Item 1.01
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Entry into a Material Definitive Agreement.
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On
September 9, 2021, Ashford Hospitality Trust, Inc. (the “Company”) and M3A LP (“M3A”),
entered into a common stock purchase agreement (the “Purchase Agreement”), which provides that subject to the terms
and conditions set forth therein, the Company may sell to M3A up to 6,040,888 shares of common stock, par value $0.01 per share,
of the Company (the “Common Stock”), from time to time during the term of the Purchase Agreement.
Additionally, on
September 9, 2021, the Company and M3A entered into a registration rights agreement (the “Registration Rights Agreement”),
pursuant to which the Company agreed to file a registration statement with the Securities and Exchange Commission (“SEC”)
covering the resale of shares of Common Stock that are issued to M3A under the Purchase Agreement.
Under the terms and
subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company has the right, but not the
obligation, to sell to M3A, and M3A is obligated to purchase, up to 6,040,888 shares of Common Stock. Such sales of Common Stock by
the Company, if any, will be subject to certain limitations as set forth in the Purchase Agreement, and may occur from time to time,
at the Company’s sole discretion, over a 36-month period commencing on the date that all of the conditions to the
Company’s right to commence such sales are satisfied, including that the registration statement referred to above is declared
effective by the SEC and a final form of the prospectus included therein is filed with the SEC (the “Commencement
Date”). M3A has no right to require the Company to sell any Common Stock to M3A, but M3A is obligated to make
purchases as the Company directs, subject to satisfaction of the conditions set forth in the Purchase Agreement.
Under the Purchase
Agreement, the Company may, at its discretion, from time to time from and after the Commencement Date, direct M3A to purchase (a
“VWAP Purchase”) shares of Common Stock on any trading day on which the closing sale price of the Common Stock is not
below $1.00 per share on the New York Stock Exchange (the “NYSE”), not to exceed 20% of the aggregate shares of our
Common Stock traded on the NYSE. The closing sale price referred to above will be adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction occurring after the date of the Purchase Agreement.
The purchase price
per share for the shares of Common Stock that may be sold to M3A in a VWAP Purchase will be based on the volume weighted average
price as computed under the Purchase Agreement. There is no upper limit on the price per share that M3A may be obligated to pay for
the Common Stock in the VWAP Purchases we elect to make under the Purchase Agreement.
Under applicable
rules of the NYSE, in no event may the Company issue or sell to M3A under the Purchase Agreement shares of Common Stock in excess
of 6,040,888 shares, which maximum number of shares is equal to 19.99% of the 30,219,551 shares of Common Stock outstanding immediately
prior to the execution of the Purchase Agreement (the “Exchange Cap”).
The Purchase Agreement
also prohibits the Company from directing M3A to purchase any shares of Common Stock if those shares, when aggregated with all other
shares of Common Stock then beneficially owned by M3A and its affiliates, would result in M3A having beneficial ownership of
more than 4.99% of the outstanding shares of Common Stock.
The Purchase Agreement
contains customary representations, warranties, covenants, indemnification and termination provisions. M3A has covenanted not to
cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Common Stock. There are no limitations
on use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s
ability to enter into additional “variable rate transactions” or substantially similar transactions as the transactions contemplated
by the Purchase Agreement, subject to certain exceptions, during certain periods beginning prior to the applicable purchase dates for
any VWAP Purchase ending after the dates on which such purchases are fully settled, as set forth in the Purchase Agreement), rights of
first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated
by the Company at any time, at the Company’s sole discretion, without any cost or penalty, upon 10 trading days’ prior written
notice to M3A. Neither the Company nor M3A may assign or transfer its rights and obligations under the Purchase Agreement, and
no provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by the parties.
The net proceeds
under the Purchase Agreement to the Company will depend on the frequency of sales and the number of shares sold to M3A and prices
at which the Company sells shares to M3A. The Company expects that any net proceeds received by the Company from such sales to M3A
will be used for working capital and general corporate purposes. The Company believes that it is prudent capital management to have the
flexibility to sell Common Stock pursuant to the Purchase Agreement, subject to market conditions.
The foregoing descriptions
of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the Purchase
Agreement and the Registration Rights Agreement, each of which is attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and
each of which is incorporated herein by reference.
The Purchase Agreement
and Registration Rights Agreement contain customary representations and warranties, covenants and indemnification provisions that the
parties made to, and solely for the benefit of, each other in the context of all of the terms and conditions of such agreements and in
the context of the specific relationship between the parties thereto. The provisions of the Purchase Agreement and Registration Rights
Agreement, including any representations and warranties contained therein, are not for the benefit of any party other than the parties
thereto and are not intended as documents for investors and the public to obtain factual information about the current state of affairs
of the parties thereto. Rather, investors and the public should look to other disclosures contained in our annual, quarterly and current
reports we may file with the SEC.
This Current Report
on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any shares of Common Stock, nor shall there be
any sale of shares of Common Stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state or other jurisdiction.