THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”), dated as of March 8, 2019, effective as of March 8, 2019, by and among CONDOR HOSPITALITY LIMITED PARTNERSHIP , a Virginia   limited partnership (“ Borrower ”), the undersigned parties to this Amendment executing as “Guarantors” (hereinafter referred to individually as “ Guarantor ” and collectively as “ Guarantors ”), KEYBANK NATIONAL ASSOCIATION (“ KeyBank ”), THE HUNTINGTON NATIONAL BANK (“Huntington”), BMO HARRIS BANK N.A. (“ BMO ”; KeyBank, Huntington and BMO collectively, the “ Lenders ”), and KeyBank as Agent for itself and the other Lenders from time to time a party to the Credit Agreement (as hereinafter defined) (KeyBank, in its capacity as Agent, is hereinafter referred to as “ Agent ”).

W I T N E S S E T H:

WHEREAS, the Borrower, Agent, KeyBank and the lenders party thereto are parties to that certain Credit Agreement dated as of March 1, 2017, as amended by that certain First Amendment to Credit Agreement and Other Loan Documents dated as of May 11, 2017 (the “ First Amendment ”), and  as amended by that certain Second Amendment to Credit Agreement dated as of December 13, 2017 (the “ Second Amendment ”) (as such Credit Agreement, as amended by the First Amendment and the Second Amendment, may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “ Credit Agreement ”);

WHEREAS, certain of the Guarantors executed and delivered to Agent that certain Unconditional Guaranty of Payment and Performance dated as of March 1, 2017, as amended by the First Amendment (as such Guaranty, as amended by the First Amendment, may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “ Guaranty ”);

WHEREAS, Borrower and certain of the Guarantors executed and delivered to Agent that certain Cash Collateral Account Agreement dated as of March 1, 2017, as amended by that certain First Amendment to Cash Collateral Account Agreement dated as of March 24, 2017, as amended by the First Amendment, as amended by that certain Second Amendment to Cash Collateral Account Agreement dated as of June 21, 2017, as amended by that certain Third Amendment to Cash Collateral Account Agreement dated as of August 31, 2017, as amended by that certain Fourth Amendment to Cash Collateral Account Agreement dated as of January 18, 2018, and as amended by that certain Fifth Amendment to Cash Collateral Account Agreement dated as of February 21, 2018 (as the same may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “ Cash Collateral Agreement ”);

WHEREAS, CDOR TLH Magnolia, LLC, TRS TLH Magnolia, LLC, CDOR LEX Lowry, LLC, TRS LEX Lowry, LLC, CDOR AUS Louis, LLC and TRS AUS Louis, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated March 24, 2017; and

---

 

WHEREAS CDOR MCO Village, LLC and TRS MCO Village, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated June 21, 2017; and

WHEREAS, CDOR ELP Edge, LLC, TRS ELP Edge, LLC, CDOR AUS Casey, LLC and TRS AUS Casey, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated August 31, 2017; and

WHEREAS, CDOR AUS Tech, LLC and TRS AUS Tech, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated January 17, 2018; and

WHEREAS, CDOR CHS Holiday, LLC and TRS CHS Holiday, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated February 21, 2018; and

WHEREAS, the Borrower and the Guarantors have requested that the Agent and the Lenders make certain modifications to the Credit Agreement and Agent and the undersigned Lenders have consented to such modifications, subject to the execution and delivery of this Amendment.

NOW, THEREFORE, for and in consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby covenant and agree as follows:

Definitions

.  Capitalized terms used in this Amendment, but which are not otherwise expressly defined in this Amendment, shall have the respective meanings given thereto in the Credit Agreement.

Modifications of the Credit Agreement

.  The Borrower, Agent and the Lenders do hereby modify and amend the Credit Agreement as follows:

(a) By deleting in their entirety the definitions of  “Applicable Margin” and “Maturity Date” appearing in §1.1 of the Credit Agreement and inserting in lieu thereof the following:

“ Applicable Margin .  The Applicable Margin for LIBOR Rate Loans and Base Rate Loans shall be a percentage per annum as set forth below based on the applicable Leverage Ratio:

---

 

The Applicable Margin shall not be adjusted based upon such ratio, if at all, until the first (1st) day of the first (1st) month following the delivery by REIT to the Agent of the Compliance Certificate after the end of a fiscal quarter.  In the event that REIT shall fail to deliver to the Agent a quarterly Compliance Certificate on or before the date required by §7.4(c), then without limiting any other rights of the Agent and the Lenders under this Agreement, the Applicable Margin for Loans shall be at Pricing Level 3 until such failure is cured within any applicable cure period, or waived in writing by the Required Lenders, in which event the Applicable Margin shall adjust, if necessary, on the first (1st) day of the first (1st) month following receipt of such Compliance Certificate.

In the event that the Agent, REIT or the Borrower determine that any financial statements previously delivered were incorrect or inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (a) the Borrower shall as soon as practicable deliver to the Agent the corrected financial statements for such Applicable Period, (b) the Applicable Margin shall be determined as if the Pricing Level for such higher Applicable Margin were applicable for such Applicable Period, and (c) the Borrower shall within three (3) Business Days of demand thereof by the Agent pay to the Agent the accrued additional amount owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Agent in accordance with this Agreement.

Maturity Date .  April 1, 2020, as the same may be extended as provided in §2.12, or such earlier date on which the Loans shall become due and payable pursuant to the terms hereof.”

(b) By deleting in its entirety §9.2(b) of the Credit Agreement, and inserting in lieu thereof the following:

---

 

“(b) Commencing on April 1, 2020 and continuing thereafter, the Borrower will not at any time permit the ratio of Consolidated Total Indebtedness to Adjusted Consolidated EBITDA determined for the most recently ended four (4) fiscal quarters to exceed 6.25 to 1.  For the avoidance of doubt commencing on April 1, 2020, the covenant in §9.2(a) shall no longer be applicable.”

References to Credit Agreement

.  All references in the Loan Documents to the Credit Agreement shall be deemed a reference to the Credit Agreement as modified and amended herein.

Consent of Guarantors

.  By execution of this Amendment, Guarantors hereby expressly consent to the modifications and amendments relating to the Credit Agreement as set forth herein and the execution and delivery of and any other agreements contemplated hereby, and Borrower and Guarantors hereby acknowledge, represent and agree that the Credit Agreement, as modified and amended herein, and the other Loan Documents, as the same may be modified in connection with this Amendment, remain in full force and effect and constitute the valid and legally binding obligation of Borrower and Guarantors, respectively, enforceable against such Persons in accordance with their respective terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity, and that the Guaranty extends to and applies to the foregoing documents as modified and amended.

Representations

.  Borrower and Guarantors represent and warrant to Agent and the Lenders as follows as of the date of this Amendment:

Authorization

.  The execution, delivery and performance by the Borrower and the Guarantors of this Amendment and any other agreements contemplated hereby and the transactions contemplated hereby and thereby (i) are within the authority of Borrower and Guarantors, (ii) have been duly authorized by all necessary proceedings on the part of such Persons, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any of such Persons is subject or any judgment, order, writ, injunction, license or permit applicable to such Persons, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, operating agreement, articles of incorporation or other charter documents or bylaws of, or any agreement or other instrument binding upon, any of such Persons or any of its properties, (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Persons other than the liens and encumbrances in favor of the Agent contemplated by this Amendment and the other Loan Documents, and (vi) do not require any approval or consent of any Person other than those already obtained and delivered to the Agent.

Enforceability

.  This Amendment and each other document executed and delivered in connection with this Amendment are the valid and legally binding obligations of Borrower and Guarantors, enforceable in accordance with the respective terms and provisions hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity.

---

 

Approvals

.  The execution, delivery and performance by the Borrower and the Guarantors of this Amendment and any other agreements contemplated hereby and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing or registration with, or the giving of any notice to, any court, department, board, governmental agency or authority other than those already obtained.

Reaffirmation

.  Each of the representations and warranties made by or on behalf of Borrower, Guarantors or any of their respective Subsidiaries contained in this Amendment, the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement or this Amendment are true in all material respects as of the date as of which they were made and are true in all material respects as of the date hereof, with the same effect as if made at and as of that time, except to the extent of changes resulting from transactions permitted by the Loan Documents (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date).

No Default .  By execution hereof, the Borrower and Guarantors certify that the Borrower and Guarantors are and will be in compliance with all covenants under the Loan Documents immediately after the execution and delivery of this Amendment and the other documents executed in connection herewith, and that no Default or Event of Default has occurred and is continuing.

Waiver of Claims

.  Borrower and Guarantors acknowledge, represent and agree that Borrower and Guarantors as of the date hereof have no defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever with respect to the Loan Documents, the administration or funding of the Loans or Letters of Credit or with respect to any acts or omissions of Agent or any Lender, or any past or present officers, agents or employees of Agent or any Lender, and each of Borrower and Guarantors does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action, if any.

Ratification

.  Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement and the other Loan Documents remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Credit Agreement and the other Loan Documents.  Nothing in this Amendment or any other document executed in connection herewith shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan Documents (including without limitation the Guaranty).  This Amendment shall constitute a Loan Document.

Counterparts

.  This Amendment may be executed in any number of counterparts which shall together constitute but one and the same agreement.

Miscellaneous

.  THIS AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and

---

 

their respective permitted successors, successors-in-title and assigns as provided in the Credit Agreement.

Amendments of Other Loan Documents

.  The Lenders authorized Agent to execute and deliver amendments to the other Loan Documents as Agent deems appropriate contemporaneously with the execution and delivery of this Amendment.

Effective Date

.  This Amendment shall be deemed effective and in full force and effect (the “ Effective Date ”) upon confirmation by the Agent of the satisfaction of the following conditions:

[CONTINUED ON NEXT PAGE]

 

---

 

IN WITNESS WHEREOF , the parties hereto, acting by and through their respective duly authorized officers and/or other representatives, have duly executed this Amendment under seal as of the day and year first above written.



 

---

 



 

---

 

LENDERS :

KEYBANK NATIONAL ASSOCIATION , individually and as Agent

By:   /s/ Daniel Stegemo e ller

Name : Daniel Stegemoeller

Title: Sr. Vice President

THE HUNTINGTON NATIONAL BANK

By: /s/ Heidi P. Gajoch

Name:   Heidi P. Gajoch

Title: Staff Officer

BMO HARRIS BANK N.A.

By: /s/ Michael Kauffman

  Name:   Michael Kauffman

  Title: Managing Director



---

FIRST AMENDMENT TO LOAN AGREEMENT



This FIRST   AMENDMENT TO LOAN AGREEMENT (this " Amendment ") ,   is effective as of March 8 , 2019 and is entered into by and between   CDOR KCI LOFT, LLC, a Delaware limited liability company (" CDOR KCI ") and TRS KCI LOFT, LLC, a Delaware limited liability company ( " TRS KCI ", and together with CDOR KCI, individually a " Borrower " and collectively, the " Borrowers ") and GREAT WESTERN BANK (" Bank ").



PR ELIMINARY STATEMENTS.  Borrower s   and Bank entered into a   Loan   Agreement dated as of   December 14, 2016 (said agreement as amended by any and all modifications or amendments thereto is hereinafter referred to as the " Loan Agreement "; the terms defined in the Loan Agreement are us ed herein as therein defined).  Borrower s and Bank have agreed to amend certain provisions of the Loan Agreement.



NOW, THEREFORE, Borrower s and Bank agree as follows:



SECTION 1. Amendment to Section 5 .01 of the Loan Agreement .  Section 5 .01 ( k ) of the Loan Agreement is hereby amended and restated in its entirety as follows : 



( k ) Debt Service Coverage Ratio .   Maintain (i) a Debt Service Coverage Ratio (pre-distribution) of not less than (A) 1.20 to 1.00 as of the end of the fiscal quarter ending June 30, 2019, (B) 1.25 to 1.00 as of the end of the fiscal quarters ending September 30, 2019 and December 31, 2019, and (C) 1. 35 to 1.00 as of the end of fiscal quarter ending March 31, 2020 and each fiscal quarter thereafter and (ii)   a Debt Service Coverage Ratio (post-distribution) of not less than 1.05 to 1.00 as the end of each fiscal quarter .



SECTION 2 . Waiver of Debt Service Coverage Ratio .  D ue to certain capital improvement projects being made by Borrowers to the Hotel, (a) Borrowers' room occupancy and revenues have  been lower than projected and (b) Borrower did not meet , or will not meet, the covenant in Section 5.01(k)(i) of the Loan Agreement (Debt Service Coverage Ratio (pre-distribution)) for the fiscal quarter s ending on December 31, 2018 an March 31, 2019 .  Bank hereby waives, on a limited one-time basis , the Borrowers’ compliance with Section 5.01(k)(i) of the Loan Agreement (Debt Service Coverage Ratio (pre-distribution)) for the fiscal quarter s   ending on December 31 , 2018 and March 31, 2019 .  Bank a grees that the failure by Borrowers to comply with Section 5.01(k)(i) of the Loan Agreement during the fiscal quarter s ending on December 31 , 2018 and March 31, 2019   shall not constitute an Event of Default under the Loan Agreement. The foregoing waiver shall terminate and be of no further force or effect in the event any of the information given by Borrowers to Bank in connecti on with the request for waiver shall h ave been materially incorrect.



SECTION 3. Franchise Agreement.     Borrower s ha ve notified Bank that they receiv ed a notice from the Franchisor, dated February 21, 2019, that that they are in default under the Franchise Agreement for failing to meet certain guest satisfaction standards (the " Franchisor Notice ") .  Borrowers have further notified Bank that the failure to meet the guest satisfaction standards relates to the on-going construction at the Hotel for the capital improvements described above. Section 5.01(o ) of the Loan Agreement requires Borrowers to perform their obligations under the Franchise Agreement and to avoid defaults thereunder.  To the extent the Franchisor Notice could constitute a default under the Loan Agreement, Bank hereby waives, on a limited one-time basis , any default based on the Franchisor Notice.     Borrowers agree to take all actions required by Franchisor to promptly cure any deficiencies described in the Franchisor Notice. The foregoing

---

 

waiver shall terminate and be of no further force or effect in the event any of the information given by Borrowers to Bank in connecti on with the request for waiver shall h ave been materially incorrect.



SECTION 4. Representations and Warranties of Borrower s .  Each Borrower represents and warrants as follows:



(a) Such Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.



(b) The execution, delivery and performance by   such Borrower of this Amendment and the Loan Agreement, as amended hereby, are within such Borrower's powers, have been duly authorized by all necessary actio n and d o not contravene   such Borrower's Organization Documents, or any law or any contractual restricti on binding on or affecting   such Borrower, or result in, or require, the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties.



(c) No authorization, approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by   such Borrower of this Amendment and the Loan Agreement, as amended hereby. 



(d) This Amendment and the Loan Agreement, as amended hereby , constitute , legal, valid and binding obligations of such B orrower enforceable against   such Borrower in accordance with their respective terms.



(e) There is no pending or threatened act ion or proceeding affecting   such Borrower before any arbitrator or Governmental Authority, which may materially adversely affect the financia l condition or operations of   such Borrower.



(f) No Event of Default under the Loan Agreement has occurred and is continuing.



SECTION 5 . Effectiveness .  This Amendment shall become effective when and only when Bank shall have received counterparts of this Amendment duly executed by Borrower s and a modification fee in the amount of $2,500 .



SE CTION 6 . Reference to and Effect on the Loan Agreement . 



(a) Upon the effectiveness of this Amendment , on and after the date hereof, each reference in the Loan Agreement to "this Agreement", "hereunder" "hereof", "herein" or words of like import shall mean and be a reference to the Loan Agreement as amended hereby.



(b) Except as specifically amended above, the Loan Agreement shall remain in full force and effect and is hereby ratified and confirmed.



(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Bank under the Loan Agreement, nor constitute a waiver of any provision of the Loan Agreement.

---

 



SECTION 7 . Execution in Counterparts .  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.



SECTION 8 . Governing Law .  This Amendment shall be governed by, and construed in accordance with, the laws (without giving effect to the conflicts of laws principles thereof) of the State of Nebraska.



SECTION 9 . Costs and Expenses .  Borrower s agree to pay on demand all costs and expenses in connection with the preparation, execution, delivery and administration of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for Bank with respect thereto and with respect to advising Bank as to its rights and respons ibilities under this Amendment.



-No further text on this page-

---

 

[ BORROWERS SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AGREEMENT]



IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.



BORROWERS:



CDOR KCI LOFT, LLC , a Delaware limited liability company







By:   /s/ Jonathan J. Gantt

Name: Jonathan J. Gantt

Its:  Vice President







TRS KCI LOFT, LLC , a Delaware limited liability company





By:  /s/ Jonathan J. Gantt

Name: Jonathan J. Gantt

Its:  Vice President



---

 

[BANK SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AGREEMENT]



BANK:

GREAT WESTERN BANK , a South Dakota corporation







By:  /s/ Kraig Williams

Kraig Williams, SVP Commercial Real Estate









---