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): November 17, 2017
ASHFORD HOSPITALITY TRUST, INC.
(Exact name of registrant as specified in its charter)
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Maryland
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001-31775
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86-1062192
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14185 Dallas Parkway, Suite 1100
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75254
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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 Company under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 1.01 Entry into a Material Definitive Agreement.
On November 17, 2017, Ashford OP General Partner LLC, a Delaware limited liability company and wholly-owned subsidiary of Ashford Hospitality Trust, Inc., a Maryland corporation (the “ Company ”), executed Amendment No. 4 to Seventh Amended and Restated Agreement of Limited Partnership (the “ Partnership Agreement Amendment ”) of Ashford Hospitality Limited Partnership, a Delaware limited partnership (“ Ashford Trust OP ”), for the purpose of creating additional preferred units of Ashford Trust OP having substantially the same designations, preferences and other rights as the economic rights of the Company’s 7.50% Series I Cumulative Preferred Stock, par value $0.01 per share (the “ Series I Preferred Stock ”), described in Item 3.03 to the Company’s Current Report on Form 8-K filed on August 14, 2017, which description is incorporated herein by reference.
The summary of the Partnership Agreement Amendment contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the full text of the Partnership Agreement Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 8.01 Other Events.
In connection with the settlement of the Company’s offering of Series I Preferred Stock occurring on November 17, 2017, a legal opinion is filed hereto as Exhibit 5.1 hereto and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit Number |
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Description |
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5.1 |
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Opinion of Hogan Lovells US LLP regarding legality of the Series I Preferred Stock. |
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10.1 |
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23.1 |
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Consent of Hogan Lovells US LLP (included in its opinion filed as Exhibit 5.1). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: November 17, 2017 |
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ASHFORD HOSPITALITY TRUST, INC. |
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By: |
/s/ David A. Brooks |
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David A. Brooks |
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Chief Operating Officer and General Counsel |
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Hogan Lovells US LLP Harbor East 100 International Drive Suite 2000 Baltimore, MD 21202 T +1 410 659 2700 F +1 410 659 2701 www.hoganlovells.com |
November 17, 2017
Board of Directors
Ashford Hospitality Trust, Inc.
14185 Dallas Parkway
Suite 1100
Dallas, TX 75254
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6,210,000 Shares of 7.50% Series I Cumulative
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Ladies and Gentlemen:
We are acting as counsel to Ashford Hospitality Trust, Inc., a Maryland corporation (the “ Company ”), in connection with its filing of a registration statement on Form S-3 (the “ Registration Statement ”), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Act ”), relating to the proposed offering of up to 6,210,000 shares of 7.50% Series I Cumulative Convertible Preferred Stock, par value $0.10 per share of the Company (the “ Preferred Shares ”) and (ii) an undetermined number of shares of common stock issuable upon conversion of the Preferred Shares (the “ Conversion Common Shares ”). The Preferred Shares were issued pursuant to the Underwriting Agreement dated as of November 8, 2017 among the Company and Morgan Stanley & Co. LLC and UBS Securities LLC, as representatives of the several underwriters named therein (the “ Underwriting Agreement ”). This opinion letter is furnished to you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of such agreements, instruments and documents as we have deemed an appropriate basis on which to render the opinions hereinafter expressed. In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the accuracy and completeness of all documents submitted to us, the authenticity of all original documents, and the conformity to authentic original documents of all documents submitted to us as copies (including telecopies). We also have assumed that the Preferred Shares and the Conversion Common Shares will not be issued in violation of the ownership limit contained in the Company’s charter and that, at the time the Preferred Shares are to be converted into Conversion Common Shares, the number of Conversion Common Shares shall not exceed the total number of authorized but unissued shares of Common Stock of the Company. As to all matters of fact, we have relied on the representations and statements of fact made in the documents so reviewed,
Board of Directors
November 17, 2017
and we have not independently established the facts so relied on. This opinion letter is given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the Maryland General Corporation Law, as amended and as currently in effect. We express no opinion herein as to any other laws, statutes, ordinances, rules, or regulations.
Based upon, subject to and limited by the foregoing, we are of the opinion that:
(1) The Preferred Shares were validly issued and are fully paid and nonassessable.
(2) The Conversion Common Shares, if and when issued upon exercise of the conversion right in accordance with the terms of the Preferred Shares, will be validly issued, fully paid and nonassessable.
This opinion letter has been prepared for use in connection with the Registration Statement. We assume no obligation to advise you of any changes in the foregoing subsequent to the effective date of the Registration Statement
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are an “expert” within the meaning of the Securities Act of 1933, as amended.
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Very truly yours, |
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/s/ Hogan Lovells US LLP |
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HOGAN LOVELLS US LLP |
AMENDMENT NO. 4
TO
SEVENTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ASHFORD HOSPITALITY LIMITED PARTNERSHIP
November 17, 2017
This Amendment No. 4 to the Seventh Amended and Restated Agreement of Limited Partnership of Ashford Hospitality Limited Partnership (this “ Amendment ”) is made as of November 17, 2017, by Ashford OP General Partner LLC, a Delaware limited liability company, as general partner (the “ General Partner ”) of Ashford Hospitality Limited Partnership, a Delaware limited partnership (the “ Partnership ”), pursuant to the authority granted to the General Partner in Section 11.1(b) of the Seventh Amended and Restated Agreement of Limited Partnership of Ashford Hospitality Limited Partnership, dated April 14, 2016, as amended by Amendment No. 1 thereto dated as of July 13, 2016, Amendment No. 2 thereto dated October 18, 2016 and Amendment No. 3 thereto dated as of August 25, 2017 (the “ Partnership Agreement ”), for the purpose of issuing additional Partnership Units in the form of Preferred Partnership Units. Capitalized terms used and not defined herein shall have the meanings set forth in the Partnership Agreement.
WHEREAS, the Board of Directors (the “ Board ”) of Ashford Hospitality Trust, Inc. (the “ Company ”) and a duly authorized committee thereof adopted resolutions on November 3, 2017 and November 8, 2017 classifying and designating 6,210,000 shares of Preferred Stock (as defined in the Articles of Amendment and Restatement of the Company (the “ Charter ”)) as Series I Preferred Stock;
WHEREAS, the Board filed Articles Supplementary to the Charter with the State Department of Assessments and Taxation of Maryland on November 14, 2017, establishing the Series I Preferred Stock, with such preferences, rights, powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption as described in the Series I Articles Supplementary;
WHEREAS, Section 11.1(b) of the Partnership Agreement permits the General Partner to amend the Partnership Agreement without the approval of any other Partner if such amendment is to create, issue or reflect the creation or issuance of additional Partnership Interests;
WHEREAS, the General Partner has determined that, in connection with the issuance of the Series I Preferred Stock, it is necessary and desirable to amend the Partnership Agreement to create additional Partnership Units in the form of Preferred Partnership Units having designations, preferences and other rights which are substantially the same as the economic rights of the Series I Preferred Stock; and
WHEREAS, the General Partner desires to so amend the Partnership Agreement as of the date first set forth above.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the General Partner hereby amends the Partnership Agreement as follows:
1. Article I is amended to add the following defined terms in their respective alphabetical order within Article I:
“ Series I Articles Supplementary ” shall mean the Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Preferred Stock, designating the rights and preferences of the 7.50% Series I Cumulative Preferred Stock, filed as part of the Company’s charter with the State Department of Assessments and Taxation of Maryland, on November 14, 2017.
“ Series I Preferred Partnership Interests ” shall mean a partnership interest in the Partnership evidenced by the Series I Preferred Partnership Units, having a preference in payment of distributions or on liquidation as set forth in Exhibit U to this Agreement.
“ Series I Preferred Partnership Units ” shall mean the series of Preferred Partnership Units established pursuant to this Agreement, representing a fractional, undivided share of the Series I Preferred Partnership Interests of all Partners issued under this Agreement.
“ Series I Preferred Stock ” shall mean the Series I Cumulative Preferred Stock of the Company, with such preferences, rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption as described in the Series I Articles Supplementary.
2. In accordance with Section 4.3 of the Partnership Agreement, set forth in Exhibit U hereto are the terms and conditions of the Series I Preferred Partnership Units which are hereby established and issued to Ashford OP Limited Partner, LLC in consideration of its contribution to the Partnership of the proceeds from the issuance and sale of the Series I Preferred Stock by the Company. The Partnership Agreement is hereby amended to incorporate such Exhibit U as Exhibit U thereto and to replace Exhibit A thereto with a revised Exhibit A to reflect the issuance of the Series I Preferred Partnership Units.
3. Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and confirms.
4. This Amendment shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to conflicts of law.
5. If any provision of this Amendment is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.
( The remainder of this page intentionally left blank. )
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first set forth above.
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Ashford OP General Partner LLC, |
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a Delaware limited liability company, as General Partner of Ashford Hospitality Limited Partnership |
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By: |
/s/ David A. Brooks |
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David A. Brooks, Vice President |
Amendment No. 4 to Seventh Amended and Restated LP Agreement of Ashford Hospitality Limited Partnership
EXHIBIT U
DESIGNATION OF TERMS AND CONDITIONS OF SERIES I
PREFERRED PARTNERSHIP UNITS
A. Designation and Number . A series of Preferred Partnership Units, designated as Series I Preferred Partnership Units, is hereby established. The number of authorized Series I Preferred Partnership Units shall be 6,210,000.
B. Rank . The Series I Preferred Partnership Units, with respect to rights to distributions and payments to Partners, the distribution of assets upon the liquidation, dissolution or winding up of the Partnership, rank (a) prior or senior to the Common Partnership Units and all Partnership Units issued by the Partnership (“ Junior Units ”) the terms of which specifically provide that such Partnership Units rank junior to the Series I Preferred Partnership Units; (b) on a parity with the Series D Preferred Partnership Units, Series F Preferred Partnership Units, Series G Preferred Partnership Units, Series H Preferred Partnership Units and all other Partnership Units issued in the future by the Partnership (“ Parity Units ”) the terms of which specifically provide that such Partnership Units rank on a parity with the Series I Preferred Partnership Units; (c) junior to all Partnership Units issued by the Partnership the terms of which specifically provide that such Partnership Units rank senior to the Series I Preferred Partnership Units; and (d) junior to all of the Partnership’s existing and future indebtedness.
C. Distributions .
(i) Pursuant to Section 8.1 of the Partnership Agreement but subject to the rights of holders of any Preferred Partnership Units ranking senior to the Series I Preferred Partnership Units as to the payment of distributions, Ashford OP Limited Partner LLC, in its capacity as the holder of the then outstanding Series I Preferred Partnership Units, shall be entitled to receive, when, as and if authorized by the General Partner, from the Cash Flow, cumulative quarterly preferential cash distributions in an amount per Series I Preferred Partnership Unit equal to 7.50% of the $25.00 liquidation preference per annum (equivalent to a fixed annual amount of $1.875 per Series I Preferred Partnership Unit). Distributions of Preferred Return on the Series I Preferred Partnership Units shall be cumulative from (and including) the date of original issuance, whether or not in any distribution period or periods (i) such distributions shall be authorized by the General Partner, (ii) there shall be funds legally available for the payment of such distributions or (iii) any agreement prohibits the Partnership’s payment of such distributions, and such distributions shall be payable quarterly on the 15th day of January, April, July and October of each year (or, if not a Business Day, the next succeeding Business Day with the same force and effect as if paid on such distribution date, and no interest or additional distributions or other sums shall accrue on the amount so payable from such distribution date to such next succeeding Business Day). Any distribution of Preferred Return payable on the Series I Preferred Partnership Units for any distribution period (as defined below) will be computed on the basis of twelve 30-day months and a 360-day year. Distributions of Preferred Return will be payable in arrears to holders of record as they appear on the records of the Partnership at the close of business on the last day of each of March, June, September and December, as the case
may be, immediately preceding the applicable distribution payment date, which dates shall be the Partnership Record Dates for the Series I Preferred Partnership Units. Except for distributions in liquidation or redemption as provided in Sections D and E , respectively, holders of Series I Preferred Partnership Units will not be entitled to receive any distributions in excess of cumulative Preferred Returns accrued on the Series I Preferred Partnership Units at the rate specified in this paragraph. No interest will be paid in respect of any distribution payment or payments on the Series I Preferred Partnership Units that may be in arrears. As used herein, “ distribution period ” shall mean the respective periods commencing on, and including, the 1st day of January, April, July and October of each year and ending on, and including, the last day of each March, June, September and December, respectively (other than the initial distribution period with respect to units issued on November 17, 2017, which shall commence on (and include) November 17, 2017 and end on (and include) December 31, 2017, and other than the distribution period during which any Series I Preferred Partnership Units shall be redeemed pursuant to Section E , which shall end on, and include, the day preceding the redemption date with respect to the Series I Preferred Partnership Units being redeemed).
(ii) When distributions of Preferred Return are not paid in full upon the Series I Preferred Partnership Units or any other series of Parity Units, or a sum sufficient for such payment is not set apart, all distributions of Preferred Return authorized by the General Partner upon the Series I Preferred Partnership Units and any other series of Parity Units shall be authorized by the General Partner ratably in proportion to the respective amounts of such distributions accumulated, accrued and unpaid on the Series I Preferred Partnership Units and accumulated, accrued and unpaid on such Parity Units. Except as set forth in the preceding sentence, unless distributions on the Series I Preferred Partnership Units equal to the full amount of accumulated, accrued and unpaid distributions of Preferred Return have been or contemporaneously are authorized by the General Partner and paid, or authorized by the General Partner and a sum sufficient for the payment thereof set apart for such payment for all past distribution periods, no distributions (other than distributions paid in Junior Units or options, warrants or rights to subscribe for or purchase Junior Units) shall be authorized by the General Partner or paid or set aside for payment by the Partnership with respect to any class or series of Parity Units. Unless full cumulative distributions of Preferred Return on the Series I Preferred Partnership Units have been paid or authorized by the General Partner and set apart for payment for all past distribution periods, no distributions (other than distributions paid in Junior Units or options, warrants or rights to subscribe for or purchase Junior Units) shall be authorized by the General Partner or paid or set apart for payment by the Partnership with respect to any Junior Units, nor shall any Junior Units or Parity Units be redeemed, purchased or otherwise acquired for any consideration, or any monies be paid to or made available for a sinking fund for the redemption of any Junior Units or Parity Units (except by conversion or exchange for Junior Units, or options, warrants or rights to subscribe for or purchase Junior Units), nor shall any other cash or property be paid or distributed to or for the benefit of holders of Junior Units or Parity Units. Notwithstanding the foregoing, the General Partner shall not be prohibited from (i) authorizing or paying or setting apart for payment any Preferred Return or distribution on any Junior Units or Parity Units or (ii) redeeming, purchasing or otherwise acquiring any Junior Units or Parity Units, in
each case, if such authorization, payment, redemption, purchase or other acquisition is necessary to maintain the Company’s qualification as a REIT.
(iii) No distribution of Preferred Return on the Series I Preferred Partnership Units shall be authorized by the General Partner or paid or set apart for payment at such time as the terms and provisions of any agreement of the Partnership, including any agreement of the Partnership relating to the Partnership’s indebtedness, prohibits such authorization, payment or setting apart for payment or provides that such authorization, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such authorization, payment or setting apart for payment shall be restricted or prohibited by law.
(iv) In determining whether a distribution (other than upon voluntary or involuntary liquidation, dissolution or winding up of the Partnership) of Preferred Return or in redemption or otherwise, is permitted, amounts that would be needed, if the Partnership were to be dissolved at the time of the distribution, to satisfy the liquidation preference of the Series I Preferred Partnership Units (as provided in Section D below) will not be added to the Partnership’s total liabilities.
D. Liquidation Preference .
(i) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Partnership, before any payment or distribution shall be made to or set apart for the holders of any Junior Units, Ashford OP Limited Partner LLC, in its capacity as holder of the Series I Preferred Partnership Units, shall be entitled to receive a liquidation preference distribution of $25.00 per Series I Preferred Partnership Unit, plus an amount equal to all accumulated, accrued and unpaid Preferred Return to the date of final distribution, but Ashford OP Limited Partner LLC shall not be entitled to any further payment with respect thereto. If upon any liquidation, dissolution or winding up of the Partnership, its assets, or proceeds thereof, distributable among Ashford OP Limited Partner LLC, in its capacity as the holder of the Series I Preferred Partnership Units, shall be insufficient to pay in full the above described preferential distribution and liquidating distributions on any other series of Parity Units, then such assets, or the proceeds thereof, shall be distributed among Ashford OP Limited Partner LLC, in its capacity as the holder of the Series I Preferred Partnership Units, and the holders of any such other Parity Units ratably in the same proportion as the respective amounts that would be payable on such Series I Preferred Partnership Units and any such other Parity Units if all amounts payable thereon were paid in full.
(ii) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall have been made in full to Ashford OP Limited Partner LLC, in its capacity as the holder of the Series I Preferred Partnership Units, holders of the Series I Preferred Partnership Units shall have no right or claim to any of the remaining assets of the Partnership.
(iii) None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, a statutory unit exchange
by the Partnership or a sale, lease or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the affairs of the Partnership.
E. Redemption . In connection with the redemption by the Company of any shares of Series I Preferred Stock in accordance with the provisions of the Series I Articles Supplementary, the Partnership shall provide cash to Ashford OP Limited Partner LLC for such purpose which shall be equal to the redemption price (as set forth in the Series I Articles Supplementary), plus all distributions of Preferred Return accumulated and unpaid to, but not including, the Redemption Date (as defined in the Series I Articles Supplementary), and one Series I Preferred Partnership Unit shall be concurrently redeemed with respect to each share of Series I Preferred Stock so redeemed by the Company. From and after the applicable Redemption Date, the Series I Preferred Partnership Units so redeemed shall no longer be outstanding and all rights hereunder, to distributions or otherwise, with respect to such Series I Preferred Partnership Units shall cease.
F. Voting Rights . Except as required by applicable law, the holder of the Series I Preferred Partnership Units, as such, shall have no voting rights.
G. Conversion . In connection with the conversion by the Company of any shares of Series I Preferred Stock into shares of REIT Common Shares in accordance with the provisions of the Series I Articles Supplementary, the Partnership shall convert Series I Preferred Partnership Units into Common Partnership Units and issue such Common Partnership Units to Ashford OP Limited Partner LLC. The number of Common Partnership Units into which the Series I Preferred Partnership Units are convertible shall be equal to the number of REIT Common Shares into which the Series I Preferred Stock is then being converted, as set forth in the Series I Articles Supplementary. From and after the applicable Change of Control Conversion Date (as such term is defined in the Series I Articles Supplementary), the Series I Preferred Partnership Units so converted shall no longer be outstanding and all rights hereunder, to distributions or otherwise, with respect to such Series I Preferred Partnership Units shall cease.
H. Restriction on Ownership . The Series I Preferred Partnership Units shall be owned and held solely by Ashford OP Limited Partner LLC.
I. Allocations . Allocations of the Partnership’s items of income, gain, loss and deduction allocable with respect to Series I Preferred Partnership Units shall be allocated pro rata among holders of Series I Preferred Partnership Units in accordance with Article V of the Partnership Agreement.