What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-10 compared with 2022-03-10 · 361 added, 270 removed, 1439 unchanged (30% of the section changed)

Changes from Prior Periodic Report

In this report we have complied with the disclosures required by the Securities and Exchange Commission (“SEC”) release No.

33-10825 “Modernization of Regulation S-K Items 101, 103, and 105”, and we have adopted the changes in disclosure standards included in SEC release No.

33-10890 “Management's Discussion and Analysis, Selected Financial Data, Supplementary Financial Information.”

Modernization of Regulation S-K Items 101, 103 and 105

Effective as of November 9, 2020, the SEC issued Release No.

33-10825, “Modernization of Regulation S-K Items 101, 103, and 105.” This release was adopted to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K.

Specifically, this release requires registrants to provide disclosures relating to their human capital resources and to restructure their risk factor disclosures.

Additionally, the release increases the threshold for disclosure of environmental proceedings to which the government is a party.

These changes are required for any annual period subsequent to the effective date of November 9, 2020.

As such, we have adopted these changes in this report.

Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information

In November 2020, the SEC issued Release No.

33-10890, “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information,” which become fully effective on August 9, 2021.

This release was adopted to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.

Specifically, the SEC eliminated the requirement for selected financial data, only requiring quarterly disclosure when there are retrospective changes affecting comprehensive income, and amending the matters required to be presented under Management’s Discussion and Analysis (“MD&A”) to, among other things, eliminate the requirement of the contractual obligations table.

We have eliminated from this document the items discussed above that are no longer required.

Information on our contractual obligations is still disclosed in a narrative within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.

We are an externally-advised Maryland corporation formed in 2013 that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts.

High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S.

national average RevPAR for all hotels as determined by Smith Travel Research.

national average RevPAR for all hotels as determined by STR, LLC.

Two times the U.S.

3 unchanged sentences

We operate in the direct hotel investment segment of the hotel lodging industry.

As of March 8, 2022, we owned interests in 14 hotel properties in six states, the District of Columbia and St.

As of March 8, 2023, we owned interests in 16 hotel properties in seven states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 4,181 total rooms, or 3,946 net rooms, excluding those attributable to our joint venture partner.

9 unchanged sentences

instead, we employ hotel management companies to operate them for us under management contracts.

On November 6, 2019, Ashford Inc.

completed its acquisition of Remington Lodging’s hotel management business from Mr.

Bennett, chairman of our board of directors, and Mr.

Archie Bennett, Jr.,

chairman emeritus of Ashford Trust.

Remington Hotels, a subsidiary of Ashford Inc.

after November 6, 2019, manages four of our 14 hotel properties.

Remington Hotels, a subsidiary of Ashford Inc., manages four of our 16 hotel properties.

Third-party management companies manage the remaining hotel properties.

1 unchanged sentence

has an ownership interest.

These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and broker-dealer services.

These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and broker-dealer services.

See note 15 to our consolidated financial statements.

3 unchanged sentences

common stock, which represented an approximate 19.6% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc.

Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc.

common stock, which if exercised as of December 31, 2021 would have increased the Bennetts’ ownership interest in Ashford Inc.

to approximately 65.6%, subject to applicable voting limitations.

Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, is convertible (at a conversion price of $117.50 per share) into an additional approximate 4,145,385 shares of Ashford Inc.

common stock, which if converted as of December 31, 2022 would have increased the Bennetts’ ownership interest in Ashford Inc.

to approximately 65.5%, provided that prior to August 8, 2023, the voting power of the holders of the Ashford Inc.

Series D Convertible Preferred Stock is limited to 40% of the combined voting power of all of the outstanding voting securities of Ashford Inc.

entitled to vote on any given matter.

The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr.

5 unchanged sentences

Archie Bennett, Jr., together owned approximately 4,553,919 common shares of the Company (including common units, long-term incentive plan (“LTIP”) units and performance LTIP units), which represented an approximate 5.8% ownership in the Company.

We continued to see a negative impact on room demand within our portfolio stemming from the COVID-19 pandemic during 2021.

A more detailed discussion of the ongoing impact of the COVID-19 pandemic on our business is contained in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Our Investment and Growth Strategies

3 unchanged sentences

Our strategy is to invest in premium-branded and high-quality independent luxury hotels and resorts that are anticipated to generate RevPAR at least twice the average RevPAR for the U.S.

lodging industry, as determined by Smith Travel Research and are located predominantly in North America.

lodging industry, as determined by STR, LLC and are located predominantly in North America.

We intend to concentrate our investments in markets where we believe there are significant growth opportunities, taking into consideration the risk of additional supply.

1 unchanged sentence

Stabilization with respect to a hotel, after the completion of an initiative such as a capital plan, conversion or change of brand name or change of the business mix or other operating characteristics, is generally expected to occur within 12 to 24 months after the completion of the related renovation, repositioning or brand change.

In connection with this investment strategy, we frequently evaluate opportunities to acquire additional hotel properties, either through direct ownership, joint ventures, partnership participations or similar arrangements.

We may use cash or debt or issue common units or other securities of ours or our operating partnership, Braemar OP, or our other subsidiaries as currency for a transaction.

15 unchanged sentences

To the extent we sell hotel properties, we generally intend to redeploy the capital into investment opportunities that we believe will achieve higher returns or buy back our common stock or other securities.

As of March 8, 2022, we own interests in a high-quality, geographically diverse portfolio of 14 hotel properties located in six states, the District of Columbia and St.

As of March 8, 2023, we own interests in a high-quality, geographically diverse portfolio of 16 hotel properties located in seven states, the District of Columbia, Puerto Rico and St.

Virgin Islands.

1 unchanged sentence

All of the hotel properties in our portfolio are generally located in markets that exhibit strong growth characteristics resulting from multiple demand generators.

Eight of the 14 hotel properties in our portfolio operate under premium brands affiliated with Marriott International, Inc.

Nine of the 16 hotel properties in our portfolio operate under premium brands affiliated with Marriott International, Inc.

(“Marriott”) and Hilton Worldwide, Inc.

One hotel property is managed by Accor Management US Inc.

(“Accor”), one is managed by Hyatt Corporation (“Hyatt”) and four hotel properties are managed by Remington Hotels, a subsidiary of Ashford Inc.

(“Accor”), one is managed by Hyatt Corporation (“Hyatt”), one is managed by Four Seasons Hotels Limited (“Four Seasons”) and four hotel properties are managed by Remington Hotels, a subsidiary of Ashford Inc.

The material terms of these hotel management agreements are described below in “Certain Agreements—Hotel Management Agreements.” Each of our hotel properties is encumbered by loans as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness.” For the year ended December 31, 2022, approximately 79% of the rooms revenue was generated by transient business, approximately 19% was generated by group sales and 2% was generated by contract sales.

3 unchanged sentences

Owned Occupancy ADR RevPAR Hotel

Net Income Hotel

Hilton La Jolla Torrey Pines (2)

16 unchanged sentences

Hotel Yountville Yountville, CA 80 100 % 54.06 % 906.82 490.21 2,547 6,958

C Beverly Hills Hotel (5)

Los Angeles, CA 143 100 % 63.88 % 332.86 212.62 1,052

C Beverly Hills Hotel Los Angeles, CA 143 100 % 74.26 % 347.57 258.10 (1,390) 3,157

The Ritz-Carlton Reserve Dorado Beach (5)

Puerto Rico 96 100 % 63.53 % 1,928.50 1,225.27 7,583 14,887

Four Seasons Resort Scottsdale (6)

Scottsdale, AZ 210 100 % 45.15 % 1,056.99 477.19 933 1,710

Total / Weighted Average (7)

6 unchanged sentences

The ground lease contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term.

(3) The above information, excluding Hotel EBITDA, does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(3) The above information, excluding Hotel EBITDA, does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.

(4) Subject to a ground lease that initially expires in 2065.

The ground lease contains two 25-year extension options, at our election.

(5) The results of Mr.

C Beverly Hills Hotel and the five adjacent luxury residences are included from August 5, 2021 through December 31, 2021.

(5) The above information, excluding Hotel EBITDA, does not include the operations of the voluntary rental program with respect to the residential units not owned by the Company.

The results of the Ritz-Carlton Reserve Dorado Beach are included from March 11, 2022 through December 31, 2022.

(6) The results of the Four Seasons Resort Scottsdale are included from December 1, 2022 through December 31, 2022.

(7) Calculated on a portfolio basis for the 16 hotel properties in our portfolio as of December 31, 2022.

2 unchanged sentences

CHH Torrey Pines Hotel Partners LP, a subsidiary of Ashford HHC Partners III LP, leases the Hilton La Jolla Torrey Pines hotel to CHH Torrey Pines Tenant Corp.

The remaining 25% partnership interest in Ashford

HHC Partners III LP is owned by Park Hotels & Resorts, Inc.

The remaining 25% partnership interest in Ashford HHC Partners III LP is owned by Park Hotels & Resorts, Inc.

The hotel opened in 1989 and is comprised of 394 guest rooms, including 232 king rooms, 152 queen/queen rooms and 10 suites.

Approximately $30.7 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which included lobby, restaurant, meeting space and room renovations.

Approximately $32.3 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which has included lobby, restaurant, meeting space and room renovations.

The hotel’s location attracts all three major demand segments:

11 unchanged sentences

• Food and Beverage :

The Hilton La Jolla Torrey Pines hosts the Torreyana Grill and Lounge, an all-purpose, three-meal restaurant with 205 seats and the Horizons Lounge.

The Hilton La Jolla Torrey Pines hosts the Torreyana Grille and Lounge, an all-purpose, three-meal restaurant with 205 seats and the Horizons Coffee Cafe.

Both outlets overlook the golf course and the Pacific Ocean.

8 unchanged sentences

2022 2021 2020

394 394 394 394 394

Occupancy 77.3 % 57.8 % 37.8 %

9 unchanged sentences

27,880 16,927 9,559

Hotel net income 13,162 1,915 (4,013)

Hotel net income margin 26.8 % 7.4 % (26.1) %

Hotel EBITDA (1)

11 unchanged sentences

The hotel opened in 1943 and is comprised of 550 guest rooms, including 283 king rooms, 94 queen/queen rooms, 90 double/double rooms, 81 single queen rooms and two parlor suites.

Approximately $65.6 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which included renovations to the guest rooms, public space, meeting space, lobby and restaurant.

Approximately $77.0 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which has included renovations to the guest rooms, public space, meeting space, lobby and restaurant.

The hotel is strategically located at 16th and K Street, in close proximity to the White House and other government facilities.

8 unchanged sentences

• Other Amenities :

The hotel has a health club as well as a gift shop, business center and valet parking.

The hotel has a health club, gift shop, business center and valet parking.

Location and Access .

9 unchanged sentences

$ 148.82 $ 48.68 $ 37.73

$ 48.68 $ 37.73 $ 192.95 $ 195.22 $ 210.83

Selected Financial Information .

6 unchanged sentences

29,877 9,773 7,595

Hotel net income 1,125 (11,082) (12,722)

Hotel net income margin 2.5 % (79.6) % (100.0) %

Hotel EBITDA (1)

11 unchanged sentences

Approximately $34.2 million has been spent on capital expenditures since the acquisition of the hotel in 2007.

Capital improvements for 2017 included the relocation of the M Club from the eighth floor to the lobby level, which recaptured three guest rooms.

A model room was recently completed in anticipation of a rooms renovation which is expected to occur in 2022.

Capital improvements in 2017 included the relocation of the M Club from the eighth floor to the lobby level, which recaptured three guest rooms.

A transformative guest room and corridor renovation occurred in 2022 which included case goods, flooring, wall covering, soft goods, lighting, and bathrooms.

The hotel is located on the Seattle Waterfront within walking distance of Pike Place Market, a unique retail experience and a major Seattle tourist attraction.

Numerous food vendors providing locally produced food, retail shops offering a variety of merchandise and the original Starbucks Coffee Shop complement the venue.

The Seattle Great Wheel, one of the tallest Ferris wheels in the western United States, and the Seattle Aquarium are located along Alaskan Way in close proximity to the hotel.

The Seattle Great Wheel, one of the tallest Ferris wheels in the western United States, and the Seattle Aquarium are located along Alaskan Way, which is in close proximity to the hotel.

The hotel is also located directly across from the Pier 66 cruise terminal, a strong leisure demand generator during the six-month long cruise season.

20 unchanged sentences

$ 162.75 $ 114.64 $ 42.41

$ 114.64 $ 42.41 $ 221.87 $ 240.49 $ 239.50

Selected Financial Information .

6 unchanged sentences

21,445 15,105 5,604

Hotel net income 3,790 (293) (6,001)

Hotel net income margin 14.4 % (1.6) % (85.5) %

Hotel EBITDA (1)

23 unchanged sentences

Approximately 9,900 square feet of indoor meeting space and nearly 1,000 square feet of private outdoor reception areas.

In 2022, we plan to convert the former indoor swimming pool space into an approximate 1,200 square foot meeting room which will include an outdoor balcony space overlooking the Block 9 Courtyard.

In 2022, we converted the former indoor swimming pool space into an approximate 1,200 square foot meeting room, which includes an outdoor balcony space overlooking the Block 9 Courtyard.

Located on the second floor adjacent to the majority of the hotel’s meeting space, this new meeting room will allow the hotel to capture additional groups while providing much greater flexibility to the group meeting guests.

13 unchanged sentences

• Other Amenities :

The hotel has a fully equipped fitness center.

In 2022 we plan to expand the fitness center by approximately 600 square feet.

Once completed it will comprise approximately 1,400 square feet.

The hotel has a fully equipped 1,400 square foot fitness center.

In 2022 we expanded the fitness center by approximately 600 square feet.

SOMA Mercantile, a gift shop of approximately 100 square feet contains food, beverage and retail items unique to San Francisco, along with national brand favorites.

14 unchanged sentences

$ 209.38 $ 97.74 $ 54.97

$ 97.74 $ 54.97 $ 271.14 $ 247.58 $ 216.12

Selected Financial Information .

6 unchanged sentences

31,334 14,627 8,249

Hotel net income (2,872) (15,467) (16,177)

Hotel net income margin (7.9) % (89.0) % (168.1) %

Hotel EBITDA (1)

33 unchanged sentences

$ 122.10 $ 65.27 $ 40.24

$ 65.27 $ 40.24 $ 142.84 $ 154.32 $ 144.60

Selected Financial Information .

6 unchanged sentences

22,237 11,889 7,349

Hotel net income (505) (6,261) (2,571)

Hotel net income margin (1.8) % (44.2) % (28.6) %

Hotel EBITDA (1)

10 unchanged sentences

A comprehensive guest room and corridor renovation began in the fourth quarter of 2017 and was completed in the second quarter of 2018.

The hotel is located one block west of Chicago’s Magnificent Mile on a 0.6 acre parcel in an area of Chicago known as the Gold Coast.

The 32-story building was designed by French architect Jean-Paul Viguier and has views of Lake Michigan and the

Chicago skyline.

The 32-story building was designed by French architect Jean-Paul Viguier and has views of Lake Michigan and the Chicago skyline.

It is located in the heart of the Gold Coast neighborhood, proximate to some of Chicago’s largest leisure demand generators, on the corner of Chestnut Street and Wabash Avenue.

26 unchanged sentences

Rooms Revenue 24,829 14,422 5,979

Hotel net income 2,226 (10,181) (2,247)

Hotel net income margin 6.6 % (53.6) % (28.5) %

Hotel EBITDA (1)

20 unchanged sentences

Key West, which is the southernmost point of the Florida peninsula, is 160 miles south of Miami.

Key West International Airport is approximately four miles from the property and the Marathon and Miami airports are all within driving distance.

Key West International Airport is approximately four miles from the property.

The Marathon and Miami airports are all within driving distance.

Operating History .

5 unchanged sentences

$ 529.03 $ 483.93 $ 235.99

$ 483.93 $ 235.99 $ 371.12 $ 349.64 $ 331.87

Selected Financial Information .

6 unchanged sentences

27,419 25,082 12,265

Hotel net income 12,377 13,411 766

Hotel net income margin 36.3 % 42.7 % 4.9 %

Hotel EBITDA (1)

7 unchanged sentences

The Bardessono Hotel and Spa was built in 2009 and has 65 luxurious rooms and suites.

Built and operated with a primary focus on green practices, the hotel is one of three LEED Platinum certified hotels in California and one of thirteen LEED Platinum certified hotels in the United States.

Built and operated with a primary focus on green practices and is LEED Platinum certified.

In 2016 the meeting space was renovated.

24 unchanged sentences

$ 804.31 $ 775.18 $ 313.89

$ 775.18 $ 313.89 $ 595.19 $ 611.84 $ 592.77

Selected Financial Information .

5 unchanged sentences

19,082 18,391 7,467

Hotel net income 4,488 5,053 (4,360)

Hotel net income margin 17.8 % 21.7 % (43.9) %

Hotel EBITDA (1)

12 unchanged sentences

Approximately $115.4 million has been spent on capital expenditures since the acquisition of the hotel in December 2015.

Capital investment has recently been focused on remediation and reconstruction effort due to damage sustained after Hurricane Irma.

Capital investment was primarily focused on remediation and reconstruction effort due to damage sustained after Hurricane Irma.

The hotel operated as a 59-room Marriott-affiliated non-branded hotel for the majority of 2019 and re-opened as a full service Ritz-Carlton resort in late November 2019.

24 unchanged sentences

$ 889.30 $ 834.39 $ 258.43

$ 834.39 $ 258.43 $ 299.87 $ 224.31 $ 442.26

Selected Financial Information .

7 unchanged sentences

58,426 54,819 16,771

Hotel net income 18,920 17,453 4,844

Hotel net income margin 21.6 % 21.7 % 15.3 %

Hotel EBITDA (1)

8 unchanged sentences

The Park Hyatt Beaver Creek Resort & Spa is an integral part of the Beaver Creek Village as the only full-service hotel with direct ski-in/ski-out access.

The Park Hyatt Beaver Creek Resort & Spa was built in 1989 and has 190 luxurious and spacious rooms, including 81 king rooms, 66 double/double rooms, 20 double/queen rooms, one suite parlor and 22 suites.

The Park Hyatt Beaver Creek Resort & Spa was built in 1989 and has 190 luxurious and spacious rooms, including 81 king rooms, 66 double/double rooms, 20 double/queen rooms, 22 suites and one suite parlor.

The hotel underwent a full lobby renovation in 2019, which included a new lobby bar and the addition of an epicurean market.

6 unchanged sentences

• Other Amenities :

The resort offers an array of amenities, including the award-winning 30,000 square foot Exhale Spa, a heated outdoor pool and five outdoor hot tubs beneath a mountain waterfall, 24-hour state-of-the-art fitness club, ski valet service, outdoor fire pits and guest access to two private championship golf courses and the Beaver Creek Tennis Center.

The resort offers an array of amenities, including the award-winning 30,000 square foot Exhale Spa, a heated outdoor pool and five outdoor hot tubs beneath a mountain waterfall, 24-hour state-of-the-art fitness club, ski valet service, outdoor fire pits, guest access to two private championship golf courses and the Beaver Creek Tennis Center.

The property also features over 18,800 square feet of fully leased, highly visible retail space in the heart of Beaver Creek.

5 unchanged sentences

The following table shows certain historical information regarding the Park Hyatt Beaver Creek Resort & Spa since 2020:

Year Ended December 31, Year Ended December 31, 2017 (combined) Period from March 31, 2017 through

December 31, 2017 Period from January 1, 2017 through

March 30, 2017

2021 2020 2019 2018

Year Ended December 31,

2022 2021 2020

10 unchanged sentences

25,253 17,303 12,847

Hotel net income 5,668 4,005 (2,204)

Hotel net income margin 11.2 % 11.1 % (8.6) %

Hotel EBITDA (1)

4 unchanged sentences

(1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from March 31, 2017 through December 31, 2017, represent the operating results since the acquisition of the hotel on March 31, 2017.

The hotel operating results for the period from January 1, 2017 through March 30, 2017, represent the period before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through March 30, 2017.

Hotel Yountville, Yountville, California

2 unchanged sentences

Currently, the property has 80 luxury rooms consisting of 62 king rooms, eight double/queen rooms and 10 suites.

We are in the early stages of planning a rooms renovation, which is expected to occur in 2023.

Approximately $3.2 million has been spent on capital expenditures since the acquisition of the hotel in May 2017.

13 unchanged sentences

The following table shows certain historical information regarding the Hotel Yountville since 2020:

Year Ended December 31, Year Ended December 31, 2017 (combined) Period from May 11, 2017 through

December 31, 2017

Period from January 1, 2017 through

2021 2020 2019 2018

Year Ended December 31,

2022 2021 2020

10 unchanged sentences

14,314 12,886 4,539

Hotel net income 2,547 2,310 (4,772)

Hotel net income margin 14.8 % 15.2 % (83.0) %

Hotel EBITDA (1)

4 unchanged sentences

The hotel operating results for the period from May 11, 2017 through December 31, 2017 represent the operating results since the acquisition of the hotel on May 11, 2017.

The hotel operating results for the period from January 1, 2017 through May 10, 2017 represent the period before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through May 10, 2017.

The Ritz-Carlton, Sarasota, Florida

16 unchanged sentences

The following table shows certain historical information regarding The Ritz-Carlton Sarasota since 2020:

Year Ended December 31, Year Ended

December 31, 2018 (combined) Period from

April 4, 2018 through December 31, 2018 Period from

January 1, 2018

through April 3, 2018 Year Ended December 31, 2017

2021 2020 2019

Year Ended December 31,

2022 2021 2020

10 unchanged sentences

46,210 40,892 21,564

Hotel net income 17,641 15,342 (294)

Hotel net income margin 17.9 % 18.5 % (0.6) %

Hotel EBITDA (1)

4 unchanged sentences

The hotel operating results for the period from April 4, 2018 through December 31, 2018, represent the operating results since the acquisition of the hotel on April 4, 2018.

The hotel operating results for the period from January 1, 2018 through April 3, 2018 and for the year ended December 31, 2017 represent periods before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

The financial statements as of and for the year ended December 31, 2017 were audited and included in an amendment to our Current Report on Form 8-K filed on June 20, 2018.

No financial statements were prepared, audited or reviewed for the period from January 1, 2018 through April 3, 2018.

The Ritz-Carlton, Lake Tahoe, California

18 unchanged sentences

The following table shows certain historical information regarding The Ritz-Carlton Lake Tahoe since 2020:

Year Ended December 31, Year Ended

December 31, 2019 (combined) Period from

January 15, 2019 through

December 31, 2019 Period from

January 1, 2019 through

January 14, 2019 Year Ended

December 31, 2018 (unaudited)

Year Ended December 31,

2022 2021 2020

3 unchanged sentences

__________________

The above information does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

The above information does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.

Selected Financial Information .

The following table shows certain selected financial information regarding The Ritz-Carlton Lake Tahoe since 2020 (dollars in thousands):

Year Ended December 31, Year Ended

December 31, 2019 (combined) Period from

January 15, 2019 through

December 31, 2019 Period from

January 1, 2019 through

January 14, 2019

Year Ended December 31,

2022 2021 2020

Total Revenue

2 unchanged sentences

26,334 21,938 15,040

Hotel net income 5,020 2,793 (3,913)

Hotel net income margin 9.6 % 6.5 % (14.4) %

Hotel EBITDA (2)

3 unchanged sentences

__________________

(1) Rooms revenue does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(1) Rooms revenue does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.

(2) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the year ended December 31, 2018, represent the period before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

No financial statements were prepared, audited or reviewed for the year ended December 31, 2018 and the period from January 1, 2019 through January 14, 2019.

C Beverly Hills Hotel, Beverly Hills, California

9 unchanged sentences

of flexible indoor/outdoor meeting space.

The 12 th floor ballroom features unparalleled 360-degree panoramic views of Los Angeles.

• Food and Beverage :

The property also boasts the acclaimed The Restaurant, which entices travelers and Angelenos alike with its truly authentic Italian flavor by the fourth generation Cipriani.

The property also boasts the acclaimed The Restaurant at Mr.

C, which entices travelers and Angelenos alike with its truly authentic Italian flavor by the fourth generation Cipriani.

• Other Amenities :

The property offers outdoor pool terrace with daybeds and cabanas, state-of-the-art fitness center and a business center.

The property offers an outdoor pool terrace with daybeds and cabanas, state-of-the-art fitness center and a business center.

Additionally, the property includes five newly-constructed and fully-furnished residences which blend contemporary architecture with elegant, minimalistic design and range in size from 2,000 to 3,400 sq.

6 unchanged sentences

C Beverly Hills Hotel since 2020:

Year Ended December 31, 2022 Year Ended

December 31, 2021 (combined) Period from

10 unchanged sentences

C Beverly Hills Hotel since 2021 (dollars in thousands):

Year Ended December 31, 2022 Year Ended

December 31, 2021 (combined) Period from

2 unchanged sentences

January 1, 2021 through

August 4, 2021 Year Ended December 31,

August 4, 2021

Total Revenue

2 unchanged sentences

13,472 8,579 4,531 4,048

Hotel net income (1)

(1,390) (2,877) (1,630) (1,247)

Hotel net income margin (7.1) % (22.4) % (24.7) % (19.9) %

Hotel EBITDA (2)

3 unchanged sentences

__________________

(1) Hotel net income (loss) for the period before the Company’s ownership includes the predecessor hotel net income (loss) and adjustments for depreciation and interest as if the Company owned the hotel during the predecessor period.

The hotel operating results for the period from August 5, 2021 through December 31, 2021 represent the operating results since the acquisition of the hotel on August 5, 2021.

The hotel operating results for the period from January 1, 2021 through August 4, 2021 and for the years ended December 31, 2020 and 2019 represent periods before our ownership and were obtained from the prior owner.

The hotel operating results for the period from January 1, 2021 through August 4, 2021 and for the year ended December 31, 2020 represent periods before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

No financial statements were prepared, audited or reviewed for the years ended December 31, 2020 and 2019 and for the period from January 1, 2021 through August 4, 2021.

No financial statements were prepared, audited or reviewed for the year ended December 31, 2020 and for the period from January 1, 2021 through August 4, 2021.

The Ritz-Carlton Reserve, Dorado, Puerto Rico

On March 11, 2022, the Company acquired a 100% interest in the 96-room Ritz-Carlton Reserve Dorado Beach in Dorado, Puerto Rico.

Approximately $1.3 million has been spent on capital expenditures since the acquisition.

The Ritz-Carlton Reserve Dorado Beach opened in 2013.

Situated on a portion of the original Rockefeller estate, the Ritz-Carlton Reserve Dorado Beach is an intimate refuge, infused with references to the surrounding natural landscape and diverse culture.

It has 96 guest rooms, each of which features beautiful modern decor, a large wardrobe and marble floors.

Some rooms also feature an en-suite plunge pool and spectacular ocean views.

Additional property highlights include:

• Meeting Space :

The property offers entirely customizable meeting packages that combine ocean-view meeting space, bespoke services and meeting expertise.

A private dining room and several lawns are also available for more social gatherings.

• Food and Beverage :

The property features three dining outlets including COA, the property’s signature steakhouse and Positivo, offering upscale open-air, ocean front dining with an Asian inspired influence.

• Other Amenities :

The property offers an award winning spa, fitness center, kids club and excellent views of the Caribbean Sea.

Location and Access .

Puerto Rico’s capital of San Juan is 25 miles away, and guests can reach Luis Muñoz Marín International Airport within a 50-minute drive of the property.

Operating History .

The following table shows certain historical information regarding Ritz-Carlton Reserve Dorado Beach since 2020:

December 31, 2022 (combined) Period from

March 11, 2022 through

December 31, 2022 Period from

January 1, 2022 through

March 10, 2022 Year Ended December 31,

96 96 96 96 96

61.6 % 63.5 % 53.1 % 64.9 % 30.2 %

$ 2,015.83 $ 1,928.50 $ 2,462.11 $ 1,674.08 $ 1,415.31

$ 1,240.97 $ 1,225.27 $ 1,308.32 $ 1,086.05 $ 427.42

__________________

The above information does not include the operations of the voluntary rental program with respect to residential units not owned by the Company.

Selected Financial Information .

The following table shows certain selected financial information regarding The Ritz-Carlton Reserve Dorado Beach since 2021 (dollars in thousands):

December 31, 2022 (combined) Period from

March 11, 2022 through

December 31, 2022 Period from

January 1, 2022 through

March 10, 2022 Year Ended December 31, 2021

Total Revenue

$ 76,415 $ 61,246 $ 15,169 $ 74,138

Rooms Revenue (1)

43,484 34,817 8,666 38,055

Hotel net income (2)

9,672 7,583 2,089 9,099

Hotel net income margin 12.7 % 12.4 % 13.8 % 12.3 %

Hotel EBITDA (3)

18,521 14,887 3,634 16,838

Hotel EBITDA Margin (3)

24.2 % 24.3 % 24.0 % 22.7 %

__________________

(1) Rooms revenue does not include the operations of the voluntary rental program with respect to residential units not owned by the Company.

(2) Hotel net income (loss) for the periods before the Company’s ownership includes the predecessor hotel net income (loss) and adjustments for depreciation and interest as if the Company owned the hotel during the predecessor periods.

(3) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from March 11, 2022 through December 31, 2022 represent the operating results since the acquisition of the hotel on March 11, 2022.

The hotel operating results for the period from January 1, 2022 through March 10, 2022 and for the years ended December 31, 2021 and 2020 represent periods before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

The financial statements as of and for the year ended December 31, 2021 were audited and included in an amendment to our Current Report on Form 8-K filed on March 11, 2022.

No financial statements were prepared, audited or reviewed for the year ended December 31, 2020 and for the period from January 1, 2022 through March 10, 2022.

Four Seasons Resort, Scottsdale, Arizona

On December 1, 2022, the Company acquired a 100% interest in the 210-room Four Seasons Resort Scottsdale at Troon North in Scottsdale, Arizona.

Approximately $383,000 has been spent on capital expenditures since the acquisition.

The Four Seasons Resort Scottsdale was opened in 1999.

It has 210 luxurious and spacious guest rooms, including 22 suites that average 1,214 sq.

in size, all boasting private patios or balconies overlooking the colorful desert landscapes.

Additional property highlights include:

• Meeting Space :

The property boasts 35,900 square feet of total indoor and landscaped outdoor event space including three ballrooms and a variety of private meeting rooms including two dedicated boardrooms

• Food and Beverage :

Guests have multiple dining options including indulging at the 100-seat Talavera steakhouse, sampling American homestyle fare at 180-seat Proof cantina, enjoying desert and pool views at the 55-seat Saguaro Blossom poolside restaurant, or enjoying handcrafted cocktails at the 100-seat Onyx Bar and Lounge.

• Other Amenities :

The property offers locally inspired spa treatments at the 9,000 sq.

spa, a bi-level pool.

It also offers guests opportunities for outdoor adventure, including close shuttle access to two world-class golf courses, four pickleball and two tennis courts, as well as the opportunities to hike, bike or rock climb surrounding hills.

Location and Access .

Set in the majestic Sonoran Desert, Four Seasons Resort Scottsdale at Troon North is minutes from outdoor adventures and two world-class golf courses.

The bustling downtowns of Scottsdale and Phoenix are 30 and 40 minutes away, respectively, but dining, shopping and area attractions are only a short drive from the Resort.

Operating History .

The following table shows certain historical information regarding the Four Seasons Resort Scottsdale since 2020:

December 31, 2022 (combined) Period from

December 1, 2022 through

December 31, 2022 Period from

January 1, 2022 through

November 30, 2022 Year Ended December 31,

210 210 210 210 210

46.3 % 45.2 % 46.4 % 41.7 % 33.3 %

$ 914.43 $ 1,056.99 $ 901.55 $ 853.53 $ 636.90

$ 423.18 $ 477.19 $ 418.17 $ 356.17 $ 211.90

Selected Financial Information .

The following table shows certain selected financial information regarding the Four Seasons Resort Scottsdale Hotel since 2021:

(dollars in thousands):

December 31, 2021 (combined) Period from

December 1, 2022 through

December 31, 2022 Period from

January 1, 2022 through

November 30, 2022 Year Ended December 31, 2021

Total Revenue

$ 61,253 $ 5,194 $ 56,059 $ 49,827

Rooms Revenue

32,437 3,107 29,330 27,299

Hotel net income (1)

4,095 933 3,162 2,581

Hotel net income margin 6.7 % 18.0 % 5.6 % 5.2 %

Hotel EBITDA (2)

19,497 1,710 17,787 16,402

Hotel EBITDA Margin (2)

31.8 % 32.9 % 31.7 % 32.9 %

__________________

(1) Hotel net income (loss) for the periods before the Company’s ownership includes the predecessor hotel net income (loss) and adjustments for depreciation and interest as if the Company owned the hotel during the predecessor periods.

The hotel operating results for the period from December 1, 2022 through December 31, 2022 represent the operating results since the acquisition of the hotel on December 1, 2022.

The hotel operating results for the period from January 1, 2022 through November 30, 2022 and for the years ended December 31, 2021 and 2020 represent periods before our ownership and were obtained from the prior owner.

The Company performed a limited review of the information as part of its analysis of the acquisition.

The financial statements as of and for the years ended December 31, 2021 and 2020 were audited and as of and for the nine months ended September 30, 2022 and 2021 were reviewed and included in our Current Report on Form 8-K filed on December 1, 2022.

No financial statements were prepared, audited or reviewed for the period from October 1, 2022 through November 30, 2022.

Asset Management

7 unchanged sentences

Hotel Management

As a result of Ashford Inc.’s November 2019 acquisition of the hotel management business from Remington Lodging, Ashford Inc.

also provides us with hotel management services through Remington Hotels, including hotel operations, sales and marketing, revenue management, budget oversight, guest service, asset maintenance (not involving capital expenditures) and related services.

1 unchanged sentence

Design and Construction Services

As a result of Ashford Inc.’s August 2018 acquisition of Premier from affiliates of Remington Lodging, Ashford Inc.

also provides us with design and construction services through Premier, including construction management, interior design, architectural oversight, and the purchasing, expediting, warehousing coordination, freight management and supervision of

installation of furniture, fixtures and equipment (“FF&E”), and related services.

See “Certain Agreements—Premier Master Project Management Agreement.”

1 unchanged sentence

Hotel Management Agreements .

Ten of our hotel properties are operated pursuant to a hotel management agreement with one of four brand hotel management companies and four of our hotel properties are operated pursuant to a hotel management agreement with Remington Hotels, a hotel management company acquired by Ashford Inc.

Twelve of our hotel properties are operated pursuant to a hotel management agreement with one of five brand management companies and four of our hotel properties are operated pursuant to a hotel management agreement with Remington Hotels, a hotel management company acquired by Ashford Inc.

on November 6, 2019, from Mr.

1 unchanged sentence

Archie Bennett, Jr., chairman emeritus of Ashford Trust.

Each hotel management company receives a base management fee and is also eligible to receive an incentive management fee if hotel operating income, as defined in the respective management agreement, exceeds certain thresholds.

Each management company receives a base management fee and may also be eligible to receive an incentive management fee if hotel operating income, as defined in the respective management agreement, exceeds certain thresholds.

The incentive management fee is generally calculated as a percentage of hotel operating income after we have received a priority return on our investment in the hotel.

2 unchanged sentences

None of our hotel properties operate under franchise agreements.

The hotel management agreements with Marriott (or its affiliates), Hilton (or its affiliates), Hyatt or Accor allow ten of our hotel properties to operate under the Marriott, Autograph Collection, The Ritz-Carlton, Hilton, Park Hyatt or Sofitel brand names, as applicable, and provide benefits typically associated with franchise agreements and licenses, including, among others, the use of the Marriott, Hilton, Hyatt or Accor, as applicable, reservation system and guest loyalty and reward program.

Any intellectual property and trademarks of Marriott (or its affiliates), Hilton (or its affiliates), Hyatt (or its affiliates) or Accor (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager or an affiliate of such manager which grants the manager rights to use such intellectual property or trademarks with respect to the applicable hotel.

The management agreements with Marriott (or its affiliates), Hilton (or its affiliates), Four Seasons, Hyatt or Accor allow twelve of our hotel properties to operate under the Marriott, Autograph Collection, The Ritz-Carlton, Ritz-Carlton Reserve, Hilton, Four Seasons, Park Hyatt or Sofitel brand names, as applicable, and provide benefits typically associated with franchise agreements, including, among others, the use of Marriott’s (or its affiliates), Hilton’s (or its affiliates), Four Seasons’ (or its affiliates), Hyatt’s (or its affiliates) or Accor’s (or its affiliates), applicable, reservation system and guest loyalty and reward program.

Any intellectual property and trademarks of its affiliates), Hilton (or its affiliates), Four Seasons (or its affiliates), Hyatt (or its affiliates) or Accor (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager (or its affiliates) and the management agreement with Marriott (or its affiliates), Hilton (or its affiliates), Four Seasons, Hyatt, and Accor grant the applicable manager the rights to use such intellectual property or trademarks with respect to the applicable hotel.

Licensing Agreement.

The Ritz-Carlton St.

Thomas is subject to a License and Royalty Agreement (the “Royalty Agreement”) which allows us to use The Ritz-Carlton brand for 50 years, subject to automatic renewal for two 10-year periods, unless the brand management company notifies us of election not to renew at least one year before the end of the initial term or the then-current renewal term.

The Royalty Agreement is coterminous with the management agreement.

In connection with our ability to use The Ritz-Carlton brand, we are obligated to pay a royalty fee of 2.6% of gross revenues and an incentive royalty of 20% of operating profit in excess of owner’s priority.

Thomas is subject to a License and Royalty Agreement, which allows the hotel to use The Ritz-Carlton name and mark for 50 years, subject to automatic renewal for two 10-year periods, unless the brand management company notifies us of election not to renew at least one year before the end of the initial term or the then-current renewal term.

The Licensed and Royalty Agreement is coterminous with the management agreement.

In connection with our ability to use The Ritz-Carlton name and mark, we are obligated to pay a royalty fee of 2.6% of gross revenues and an incentive royalty of 20% of operating profit in excess of owner’s priority.

Additionally, in conjunction with the Mr.

6 unchanged sentences

The agreement expires on August 5, 2023.

Further, the Ritz-Carlton Reserve Dorado Beach is subject to a License and Royalty Agreement, which allows the hotel to use the Ritz-Carlton name and mark for 30 years, subject to automatic renewal for two 10-year periods, unless the licensor notifies us of election not to renew at least 18 months before the end of the initial term or the then-current renewal term.

The License and Royalty Agreement is coterminous with the management agreement.

In connection with our ability to use The Ritz-Carlton name and mark, we are obligated to pay a royalty fee of 2.6% of gross revenues and an incentive royalty equal to the sum of (a) $250,000 if operating profit is equal to or greater than owner’s priority, to be paid out of owner’s priority, plus (b) 20% of operating profit in excess of owner’s priority.

Furthermore, Four Seasons Resort Scottsdale is subject to a Hotel License Agreement, which allows the hotel to use the Four Seasons name and mark until December 31, 2039, subject to automatic renewal for two 20-year periods, unless the licensor notifies us of election not to renew at least 12 months before the end of the current term (or any renewal thereof).

The Hotel License Agreement is coterminous with the management agreement.

In connection with our ability to use Four Seasons name and mark, we are obligated to pay a royalty fee of 0.5% of gross revenues.

Our Financing Strategy

As of December 31, 2021, our indebtedness was approximately $1.2 billion, with a weighted average interest rate of 2.65% per annum.

Approximately 7.3% of our debt bears interest at a fixed rate of 4.5% and the remaining 92.7% bears interest at the variable rate of LIBOR plus 2.44%.

As of December 31, 2022, our indebtedness was approximately $1.3 billion, with a weighted average interest rate of 6.36% per annum, taking into account in-the-money interest rate caps.

Approximately 6.5% of our debt bears interest at a fixed rate of 4.5% and the remaining 93.5% bears interest at the variable rate of LIBOR/SOFR plus 2.57%.

We intend to continue to use variable-rate debt or a mix of fixed and variable-rate debt as we see fit, and we may, if appropriate, enter into interest rate hedges.

We intend to finance our long-term growth and liquidity needs with operating cash flow, equity issuances of both common and preferred stock, joint ventures, a revolving line of credit and secured and unsecured debt financings having staggered maturities.

We target leverage of 35% net debt to gross assets.

28 unchanged sentences

and its subsidiaries.

Ashford LLC also has the power to delegate all or any part of its rights and powers to manage and control our business and affairs to such officers, employees, affiliates, agents and representatives of Ashford LLC or our company as it may deem appropriate.

Any authority delegated by Ashford LLC to any other person is subject to the limitations on the rights and powers of our advisor specifically set forth in the advisory agreement or our charter.

24 unchanged sentences

The base fee is payable on the fifth business day of each month.

“Net Asset Fee Adjustment” shall be equal to (i) the product of the Sold Non-ERFP Asset Amount (as more particularly defined in the advisory agreement, but generally equal to the net sales prices of real property (other than any Enhanced Return Hotel Assets (as defined in the ERFP Agreement)) sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale) and 0.70% plus (ii) the product of the Sold ERFP Asset Amount (as more particularly defined in the advisory agreement, but generally equal to the net sales prices of

Enhanced Return Hotel Assets sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale) and 1.07%.

The minimum base fee for Braemar for each month will be equal to the greater of:

2 unchanged sentences

The “G&A Ratio” is calculated as the simple average of the ratios of total general and administrative expenses, including any dead deal costs, less any non-cash expenses, paid in the applicable quarter by each member of a select peer group, divided by the total market capitalization of such peer group member.

The peer group for each company may be adjusted from time-to-time by mutual agreement between Ashford LLC and a majority of our independent directors.

The peer group for the Company may be adjusted from time-to-time by mutual agreement between Ashford LLC and a majority of our independent directors.

Each month’s base fee is determined based on prior month results and is payable in cash on the fifth business day of the month for which the fee is applied.

8 unchanged sentences

Except in the case when the incentive fee is payable on the date of termination of the advisory agreement, up to 50% of the incentive fee may be paid in our common stock or in common units of our operating partnership, at our discretion, with the balance payable in cash unless at the time for payment of the incentive fee, Ashford LLC owns common stock or common units in an amount greater than or equal to three times the base fee for the preceding four quarters or payment in such securities would cause the advisor to be subject to the provision of the Investment Company Act of 1940, as amended, or payment in such securities would not be legally permissible for any reason, in which case the entire incentive fee will be payable in cash.

Upon the determination of the incentive fee, except in the case of any termination of the advisory agreement in which case the incentive fee for the stub period and all unpaid installments of an incentive fee shall be deemed earned and fully due and payable, each one-third installment of the incentive fee shall not be deemed earned by the advisor or otherwise payable by us unless we, as of the December 31 immediately preceding the due date for the payment of the incentive fee installment, have a FCCR of 0.20x or greater (the “FCCR Condition”).

fully due and payable, each one-third installment of the incentive fee shall not be deemed earned by the advisor or otherwise payable by us unless we, as of the December 31 immediately preceding the due date for the payment of the incentive fee installment, have a FCCR of 0.20x or greater (the “FCCR Condition”).

For purposes of this calculation, “FCCR” means our fixed charge coverage ratio, which is the ratio of adjusted EBITDA for the previous four consecutive fiscal quarters to fixed charges, which includes all (i) our and our subsidiaries’ interest expense, (ii) our and our subsidiaries’ regularly scheduled principal payments, other than balloon or similar principal payments which repay indebtedness in full and payments under cash flow mortgages applied to principal, and (iii) preferred dividends paid by us.

1 unchanged sentence

To incentivize employees, officers, consultants, non-employee directors, affiliates and representatives of Ashford LLC, or its affiliates, to achieve our goals and business objectives, as established by our board of directors, in addition to the base fee and the incentive fee described above, our board of directors has the authority to make equity awards to Ashford LLC or directly to employees, officers, consultants and non-employee directors of Ashford LLC, or its affiliates, based on our achievement of certain financial and other hurdles established by our board of directors.

These annual equity awards are intended to provide an incentive to Ashford LLC and its

employees to promote the success of our business.

These annual equity awards are intended to provide an incentive to Ashford LLC and its employees to promote the success of our business.

The compensation committee of our board of directors has full discretion regarding the grant of any annual equity awards, and other than the overall limitation on the total number of shares that are authorized to be granted under our Second Amended and Restated 2013 Equity Incentive Plan (as amended, the “2013 Equity Incentive Plan”) there are no limitations on the amount of these equity awards.

14 unchanged sentences

If we materially revise our initial investment guidelines without the express written consent of Ashford LLC, Ashford LLC will use its best judgment to allocate investment opportunities to us and other entities it advises, taking into account such factors as it deems relevant, in its discretion, subject to any then-existing obligations of Ashford LLC to such other entities.

We have agreed that we will not revise our initial investment guidelines to be directly competitive with the investment guidelines of Ashford Trust as of November 19, 2013.

We have agreed that we will not revise our initial investment guidelines to be directly competitive with

the investment guidelines of Ashford Trust as of November 19, 2013.

The advisory agreement gives us the right to equitable treatment with respect to other clients of Ashford LLC, but does not give us the right to preferential treatment, except that Ashford LLC and Ashford Trust have agreed that, so long as we have not materially changed our initial investment guidelines without the express consent of Ashford LLC, any individual hotel investment opportunities that satisfy our investment focus will be presented to our board of directors, who will have up to 10 business days to accept such opportunity prior to it being available to Ashford Trust or any other entity advised by Ashford LLC.

2 unchanged sentences

however, if we materially change our investment guidelines without the express consent of Ashford LLC, Ashford LLC will use its best judgment to allocate investment opportunities to us and Ashford Trust, taking into account such factors as it deems relevant, in its discretion, subject to any then-existing obligations of Ashford LLC to other entities.

In the advisory agreement, we declared

our initial investment guidelines to be hotel real estate assets primarily consisting of equity or ownership interests, as well as debt investments when such debt is acquired with the intent of obtaining an equity or ownership interest, in:

In the advisory agreement, we declared our initial investment guidelines to be hotel real estate assets primarily consisting of equity or ownership interests, as well as debt investments when such debt is acquired with the intent of obtaining an equity or ownership interest, in:

• full-service hotels and resorts with trailing 12 month average RevPAR or anticipated 12 month average RevPAR of at least twice the then-current U.S.

national average RevPAR for all hotels as determined with reference to the most current Smith Travel Research reports, generally in the 20 most populous metropolitan statistical areas, as estimated by the United States Census Bureau and delineated by the U.S.

national average RevPAR for all hotels as determined with reference to the most current STR, LLC reports, generally in the 20 most populous metropolitan statistical areas, as estimated by the United States Census Bureau and delineated by the U.S.

Office of Management and Budget;

12 unchanged sentences

All related party transactions are approved by either the Related Party Transactions Committee or the independent members of our board of directors.

ERFP Agreement

On January 15, 2019, we entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) and Amendment No.

1 to the Fifth Amended and Restated Advisory Agreement with the other parties to our advisory agreement.

The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on our behalf and on behalf of Ashford Inc., respectively.

The ERFP Agreement replaced the “key money investments” previously contemplated by our advisory agreement.

Under the ERFP Agreement, Ashford LLC agreed to provide $50 million to us in connection with our acquisition of additional hotels recommended by Ashford LLC, with the option to increase the funding commitment to up to $100 million upon mutual agreement by the parties.

Under the ERFP Agreement, Ashford LLC is obligated to provide us with 10% of the acquired hotel’s purchase price in exchange for FF&E at our properties, which is subsequently leased by Ashford LLC to our

TRSs on a rent-free basis.

As a result of The Ritz-Carlton Lake Tahoe acquisition, we received $10.3 million from Ashford LLC in the form of future purchases of hotel FF&E at Braemar hotel properties that is leased to us by Ashford LLC rent-free.

Under the ERFP Agreement, we must provide reasonable advance notice to Ashford LLC to request ERFP funds in accordance with the ERFP Agreement.

The ERFP Agreement requires that Ashford LLC acquire the related FF&E either at the time of the property acquisition or at any time generally within two years of our acquisition of the hotel property.

Conditions to Funding.

Ashford LLC has no obligation to provide any enhanced return investment in the event that (i) we or our subsidiaries, as applicable, has materially breached any provision of the advisory agreement (provided that we shall be entitled to cure any such breach prior to the applicable date of required acquisition of FF&E), (ii) any event or condition has occurred or is reasonably likely to occur which would give rise to a right of termination in favor of Ashford LLC under the advisory agreement or the ERFP Agreement, (iii) there would exist, immediately after such proposed enhanced return investment, a Sold ERFP Asset Amount (as defined in the ERFP Agreement, but generally equal to the net sales prices of Enhanced Return Hotel Assets sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale), or (iv) (a) Ashford LLC’s Unrestricted Cash Balance (as defined below) is, after taking into account the cash amount anticipated to be required for the proposed enhanced return investment, less than fifteen million dollars ($15,000,000) (the “Cash Threshold”) as of one week after the date that Braemar OP requires that Ashford LLC commit to fund an enhanced return investment with respect to an Enhanced Return Hotel Asset or (b) Ashford LLC reasonably expects, in light of its then-anticipated contractual funding commitments (including amounts committed pursuant to the ERFP Agreement but not yet paid) and cash flows, to have an Unrestricted Cash Balance that is less than the Cash Threshold immediately after the expected date of closing of the purchase of the Enhanced Return Hotel Asset.

For purposes of the ERFP Agreement, “Unrestricted Cash Balance” means, unrestricted cash of Ashford LLC;

provided, that any cash or working capital of Ashford Inc.

or its other subsidiaries, including without limitation, Ashford Hospitality Services LLC (“Ashford Services”), will be included in the calculation of “Unrestricted Cash Balance” if such funds have been contributed, transferred or loaned from Ashford LLC to Ashford Services or such other subsidiaries for the purpose of avoiding, hindering or delaying Ashford LLC’s obligations under the ERFP Agreement (it being understood that good faith loans or advances to, or investments in, Ashford Services’ or such other subsidiaries’ existing businesses or new services or other businesses, or the provision of working capital to Ashford Services or such other subsidiaries generally consistent with Ashford Services’ or such other subsidiaries past practices, will not be deemed to have been made for the purpose of avoiding, hindering or delaying Ashford LLC’s obligations under the ERFP Agreement).

Repayment Events.

With respect to any acquisition of FF&E by Ashford LLC pursuant to the ERFP Agreement, if prior to the date that is two years after such acquisition, (i) we are subject to a Company Change of Control (as defined in the advisory agreement) or (ii) we or Ashford Inc.

terminates the advisory agreement and we are required to pay the Termination Fee thereunder (each of clauses (i) and (ii), a “Repayment Event”), Braemar OP is required to pay to Ashford LLC an amount equal to one hundred percent (100%) of any enhanced return investments actually funded by Ashford LLC during such two-year period.

Disposition of Enhanced Return Hotel Assets.

If Braemar OP or its subsidiaries dispose of or cause to be disposed any Enhanced Return Hotel Asset or other real property with respect to which Ashford LLC owns FF&E, including by way of a foreclosure or deed-in-lieu of foreclosure by a mortgage or mezzanine lender of Braemar OP or its subsidiaries, we will promptly identify, and Ashford LLC will acquire, in exchange for such FF&E, FF&E for use at another real property asset leased by the applicable taxable REIT subsidiary (“TRS”) and with a fair market value equal to the value of such FF&E as established in connection with such disposition.

The initial term of the ERFP Agreement is two (2) years (the “Initial Term”), which began on January 15, 2019.

At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and will automatically renew for successive one (1) year periods (each such period a “Renewal Term”) unless either we or Ashford Inc., as applicable, provides written notice to the other at least sixty (60) days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.

The ERFP Agreement may be terminated by us in the event we have a right to terminate the advisory agreement or by Ashford Inc.

in the event that it is entitled to transfer cash owned by us but controlled by our advisor to the Termination Fee Escrow Account (as defined in the advisory agreement).

The amendments to the advisory agreement set forth in the ERFP Agreement will continue in force notwithstanding any termination of the ERFP Agreement.

On November 8, 2021, the Company received written notice from the Advisor of its intention not to renew the ERFP program.

As a result, the ERFP Agreement was terminated in accordance with its terms on January 15, 2022.

\ Hotel Management Agreements

For us to qualify as a REIT, we cannot directly or indirectly operate any of our hotel properties.

To qualify as a REIT, we cannot directly or indirectly operate any of our hotel properties.

Third parties must operate our hotel properties.

2 unchanged sentences

Each of our hotel properties, other than the Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr.

C Beverly Hills Hotel (which are operated by Remington Hotels) are operated pursuant to a hotel management agreement with one of four independent hotel management companies:

C Beverly Hills Hotel (which are operated by Remington Hotels), are operated pursuant to a hotel management agreement with one of five independent hotel management companies:

(1) Hilton Management LLC, (2) Marriott Hotel Services, Inc.

or its affiliates, Ritz-Carlton (Virgin Islands), Inc.

and The Ritz-Carlton Hotel Company, L.L.C., (3) Accor and (4) Hyatt.

The Ritz-Carlton is a registered trademark of The Ritz-Carlton Hotel Company, L.L.C., an affiliate of Marriott, and Sofitel is a registered trademark of affiliates of Accor.

(or its affiliates, The Ritz-Carlton Hotel Company, L.L.C., Ritz-Carlton (Virgin Islands), Inc., and Luxury Hotels International of Puerto Rico, Inc.) (3) Four Seasons, (4) Accor, and (5) Hyatt.

“Hilton” is a registered trademark of Hilton International Holding LLC.

“Marriott” is a registered trademark of Marriott International, Inc.

“Autograph Collection” is a registered trademark of Marriott International, Inc.

“The Ritz-Carlton”, “Ritz-Carlton”, and “Ritz-Carlton Reserve” are registered trademarks of The Ritz-Carlton Hotel Company, L.L.C., an affiliate of Marriott International, Inc.

“Park Hyatt” is a registered trademark of Hyatt Corporation.

“Four Seasons” is a registered trademark of Four Seasons Hotels Limited.

Sofitel is a registered trademark of affiliates of Accor.

The terms of each of the hotel management agreements, as well as any remaining extension, are set forth in the table below:

2 unchanged sentences

Hilton La Jolla Torrey Pines

Three 10-year options

Two 10-year options

Capital Hilton

Three 10-year options

Two 10-year options

Marriott Seattle Waterfront

23 unchanged sentences

C Beverly Hills Hotel 8/5/2021 08/05/2031 Three 7-year options and one 4-year option

The Ritz-Carlton Reserve Dorado Beach 7/30/2008 12/31/2042 Two 10-year options

Four Seasons Resort Scottsdale 3/29/1996 12/31/2039 Two 20-year options

Each hotel management company receives a base management fee (expressed as a percentage of gross revenues) ranging from 3.0%–5.0%, as well as an incentive management fee calculated as a percentage of hotel operating income, in certain cases after funding of certain requirements, including the capital renewal reserve, and in certain cases after we have received a priority return on our investment in the hotel (referred to as the owner’s priority), as summarized in the chart below:

Hotel Management Fee (1)

Incentive Fee

Marketing Fee

Incentive Fee Marketing Fee

Owner’s Priority (2)

4 unchanged sentences

3% 20% of operating cash flow (after deduction for capital renewals reserve and owner’s priority) Reimbursement of hotel’s pro rata share of group services 11.5% of owner’s total investment $140,076,304

Hotel Management Fee (1)

Incentive Fee Marketing Fee

Owner’s Priority (2)

Investment (2)

Marriott Seattle Waterfront

3 unchanged sentences

Owner’s 2nd Priority:

After payment of the owner’ 1st priority, remaining operating profit is split between owner and manager, such that owner receives 70% of remaining operating profit that is less than the sum of $15,113,000 plus 10.75% of owner-funded capital expenses, and 50% of the operating profit in excess of such sum $89,732,668

Hotel Management Fee (1)

Incentive Fee

Marketing Fee

Owner’s Priority (2)

Investment (2)

After payment of the owner’s 1st priority, remaining operating profit is split between owner and manager, such that owner receives 70% of remaining operating profit that is less than the sum of $15,113,000 plus 10.75% of owner-funded capital expenses, and 50% of the operating profit in excess of such sum $89,732,668

The Clancy 5% 50% of the excess of operating profit (after deduction for contributions to the FF&E reserve) over owner’s priority up to the Spread Threshold of $3,000,000, reduced to 25% for Operating Profit exceeding the Spread Threshold.

System wide contribution to the marketing fund (1.5% of gross room sales) $12,279,659, plus 11.5% of owner funded capital expenses Not applicable

The Notary Hotel 4% 20% of the excess of operating profit over owner’s priority System wide contribution to the marketing fund (1.5% of gross room sales).

1.5% of gross room sales $12,279,659, plus 11.5% of owner funded capital expenses Not applicable

The Notary Hotel 4% 20% of the excess of operating profit over owner’s priority 1.5% of gross room sales 2021 and after:

$8,938,867 Plus 10.25% of owner-funded capital expenditures after the effective date, the amount of reserve shortfalls funded by Owner after the effective date, and the amount of owner-funded capital expenditures spent for completion of the conversion of the hotel to The Notary Hotel, up to $18,000,000 Not applicable

Sofitel Chicago Magnificent Mile 3% 20% of the amount by which the hotel’s annual net operating income exceeds a threshold amount (equal to 8% of our total investment in the hotel), capped at 2.5% of gross hotel revenues 2% of gross hotel revenues Not applicable Not applicable

Pier House Resort & Spa Greater of $16,294

3 unchanged sentences

The Ritz-Carlton St.

Thomas 3.0%, comprised of a management fee of 0.4% and a royalty fee of 2.6% 20% of the excess, if any, of Operating Profit for such Fiscal Year over owner’s priority for such Fiscal Year 1.0% of gross revenues $8,000,000 plus 10.25% of the amount of owner-funded capital expenditures (3)

Not applicable

Park Hyatt Beaver Creek Resort & Spa Greater of 3.0% or $2,405,544 on an annual basis (increased annually by lesser of CPI or 8% of prior year management fee) 12.5% Profit plus 15% of Profit less the Base Fee that is in excess of $4 million Not applicable Not applicable Not applicable

Hotel Yountville Greater of $16,294 monthly or 3% The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit Not applicable Not applicable Not applicable

The Ritz-Carlton Sarasota 3% 20% of Available cash flow defined as Net Operating Income minus the owner’s priority 1% of gross hotel revenues for each fiscal year, excluding member dues, initiation, or joining fees or deposits of Club members $7,465,000 plus 10.25% of the amount of owner-funded capital expenditures Not applicable

Hotel Management Fee (1)

Incentive Fee

Marketing Fee

Incentive Fee Marketing Fee

Owner’s Priority (2)

Investment (2)

The Ritz-Carlton Lake Tahoe 3% The sum of (i) 15% of the amount by which Adjusted House Profit (“AHP”) for such Fiscal Year exceeds the owner’s priority but is less than $10.8 million plus (ii) 20% of the amount by which AHP exceeds $10.8 million;

provided, however, that in no event shall the total, aggregate sum of the Base Fee and the Incentive Fee paid to Operator in any given Fiscal Year exceed 6% of gross revenues for such Fiscal Year

1% of gross revenues for each fiscal year $8,200,000 plus 10% of the amount of owner-funded capital expenditures in excess of amounts in the reserve Not applicable

The Ritz-Carlton Lake Tahoe 3% The sum of (i) 15% of the amount by which Adjusted House Profit (“AHP”) for such Fiscal Year exceeds the owner’s priority;

provided, however, that in no event shall the total, aggregate sum of the Base Fee and the Incentive Fee paid to Operator in any given Fiscal Year exceed 6% of gross revenues for such Fiscal Year 1% of gross revenues for each fiscal year $8,208,965.08 plus 10% of the amount of certain owner-funded renovation expenditures, plus 10% of any other owner-funded capital expenditures after 1/1/2022 that were approved by manager, plus a varying additional credit based on the number of condominium units (which are to be constructed) in the voluntary rental program Not applicable

C Beverly Hills Hotel Greater of $16,294 monthly or 3% The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit Not applicable Not applicable Not applicable

The Ritz-Carlton Reserve Dorado Beach 3%, comprised of a management fee of 0.4% and a royalty fee of 2.6% $250,000 if Net House Profit exceeds Owner’s Priority plus 20% of the excess of Net House Profit over Owner’s Priority with annual true-up 1% of Gross Revenues plus allocation of reimbursable expenses $11,670,000 plus (a) 11% of any operating losses funded by owner, plus (b) 11% of certain non-routine capital expenditures incurred by manager and certain non-routine owner-funded capital expenditures, plus (c) $100,000 time the number of condominium units in the voluntary rental program at the beginning of each FY, plus (d) an amount negotiated at the beginning of each year for the West Beach Estates and East Beach Villas participating in the standard and flexible voluntary rental program Not applicable

Four Seasons Resorts Scottsdale 3% 7.5% of the amount of operating profit (after deducting property taxes, insurance premiums, and expenditures from the capital reserve) for a particular period, minus the Hurdle Amount applicable for the same period.

If there is a negative incentive fee in any year, the negative balance will carry forward and operate as a hurdle to future incentive fees 1.47% of budgeted gross revenues.

$10,499,207 (to be reduced to zero in January 1, 2033) plus 11.5% of Additional Capital after January 1, 2018 in excess of the FF&E Reserve.

(Any Additional Capital will be reduced to zero 15 years after made).

Not applicable

__________________

2 unchanged sentences

For some properties these amounts will continue to increase over time by the amount of additional owner-funded capital expenses.

(3) In addition, dollar amounts no greater than $19,000,000 in the aggregate that are funded by owner for renovation projects will be treated as owner-funded capital expenditures and give a one-time adjustment to owner’s priority for 13% of the amounts.

The hotel management agreements allow each hotel to operate under the Marriott, The Ritz-Carlton, Hilton, Sofitel or Park Hyatt brand names, as applicable, and provide benefits typically associated with franchise agreements, including, among others, the use of the Marriott, The Ritz-Carlton, Hilton, Sofitel or Hyatt, as applicable, reservation system and guest loyalty and reward program.

Any intellectual property and trademarks of Marriott (or its affiliates), The Ritz-Carlton, Hilton (or its affiliates), Accor (or its affiliates), or Hyatt (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager or an affiliate of such manager who grants the manager rights to use such intellectual property or trademarks with respect to the applicable hotel.

Below is a summary of the principal terms of the hotel management agreements with Marriott (or its affiliates), Hilton (or its affiliates), Accor, Hyatt and Remington Hotels.

The hotel management agreements allow each hotel to operate under the Marriott, Autograph Collection, The Ritz-Carlton, Ritz-Carlton Reserve, Hilton, Four Seasons, Sofitel, and Park Hyatt brand names, as applicable, and provide benefits typically associated with franchise agreements, including, among others, the use of the Marriott’s (or its affiliates), Hilton’s (or its affiliates), Four Seasons’ (or its affiliates), Accor’s (or its affiliates), or Hyatt’s (or its affiliates), as applicable, reservation system and guest loyalty and reward program.

Any intellectual property and trademarks of Marriott (or its affiliates, including, without limitation, The Ritz-Carlton), Hilton (or its affiliates), Four Seasons (or its affiliates), Accor (or its affiliates), or Hyatt (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager or an affiliate of such manager who grants the manager rights to use such intellectual property or trademarks with respect to the applicable hotel.

Below is a summary of the principal terms of the hotel management agreements with Marriott (or its affiliates), Hilton, Accor, Hyatt, Four Seasons, and Remington Hotels.

Marriott Management Agreements

The remaining base term of each of our six management agreements with Marriott (or its affiliates) ranges from approximately 6 to 44 years, expiring between December 31, 2027 and December 31, 2065.

The remaining base term of each of our seven management agreements with Marriott (or its affiliates) ranges from approximately 5 to 43 years, expiring between December 31, 2027 and December 31, 2065.

Each of these agreements has remaining automatic extension options at the discretion of the manager, ranging from two 10-year extensions to five 10-year extensions.

4 unchanged sentences

provided, however, the hotel management agreement may not be terminated by the non-defaulting party unless and until such Event of Default has a material adverse effect on the non-defaulting party.

In the case of The Notary Hotel and The Clancy, if the defaulting party contests such Event of Default or such material adverse effect, the non-defaulting party may not terminate unless a court of competent jurisdiction has issued a final, binding and non-appealable order finding that the Event of Default has occurred and that the default resulted in a material adverse effect.

In the case of The Notary Hotel, The Clancy, and The Ritz-Carlton Reserve Dorado Beach, if the defaulting party contests such Event of Default or such material adverse effect, the non-defaulting party may not terminate unless a court of competent jurisdiction has issued a final, binding and non-appealable order finding that the Event of Default has occurred and that the default resulted in a material adverse effect.

Early Termination for Casualty .

The termination provisions for our hotel properties in the event of casualty are summarized as follows:

The termination provisions for our Marriott-managed hotel properties after casualty are summarized as follows:

• If the hotel suffers a total casualty (meaning the cost of the damage to be repaired or replaced would be equal to 30% or more of the then-total replacement cost in the case of the Marriott Seattle Waterfront, 33% or more of the then replacement cost in the case of The Ritz-Carlton Lake Tahoe and The Ritz-Carlton Sarasota, and 60% or more of the then-total replacement cost in the case of The Ritz-Carlton St.

Thomas, The Clancy and The Notary Hotel), then either party may terminate the hotel management agreement.

Thomas, The Ritz-Carlton Reserve Dorado Beach, The Clancy and The Notary Hotel), then either party may terminate the hotel management agreement.

Early Termination for Condemnation.

5 unchanged sentences

The performance criteria generally includes each of the following:

(i) operating profit for each such fiscal year is less than the applicable performance termination threshold (as defined in the hotel management agreement) which ranges from 9.5% to 10.25% of the approximate total investment in the hotel;

provided, however, in the case of The Notary Hotel, it is 85% of the owner’s priority return (as defined in the hotel management agreement), and in the case of The Clancy, it is 82.6% of the owner’s priority return (as defined in the hotel management agreement), (ii) the RevPAR penetration index of the hotel during each such fiscal year is less than the revenue index threshold (as such terms are defined in the hotel management agreements) which range from 0.65 to 1.00 (this item is not applicable for The Ritz-Carlton Lake Tahoe), and (iii) the fact that the criteria set forth in (i) or (ii) is not the result of an extraordinary event or force majeure, any major renovation of the hotel adversely affecting a material portion of the income generating areas (or any major renovation with respect to The Notary Hotel, The Clancy, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Sarasota, and The Ritz-Carlton St.

Thomas), or any default by us under the hotel management agreement.

(i) operating profit for each such fiscal year is less than the applicable performance termination threshold (as defined in the hotel management agreement), which, (a) in the case of Marriott Seattle Waterfront is 9.5% of the approximate total investment in the hotel, (b) in the case of The Clancy is 82.6% of the owner’s priority return (as defined in the hotel management agreement), (c) in the case of The Notary Hotel is 85% of the owner’s priority return (as defined in the hotel management agreement), (d) in the case of The Ritz-Carlton St.

Thomas is $6,000,000, plus 85% of 10.25% of owner-funded capital expenditures incurred after November 20, 2019, (e) in the case of The Ritz-Carlton Sarasota is $6,000,000, (f) in the case of The Ritz-Carlton Lake Tahoe is $7,200,000 minus (b) (i) the annual amount of certain shared facilities expenses relating to offsite parcels that are deemed to gross operating expenses for a fiscal year, and (g) in the case of Dorado Beach, a Ritz-Carlton Reserve, it is 75% of the owner’s priority return (as defined in the hotel management agreement), (ii) the RevPAR penetration index of the hotel during each such fiscal year is less than the revenue index threshold (as such terms are defined in the hotel management agreements) which ranges from 0.65 to 1.80 (this item is currently being negotiated for Dorado Beach, a Ritz-Carlton Reserve), and (iii) the fact that the criteria set forth in (i) or (ii) is not the result of certain disruptive events, such force majeure, major renovation, or any default by us under the hotel management agreement.

The manager has a right to avoid a performance termination by paying to us the total amount by which the operating profit for each of the fiscal years in question was less than the performance termination threshold for such fiscal years, or in the case of The Notary Hotel and The Clancy, by waiving base management fees (and, with respect to The Ritz-Carlton St.

Thomas, certain royalty fees owed to Marriott Switzerland Licensing Company S.ar.L (St.

Kitts & Nevis Branch)) until such time as the total amount of waived base management fees equals the shortfall of operating profit for each of the fiscal years in question to the performance termination threshold for such fiscal years.

Kitts & Nevis Branch)) until such time as the total amount of waived base management fees

equals the shortfall of operating profit for each of the fiscal years in question to the performance termination threshold for such fiscal years.

Limitation on Termination Rights.

1 unchanged sentence

Assignment and Sale.

Each management agreement with Marriott (or its affiliates) contains restrictions on our ability to sell the applicable hotel property or engage in certain change of control actions if (i) we are in default under the hotel management agreement, (ii) the transferee is known to be of bad moral character or has been convicted of a felony or is in control of or is controlled by persons who have been convicted of felonies, (iii) the transferee does not (in the reasonable judgment of manager) have sufficient financial resources and liquidity to fulfill the owner’s obligations under the hotel management agreement, or (iv) the transferee has an ownership interest, either directly or indirectly, in a brand or group of hotels that competes with the manager or any affiliate thereof.

Each management agreement with Marriott (or its affiliates) contains restrictions on our ability to sell the applicable hotel property or engage in certain change of control actions if (i) we are in default under the hotel management agreement, (ii) the transferee is known to be of bad moral character or has been convicted of a felony or is in control of or is controlled by persons who have been convicted of felonies, (iii) the transferee does not (in the reasonable judgment of manager) have sufficient financial resources and liquidity to fulfill the owner’s obligations under the hotel management agreement, (iv) the transferee has an ownership interest, either directly or indirectly, in a brand or group of hotels that competes with the manager or any affiliate thereof, or (v) the transferee is a person designated by the U.S.

Department of Treasury’s Office of Foreign Assets Control or other governmental entity from to time as a “specially designated national or blocked person” or similar status, is a person described in Section 1 of U.S.

Executive Order 13224, or is a person otherwise identified by any government or legal authority as being someone with whom Marriott is prohibited from transacting business.

The management agreements with Marriott (or its affiliates) may have additional restrictions on our ability to sell the applicable hotel property or engage in certain change of control actions.

4 unchanged sentences

After notice of a proposed sale to the manager, we have a specified time period, ranging from 10 business days to 60 days, to negotiate an acceptable purchase and sale agreement.

If after such time period no agreement is signed, we are free to sell or lease the hotel to a third party, subject to certain conditions, such as providing notice of sale to the

manager (with certain details regarding the terms of sale).

If after such time period no agreement is signed, we are free to sell or lease the hotel to a third party, subject to certain conditions, such as providing notice of sale to the manager (with certain details regarding the terms of sale).

The manager then has a specified time period, ranging from 15 to 45 days, depending on our compliance with the assignment and sale provisions above, to either consent to such sale or not consent to such sale.

1 unchanged sentence

Thomas also requires that the sale must occur within 15 months after the manager’s 30-day negotiation period if the manager makes an offer acceptable to us pursuant to the manager’s right of first offer;

The Ritz-Carlton Sarasota management agreement requires that the sale must occur within 365 days after the manager’s receipt of our original notice pertaining to the manager’s right of first offer and The Notary Hotel and The Clancy management agreements require that the sale must occur within one year after the expiration of the right of first negotiation period) or the notice of sale is deemed void and we must provide a new notice to the manager.

the Ritz-Carlton Reserve Dorado Beach management agreements requires that the sale must occur within 18 months after the 30-day right of first negotiation period) or the notice of sale is deemed void and we must provide a new notice to the manager.

Hilton Management Agreements

6 unchanged sentences

Performance Termination.

Each of the management agreements with Hilton (or its affiliates) provide us with a right to terminate the hotel management agreement without the payment of a termination fee if the manager fails to achieve certain criteria relating to the performance of the applicable hotel.

criteria relating to the performance of the applicable hotel.

The performance period is measured with respect to any two consecutive fiscal years.

5 unchanged sentences

Early Termination for Casualty .

In the event the applicable hotel is substantially damaged by fire or other casualty such that it cannot be restored within 240 days, or in the event our lender doesn’t provide adequate insurance proceeds to restore the hotel, we may terminate the hotel management agreement.

If an applicable hotel is substantially damaged by fire or other casualty such that it cannot be restored within 240 days, or if our lender doesn’t provide adequate insurance proceeds to restore the hotel, we may terminate the hotel management agreement.

If we undertake to restore the hotel or if we are required to restore the hotel because it was not substantially damaged and fail to commence such repairs within 60 days of receiving sufficient insurance proceeds to complete such work, or fail to complete such repairs within 240 days of the casualty, the manager may terminate the agreement.

5 unchanged sentences

Assignment and Sale.

control actions (i) if such party has an ownership interest, either directly or indirectly, in a brand of hotels totaling at least 10 hotels and such brand competes with the manager or any affiliate thereof;

Each management agreement with Hilton (or its affiliates) provides that we cannot sell the applicable hotel to any unrelated third party, which includes the transfer of an equity interest, or engage in certain change of control actions (i) if such party has an ownership interest, either directly or indirectly, in a brand of hotels totaling at least 10 hotels and such brand competes with the manager or any affiliate thereof;

(ii) if such party is known to be of ill repute or an unsuitable business associate (per gaming industry regulations where the manager holds a gaming license);

6 unchanged sentences

If the manager declines to exercise its right to purchase or lease, the sale or lease must occur within 180 days at greater than 90% of the price or the notice of sale must be renewed to manager.

Four Seasons Management Agreement

The base term of our management agreement with Four Seasons was 20 years, expiring December 31, 2019.

It has been extended through December 31, 2039, and Four Seasons has two 20-year automatic extension options remaining, at the discretion of the manager.

Events of Default.

An “event of default” under the hotel management agreement with Four Seasons is generally defined to include the bankruptcy or insolvency of either party, the failure to make a payment under the hotel management agreement and failure to cure such non-payment after due notice, a breach by either party of any material covenants or obligations in the hotel management agreement which continues beyond the applicable notice and grace period.

Termination Upon Event of Default.

If an event of default occurs and continues beyond any applicable notice and cure periods set forth in the hotel management agreement, the non-defaulting party generally has, among other remedies, the option of terminating the applicable hotel management agreement upon written notice to the defaulting party.

Performance Termination.

The hotel management agreement with Four Seasons provides us with a right to terminate the hotel management agreement without the payment of a termination fee if the manager fails to achieve certain criteria relating to the performance of the applicable hotel.

The performance period is measured with respect to any two consecutive fiscal years.

The performance criteria are:

(i) the hotel’s RevPAR for such fiscal years is less than the RevPAR of the top three hotels (a) having substantially the same number of rooms as the Four Seasons Resort Scottsdale, (b) located in the Phoenix metropolitan area, (c) having substantially similar operating philosophy and components as the Four Seasons Resort Scottsdale, and (d) competing for substantially similar market segments as the Four Seasons Resort Scottsdale during the same fiscal years (ranked in terms of achieved room revenue);

and (ii) the gross operating profit for the Four Seasons Resort Scottsdale is less than 80% of the amount of budgeted gross operating profit.

Four Seasons has a right to avoid a performance termination by paying to us an amount equal to the amount by which the Four Seasons Resort Scottsdale failed to achieve 80% of budgeted gross operating profit for either or both of the fiscal years during the test period, but if Four Seasons pays such amount with respect to only one fiscal year of the applicable test period, the other fiscal year in the test period and the fiscal year immediately following the applicable test period will be deemed to constitute the next test period.

Four Seasons may not exercise its cure right twice during each 20-year extension term.

Notwithstanding the foregoing, we will not have the right to terminate this agreement if during either fiscal year during an applicable test period, one or more of the following events occurs and, in their totality, after giving effect to proceeds received from any applicable business interruption insurance, they adversely affect gross operating profit or RevPAR:

casualty, condemnation, a force majeure event, a capital refurbishing program affecting 20% or more of the Four Seasons Resort Scottsdale.

Early Termination for Casualty.

If the Four Seasons Resort Scottsdale is damaged by fire or other casualty and the cost to repair, rebuild, or replace the hotel that is not covered by insurance would exceed 20% of the replacement cost of the hotel, then we may terminate the hotel management agreement.

We may also terminate the hotel management agreement if the casualty occurs in the last five years of the last extension term and the cost to repair, rebuild, or replace the hotel is estimated to exceed 20% of the replacement cost of the hotel.

Operator may have the right to reinstate the hotel management agreement if Owner commences the repair, rebuilding, or replacement of the hotel within five years after the termination of the hotel management agreement as a result of a fire or other casualty.

Early Termination for Condemnation.

If all or substantially all of the Four Seasons Resort Scottsdale is taken in any condemnation or similar proceeding which, in ours and Four Season’s opinion, makes it imprudent or unreasonable to continue to operate the remaining portion of the hotel in accordance with the hotel management agreement, the hotel management agreement shall terminate.

Assignment and Sale.

The hotel management agreement with Four Seasons provides that we cannot, without Four Seasons’ prior written consent, sell, assign, transfer, or otherwise dispose of the Four Seasons Resort Scottsdale, which includes the transfer of an equity interest, or engage in certain change of control actions, if the buyer, assignee, transferee, or other recipient (i) is, or is an affiliate of, an individual or entity (either on its own or in conjunction with its affiliates) that has as a primary business (a) the operation and management of hotels or resorts, (b) the ownership and operation and management of hotels and resorts, or (c) the ownership of hotels or resorts on an active basis (as distinguished from the ownership of hotels or resorts on a passive basis) and can be foreseen to be a competitor of Four Season or any of its affiliates in the operation and management of hotels or resorts;

(ii) does not have adequate financial capacity to perform its obligations under hotel management agreement;

(iii) is of ill repute;

or (iv) is in any other manner an individual or entity with whom or with which a prudent business person would not with to associate in a commercial venture.

Accor Management Agreement

1 unchanged sentence

The material terms of the Accor management agreement are summarized as follows:

The initial term of the management agreement expires on December 31, 2030 and automatically renews for three consecutive 10-year renewal terms, unless the manager terminates the agreement by written notice at least 180 days prior to the expiration of the then-current term.

The initial term of the Accor management agreement expires on December 31, 2030 and automatically renews for three consecutive 10-year renewal terms, unless the manager terminates the agreement by written notice at least 180 days prior to the expiration of the then-current term.

Events of Default.

16 unchanged sentences

If we fail to complete the restoration within two years after the date of the casualty, then for so long as such failure continues, the manager may terminate the Accor management agreement.

If we or the manager terminate the management agreement because of a casualty, or if we have not restored the hotel and desire to lease or sell it, we must first offer to sell the hotel to the manager.

If we or the manager terminate the Accor management agreement because of a casualty, or if we have not restored the hotel and desire to lease or sell it, we must first offer to sell the hotel to the manager.

If we repair, rebuild or replace the premises within five years, the manager may reinstate the Accor management agreement.

11 unchanged sentences

Early Termination for Casualty.

In the event the applicable hotel is substantially damaged by fire or other casualty, and if, in connection with any casualty, the cost of restoring the hotel equals or exceeds 25% of the replacement cost of the hotel in the case that the casualty is covered by insurance, or 10% of the replacement cost of the hotel in the case that the casualty is not covered by insurance, then we may elect, by providing notice to Hyatt within 90 days of the occurrence of the casualty to not restore the hotel and to terminate the agreement.

If the applicable hotel is substantially damaged by fire or other casualty, and if, in connection with any casualty, the cost of restoring the hotel equals or exceeds 25% of the replacement cost of the hotel in the case that the casualty is covered by insurance, or 10% of the replacement cost of the hotel in the case that the casualty is not covered by insurance, then we may elect, by providing notice to Hyatt within 90 days of the occurrence of the casualty to not restore the hotel and to terminate the agreement.

Early Termination for Eminent Domain.

10 unchanged sentences

In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, we amended and restated the original master hotel management agreement to provide only for hotel management services to be provided to our TRS lessees by Remington Lodging by entering into the Amended and Restated Hotel Master Management Agreement dated as of August 8, 2018, which agreement we refer to below as the “master hotel management agreement.” In connection with Ashford Inc.’s acquisition of the hotel management business of Remington Lodging on November 6, 2019, Remington Hotels became a subsidiary of Ashford Inc., and the master hotel management agreement between Remington Hotels and us remains in effect.

Pursuant to the master hotel management agreement, Remington Hotels currently manages the

Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr.

Pursuant to the master hotel management agreement, Remington Hotels currently manages the Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr.

C Beverly Hills Hotel.

13 unchanged sentences

• 3% of the gross revenues associated with that hotel for the related month.

The incentive management fee, if any, for each hotel will be due annually in arrears within 90 days of the end of the fiscal year and will be equal to the lesser of (i) 1% of gross revenues and (ii) the amount by which the actual house profit (gross operating profit of the applicable hotel before deducting management fees or franchise fees) exceeds the target house profit as set forth in the annual operating budget approved for the applicable fiscal year, except with respect to hotels where Remington Hotels takes over management upon our acquisition, in which case, for the first five years, the incentive management fee to be paid to Remington Hotels, if any, is the amount by which the hotel’s actual house profit exceeds the projected house profit for such calendar year as set forth in our acquisition pro forma.

set forth in the annual operating budget approved for the applicable fiscal year, except with respect to hotels where Remington Hotels takes over management upon our acquisition, in which case, for the first five years, the incentive management fee to be paid to Remington Hotels, if any, is the amount by which the hotel’s actual house profit exceeds the projected house profit for such calendar year as set forth in our acquisition pro forma.

If, however, based on actual operations and revised forecasts from time to time, it is reasonably anticipated that the incentive fee is reasonably expected to be earned, the TRS lessee will consider payment of the incentive fee pro rata on a quarterly basis.

5 unchanged sentences

• for the convenience of our TRS lessee;

• in the event of a casualty to, condemnation of, or force majeure involving a hotel;

• a casualty to, condemnation of, or force majeure involving a hotel;

• upon a default by Remington Hotels or us that is not cured prior to the expiration of any applicable cure periods.

1 unchanged sentence

We will be obligated to pay termination fees in the circumstances described below, provided that Remington Hotels is not then in default, subject to certain cure and grace periods:

the management fee (both base fees and incentive fees) estimated to be payable to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget for the balance of the first year of the term.

If any hotel subject to the master hotel management agreement is sold during the first 12 months of the date such hotel becomes subject to the master hotel management agreement, our TRS lessee may terminate the master hotel management agreement with respect to such sold hotel, provided that it pays to Remington Hotels an amount equal to the management fee (both base fees and incentive fees) estimated to be payable to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget for the balance of the first year of the term.

If any hotel subject to the master hotel management agreement is sold at any time after the first year of the term and the TRS lessee terminates the master hotel management agreement with respect to such hotel, our TRS lessee will have no obligation to pay any termination fees.

2 unchanged sentences

• Condemnation or Force Majeure.

In the event of a condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master hotel management agreement terminates as to those hotels.

If there is a condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master hotel management agreement terminates as to those hotels.

• Failure to Satisfy Performance Test.

2 unchanged sentences

Upon a performance test failure, the TRS lessee must give Remington Hotels two years to cure.

If, after the first year, the performance test failure has not been cured, then the TRS lessee may, in order not to waive any such failure, require Remington Hotels to engage a consultant with significant hotel lodging experience reasonably acceptable to both Remington Hotels and the TRS lessee, to make a determination as to whether or not another management company could manage the hotel in a materially more efficient manner.

materially more efficient manner.

If the consultant’s determination is in the affirmative, then Remington Hotels must engage such consultant to assist with the cure of such performance failure for the second year of the cure period after that failure.

10 unchanged sentences

The cost of all such routine maintenance, repairs and alterations will be paid by the TRS lessee.

All non-routine repairs and maintenance, either to a hotel or its fixtures,

furniture and equipment pursuant to the capital improvement budget described below, will be managed by Premier pursuant to the master project management agreement.

All non-routine repairs and maintenance, either to a hotel or its fixtures, furniture and equipment pursuant to the capital improvement budget described below, will be managed by Premier pursuant to the master project management agreement.

Remington Hotels must coordinate with the TRS lessee the procurement and maintenance of all workers’ compensation, employer’s liability, and other appropriate and customary insurance related to its operations as a property manager, the cost of which is the responsibility of the TRS lessee.

4 unchanged sentences

Monty or Archie Bennett, Jr.

(including step children) and spouses.

(including stepchildren) and spouses.

“Controlled” means (i) the possession of a majority of the capital stock (or ownership interest) and voting power of such affiliate, directly or indirectly, or (ii) the power to direct or cause the direction of the management and policies of such affiliate in the capacity of chief executive officer, president, chairman, or other similar capacity where they are actively engaged or involved in providing such direction or control and spend a substantial amount of time managing such affiliate.

3 unchanged sentences

If the lease relating to such damaged hotel is terminated pursuant to the terms of the lease, the TRS lessee has the right to terminate the master hotel management agreement with respect to such damaged hotel upon 60 days’ written notice.

In the event of a termination, neither the TRS lessee nor Remington Hotels will have any further liabilities or obligations under the master hotel management agreement with respect to such damaged hotel, except that we may be obligated to pay to Remington Hotels a termination fee, as described above.

Upon termination, neither the TRS lessee nor Remington Hotels will have any further liabilities or obligations under the master hotel management agreement with respect to such damaged hotel, except that we may be obligated to pay to Remington Hotels a termination fee, as described above.

If the hotel management agreement remains in effect with respect to such damaged hotel, and the damage does not result in a reduction of gross revenues at the hotel, the TRS lessee’s obligation to pay management fees will be unabated.

2 unchanged sentences

If all or substantially all of a hotel is subject to a total condemnation or a partial taking that prevents use of the property as a hotel, the master hotel management agreement, with respect to such hotel, will terminate, subject to the requirements of the applicable lease.

In the event of termination, neither the TRS lessee nor Remington Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel.

Upon termination, neither the TRS lessee nor Remington

Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel.

If any partial taking of a property does not make it unreasonable to continue to operate the hotel, there is no right to terminate the master hotel management agreement.

If there is an event of force majeure or any other cause beyond the control of Remington Hotels that directly involves a hotel and has a significant adverse effect upon the continued operations of that hotel, then the master hotel management agreement may be terminated by the TRS lessee.

In the event of such a termination, neither the TRS lessee nor Remington Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel.

Upon termination, neither the TRS lessee nor Remington Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel.

Annual Operating Budget.

The master hotel management agreement provides that not less than 45 days prior to the beginning of each fiscal year during the term of the master hotel management agreement, Remington Hotels will submit to the TRS lessee for each of the hotels, an annual operating budget setting forth in detail an estimated profit and loss statement for each of the next 12 months (or for the balance of the fiscal year in the event of a partial first fiscal year), including a schedule of hotel room rentals and other rentals and a marketing and business plan for each of the hotels.

The master hotel management agreement provides that not less than 45 days prior to the beginning of each fiscal year during the term of the master hotel management agreement, Remington Hotels will submit to the TRS lessee for each of the hotels, an annual operating budget setting forth in detail an estimated profit and loss statement for each of the next 12 months (or for the balance of the fiscal year or a partial first fiscal year), including a schedule of hotel room rentals and other rentals and a marketing and business plan for each of the hotels.

The budget is subject to the TRS lessee approval, which may not be unreasonably withheld.

5 unchanged sentences

Remington Hotels has agreed to indemnify the TRS lessee against all damages not covered by insurance that arise from:

(i) the fraud, willful misconduct or gross negligence of Remington Hotels subject to certain

(i) the fraud, willful misconduct or gross negligence of Remington Hotels subject to certain limitations;

(ii) infringement by Remington Hotels of any third party’s intellectual property rights;

16 unchanged sentences

If an event of default occurs and continues beyond any grace period, the non-defaulting party will have the option of terminating the master hotel management agreement, on 30 days’ notice to the other party.

To minimize conflicts between us and Remington Hotels on matters arising under the master hotel management agreement, the Company’s Corporate Governance Guidelines provide that any waiver, consent, approval, modification, enforcement matters or elections which the Company may make pursuant to the terms of the master hotel management agreement shall be within the exclusive discretion and control of a majority of the independent members of the board of directors (or higher vote thresholds specifically set forth in such agreements).

thresholds specifically set forth in such agreements).

In addition, our board of directors has established a Related Party Transactions Committee comprised solely of independent members of our board of directors to review all related party transactions that involve conflicts.

21 unchanged sentences

• for the convenience of our TRS lessee;

• in the event of a casualty to, condemnation of, or force majeure involving a hotel;

• a casualty to, condemnation of, or force majeure involving a hotel;

• upon a default by Premier or us that is not cured prior to the expiration of any applicable cure periods.

3 unchanged sentences

• Casualty, Condemnation or Force Majeure.

In the event of a casualty with respect to, condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master project management agreement terminates as to those hotels.

If there is a casualty with respect to, condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master project management agreement terminates as to those hotels.

• For Convenience.

8 unchanged sentences

Monty or Archie Bennett, Jr.

(including step children) and spouses.

(including stepchildren) and spouses.

3 unchanged sentences

If the lease relating to such damaged hotel is terminated pursuant to the terms of the lease, the TRS lessee has the right to terminate the master project management agreement with respect to such damaged hotel upon 60 days’ written notice.

In the event of a termination, neither the TRS lessee nor Premier will have any further liabilities or obligations under the master project management agreement with respect to such damaged hotel.

Upon termination, neither the TRS lessee nor Premier will have any further liabilities or obligations under the master project management agreement with respect to such damaged hotel.

Condemnation of a Property or Force Majeure.

If all or substantially all of a hotel is subject to a total condemnation or a partial taking that prevents use of the property as a hotel, the master project management agreement, with respect to such hotel, will terminate, subject to the requirements of the applicable lease.

In the event of termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel.

Upon termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel.

If any partial taking of a property does not make it unreasonable to continue to operate the hotel, there is no right to terminate the master project management agreement.

If there is an event of force majeure or any other cause beyond the control of Premier that directly involves a hotel and has a significant adverse effect upon the continued operations of that hotel, then the master project management agreement may be terminated by the TRS lessee.

In the event of such a termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel.

Upon termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel.

Indemnity Provisions.

2 unchanged sentences

(ii) infringement by Premier of any third party’s intellectual property rights;

(iii) the knowing or reckless placing, discharge, leakage, use or storage of hazardous materials in violation of applicable environmental laws on or in any of our hotels by Premier;

(iii) the knowing or reckless placing, discharge, leakage, use or storage of hazardous materials in

violation of applicable environmental laws on or in any of our hotels by Premier;

or (iv) the breach by Premier of the master project management agreement, including action taken by Premier beyond the scope of its authority under the master project management agreement, which is not cured.

9 unchanged sentences

If an event of default occurs and continues beyond any grace period, the non-defaulting party will have the option of terminating the master project management agreement, on 30 days’ notice to the other party.

To minimize conflicts between us and Premier on matters arising under the master project management agreement, the Company’s Corporate Governance Guidelines provide that any waiver, consent, approval, modification, enforcement matters or elections which the Company may make pursuant to the terms of the master project management agreement shall be within the exclusive discretion and control of a majority of the independent members of the board of directors (or higher vote thresholds

specifically set forth in such agreements).

14 unchanged sentences

Modification of Investment Guidelines.

In the event that we materially modify our initial investment guidelines without the written consent of Remington Hotels, which consent may be withheld at its sole and absolute discretion, and may further be subject to the consent of Ashford Trust parties, the Remington Hotels parties will have no obligation to present or offer us investment opportunities at any time thereafter.

If we materially modify our initial investment guidelines without the written consent of Remington Hotels, which consent may be withheld at its sole and absolute discretion, and may further be subject to the consent of Ashford Trust parties, the Remington Hotels parties will have no obligation to present or offer us investment opportunities at any time thereafter.

Instead, the Remington Hotels parties, subject to the superior rights of the Ashford Trust parties or any other party with which the Remington Hotels parties may have an existing agreement, shall use their reasonable discretion to determine how to allocate investment opportunities it identifies.

In the event we materially modify our investment guidelines without the written consent of Remington Hotels, the Ashford Trust parties will have superior rights to investment opportunities identified by the Remington Hotels parties, and we will no longer retain preferential treatment to investment opportunities identified by the Remington Hotels parties.

If we materially modify our investment guidelines without the written consent of Remington Hotels, the Ashford Trust parties will have superior rights to investment opportunities identified by the Remington Hotels parties, and we will no longer retain preferential treatment to investment opportunities identified by the Remington Hotels parties.

A material modification for this purpose means any modification of our initial investment guidelines to be competitive with Ashford Trust’s investment guidelines.

42 unchanged sentences

Archie Bennett, Jr.

Bennett (including step children) and spouses;

Bennett (including stepchildren) and spouses;

• we experience a change in control and terminate the master hotel management agreement between us and Remington Hotels with respect to all hotels and have paid a termination fee equal to the product of (i) 65% of the aggregate management fees budgeted in the annual operating budget applied to the hotels for the full current fiscal year in which such termination is to occur for such hotels (both base fees and incentive fees, but in no event less than the base fees and incentive fees for the preceding full fiscal year) and (ii) nine;

8 unchanged sentences

Premier Project Management MEA

In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, we entered into the Mutual Exclusivity Agreement dated as of August 8, 2018 with Braemar OP and Premier, which agreement we refer to below as the “project management MEA,” pursuant to which Premier gave us a first right of refusal to purchase any lodging-related investments identified by Premier and any of its affiliates that met our initial investment criteria, and we agreed to engage Premier to provide project management for hotels we acquired or invested in, to the extent that we had the right or controlled the right to direct such matters.

related investments identified by Premier and any of its affiliates that met our initial investment criteria, and we agreed to engage Premier to provide project management for hotels we acquired or invested in, to the extent that we had the right or controlled the right to direct such matters.

The initial term of the project management MEA is 10 years from November 19, 2013.

4 unchanged sentences

Modification of Investment Guidelines.

In the event that we materially modify our initial investment guidelines without the written consent of Premier, which consent may be withheld at its sole and absolute discretion, Premier will have no obligation to present or offer us investment opportunities at any time thereafter pursuant to the project management MEA.

If we materially modify our initial investment guidelines without the written consent of Premier, which consent may be withheld at its sole and absolute discretion, Premier will have no obligation to present or offer us investment opportunities at any time thereafter pursuant to the project management MEA.

Instead, Premier shall allocate investment opportunities it identifies pursuant to the terms of our advisory agreement.

3 unchanged sentences

Bennett), including opportunities to buy hotel properties, to buy land and build hotels, or to otherwise invest in hotel properties that satisfy our initial investment guidelines and are not considered excluded transactions pursuant to the project management MEA.

If investment opportunities are identified and are subject to the project management MEA, and we have not materially modified our initial investment

guidelines, then Premier and its affiliates, as the case may be, will not pursue those opportunities (except as described below) and will give us a written notice and description of the investment opportunity, and we will have 10 business days to either accept or reject the investment opportunity.

If investment opportunities are identified and are subject to the project management MEA, and we have not materially modified our initial investment guidelines, then Premier and its affiliates, as the case may be, will not pursue those opportunities (except as described below) and will give us a written notice and description of the investment opportunity, and we will have 10 business days to either accept or reject the investment opportunity.

If we reject the opportunity, Premier may then pursue such investment opportunity, on materially the same terms and conditions as offered to us.

10 unchanged sentences

• With respect to Premier, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Premier as the manager or developer based on their determination, in their reasonable business judgment, that special circumstances exist such that it would be in our best interest not to engage Premier with respect to the particular hotel.

• With respect to Premier, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Premier as the manager or developer because they have determined, in their reasonable business judgment, that another manager or developer could perform the project management, project related services or development duties materially better than Premier for the particular hotel, based on Premier’s prior performance.

judgment, that another manager or developer could perform the project management, project related services or development duties materially better than Premier for the particular hotel, based on Premier’s prior performance.

• Existing hotel investments of Premier or its affiliates with any of their existing joint venture partners, investors or property owners.

24 unchanged sentences

Likewise, we have agreed to give Ashford Trust a right of first offer with respect to any properties that we acquire in a portfolio transaction, to the extent our board of directors determines it is appropriate to market and sell such assets and we control the disposition, provided such assets satisfy Ashford Trust’s investment guidelines.

Any such right of first offer granted to Ashford Trust will be subject to certain prior rights, if any, granted to the managers of the related properties or other third parties.

Any such right of first offer granted

to Ashford Trust will be subject to certain prior rights, if any, granted to the managers of the related properties or other third parties.

The right of first offer agreement has an initial term of 10 years and is subject to automatic one year renewal periods unless one party notifies the other at least 180 days prior to the expiration of the current term that it does not intend to renew the agreement.

44 unchanged sentences

If the cost of restoration exceeds the amount of insurance proceeds, we will contribute any excess amounts necessary to complete the restoration to the TRS lessee before requiring the work to begin.

In the event of damage or destruction not covered by insurance, our obligations, as well as those of the applicable TRS lessee, will be the same as in the case of inadequate insurance proceeds.

If there is damage or destruction not covered by insurance, our obligations, as well as those of the applicable TRS lessee, will be the same as in the case of inadequate insurance proceeds.

However, regardless of insurance coverage, if damage or destruction rendering the property unsuitable for its primary intended purpose occurs within 24 months of the end of the lease term, we may terminate the lease with 30 days’ notice.

31 unchanged sentences

If we breach any of the leases, we will have 30 days from the time we receive written notice of the breach from the TRS lessee to cure the breach.

This cure period may be extended in the event of certain specified, unavoidable delays.

This cure period may be extended or certain specified, unavoidable delays.

Ground Leases

8 unchanged sentences

Percentage rent is determined from a percentage of room and banquet rental revenue, food and beverage sales, alcohol sales, lobby, gift shop and coin operated machine and telephone sales and other authorized uses.

Percentage rent is adjusted at least

six months prior to the end of (December 31, 2027) and thereafter at least six months prior to each 10th year by mutual agreement to provide fair rental to landlord.

Percentage rent is adjusted at least six months prior to the end of (December 31, 2027) and thereafter at least six months prior to each 10th year by mutual agreement to provide fair rental to landlord.

The lease may be assigned with the landlord’s prior written consent.

34 unchanged sentences

We have selected policy specifications and insured limits which we believe to be appropriate given the relative risk of loss, the cost of the coverage and industry practice.

We do not carry insurance for generally uninsured losses, including, but not limited to losses caused by riots, global pandemics war or acts of God as well as certain types coverages previously available under policies set forth above (for example, communicable disease, abuse & molestation coverages previously available under general liability policies).

We do not carry insurance for generally uninsured losses, including, but not limited to losses caused by riots, global pandemics war or acts of God as well as certain types of coverages previously available under policies set forth above (for example, communicable disease, abuse & molestation coverages previously available under general liability policies).

In the opinion of our management, our hotels are adequately insured.

4 unchanged sentences

Our principal competitors include other hotel operating companies, ownership companies and national and international hotel brands.

We face increased competition from providers of less expensive accommodations, such as select service hotels or independent owner-managed hotels, during periods of economic downturn when leisure and business travelers become more sensitive to room rates.

We face increased competition from providers of less expensive accommodations, such as select service hotels or

independent owner-managed hotels, during periods of economic downturn when leisure and business travelers become more sensitive to room rates.

We also experience competition from alternative types of accommodations such as home sharing companies.

12 unchanged sentences

This seasonality pattern can cause fluctuations in our quarterly revenue.

Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as the COVID-19 pandemic and government-issued travel restrictions in response, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel.

to utilize cash on hand, cash generated through borrowings and issuances of common or preferred stock to fund required distributions.

Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as pandemics, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel.

To the extent that cash flows from operations are insufficient during any quarter to enable us to make quarterly distributions to maintain our REIT status due to temporary or seasonal fluctuations in lease revenue, we expect to utilize cash on hand, cash generated through borrowings and issuances of common or preferred stock to fund required distributions.

However, we cannot make any assurances that we will make distributions in the future.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business