LIMITED GUARANTY OF PAYMENT AND PERFORMANCE

 

 

 

Exhibit 10.5

 

This Limited Guaranty of Payment and Performance (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Limited 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 Limited Guaranty; and

WHEREAS, upon the request of, and as an accommodation to, Borrowers, Guarantor has agreed to execute this Limited 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 Losses (as defined below) Bank incurs due to fraud by or on behalf of any Borrower in connection with the making or the servicing of either Loan;

(b)	Payment of all Losses Bank incurs due to theft by or on behalf of any Borrower; and

(c)	Payment of all Losses (as defined below) Bank incurs due to the filing of an involuntary bankruptcy or other debtor relief proceeding against any Borrower.

As used in this Limited Guaranty, the term “Losses” means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement of whatever kind or nature (including but not limited to reasonable legal fees).

(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 Limited 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)

within fifty (50) days after the end of each fiscal quarter, copies of Guarantor's SEC Form 10-Q;

(b)

within ninety-five (95) days after the end of each fiscal year, copies of Guarantor's SEC Form 10-K and the operating statement for the Hotel that is used in preparing Guarantor's consolidated audit by KMPG;

(c)

Within one hundred twenty (120) days after the end of each fiscal year, a copy of Guarantor's annual financial statements audited by independent public accountants reasonably acceptable to Bank and otherwise in a form and substance reasonably satisfactory to Bank;

(d)

Within forty-five (45) days after submission to the Internal Revenue Service, a copy of Guarantor's annual federal tax return, including all schedules attached thereto; and

(e)

Guarantor will maintain as of the end of each fiscal quarter a "Condor Debt Service Coverage Ratio" (as defined in the Loan Agreement) of at least 1.05 to 1.00.  Any violations of the Condor Debt Service Coverage Ratio may be cured in accordance with the terms of Section 5.01(l) of the Loan Agreement.

(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 Limited Guaranty, within 30 days after written notice from Bank; or

(c)

Guarantor attempts to revoke this Limited Guaranty or this Limited 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.

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 Limited Guaranty in accordance with the terms and provisions of this Limited Guaranty and pursue all rights and remedies as provided by applicable law.

(a)

Governing Law.  This Limited 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 Limited 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 Limited Guaranty.

(d)

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

(e)

Drafting of Agreement.  This Limited 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 Limited Guaranty, such ambiguity shall not be construed against Bank.  It is the express intention of the parties that all aspects of this Limited 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 Limited Guaranty, the term "Guarantor" shall mean all and any one or more of them.  As used in this Limited 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 Limited Guaranty or any document, instrument of agreement executed with respect to, evidencing or securing the indebtedness hereunder.

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[SIGNATURE PAGE TO LIMITED 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