| Item 1.01. | Entry into a Material Definitive Agreement. |
Fifth Amendment to $600.0 Million
Senior Credit Facility
On July 21, 2022, Summit Hotel OP,
LP (the “Operating Partnership”), as Borrower, Summit Hotel Properties, Inc. (the “Company”), as Parent Guarantor,
and each party executing the credit facility documentation as a subsidiary guarantor, entered into the Fifth Amendment to Credit Agreement
(the “Fifth Amendment”) of the Operating Partnership’s $600 Million senior credit facility (the “Credit Facility”)
with Bank of America, N.A., as administrative agent, and a syndicate of lenders including Bank of America, N.A., Wells Fargo Bank, N.A.,
Regions Bank, U.S. Bank National Association, KeyBank National Association, Royal Bank of Canada, PNC Bank, National Association, Capital
One, National Association, Raymond James Bank, BMO Harris Bank N.A, and Truist Bank.
The following summary of the Fifth Amendment
is qualified in its entirety by reference to the Fifth Amendment to Credit Agreement, dated July 21, 2022, a copy of which is attached
hereto as Exhibit 10.1 and incorporated by reference herein. The following is a summary of the material amendments to the Credit Agreement:
The $600 million senior credit facility is comprised
of a $400 million revolving credit facility and a $200 million term loan facility. As part of the Fifth Amendment, the revolving credit
facility and term loan facility each now have two additional six-month extension options available, subject to certain conditions, that
result in a fully extended maturity date of March 31, 2025, for the $400 million revolving credit facility and April 1, 2025, for the
$200 million term loan facility. The initial maturity dates for the revolving credit facility and term loan facility remain March 31,
2023, and April 1, 2024, respectively.
The requirement that Borrower grant first lien
mortgages and assignments of leases on the unencumbered assets upon any advance that would cause the total amount outstanding under the
revolving credit facility to exceed $350,000,000 was eliminated in its entirety. On the Fifth Amendment effective date, the Borrower had
$400 million available to borrow on its revolving credit facility.
Certain financial and other covenants under the
Credit Facility were eliminated, waived, or adjusted for the periods described below:
| · | Minimum Liquidity Covenant: Eliminated on the Fifth Amendment
effective date and of no further force or effect |
| · | Minimum Consolidated Fixed Charge Coverage Ratio: Borrower must
maintain a ratio equal to or greater than 1.25:1.00 through December 31, 2022, and a ratio equal to or greater than 1.50:1.00 thereafter. |
| · | Maximum Leverage Ratio: Borrower must maintain a ratio less
than or equal to 8.75:1.00 beginning in the quarter ended June 30, 2022, which adjusts lower through March 31, 2024, and must be maintained
at less than or equal to 7.25:1.00 thereafter. |
| · | Maximum Secured Leverage Ratio: Waived through December 31,
2022. Must not exceed 45% of total asset value thereafter. |
| · | Maximum Secured Recourse Leverage Ratio: Waived through December
31, 2022. Must not exceed 10% of total asset value thereafter. |
| · | Maximum Unsecured Leverage Ratio: Shall not exceed 65% through
and including the quarter ended December 31, 2023, and 60% for the quarter ended March 31, 2024, and thereafter. |
| · | Minimum Unsecured Interest Coverage Ratio: Borrower must maintain
a ratio greater than or equal to 1.50:1.00 beginning in the quarter ended June 30, 2022, which adjusts higher through December 31, 2023,
and must be maintained at less than or equal to 2.00:1.00 thereafter. |
All equity pledges may be released upon demonstration
of compliance with financial covenants for two consecutive quarters after December 31, 2022.
The Credit Facility interest rate provisions
transitioned from the London Interbank Offering Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”)
on the Fifth Amendment effective date. The Borrower may elect from various interest period options including Adjusted Base Rate, Adjusted
Term SOFR, and Adjusted Daily SOFR
The Credit Facility Swingline was terminated
on the Fifth Amendment effective date, but the Borrower has retained its ability to make same-day borrowings through Base rate and Adjusted
Daily SOFR advances.
Simultaneous with the effectiveness of the Fifth
Amendment, Deutsche Bank AG New York Branch resigned as administrative agent under the Credit Agreement and the syndicate of lenders appointed
Bank of America, N.A. to function as the successor administrative agent.
Eighth Amendment to $225.0 Million 2018 Term Loan
On July 21, 2022, the Operating Partnership,
as borrower, the Company, as parent guarantor, and each party executing the credit facility documentation as a subsidiary guarantor, entered
into the Eighth Amendment to the First Amended and Restated Credit Agreement (the “Eighth Amendment”) of the Operating Partnership’s
$225 Million 2018 term loan (the “2018 Term Loan”) with KeyBank National Association, as administrative agent, and a syndicate
of lenders including KeyBank National Association, Regions Bank, Raymond James Bank, N.A., Branch Banking and Trust Company, Capital One,
National Association, PNC Bank, National Association, American Bank, N.A., and U.S. Bank National Association.
The amendments to the 2018 Term
Loan made pursuant to the Eighth Amendment are substantially similar to the amendments described above concerning the Company’s
$600 Million Senior Credit Facility. There was no modification to the maturity date of the $225.0 Million 2018 Term Loan. The summary
of the Eighth Amendment is qualified in its entirety by reference to the Eighth Amendment to First Amended and Restated Credit Agreement,
dated July 21, 2022, a copy of which is attached hereto as Exhibit 10.2 and incorporated by reference herein.
