986, as amended.

(h) “REIT Termination Event” shall mean the earliest to occur of: (i) the filing of a federal income tax return by the Company for any taxable year on which the Company does not compute its income as a real estate investment trust; (ii) the approval by the stockholders of the Company of a proposal for the Company to cease to qualify as a real estate investment trust; (iii) the approval by the Board of a proposal for the Company to cease to qualify as a real estate investment trust; (iv) a determination by the Board, based on the advice of counsel, that the Company has ceased to qualify as a real estate investment trust; or (v) a “determination” within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended, that the Company has ceased to qualify as a real estate investment trust.

4. Maturity. The Series B Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption. Shares of the Series B Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them. We are not required to set aside funds to redeem the Series B Preferred Stock.


5.	Dividends.

(a) Holders of shares of the Series B Preferred Stock are entitled to receive, when, as and if authorized and declared by the Board, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 5.50% per annum on the $25.00 per share liquidation preference (equivalent to $1.375 per annum per share). Dividends on the Series B Preferred Stock shall be cumulative from the date of original issuance and shall be payable quarterly on the 15th day of each January, April, July, October (each, a “dividend payment date”), starting January 15, 2016; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will accrue on the amount so payable for the period from and after that dividend payment date to that next succeeding business day. Any dividend payable on the Series B Preferred Stock, including dividends payable for any partial dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in our stock records for the Series B Preferred Stock at the close of business on the applicable record date, which shall be, whether or not a business day, the 30th calendar day of the month preceding the next applicable dividend payment date (each, a “dividend record date”); provided that the record date for the first dividend payment date scheduled for January 15, 2016 shall be January 1, 2016.

(b) No dividends on shares of Series B Preferred Stock shall be authorized by the Board or paid or set apart for payment by us at any time when the declaration or payment thereof would be unlawful.

(c) Notwithstanding the foregoing, dividends on the Series B Preferred Stock will accrue whether or not there are funds legally available for the payment of those dividends and whether or not those dividends are declared. No interest, or sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears, and holders of the Series B Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series B Preferred Stock shall first be credited against the earliest accumulated, accrued but unpaid dividend due with respect to those shares.

(d) When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series B Preferred Stock and the shares of any other series of Preferred Stock that we may issue ranking on parity as to dividends with the Series B Preferred Stock, all dividends declared upon the Series B Preferred Stock and any other series of Preferred Stock ranking on parity that we may issue as to dividends with the Series B Preferred Stock shall be declared pro rata in proportion to the respective amounts of dividends accumulated, accrued and unpaid on the Series B Preferred Stock and accumulated, accrued and unpaid on such parity stock. Except as set forth in the preceding sentence, unless dividends on the Series B Preferred Stock equal to the full amount of accumulated, accrued and unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof set apart for such payment for all past dividend periods, no dividends shall be declared or paid or set aside for payment by us with respect to any class or series of parity stock. Unless full cumulative dividends on the Series B Preferred Stock have been paid or declared and set apart for payment for all past dividend periods, no dividends (other than dividends paid in shares junior in rank to the Series B Preferred Stock or options, warrants or rights to subscribe for or purchase such junior stock) shall be declared or paid or set apart for payment by us with respect to any junior stock, nor shall any junior stock or parity stock be redeemed, purchased or otherwise acquired (except for purposes of an employee benefit plan) for any consideration, or any monies be paid to or made available for a sinking fund for the redemption of any junior stock or parity stock (except by conversion or exchange for junior stock, or options, warrants or rights to subscribe for or purchase junior stock), nor shall any other cash or property be paid or distributed to or for the benefit of holders of junior stock. Notwithstanding the foregoing, we shall not be prohibited from (i) declaring or paying or setting apart for payment any dividend or distribution on any parity or junior stock or (ii) redeeming, purchasing or otherwise acquiring any parity or junior stock, in each case, if such declaration, payment, redemption, purchase or other acquisition is necessary to maintain our qualification as a REIT.

(e) No interest shall be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears.

(g) Whenever dividends on any shares of Series B Preferred Stock are in arrears for six or more quarterly dividend periods, whether or not consecutive (a “Penalty Event”), the dividend rate shall be increased by 200 basis points per annum (equivalent to $1.875 per annum per share)

(as increased, the “Penalty Rate”). This Penalty Rate shall remain in effect until all accumulated, accrued but unpaid dividends on the Series B Preferred Stock have been paid in full, at which time the dividend rate shall revert to the rate of 5.50% of the $25.00 per share stated liquidation preference per annum.


6.	Liquidation Preference.

(a) In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of shares of Series B Preferred Stock will be entitled to be paid out of the assets we have legally available for distribution to our stockholders, subject to the preferential rights of any class or series of our equity securities we may issue ranking senior to the Series B Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated, accrued and unpaid dividends to, but not including, the date of final distribution to such holders. Until the holders of the Series B Preferred Stock have been paid the liquidation preference in full, plus an amount equal to all accumulated, accrued and unpaid dividends to, but not including, the date of final distribution to such holders, no payment shall be made to any holder of our Common Stock or any other class or series of our stock we may issue that ranks junior to the Series B Preferred Stock upon the liquidation, dissolution or winding up of the Company.

(b) In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets, or proceeds thereof, distributable among the holders of Series B Preferred Stock are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock and the corresponding amounts payable on all shares of other classes or series of our equity securities that we may issue ranking on parity with the Series B Preferred Stock upon the liquidation, dissolution or winding up of the Company, then the holders of the Series B Preferred Stock and all other such classes or series of equity securities shall share ratably in any such distribution of assets or the proceeds thereof in proportion to the full liquidating distributions or amounts to which they would otherwise be respectively entitled.

(c) Holders of Series B Preferred Stock will be entitled to written notice of any such liquidation no fewer than 30 days and no more than 60 days prior to the payment date. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of our remaining assets. Our voluntary or involuntary liquidation, dissolution or winding up shall not include our consolidation or merger with or into one or more entities, a sale or transfer of all or substantially all of our assets or a statutory stock exchange (although such events may give rise to the other rights as described herein).


7.	Redemption.

(a) On and after June 11, 2020, we may, at our option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends thereon to, but not including, the date fixed for redemption. If we elect to redeem any shares of Series B Preferred Stock as described in this paragraph, we may use any available cash to pay the redemption price, and we will not be required to pay the redemption

price only out of the proceeds from the issuance of other equity securities or any other specific source.

(b) On or prior to the occurrence of a Change of Control, we may, at our option, redeem any then outstanding Series B Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends thereon to, but not including, the date of redemption. In the event that the Company shall have received notice of a holder’s intent to convert the Series B Preferred Stock into our Common Stock in accordance with the Change of Control Conversion Right or the General Conversion Right (as defined below) prior to the date fixed for redemption, then such Change of Control Conversion Right or the General Conversion Right shall be exercised first in lieu of our right to redeem the Series B Preferred Stock in accordance with this paragraph. If we elect to redeem any shares of the Series B Preferred Stock as described in this paragraph, we may use any cash lawfully available to pay the redemption price. In the event a Change of Control has not occurred on or prior to the date fixed for redemption, without the necessity of further action by the Board, the notice of redemption shall be deemed to have been withdrawn and no redemption of the Series B Preferred Stock shall be made.

(c) In the event we elect to redeem Series B Preferred Stock, the notice of redemption will be mailed to each holder of record of Series B Preferred Stock called for redemption at such holder’s address as it appear on our stock transfer records, not less than 30 nor more than 60 days’ prior to the date fixed for redemption, and will state the following:

● the redemption date;

● the number of shares of Series B Preferred Stock to be redeemed;

● the redemption price;


●	the place or places where certificates (if any) for the Series B Preferred Stock are to be surrendered for payment of the redemption price;


●	that dividends on the shares to be redeemed will cease to accumulate on the redemption date;


●	whether such redemption is being made pursuant to the provisions described in clauses (a) or (b), above;


●	if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control.

If less than all of the shares of Series B Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series B Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series B Preferred Stock except as to the holder to whom notice was defective or not given.

Holders of Series B Preferred Stock to be redeemed shall surrender the Series B Preferred Stock at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated, accrued and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of Series B Preferred Stock has been given and if we have irrevocably set aside the funds necessary for redemption in trust for the benefit of the holders of the shares of Series B Preferred Stock so called for redemption, then from and after the redemption date, dividends will cease to accumulate on those shares of Series B Preferred Stock, those shares of Series B Preferred Stock shall no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated, accrued and unpaid dividends, if any, payable upon redemption (except, in the case of a Special Optional Redemption, should a Change of Control not occur, then no holder shall be entitled to receive the redemption price or any accumulated, accrued and unpaid dividends). If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding Series B Preferred Stock is to be redeemed, the Series B Preferred Stock to be redeemed shall be selected pro rata or by lot (as nearly as may be practicable without creating fractional shares).

If a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, each holder of Series B Preferred Stock at the close of business on such dividend record date shall be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of the Series B Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of Series B Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment, no shares of Series B Preferred Stock shall be redeemed unless all outstanding shares of Series B Preferred Stock are simultaneously redeemed, and we shall not purchase or otherwise acquire directly or indirectly any shares of Series B Preferred Stock (except by exchanging it for our capital stock ranking junior to the Series B Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase or acquisition by us of shares of Series B Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series B Preferred Stock or pursuant to our Charter or otherwise in order to ensure that we remain qualified as a REIT for federal income tax purposes.

Subject to applicable law and the terms of these articles supplementary, we may purchase shares of Series B Preferred Stock in the open market, by tender or by private agreement. Any shares of Series B Preferred Stock that we acquire shall revert to the status of authorized but unissued shares of Preferred Stock, without designation as to class or series, and may thereafter be reissued as any class or series of Preferred Stock.

(d) If at any time (i) a REIT Termination Event occurs or (ii) after our Common Stock shall fail to or cease to be listed on the NYSE, NYSE MKT, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”; and each of (i) and (ii) above being a “Repurchase Event”), then the holders of Series B Preferred Stock shall have the right to require the Company, to the extent the Company shall have funds legally available therefor, to redeem any or all of the Series B Preferred Stock held by such holder at a repurchase price payable in cash (the “Repurchase Payment”) in an amount equal to 103% of the liquidation preference per share of Series B Preferred Stock (plus all accumulated, accrued and unpaid dividends, on the date of redemption (the “Repurchase Date”) pursuant to the offer described in the immediately following paragraph (the “Repurchase Offer”); provided, however , that in the event a Repurchase Event occurs as the result of, or is otherwise related to, a Change of Control, then the respective rights of the Company and the holders of Series B Preferred Stock shall be governed by the provisions described under sections 7(b) and 9(b) herein, and not this paragraph. If funds are not legally available to make the full Repurchase Payment as described in this paragraph, then the Company shall make the Repurchase Payment to the extent such funds are legally available.

(e) Subject to the requirements of applicable law, within ten (10) business days following the Company becoming aware that a Repurchase Event has occurred, the Company shall mail by recognized overnight courier a notice to each holder of Series B Preferred Stock stating (i) that a Repurchase Event has occurred and that such holder has the right to require the Company to repurchase any or all of the Series B Preferred Stock then held by such holder for cash, (ii) the Repurchase Date (which shall be a business day, no earlier than 30 days and no later than 60 days from the date such notice is mailed, or such later date as may be necessary to comply with the requirements of applicable law or the exchange, if any, upon which the Series B Preferred Stock may then be listed; provided, however , that if the Repurchase Event is the result of a transaction giving rise to a Change of Control consisting of an exchange of the Common Stock for cash or other securities, the date of repurchase, if any, shall be no later than the consummation of such exchange), (iii) the amount of the Repurchase Payment with respect to such holder and (iv) the instructions determined by the Company, consistent with this subsection, that such holder must follow in order to have its Series B Preferred Stock repurchased.

(f) On the Repurchase Date, the Company, to the extent lawful, shall accept for payment Series B Preferred Stock or portions thereof tendered by each holder of Series B Preferred Stock pursuant to the Repurchase Offer and promptly by wire transfer of immediately available funds to such holder, as directed by such holder, send an amount equal to the Repurchase Payment in respect of all Series B Preferred Stock or portions thereof so tendered.

(g) Notwithstanding anything else herein, to the extent they are applicable to any Repurchase Offer, the Company will comply with any federal and state securities laws, rules and regulations applicable to it or its securities, and all time periods and requirements set forth above shall be adjusted accordingly to conform to such requirements.

(h) Shares of Series B Preferred Stock that are redeemed, purchased or otherwise acquired by the Company, or converted into shares of Common Stock, shall be cancelled and shall

revert to authorized but unissued shares of Preferred Stock and shall be available for further classification and reclassification.


8.	Mandatory Conversion.

(a) Commencing June 11, 2016, we at our option, may cause the Series B Preferred Stock to be converted in whole or in part, on a pro rata basis, into fully paid and nonassessable shares of our Common Stock at the applicable Conversion Rate (defined in section 9(a)(i) below), provided that the Closing Bid Price of the Common Stock shall have equaled or exceeded 110% of the Conversion Price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion (such event, the “Market Trigger”; the exercise of the Company’s conversion right upon the occurrence of a Market Trigger, the “Mandatory Conversion”). Any shares of Series B Preferred Stock so converted shall be treated as having been surrendered by the holder thereof for conversion on the date of such Mandatory Conversion (unless previously converted at the option of the holder).

(b) In the event of a Mandatory Conversion (unless shares of Series B Preferred Stock have been previously converted at the option of the holder), we shall pay holders of the Series B Preferred Stock an additional dividend payment to make the holders whole on dividends expected to be received through June 11, 2019 on the Series B Preferred Stock in an amount equal to the net present value, where the discount rate is the dividend rate on the Series B Preferred Stock, of the difference between (i) the annual dividend payments the holders of Series B Preferred Stock would have received in cash from the date of the Mandatory Conversion to June 11, 2019, and (ii) the Common Stock quarterly dividend payments the holders of Series B Preferred Stock would have received over the same time period had such holders held Common Stock (such latter amount calculated by annualizing the quarterly dividends paid by the Company on its Common Stock in or for the last full calendar quarter immediately preceding such Mandatory Conversion).

(c) In the event of a Mandatory Conversion, notice (the “Notice of Mandatory Conversion”) by first class mail, postage prepaid, shall be given to the holders of record of the Series B Preferred Stock subject to such Mandatory Conversion at such holder’s address as it appears on our stock transfer records, not less than 30 nor more than 60 days prior to the date fixed for such Mandatory Conversion, and such notice will state the following: (i) the business day selected for the Mandatory Conversion (the “Mandatory Conversion Date”), (ii) the aggregate number of shares of Series B Preferred Stock subject to Mandatory Conversion, and (iii) the number of shares of Common Stock to be issued to such holder on the Mandatory Conversion Date.

(d) Notwithstanding any other provision of the Series B Preferred Stock, no holder of Series B Preferred Stock will be entitled to convert such Series B Preferred Stock for shares of our Common Stock to the extent that receipt of such Common Stock would cause such holder (or any other person) to exceed the applicable ownership limits contained in our Charter, unless we provide an exemption from this limitation for such holder.

(e) Except as provided above, the Series B Preferred Stock is not convertible into or exchangeable for any other securities or property.


9.	Conversion Rights.

(a) General Conversion Right.

(i) Each outstanding share of Series B Preferred Stock shall be convertible at any time at the option of the holder (the “General Conversion Right”) into that number of whole shares of our Common Stock at an initial conversion price equal to $18.90 (the “Conversion Price”), which represents an initial conversion rate of 1.3228 shares of our Common Stock (as may be subject to adjustment as provided herein, the “Conversion Rate”). A share of Series B Preferred Stock called by the Company for redemption shall be convertible into shares of our Common Stock up to and including, but not after, the close of business on the date fixed for redemption unless we default in the payment of the amount payable upon redemption.

(ii) To exercise the General Conversion Right, the holder of each share of Series B Preferred Stock to be converted shall surrender the certificate representing such share, if certificated, duly endorsed or assigned to us or in blank, at the office of the transfer agent, together with written notice of the election to convert executed by the holder (the “Conversion Notice”) specifying the number of shares of Series B Preferred Stock to be converted, the name in which the share of the Common Stock deliverable upon conversion shall be registered, and the address of the named person. If the shares of Series B Preferred Stock are not certificated, the holder must deliver evidence of ownership satisfactory to us and the transfer agent. Unless the shares of Common Stock deliverable upon conversion are to be issued in the same name as the name in which the shares of Series B Preferred Stock to be converted are registered, the holder must also deliver to the transfer agent an instrument of transfer, in form satisfactory to us, duly executed by the holder or the holder’s duly authorized attorney, together with an amount sufficient to pay any transfer or similar tax in connection with the issuance and delivery of such shares of Common Stock in such name (or evidence reasonably satisfactory to us demonstrating that such taxes have been paid).

(b) Change of Control Conversion Rights.

(i) On or prior to the occurrence of a Change of Control, each holder of Series B Preferred Stock will have the right to convert some or all of the Series B Preferred Stock held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of shares of our Common Stock per share of Series B Preferred Stock (the “Common Stock Conversion Consideration”) equal to the lesser of:

◦

the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference per share of Series B Preferred Stock plus the amount of any accumulated, accrued and unpaid dividends thereon to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date and prior to the corresponding dividend payment date for the Series B Preferred Stock, in which case no additional amount for accumulated, accrued and unpaid dividends will be included in this sum) by (ii) the Common Stock Price; and

◦

1.6057 (the “Share Cap”), subject to certain adjustments as described below, provided, however , that in the event that the Company effects a registered public offering for cash of further shares of Series B Preferred Stock the share Cap shall automatically, and without further action, be reset to 3.2216 (the “Amended Share Cap”), provided further that the Amended Share Cap as set forth herein shall be subject to the adjustments as provided under Section 12 occurring at any time following the date of original issuance of the Series B Preferred Stock created hereby.

(ii) Notwithstanding the foregoing, holders shall always have the right, up to the close of business on the applicable redemption date, to convert the Series B Preferred Stock in accordance with the General Conversion Right.

(iii) Notwithstanding anything in our Charter or the articles supplementary to the contrary and except as otherwise required by law, the persons who are the holders of record of shares of Series B Preferred Stock at the close of business on a dividend record date will be entitled to receive the dividend payable on the corresponding dividend payment date notwithstanding the conversion of those shares after such dividend record date and on or prior to such dividend payment date and, in such case, the full amount of such dividend shall be paid on such dividend payment date to the persons who were the holders of record at the close of business on such dividend record date. Except as provided above, we will make no allowance for unpaid dividends that are not in arrears on the shares of Series B Preferred Stock to be converted.

(iv) We will provide to holders of Series B Preferred Stock a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right, not less than 30 nor more than 60 days prior to the date on which the Change of Control is expected to occur in accordance with section 7(b) herein, and will state the following:

• the events constituting the Change of Control;

• the date of the Change of Control;


•	the last date on which the holders of Series B Preferred Stock may exercise their Change of Control Conversion Right;

• the method and period for calculating the Common Stock Price;

• the Change of Control Conversion Date;


•	if applicable, the type and amount of exchange property entitled to be received per share of Series B Preferred Stock;


•	the name and address of the paying agent, transfer agent and conversion agent for the Series B Preferred Stock;


•	the procedures that the holders of Series B Preferred Stock must follow to exercise the Change of Control Conversion Right (including procedures for surrendering shares for conversion through the facilities of a Depositary (as defined below)), including the form of conversion notice to be delivered by such holders as described below; and


•	the last date on which holders of Series B Preferred Stock may withdraw shares surrendered for conversion and the procedures that such holders must follow to effect such a withdrawal.

(v) To exercise the Change of Control Conversion Right, the holders of Series B Preferred Stock will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) representing the shares of Series B Preferred Stock to be converted, duly endorsed for transfer (or, in the case of any shares of Series B Preferred Stock held in book-entry form through a Depositary, to deliver, on or before the close of business on the Change of Control Conversion Date, the shares of Series B Preferred Stock to be converted through the facilities of such Depositary), together with a written conversion notice in the form provided by us, duly completed, to our transfer agent. In the event a Change of Control has not occurred on or prior to the date fixed for redemption, without the necessity of further action by the Board, the notice of redemption shall be deemed to have been withdrawn and no redemption of the Series B Preferred Stock shall be made. The conversion notice must state:


•	the relevant Change of Control Conversion Date;


•	the number of shares of Series B Preferred Stock to be converted; and


•	that the Series B Preferred Stock is to be converted pursuant to the applicable provisions of the Series B Preferred Stock.

(vi) Holders of Series B Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal delivered by any holder must state:

● the number of withdrawn shares of Series B Preferred Stock;


●	if certificated Series B Preferred Stock has been surrendered for conversion, the certificate numbers of the withdrawn shares of Series B Preferred Stock; and


●	the number of shares of Series B Preferred Stock, if any, which remain subject to the holder’s conversion notice.

Notwithstanding the foregoing, if any shares of Series B Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”) or a similar depositary (each, a “Depositary”), the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures, if any, of the applicable Depositary.

(vii) Series B Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date.

(viii) We will deliver all securities, cash and any other property owing upon conversion no later than the third business day following the Change of Control Conversion Date. Notwithstanding the foregoing, the persons entitled to receive any shares of our Common Stock or other securities delivered on conversion will be deemed to have become the holders of record thereof as of the Change of Control Conversion Date.

(ix) In connection with the exercise of any Change of Control Conversion Right, we will comply with all federal and state securities laws and stock exchange rules in connection with any conversion of Series B Preferred Stock into shares of our Common Stock or other property.

10. Make-Whole Premium. In the event a Change of Control occurs prior to June 11, 2019 and either (i) the Company exercises its Special Optional Redemption Right or (ii) the holder elects to convert such holder’s shares of Series B Preferred Stock by exercising the Change of Control Conversion Right, then we will pay to such holder in cash, to the extent we are legally permitted to do so, the present value, computed using a discount rate of 5.50% per annum compounded quarterly, of all dividend payments on the Series B Preferred Stock for all remaining dividend periods (excluding any accumulated dividend amount) from the date of such exercise up to but excluding June 11, 2019.

11. No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series B Preferred Stock, whether voluntary or mandatory. Instead, the Company shall pay the cash value to each holder that would otherwise be entitled to a fractional share.

12. Anti-Dilution Adjustments. The applicable Conversion Rate will be adjusted, without duplication, upon the occurrence of any of the following events:

(a) We issue common stock to all holders of our common stock as a dividend or other distribution, or if we effect a share split, share combination or reverse share split, in which event the applicable Conversion Rate will be adjusted based on the following formula:




CR ₁	=	CR ₀	x	OS ₁ OS ₀

where,



CR ₀	=	the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution, or the open of business on the effective date of such share split or share combination, as the case may be;
CR ₁	=	the Conversion Rate in effect immediately after the open of business on the Ex-Date for such dividend or distribution, or the open of business on the effective date of such share split or share combination, as the case may be;
OS ₀	=	the number of shares of our common stock outstanding immediately prior to the open of business on the Ex-Date for such dividend or distribution, or the open of business on the effective date of such share split or share combination, as the case may be; and
OS ₁	=	the number of shares of our common stock outstanding immediately after such dividend or distribution, or such share split, share combination or reverse share split, as the case may be.

Any adjustment made pursuant to this clause (a) will become effective immediately after the open of business on the Ex-Date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination. If any dividend or distribution of the type described in this clause (a) is declared but not so paid or made, or any share split or combination of the type described in this clause (a) is announced but the outstanding shares of our common stock are not split or combined, as the case may be, the Conversion Rate shall immediately be readjusted, effective as of the date our Board of Directors publicly announces its decision not to make such dividend or distribution, or not to split, combine or reverse split the outstanding shares of our common stock , as the case may be, to such Conversion Rate that would be in effect if such dividend, distribution, share split, reverse share split or share combination had not been declared or announced.

(b) We issue to all holders of our common stock rights or warrants (other than as provided herein) entitling them, for a period of up to 45 calendar days from the record date of such distribution, to subscribe for or purchase our common stock at less than the “current market price” (as defined below) of our common stock, in which case the applicable Conversion Rate will be increased based on the following formula:




CR ₁	=	CR ₀	x	OS ₀ + X OS ₀ + Y



CR ₀	=	the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such distribution;
CR ₁	=	the Conversion Rate in effect immediately after the open of business on the Ex-Date for such distribution;
OS ₀	=	the number of shares of our common stock outstanding immediately prior to the open of business on the Ex-Date for such distribution;
X	=	the total number of shares of our common stock issuable pursuant to such rights or warrants; and
Y	=	the number of shares of our common stock equal to the aggregate price payable to exercise such rights or warrants divided by the current market price of our common stock.

Any adjustment made pursuant to this clause (b) will become effective immediately after the open of business on the Ex-Date for such distribution. In the event that such rights or warrants described in this clause (b) are not so issued, the applicable Conversion Rate shall be readjusted, effective as of the date our Board of Directors publicly announces its decision not to issue such rights or warrants, to the Conversion Rate that would then be in effect if such Ex-Date for such distribution had not occurred. To the extent that such rights or warrants are not exercised prior to their expiration or our common stock are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the applicable Conversion Rate shall be readjusted to such Conversion Rate that would then be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of our common stock actually delivered. In determining whether any rights or warrants entitle the holders thereof to subscribe for or purchase common stock at less than the current market price, and in determining the aggregate offering price payable for such common stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration and any amount payable on exercise or conversion thereof (if other than cash, to be determined in good faith by our Board of Directors, which determination shall be final).

(c) We distribute to all holders of our common stock evidences of our indebtedness, share capital, securities, cash or other assets, excluding:


•	any dividend or distribution covered by clauses (a) or (b) above;


•	any rights or warrants covered by clause (b) above;


•	any dividend or distribution covered by clause (d) below; and


•	any spin-off to which the provisions set forth below in this clause (c) shall apply,

then the Conversion Rate will be increased based on the following formula:




CR ₁	=	CR ₀	x	SP ₀ SP ₀ − FMV

where,



CR ₀	=	the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such distribution;
CR ₁	=	the Conversion Rate in effect immediately after the open of business on the Ex-Date for such distribution;
SP ₀	=	the current market price of our common stock; and
FMV	=	the fair market value (as determined by our Board of Directors in its good faith judgment) of our indebtedness, share capital, securities, cash or other assets distributable with respect to each outstanding share of our common stock on the Ex-Date for such distribution.

Any adjustment under this above portion of this clause (c) will become effective immediately after the open of business on the Ex-Date for such distribution.

In the event that we make a distribution to all holders of our common stock consisting of share capital of, or similar equity interests in, or relating to a subsidiary or other business unit of ours that is listed or quoted (or will be listed or quoted upon consummation of the spin-off (as defined below)) on a national securities exchange (herein referred to as a “spin-off”), the applicable Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the tenth trading day immediately following, and including, the Ex-Date for the spin-off will be increased based on the following formula:




CR ₁	=	CR ₀	x	FMV + MP ₀ MP ₀




where,
CR ₀	=	the Conversion Rate in effect immediately prior to the close of business on the tenth trading day immediately following, and including, the Ex-Date for the spin-off;
CR ₁	=	the Conversion Rate in effect immediately after the close of business on the tenth trading day immediately following, and including, the Ex-Date for the spin-off;
FMV	=	fair market value, as determined by our Board of Directors in its good faith judgment, of the portion of those shares of share capital or similar equity interests so distributed applicable to one share of common stock over the ten consecutive trading day period immediately following, and including, the Ex-Date for the spin-off (or, if such shares of share capital or equity interests are listed on a U.S. national or regional securities exchange, the current market price of such securities); and
MP ₀	=	the current market price of our common stock.

Any adjustment made pursuant to this clause (c) shall become effective at the close of business on the 10 ^th trading day immediately following, and including, the Ex-Date for the spin-off; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 10 trading days following, and including, the effective date of any spin-off, references within the portion of this clause (c) related to “spin-offs” to 10 consecutive trading days shall be deemed replaced with such lesser number of consecutive trading days as have elapsed between the effective date of such spin-off and the relevant conversion date. In the event that such distribution described in this clause (c) is not so made, the applicable Conversion Rate shall be readjusted, effective as of the date our Board of Directors publicly announces his decision not to make such distribution, to such Conversion Rate that would then be in effect if such distribution had not been declared.

(d) We make a distribution consisting exclusively of cash to all holders of our common stock, excluding:

(1) any regularly scheduled quarterly cash dividend in the ordinary course of business;

(2) any cash that is distributed in a reorganization event (as described below);

(3) any dividend or distribution in connection with our liquidation, dissolution or winding up; and

(4) any consideration payable as part of a tender or exchange offer;

in which event, the applicable Conversion Rate will be increased based on the following formula:




CR ₁	=	CR ₀	x	SP ₀ SP ₀ − C

where,



CR ₀	=	the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution;
CR ₁	=	the Conversion Rate in effect immediately after the open of business on the Ex-Date for such dividend or distribution;
SP ₀	=	the current market price of our common stock; and
C	=	the amount in cash per share of our common stock so distributed (excluding any amounts set forth under (d)(1)-(4) above).

Such increase shall become effective immediately after the open of business on the Ex-Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(e) We or any of our subsidiaries successfully complete a tender or exchange offer pursuant to a Schedule TO or registration statement on Form S-4 for our common stock (excluding any securities convertible or exchangeable for our common stock), where the cash and the fair market value of any other consideration included in the payment per share of common stock exceeds the current market price of our common stock, in which event the applicable Conversion Rate in effect at 5:00 p.m., New York City time, on the date of expiration of the tender or exchange offer (the “expiration date”) will be increased based on the following formula:




CR ₁	=	CR ₀	x	AC + (SP ₁ x OS ₁ ) OS ₀ x SP ₁




CR ₀	=	the Conversion Rate in effect immediately prior to the close of business on the last trading day of the 10 consecutive trading-day period commencing on, and including, the trading day next succeeding the date such tender or exchange offer expires;
CR ₁	=	the Conversion Rate in effect immediately after the close of business on the last trading day of the 10 consecutive trading-day period commencing on, and including, the trading day next succeeding the date such tender or exchange offer expires;
AC	=	the aggregate value of all cash and the fair market vaue of any other consideration (as determined by our Board of Directors in its good faith judgment) paid or payable for shares purchased in such tender or exchange offer;
OS ₀	=	the number of shares of our common stock outstanding immediately prior to the date such tender or exchange offer expires;
OS ₁	=	the number of shares of our common stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to such tender offer or exchange offer and excluding fractional shares); and
SP ₁	=	the current market price of our common stock.

Any adjustment made pursuant to this clause (e) shall become effective immediately after 5:00 p.m., New York City time, on the 10th trading day immediately following the expiration date but will be given effect as of the open of business on the expiration date for the tender or exchange offer; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 10 trading days immediately following, but excluding, the date that any such tender or exchange offer expires, references within this clause (e) to 10 consecutive trading days shall be deemed replaced with such lesser number of consecutive trading days as have elapsed between the date such tender or exchange offer expires and the relevant conversion date. In the event that we are, or one of our subsidiaries is, obligated to purchase our common stock pursuant to any such tender offer or exchange offer, but we are, or such subsidiary is, permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the applicable Conversion Rate shall be readjusted to be such Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made.

Notwithstanding the foregoing, if (i) a Conversion Rate adjustment pursuant to any of the foregoing becomes effective on any Ex-Date as described above and (ii) a holder converting its Series B Preferred Stock on or after such Ex-Date and on or prior to the related record date would be treated as the record holder of shares of our common stock as of the related conversion date based on an adjusted Conversion Rate for such Ex-Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the Conversion Rate adjustment relating to such Ex-Date will not be made for any holder converting Series B Preferred Stock on or after such Ex-Date and on or prior to the related record date. Instead, such holder will be treated as if such holder were the record owner of the shares of our common stock on an un-adjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

We are not required to adjust the Conversion Rate for any of the transactions described in the clauses above (other than for share splits, share combinations or reverse share splits) if we make

provision for each holder of a share of Series B Preferred Stock to participate in the transaction, at the same time as holders of our common stock participate, without conversion, as if such holder held a number of shares of our common stock in respect of each share of Series B Preferred Stock equal to the Conversion Rate in effect on the “Ex-Date” or effective date of such transaction.

If we issue rights, options or warrants that are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate will not be adjusted pursuant to clauses (b) and (c) above, as applicable, until the earliest of these triggering events occurs and the Conversion Rate shall be readjusted to the extent any of these rights, options or warrants are not exercised before they expire.

To the extent that we have a rights plan in effect with respect to our common stock on any conversion date, upon conversion of any Series B Preferred Stock, you will receive, in addition to common stock, the rights under the rights plan, unless, prior to such conversion, the rights have expired, terminated or been redeemed or unless the rights have been separated from our common stock, in which case the applicable Conversion Rate will be adjusted at the time of separation as if we made a distribution to all holders of our common stock as described in clause (c) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. Any distribution of rights or warrants pursuant to a rights plan that would allow you to receive upon conversion, in addition to any common stock, the rights described therein (unless such rights or warrants have separated from our common stock) shall not constitute a distribution of rights or warrants that would entitle you to an adjustment to the Conversion Rate.

We will not adjust the Conversion Rate pursuant to the clauses above unless the adjustment would result in a change of at least 1% in the then effective Conversion Rate. However, we will carry forward any adjustment that is less than 1% of the Conversion Rate and make such carryforward adjustment in any subsequent adjustment and, regardless of whether the aggregate adjustment is less than 1%, on the conversion date for any Series B Preferred Stock. In addition, at the end of each fiscal year, beginning with the fiscal year ending December 31, 2015, we will give effect to any adjustments that we have otherwise deferred pursuant to this provision, and those adjustments will no longer be carried forward and taken into account in any subsequent adjustment. Adjustments to the Conversion Rate will be calculated to the nearest 1/10,000 of a share.

To the extent permitted by law and the continued listing requirements of NYSE (or any stock exchange on which our common stock may then be listed), we may, from time to time, increase the Conversion Rate by any amount for a period of at least 20 business days or any longer period permitted or required by law, so long as the increase is irrevocable during that period and our Board of Directors determines that the increase is in our best interests. We will mail a notice of the increase to registered holders at least 15 calendar days before the day the increase commences. In addition, we may, but are not obligated to, increase the Conversion Rate as we determine to be advisable in order to avoid or diminish taxes to recipients of certain distributions.

For the purposes of determining the adjustment to the applicable Conversion Rate for the purposes of:

•

clauses (b), (c) in the event of an adjustment not relating to a spin-off and (d) above, the “current market price” of our common stock is the average of the per share volume-weighted average prices of our common stock for each day over the 10 consecutive trading day period ending on the trading day before the Ex-Date (as defined below) with respect to the issuance or distribution requiring such computation;


•	clause (c) above in the event of an adjustment relating to a spin-off, the “current market price” of our common stock, share capital or equity interest, as applicable, is the average of the per share volume-weighted average prices of our common stock for each day over the first ten consecutive trading days immediately following, and including, the Ex-Date for the spin-off; and


•	clause (e) above, the “current market price” of our common stock is the average of the per share volume-weighted average prices of our common stock for each day over the 10 consecutive trading day period commencing on, and including, the trading day next succeeding the expiration date of the tender or exchange offer.

In the event of:



	•		any consolidation or merger of us with or into another person (other than a merger or consolidation in which we are the continuing corporation and in which the common stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities or other property of us or another person);



	•		any sale, transfer, lease or conveyance to another person of all or substantially all of our property and assets;



	•		any recapitalization, reclassification or change of our common stock into securities, including securities other than our common stock; or



	•		any statutory exchange of our securities with another person (other than in connection with a merger or acquisition),

in each case, as a result of which our common stock would be converted into, or exchanged for, securities, cash or property (each, a “reorganization event”), each share of Series B Preferred Stock outstanding immediately prior to such reorganization event shall, without the consent of the holders of the Series B Preferred Stock, become convertible into the kind of securities, cash and other property that such holder would have been entitled to receive if such holder had converted its Series B Preferred Stock into common stock immediately prior to such reorganization event (such securities, cash and other property, the “exchange property,” with each “unit of exchange property” meaning the kind and amount of exchange property that a holder of one share of common stock is

entitled to receive). For purposes of the foregoing, the type and amount of exchange property in the case of any reorganization event that causes our common stock to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of shareholder election) will be deemed to be the weighted average of the types and amounts of consideration received by the holders of our common stock that affirmatively make such an election (or of all holders of our common stock if none makes an election). We will notify holders of the Series B Preferred Stock of the weighted average as soon as practicable after such determination is made. The number of units of exchange property for each share of Series B Preferred Stock converted following the effective date of such reorganization event will be determined as if references to our common stock in the description of the conversion rate applicable upon mandatory conversion and conversion at the option of the holder were to units of exchange property (without interest thereon and without any right to dividends or distributions thereon which have a record date prior to the date such Series B Preferred Stock are actually converted).

In addition, we may make such increases in the Conversion Rate as we deem advisable in order to avoid or diminish any income tax to holders of our common stock resulting from any dividend or distribution of our common stock (or issuance of rights or warrants to acquire our common stock) or from any event treated as such for income tax purposes or for any other reason. We may only make such a discretionary adjustment if we make the same proportionate adjustment to the applicable Conversion Rate.

The term “Ex-Date” as used herein is the first date on which our common stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question from us or, if applicable, from the seller of our common stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

Upon each adjustment to the Conversion Rate, a corresponding adjustment shall be made to the Conversion Price, calculated by dividing the liquidation preference by the adjusted Conversion Rate. Any adjustment pursuant to the foregoing provisions shall also result in a corresponding adjustment to the Share Cap.


13.	Events That Will Not Result in Adjustment.

The Conversion Rate will not be adjusted:




	•	upon the issuance of any shares of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities;

	•	upon the issuance of any shares of our common stock, restricted stock or restricted stock units, nonqualified stock options, incentive stock options or any other options or rights (including stock appreciation rights) to purchase shares of our common stock pursuant to any present or future employee, director or consultant benefit plan or program of, or assumed by, us or any of our subsidiaries;

	•	upon the issuance of any shares of our common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding bullet point and outstanding as of the date the Series B Preferred Stock was first issued;

	•	for unpaid accrued and accumulated dividends, if any;

	•	upon the repurchase of any shares of our common stock pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer; or

	•	for a change in the par value of shares of our common stock.

We shall not take any action that would require an adjustment to the Conversion Rate such that the Conversion Price, as adjusted to give effect to such action, would be less than the then-applicable par value per share of our common stock, except we may undertake a share split or similar event if such share split results in a corresponding reduction in the par value per share of our common stock such that the as-adjusted new effective Conversion Price per share would not be below the new as-adjusted par value per share of our common stock following such share split or similar transaction and the Conversion Rate is adjusted as provided under clause (a) (and/or any such other clause(s) as may be applicable) under Section 12 of these Articles Supplementary. In addition, the articles supplementary provide that we may not take any action that would result in an adjustment to the Conversion Rate without complying with any applicable stockholder approval rules of the NYSE or any other stock exchange on which our common stock may be listed at the relevant time.

Except as otherwise provided for in these Articles Supplementary, we will not adjust the Conversion Rate for any issuance of shares of our common stock or any securities convertible into or exchangeable or exercisable for shares of our common stock or rights to purchase shares of our common stock or such convertible, exchangeable or exercisable securities.


14.	Notice of Adjustment.

Whenever a Conversion Rate is to be adjusted, the Company shall:

(a) compute such adjusted Conversion Rate and prepare and transmit to the Transfer Agent an notice setting forth such adjusted Conversion Rate, the method of calculation thereof in

reasonable detail and the facts requiring such adjustment and upon which such adjustment is based;

(b) not more than 10 calendar days prior to the occurrence of an event that requires an adjustment to the Conversion Rate, provide, or cause to be provided, a written notice to the registered holders (which, for the avoidance of doubt, shall be DTC in the event that the Series B Preferred Stock are represented by global certificates) of the occurrence of such event; and

(c) as soon as practicable following the determination of such adjusted Conversion Rate provide, or cause to be provided, to the registered holders a statement setting forth in reasonable detail the method by which the adjustment to the Conversion Rate was determined and setting forth such adjusted Conversion Rate.


15.	Voting Rights.

(a) Holders of the Series B Preferred Stock generally have no voting rights, except as set forth below:

(i) Whenever a Penalty Event has occurred, the number of directors constituting the Board will be increased by two (if not already increased by two by reason of the election of directors by the holders of any other classes or series of our equity securities we may issue upon which similar voting rights have been conferred) and the holders of Series B Preferred Stock (voting separately as a class with all other classes or series of equity securities we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of those two directors) will be entitled to vote for the election of those two additional directors at a special meeting called by us at the request of the holders of record of at least 25% of the outstanding shares of Series B Preferred Stock or by the holders of any other classes or series of equity securities upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of those two directors (unless the request is received less than 90 days before the date fixed for the next annual or special meeting of stockholders, in which case, such vote will be held at the earlier of the next annual or special meeting of stockholders), and at each subsequent annual meeting until a Correction Event has occurred with respect to each Penalty Event then continuing. In that case, the right of holders of the Series B Preferred Stock to elect any directors will cease and, any directors elected by holders of the Series B Preferred Stock shall immediately resign and the number of directors constituting the Board shall be reduced accordingly. In no event shall the holders of Series B Preferred Stock be entitled pursuant to these voting rights to elect a director that would cause us to fail to satisfy a requirement relating to director independence of any National Exchange on which any class or series of our stock is listed or quoted. For the avoidance of doubt, in no event shall the total number of directors elected by holders of the Series B Preferred Stock (voting separately as a class with all other classes or series of equity securities we may issue upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of such directors) pursuant to these voting rights exceed two.

(ii) If a special meeting is not called by us within 30 days after request from the holders of Series B Preferred Stock as described above, then the holders of record of at least 25% of the outstanding Series B Preferred Stock may designate a holder to call the meeting at our expense.

(iii) If, at any time when the voting rights conferred upon the Series B Preferred Stock are exercisable as a result of a Penalty Event, as described above, any vacancy in the office of a director elected pursuant to those special voting rights shall occur, then such vacancy may be filled only by the remaining such director or by vote of the holders of record of the outstanding Series B Preferred Stock and any other classes or series of equity securities upon which similar voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series B Preferred Stock in the election of directors. Any director elected or appointed may be removed only by the affirmative vote of holders of the outstanding Series B Preferred Stock and any other classes or series of equity securities upon which similar voting rights have been conferred and are exercisable and which classes or series of equity securities are entitled to vote as a class with the Series B Preferred Stock in the election of directors, such removal to be effected by the affirmative vote of a majority of the votes entitled to be cast by the holders of the outstanding Series B Preferred Stock and any such other classes or series of equity securities, and may not be removed by the holders of the Common Stock.

(iv) On each matter on which holders of Series B Preferred Stock are entitled to vote, each share of Series B Preferred Stock will be entitled to one vote, except that when shares of any other class or series of our equity securities have the right to vote with the Series B Preferred Stock as a single class on any matter, the Series B Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of stated liquidation preference (excluding accumulated dividends).

(v) So long as any shares of the Series B Preferred Stock remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Series B Preferred Stock and all other series of voting preferred stock entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing or at an annual or special meeting of such stockholders, in addition to any other vote required by our Charter or Maryland law:


•	amend, alter the provisions of the Charter, including the articles supplementary so as to authorize or create, or increase the authorized amount of, any class or series of senior stock; or


•	amend, alter or repeal the provisions of the Charter, including the articles supplementary so as to adversely affect the special rights, preferences, privileges or voting powers of the Series B Preferred Stock; or

•

consummate a binding share exchange or reclassification involving the shares of the Series B Preferred Stock or a merger or consolidation of us with another entity, unless in each case: (i) the shares of the Series B Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity (or the Series B Preferred Stock

is otherwise exchanged or reclassified), are converted or reclassified into or exchanged for preferred stock of the surviving or resulting entity or its ultimate parent; and (ii) such shares of the Series B Preferred Stock that remain outstanding or such shares of Preferred Stock, as the case may be, have rights, preferences, privileges and voting powers that, taken as a whole, are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, taken as a whole, of the Series B Preferred Stock immediately prior to the consummation of such transaction; provided, however , that the following will be deemed not to adversely affect (or to otherwise cause to be materially less favorable the rights, preferences, privileges or voting powers of the Series B Preferred Stock and shall not require the affirmative vote of holders of the Series B Preferred Stock but may be effected by due action of the Board and any required approval of the holders of the Company’s common stock: (1) any increase in the amount of the Company’s authorized but unissued shares of the Company’s Preferred Stock, (2) any increase in the amount of our authorized Series B Preferred Stock or the issuance of any additional shares of the Series B Preferred Stock, (3) the authorization or creation of any class or series of parity or junior stock, any increase in the amount of authorized but unissued shares of such class or series of parity or junior stock or the issuance of additional shares of such class or series of parity or junior stock or (4) the adoption or inclusion (by amendment, alteration, share exchange, reclassification, merger, consolidation or similar means) of charter provisions (whether in the Charter or a successor entity certificate of incorporation or other equivalent governing document) applicable to capital stock (including Series B Preferred Stock or any successor Preferred Stock) relating to the ownership limitations and transfer restrictions that are customary, in the sole determination of the Board, for the protection of our or any successor entity’s status as a REIT and a “domestically controlled qualified investment entity” for tax purposes; provided, further, in each case that no vote of the holders of Series B Preferred Stock shall be required if provision is made to redeem and all Series B Preferred Stock is redeemed at or prior to the time such amendment, alteration, repeal, share exchange, reclassification, merger or consolidation is to take effect or when the issuance of any such shares or convertible securities is to be made, as the case may be, which provision shall include, for the avoidance of doubt, any Special Optional Redemption as described above.

(vi) If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation described above would adversely affect one or more but not all series of voting Preferred Stock, then only the series of voting Preferred Stock adversely affected and entitled to vote shall vote as a class in lieu of all other series of voting Preferred Stock. Except as expressly stated in the Articles Supplementary or as may be required by applicable law, the Series B Preferred Stock will not have any relative, participating, optional or other special voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action.

16. Information Rights.

During any period in which the Company is not subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act and any shares of Series B Preferred Stock are outstanding, the Company will (i) transmit by mail (or other permissible means under the Exchange Act) to all holders of Series B Preferred Stock, as their names and addresses appear in our record books and without cost to such holders, copies of the annual reports on Form 10-K and quarterly reports on Form 10- Q that the Company would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject thereto (other than any exhibits that would have been required) and (ii) promptly, upon written request, supply copies of such reports to any holders or prospective holder of Series B Preferred Stock. The Company will mail (or otherwise provide) the reports to the holders of the Series B Preferred Stock within 15 days after the respective dates by which we would have been required to file such reports with the SEC, if the Company were subject to Section 13 or Section 15(d) of the Exchange Act, in each case, based on the dates on which the Company would be required to file such periodic reports if the Company were a “non-accelerated filer” as such term is understood in the context of the Exchange Act.

17. The Series B Preferred Stock Ownership Limit .

The ownership limits set forth in Article VI of the Charter shall fully apply to the Series B Preferred Stock. Notwithstanding any other provision of the Series B Preferred Stock, no holder of shares of the Series B Preferred Stock will be entitled to convert any shares of Series B Preferred Stock into shares of our Common Stock to the extent that receipt of our Common Stock would cause such holder or any other person to exceed the applicable ownership limit contained in our Charter.

SECOND : The Series B Preferred Stock has been classified by the Board under the authority contained in the Charter.

THIRD : These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.

FOURTH : These Articles Supplementary shall be effective at the time the State Department of Assessments and Taxation of Maryland accepts these Articles Supplementary for record.

FIFTH : The undersigned President of the Company acknowledges these Articles Supplementary to be the act of the Company and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be executed in its name and on its behalf by its President and attested to by its Secretary of this 4th day of December, 2015.



	ASHFORD HOSPITALITY PRIME, INC.

	By:	/s/ Douglas A. Kessler
		Name: Douglas A. Kessler
		Title: President



	ATTEST:

	By:	/s/ David Brooks
		Name: David Brooks
		Title: Secretary

EXHIBIT 4.1

Termination of Registration Rights Agreement

Dated: December 4, 2015

Reference is made to that certain Registration Rights Agreement (the “ Registration Rights Agreement ”), dated as of June 9, 2015, by and among Ashford Hospitality Prime, Inc. (the “ Company ”), Ashford Hospitality Prime Limited Partnership (the “ Operating Partnership ”), Ashford Hospitality Advisors LLC (the “ Advisor ”) and MLV & Co. LLC (“ MLV ”) with respect to the Company’s 5.50% Series A Cumulative Convertible Preferred Stock (the “ Series A Preferred Stock ”).

The Parties hereby terminate the Registration Rights Agreement, effective immediately, such that the Registration Rights Agreement shall be of no further force or effect, with no further liability of any party thereto.

[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

[Signature Page to Termination of Registration Rights Agreement]

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.



	ASHFORD HOSPITALITY PRIME, INC.

	By:	/s/ David A. Brooks
		Name: David A. Brooks
		Title: Chief Operating Officer and General Counsel



	ASHFORD HOSPITALITY PRIME LIMITED PARTNERSHIP

	By: Ashford Prime OP General Partner LLC, as the sole general partner

	By: Ashford Hospitality Prime, Inc., as the sole managing member



	By:	/s/ David A. Brooks
		Name: David A. Brooks
		Title: Vice President



	ASHFORD HOSPITALITY ADVISORS LLC

	By:	/s/ David A. Brooks
		Name: David A. Brooks
		Title: Vice President



	MLV & CO. LLC

	By:	/s/ Patrice McNicoll
		Name: Patrice McNicoll
		Title: CEO

[Signature Page to Termination of Registration Rights Agreement]

EXHIBIT 4.2

Ashford Hospitality Prime, Inc.
5.50% Series B Cumulative Convertible Preferred Stock
REGISTRATION RIGHTS AGREEMENT

December 4, 2015

Forward Real Estate Long/Short Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Forward Select Income Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Ladies and Gentlemen:

Ashford Hospitality Prime, Inc., a Maryland corporation (the “ Company ”), issued and sold to the Initial Purchaser (as defined below), upon the terms set forth in a purchase agreement, dated June 9, 2015 (the “ Purchase Agreement ”), $65,000,000 of the Company’s 5.50% Series A Cumulative Convertible Preferred Stock, par value $0.01 per share and liquidation preference $25.00 per share (the “ Series A Convertible Preferred Stock ”).

On December 4, 2015, the Company, Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership and the Company’s operating partnership (the “ Operating Partnership ”), Ashford Hospitality Advisors LLC, a Delaware limited liability company (the “ Advisor ”) and Forward Real Estate Long/Short Fund and Forward Select Income Fund (the “ Funds ”), each of which purchased the Series A Convertible Preferred Stock from the Initial Purchaser pursuant to the Purchase Agreement (collectively, the “ Parties ”) entered into an Exchange Agreement (the “ Exchange Agreement ”), pursuant to which the Parties agreed to exchange the Series A Convertible Preferred Stock for a newly-issued series of 5.50% Series B Cumulative Convertible Preferred Stock (the “ Series B Convertible Preferred Stock ”). The Parties have entered this Agreement in accordance with Sections 2.1(b) and 2.2(d) of the Exchange Agreement.

The Series B Convertible Preferred Stock is convertible into shares of Common Stock (as defined below) pursuant to the terms of the Articles Supplementary (as defined below). Each of the Company, the Operating Partnership and the Advisor agrees with you, for your benefit as holders of the Series B Convertible Preferred Stock and the shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock, as follows:

1. Definitions. Capitalized terms used herein without definition shall have the respective meanings set forth in the Exchange Agreement. As used in this Agreement, the following capitalized terms shall have the following meanings:

“ Affiliate ” of any specified person means any other person directly or indirectly controlling or controlled by or under common control with such specified person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person whether through the ownership of voting securities or by agreement or otherwise.

“ Articles Supplementary ” means the articles supplementary to the Company’s articles of amendment and restatement defining the terms of the Series B Convertible Preferred Stock filed with the Maryland State Department of Assessments and Taxation on or before the Exchange Date and any subsequent Articles Supplementary relating to the Series B Convertible Preferred Stock filed with the Maryland State Department of Assessments and Taxation.

“ Business Day ” means any day other than a Saturday or Sunday or other day on which commercial banks in New York City are authorized or required by law or executive order to close.

“ Common Stock ” means the common stock, par value $0.01 per share, of the Company, as it exists on the date of this Agreement and any other shares of capital stock or other securities of the Company into which such Common Stock may be reclassified or changed, together with any and all other securities which may from time to time be issuable upon conversion of the Series B Convertible Preferred Stock.

“ Company ” has the meaning set forth in the preamble hereto.

“ Series A Convertible Preferred Stock ” has the meaning set forth in the preamble hereto.

“ Series B Convertible Preferred Stock ” has the meaning set forth in the preamble hereto

“ DTC ” means The Depository Trust Company or its nominee.

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

“ Exchange Date ” means December 4, 2015.

“ FINRA ” has the meaning set forth in Section 3(i) hereof.

“ Holder ” means a person who is a registered holder or beneficial owner of any Transfer Restricted Securities (including Funds).

“ Holder Information ” with respect to any Holder means information with respect to such Holder and the distribution of such Holders’ Transfer Restricted Securities required to be included in any Shelf Registration Statement or the related Prospectus, or any amendment or supplement thereto, pursuant to the Securities Act and which information is included therein in reliance upon and in conformity with information furnished to the Company in writing by such Holder for inclusion therein.

“ Initial Purchaser ” means MLV & Co. LLC.

“ Majority Holders ” means the Holders of a majority in voting power of the then outstanding Transfer Restricted Securities.

“ person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“ Prospectus ” means the prospectus included in any Shelf Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any shares of Series B Convertible Preferred Stock or shares of Common Stock issuable upon conversion thereof covered by such Shelf Registration Statement, including all documents incorporated or deemed to be incorporated by reference in such prospectus.

“ Rule 144 ” means Rule 144 under the Securities Act (or any similar provision then in force).

“ Rule 144A ” means Rule 144A under the Securities Act (or any successor provision promulgated by the SEC).

“ Rule 415 ” means Rule 415 under the Securities Act (or any successor provision promulgated by the SEC).

“ SEC ” means the Securities and Exchange Commission.

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

“ Shelf Registration ” means a registration effected pursuant to Section 2 hereof.

“ Shelf Registration Statement ” means any “shelf” registration statement of the Company filed pursuant to the provisions of Section 2 hereof which covers the Transfer Restricted Securities on Form S-3 (if then eligible) or on another appropriate form, if any (as determined by the Company) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated or deemed to be incorporated by reference therein.

“Transfer Agent” means Computershare Trust Company, N.A., or any successor that serves as transfer agent with respect to the Series B Convertible Preferred Stock.

“ Transfer Restricted Securities ” means each share of Series B Convertible Preferred Stock and each share of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock until the earliest of the date on which such share of Series B Convertible Preferred Stock or share of Common Stock, as the case may be, (i) has been transferred pursuant to a Shelf Registration Statement or another registration statement covering such share of Series B Convertible Preferred Stock or share of Common Stock which has been filed with the SEC pursuant to the Securities Act, in either case after such registration statement has become effective and while such registration statement is effective under the Securities Act, (ii) has been transferred pursuant to Rule 144 under circumstances in which any legend borne by such share of Series B Convertible Preferred Stock or share of Common Stock relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed, (iii) may be freely sold or transferred without restriction under Rule 144 or (iv) the date on which such share of Series B Convertible Preferred Stock or share of Common Stock ceases to be outstanding.

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” or “stated” in the Shelf Registration Statement, any preliminary Prospectus or Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information incorporated or deemed to be incorporated by reference in such Shelf Registration Statement, preliminary Prospectus or Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Shelf Registration Statement, any preliminary Prospectus or

Prospectus shall be deemed to mean and include any document filed with the SEC under the Exchange Act, after the date of such Shelf Registration Statement, preliminary Prospectus or Prospectus, as the case may be, which is incorporated or deemed to be incorporated by reference therein (which shall not include, unless incorporated therein, documents and information furnished and not filed under applicable SEC rules).

2. Shelf Registration Statement.

(a) The Company shall, at its expense, use its commercially reasonable efforts to cause a Shelf Registration Statement with respect to resales of shares of Common Stock issued upon conversion of shares of Series B Convertible Preferred Stock that are Transfer Restricted Securities by each Holder from time to time on a delayed or continuous basis pursuant to Rule 415 (or any similar provisions then in force) to be prepared, filed and declared effective under the Securities Act by February 28, 2016.

(b) The Company shall, at its expense, use its commercially reasonable efforts to cause a Shelf Registration Statement with respect to resales of shares of Series B Convertible Preferred Stock (including, for purposes of registering the sale of such Preferred Stock only, shares of Common Stock issuable upon conversion of such Preferred Stock) that are Transfer Restricted Securities by each Holder from time to time on a delayed or continuous basis pursuant to Rule 415 (or any similar provisions then in force) to be prepared, filed and declared effective under the Securities Act by February 28, 2016. If eligible, the Company may satisfy the requirement to file a Shelf Registration Statement pursuant to this Section 2(b) by registering for resale the Series B Convertible Preferred Stock on the Shelf Registration Statement required to be filed under Section 2(a) above.

(c) The Company shall use its commercially reasonable efforts to name each Holder of Transfer Restricted Securities as a selling shareholder in each Shelf Registration Statement at the time of its effectiveness so that such Holder is permitted to deliver the Prospectus forming a part thereof as of such time to purchasers of such Holder’s Transfer Restricted Securities in accordance with applicable law. The Company may require each Holder of Transfer Restricted Securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company such information (including, but not limited to, by completing questionnaires within a reasonable timeframe established by the Company) regarding the Holder and the proposed distribution of such Transfer Restricted Securities as may, from time to time, be required by the Securities Act and/or the SEC or any other federal or state governmental authority, and the obligations of the Company to any Holder under this Agreement shall be expressly conditioned on the timely compliance of such Holder with such request.

(d) After a Shelf Registration Statement has become effective, the Company shall, upon the request of any Holder of Transfer Restricted Securities, use its commercially reasonable efforts to promptly prepare and file with the SEC (x) a supplement to the Prospectus or, if required by applicable law in order to cause a Holder to be named as a selling shareholder in the Shelf Registration Statement, a post-effective amendment to the Shelf Registration Statement (a “ Seller Post-Effective Amendment ”) and (y) any other document required by applicable law, so that the Holder is named as a selling shareholder in the Shelf Registration Statement and is permitted to deliver the Prospectus to purchasers of such Holder’s Transfer Restricted Securities in accordance with applicable law. If the Company files a Seller Post-Effective Amendment, it shall use its commercially reasonable efforts to cause such post-effective amendment to become effective under the Securities Act as promptly as is practicable. Notwithstanding the foregoing requirement above, the Company shall not be obligated to file more than one Seller Post-Effective Amendment in any fiscal quarter.

(e) (i) The Company shall use its commercially reasonable efforts, subject to Section 2(e)(ii), to keep the Shelf Registration Statement continuously effective, supplemented and amended under the Securities Act in order to permit the Prospectus forming a part thereof to be usable, subject to Sections 2(c) and 2(d), by all Holders until all Transfer Restricted Securities (A) have been transferred pursuant to a Shelf Registration Statement or another registration statement covering such Transfer Restricted Securities which has been filed with the SEC pursuant to the Securities Act, in either case after such registration statement has become effective and while such registration statement is effective under the Securities Act, (B) have been transferred pursuant to Rule 144 under circumstances in which any legend borne by such Transfer Restricted Securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed, (C) may be sold or transferred without restriction under Rule 144 or (D) have ceased to be outstanding (in any such case, such period being called the “ Shelf Registration Period ”). The Company will (x) subject to Sections 2(c) and 2(d), use its commercially reasonable efforts to prepare and file with the SEC such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement continuously effective for the Shelf Registration Period, subject to Section 2(e)(ii), (y) subject to Sections 2(c) and 2(d), cause the related Prospectus to be supplemented by any required supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act and (z) comply in all material respects with the provisions of the Securities Act with respect to the Shelf Registration Statement during the Shelf Registration Period.

(ii) Notwithstanding anything herein to the contrary, the Company may suspend the filing or use of the Shelf Registration Statement or any Prospectus, if the Company shall have determined in good faith that because of valid business reasons, including without limitation any proposal or plan of the Company or any of its subsidiaries to effect a merger, acquisition, disposition, financing, reorganization, recapitalization or other transaction, or because of required disclosure or filings with the SEC, it is in the best

interests of the Company to suspend such use, and prior to suspending such use the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension (and, upon receipt of such notice, each Holder agrees not to sell any Transfer Restricted Securities pursuant to the Shelf Registration Statement until such Holder is advised in writing that the Prospectus may be used, which notice the Company agrees to provide promptly following the lapse of the event or circumstances giving rise to such suspension).

Each Holder shall keep confidential any communications received by it from the Company regarding the suspension of the use of the Prospectus (including the fact of the suspension), except as required by applicable law.

(f) Notwithstanding anything herein to the contrary, the Company shall not be required to file a Shelf Registration Statement that pursuant to (i) any written or oral guidance, comments, requirements or requests of the SEC staff and (ii) the Securities Act, would be deemed to constitute a primary offering of securities by it.

3. Registration Procedures. In connection with any Shelf Registration Statement, the following provisions shall apply, subject to Section 2(e)(ii):

(a) The Company shall (i) furnish to the Funds, within a reasonable period of time, but in any event within five Business Days, prior to the filing thereof with the SEC to afford the Funds and their counsel a reasonable opportunity for review, a copy of each Shelf Registration Statement, and each amendment thereof, and a copy of each Prospectus, and each amendment or supplement thereto proposed to be filed (excluding (x) amendments caused by the filing of a report under the Exchange Act and (y) amendments and supplements that are filed solely for the purpose of naming a Holder as a selling shareholder and providing information with respect thereto), and shall use its commercially reasonable efforts to reflect in each such document, when so filed with the SEC, such comments as the Funds may reasonably propose in good faith within three Business Days of the delivery of such copies to the Funds and their counsel, except to the extent the Company reasonably determines, on the advice of counsel, it to be inadvisable or inappropriate to reflect such comments therein, and (ii) include information regarding the Holders and the methods of distribution they have elected for their Transfer Restricted Securities as necessary to permit such distribution by the methods specified therein. Each Holder who sells, transfers or disposes of Transfer Restricted Securities pursuant to a Shelf Registration Statement shall, as a condition to the obligations of the Company hereunder, do so only in accordance with the terms of this Agreement, the methods of distribution elected by such Holder, the Securities Act and the Exchange Act, and shall be responsible for the delivery of the Prospectus as may be required to any person to whom such Holder sells any of the Transfer Restricted Securities. Each Holder, following the termination of the Shelf Registration Period, shall notify the Company,

within 10 Business Days of a request by the Company, of the amount of the Transfer Restricted Securities sold pursuant to any Shelf Registration Statement and, in the absence of a response, the Company may assume that all of such Holder’s Transfer Restricted Securities were so sold.

(b) The Company shall ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any amendment or supplement thereto comply in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming a part of any Shelf Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company makes no representation with respect to any Holder Information.

(c) The Company, as promptly as reasonably practicable (but in any event within three Business Days following the occurrence of any of the events specified in (i) – (vii) below), shall notify the Funds and each Holder and, if requested by the Funds or any such Holder, confirm such notice in writing:

(i) when a Shelf Registration Statement or any post-effective amendment thereto or any Prospectus or any amendment or supplement thereto has been filed with the SEC and when the Shelf Registration Statement or any post-effective amendment thereto has become effective, which notice and confirmation may be made at the election of the Company by making a public announcement thereof by a press release;

(ii) of any request, following effectiveness of the Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to the Shelf Registration Statement or the Prospectus or for additional information (other than any such request relating to a review of the Company’s Exchange Act filings);

(iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Shelf Registration Statement or of any order preventing or suspending the use of any Prospectus or the initiation or threat of any proceedings for that purpose;

(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of the Transfer Restricted Securities

included in any Shelf Registration Statement for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose;

(v) of the occurrence (but not the nature of or details surrounding) any event or the existence of any condition or any information becoming known that requires the making of any changes in any Shelf Registration Statement or the Prospectus or any document incorporated by reference therein so that, as of such date, the statements therein are not misleading and any Shelf Registration Statement or the Prospectus or any document incorporated by reference therein, as the case may be, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, provided , however , that no notice by the Company shall be required pursuant to this clause (v) in the event the Company promptly files a Prospectus supplement to update the Prospectus, a post-effective amendment to the Shelf Registration Statement or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Shelf Registration Statement, which, in any case, contains the requisite information that results in such Shelf Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements therein not misleading;

(vi) of the Company’s determination that a post-effective amendment to the Shelf Registration Statement is necessary under applicable law; and

(vii) the determination by the Company that the filing of a Shelf Registration Statement will not be made pursuant to Section 2(f).

(d) The Company shall use its commercially reasonable efforts to obtain (i) the withdrawal of any order suspending the effectiveness of any Shelf Registration Statement and the use of any related Prospectus and (ii) the lifting of any suspension of the qualification (or exemption from qualification) of any of the Transfer Restricted Securities for offer or sale in any jurisdiction in which they have been qualified for sale, in each case at the earliest possible time, and shall provide notice to the Funds and to each Holder of the withdrawal of any such orders or suspensions.

(e) The Company shall promptly furnish to the Funds and each Holder, upon their request and without charge, at least one copy of any Shelf Registration Statement and any post-effective amendment thereto, excluding all documents incorporated or deemed to be incorporated therein by reference and all exhibits thereto and any amendment or post-effective amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on the Company’s or SEC’s website.

(f) During the Shelf Registration Period, the Company shall, promptly deliver to the Funds, each Holder and any broker-dealers acting on their behalf, without charge, as many copies

of the Prospectus (including each preliminary Prospectus) included in any Shelf Registration Statement, and any amendment or supplement thereto, as such person may reasonably request, except as provided in Section 3(q) hereof, and provided that the Company shall have no obligation to deliver to the Funds, each Holder and any broker-dealers acting on their behalf copies of any supplement or amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise available on the Company’s or SEC’s websites; and the Company hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto in the manner set forth therein.

(g) Prior to any offering of Transfer Restricted Securities pursuant to any Shelf Registration Statement, the Company shall use its commercially reasonable efforts to qualify or cooperate with the Holders and their respective counsel in connection with the qualification (or exemption from registration or such qualification) of such Transfer Restricted Securities for offer and sale, under the securities or blue sky laws of such jurisdictions within the United States as any such Holders reasonably request in writing, and only upon such request, and shall use its commercially reasonable efforts to maintain such qualification in effect so long as required during the Shelf Registration Period and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the Transfer Restricted Securities covered by such Shelf Registration Statement; provided, however that in no event shall the Company’s commercially reasonable efforts include the registration of Transfer Restricted Securities in any jurisdiction within the United States under the securities or blue sky laws of such jurisdictions; and provided further that the Company will not be required to (A) qualify generally to do business as a foreign corporation or as a dealer in securities in any jurisdiction where it is not then so qualified or to (B) take any action which would subject it to service of process or taxation in any such jurisdiction where they are not then so subject.

(h) Unless any Transfer Restricted Securities shall be in book-entry only form, if requested by any Holder, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities (to the extent certificates for the Series B Convertible Preferred Stock or the Common Stock issued upon conversion of Series B Convertible Preferred Stock are issuable) sold pursuant to any Shelf Registration Statement free of any restrictive legends and registered in such names as such Holder may request at least one Business Day prior to settlement of sales of Transfer Restricted Securities pursuant to such Shelf Registration Statement; provided , however that such Holder shall be responsible for the payment of any taxes payable on account of any transfer to any person other than such Holder.

(i) Subject to the exceptions contained in (A) and (B) of Section 3(g) above, the Company shall use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the applicable Shelf Registration Statement to be registered with or approved by such

other federal, state and local governmental agencies or authorities, and self-regulatory organizations in the United States as may be necessary to enable the Holders to consummate the disposition of such Transfer Restricted Securities as contemplated by any Shelf Registration Statement; without limitation to the foregoing, the Company shall use its commercially reasonable efforts to provide all such information as may be required by the Financial Industry Regulatory Authority, Inc. (“ FINRA ”) in connection with the offering under any Shelf Registration Statement of the Transfer Restricted Securities, and shall cooperate with each Holder in connection with any filings required to be made with FINRA by such Holder in that regard. The Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of Transfer Restricted Securities and Common Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any FINRA affiliations, (iii) any natural persons who have the power to vote or dispose of its Transfer Restricted Securities and shares of Common Stock and (iv) any other information as may be requested by the SEC, FINRA or any state securities commission.

(j) During any period when a Shelf Registration Statement is effective, upon the occurrence of any event described in Section 3(c)(v) or 3(c)(vi) hereof, the Company shall use its commercially reasonable efforts to prepare and file with the SEC a post-effective amendment to any Shelf Registration Statement, or an amendment or supplement to the related Prospectus, or any document incorporated therein by reference, or file a document which is incorporated or deemed to be incorporated by reference in such Shelf Registration Statement or Prospectus, as the case may be, so that, as thereafter delivered to purchasers of the Transfer Restricted Securities included therein, the Shelf Registration Statement and the Prospectus, in each case as then amended or supplemented, will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading and, in the case of a post-effective amendment, use its commercially reasonable efforts to cause it to become effective as promptly as practicable.

(k) The Company shall provide, prior to the effective date of any Shelf Registration Statement hereunder (i) a CUSIP number for the Transfer Restricted Securities registered and sold under such Shelf Registration Statement and (ii) global certificates for such Transfer Restricted Securities to the Transfer Agent, in a form eligible for deposit with DTC.

(l) The Company shall make generally available to its security holders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated by the SEC thereunder (or any similar rule promulgated under the Securities Act) for a 12-month period commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of any Shelf Registration Statement or each post-effective amendment to any Shelf Registration Statement, which statements shall be made available no later than 45 days after the end of the 12-month period or 90 days after the end of the 12-month period, if the 12-month period coincides with the fiscal year of the Company.

(m) The Company shall use its commercially reasonable efforts to cause all shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock to be approved for listing (upon official notice of issuance) or quotation, as applicable, on each securities exchange, automated quotation system or other market (if any) on which the Common Stock is then listed or quoted, as applicable, no later than the date the applicable Shelf Registration Statement is declared effective (or, if later, the date on which the Common Stock is listed or quoted, as applicable, on such securities exchange, automated quotation system or other market) and, in connection therewith, to make such filings as may be required under the Exchange Act and to have such filings declared effective as and when required thereunder.

(n) The Company shall, if reasonably requested, use its commercially reasonable efforts to promptly incorporate in a Prospectus supplement or post-effective amendment to a Shelf Registration Statement (i) such information as the Majority Holders provide to the Company in writing and (ii) such information as a Holder may provide from time to time to the Company in writing for inclusion in a Prospectus or any Shelf Registration Statement concerning such Holder and the distribution of such Holder’s Transfer Restricted Securities and, in either case, shall use its commercially reasonable efforts to make all required filings of such Prospectus supplement or post-effective amendment promptly after being notified in writing of the matters to be incorporated in such Prospectus supplement or post-effective amendment; provided that the Company shall not be required to take any action under this Section 3(n) that is not, in the reasonable opinion of counsel for the Company, in compliance with applicable law.

(o) In the case of an underwritten offering provided by Section 7 below, the Company shall use its commercially reasonable efforts to take all actions reasonably necessary, or reasonably requested by the holders of a majority of the Transfer Restricted Securities being sold in such underwritten offering, in order to expedite or facilitate disposition of such Transfer Restricted Securities; provided that the Company shall not be required to take any action in connection with an underwritten offering made without its consent.

During any period when a Shelf Registration Statement is effective, if reasonably requested in writing in connection with any disposition of Transfer Restricted Securities pursuant to a Shelf Registration Statement, the Company shall make reasonably available for inspection during normal business hours by a representative for the Holders of such Transfer Restricted Securities and any broker-dealers, attorneys and accountants retained by such Holders, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, but excluding privileged information, and cause the appropriate executive officers, directors and designated employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours all relevant information reasonably requested by such representative for the Holders or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar “due diligence” examinations; provided, however , that any information that is designated by the Company, in good faith, as confidential or proprietary at the time of delivery of such information

shall be kept confidential by such persons and such persons shall take such actions as are necessary to protect the confidentiality of such information, unless disclosure thereof is made in connection with a court, administrative or regulatory proceeding or required by law, or such information has become available to the public generally through the Company or through a third party without an accompanying obligation of confidentiality, and the Company may, at its option, require all such Holders and representatives to sign a confidentiality agreement in form and substance reasonably satisfactory to the Company with respect thereto prior to permitting access to such confidential or proprietary information.

(q) After any Shelf Registration Statement becomes effective, each Holder agrees that, upon receipt of notice of the happening of an event described in Sections 3(c)(ii) through and including 3(c)(vi), such Holder shall forthwith discontinue (and shall cause its agents and representatives to discontinue) disposition of Transfer Restricted Securities and will not resume disposition of Transfer Restricted Securities until such Holder has received copies of an amended or supplemented Prospectus contemplated by Section 3(j) hereof upon request of such Holder, or until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, provided that the foregoing shall not prevent the sale, transfer or other disposition of Transfer Restricted Securities by a Holder in a transaction which is exempt from, or not subject to, the registration requirements of the Securities Act, so long as such Holder does not and is not required to deliver the applicable Prospectus or Shelf Registration Statement in connection with such sale, transfer or other disposition, as the case may be.

(r) Each Holder shall promptly notify the Company of any inaccuracies in the information provided in such Holder’s Holder Information that may occur subsequent to the date thereof at any time while the Shelf Registration Statement remains effective and shall promptly provide to the Company in writing the necessary changes to such information required to be disclosed in order to make the information previously furnished to the Company by such Holder not misleading.

4. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 2 and 3 hereof.

Such fees and expenses shall include, without limitation: (i) all registration and filing fees and expenses (including filings made with FINRA); (ii) all fees and expenses of compliance with federal securities and state blue sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses and certificates for the Common Stock to be issued upon conversion of the Series B Convertible Preferred Stock) and the Company’s expenses for messenger and delivery services and telephone; (iv) all fees and disbursements of counsel to the Company and, in the case of the Shelf Registration Statement, and any amendment and supplement thereto, the fees and disbursements (not exceeding $25,000 in the aggregate) of the counsel for the Funds and counsel for the Holders; (v) all application and filing fees in connection with listing (or authorizing for quotation) the Common Stock on a national securities exchange, automated

quotation system or other market pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company. The Company shall bear its internal expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal, accounting or other duties), the expenses of any annual audit and the fees and expenses of any person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 4, each Holder shall bear the expense of any broker’s commission,

agency fee and underwriter’s discount or commission (including, without limitation, the expenses related to the engagement of a “qualified independent underwriter”), if any, relating to the sale or disposition of such Holder’s Transfer Restricted Securities pursuant to a Shelf Registration Statement.

5. Indemnity and Contribution.

(a) The Company, the Operating Partnership, and the Advisor, jointly and severally, agree (i) to indemnify and hold harmless each Holder (including, without limitation, the Funds) named in any Shelf Registration Statement, or in any Prospectus, or in any amendment thereof or supplement thereto, its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls any such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively referred to for purposes of this Section 5 as a “Holder”) against any loss, claim, damage, liability or expense, as incurred, to which such person may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such loss, claim, damage, liability or expense arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in such Shelf Registration Statement, or any omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in the case of any Prospectus, and (ii) to reimburse such persons promptly upon demand for all reasonable expenses (including the fees and disbursements of counsel chosen by such Holder) as such expenses are reasonably incurred by such persons in connection with investigating, preparing or defending any action; provided , however , that the foregoing indemnity agreement shall not apply, with respect to such Holder, to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in such Shelf Registration Statement or Prospectus.

Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Operating Partnership and the Advisor, their respective Affiliates, each of their directors and officers, and each person, if any, who controls the Company, the Operating Partnership or the Advisor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which such person may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Holder), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement, or any omission or alleged omission therefrom of a material fact

necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in the case of any Prospectus, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such Shelf Registration Statement or Prospectus in reliance upon and in conformity with written information furnished to the Company by such Holder expressly

for use therein; and (ii) to reimburse such persons promptly upon demand for all reasonable expenses (including the fees and disbursements of counsel chosen by the Company, the Operating Partnership or the Advisor) as such expenses are reasonably incurred by such persons in connection with investigating, preparing or defending any action.

(c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 5, notify the indemnifying party in writing of the commencement thereof; provided , that the failure to so notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party under this Section 5, except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure and shall not relieve the indemnifying party from any liability that the indemnifying party may have to an indemnified party other than under this Section 5. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party's election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) representing the indemnified parties who are parties to such action (which separate counsel shall be selected by (x) such Holder, in the case of counsel representing such Holder or its related persons or (y) the Company, in the case of counsel representing the Company, the Operating Partnership and the Advisor or their respective related persons)) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.

(d) No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 5 hereof (whether or not the indemnified parties are actual or potential

parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by this Section 5 effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

(e) If the indemnification provided for in paragraph (a) or (b) of this Section 5 is unavailable to an indemnifying party or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnifying party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the Operating Partnership, and the Advisor, on the one hand and the Holder on the other hand with respect to the sale by such Holder of Series B Convertible Preferred Stock or Common Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Operating Partnership, and the Advisor, on the one hand and of such Holder on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company, the Operating Partnership, and the Advisor, on the one hand and such Holder on the other shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by such Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(f) The Company, the Operating Partnership, the Advisor, and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation that does not take account of the equitable considerations referred to in this Section 5. The amount paid or payable by an indemnifying party as a result of losses, claims, damages and liabilities referred to in this Section 5 shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses incurred by such indemnifying party not otherwise reimbursed in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5, in no event shall any Holder be required

to contribute any amount in excess of the amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Shelf Registration Statement exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be

entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(g) The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnifying party at law or in equity.

(g) For purposes of this Section 5, each person, if any, who controls a Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of the Holder’s Affiliates and selling agents shall have the same rights to contribution as such Holder, and each director of the Company and the Advisor, and each officer of the Company, and each person, if any, who controls the Company, the Operating Partnership or the Advisor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company, the Operating Partnership or the Advisor. The Company’s, the Operating Partnership’s and the Advisor’s respective obligations to contribute pursuant to this Section 5 are joint and several.

(h) The indemnity and contribution agreements contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or any person controlling any Holder or by or on behalf of the Company its officers or directors or any other person controlling the Company, and the indemnity and contribution agreements contained in this Section 5 shall survive the sale by a Holder of Transfer Restricted Securities covered by a Shelf Registration Statement.

6. Rule 144A. The Company covenants that it shall file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner so long as the Transfer Restricted Securities remain outstanding. If at any time the Company is not required to file such reports, it will, upon request of any Holder or beneficial owner of Transfer Restricted Securities, make available such information necessary under Rule 144A(d)(4) to permit sales pursuant to Rule 144A. The Company further covenants that, for as long as any Transfer Restricted Securities remain outstanding, it will take such further action as any Holder of Transfer Restricted Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Transfer Restricted Securities without registration under the Securities Act within the limitation of the exemption provided by Rule 144A or any other exemption then available. Upon the written request of any Holder of Transfer Restricted Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Nothing in this Section 6 shall be deemed to require the Company to register any of its securities under the Exchange Act.

7. Underwritten Offering.

(a) If any of the Transfer Restricted Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the underwritten offering will be selected by the

Majority Holders of such Transfer Restricted Securities included in such underwritten offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed), and such Holders shall be responsible for all underwriting commissions and discounts (and any other expenses of the underwriters not borne by the underwriters themselves) in connection therewith; provided, however , that notwithstanding anything contained in this Agreement to the contrary, the Company shall be under no obligation to participate in any underwritten offering with respect to the Transfer Restricted Securities and no underwritten offering shall be effected pursuant to this Agreement without the prior written consent of the Company.

(b) No Holder may participate in any underwritten offering hereunder unless such person (i) agrees to sell such Holder’s Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the Holders entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

8. Miscellaneous.

(a) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. In addition, the Company shall not grant to any of its securityholders the right to include any of its securities in the Shelf Registration Statement provided for in this Agreement other than the Transfer Restricted Securities.

(b) Amendments and Waivers. Except as provided in the next paragraph, this Agreement, including this Section 8(b), may be amended, modified or supplemented, and waivers or consents to depart from the provisions hereof may be given, only by the written consent of the Company and the Majority Holders; provided that with respect to any matter that directly or indirectly affects the rights of the Funds hereunder, the Company shall obtain the written consent of the Funds against which such amendment, supplement, waiver or consent is to be effective. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders (giving effect to the second proviso of the definition thereof).

Notwithstanding the foregoing two sentences, (i) this Agreement may be amended by written agreement signed by the Company, Operating Partnership, Advisor and the Funds, without the consent of the Majority Holders, to cure any ambiguity or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision

contained herein, or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect the interests of the Holders of Transfer Restricted Securities. Each Holder of Transfer Restricted Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(b), whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Transfer Restricted Securities or is delivered to such Holder.

Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery; certified mail, return receipt requested; air courier guaranteeing overnight delivery or sent by email:

(i) if to the Funds, to:

Forward Real Estate Long/Short Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Attn: Barbara Tolle, Treasurer

Forward Select Income Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Attn: Barbara Tolle, Treasurer

(ii) if to any other Holder, at the most current address of such Holder maintained by the Transfer Agent (provided that while the Series B Convertible Preferred Stock or the Common Stock are in book-entry form, notice to the Transfer Agent shall serve as notice to the Holders); and

(iii) if to the Company, to:

Ashford Hospitality Prime Inc. 14185 Dallas Parkway

Suite 1100

Dallas, Texas 75254

Facsimile number: 972-490-9605 Attention: David Brooks

With a copy to:

Gibson, Dunn & Crutcher LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 20036-5306 Facsimile number: 202-530-9526 Attention: Howard B. Adler

All such notices and communications shall be deemed to have been duly given when received, if delivered by hand or air courier, and when sent, if sent by first-class mail, provided that notice given by email shall not be effective unless either (i) a duplicate copy of such email notice is promptly given by one of the other methods described in this Section 8(c) or (ii) the receiving party delivers a written confirmation of receipt for such notice by email or any other method described in this Section 8(c).

The Funds or the Company by notice to the other may designate additional or different addresses for subsequent notices or communications.

(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, without the need for an express assignment or any consent by the Company or subsequent Holders. The Company hereby agrees to extend the benefits of this Agreement to any Holder and any such Holder may enforce the provisions of this Agreement as if an original party hereto. In the event that any other person shall succeed to the Company’s interests and obligations, except for the reincorporation set forth in the first sentence of this Section 8(d), then such successor shall enter into an agreement, in form and substance reasonably satisfactory to the Funds, whereby such successor shall assume all of the Company’s obligations under this Agreement.

(e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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

(g) GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK.

(h) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected

thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

(i) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Shelf Registration Period, except for any liabilities or obligations under Section 2(d), 4 or 5 to the extent arising prior to the end of the Shelf Registration Period.

[Remainder of Page Intentionally Blank]
[Signature Page Follows]

Please confirm that the foregoing correctly sets forth the agreement among the Company and you.

ASHFORD HOSPITALITY PRIME, INC.


By:	/s/ David A. Brooks Name: David A. Brooks Title: Chief Operating Officer

ASHFORD HOSPITALITY PRIME LIMITED PARTNERSHIP

By: Ashford Prime OP General Partner LLC,

as the sole general partner

By: Ashford Hospitality Prime, Inc.,

as the sole managing member


By:	/s/ David A. Brooks Name: David A. Brooks Title: Chief Operating Officer

ASHFORD HOSPITALITY ADVISORS LLC


By:	/s/ David A. Brooks Name: David A. Brooks Title: Chief Operating Officer

The foregoing Agreement is hereby confirmed and accepted as of the date first above written.

FORWARD REAL ESTATE LONG/SHORT FUND

By: /s/ Barbara Tolle

Name: Barbara Tolle

Title: Treasurer

FORWARD SELECT INCOME FUND

By: /s/ Barbara Tolle

Name: Barbara Tolle

Title: Treasurer

[Signature Page to Series B Cumulative Convertible Preferred Stock Registration Rights Agreement]

EXHIBIT 4.3

December 4, 2015

Forward Real Estate Long/Short Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Forward Select Income Fund

101 California Street, 16 ^th Floor

San Francisco, California 94111

Ladies and Gentlemen:

Reference is made to the Exchange Agreement, dated December 4, 2015 (the “ Exchange Agreement ”), by and between Ashford Hospitality Prime, Inc., a Maryland corporation (the “ Company ”), Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership (the “ Operating Partnership ”), Ashford Hospitality Advisors LLC, a Delaware limited liability company (the “ Advisor ”), and each of Forward Real Estate Long/Short Fund and Forward Select Income Fund (together, the “ Investors ”), pursuant to which the Company agreed to exchange an aggregate of 2,600,000 shares of its shares of 5.50% Series B Cumulative Convertible Preferred Stock (the “ Series B Preferred Stock ”) for an aggregate of 2,600,000 shares of its 5.50% Series A Cumulative Convertible Preferred Stock (the “ Series A Preferred Stock ”) held by the Investors (the “ Exchange ”).

In connection with the Exchange, the Company, the Operating Partnership and the Advisor hereby have formed the following mutual agreements and covenants:

1. The Company will use commercially reasonable efforts to apply to list the Series B Preferred Stock on a “national securities exchange” registered with the Securities and Exchange Commission (the “ SEC ”) under Section 6 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) by February 28, 2016, in conjunction with an underwritten offering pursuant to an effective registration statement covering the offer and sale of the Series B Preferred Stock to the public, for the account of the Company (the “Initial Public Offering”).

2. Each of the Investors will have the right to purchase its pro rata share of a Qualified Offering (as defined below) after December 4, 2015. Each of the Investors’ pro rata share of a Qualified Offering is equal to the product of (x) 20% and (y) the ratio of (i) the number of shares of the Company’s Series B Preferred Stock which is owned of record by the Investor, or owned beneficially by the Investor through a custodian or nominee holding on behalf of the Investor, immediately prior to the issuance of such shares of Series B Preferred Stock to (ii) the total

number of shares of the Company’s outstanding Series B Preferred Stock immediately prior to such issuance following a Qualified Offering. “Qualified Offering” means any offering of the Series B Preferred Stock, for the account of the Company, including, without limitation, the Initial Public Offering (as defined below), for an aggregate offering amount of not less than $50,000,000 (prior to deducting any underwriting discounts and commissions), subject to the conditions set forth herein.

3. If the Company proposes to issue any Series B Preferred Stock in a Qualified Offering, it shall give the Investors written notice (a “ Rights Notice ”) together with a description of the material terms of the Qualified Offering. Each of the Investors will have three (3) days from the delivery of such Rights Notice to agree to purchase its pro rata share of the Qualified Offering for the price and upon the terms and conditions specified in the Rights Notice by giving written notice to the Company and stating therein the quantity of the Series B Preferred Stock to be purchased. Notwithstanding the foregoing, the Company shall not be required to offer or sell such Series B Preferred Stock to any Investor who would cause the Company to be in violation of applicable laws or any restriction or qualification in the Company’s charter or bylaws.

4. The pre-emptive rights established by this letter agreement shall terminate upon the date of the final prospectus pertaining to the Initial Public Offering. The rights established by this letter agreement may be amended, or any provision waived (which amendment or waiver shall be binding and effective on all holders), with the written consent of the holders of a majority in voting power of the then outstanding shares of Series B Preferred Stock held by the Investors.

5. The rights established by this letter agreement shall have no application to any of the following:

(a) any share of Series B Preferred Stock issued for consideration in connection with a merger, consolidation, acquisition or similar business combination;

(b) any shares of Series B Preferred Stock issued for consideration in connection with a joint venture, strategic alliance or similar corporate partnering arrangement;

(c) any share of Series B Preferred Stock issued for consideration in connection with any acquisition of assets by the Company;

(d) any shares of Series B Preferred Stock issued as part of a compensatory or employment arrangement; and

(e) any other issuance of Series B Preferred Stock for non-cash consideration.

6. For the avoidance of doubt, this letter agreement shall be governed by the laws of the State of Maryland.

[Signature Page Follows]

Very Truly Yours,

ASHFORD HOSPITALITY PRIME, INC.

By: /s/ David A. Brooks

Name: David A. Brooks

Title: Chief Operating Officer and General Counsel

ASHFORD HOSPITALITY PRIME LIMITED PARTNERSHIP

By: Ashford Prime OP General Partner LLC, as the sole general partner

By: Ashford Hospitality Prime, Inc., as the sole managing member

By: /s/ David A. Brooks

Name: David A. Brooks

Title: Vice President

ASHFORD HOSPITALITY ADVISORS LLC

By: /s/ David A. Brooks

Name: David A. Brooks

Title: Vice President

Accepted and Agreed:

FORWARD SELECT INCOME FUND

By: /s/ Barbara Tolle

Name: Barbara Tolle

Title: Treasurer

FORWARD REAL ESTATE LONG/SHORT FUND

By: /s/ Barbara Tolle

Name: Barbara Tolle

Title: Treasurer