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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 26, 2025, Braemar Hotels & Resorts Inc. (the "Company") entered into a Letter Agreement (the "Letter Agreement") with its external advisor, Ashford Inc. (the "Advisor"), with respect to that certain Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018, among the Company, Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Hospitality Advisors LLC and the Advisor (as amended, the "Advisory Agreement"). The Letter Agreement was entered into in connection with the exploration of a potential sale of the Company by the Company's Board of Directors.
Pursuant to the Letter Agreement, the Company and the Advisor have agreed that the fair and reasonable calculation of all amounts due from the Company to the Advisor under the termination provisions in Section 12.5(b) of the Advisory Agreement with respect to a Company Sale Transaction (as defined in the Letter Agreement) is $574.83 million (exclusive of accrued fees). However, the Company and the Advisor have agreed to the payment of a discounted aggregate amount of $480 million plus accrued fees (the "Company Sale Fee") by the Company to the Advisor upon a Company Sale Transaction in full and final satisfaction of such termination payment obligations. The Advisor received $17 million of such payment upon the execution of the Letter Agreement in accordance with its terms, which amount will be credited against amounts due and payable to the Advisor by the Company under the Advisory Agreement in the event the Company does not undergo a Company Sale Transaction by July 1, 2028 in accordance with the Letter Agreement. In addition, the definitive documentation in any Company Sale Transaction will include an express condition that the buyer will assume the master project management agreement with Premier Project Management, LLC and the master hotel management agreement with Remington Lodging & Hospitality, LLC (together, the "Master Agreements"). However, the special committee of the Board of Directors and the independent members of the Board of Directors have negotiated that the Master Agreements may be completely canceled by the buyer for an additional payment of $25 million to be paid to the Advisor at the time of closing of any Company Sale Transaction.
If a Company Sale Transaction is consummated at any time prior to July 1, 2028, then the Company Sale Fee shall be due and payable in accordance with the terms of the Letter Agreement. If a Company Sale Transaction has not been consummated by July 1, 2028, the Letter Agreement shall terminate without further obligation by the Company to pay the Company Sale Fee or to make any other payment to the Advisor in connection with the Letter Agreement and, for the avoidance of doubt, the Advisory Agreement shall remain in full force and effect.
Upon the consummation of a Company Sale Transaction, the Advisory Agreement will be terminated.
The Letter Agreement contains additional customary terms, conditions, covenants, representations and warranties from each of the respective parties.
Posted In: BHR
