Exhibit 10.1

 

AMENDMENT NO. 3
TO THE THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRAEMAR HOSPITALITY LIMITED PARTNERSHIP

 

December 4, 2019

 

This Amendment No. 3 to the Third Amended and Restated Agreement of Limited
Partnership of Braemar Hospitality Limited Partnership (this “Amendment”) is
made as of December 4, 2019, by Braemar OP General Partner LLC, a Delaware
limited liability company, as general partner (the “General Partner”) of Braemar
Hospitality Limited Partnership, a Delaware limited partnership (the
“Partnership”), pursuant to the authority granted to the General Partner in
Section 11.1(b) of the Third Amended and Restated Agreement of Limited
Partnership of Braemar Hospitality Limited Partnership, dated March 7, 2017, as
amended by Amendment No. 1 thereto dated as of April 23, 2018 and Amendment
No. 2 thereto dated November 20, 2018 (the “Partnership Agreement”), for the
purpose of issuing additional Partnership Units in the form of Preferred
Partnership Units. Capitalized terms used and not defined herein shall have the
meanings set forth in the Partnership Agreement.

 

WHEREAS, the Board of Directors (the “Board”) of Braemar Hotels & Resorts Inc.
(the “Company”) previously classified and designated 5,200,000 shares of 5.50%
Series B Cumulative Convertible Preferred Stock (the “Series B Preferred
Stock”), having the preferences, rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption as set forth in: (i) the “Articles Supplementary
Establishing and Fixing the Rights and Preferences of a Series of Preferred
Stock” filed by the Company with the State Department of Assessments and
Taxation of Maryland on December 4, 2015 (the “Series B Articles
Supplementary”); (ii) the Articles Supplementary filed and accepted for record
on April 27, 2016; and (iii) the Articles Supplementary filed and accepted for
record on March 3, 2017.

 

WHEREAS, the Board of the Company adopted resolutions on December 3, 2019
classifying and designating 1,900,000 shares of Preferred Stock, as defined in
the Articles of Amendment and Restatement of the Company (the “Charter”) as
additional shares of Series B Preferred Stock (the “Additional Series B
Preferred Stock”), having the preferences, rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption as set forth in the Series B Articles
Supplementary;

 

WHEREAS, the Board filed Articles Supplementary to the Charter with the State
Department of Assessments and Taxation of Maryland on December 4, 2019,
classifying the Additional Series B Preferred Stock, with such preferences,
rights, powers, restrictions, limitations as to distributions, qualifications
and terms and conditions of redemption as described in the Series B Articles
Supplementary, with the result that as of the date hereof, the Company has
authorized an aggregate of 7,100,000 shares of Series B Preferred Stock, all of
which constitute a single series of preferred stock having the terms set forth
in the Series B Articles Supplementary;

 

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WHEREAS, Section 11.1(b) of the Partnership Agreement permits the General
Partner to amend the Partnership Agreement without the approval of any other
Partner if such amendment is to create, issue or reflect the creation or
issuance of additional Partnership Interests;

 

WHEREAS, the General Partner has determined that, in connection with the
issuance of the Additional Series B Preferred Stock, it is necessary and
desirable to amend the Partnership Agreement to create additional Partnership
Units in the form of Preferred Partnership Units having designations,
preferences and other rights which are substantially the same as the economic
rights of the Series B Preferred Stock (the “Additional Series B Preferred
Partnership Units”); and

 

WHEREAS, the General Partner desires to so amend the Partnership Agreement as of
the date first set forth above.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement as
follows:

 

1.                                      Article I is amended to delete the
following existing defined term and replace it in its entirety as follows:

 

“Series B Articles Supplementary” shall mean the Articles Supplementary
Establishing and Fixing the Rights and Preferences of a Series of Preferred
Stock, designating the rights and preferences of the 5.50% Series B Cumulative
Preferred Stock, filed as part of the Company’s charter with the State
Department of Assessments and Taxation of Maryland, on December 4, 2015,
together with: (i) the Articles Supplementary Establishing Additional Shares of
Series B Preferred Stock, filed as part of the Company’s charter with the State
Department of Assessments and Taxation of Maryland, on April 27, 2016; (ii) the
Articles Supplementary Establishing Additional Shares of Series B Preferred
Stock, filed as part of the Company’s charter with the State Department of
Assessments and Taxation of Maryland, on March 3, 2017; and (iii) the Articles
Supplementary Establishing Additional Shares of Series B Preferred Stock, filed
as part of the Company’s charter with the State Department of Assessments and
Taxation of Maryland, on December 4, 2019.

 

2.                                      In accordance with Section 4.3 of the
Partnership Agreement, set forth in Exhibit G of the Partnership Agreement, as
amended and restated by Exhibit G hereto, are the terms and conditions of the
Series B Preferred Partnership Units which are hereby established and issued to
Braemar OP Limited Partner, LLC in consideration of its contribution to the
Partnership of the proceeds from the issuance and sale of the Series B Preferred
Stock by the Company. The Partnership Agreement is hereby amended to replace
Exhibit G thereto with the amended and restated Exhibit G to reflect the
issuance of the Additional Series B Preferred Partnership Units.

 

3.                                      Except as modified herein, all terms and
conditions of the Partnership Agreement shall remain in full force and effect,
which terms and conditions the General Partner hereby ratifies and confirms.

 

4.                                      This Amendment shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware,
without regard to conflicts of law.

 

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5.                                      If any provision of this Amendment is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.

 

[The remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date
first set forth above.

 

 

Braemar OP General Partner LLC,

 

a Delaware limited liability company, as General Partner of Braemar Hospitality
Limited Partnership

 

 

 

By:

/s/ Robert G. Haiman

 

 

Name:

Robert G. Haiman

 

 

Title:

Executive Vice President, General
Counsel and Secretary

 

[Amendment No. 3 to Third Amended and Restated LP Agreement of Braemar
Hospitality Limited Partnership]

 

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AMENDED AND RESTATED

 

EXHIBIT G

 

DESIGNATION OF TERMS AND CONDITIONS OF SERIES B PREFERRED PARTNERSHIP UNITS

 

A. Designation and Number.  A series of Preferred Partnership Units, designated
as Series B Preferred Partnership Units, is hereby established. The number of
authorized Series B Preferred Partnership Units shall be 7,100,000.

 

B. Rank.  The Series B Preferred Partnership Units, with respect to distribution
rights and rights upon the liquidation, winding-up or dissolution of the
Partnership, rank: (i) senior to all classes or series of the Common Partnership
Units and to all other equity securities issued by the Partnership other than
equity securities referred to in clauses (ii) and (iii); (ii) junior to all
equity securities whose terms specifically provide that those equity securities
rank senior to the Series B Preferred Partnership Units with respect to rights
to distributions or the distribution of the Partnership’s assets upon
liquidation, dissolution or winding up; and (iii) on parity with the Series D
Preferred Partnership Units and all other equity securities issued by the
Partnership whose terms provide that those equity securities rank on parity with
the Series B Preferred Partnership Units with respect to rights to distributions
or the distribution of the Partnership’s assets upon liquidation, dissolution or
winding up. The term “equity securities” does not include convertible debt
securities, which will rank senior to the Series B Preferred Partnership Units.

 

C. Maturity.  The Series B Preferred Partnership Units have no stated maturity
and will not be subject to any sinking fund or mandatory redemption. The
Series B Preferred Partnership Units will remain outstanding indefinitely unless
the Company redeems or otherwise repurchases the related shares of Series B REIT
Preferred Stock. The Partnership is not required to set aside funds to redeem
the Series B Preferred Partnership Units.

 

D. Distributions.

 

(i)                                     Holders of the Series B Preferred
Partnership Units are entitled to receive, when, as and if authorized by the
General Partner, out of funds legally available for the payment of
distributions, cumulative cash distributions at the rate of 5.50% per annum on
the $25.00 per Series B Preferred Partnership Unit liquidation preference
(equivalent to $1.375 per annum per Series B Preferred Partnership Unit).
Distributions on the Series B Preferred Partnership Units shall be cumulative
from the date of original issuance and shall be payable quarterly on the 15th
day of each January, April, July, October (each, a “distribution date”),
starting January 15, 2016; provided that if any distribution date is not a
Business Day, then the distribution which would otherwise have been payable on
that distribution date may be paid on the next succeeding Business Day, and no
interest, additional distributions or other sums will accrue on the amount so
payable for the period from and after that distribution date to that next
succeeding Business Day. Any distribution payable on the Series B Preferred
Partnership Units, including distributions payable for any partial distribution
period, will be computed on the basis of a 360-day year consisting of twelve
30-day months. Distributions will be payable to holders of record as they appear
in the Partnership’s

 

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records for the Series B Preferred Partnership Units at the close of business on
the applicable record date, which shall be, whether or not a Business Day, the
30th calendar day of the month preceding the next applicable distribution date
(each, a “Partnership Record Date”); provided that the Partnership Record Date
for the first distribution date scheduled for January 15, 2016 shall be
January 1, 2016.

 

(ii)                                  No distributions on Series B Preferred
Partnership Units shall be authorized by the General Partner or paid or set
apart for payment by the Partnership at any time when the authorization or
payment thereof would be unlawful.

 

(iii)                               Notwithstanding the foregoing, distributions
on the Series B Preferred Partnership Units will accrue whether or not there are
funds legally available for the payment of those distributions and whether or
not those distributions are authorized by the General Partner. No interest, or
sum in lieu of interest, will be payable in respect of any distribution or
payments on the Series B Preferred Partnership Units which may be in arrears,
and holders of the Series B Preferred Partnership Units will not be entitled to
any distributions in excess of full cumulative distributions described above.
Any distribution made on the Series B Preferred Partnership Units shall first be
credited against the earliest accumulated, accrued but unpaid distribution due
with respect to those Series B Preferred Partnership Units.

 

(iv)                              When distributions are not paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series B
Preferred Partnership Units and any other series of Preferred Partnership Units
that the Partnership may issue ranking on parity as to distributions with the
Series B Preferred Partnership Units, all distributions authorized by the
General Partner upon the Series B Preferred Partnership Units and any other
series of Preferred Partnership Units ranking on parity that the Partnership may
issue as to distributions with the Series B Preferred Partnership Units shall be
authorized by the General Partner pro rata in proportion to the respective
amounts of distributions accumulated, accrued and unpaid on the Series B
Preferred Partnership Units and accumulated, accrued and unpaid on such parity
Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Series B Preferred Partnership Units equal to the full
amount of accumulated, accrued and unpaid distributions have been or
contemporaneously are authorized by the General Partner and paid, or authorized
by the General Partner and a sum sufficient for the payment thereof set apart
for such payment for all past distribution periods, no distributions shall be
authorized by the General Partner or paid or set aside for payment by the
Partnership with respect to any class or series of parity Partnership Units.
Unless full cumulative distributions on the Series B Preferred Partnership Units
have been paid or authorized by the General Partner and set apart for payment
for all past distribution periods, no distributions (other than distributions
paid in Partnership Units junior in rank to the Series B Preferred Partnership
Units or options, warrants or rights to subscribe for or purchase such junior
Partnership Units) shall be authorized by the General Partner or paid or set
apart for payment by the Partnership with respect to any junior Partnership
Units, nor shall any junior Partnership Units or parity Partnership Units be
redeemed, purchased or otherwise acquired (except for purposes of an employee
benefit plan) for any consideration, or any monies be paid to or made available
for a sinking fund for the redemption of any junior Partnership Units or parity
Partnership Units (except by conversion or exchange for junior Partnership
Units, or options, warrants or rights to subscribe for or purchase junior
Partnership Units), nor shall any other cash or property be paid or distributed
to or for the benefit of holders of junior Partnership Units. Notwithstanding
the foregoing, the Partnership shall

 

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not be prohibited from (i) authorizing or paying or setting apart for payment
any distribution on any parity or junior Partnership Units or (ii) redeeming,
purchasing or otherwise acquiring any parity or junior Partnership Units, in
each case, if such authorization, payment, redemption, purchase or other
acquisition is necessary to maintain the Company’s qualification as a REIT.

 

(v)                                 No interest shall be payable in respect of
any distribution or payments on the Series B Preferred Partnership Units which
may be in arrears.

 

(vi)                              Whenever distributions on Series B Preferred
Partnership Units are in arrears for six or more quarterly distribution periods,
whether or not consecutive (a “Penalty Event”), the distribution rate shall be
increased by 200 basis points per annum (equivalent to $1.875 per annum per
Series B Preferred Partnership Unit) (as increased, the “Penalty Rate”). This
Penalty Rate shall remain in effect until all accumulated, accrued but unpaid
distributions on the Series B Preferred Partnership Units have been paid in
full, at which time the distribution rate shall revert to the rate of 5.50% of
the $25.00 per Series B Preferred Partnership Unit stated liquidation preference
per annum.

 

E. Liquidation Preference.

 

(i)                                     In the event of the Partnership’s
voluntary or involuntary liquidation, dissolution or winding up, the holders of
Series B Preferred Partnership Units will be entitled to be paid out of the
assets the Partnership has legally available for distribution to the Partners,
subject to the preferential rights of any class or series of the equity
securities the Partnership may issue ranking senior to the Series B Preferred
Partnership Units with respect to the distribution of assets upon liquidation,
dissolution or winding up, a liquidation preference of $25.00 per Series B
Preferred Partnership Unit, plus an amount equal to any accumulated, accrued and
unpaid distributions to, but not including, the date of final distribution to
such holders. Until the holders of the Series B Preferred Partnership Units have
been paid the liquidation preference in full, plus an amount equal to all
accumulated, accrued and unpaid distributions to, but not including, the date of
final distribution to such holders, no payment shall be made to any holder of
the Common Partnership Units or any other class or series of Partnership Units
the Partnership may issue that ranks junior to the Series B Preferred
Partnership Units upon the liquidation, dissolution or winding up of the
Partnership.

 

(ii)                                  In the event that, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the Partnership’s
available assets, or proceeds thereof, distributable among the holders of
Series B Preferred Partnership Units are insufficient to pay the amount of the
liquidating distributions on all outstanding Series B Preferred Partnership
Units and the corresponding amounts payable on all Partnership Units of other
classes or series of the equity securities that the Partnership may issue
ranking on parity with the Series B Preferred Partnership Units upon the
liquidation, dissolution or winding up of the Partnership, then the holders of
the Series B Preferred Partnership Units and all other such classes or series of
equity securities shall share ratably in any such distribution of assets or the
proceeds thereof in proportion to the full liquidating distributions or amounts
to which they would otherwise be respectively entitled.

 

(iii)                               After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series B
Preferred Partnership Units will have no right or claim to any of

 

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the Partnership’s remaining assets. The Partnership’s voluntary or involuntary
liquidation, dissolution or winding up shall not include the Partnership’s
consolidation or merger with or into one or more entities, a sale or transfer of
all or substantially all of the assets of the Partnership or a statutory
security exchange (although such events may give rise to the other rights as
described herein).

 

F. Redemption of Series B REIT Preferred Stock.  In connection with the
redemption by the Company of any shares of Series B REIT Preferred Stock in
accordance with the provisions of the Series B Articles Supplementary, the
Partnership shall provide cash to Braemar OP Limited Partner LLC for such
purpose which shall be equal to the redemption price (as set forth in the
Series B Articles Supplementary), plus all distributions accumulated and unpaid
to, but not including, the redemption date, and one Series B Preferred
Partnership Unit shall be concurrently redeemed with respect to each share of
Series B REIT Preferred Stock so redeemed by the Company. From and after the
applicable redemption date, the Series B Preferred Partnership Units so redeemed
shall no longer be outstanding and all rights hereunder, to distributions or
otherwise, with respect to such Series B Preferred Partnership Units shall
cease.

 

G. Conversion.

 

(i)                                     Conversion by the Company. In connection
with the conversion of any shares of Series B REIT Preferred Stock into shares
of REIT Common Shares in accordance with the provisions of the Series B Articles
Supplementary, the Partnership shall convert Series B Preferred Partnership
Units into Common Partnership Units and issue such Common Partnership Units to
Braemar OP Limited Partner LLC. The number of Common Partnership Units into
which the Series B Preferred Partnership Units are convertible shall be equal to
the number of REIT Common Shares into which the Series B REIT Preferred Stock is
then being converted, as set forth in the Series B Articles Supplementary. From
and after the date of such conversion (as determined under the Series B Articles
Supplementary), the Series B Preferred Partnership Units so converted shall no
longer be outstanding and all rights hereunder, to distributions or otherwise,
with respect to such Series B Preferred Partnership Units shall cease.

 

(ii)                                  Fractional Partnership Units. If, in
connection with a conversion by the Company of any shares of Series B REIT
Preferred Stock into shares of REIT Common Shares, the Company makes a cash
payment or payments with respect to fractional shares of REIT Common Shares, the
Partnership shall redeem a corresponding amount of Series B Preferred
Partnership Units in consideration of a payment equal to the aggregate cash
payment or payments made by the Company.

 

H. Restriction on Ownership.  Unless approved by the General Partner in its sole
discretion, the Series B Preferred Partnership Units shall be owned and held
solely by Braemar OP Limited Partner LLC. If the Series B Preferred Partnership
Units are allowed to be owned and held by a Person other than Braemar OP Limited
Partner LLC, the General Partner is authorized to amend this Exhibit G to the
extent the General Partner deems necessary or appropriate to allow such
ownership.

 

I. Allocations.  Allocations of the Partnership’s items of income, gain, loss
and deduction allocable with respect to Series B Preferred Partnership Units
outstanding from time to time shall

 

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be allocated pro rata among holders of such Series B Preferred Partnership Units
in accordance with Article V of the Partnership Agreement.

 

J. Voting Rights.  Except as required by applicable law, each holder of the
Series B Preferred Partnership Units, as such, shall have no voting rights.

 

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