NOTE 16. SUBSEQUENT EVENTS

On May 12, 2020, the Company entered into an amendment to its loan agreement with Wells Fargo Bank which, among other things:

suspends principal payments under the loan agreement until October 2020;

suspends measurement of the debt yield for purposes of determining if a cash trap has occurred under the loan agreement until February 1, 2021;

suspends payments to the monthly furniture, fixtures, and equipment (“FF&E”) reserve under the loan agreement until November 2020;

permits the withdrawal of $650 from the FF&E reserve under the loan agreement between May 2020 and September 2020 to pay operating expenses of the borrowers thereunder;

provides for the allocation of 50% of the excess cash flow of the borrowers thereunder to the FF&E reserve starting in January 2021 and continuing until the FF&E reserve is replenished with $923; and

suspends the ability of the borrowers thereunder to make dividends and other distributions until the FF&E reserve is replenished.

On May 13, 2020, the Company entered into an amendment to its credit facility with Key Bank which, among other things, (a) increases the commitments under the credit facility from $102,000 to $136,080 and provides for an additional advance in order to refinance the New Term Loan related to the Aloft hotel located in downtown Atlanta, Georgia and (b) increases the floor to LIBOR for purposes of calculating the applicable interest rate under the credit facility from 0.25% to 0.50%. At the closing of the amendment, the Company borrowed $34,080 under the credit facility to repay the principal outstanding under the mortgage loan that previously financed the hotel and the hotel was added to the collateral pool of hotels securing the credit facility.

On May 13, 2020, the Company entered into an amendment to its loan agreement with Great Western Bank which, among other things, provides for the following modifications to the debt service coverage ratio covenant for the Leawood, Kansas Aloft collateral:

reduces the pre-distribution covenant from 1.35x to 1.00x for March 31, 2021 and June 30, 2021;

reduces the post-distribution covenant from 1.05x to 1.00x for March 31, 2021 and June 30, 2021; and

provides for the use of annualized results for purposes of measuring the covenants through March 31, 2021.