BHR Letter Agreement: $17M paid to advisor, $25M option to cancel management agreements

Rhea-AI Filing Summary

Braemar Hotels & Resorts Inc. entered a Letter Agreement with its external advisor, Ashford Inc., related to the Fifth Amended and Restated Advisory Agreement as the Board explores a potential sale of the company. Under the Letter Agreement the Advisor received a $17 million payment upon execution; that payment will be credited against amounts due under the Advisory Agreement if the company does not complete a qualifying sale by July 1, 2028. The definitive sale documentation will require the buyer to assume two master agreements: the master project management agreement with Premier Project Management, LLC and the master hotel management agreement with Remington Lodging & Hospitality, LLC. The special committee and independent directors negotiated that a buyer may instead cancel those Master Agreements by paying an additional $25 million to the Advisor at closing. The filing references the Advisory Agreement (dated April 23, 2018), the August 26, 2025 Letter Agreement, a press release dated August 26, 2025, and an Inline XBRL cover page file as exhibits.

Positive

• $17 million upfront payment provides certainty to the Advisor and clarifies compensation treatment
• Definitive sale documents will require buyer assumption of master agreements unless the buyer pays a specified cancellation fee, offering clear transaction mechanics

Negative

• The company incurs a contingent $25 million additional payment obligation if a buyer elects to cancel the Master Agreements
• The $17 million payment is non-refundable unless credited only against amounts due if no sale occurs by July 1, 2028, creating a potential sunk cost

Insights

M&A Specialist

TL;DR: Letter Agreement secures a $17M upfront payment and a $25M buyout option for management contracts, structuring deal economics for a potential sale.

The Letter Agreement crystallizes advisor compensation and creates clear buyout mechanics for the Master Agreements, which materially affect transaction economics. The $17 million upfront payment, credited if no sale occurs by July 1, 2028, shifts some timing risk to the company while preserving adviser incentives. The negotiated $25 million payment to cancel legacy management and project agreements provides buyers a defined path to operational control post-closing, but also increases the effective cash consideration required to acquire unencumbered operations. These terms are substantive for potential acquirers and influence valuation and negotiation dynamics.

Corporate Governance Expert

TL;DR: Independent directors and the special committee imposed protections and options related to legacy agreements and advisor fees.

The filing shows the special committee and independent board members negotiated explicit protections by (1) documenting the $17 million payment treatment and (2) allowing cancellation of Master Agreements only for a specified $25 million payment to the Advisor. These provisions reflect governance attention to conflicts and sale mechanics and ensure explicit conditions in definitive sale agreements. The inclusion of these negotiated terms as conditions demonstrates oversight but also creates contingent obligations tied to any sale transaction.

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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 26, 2025

BRAEMAR HOTELS & RESORTS INC.

(Exact name of registrant as specified in its charter)

Maryland		001-35972		46-2488594
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS employer identification number)

14185 Dallas Parkway Suite 1200 Dallas Texas		75254
(Address of principal executive offices)		(Zip code)

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 below 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 14a-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:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		BHR		New York Stock Exchange
Preferred Stock, Series B		BHR-PB		New York Stock Exchange
Preferred Stock, Series D		BHR-PD		New York Stock Exchange

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.

ITEM 7.01 REGULATION FD DISCLOSURE.

A copy of the press release announcing the Company’s exploration of a Company Sale Transaction is attached hereto as Exhibit 99.1.

The information in this Item 7.01 of this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit Number		Description
10.1		Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018, among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Hospitality Advisors LLC and Ashford Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 23, 2018) (File No. 001-35972).
10.2		Letter Agreement, dated August 26, 2025, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Ashford Inc. and Ashford Hospitality Advisors LLC.
99.1		Press Release of the Company, dated August 26, 2025.
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

SIGNATURES

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.

	BRAEMAR HOTELS & RESORTS INC.
Dated: August 26, 2025	By:	/s/ Alex Rose
		Alex Rose
		Executive Vice President, General Counsel & Secretary

FAQ

What did Braemar Hotels & Resorts (BHR) agree to pay Ashford Inc. under the Letter Agreement?

The Advisor received an upfront payment of $17 million upon execution of the Letter Agreement.

How does the $17 million payment get treated if Braemar is not sold?

The $17 million will be credited against amounts due to the Advisor under the Advisory Agreement if the company does not complete a qualifying sale by July 1, 2028.

What must a buyer do regarding the Master Agreements in a Company Sale Transaction?

The definitive sale documents will include a condition that the buyer must assume the Master Agreements with Premier Project Management, LLC and Remington Lodging & Hospitality, LLC, unless the buyer pays $25 million to cancel them at closing.

Were any exhibits referenced in the 8-K filing?

Yes; the filing references the April 23, 2018 Advisory Agreement, the August 26, 2025 Letter Agreement, a press release dated August 26, 2025, and an Inline XBRL cover page exhibit.