Condor Hospitality Trust, Inc. (NASDAQ:CDOR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On October4, 2017, Condor Hospitality Trust, Inc. (the “Company”), through its indirect wholly owned subsidiaries, CDOR Jax Court, LLC, TRS Jax Court, LLC, CDOR Atl Indy, LLC, TRS Atl Indy, LLC, CDOR San Spring, LLC and TRS San Spring, LLC (the “Borrowers”), obtained a mortgage loan from Wells Fargo Bank, National Association (“Wells Fargo”), in the principal amount of $26,500,000, to a Loan Agreement dated as of October 4, 2017 between Borrowers and Wells Fargo. The Wells Fargo loan is secured by 3 hotel properties owned by Borrowers, the Courtyard in Jacksonville, Florida, the Hotel Indigo in Atlanta, Georgia and the SpringHill Suites in San Antonio, Texas. The loan requires monthly principal and interest payments based on a 30-year amortization with the principal balance due and payable on November1, 2022. Subject to the satisfaction of certain conditions, the loan also has two one-year extension options. The loan bears interest at one-month LIBOR plus 2.39%. On October4, 2017, Borrowers entered into an interest rate swap with Wells Fargo to effectively fix the interest rate of the loan at 4.44%.

On October4, 2017, the proceeds of the Wells Fargo loan were used to refinance: (a) $9.7million of indebtedness outstanding under that certain Loan Agreement dated as of October2, 2015 between Western Alliance Bank, CDOR Jax Court, LLC and TRS Jax Court, LLC, secured by the Courtyard in Jacksonville, Florida; (b) $4.8million of indebtedness outstanding under that certain Loan Agreement dated as of October2, 2015 between Western Alliance Bank, CDOR Atl Indy, LLC and TRS Atl Indy, LLC, secured by the Hotel Indigo in Atlanta, Georgia; and (c) $10.5million of indebtedness outstanding under that certain Credit Agreement dated as of March1, 2017 by and among Condor Hospitality Limited Partnership, as Borrower, KeyBank National Association and the other lenders party thereto, as Lenders, and KeyBank National Association, as Agent, as amended, secured by the SpringHill Suites in San Antonio, Texas.

The Wells Fargo loan is non-recourse to Borrowers, except for certain customary carve-outs to the general non-recourse liability, which carve-outs are guaranteed by the Company. The loan is evidenced by documentation generally consistent with loans of similar size and type, including a loan agreement, promissory note, mortgages or deeds of trust and assignments of leases and rents with respect to the refinanced hotels and a guaranty of recourse obligations.

The Wells Fargo loan is secured by first priority liens and security interests on the refinanced hotels and the tangible and intangible personal property owned by Borrowers in connection with the operations on the hotel properties, including inventory, equipment, fixtures, accounts and general intangibles. The loan agreement contains certain affirmative and negative covenants with which Borrowers must comply, including maintenance of insurance, single-purpose bankruptcy remote entity requirements, reporting requirements and restrictions on property and equity transfers and the granting of liens. Customary events of default are included in the loan agreement, including payment defaults, breaches of covenants and insolvency/bankruptcy events, the occurrence of which give Wells Fargo the right to accelerate repayment of the loan.

The Wells Fargo loan may be voluntarily prepaid in whole or in part, subject to payment of prepayment fees of 4.0% in months 1-12 of the loan, 3.0% in months 13-24 of the loan, 2.0% in months 25-36 of the loan, 1.0% in months 37-48 of the loan, 0.5% in months 49-57 of the loan and 0.0% in months 58-60 of the loan. The loan may also be voluntarily prepaid in part in connection with the release of individual hotel properties as collateral security for the loan. Any such partial prepayment and release requires prepayment of the loan amount allocated to the hotel property being released, payment of applicable prepayment fees and satisfaction of other conditions set forth in the loan agreement.

In connection with the Wells Fargo loan, Borrowers entered into a cash management agreement with Wells Fargo to which Borrowers will maintain a restricted account into which all revenue from the refinanced hotels will be deposited during the term of the loan. Amounts on deposit in the restricted account will be transferred: (a)periodically to an account under the sole control of Wells Fargo, when a cash sweep period is continuing; or (b)on a weekly basis to an account under the sole control of Borrowers, when a cash sweep period is not continuing. Funds deposited in the account controlled by Wells Fargo will be used by Wells Fargo to pay items such as real estate taxes, insurance, debt service obligations, reserves for furniture, fixtures and equipment and operating expenses.

A cash sweep period occurs under the cash management agreement when: (a)there is an event of default in connection with the Wells Fargo loan; or (b)the debt yield with respect to the refinanced hotels is less than 10%. The cash management agreement contains provisions for the cure of certain of these events and termination of the cash sweep period, including prepayment of the loan (without payment of prepayment fees) in an amount which would cause the debt yield to be 10.5%.

The terms of the material agreements described herein relating to the Wells Fargo loan are qualified in their entirety by reference to the agreements, copies of which are attached as Exhibits 10.1 through 10.3 to this Current Report on Form 8-K and incorporated herein by reference.

Item 1.01. Termination of a Material Definitive Agreement.

The information reported under Item 1.01 above is incorporated herein by reference. On October4, 2017 and in connection with the closing of the Wells Fargo loan described under Item 1.01 above, the following loans were repaid in full and the related loan documents were terminated: (a) $9.7million of indebtedness outstanding under that certain Loan Agreement dated as of October2, 2015 between Western Alliance Bank, CDOR Jax Court, LLC and TRS Jax Court, LLC, secured by the Courtyard in Jacksonville, Florida; and (b) $4.8million of indebtedness outstanding under that certain Loan Agreement dated as of October2, 2015 between Western Alliance Bank, CDOR Atl Indy, LLC and TRS Atl Indy, LLC, secured by the Hotel Indigo in Atlanta, Georgia.

Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information reported under Item 1.01 above is incorporated herein by reference.

Item 1.01 Financial Statements and Exhibits.

(d) Exhibits.

EXHIBIT INDEX

CONDOR HOSPITALITY TRUST, INC. Exhibit
EX-10.1 2 d469720dex101.htm EX-10.1 EX-10.1 Exhibit 10.1       Loan No: 33-0942145 LOAN AGREEMENT Dated as of October 4,…
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