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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): August 16, 2021
BRAEMAR HOTELS & RESORTS INC.
(Exact name of registrant as specified in its charter)
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Maryland
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001-35972
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46-2488594
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(IRS employer identification number)
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14185 Dallas Parkway
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Suite 1200
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Dallas
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Texas
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75254
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(Address of principal executive offices)
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(Zip code)
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Registrant’s telephone number, including area code: (972) 490-9600
Not Applicable
(Former name or former address, if changed since last report)
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))
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 ☐
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock
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BHR
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New York Stock Exchange
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Preferred Stock, Series B
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BHR-PB
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New York Stock Exchange
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Preferred Stock, Series D
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BHR-PD
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New York Stock Exchange
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The independent directors of the board of directors of Braemar Hotels & Resorts Inc. (the “Company”) proposed to Ashford Inc. (“AINC”) to amend the Fifth Amended and Restated Advisory Agreement (as amended, the “Amended and Restated Advisory Agreement”). The independent directors of the board of directors of AINC agreed to the proposed amendment, and on August 16, 2021, the parties entered into Amendment No. 2 (the “Amendment”) to the Amended and Restated Advisory Agreement by and among the Company, Braemar Hospitality Limited Partnership, Braemar TRS Corporation, AINC and Ashford Hospitality Advisors LLC (together with AINC, the “Advisor”). The Amendment amends the Amended and Restated Advisory Agreement solely to remove the requirement that the Advisor publish in each Quarterly Report on Form 10-Q and each Annual Report on Form 10-K that it files under the Securities Exchange Act of 1934, as amended, the incremental expenses incurred by the Advisor in connection with providing services to the Company under the Amended and Restated Advisory Agreement (the “Incremental Expenses”) and to provide to the audit committee of the board of directors of the Company a report of an accounting firm that the Advisor’s determination of such Incremental Expenses is reasonable. The independent directors of the board of directors of the Company believe this was having a negative impact on the Company’s valuation, and have determined that it is in the best interests of the Company and its stockholders to enter into the Amendment.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit Number Description
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
SIGNATURE
Pursuant to the requirements 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: August 17, 2021
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BRAEMAR HOTELS & RESORTS INC.
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By:
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/s/ Deric S. Eubanks
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Deric S. Eubanks
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Chief Financial Officer
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AMENDMENT NO. 2
TO THE
FIFTH AMENDED AND RESTATED ADVISORY AGREEMENT
This Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement (this “Amendment”), is dated and effective as of August 16, 2021, by and among BRAEMAR HOTELS & RESORTS INC., a Maryland corporation (“Braemar” or the “Company”), BRAEMAR HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Operating Partnership”), BRAEMAR TRS CORPORATION, a Delaware corporation (“Braemar TRS”), ASHFORD INC., a Nevada corporation (“Ashford Inc.”), and ASHFORD HOSPITALITY ADVISORS LLC, a Delaware limited liability company (“Ashford LLC” and, together with Ashford Inc., the “Advisor”). All capitalized terms appearing herein that are not otherwise defined shall have the meanings ascribed to them in the Fifth Amended and Restated Advisory Agreement, dated April 23, 2018, by and among the parties hereto (as amended from time to time (including pursuant to this Amendment), the “Advisory Agreement”).
W I T N E S S E T H:
WHEREAS, Braemar, through its interest in the Operating Partnership, is in the business of investing in the hospitality industry, primarily in high revenue per available room luxury hotels (for purposes hereof, unless the context otherwise requires, the term “Company” shall collectively include Braemar and the Operating Partnership);
WHEREAS, the parties hereto entered into the Advisory Agreement, pursuant to which the Advisor agreed to perform certain advisory services identified in such agreement, on behalf of, and subject to the supervision of, the board of directors of Braemar (the “Board of Directors”), in exchange for the compensation set forth therein;
WHEREAS, the Advisory Agreement provides for certain investments to be made from time to time by Ashford LLC to the Company;
WHEREAS, the parties hereto desire to amend the Advisory Agreement solely as set forth herein; and
WHEREAS, the independent directors of each of the board of directors of Ashford Inc. and the Board of Directors have reviewed this Amendment and the terms and conditions set forth herein and have deemed this Amendment and such terms and conditions to be advisable and in the best interests of Ashford Inc. and the Company, respectively.
NOW, THEREFORE, in consideration of the mutual covenants set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I.AMENDMENTS TO THE ADVISORY AGREEMENT
Section I.01Section 6.7 of the Advisory Agreement is hereby deleted in its entirety.
Section I.02Clause (B) of the first sentence of the definition of “Net Earnings” in Section 24.1 of the Advisory Agreement is hereby amended and restated to read in its entirety as follows:
“(B) the total incremental expenses incurred by the Advisor (including all reimbursable expenses) as reasonably determined by the Advisor in connection with providing services to the Company under this Amended Agreement,”.
ARTICLE II.MISCELLANEOUS
Section II.01Interpretation. The parties hereto have participated jointly in the negotiation and drafting of this Amendment. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Amendment.
Section II.02Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflict of laws principals thereof.
Section II.03Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same agreement.
Section II.04Ratification of the Advisory Agreement. Except as expressly amended hereby, the Advisory Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.
[Signatures follow on the next page.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and the year first above written.
BRAEMAR:
Braemar Hotels & Resorts Inc.
By: /s/ Richard Stockton
Name: Richard Stockton
Title: Chief Executive Officer
OPERATING PARTNERSHIP:
Braemar Hospitality Limited Partnership
By: Braemar OP General Partner LLC, its general partner
By: /s/ Richard Stockton
Name: Richard Stockton
Title: Chief Executive Officer
BRAEMAR TRS:
Braemar TRS Corporation
By: /s/ Deric S. Eubanks
Name: Deric S. Eubanks
Title: President
[Signature Page to Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement]
ADVISOR:
Ashford Hospitality Advisors LLC
By: /s/ Deric S. Eubanks
Name: Deric S. Eubanks
Title: Chief Financial Officer
Ashford Inc.
By: /s/ Alex Rose
Name: Alex Rose
Title: Executive Vice President, General Counsel
and Secretary
[Signature Page to Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement]