SPRINGING UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE

Exhibit 10.4

 

This Springing Unconditional Guaranty of Payment and Performance (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Springing Guaranty") is entered into as of December 14, 2016 and given by CONDOR HOSPITALITY TRUST, INC., a Maryland corporation ("Guarantor") to and in favor of GREAT WESTERN BANK ("Bank").

WHEREAS, Bank has made certain Loans to CDOR KCI LOFT, LLC, a Delaware limited liability company and TRS KCI LOFT, LLC, a Delaware limited liability company (individually, a "Borrower" and collectively, "Borrowers") pursuant to the terms of a Loan Agreement dated as of the date hereof among Borrowers and Bank (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Loan Agreement"); and

WHEREAS, as a condition to entering into the Loan Agreement, Bank requires Guarantor to execute this Springing Guaranty; and

WHEREAS, upon the request of, and as an accommodation to, Borrowers, Guarantor has agreed to execute this Springing Guaranty.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor and Bank hereby agree as follows:

(a)	Payment of all Obligations under the Loan Agreement and payment of any other indebtedness, obligations, fees and costs due and owing from either Borrower to Bank under the Loan Documents;

(b)	Performance of all covenants, conditions and obligations of either Borrower under the Loan Documents;

(c)

Payment and performance of all obligations of Guarantor under this Springing Guaranty;

(d)

Payment and performance of all future advances and other obligations of Borrower to Bank, whether now existing or hereafter incurred or created, whether voluntary or involuntary, whether absolute or contingent, liquidated or unliquidated, determined or undetermined, secured or unsecured, whether on original, renewed, extended or revised terms, whether Borrower may be liable individually or jointly with others, or whether incurred directly or acquired by Bank by assignment or otherwise; and

(e)

Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Guaranteed Obligations.

Notwithstanding any provision contained herein to the contrary, this Springing Guaranty will remain in effect from the date of the applicable DSCR Violation until Borrowers meet the minimum Debt Service Coverage Ratio pre-distribution required in the Loan Agreement either (1) through Guarantor paying down the principal amount of the Loans, without repayment penalty, in an amount determined by Bank in its reasonable discretion to result in Borrowers meeting such minimum requirement and/or (2) the Hotel operation re-achieves the minimum Debt Service Coverage Ratio pre-distribution requirement. Notwithstanding any provision contained herein to the contrary, in the event that after the first instance in which a DSCR Violation occurs and is subsequently cured, another DSCR Violation occurs, then this Springing Guaranty shall automatically be deemed in force and effect until such time as the DSCR Violation is again cured in accordance with the terms of this paragraph.

(a)

Election of Remedies.  Guarantor waives all rights and defenses arising out of an election of remedies by Bank, including without limitation in connection with any bankruptcy or other debtor relief laws or under any other applicable federal, state or local law, including, but not limited to, those purporting to reduce Bank's right against Guarantor in proportion to the principal amount of the Guaranteed Obligations.

(b)

Statute of Limitations.  To the maximum extent permitted by law, Guarantor waives the benefit of the statute of limitations affecting Guarantor's liability hereunder or the enforcement hereof.

(c)

Action Against Borrowers and Collateral.  Guarantor waives all right to require Bank to:  (i) proceed against either Borrower, any endorser, cosigner, other guarantor or other person liable on any Guaranteed Obligation; (ii) join either Borrower or any endorser, cosigner, other guarantor or other Person liable on any Guaranteed Obligation in any action or actions that may be brought and prosecuted by Bank solely and separately against Guarantor on any Guaranteed Obligation; (iii) proceed against any item or items of collateral securing any Guaranteed Obligation or any guaranty thereof; or (iv) pursue or refrain from pursuing any other remedy whatsoever in Bank's power.

(d)

Borrower's Defenses.  Guarantor waives any defense arising by reason of any disability or other defense of either Borrower, either Borrower's successors or any endorser, cosigner, other guarantor or other Person liable on any Guaranteed Obligation including, without limitation, any statute of limitation defense that may be available to either Borrower or such other Person.  Until all Guaranteed Obligations have been paid in full, even though it may be in excess of the liability incurred hereby and Bank has no further commitment to lend or extend financial accommodations to either Borrower, Guarantor shall not have any right of subrogation and Guarantor waives any benefit of and right to participate in any collateral now or hereafter held by Bank.  Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of sale of any collateral securing any Guaranteed Obligation or any guaranty thereof, and notice of the existence, creation or incurring of new or additional Guaranteed Obligations.

(e)

Borrower's Financial Condition.  Guarantor hereby recognizes, acknowledges and agrees that advances may be made from time to time with respect to any Guaranteed Obligation without authorization from or notice to Guarantor even though the financial condition of either Borrower, any endorser, cosigner, other guarantor or other Person liable on any Guaranteed Obligation may have deteriorated since the date of this Springing Guaranty.  Guarantor waives all right to require Bank to disclose any information with respect to any Guaranteed Obligation; the financial condition, credit or character of either Borrower, any endorser, cosigner, other guarantor or other Person liable on any Guaranteed Obligation; any collateral securing any Guaranteed Obligation or any guaranty thereof; or any action or inaction on the part of Bank, either Borrower or any endorser, cosigner, other guarantor or other Person liable on any Guaranteed Obligation.  Guarantor hereby assumes the responsibility for being informed of the financial condition, credit and character of either Borrower and of all circumstances bearing upon the risk of non-payment of any Guaranteed Obligation which diligent inquiry would reveal.

(a)

The occurrence of an "Event of Default" (as defined in the Loan Agreement) under the Loan Agreement; or

(b)

Guarantor fails to perform any of its obligations under this Springing Guaranty within 30 days after written notice from Bank; or

(c)

Guarantor attempts to revoke this Springing Guaranty or this Springing Guaranty becomes ineffective for any reason; or

(d)

any representation or warranty made or given by Guarantor to Bank proves to be false or misleading in any material respect; or

(e)

Guarantor becomes insolvent or the subject of any bankruptcy proceeding or other debtor relief proceeding which remains undismissed or unstayed for a period of 60 days.

Subject to the continuing existence of a DSCR Violation, if an Event of Default shall occur and be continuing, Bank may declare all Guaranteed Obligations to be due and payable, in which event Guarantor shall provide for immediate payment of all Guaranteed Obligations, and Bank may proceed to enforce this Springing Guaranty in accordance with the terms and provisions of this Springing Guaranty and pursue all rights and remedies as provided by applicable law.

(a)

Governing Law.  This Springing Guaranty shall be governed by and construed according to the internal laws of the State of Nebraska without regard to conflict of law principles. Guarantor hereby submits to the jurisdiction of the Nebraska state courts sitting in ▇▇▇▇▇▇▇ County, Nebraska and the United States District Court for the District of Nebraska.

(b)

Headings.  The headings used herein are solely for the purpose of identification and have no legal significance.

(c)

Entire Agreement.  This Springing Guaranty constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and undertaking both written and orally between the parties with respect to the subject matter contained in this Springing Guaranty.

(d)

Severability.  Should any one or more provisions of this Springing Guaranty be determined to be illegal or unenforceable, all other provisions shall remain effective.

(e)

Drafting of Agreement.  This Springing Guaranty, as a matter of convenience for all parties, has been prepared by Bank.  The parties hereto agree that in the event of any ambiguity in this Springing Guaranty, such ambiguity shall not be construed against Bank.  It is the express intention of the parties that all aspects of this Springing Guaranty shall be construed and interpreted in as broad a manner as possible to the benefit and protection of Bank.

(f)

Interpretation.  If there is more than one Guarantor executing this Springing Guaranty, the term "Guarantor" shall mean all and any one or more of them.  As used in this Springing Guaranty, neuter terms include the masculine and feminine, and vice versa.  The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.  Terms used, but not defined herein, shall have the meaning set forth in the Loan Agreement.

(g)

Attorney's Fees. Guarantor shall pay to Bank all costs and expenses, including, but not limited to reasonable attorney fees, incurred by Bank in connection with the administration, enforcement, including any bankruptcy, at trial and on appeal, or the enforcement of any judgment or any refinancing or restructuring of Guarantor’s obligations under this Springing Guaranty or any document, instrument of agreement executed with respect to, evidencing or securing the indebtedness hereunder.

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[SIGNATURE PAGE TO SPRINGING GUARANTY]

Executed by the undersigned Guarantor as of the first date set forth above.

GUARANTOR:

CONDOR HOSPITALITY TRUST, INC., a Maryland corporation

By:   /s/ ▇▇▇▇▇▇▇▇ ▇. Gantt_____________

Name:  ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇

Title:

Senior Vice President and Chief Financial Officer