LOAN AGREEMENT

Exhibit 10.1

LOAN AGREEMENT

     THIS LOAN AGREEMENT (“Loan Agreement”) is made and entered into as of this 25th day of July, 2006, by and between M&I MARSHALL & ILSLEY BANK (“Lender”) and SUMMIT HOTEL PROPERTIES, LLC, a South Dakota limited liability company (the “Borrower”).

W I T N E S S E T H :

     WHEREAS, Lender has agreed to make up to a $14,080,000.00 loan to finance the construction of a 146 room hotel and related improvements thereon (the “Project”).

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

     1. Definitions. The following definitions shall apply to this Loan Agreement:

     1.1. Architect. The Architect is Peter Villard.

     1.2. Business Day. Business Day shall mean any day except a Saturday, Sunday or a day on which banks in Milwaukee, Wisconsin are authorized or required by law to close.

     1.3. Capital Lease. Capital Lease shall mean a financing mechanism that meets any one of the following criteria: (i) ownership (title) to the leased asset passes to the lessee by the end of the lease term for a relatively nominal amount as compared to the fair market of such asset; (ii) pursuant to the lease, lessee has an option to purchase the leased asset at the end (or near the end) of the lease term for a relatively nominal amount as compared to the fair market value of such asset; (iii) the lease term is equal to or greater than 75% of the estimated economic life of the leased asset; or (iv) the net present value of the lease payments equals or exceeds 90% of the current market value of the leased asset.

     1.4. City. The City shall be the City of Bloomington, Minnesota.

     1.5. Collateral Security Documents. The Collateral Security Documents shall include the following documents, each of which has been executed by Borrower in favor of Lender and dated as of an even date herewith unless otherwise noted:

          1.5.1. Real Estate Mortgage, Security Agreement, Financing Statement and Assignment of Leases and Rents (“Mortgage”).

          1.5.2. Collateral Assignment of Contract Rights.

          1.5.3. General Business Security Agreement.

          1.5.4. UCC Financing Statement.

          1.5.5. Collateral Assignment of Licenses, Approvals and Permits.

          1.5.6. Reserved.

          1.5.7. The Collateral Security Documents shall also include all other documents and instruments, at any time, executed, which evidence or secure the Loan.

          1.5.8. Subordination, Non-Disturbance and Attornment Agreement regarding the Management Agreement.

          1.5.9. Estoppel Certificate regarding the Management Agreement.

          1.5.10. Franchise Letter.

          1.5.11. Borrower Organizational Perfection Certificate.

          1.5.12. Assignment of General Contractor’s Contract.

          1.5.13. Assignment of Architect’s Contract.

          1.5.14. Cross Collateralization Agreement executed by Borrower.

     1.6. Construction Budget. The Construction Budget is the budget attached hereto as EXHIBIT B, as previously approved by Lender.

     1.7. Debt Service Coverage Ratio. Debt Service Coverage Ratio shall mean a ratio of the Net Operating Income attributable to the Project for any twelve (12) consecutive months to the sum of (i) the aggregate of all principal and interest payments due Lender under the Note during the same twelve (12) month period, and (ii) any and all other payments of principal and interest that Borrower is obligated to pay attributable to the Project (whether such obligation is undertaken prior to or subsequent to the date hereof) during the same twelve (12) month period (“Other Debt”). Other Debt shall include, but is not limited to, debt financing categorized as a Capital Lease.

     1.8. Disbursing Agreement. The Disbursing Agreement is the agreement executed by and between Borrower, Lender and Title Insurance Company and pursuant to which the Loan proceeds are to be disbursed.

     1.9. Estoppel Certificate. The Estoppel Certificate is the Certificate to be executed in favor of Lender by the Manager of the Management Agreement and such affidavit shall be in form and content acceptable to Lender.

     1.10. Existing Indebtedness. Borrower is indebted to First National Bank of Omaha pursuant to the loan documents executed on June 24, 2005, as amended on November 30, 2005. Such loan documents provide for a credit line in the amount of Fifty Million Dollars ($50,000,000.00).

     1.11. Franchise Agreement. The Franchise Agreement is the Franchise Agreement dated March 28, 2006, by and between Promus Hotels, Inc. and Borrower relating to the operation of the 146-room hotel on the Real Estate.

     1.12. General Contractor. The General Contractor is Stahl Construction Company.

     1.13. Licenses, Approvals and Permits. The Licenses, Approvals and Permits shall be those licenses, approvals and permits issued by the appropriate federal, state or local governments or quasi-governmental agencies required for Borrower to construct and operate the Project on the Real Estate.

     1.14. Reserved.

     1.15. Loan. The Loan amount shall not exceed the lesser of 80% of total cost of the Project as set forth in the Construction Budget or $14,080,000.00. The proceeds of such Loan shall be used for the construction of a 146 room hotel and related improvements thereon in accordance with Construction Budget and the Plans and Specifications.

     1.16. Loan Documents. The Loan Documents shall include, but not be limited to, the Collateral Security Documents, the Note, the Disbursing Agreement and this Loan Agreement.

     1.17. Management Agreement. The Management Agreement is the Management Agreement dated as of February 11, 2004, which was amended by that certain First Amendment to Management Agreement dated April 24,2006 by and between Borrower and The Summit Group, a South Dakota corporation (“Manager”) and Borrower, pursuant to which Manager shall manage the 146 room hotel once completed on behalf of Borrower.

     1.18. Net Operating Income. Net Operating Income shall mean the gross income received from operation of the Project minus the Operating Expenses.

     1.19. Note. The Note is the $14,080,000.00 Mortgage Note executed by Borrower in favor of Lender on a date even herewith, the proceeds of which shall be disbursed under the Loan Agreement.

     1.20. Operating Expenses. Operating Expenses shall mean all expenses incurred by Borrower with respect to the Project, whether or not now foreseen, determined on an accrual basis (including reasonably foreseeable expenses not occurring annually), including, but not limited to, the following: real estate taxes and special assessments (or any substitutes hereafter collected by any governmental authority in lieu thereof or in addition thereto), payroll taxes, federal and state unemployment taxes and social security taxes; insurance, including but not limited to, fire (including, but not limited to, endorsements for extended coverage, vandalism and malicious mischief and theft and mysterious disappearance), public liability, water damage, worker’s compensation and business and rental interruption insurance; water and sewer charges; license, permit and inspection fees; costs of wages and salaries of operating personnel including other

compensation and fringe benefits; management fees pursuant to the Management Agreement; auditors’ fees and legal fees; materials and supplies, including charges for telephone, telegraph, postage, stationery supplies and other materials and expenses required for operation of the Project; repairs to and maintenance of any portion of the Project, including costs of materials, supplies, tools and equipment used in connection therewith and including the repaving of parking areas, replanting of landscaped areas and replacing any building components; costs incurred in connection with the operation, maintenance, repair, inspection and servicing (including outside maintenance contracts) of electrical, plumbing, heating, air-conditioning and mechanical equipment and the cost of materials, supplies, tools and equipment used in connection therewith; cost of services (including heat, air conditioning, electricity, gas, water and other utilities for the operation and maintenance of any portion of the Project); any costs allocable to the Project under any easements benefiting the Real Estate for parking and/or access; and all other expenses and costs necessary or desirable to be incurred for the purpose of operating and maintaining the Project in good and workmanlike condition, whether or not similar to the foregoing. Should any governmental agency or political subdivision impose any taxes and/or assessments, whether or not now customary or within the contemplation of the parties hereto, either by way of substitution for taxes and assessments presently levied and assessed against the Project, or in addition thereto, including, but not limited to, any tax or assessment levied, assessed or imposed upon or measured by the rental payable hereunder, such taxes and/or assessments shall be deemed to constitute an Operating Expense hereunder. Notwithstanding the above, Operating Expenses shall not include: principal or interest payments on the Note, Capital Leases, or any other obligation of Borrower; capital improvements to the 146-room hotel located on the Real Estate other than routine maintenance expenses; or, other non-recurring expenses funded with non-operating cash sources, including but not limited to loan proceeds, investor equity, or hotel sale proceeds.

     1.21. Permitted Liens and Encumbrances. Permitted Liens and Encumbrances shall be those liens and encumbrances permitted by Exhibit B to the Mortgage.

     1.22. Plans and Specifications. The Plans and Specifications are the plans and specifications for the construction of Project, as prepared by the Architect.

     1.23. Project. The Project is the construction of 146 room hotel on the Real Estate, all of which shall be constructed in accordance with the Construction Budget and the Plans and Specifications.

     1.24. Property. The Property is the 146-room hotel to be located on the Real Estate.

     1.25. Real Estate. The Real Estate is the real property described on EXHIBIT A, attached hereto.

     1.26. Secured Assets. The Secured Assets shall mean all of the personal property of Borrower related to the Property as described in the General Business Security Agreement and the Collateral Assignment of Contract Rights.

     1.27. Statement of Accounts. Statements of Accounts shall be defined as that documentation provided periodically by the financial institutions where cash, marketable securities and bonds related to the Property are held in deposit or on account for Borrower.

     1.28. Subordination Agreement. The Subordination Agreement is the Subordination, Non-Disturbance and Attornment Agreement to be executed by Lender and the Manager under the Management Agreement and shall be in form and content reasonably acceptable to Lender.

     1.29. Title Commitment. The Title Commitment shall be the commitment referenced in Section 2.5.

     1.30. Title Insurance Company. The Title Insurance Company shall be Chicago Title as approved by Lender.

     1.31. Zoning Letters. The Zoning Letters shall be the zoning letters issued by the City relating to Borrower’s construction and operation of the Project on the Real Estate.

     2. Conditions Precedent. This Loan Agreement shall become effective upon satisfaction of the conditions set forth in this Section; provided, however, construction disbursements for the Loan shall not be made until the conditions set forth in Section 3.1.1 and 3.1.2 are satisfied.

     2.1. Loan Documents. The Borrower shall have executed each of the Loan Documents it is required to execute.

     2.2. Borrower’s Limited Liability Company Documents. Borrower shall have furnished Lender copies, certified to Lender by a manager of Borrower to be true and correct as of the date hereof, of the Articles of Organization and the Third Amended and Restated Operating Agreement of Borrower, plus any amendments thereto, of Borrower and a Borrowing Resolution authorizing the execution and delivery of the Loan Documents. Borrower shall also deliver a satisfactory Certificate of Existence for Borrower issued by the Secretary of State for the State of South Dakota and a Certificate of Authority for Borrower issued by the Secretary of State for the State of Minnesota authorizing the Borrower to conduct business in the State of Minnesota. Lastly, the Borrower shall furnish copies of the following documents for The Summit Group, Inc., Borrower’s manager: Articles of Incorporation, Bylaws and Certificate of Existence issued by the Secretary of State for the State of South Dakota.

     2.3. Appraisal. Lender shall have received an appraisal by an appraiser acceptable to Lender, in its reasonable discretion, showing that as of the date of completion, the Project and the Real Estate shall have a value of $17,600,000.00.

     2.4. Insurance. Borrower shall have furnished to Lender the policies, or certificates evidencing such policies, of insurance required in Section 5.3.

     2.5. Title Insurance. Borrower shall have furnished to Lender a commitment for an ALTA form of mortgage title policy and attached endorsements, as requested by Lender, issued by the Title Insurance Company, in form and content reasonably satisfactory to Lender to the effect that the Title Insurance Company will issue its mortgagee’s title policy in the amount of the Loan, insuring that Borrower owns fee simple title to the Real Estate subject only to the Permitted Liens and Encumbrances and insuring that the Mortgage constitutes a first and valid lien on the Real Estate, subject only to such Permitted Liens and Encumbrances.

     2.6. Compliance with Laws. Borrower shall have provided Lender with satisfactory evidence of compliance by the Real Estate and the Project, with respect to both present and contemplated future uses, of all applicable laws, regulations, ordinances and codes, including, but not limited to, zoning and subdivision laws, regulations, ordinances and codes.

     2.7. Approvals and Permits. Borrower shall have provided Lender with copies of all governmental approvals and permits required to construct the Project in Borrower’s possession or control as of the date hereof.

     2.8. Plans and Specifications. Borrower shall have delivered, and Lender shall have the right to approve or disapprove in its reasonable discretion, a complete set of the Plans and Specifications to Lender.

     2.9. Phase I Environmental Assessment Report. An environmental assessment report prepared by a qualified environmental engineer approved by Lender confirming that the Real Estate complies with all applicable environmental laws, rules and regulations.

     2.10. Construction Budget. Borrower shall have delivered, and Lender shall have the right to approve or disapprove in its reasonable discretion, the Construction Budget to Lender.

     2.11. Construction Contracts. To the extent available, Borrower shall have delivered to Lender, and Lender shall have the right to approve or disapprove in its reasonable discretion, certified copies of all construction contracts, including, but not limited to, all subcontractor contracts, necessary to complete the Project.

     2.12. Disbursing Agreement. Borrower shall have complied with all other terms and conditions of the Disbursing Agreement.

     2.13. Utilities. Borrower shall have delivered to Lender evidence that sanitary sewer, water, electricity, natural gas, cable television and other necessary utilities are available to the Real Estate and the Project in a manner and at a time and cost reasonably acceptable to Lender.

     2.14. Loan Fee. The Loan Fee shall equal one half (1/2) point or (0.005%) of the Loan.

     2.15. Geotechnical Evaluation. The Borrower shall provide the Lender with a Geotechnical Evaluation prepared by an engineer which is acceptable to Lender, at its reasonable discretion, which report states that the soil is sufficient for the construction of the Project.

     2.16. Legal Opinion. Lender shall receive from an attorney acceptable to Lender, a legal opinion in form, scope and content acceptable to Lender in its sole discretion, which may, among other things reasonably requested by Lender, confirm the legality, validity and enforceability of the Loan Documents.

     2.17. Survey. Borrower shall have furnished Lender with an ALTA/ASCM Survey prepared by a licensed surveyor reasonably satisfactory to Lender, which shows (i) all foundations, improvements, driveways and fences, if any, on the real estate, (ii) all easements and roads of right-of-ways and setback lines, if any, affecting the real estate, (ii) the dimensions, boundaries and square footage of the real estate, (iv) no encroachments by improvements on the real estate or by improvements located on the adjoining property exist, and (iv) such additional information that may be required by Lender, and its reasonable discretion.

     2.18. Assignment of General Contractor’s Contract. Borrower shall have furnished Lender with a copy of the Assignment of General Contractor’s Contract, in form and substance reasonably acceptable to Lender, assigning the contract for the construction of the Project with the General Contractor to the Borrower.

     2.19. Assignment of Architect’s Contract. Borrower shall have furnished Lender with a copy of the Assignment of Architect’s Contract, in form and substance reasonably acceptable to Lender, assigning the contract for the architectural services necessary to construct the Project with the Architect to the Borrower.

     2.20. Architect’s Contract. Borrower shall have furnished Lender with a copy of the Architect’s Contract for architectural services necessary to construct the Project, in form and substance reasonably acceptable to Lender.

     2.21. Architect’s Certificate. Borrower shall have furnished Lender with an original Architect’s Certificate, in form and substance reasonably acceptable to Lender, from the Architect relating to the Architect’s Contract for architectural services necessary to construct the Project.

     2.22. Management Agreement. Borrower shall have furnished and Lender shall have reviewed and approved a certified copy of the Management Agreement. Lender acknowledges receipt and its approval of the Management Agreement.

     2.23. Searches. Lender shall have conducted, reviewed and approved a UCC search, federal tax lien search, bankruptcy search, pending civil suit search and judgment lien search of Borrower and Borrower’s manager, The Summit Group, Inc., in those jurisdictions that Lender reasonably requires.

     2.24. Franchise Agreement. Borrower shall have furnished and Lender shall have reviewed and approved a certified copy of the Franchise Agreement. Lender acknowledges receipt and its approval of the Franchise Agreement.

     2.25. Manager Consent to Transaction. Manager shall have executed and delivered to Lender a Manager’s Estoppel Affidavit pursuant to which it shall, among other things, represent that the Management Agreement is in effect and that the Manager shall manage the Property pursuant to the Management Agreement.

     2.26. Franchisor Consent. Promus Hotels, Inc. shall have executed and delivered to Lender a Comfort Letter related to the Property in the standard form used by Promus Hotels, Inc.

     2.27. Borrower’s Initial Equity Deposit. Borrower shall have provided Lender with evidence, satisfactory to Lender, in its sole discretion, that Borrower has contributed $3,520,000.00 to the construction of the Project. If Borrower has not previously contributed the amount to Borrower’s equity as set forth in the Construction Budget, Borrower shall deposit no later than August 11, 2006 with Lender $3,520,000.00 (“Initial Equity Deposit”). The Initial Equity Deposit shall be held by Lender in an interest bearing account and shall be used to fund the construction disbursements described herein prior to Lender disbursing any Loan proceeds set forth herein.

     2.28. Plans and Specifications. Prior to the commencement of vertical construction, Borrower shall have delivered to Lender, and Lender shall have the right to approve or disapprove, in its sole discretion, a complete set of the Plans and Specifications.

     3. Loan Disbursements. Proceeds of the Loan shall be disbursed as follows:

     3.1 Construction Loan Disbursements.

     3.1.1. Periodic Disbursements. The Loan proceeds may be disbursed in several advances in accordance with the Disbursing Agreement and the following conditions (except for the final disbursement of proceeds pursuant to the Loan which shall be disbursed in accordance with Section 3.1.2); provided the following are submitted to Lender:

     3.1.1.1. A draw request, on a satisfactory form to Lender, in its reasonable discretion, certified by Borrower, Architect and General Contractor setting forth, among other things (i) an itemized list of the type of work completed for which payment is requested, (ii) the original estimated cost to complete such work, (iii) the amount requested, (iv) the amount previously disbursed for such work, (v) the estimated cost of completing such work, and (vi) that no Event of Default exists pursuant to this Loan Agreement, no default exists pursuant to the construction contracts and no condition exists, with respect to the Loan Documents or construction contracts that with the passage of time or giving of notice, or both, would constitute an Event of Default pursuant to the Loan Agreement or a default pursuant to the construction contracts.

     3.1.1.2. All other items required by the Disbursing Agreement.

     3.1.2. Final Construction Disbursement. Subject to the terms and conditions hereof, Lender agrees to make the final disbursement under the Loan; provided, Lender shall be satisfied that the construction has been completed in a good and workmanlike manner in accordance with the Plans and Specifications and Borrower shall submit to Lender the following:

     3.1.2.1. The items required in Section 3.1.1.

     3.1.2.2. A Certificate of Completion of the Project, in form and content satisfactory to Lender executed by Borrower, General Contractor and Architect.

     3.1.2.3. A Certificate of Occupancy for the Project as issued by the City.

     3.1.2.4. Proper update endorsements to the Title Commitment (or the policy if issued) in the face amount of the total sum outstanding under the Loan insuring the Mortgage as a first lien on the Real Estate, subject only to the Permitted Liens and Encumbrances.

     3.2. Additional Conditions as to Construction Loan Disbursements.

     3.2.1. Change Orders. The Borrower shall deliver to Lender revised statements of estimated costs of construction of the Project showing changes in or variations from the Construction Budget, as soon as such changes are known to the Borrower; provided that such revised statements are only required to cover changes involving amounts of $30,000.00 or more for individual changes, or if the aggregate cost of all such changes is more than $100,000.00.

     3.2.2. Loan In Balance. Borrower agrees that the Loan must at all times remain in balance. The Borrower shall from time to time furnish Lender reasonably satisfactory evidence of the Borrower’s ability to pay for all costs of completing the Project, and if the estimated cost of completing the Project exceeds the then remaining balance of proceeds available under the Loan, Borrower shall pay out of Borrower’s own funds the next sums coming due for such work until the Loan is brought back into balance before the Lender shall be required to disburse any further sums hereunder.

     3.2.3. Completion of Construction. Construction of the Project shall be completed in an orderly manner, but in any event on or before the date that is one year from the date of commencement of construction.

     3.2.4. Liens. Upon demand by Lender, if any intervening liens or other matters affecting title, which in Lender’s reasonable opinion materially jeopardize its security interest in the Project or the Real Estate, are disclosed by any means, Lender may withhold payment of further advances until such intervening liens or such other matters have been waived by Lender in writing or satisfied. Borrower shall immediately have any such liens or such other matters satisfied of record and the existence of any such lien or encumbrance shall, if not removed within thirty (30) days or if adequate steps satisfactory to Lender are not taken within thirty (30) days to insure removal, constitute an Event of Default. Notwithstanding the foregoing, Borrower may, in good faith and with reasonable diligence, contest the validity or amount of any lien; provided, Borrower provides Lender reasonable security that such lien shall not materially jeopardize Lender’s security interest in the Project or the Real Estate.

     3.2.5. Segregation of Loan Proceeds. Lender shall, at its option, be entitled to segregate and earmark sufficient proceeds of the Loan for the purpose of paying all sums due or to become due Lender under this Agreement, including but not limited to, reasonable fees, interest, and all out-of-pocket expenses incurred relative to this Agreement and the Loan. Lender shall also be entitled to advance such proceeds to itself in payment of such sums as they become due and payable, all without further order or consent of the Borrower. Lender shall give Borrower notice of any such action.

     3.2.6. Status of Disbursements. The Borrower agrees that all moneys disbursed by Lender pursuant to the Loan (including amounts payable to and deducted by Lender) shall (i) constitute loans made to the Borrower under this Agreement (ii) shall be evidenced by the Note and (iii) that interest shall be computed thereon as prescribed by the Note from the date the Borrower’s Loan accounts are charged with the amount of the advance. Upon disbursement of any amount pursuant to the Loan, Lender is authorized to record the date and the amount of each disbursement and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded.

     3.2.7. Objection to Requested Disbursement. If (i) Lender reasonably determines that the quality or dollar value of the work performed or the material furnished as represented by the draw requests delivered to Lender does not correspond with the actual work performed or materials actually furnished, or (ii) the work performed does not conform with the Plans and Specifications or the Construction Budget, then Lender shall notify the Borrower of its objection to such payment and, until such time as such objection is corrected to the reasonable satisfaction of Lender, Lender may withhold such requested payment. If such objection is not corrected within ten (10) days after the date of notification to the Borrower of Lender’s objection, or, if greater, the time reasonably required to correct such objection, Lender may withhold any future advances.

     3.2.8. Inspections. The Borrower shall be responsible for making inspections of the Project during the course of construction and shall determine to its own satisfaction that the work done or material supplied by the contractors have been properly done or supplied in accordance with applicable contracts with such contractors. Lender, in addition, may conduct such inspections of the Project and the Real Estate as Lender shall reasonably deem necessary for the protection of its interest. Unless an Event of Default exists hereunder, Borrower shall not be required to pay the costs of more than one inspection per month made for the benefit of Lender. Lender may also take such steps as it may reasonably deem appropriate to verify the application of the Loan proceeds to work done and material furnished for the Project and to vary the disbursement procedures set forth herein and in the Disbursing Agreement, if the same becomes necessary to assure the proper application of the Loan proceeds.

     3.2.9. No Liability of Lender. It is expressly under