Braemar Hotels & Resorts Inc., Independent Members of the Board of Directors
Ms. Stefani Danielle Carter, Lead Director
Ms. Mary Candace Evans
Ms. Rebecca Musser
Ms. Rebeca Odino-Johnson
Mr. Matthew D. Rinaldi
Ms. Kellie Sirna

Re: Your Duty to Protect the Interests of Braemar’s Public Shareholders

Independent Members of the Board of Directors:

I am writing to you again on behalf of Al Shams Investments Limited, which holds approximately 9.5% of the outstanding shares of Braemar Hotels & Resorts Inc. (“Braemar” or the “Company”), making it the Company’s largest shareholder.

In August 2025, Braemar announced that its Board of Directors (the “Board”) had determined that it was in the best interests of the Company and its shareholders to pursue a sale of the Company. A few months later, in February 2026, the Company seemingly abandoned this strategy, disclosing that the Board had shifted its focus to exploring sales of the Company’s hotel assets and had engaged real estate brokers to evaluate divestitures of individual hotel properties. Last week, the Board took what appears to be the first step of this process by approving the sale of Park Hyatt Beaver Creek.

In our view, continuing down this path and pursuing further individual hotel divestitures will be ruinous for Braemar’s public shareholders to whom you owe fiduciary duties.

As you are undoubtedly aware, the Company’s Advisory Agreement (the “Advisory Agreement”) with Ashford Hospitality Advisors LLC (together with Ashford, Inc. the “Advisor”) contains a so-called “termination provision” that could result in a payment to Ashford Inc. in excess of $480 million—a sum equaling nearly 2.4 times the Company’s current market capitalization. Importantly, the Advisory Agreement provides that, under some circumstances, selling even a handful of hotels (e.g., three hotels within a year if they represent over 20% of the Company’s gross asset value, or five hotels over three years if they exceed 30% of that value) could constitute a “Company Change of Control,” likely causing a constructive “termination”.1

Just as critical, once a “Company Change of Control” is triggered under the Advisory Agreement, the entire fee must be paid directly to the Advisor by the buyer of Braemar’s hotel assets before any proceeds from the sale or subsequent sales flow to the Company or its shareholders.2 In effect, the Advisor would immediately assume the position of a senior, super-priority creditor, entitled to receive the full termination payment dollar-for-dollar ahead of any other stakeholder, such that no proceeds from asset sales (including any subsequent dispositions) would be available to Braemar or its public shareholders unless and until the Advisor is paid in full. Minority asset sales of the kind the Board is undertaking—which are unlikely to require a shareholder vote or approval—could thus precipitate a massive transfer of value to the Advisor and its controlling shareholders, Archie and Monty Bennett, the latter of whom serves as the Chairman of Braemar, which we believe creates an obvious conflict of interest.

Given the potential half-billion-dollar windfall to the Chairman’s family, we believe the Company’s strategic review process is rife with potential and actual conflicts of interest. As independent directors and members of the Special Committee, you are duty-bound to protect public shareholders from disadvantageous strategies (such as piecemeal sales) and transactions. You must exercise heightened vigilance and prudent judgment to avoid the eminently foreseeable harm that would result from a “termination” of the Advisor’s agreement driven by these contemplated asset sales. Importantly, it is not enough for Braemar to achieve fair—or even at above-market—prices if the proceeds are effectively diverted to a springing creditor that would not otherwise benefit from the asset’s value or cash flow.

We believe many shareholders share our view and lack confidence that this Board can fulfill these complex duties or act with fidelity on behalf of public shareholders. The Board has three directors whom shareholders, by a majority of votes cast, have rejected multiple times.3 These directors include both the Chair and the Lead Director, the latter of whom has been thrice rejected by shareholders during her tenure. Yet, she remains on the Board and in a leadership role. The other incumbent directors have not fared much better: support for each of Braemar’s eight incumbent directors ranked in the bottom 5% of all directors elected in 2025 at Russell 3000 companies.4

In our view, these vote results reflect an unequivocal lack of shareholder trust and confidence in the Board’s independent oversight and prudential judgment and are a clear indication that the Board should defer any further major actions, including asset sales, until after the 2026 Annual Meeting. At that meeting, we intend to seek the election of new Board members that have legitimacy with shareholders and a mandate to act on their behalf. We urge you to pause any additional deal-making until shareholders have had a chance to elect a Board of their choosing.

Should you disregard this message—and your fiduciary obligations—and proceed with asset sales that benefit the Advisor and harm shareholders, you should expect to be held fully accountable. We will not hesitate to pursue legal action against the existing members of the Special Committee (and the advisors that aid and abet any breaches of their duties) and challenge any transaction that unjustly enriches the Advisor, as well as any payment of a termination fee. We anticipate that the pursuit of the Company’s rights by shareholders would involve a thorough review of the legality of the Advisory Agreement, including its termination provision, the deal process and rationale, the waterfall of proceeds and the conduct of all parties involved. We would not be surprised if such an investigation led to litigation and concomitant discovery demands involving all parties involved.

As the Company’s largest shareholder, we will not stand by idly and allow you, or the Advisor with your blessing, to overstep your mandate and extract value at shareholders’ expense. We urge you to act with dedication to shareholders and as a check against the considerable power and influence of the Advisor. If you wish to be relieved of these obligations, you should call the Annual Meeting and allow shareholders to replace you with fiduciaries who will not shirk from the challenge at hand.

Respectfully,
Al Shams Investments Limited

Source: https://www.sec.gov/Archives/edgar/data/1574085/000139834426008805/fp0098873-1_ex7.htm