Item 1.01 Entry into a Material Definitive Agreement.
On January 22, 2021, Ashford Hospitality Trust, Inc. (the "Company") entered
into a Standby Equity Distribution Agreement (the "SEDA") with YA II PN, Ltd.,
("YA"), pursuant to which the Company will be able to sell up to 13,718,319
shares of its common stock (the "Commitment Amount") at the Company's request
any time during the commitment period commencing on January 22, 2021, and
terminating on the earliest of (i) the first day of the month next following the
36-month anniversary of the SEDA or (ii) the date on which YA shall have made
payment of Advances (as defined in the SEDA) pursuant to the SEDA for Common
Shares equal to the Commitment Amount. The shares would be purchased at 95% of
the Market Price (as defined below) and would be subject to certain limitations,
including that YA could not purchase any shares that would result in it owning
more than 4.99% of the Company's common stock. "Market Price" shall mean the
lowest daily VWAP (as defined below) of the Company's common stock during the 5
consecutive trading days commencing on the trading day following the date the
Company submits an advance notice to YA. "VWAP" means, for any trading day, the
daily volume weighted average price of the Company's common stock for such date
on the principal market as reported by Bloomberg L.P. during regular trading
hours.
Pursuant to the SEDA, we are required to register all shares which YA may
acquire and the Company shall file with the Securities and Exchange Commission a
registration statement on Form S-11, registering all of the shares of the
Company's common stock that are to be offered and sold to YA pursuant to the
SEDA.
Pursuant to the SEDA, we currently intend to use the net proceeds from any sale
of the shares for working capital purposes, including the repayment of
outstanding debt. There are no other restrictions on future financing
transactions. The SEDA does not contain any right of first refusal,
participation rights, penalties or liquidated damages. We are not required to
pay any additional amounts to reimburse or otherwise compensate YA in connection
with the transaction except for a $10,000 structuring fee.
YA has agreed that neither it nor any of its affiliates shall engage in any
short-selling or hedging of the Company's common stock, subject to certain
limited exceptions.
The foregoing is a summary description of certain terms of the SEDA. For a full
description of all terms, please refer to the copy of the SEDA that is filed
herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference. All readers are encouraged to read the entire text of the
SEDA.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Standby Equity Distribution Agreement, dated as of January 22, 2021,
by and between Ashford Hospitality Trust, Inc. and YA II PN, Ltd.
104 Cover Page Interactive Data File (formatted in Inline XBRL and
contained in Exhibit 101).
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