FIRST AMENDED AND RESTATED LOAN AGREEMENT

FIRST AMENDED AND RESTATED LOAN AGREEMENT

THIS FIRST AMENDED AND RESTATED LOAN AGREEMENT (“Agreement”) is entered into as of August 31, 2009 by and between FIRST NATIONAL BANK OF OMAHA, N.A., a national banking association (“First National”) as a Lender, Administrative Agent and Collateral Agent for the Lenders, Union Bank & Trust Company, a Nebraska State Banking Corporation (“Union”) as a Lender, and the other Lenders a party hereto from time to time, and SUMMIT HOTEL PROPERTIES, LLC (“Summit Hotel”), a South Dakota limited liability company and SUMMIT HOSPITALITY V, LLC (“Summit Hospitality”), a South Dakota limited liability company. First National, Union and the other lenders a party hereto from time to time may be hereinafter collectively referred to as the “Lenders” and individually as a “Lender”. Summit Hotel and Summit Hospitality may be collectively referred to hereinafter as the “Borrowers” and individually as a “Borrower”. The Administrative Agent and the Collateral Agent for the Lenders may be hereinafter collectively referred to as the “Agent”.

WHEREAS, the Borrowers, the Agent, and certain of the Lenders are parties to a Loan Agreement, dated as of July 20, 2004, as amended (as so amended and as in effect prior to the date hereof, the “Current Credit Agreement”), pursuant to which the Lenders party thereto have made loans available to the Borrowers;

WHEREAS, the Borrowers have requested that the Current Credit Agreement be amended and restated on the terms and conditions set forth herein;

WHEREAS, it is intended that the indebtedness of the Borrowers under this Agreement be a continuation of the indebtedness of the Borrowers under the Current Credit Agreement; and

WHEREAS, under the terms and conditions of and subject to the limitations contained in this Agreement, Lenders have approved a revolving line of credit facility in the maximum principal amount of the lesser of (i) the aggregate Commitments from Lenders or (ii) $28,200,000.00 (the “Line of Credit”). The Line of Credit will consist of Acquisition Advances, Construction Advances and letters of credit as provided for in this Agreement. The Advances and other financial accommodations described in this Agreement may be collectively referred to as the “Loan”.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I
Loan

1.1. Definitions . Certain capitalized terms not otherwise defined in the body of this Agreement shall have the meanings given to such terms in Exhibit A attached hereto and incorporated herein by reference.

1.2. Line of Credit . Subject to the terms of this Agreement and the maximum amount available for Advances provided for in this Agreement, Lenders severally agree to lend Borrowers, from time to time until the termination hereof, such sums as a Borrower may request, but which shall not exceed in the aggregate principal amount at any time outstanding the lesser of (i) the aggregate Commitments from Lenders, and (ii) Twenty-Eight Million Two Hundred Thousand and No/100 Dollars ($28,200,000.00), with a Five Million and No/100 Dollar ($5,000,000.00) sub-limit on the Line of Credit to support the issuance of letters of credit by First National only for the account of Borrowers. The maximum principal amount available under the Line of Credit will be reduced by the face amount of letters of credit issued under the Line of Credit. Such letters of credit will be evidenced and governed by First National’s standard letter of credit documentation in effect at the time of issuance of a letter of credit. In consideration of First National’s issuance of letters of credit, Borrowers will pay the Agent for the account of First National a fee equal to one percent (1%) of the face amount of letters of credit outstanding, payable quarterly, in arrears. Such letters of credit will be deemed a Loan under this Agreement and the other Loan Documents, secured by the Collateral. In no event shall the outstanding aggregate principal amount of Advances exceed the aggregate Commitments from Lenders. The Loan will consist of Acquisition Advances and Construction Advances as described below, and letters of credit. In addition, the aggregate Commitments will be reduced by the outstanding principal amount of Advances and letters of credit extended under the Current Loan Agreement. Subject to the conditions and limitations set forth herein, Advances will be made to Borrowers from time to time during the period commencing on the date hereof to but not including the Termination Date, unless renewed by written agreement between Lenders and Borrowers. In addition to the foregoing, the Line of Credit shall be deemed to automatically terminate if the Agent accelerates the Notes and Advances following an Event of Default, or if the occurrence of an Event of Default (as defined under Article VI hereof) causes any Note or Advance to become immediately due and payable.

1.3. Purpose . Borrowers will use the Advances for the following purposes: (i) to finance the purchase of a Hotel(s) (an Advance used for such purpose shall be hereinafter referred to as an “Acquisition Advance”); (ii) to fund the development and construction of a Hotel and related improvements on real property acquired or leased by a Borrower (an Advance to construct a Hotel and related improvements on Property shall be hereafter referred to as a “Construction Advance” and the Hotel and related improvements to be financed with each Construction Advance shall be referred to as a “Project”) and (iii) to support the issuance, for the account of Borrowers, of letters of credit as described above.

1.4. Limitations on Advances . If the underlying Hotel being acquired or developed has been owned by the requesting Borrower for less than two (2) years, Acquisition Advances and Construction Advances shall at no time exceed the lesser of (i) the Project Costs for Property acquired with such Acquisition Advance or being developed with such Construction Advance or (ii) sixty-five percent (65%) of the appraised as stabilized value of such Property. If the underlying Hotel being acquired or developed has been owned by the requesting Borrower for two (2) years or more, Acquisition Advances and Construction Advances shall at no time exceed sixty-five percent (65%) of the appraised as stabilized value of such Property. In connection with a request for an Acquisition Advance or Construction advance, the requesting Borrower will provide the Agent for the Agent’s approval a Project Budget which includes the total Project Cost of constructing or acquiring a Project. No Construction Term Note (as defined below) shall exceed sixty-five percent (65%) of the lesser of (i) the Appraised Value of such Property or (ii) the Total Project Costs for such Property. Advance supporting the issuance of letters of credit shall at no time exceed the letter of credit sub-limit provided for in Section 1.1 above at any one time in the aggregate.

1.5. Notes . Each Acquisition Advance will be evidenced by a Term Note in the form attached hereto as Exhibit B in the principal amount of such Acquisition Advance. Each Term Note evidencing an Acquisition Advance will be limited to a term of one year and have a maturity date of the first anniversary date of the Term Note evidencing such Acquisition Advance. The availability under the Line of Credit for Advances shall be reduced by the aggregate principal balance outstanding on Term Notes evidencing Acquisition Advances.

Each Construction Advance shall be evidenced by a Construction Note in the maximum principal amount of the Construction Advance to be executed and delivered by the applicable Borrower to the Agent prior to the any advances being made under such Construction Note. Advances under a Construction Note shall be made in accordance with the applicable provisions of this Agreement and the terms of such Construction Note. The availability for Advances under the Line of Credit shall be reduced by the maximum principal amount of the Construction Note as of the date of such Construction Note. Each Construction Note evidencing a Construction Advance shall have a term not to exceed eighteen (18) months from the date of the Construction Note evidencing such Construction Advance. Each Construction Note shall be substantially in the form of the Construction Note attached to this Agreement as Exhibit C and incorporated herein by reference.

The Agent is authorized to record in a manner satisfactory to the Agent, appropriate notations evidencing the date, type and amount of each Advance, the interest rate applicable thereto, the date and amount of each payment, and the interest of each Lender therein, which recording shall constitute prime facie evidence of the accuracy of the information recorded; provided, however, that the failure to make such recordings shall not affect the obligations of Borrowers under the Loan or this Agreement or affect the validity of any Advance.

1.6. Repayment . Advances shall be repaid as follows:

(a) Acquisition Advances . Each Term Note evidencing an Acquisition Advance shall be payable as follows: (i) interest only shall be paid monthly, in arrears on the dates specified in the applicable Term Note and (ii) the principal balance together with accrued and unpaid interest shall be due and payable in full on the first anniversary date of the Term Note evidencing such Acquisition Advance.

(b) Construction Advances . Each Construction Note shall be payable as follows: (i) interest only shall be payable monthly, in arrears on the dates specified in the applicable Construction Note; and (ii) the principal balance together with accrued and unpaid interest shall be due and payable in full on the Maturity Date provided for in each Construction Note (which Maturity Date shall not be more than 18 months from the date of such Construction Note); provided, however, that subject to the terms of this Agreement and provided that no Event of Default has occurred, Borrowers may, on the Maturity Date of such Construction Note, convert the principal amount outstanding on a Construction Note to a “Construction Term Note” described below. If Borrowers elect to convert the principal amount outstanding on a Construction Note to a Construction Term Note, then such Construction Term Note shall be evidenced by a Construction Term Note in the principal amount of the principal amount outstanding on the Construction Note being converted executed by Borrowers in favor of the Agent. Each Construction Term Note will bear interest at the rate provided for below and will be payable as follows: (y) interest only shall be paid monthly, in arrears and (z) the principal balance together with accrued and unpaid interest shall be due and payable in full on the first anniversary date of the Construction Term Note.

All payments due under this Agreement and the other Loan Documents shall be made in immediately available funds to the Agent at its office described in the notice provision of this Agreement unless the Agent gives notice to the contrary. Payments so received at or before 1:00 p.m. Omaha, Nebraska time on any Business Day shall be deemed to have been received by the Agent on that Business Day. Payments received after 1:00 p.m. Omaha, Nebraska time on any Business Day shall be deemed to have been received on the next Business Day, and interest, if payable in respect of such payment, shall accrue thereon until such next Business Day. The Agent shall remit to each Lender its Percentage of all payments of principal and interest received by the Agent no later than the next Business Day after the Agent is deemed to have received such payment.

1.7. Interest . The principal balance of each Term Note evidencing an Acquisition Advance, each Construction Note evidencing a Construction Advance and each Construction Term Note will bear interest at a variable per annum rate equal to the greater of (i) the LIBOR Rate plus four percent (4%), fixed for interest periods of ninety (90) days, or (ii) five and one half percent (5 1/2 %). In no event will any Note bear interest at a per annum rate less than five and one half percent (5 1/2 %).

Interest on the Advances will be calculated on the number of days outstanding based upon a year consisting of three hundred and sixty (360) days. The LIBOR Rate shall initially be set on the first Business Day on the calendar month of the applicable note, and shall adjust 90 days thereafter to the LIBOR Rate in effect on the first Business Day of the month in which such 90 ^th day falls. If the Advance is made on any day other than the first Business Day of a month, the initial LIBOR Rate to be in effect until adjustment as provided for above month shall be that 90 day LIBOR rate in effect on the first Business Day of the month of in which such Advance is made. The interest rate charged on any Term Notes, Construction Notes or Construction Term Notes outstanding under the Current Loan Agreement is hereby amended to the applicable rate provided for in this Section.

The principal balance of all Notes will bear interest after the occurrence and during the continuance of any Event of Default and after their maturity date, whether by acceleration or otherwise, at the variable per annum rate of four percent (4%) in excess of the interest rate determined above, but not to exceed the maximum rate allowed by law.

1.8. Notice of Borrowing/Disbursements . A Borrower may request an Acquisition Advance or a Construction Advance by delivering a notice (a “Notice of Borrowing”) to the Agent not less than thirty (30) Business Days prior to the requested date of funding of such Acquisition Advance or Construction Advance. Each Notice of Borrowing shall specify the requested date of such Acquisition Advance or Construction Advance (which shall be a Business Day), and the amount of such requested Acquisition Advance or Construction Advance. In addition, each Notice of Borrowing shall include the Property location, franchise or brand of the applicable hotel, the Project Costs and such other information as may be requested by the Agent. Lenders will not be obligated to fund any Advances until the conditions set forth in this Agreement have been satisfied. Each Borrower agrees that the Agent may rely and act upon any Notice of Borrowing the Agent receives from an individual who the Agent, absent gross negligence or willful misconduct, believes to be a representative of a Borrower. The Agent will provide the Lenders each Notice of Borrowing received by the Agent.

The Lenders shall, before 1:00 p.m. central time on the date of funding of an Advance, make available to the Agent at the Agent’s address referred to in this Agreement for notices in same day funds, such Lenders’ Percentage of such Advance. After the Agent’s receipt of such funds, the Agent will make such funds available to the applicable Borrower as provided for in this Agreement. Notwithstanding the foregoing, unless the Agent shall have received notice from a Lender prior to the date of funding of any Advance that such Lender will not make available to the Agent such Lender’s Percentage of such Advance, the Agent may assume that each Lender has made such Percentage available to the Agent on the date of funding of such Advance in accordance with the first sentence of this paragraph, and the Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If and to the extent a Lender shall not have so made such funds available to the Agent (a “Funding Default”), such Lender agrees to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the applicable Borrower until the date such amount is repaid to the Agent, at the customary rate reasonably set by the Agent for the correction of errors among banks. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Percentage in such Advance for purposes of this Agreement. Once a Funding Default has occurred, then the Agent shall no longer have the discretion under this Section to make funds available to the applicable Borrower on the assumption that the Lenders will make the corresponding funds available to the Agent. In no event shall the Agent be obligated to advance funds to the Borrowers (and in no event shall any other Lender have any liability to the Borrowers) if a Defaulting Lender fails to advance its share of such funds to the Agent in accordance with the requirements of this Section.

The Agent will deposit the proceeds of any Advance to the requesting Borrower’s designated deposit account maintained at First National.

1.9 Construction Note Advances . Subject to compliance by Borrowers with the terms and conditions of this Agreement, Lenders will make advances under a Construction Note to the applicable Borrower according to the applicable Loan Budget for the Project financed with the Construction Note (i) for direct construction costs provided for in the Project Budget incurred by such Borrower in connection with the construction of the Project, and (ii) for costs, other than such direct construction costs, incurred by the such Borrower in connection with the Construction Advance or the construction of the Project and approved by the Agent in the Loan Budget (hereinafter referred to as “Other Project Costs”), as itemized in an Application for Certificate for Payment, AIA Document G702, together with continuation sheets, AIA Document G703, as the same may be revised from time to time after the date hereof with the approval of the Agent, or as Other Project Costs are itemized and provided to the Agent by such Borrower. Lenders will not be required to make an advance under a Construction Note to a Borrower in an amount in excess of that set forth in the Loan Budget for any item set forth therein. The Loan Budget may be amended during the course of construction of a Project to reallocate funds from a budget category in which the full budgeted amount is not required to another budget category provided that any such reallocation which results in a variance over five percent (5%) and greater than $5,000.00 as to any such budget category shall be subject to the prior written approval of the Agent. Lenders will not be obligated to make aggregate advances under a Construction Note in excess of the amount, from time to time, of Total Project Costs, unless the Agent deems it advisable to do so. Each request by a Borrower for an advance under a Construction Note for direct construction costs shall be on AIA Documents G702 and G703 and for Other Project Costs a certificate of payment in form and substance satisfactory to the Agent and signed by the such Borrower’s chief financial officer (any such request being hereinafter referred to as a “Request for Construction Note Advance”). Each Request for Construction Note Advance shall be delivered to the Agent not less than seven (7) business days prior to the date upon which an advance under a Construction Note is requested and shall be based upon the items and descriptions shown in the continuation sheets, and shall be accompanied by (i) lien waivers or paid invoices in form and content acceptable to the Agent, by the Agent’s architect engaged to inspect the construction of the Project (the “Inspecting Architect”) and, if applicable, the title company, executed by each and every individual supplier of labor or material for all contracts greater than $10,000.00 in the aggregate for all the costs of labor and material provided on a timely basis for the immediately preceding disbursement (execution of lien waivers are to be by proper party or parties so authorized to execute on behalf of the supplier or contractor and shall clearly identify the party executing the waiver, the date, the amount, the item of labor or materials supplied, the name of the firm, and address of the property and such other documents as may be required to induce the title company to insure each advance under a Construction Note made hereunder against all future mechanics’ and materialmen’s liens for labor furnished and material supplied in connection with the construction of the Project); (ii) the requisitions for payment from subcontractors and materialmen engaged in the construction of the Project; and (iii) such other information and documents as may be reasonably requested or required by the Agent. All requests and requisitions for payment shall be approved by the applicable Borrower’s chief financial officer or other officer acceptable to the Agent. Advances under a Construction Note shall be disbursed by the Agent, and each advance under a Construction Note shall be made, in whole or in part, (i) by crediting the amount thereof to an account of the applicable Borrower to be maintained with the Agent and designated for the applicable Project, (ii) at the discretion of the Agent, by paying the general contractor on the Project (the “General Contractor”) or a subcontractor or materialmen engaged in the construction of the Project, or (iii) in such other manner as shall be mutually agreed upon by the title company and the Agent. Lenders will not be obligated to make advances under a Construction Note more frequently than once every thirty (30) days. The Agent will not be obligated to fund an advance under a Construction Note unless the Agent is satisfied, in its sole discretion, and the Inspecting Architect is satisfied, that the conditions precedent to the making of such advance have been satisfied by the applicable Borrower. Anything in this Agreement or any other agreement made with respect to a Construction Advance to the contrary notwithstanding, any advance under a Construction Note or approval given by the Agent or the Inspecting Architect, whether or not before or after an inspection of the Project by the Agent, the Inspecting Architect or otherwise, shall not be deemed to be an approval by the Agent or Lenders of any work performed thereon or approval or acceptance by the Agent or Lenders of any work done or materials furnished with respect thereto or a representation by the Agent or Lenders as to the fitness of such work or materials. All disbursements by the Agents shall create indebtedness under the applicable Construction Note. Lenders will fund their Percentage of any advance under a Construction Note in the manner provided for in Section 1.8 above.

1.10 Advances for Stored Materials . Notwithstanding anything to the contrary contained in this Agreement, Lenders may make advances under a Construction Note to pay for stored materials required in connection with the construction of the Project, provided that (i) such materials are in accordance with the Plans and Specifications approved by the Agent for the Project, (ii) such materials are securely stored and properly inventoried, (iii) such materials, if stored off-site, are stored in a bonded warehouse or with a contractor, materialman or fabricator who bears the risk of loss until delivery and installation of such materials in the Project as part of the work in place, and who has supplied a bond securing such contractor’s, materialman’s or fabricator’s obligation to so deliver and install, such bond shall be issued by a company, shall be in an amount and shall be in form and substance satisfactory to the Agent and shall name the Agent as a dual obligee, (iv) the bills of sale and contracts under which such materials are being provided shall be in form and substance satisfactory to the Agent, (v) such materials are insured against casualty, loss and theft in a manner satisfactory to the Agent, (vi) the applicable Borrower owns such materials free and clear of all liens and encumbrances of any nature whatsoever and establishes such ownership by evidence satisfactory to the Agent, (vii) the applicable Borrower executes and delivers to the Agent such additional security documents as the Agent deems necessary to create and perfect a first lien in such materials as additional security for the payment of the Construction Advance, (viii) the aggregate amount of such disbursements for such materials is verified by the Agent pursuant to the provisions of this Agreement, and (ix) the aggregate amount of such disbursements for such materials which are stored shall in no event exceed Fifty Thousand Dollars ($50,000.00).

1.11 Additional Conditions to Advances under a Construction Note . The obligation of Lenders to make any advances under a Construction Note pursuant to this Agreement (including, but not limited to the initial advance if applicable) is subject to the following additional conditions precedent:

(a) Each Request for Construction Note Advance shall be accompanied by a certificate of the Inspecting Architect in the form attached to the Request for Construction Note Advance based upon an on-site inspection of the Project made by the Inspecting Architect not more than seven (7) days prior to the date of such Request for Construction Note Advance, in which the Inspecting Architect shall (i) certify that the portion of the Project completed as of the date of such inspection has been completed in accordance with the Plans and Specifications approved by the Agent, and (ii) state its estimate of (aa) the percentage of construction of the Project completed as of the date of such inspection on the basis of work in place as part of the Project and the continuation sheets of the Request for Construction Note Advance, (bb) direct construction costs actually incurred for work in place as part of the Project as of the date of such inspection, (cc) the actual sum necessary to complete construction of the Project in accordance with the approved Plans and Specifications, and (dd) the amount of time from the date of such inspection which will be required to complete construction of the Project in accordance with the approved Plans and Specifications.

(b) Prior to each advance under a Construction Note, the title company shall have issued (i) an endorsement to the Title Policy reflecting the amount of all previous advances, insuring the continued priority of the Mortgage encumbering the Project over mechanic’s liens and showing no exceptions to the title of the property encumbered thereby other than those exceptions previously approved by the Agent, and (ii) a commitment to issue an endorsement insuring the priority of the lien of the deed of trust or mortgage applicable to the Project, subject only to exceptions previously approved by the Agent in writing, for the full amount of each such advance under such Construction Note and all previous advances under such Construction Note made by Lenders to the such Borrower pursuant to this Agreement. Such continuation of title shall contain affirmative insurance that covenants and restrictions, if any, reported against the fee or leasehold estate have not been violated by the Project.

(c) Prior to each advance under a Construction Note, the applicable Borrower shall, upon request of the Agent, furnish the Agent, the title company and the Inspecting Architect with evidence satisfactory to the Agent, the title company and the Inspecting Architect, showing payment of all bills and charges for which advances under such Construction Note have been previously made pursuant to this Agreement. Such Borrower shall also deliver to the Agent, upon request, such bills, receipts, invoices and other evidence as may reasonably be required by the Agent, the title company and/or the Inspecting Architect.

(d) Construction of the Project shall comply with all applicable laws, rules, restrictions, orders and regulations of all governmental authorities with jurisdiction over the Project, and Borrowers have delivered to the Agent all necessary certificates, authorizations, permits and licenses which are required to permit the construction and completion of the Project, as issued by the appropriate governmental authorities. Borrowers, to the extent Borrowers may lawfully do so, hereby assigns to the Agent all of Borrowers’ right, title and interest in and to such certificates, authorizations, permits and licenses, as security for the payment of the applicable Construction Note and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan Documents.

(e) The applicable Borrower has submitted to the Agent and the Inspecting Architect the Plans and Specifications. Such Borrower shall have submitted the Plans and Specifications to the General Contractor and the General Contractor shall have agreed to perform its obligations under the General Construction Contract in a manner consistent with the requirements of the Plans and Specifications and to keep the Project within budget. The General Construction Contract and all major subcontracts shall include a provision for retainage of not more than ten percent (10%) of all amounts due, which retainage shall be disbursed only upon substantial completion of the Project and satisfaction of all final disbursement and certification requirements, except as otherwise approved by the Agent in writing. Each material addition or modification to the Plans and Specifications shall be approved in writing by the Agent, and, to the extent required by law, by the appropriate governmental authorities. Such Borrower will construct and equip the Project in accordance with the Plans and Specifications approved by the Agent free and clear of all liens, encumbrances and security instruments (other than the Mortgage encumbering the Project and the other Loan Documents and the permitted encumbrances set forth therein). The Plans and Specifications as approved by the Agent shall become the property of the Agent upon the occurrence of an Event of Default. The Project shall be constructed and equipped in compliance with the requirements of governmental authorities including, without limitation, zoning, building codes, and laws relating to disabled persons, endangered species, and the environment. The Agent and/or its representatives (including, without limitation, the Inspecting Architect) shall have the right of entry and free access to the Project to inspect the Project during normal business hours upon reasonable notice. Borrowers shall make available to the Inspecting Architect and the Agent, upon request and at the location where the same are kept, all shop and related drawings used in connection with the Plans and Specifications and the construction of the Project, and shall provide copies of such drawings and documents to the Agent and the Inspecting Architect promptly upon request.

(f) The Inspecting Architect shall be of the opinion that the Project can be completed by its completion date within budget.

(g) The applicable Borrower shall have delivered to the Agent and the Inspecting Architect a copy of the Architect Contract for the Project, which Architect Contract shall be in form and substance satisfactory in all respects to the Agent and to the Inspecting Architect. Such Borrower will not agree to any material modification or termination of the Architect Contract without the prior approval of the Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s right, title and interest in and to the Architect Contract, as security for the payment of the Construction Note and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan Documents.

(h) The applicable Borrower shall have delivered to the Agent a copy of the General Construction Contract, which General Construction Contract shall be in form and substance satisfactory in all respects to the Agent. Such Borrower will not agree to any material modification or termination of the General Construction Contract without the prior approval of the Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s right, title and interest in and to the General Construction Contract, as security for the payment of the Construction Note and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan Documents.

(i) All major subcontracts shall be submitted to the Agent and the Inspecting Architect before any such major subcontracts are awarded by the applicable Borrower or the General Contractor, and each major subcontract shall be in form and substance satisfactory in all respects to the Agent. A subcontract shall be deemed major if the amount due thereunder is $75,000.00 or more. Neither such Borrower nor the General Contractor will agree to any material modification or termination of any major subcontract without the prior approval of the Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s right, title and interest in and to the major subcontracts, as security for the payment of the Construction Note and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan Documents.

(j) The applicable Borrower will make available for inspection at all times by the Agent and the Inspecting Architect copies of all subcontracts other than the major subcontracts, and will furnish to the Agent and the Inspecting Architect, upon request, copies of the same. Neither such Borrower nor the General Contractor will agree to any material modification or termination of such subcontracts without the prior approval of the Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s right, title and interest in and to such subcontracts, as security for the payment of the Construction Note and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan Documents.

(k) The major subcontracts shall be awarded in accordance with the timetable approved by the Agent and the Inspecting Architect, as the same may be revised from time to time with the approval of the Agent. If requested by the Agent, the applicable Borrower will cause the Architect, the General Contractor and the major subcontractors to respectively execute and deliver to the Agent, contemporaneously with the execution and delivery of their respective contracts, consents or letter agreements pursuant to the provisions of which the Architect, the General Contractor and the major subcontractors shall agree to perform their respective contracts at no additional cost or expense for the benefit of the Agent, in the Event of Default or a foreclosure of the Mortgage encumbering the Project, which consent or letter agreement shall be in form and substance satisfactory to the Agent.

(l) Lenders will not be obligated to make an advance under a Construction Note with respect to any subcontractor or materialman providing work or materials with respect to the Project unless such subcontractor or materialman is providing such work or materials under a signed contract or purchase order.

(m) The applicable Borrower will observe and perform all of the terms, covenants and conditions of the Architect Contract, the General Construction Contract, the subcontracts and any other contracts relating to the Project on such Borrower’s part to be observed or performed.

(n) The applicable Borrower will comply with and is in compliance with all environmental laws which are applicable to the Property encumbered by the applicable Mortgage, and shall have submitted an environmental site assessment in form and content satisfactory to the Agent prepared by a firm approved by the Agent which establishes the environmental condition of the Property as satisfactory to the Agent.

(o) The Agent and/or the Inspecting Architect shall have made such site inspection of the Project site as it deems necessary.

(p) The Agent shall have received the following, in addition to all other conditions to the initial advance under a Construction Note set forth in this Agreement, from the applicable Borrower on or before the date of such initial advance:

(1) the applicable Construction Note, duly executed by Borrowers;

(2) the Mortgage and Security Agreement, duly executed by the applicable Borrower, constituting a valid and perfected first lien on the Project;

(3) Uniform Commercial Code financing statements, in form and substance satisfactory to the Agent, duly authorized and describing the equipment, machinery, furniture and fixtures and any personal property collateral covered by the applicable Mortgage and Security Agreement;

(4) Any other applicable Loan Documents duly executed by the applicable Borrower and any other Person required by the applicable Loan Document;

(5) a duly certified ALTA/ACSM survey showing the boundaries of the land and all improvements thereon comprising the Project, with flood zone and wetlands certification, of date satisfactory to the Agent (upon request, Borrowers will supply successive surveys as construction progresses);

(6) evidence of zoning and construction permits;

(7) a complete copy of the Plans and Specifications along with any changes or amendments thereto;

(8) an MAI Appraisal Report of the Project meeting FIRREA guidelines and acceptable to the Agent establishing the value of the Project in an amount acceptable to the Agent;

(9) A Phase I environmental site assessment meeting current ASTM Standards and otherwise in form and scope satisfactory to the Agent and such other reports or studies of the Project as may be reasonably required by the Agent, performed by an environmental consultant or engineer acceptable to the Agent, which establishes the environmental condition of the Project as satisfactory to the Agent;

(10) A soil survey or study performed by engineers acceptable to the Agent which establishes that the soil condition of the Project is suitable for the construction of the Project thereon;

(11) the Project Budget and Loan Budget, in form and substance satisfactory to the Agent and the Inspecting Architect;

(12) Evidence satisfactory to the Agent that all installments of general real estate taxes, special assessments and other levies against the Project have been paid in full;

(13) Evidence satisfactory to the Agent that the construction of the Project and the operation thereof are in compliance with all governmental requirements and that all utilities necessary or desirable for the operation of the Project are available to the Project;

(14) Payment of all of the Agent’s costs and expenses incurred in underwriting, documenting, closing and disbursing the Construction Advance, including, but not limited to, the Agent’s attorneys’ fees and costs and the costs and expenses of the Inspecting Architect; and

(15) a Federal Emergency Management Agency Standard Agency Flood Hazard Determination Certificate covering the Hotel securing the Loan.

All conditions and requirements of this Agreement relating to the obligation of Lenders to make advances under a Construction Note are for the sole benefit of Lenders and no other person or party (including, without limitation, the General Contractor, major subcontractors, and other subcontractors and materialmen engaged in the construction of the Project) shall have the right to rely on the satisfaction of such conditions and requirements by Borrowers as a condition precedent to Lenders making an advance under a Construction Note. The Required Lenders shall have the absolute right, in their sole discretion, to waive any such condition or requirement as a condition precedent to making an advance under a Construction Note.

1.12. Advances Without Receipt of a Draw Request . Notwithstanding anything to the contrary, the Agent has the irrevocable right at any time and from time to time to apply funds which Lenders agree to advance hereunder to pay interest on a Construction Note as and when interest becomes due, and to pay any and all reasonable actual costs of the Agent in connection with a Construction Advance which shall include all abstracting and recording fees, site inspection expenses, reasonable attorneys’ fees for preparation and review of documents, and expenses related to the closing of the Construction Advance.

1.13. Deficiency : The applicable Borrower will submit to the Agent and the Inspecting Architect the Project Budget detailing by line item the estimated cost of constructing each phase of the applicable Project, and the Loan Budget prepared by such Borrower which details the application of the Construction Note proceeds to each phase of the Project. Lenders will not be obligated to make any advance under a Construction Note, in the reasonable opinion of the Agent or the Inspecting Architect, at any time, the balance of the Construction Note yet to be advanced by Lenders is less (the amount by which it is less being hereinafter referred to as the “Deficiency”) than the actual sum, as estimated by the Agent or the Inspecting Architect, which will be required to complete construction of the Project in accordance with the Plans and Specifications and this Agreement and all costs and expenses of any nature whatsoever which will be incurred in connection with the completion of construction of the Project and all operating deficits of the Project (including debt service on the Construction Note). Borrowers will, within ten (10) days after being notified by the Agent that there is or will be a Deficiency, either (i) invest Borrowers’ own funds in the Project in a manner satisfactory to the Agent an amount equal to the Deficiency and deliver to the Agent evidence satisfactory to the Agent of such investment, which investment shall remain invested in the Project until the Construction Advance has been paid in full, or (ii) deposit with the Agent an amount sufficient to eliminate the Deficiency. Any amounts deposited by Borrowers with the Agent to pay the Deficiency shall not bear interest, may be held separate or co-mingled with other funds of the Agent, and shall be applied by the Agent to pay costs as construction of the Project progresses before any further advances are made on the Construction Note. Borrowers’ failure to invest in the Project or deposit the funds necessary to eliminate the Deficiency within five (5) days following notice from the Agent shall constitute an Event of Default hereunder entitling the Agent to exercise any and all remedies provided for in this Agreement, otherwise available at law or in equity or in any other Loan Documents. Any determination of a Deficiency by the Agent or the Inspecting Architect will be deemed conclusive. If an Event of Default shall occur and be continuing, the Agent, in addition to all other rights and remedies which it may have, shall have the unconditional right, at its option, to apply, in whole or in part, any amounts deposited by either Borrower with the Agent with respect to the Deficiency, to the payment of the Advances in such order and priority as the Required Lenders deem appropriate.

1.14. Specific Additional Covenants of Borrowers. Each Borrower will comply with each of the following terms and condition:

(a) The applicable Borrower will obtain and furnish to the Agent within thirty (30) days after the completion of the Project the originals or copies of all permanent certificates of occupancy and all other certificates, licenses, consents and other approvals of the governmental authorities which are required for the use and occupancy of the Project; and a certificate of completion from the Architect and General Contractor certifying that work on the Project has been completed in accordance with the Plans and Specifications and any and all change orders as permitted under this Agreement, and that all labor, services, materials and supplies used in such work have been paid for and that the completed Project conforms with all applicable zoning, land use and planning, building and environmental laws and regulations of the governmental authorities having jurisdiction over the Project. In no event shall Lenders be required to make the last advance under a Construction Note pursuant to this Agreement until all such certificates, licenses, consents and approvals have been obtained and delivered to and approved by the Agent and the Inspecting Architect.

(b) The applicable Borrower will furnish to the Agent from time to time upon request (i) the names of all persons with whom such Borrower or the General Contractor has contracted or intends to contract for the construction of the Project or the furnishing of labor or materials in connection therewith along with the tax identification numbers for all such persons and copies of their contracts, (ii) a list of all unpaid bills for labor and materials with respect to construction of the Project, (iii) the Project Budget and Loan Budget and revisions thereof showing estimated direct construction costs and other costs and expenses to be incurred in connection with the completion of construction of the Project, (iv) lien waivers, receipted bills or other evidences of payment of all direct construction costs and other costs and expenses incurred in connection with the construction of the Project and any other costs and expenses relating thereto, and (v) such other information relating to Borrowers, the Project, any indemnitor or other Person connected with Borrowers, the construction of the Project or any collateral for the Advances or other source of repayment of the Advances as the Agent may reasonably request.

(c) Borrowers will pay when due all direct construction costs and other costs and expenses incurred by a Borrower in connection with the construction of the Project or any repair and restoration of the Project.

(d) Borrowers will pay all reasonable fees and charges incurred in the procuring, making and administrating of a Construction Advance and any Construction Term Note converted therefrom, including, without limitation, fees, expenses and attorneys fees incurred by the Agent, fees of the Inspecting Architect, appraisal fees, and fees and expenses relating to examination of title, title insurance premiums, environmental assessments and surveys.

(e) The applicable Borrower will execute and/or enter into any easements which the Agent may determine are necessary to obtain ingress and egress to the Project or for the use thereof or for the purpose of providing utilities thereto.

(f) The applicable Borrower will comply with all governmental requirements with respect to the construction, ownership and operation of a Project, and shall pay all taxes and assessments, general and special, and all other levies or impositions on the Project prior to delinquency; provided, however, that such Borrower may contest the amount or validity of any taxes, assessments, levies or impositions on the Project by appropriate legal proceedings, diligently pursued, provided that (i) such Borrower will first make all contested payments, under protest if it desires, but if payment under protest is not permitted by the taxing authority, such contested payment need not be made, (ii) neither the Project, any part thereof, nor any interest therein shall be in any danger of being sold, forfeited, lost or interfered with, (iii) Borrowers shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by the Agent, and (iv) all expenses incurred in connection with such proceedings shall be paid by Borrowers.

1.15. Change Orders . Notwithstanding anything to the contrary contained in this Agreement, the applicable Borrower has the right to enter into or to authorize the entering into of change orders with respect to a Project without obtaining the Agent’s prior written consent, provided that no such change order will change the gross square feet to be contained in the Project, the basic layout of the Project, the number of parking spaces to be contained in the Project, involve the use of materials, fixtures or equipment which will not be at least equal in quality to the materials, fixtures and equipment originally specified in or required by the Plans and Specifications, as approved by the Agent and the Inspecting Architect, or increase the Total Project Cost by more than $10,000.00.

1.16. Inspecting Architect . Borrowers will be responsible for payment of the Inspecting Architect’s reasonable fees at rates reasonable within the local market.

1.17. Title Insurance . As a condition precedent to the obligation of Lenders to make the initial advance under a Construction Note, the applicable Borrower shall deliver to the Agent a construction lender’s title policy (the “Title Policy”) in form satisfactory to the Agent from a title company acceptable to the Agent, with authorization for the title company to insure all Construction Note advances by endorsements to the Title Policy or otherwise, covering the Project and insuring against mechanics lien(s). The Title Policy shall insure in the amount of the Construction Advance that the Mortgage encumbering the Project is a valid and subsisting first priority mortgage on the Project and all appurtenant easements, if any, subject only to exceptions acceptable to the Agent, and containing such endorsements required by the Agent. The applicable Borrower will deliver to the Agent an ALTA/ACSM Survey of the Project acceptable to the Agent.

1.18. Conversion of a Construction Advance . Subject to the terms of this Agreement, and provided that no Event of Default has occurred, on the Maturity Date of a Construction Note, the applicable Borrower may convert such Construction Note to a Construction Term Note upon the following terms and conditions precedent:

(1) delivery by Borrowers of a Construction Term Note duly executed by Borrowers in an amount equal to the outstanding principal balance on the Construction Note, but not to exceed the maximum amount of a Construction Term Note as provided for in this Agreement unless approved in writing by the Required Lenders;

(2) Borrowers have accomplished satisfactory delivery of all items under Section 7.2 below and this Article I;

(3) delivery of evidence of substantial completion of the Project in accordance with the approved plans and specifications, as determined by: (a) the Agent and the Inspecting Architect, (b) an As-Built, ALTA/ACSM Class A Urban Survey of the Project and appurtenant easements from a surveyor satisfactory to the Agent and the title company and certified to both of them; (c) issuance of a certificate of occupancy from the applicable governmental authority and (d) any endorsements to the applicable title policy required by the Agent;

(4) delivery of all other documentation required by the Agent, in the exercise of its reasonable judgment otherwise affecting the Project and the applicable Construction Term Note; and

(5) payment by Company to the Agent of all of the Agent’s costs and expenses relating to the closing of the Construction Term Note, including, but not limited to, attorneys’ fees and costs.

1.19. Accordion Feature .

(a) At any time prior to one Business Day before the Termination Date, Borrowers may request Lenders to effectuate a one-time increase in the aggregate Commitments (a “Commitment Increase”). Each Lender may, in its sole discretion, participate in such Commitment Increase (an “Increasing Lender”) or the Agent may locate one or more other banks or other financial institutions reasonably acceptable to the Agent to become a Lender under this Agreement (an “Additional Lender”) to participate in such Commitment Increase; provided, however, that (A) the aggregate amount of the Line of Credit may not exceed $40,000,000.00, and (B) all Commitments provided pursuant to a Commitment Increase shall be available on the same terms as those applicable to the existing Commitments and Advances. Borrowers shall provide prompt notice of any proposed Commitment Increase to the Agent. Nothing in this Section 1.19 shall be construed to create any obligation on the Agent or any Lender to agree to or participate in any Commitment Increase requested by Borrowers, to advance or to commit to advance any credit to Borrowers in excess of its Commitment or to arrange for any other Person to advance or to commit to advance any credit to Borrowers.

(b) A Commitment Increase shall become effective upon (A) the receipt by the Agent of (1) an agreement in form and substance reasonably satisfactory to the Agent signed by Borrowers, each Increasing Lender and each Additional Lender, setting forth the Commitments of each such Lender and setting forth the agreement of each Additional Lender to become a party to this Agreement and to be bound by all the terms and provisions hereof binding upon each Lender, and (2) such evidence of appropriate authorization on the part of Borrowers with respect to such Commitment Increase as the Agent may reasonably request, and (B) receipt by the Agent of a certificate of an officer of each Borrower stating that, both before and after giving effect to such Commitment Increase, no Default or Event of Default has occurred and is continuing or would result from the Commitment Increase, and that all representations and warranties made by Borrowers in this Agreement and the other Loan Documents are true and correct in all material respects, unless such representation or warranty relates to an earlier date which remains true and correct as of such earlier date.

(c) Notwithstanding any provision contained herein to the contrary, from and after the date of any Commitment Increase, all calculations and payments of interest on the Advances shall take into account the actual Commitment of each Lender and the principal amount outstanding of each Advance made by such Lender during the relevant period of time.

1.20. Conditions to Advances . In addition to the conditions precedent set forth above and in Article VII below, each request for an Advance will be deemed to constitute a representation by the Borrowers at the time of the request that no Event of Default (as defined in Article VI hereof) exists or is imminent and that the representations and warranties of the Borrowers contained in this Agreement and the other Loan Documents are true in all material respects on or as of the date of such request for a Loan.

1.21. Fees . In consideration for Lenders making the Loan available to Borrowers, Borrowers will jointly and severally pay to the Agent for the pro rata account of Lenders (i) a commitment fee equal to ten (10) basis points of the aggregate Commitments of the Lenders payable in full at the closing of this Agreement. In addition, Borrowers will jointly and severally pay the Agent for the account only of the Agent an annual agency fee equal to twelve and one half (12 1/2 ) basis points of the aggregate Commitments of the Lenders payable at the closing of this Agreement.

Additional commitment fees and agency fees which arise due to an increase in a Lender’s Commitment or the adding of a Lender and such added Lender’s Commitment shall also be due at the time such increased Commitment or additional Commitment becomes available to Borrowers for borrowing and shall be prorated based on the amount of the Commitment added by such Lender and the number of days remaining until the Termination Date.

ARTICLE II
Collateral

Payment of Borrowers’ obligations hereunder, under the Loan and under the Loan Documents shall be secured and/or supported by the following (hereinafter collectively referred to as the “Collateral”) until all such obligations are fully and finally paid and performed in full:

2.1. Personal Property . The Loan made pursuant to this Agreement and all other indebtedness arising hereunder or in connection herewith shall be collateralized and supported by a security interest, and each Borrower hereby grants to the Agent, a security interest in all of each Borrower’s respective assets associated with or located at a Hotel encumbered with a Mortgage to secure the Loan, including, but not limited to, each Borrower’s goods, equipment and inventory, now owned as well as any and all thereof that may hereafter be acquired by such Borrower, and in and to all cash and non-cash proceeds (including, without limitation, insurance proceeds), accessions, accessories and products thereof, and all of such Borrower’s accounts receivable, general intangibles, payment intangibles, software, chattel paper (whether tangible or electronic), deposit accounts, documents, investment property and instruments now owned or hereafter arising or acquired and all cash and non-cash proceeds thereof. Such security interest shall be further evidenced by a security agreement specific to the applicable Borrower’s assets located at the applicable Hotel in form and substance acceptable in all respects to the Agent (the “Security Agreement”). Each Borrower further agrees to authenticate to the Agent and hereby authorizes the Agent to file in all filing offices the Agent deems necessary, appropriate or desirable such financing statements, continuations, assignments or other instruments as may be requested by the Agent at any time and from time to time in order for the Agent to perfect the security interest in the aforementioned Collateral. Borrowers will each execute in favor of and deliver to the Agent a First Amended and Restated Security Agreement which will amend and restate any Security Agreement executed in connection with the Current Loan Agreement.

2.2. Real Property . Contemporaneously with the execution and delivery of a Term Note or Construction Note, the applicable Borrower will grant and execute in favor of the Agent a first priority Mortgage and assignment of rents and leases on the Hotel acquired or financed with the applicable Advance, with such Mortgage in form and substance acceptable to the Agent. Thereafter, such Mortgage and assignment of rents and leases shall secure the Loan.

2.3. Other Documents . Borrowers agree to furnish such information and to execute such other documents or undertake any other acts as may be reasonably necessary to attach, perfect and maintain the security interests and assignments contemplated by this Agreement, or as otherwise reasonably requested by the Agent from time to time.

ARTICLE III
Representations and Warranties

Each Borrower represents and warrants to Lenders (which representations and warranties will survive the delivery of the Notes and shall continue so long as any sums remain outstanding under the Loan, this Agreement or any other Loan Document or Lenders have any Commitments remaining) as follows:

3.1. Standing . Each Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of South Dakota. Each Borrower is duly qualified and is in good standing in every other jurisdiction where such qualification and good standing is required in order to conduct business in such jurisdiction. Each Borrower has the power and authority to own its property and to carry on its business.

3.2. Authority . Each Borrower has the full power and authority to execute and deliver this Agreement and the other Loan Documents, and the same constitute the binding and enforceable obligations of Borrowers in accordance with their terms. No consent or approval of the members or manager of either Borrower or any other Person, creditor, governmental department, agency or body is required as a condition to the effectiveness and validity of the Loan Documents. The execution of and performance by each Borrower of its obligations under the Loan Documents to which it is a party has been duly authorized by all appropriate and required limited liability company proceedings and action and will not violate, conflict with or contravene any provisions (i) of law or any regulation, order, writ, judgment, injunction, decree, permit, or license applicable to such Borrower or any of such Borrower’s property, or (ii) of such Borrower’s Articles of Organization, Operating Agreement or any members’ agreement or other governing or organizational agreement of such Borrower or such Borrower’s members.

3.3. Litigation . There are no actions, suits, arbitration proceedings or other proceedings of any nature pending or, to the knowledge of either Borrower, threatened, or any basis therefor, against or affecting either Borrower or any Collateral at law or in equity, in any court or before any governmental department or agency or arbitrator or arbitration panel, which may result in a Material Adverse Effect.

3.4. Conflicting Agreements . There are no provisions of any existing mortgage, indenture, deed of trust, trust deed, lease, contract or agreement of any nature binding on either Borrower or affecting the Collateral or either Borrower’s other property, which would conflict with or in any way prevent the execution, delivery, or performance of the terms of this Agreement and/or the Loan Documents. Neither Borrower is in default in any respect in the performance, observance or fulfillment of any obligation, covenant or condition contained in any agreement or instrument to which it is a party.

3.5. Title and Liens . Each Borrower has good, valid and marketable title of record to its real, mixed and personal property (including, without limitation, the property constituting Collateral), all of which is owned free and clear of all mortgages, Liens, pledges, charges, attachments and other security interests and encumbrances of any nature, except for the Permitted Liens or as otherwise provided for in this Agreement or disclosed to and approved by Lenders in writing. In respect of leased property, the applicable Borrower has valid and enforceable leasehold interests therein.

3.6. Taxes . Each Borrower has filed all federal, state, local, and other tax and similar returns and has paid or provided for the payment of all taxes assessments and other governmental charges due thereunder through the date of this Agreement, including without limitation, all withholding, FICA and franchise taxes. No claims or Liens for unpaid taxes which are due have been asserted, claimed or threatened against either Borrower.

3.7. Financial Statements . Summit Hotel’s audited financial statements dated as of December 31, 2008 and internally-prepared interim financial statement dated June 30, 2009, copies of which have been furnished to Lenders, are complete and correct and fairly and accurately present the financial condition of each Borrower as of such date and the results of operations for the period covered by such statements. Since June 30, 2009, there has been no Material Adverse Effect or change with respect to either Borrower. Neither Borrower has any material liabilities, direct or contingent, except those disclosed in the foregoing financial statements or as otherwise disclosed to Lenders in writing. No information, exhibit or report furnished by either Borrower to Lenders or the Agent in connection with the Loan, this Agreement or any other Loan Document contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statement contained therein incomplete or not materially misleading.

3.8. Other . All statements by either Borrower contained in any certificate, statement, document or other instrument or writing delivered by or on behalf of either Borrower at any time pursuant to this Agreement or the other Loan Documents shall constitute representations and warranties made by Borrowers hereunder. No representation or warranty of either Borrower contained in this Agreement or any other Loan Document, and no statement contained in any certificate, schedule, list, financial statement or other instrument furnished to Lenders or the Agent by or on behalf of Borrowers contains, or will contain, any untrue statement of a material fact, or omits, or will omit, to state a material fact necessary to make the statements contained herein or therein not misleading. To the best of each Borrower’s knowledge, all information material to the transactions contemplated in this Agreement has been expressly disclosed to Lenders in writing.

3.9. Regulation U . No part of the proceeds of the Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or to reduce or retire any indebtedness incurred for any such purpose. If requested by the Agent, Borrowers will furnish to the Agent a statement in conformity with the requirements of Federal Reserve Form U-1 referred to