8-K - Ashford Hospitality Trust, Inc. | StockGist

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Ashford Hospitality Trust entered into a Fourth Amended and Restated Advisory Agreement with Ashford Inc. and Ashford Hospitality Advisors LLC, extending the advisory relationship to 2055 and modifying key financial terms, including fee structures and termination conditions.

Key Takeaways

1The advisory agreement term was extended to December 31, 2055 with two possible 20-year extensions, significantly lengthening the contractual relationship.

2The Termination Fee was redefined as thirty years of Foregone Adjusted EBITDA discounted at 2%, potentially creating substantial future liabilities.

3The minimum required Tangible Net Worth was reduced from $750 million to $600 million plus 75% of net equity proceeds after June 30, 2023, easing financial covenants.

4The cap on the Incentive Fee for peer outperformance increased from 25% to 100%, potentially increasing advisor compensation.

5The Company's Working Capital Reserve was fixed at $20 million, removing the previous percentage of asset value component.

6The Company's ability to terminate the agreement for fraud was removed, limiting termination options.

Current Report Details

Event Type

Material Agreement

Exhibits Only

Disclosure

Mandatory

Variant

8-K

Items Reported

1.01

is qualified in its entirety by reference to the Fourth Amended and Restated Advisory Agreement, which is filed as Exhibit 10.1 hereto and incorporated by refer

Material Agreement

Source Document

9.01

FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits Exhibit Number Exhibit Description 10.1 * Fourth Amended and Restated Advisory Agreement, dated as of March 27,

Exhibits Only

Transaction Details

Material Agreement

Agreement: Fourth Amended and Restated Advisory Agreement
Parties: Ashford Hospitality Trust, Inc., Ashford Hospitality Limited Partnership, Ashford TRS Corporation, Ashford Inc., Ashford Hospitality Advisors LLC

•Termination Fee redefined as thirty years of Foregone Adjusted EBITDA discounted at 2%
•Company Change of Control definition amended with specific timing and Annualized Portfolio Cash Flow threshold of less than $65 million
•Operating Partnership will indemnify Advisor for tax liabilities related to asset dispositions since January 1, 2024
•Advisor reimbursement obligation for costs associated with chairman emeritus removed
•Company may grant cash incentive awards to Advisor employees
•Working Capital Reserve fixed at $20 million
•Total Market Capitalization component of Net Asset Fee Adjustment reduced at specified thresholds
•Incentive Fee cap increased from 25% to 100%
•Minimum Tangible Net Worth reduced to $600 million plus 75% of net equity proceeds after June 30, 2023
•Fee renegotiation scheduled for tenth anniversary of effective date and every tenth anniversary thereafter
•Initial term extended to December 31, 2055 with two 20-year extensions
•Company's ability to terminate for fraud removed

Exhibits (2)

10.1

EX-10.1

8-K