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

Item1.01

Entry into a Material Definitive Agreement.

On February28, 2017, Condor Hospitality Trust, Inc. (the Company
or Condor) entered into agreements with respect to:

the conversion of all 6,245,156 shares of 6.25% Series D Cumulative Convertible Preferred Stock, with a par value of $0.01 per share, of Condor (the Series D Preferred Stock) into 39,032,225 shares of common stock par value $0.01 per share of Condor (Common Stock), to the terms of the Series D Preferred Stock; and

the issuance of 925,000 shares of a new series of preferred stock, Series E Cumulative Convertible Preferred Stock, with a par value of $0.01 per share (the Series E Preferred Stock) to Real Estate Strategies L.P. (RES) and SREP III Flight-Investco, L.P. (SREP).

The agreements, related transactions and terms of the Series E
Preferred Stock are discussed below.

Agreements

On February28, 2017, Condor entered into an agreement with RES an
affiliate of IRSA Inversiones y Representaciones Sociedad Annima
(IRSA) and IRSA (the RES Agreement) and an agreement with SREP,
an affiliate of StepStone Group Real Estate LP(StepStone) and
StepStone (the SREP Agreement) for the voluntary conversion of
all of the shares of Series D Preferred Stock held by each of
them into Common Stock, to the terms of the Series D Preferred
Stock, and the issuance of Series E Preferred Stock to RES and
SREP.

Each share of Series D Preferred Stock was convertible, at the
option of the holder, at any time into Common Stock at a
conversion price of $1.60 for each share of Common Stock, which
is equal to the rate of 6.25 shares of Common Stock for each
share of Series D. to the RES Agreement, RES voluntarily
converted its 3,245,156 shares of Series D Preferred Stock into
20,282,225 shares of Common Stock. to the SREP Agreement, SREP
voluntarily converted its 3,000,000 shares of Series D Preferred
Stock into 18,750,000 shares of Common Stock.

to the RES Agreement, RES received 487,738 shares of Series E
Preferred Stock and SREP received 437,262 shares of Series E
Preferred Stock upon the conversion of their Series D Preferred
Stock. Each of the agreements also extended and amended certain
existing registration rights held by RES and SREP, respectively,
to Common Stock issued on conversion of the Series D Preferred
Stock, and issuable on conversion of the Series E Preferred
Stock. to the RES Agreement, a promissory note issued to RES in
connection with the issuance of the Series D Preferred Stock in
March 2016, bearing interest at 6.25% per annum, in the principal
amount of $1,011,599 and convertible into 101,159 shares of
Series D Preferred Stock (the Note) was amended so that it is
convertible instead directly into 632,249 shares of Common Stock
which would have otherwise been issuable upon conversion of such
shares of Series D Preferred Stock. The Note was also amended so
that interest will be paid on the Note only at times that
preferred dividends are paid to the holders of the Series E
Preferred Stock.

Additional provisions of the SREP Agreement and RES Agreement are
described below.

Certain Future Offerings and Registration Rights

to the SREP Agreement, prior to March16, 2021, and provided that
the Series E Preferred Stock is outstanding and SREP holds 14% or
more of the voting control of Condor, then with respect to the
issuance of Common Stock, or securities convertible into Common
Stock (a Future Offering) (exclusive of the issuance of Common
Stock with respect certain commitments, and certain existing
long-term incentive plan or operating units of Condors operating
partnership and certain future compensation awards), Condor will
not without the consent of SREP:

until an aggregate of $100million of Common Stock has been sold, issue Common Stock below the price of $1.60 per share, or securities convertible into Common Stock with a real or effective conversion or strike price below $1.60 per share of Common Stock, and

thereafter issue Common Stock below the price of $1.72 per share, or securities convertible into Common Stock with a real or effective conversion or strike price below $1.72 per share of Common Stock (each of the foregoing prices per share appropriately adjusted in the same manner as the conversion price of the Series E Preferred Stock is adjusted to the antidilution terms of the Series E Preferred Stock).

If SREP does not consent with respect to a Future Offering that
requires its consent, then Condor may make an irrevocable offer
to SREP to repurchase all shares of Series E Preferred Stock and
Common Stock received by SREP on conversion of Series E Preferred
Stock and Series D Preferred Stock.The repurchase price will be
equal to the greater of:

an aggregate amount equal to (A) 120% of the liquidation preference of Series E Preferred Stock beneficially owned by SREP plus (B) 120% of the then-current conversion price of the Series E Preferred Stock for each share of Common Stock beneficially owned by SREP that were issued upon conversion of any Series D Preferred Stock or Series E Preferred Stock, or

in exchange for the Series E Preferred Stock and Common Stock issued upon conversion of any Series D Preferred Stock and Series E Preferred Stock, an amount equal to 95% of the aggregate net asset value of Condor per share multiplied by the number of shares of the Common Stock beneficially owned by SREP that were issued upon conversion of any Series D Preferred Stock and Series E Preferred Stock, and shares of Common Stock issuable upon conversion of Series E Preferred Stock (regardless of whether the Series E Preferred Stock is convertible at such time).

Such repurchase offer, if accepted by SREP, will be conditioned
upon, and the repurchase will occur concurrently with the closing
of the Future Offering.

The RES Agreement provides the same consent and repurchase rights
with respect to RES.

Board of Directors

If the outstanding shares of Series E Preferred Stock declines
below 434,750 shares (47% of the original outstanding shares of
Series E Preferred Stock), as described below under the
description of the terms of the Series E Preferred Stock, the
holders of the Series E Preferred Stock will no longer have
rights for a class vote to approve or consent to certain actions
by Condor. If those voting rights are no longer available and
SREP holds 15% or more of the voting power of Condor, Condor has
agreed in the SREP Agreement with SREP to reduce the size of
board of directors of Condor from its current size of nine member
to seven members. Similarly, if those voting rights are no longer
available and RES holds 15% or more of the voting power of
Condor, Condor has agreed in the RES Agreement with RES to reduce
the size of board of directors of Condor from its current size of
nine member to seven members.

If size of the board of directors of Condor is reduced to seven
members, SREPs current rights to designate directors for election
to the board of directors based on its percentage of voting power
to vote for election of directors would also change to the
following:

Voting Ownership %		#ofDirector Designees
29% or more
Less than 29% but 15% or more
Less than 15% but 7% or more

If size of the board of directors of Condor is reduced to seven
members, RESs current rights to designate directors for election
to the board of directors based on its voting power to vote for
the election of directors would also change as described above.

Liquidation Proposal

If a sale of Common Stock in a single offering of at least
$50,000,000 or the sale of Common Stock in up to three separate
offerings totaling at least $75,000,000 in the aggregate, in each
case at a real or effective offering price of $1.60 per share
(subject to the antidilution adjustment for the conversion price
of the Series E Preferred Stock) or more has not occurred by
March16, 2021, SREP or RES may require Condor to submit a
proposal to liquidate Condor to the shareholders, provided that
the holders of the Series E Preferred Stock otherwise hold in the
aggregate 50% of the voting power to approve such liquidation of
Condor.

Shareholder Vote

On the specific items in the terms of the Series E Preferred
Stock that are required to be submitted for shareholder vote at
the next annual shareholders meeting of Condor, RES, in the RES
Agreement, and SREP, in the SREP agreement, have agreed to vote
all shares of their Common Stock affirmatively on such matters.
The aggregate voting power of RES and SREP voted affirmatively
for such matters is sufficient to assure approval of such matters
at the next annual shareholders meeting of Condor in May 2017.

Series E Preferred Stock

The principal terms of the Series E Preferred Stock are set forth
below:

Dividends. A holder will receive preferential cumulative
cash dividends at the rate of 6.25%per annum of the $10.00 face
value per share (equivalent to a fixed annual amount of $0.625
per year) as an annual cumulative dividend, payable quarterly,
commencing March31, 2017, for each share of Series E Preferred
Stock, when authorized by the Board or a duly authorized
committee thereof. Dividends are cumulative and accrue, whether
or not declared. Accrued but unpaid dividends on the Series E
Preferred Stock will accumulate and will earn additional
dividends at 9.5%, or 12.5% if a Qualified Offering (as defined
below) has not occurred, compounding quarterly.

Rank. With respect to dividend rights and rights upon
the Companys liquidation, dissolution or winding up, the Series E
Preferred Stock will rank (a)prior or senior to the Common Stock,
(b)prior or senior to all classes or series of preferred stock
issued by the Company (the Preferred Stock), the terms of which
specifically provide that such shares rank junior to the Series E
Preferred Stock with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company (together
with the Common Stock, collectively, Junior Shares), (c) on a
parity with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company with all
classes or series of shares of preferred stock issued by the
Company, the terms of which specifically provide that such shares
rank on a parity with the Series D Preferred Stock (collectively,
Parity Shares) and (d)junior to all existing and future
indebtedness of the Company.

Liquidation Preference. Upon Condors liquidation,
dissolution or winding up, before any distribution is made to the
holders of Common Stock or any other capital stock that ranks
junior, the holders of the Series E Preferred Stock are entitled
to a liquidation preference of $10.00 per share (the Liquidation
Preference), plus the sum of (i)an amount equal to any accrued
and unpaid dividends to the date of payment and (ii)in the case
of a liquidation, dissolution or winding up that occurs on or
after March16, 2021, and if a Qualified Offering has not occurred
prior to the time of such liquidation, dissolution or winding up,
the additional sum of the Net Series E Per Share Additional
Liquidation Preference described below.

Qualified Offering means (i)the sale of Common Stock in a single
offering of at least $50,000,000 or (ii)the sale of Common Stock
in up to three separate offerings totaling at least $75,000,000
in the aggregate, in each case at an offering price of $1.60 per
share (appropriately adjusted in the same manner as the
Conversion Price, described below) or more.

Net Series E Per Share Additional Liquidation Preference means an
amount equal to [AB /- C]/925,000, where:

A = $16,135,263

B = the (i)amount to the extent by which the per share weighted
market sale price average of the Common Stock, as reported by the
Nasdaq Stock Market or any other national securities exchange on
which the Common Stock are then listed for trading, or if none,
the most recently reported over the counter trade price, for the
30 trading days (or such longer trading period as required to
have at least 5 trading days on which trades occurred) preceding
the public disclosure of the liquidation, dissolution or winding
up exceeds $1.60 per share, multiplied by (ii) 39,644,474.

C =

(i) subtract the amount, if any positive amount, prorated for any
partial year, by which the (A)aggregate cash dividends paid on
39,644,474 shares of Common Stock during the Dividend Benefit
Measuring Period (as defined below) exceeds (B)an amount equal to
the equivalent of a 6.25% annual dividend on securities with a
face value of $63,463,159 as if paid during the Dividend
Measuring Period (and if there are accumulated but unpaid
dividends on the Series E Preferred Stock, 9.5% or 12.5% on
equivalent dividends as if there were accumulated and unpaid for
the same periods in the same manner); or

(ii) add the amount, if any positive amount, prorated for any
partial year, by which (A)an amount equal to the equivalent of a
6.25% annual dividend on securities with a face value of
$63,463,159 as if paid during the Dividend Measuring Period (and
if there are accumulated but unpaid dividends on the Series E
Preferred Stock, 9.5% or 12.5% on equivalent dividends as if
there were accumulated and unpaid for the same periods) is
greater than (B)the aggregate cash dividends paid on 39,644,474
shares of Common Stock during the Dividend Benefit Measuring
Period.

Dividend Measurement Period means the period commencing on the
date of issuance of the Series E Preferred Stock and ending on
the date immediately preceding the public disclosure of the
liquidation, dissolution or winding up of the Company.

Redemption. The Company upon not less than 30 nor more
than 60 calendar days prior written notice, may at its option at
any time after a Qualified Offering has occurred or from time to
time thereafter, select a redemption date or dates to redeem up
to a total of 490,250 shares of Series E Preferred Stock, in all
cases for cash at a redemption price equal to the Redemption
Amount, described below, per share, plus all accrued and unpaid
dividends to the date of redemption provided that (x)redemptions
are made pro rata (as nearly as practicable without creating
factional shares) to all holders of Series E Preferred Stock, and
(y)the Company may not borrow funds, or delay making any capital
expenditures or paying any operating expenses, for the purpose of
making any such partial redemptions.

The Redemption Amount with respect to a share of Series E
Preferred Stock means:

110% of the Liquidation Preference for redemption on or before March16, 2019;

120% of the Liquidation Preference for redemption from March16, 2019 and prior to March16, 2020; and

130% of the Liquidation Preference for redemption on or after March16, 2020.

Conversion. Subject to obtaining shareholder approval to
the Nasdaq Marketplace Rules as described below, the Series E
Preferred Stock is convertible, at the option of the holder, at
any time on or after February28, 2019, into common stock (the
Conversion Price) of $2.13 for each share of common stock, which
is equal to the rate of 4.69 shares of Common Stock for each
share of Series D Preferred Stock.

Conversion Price. The initial conversion price will be
$2.13, but the conversion price will be subject to anti-dilution
adjustments upon the occurrence of stock splits and stock
dividends.

Automatic Conversion. In the event of a Qualified
Pricing Event, described below, a number of shares of Series E
Preferred Stock (including any fraction of a share) as is
determined by:

multiplying the daily weighted market sales price average by the daily average volume of the Common Stock during the Qualified Pricing Event Period, described below, and then

multiplying the result by 15, and then

dividing that result by the Liquidation Preference (the Qualified Number of Shares)

shall automatically convert into an aggregate number of shares of
Common Stock (including any fraction of a share) as is determined
by:

multiplying the Qualified Number of Shares (including any fraction of a share) by the Liquidation Preference, and then

dividing the result by the Conversion Price then in effect.

No automatic conversion of Series E Preferred Stock will occur
during a period of 90 calendar days following an automatic
conversion of Series E Preferred Stock (an Automatic Conversion
Limitation Period) but may occur on the 91st day and any day
thereafter, unless prohibited by another Automatic Conversion
Limitation Period.

A Qualified Pricing Event means the Common Stock trades for 60
consecutive trading days (or such longer trading period to have
at least 5 trading days on which trades occurred) at a weighted
market sales price average equal to or greater than 120% of the
Conversion Price as reported by the Nasdaq Stock Market or any
other national securities exchange on which the Common Stock are
then listed for trading, or if none, the as reported over the
counter trade price for such time period (a Qualified Pricing
Event Period).

Voting Rights as a Class. So long as any shares of Series E
Preferred Stock remain outstanding, the Company will not, without
the affirmative vote or consent of the holders of not less than
75% of the Series E Preferred Stock, voting separately as a
class:

amend, alter, repeal or make other changes to any provision of the terms of the Series E Preferred Stock of any provision elsewhere in the Articles of Incorporation of the Company (the Articles) so as to adversely affect any right, preference, privilege or voting power of the Series E Preferred Stock or the holders thereof, including without limitation any amendment, alteration, repeal or other change effected in connection with a merger, consolidation or similar transaction (any such transaction, which for the avoidance of doubt does not include any liquidation, dissolution or winding up of the Company, an Event);

authorize, create or issue, or increase the authorized or issued amount of, any class or series of capital stock or rights to subscribe to or acquire any class or series of capital stock or any class or series of capital stock convertible into any class or series of capital stock, in each case ranking on a parity with, or senior to, the Series E Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of the Company or otherwise, or reclassify any shares of capital stock into any such shares; or

agree or commit to any of the foregoing.

So long as 434,750 shares of Series E Preferred Stock (47% of the
originally issued shares of Series E Preferred Stock) remain
outstanding, the Company will not, without the affirmative vote
or consent of the holders of not less than 75% of the Series E
Preferred Stock then outstanding;

merge, consolidate, liquidate, dissolve or wind up the Company or sell, lease or convey all or substantially all of the assets of the Company;

engage in any transaction in which the Company is to be a participant and the amount involved exceeds $120,000, other than employment compensation, and in which any of the Companys directors or executive officers or any member of their immediate families will have a material interest, exclusive of interests arising solely from the ownership of a class of equity securities of the Company provided that all holders of such class of equity securities receive the same benefit on a pro rata basis;

except for dividends or distributions of cash from the Companys funds from operations and except as required to preserve the Companys qualification as a real estate investment trust under the Internal Revenue Code of 1986 (the Code), declare or pay any dividends or other distributions on shares of Common Stock or any other Junior Shares;

grant an exemption from the 9.9% ownership limit set forth in the Articles or otherwise, provided that the board of directors may grant additional exemptions to the Articles to prior recipients of such exemptions, and their affiliates, if such recipients were shareholders as of February28, 2017;

issue any preferred stock of the Company; or

agree or commit to do any of the foregoing.

With respect solely to the exercise of the above described voting
rights as a class, each share of Series E Preferred Stock has one
vote per share.

The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding Series E
Preferred Stock shall have been redeemed or called for redemption
upon proper notice and sufficient funds shall have been deposited
in trust to effect such redemption.

The above summary of the SREP Agreement, RES Agreement and terms
of the Series E Preferred Stock is qualified in its entirety by
reference to the full text of the SREP Agreement, RES Agreement
and terms of the Series E Preferred Stock each of which are
incorporated herein by reference. Copies of the SREP Agreement,
RES Agreement and terms of the Series E Preferred Stock are
attached as Exhibits 10.1, 10.2 and 3.2, respectively, to this
Current Report on Form 8-K.

Item3.02 Unregistered Sales of Equity
Securities.

The information contained in Item1.01 is hereby incorporated by
reference. The shares of Series E Preferred stock were offered
and sold in a transaction exempt from registration under the
Securities Act of 1933, in reliance on Section4(a)(2) thereof and
Rule 506 of Regulation D thereunder. Each investor represented
that it was an accredited investor as defined in Regulation D.

Item5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.

On February28, 2017, the Company supplemented its Amended and
Restated Articles of Incorporation, as amended, by filing
Articles Supplementary thereto, which classifies and establishes
the Series E Preferred Stock.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

3.1 Amended and Restated Articles of Incorporation of the
Company, as amended.

3.2 Articles Supplementary of the Company classifying and
establishing the Series E Preferred Stock and filed as a
supplement to the Amended and Restated Articles of Incorporation,
as amended, of the Company.

10.1 Agreement, dated as of February28, 2017, between SREP III
Flight-Investco, L.P., StepStone Group Real Estate LP and the
Company.

10.2 Agreement, dated as of February28, 2017, by and among Real
Estate Strategies L.P., IRSA Inversiones y Representaciones
Sociedad Annima and the Company.

Condor Hospitality Trust, Inc. (NASDAQ:CDOR) Recent Trading Information

Condor Hospitality Trust, Inc. (NASDAQ:CDOR) closed its last trading session up +0.02 at 2.15 with 2,353 shares trading hands.