Exhibit 10.1

CONSOLIDATED, AMENDED
AND RESTATED LOAN AGREEMENT

by and between

SUMMIT HOTEL OP, LP,
a Delaware limited partnership

and

ING LIFE INSURANCE AND ANNUITY COMPANY,
a Connecticut corporation

Dated as of February 13, 2012

[LOAN AGREEMENT]
ING No. 28536
 
 

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CONSOLIDATED, AMENDED AND
RESTATED LOAN AGREEMENT

THIS AGREEMENT is made and entered into as of February 13, 2012 by and between
SUMMIT HOTEL OP, LP, a Delaware limited partnership (“Borrower”), and ING LIFE
INSURANCE AND ANNUITY COMPANY, a Connecticut corporation (“Lender”).

WINESSETH:
 
WHEREAS, Lender made certain loans to Summit Hotel Properties, LLC, a South
Dakota limited liability company (“Original Borrower”), said loans each being
assumed by Borrower pursuant to the Assumption Agreement (as hereinafter
defined) (collectively, the “Loan”); and

WHEREAS, Borrower has requested that Lender consolidate and modify the Loan; and
 
WHEREAS, on the terms and subject to the conditions and requirements set forth
in this Agreement, Lender has agreed to consolidate and modify the Loan; and
 
WHEREAS, in connection therewith, Borrower and Lender desire to consolidate,
amend and restate in their entirety the Original Loan Agreements (as hereinafter
defined);
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties to this Agreement hereby agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.01          Definitions.  For purposes of this Agreement, the
following terms shall have the indicated meanings as set forth below:

“Affiliate” shall mean any corporation, limited liability company, partnership
or other entity which is controlling of, controlled by or under common control
with Borrower.

“Agreement” shall mean this Consolidated, Amended and Restated Loan Agreement,
as amended, supplemented or modified from time to time.

“Assignment of Management Agreement” shall mean collectively, the Assignments,
Consents and Subordinations Regarding Management Agreements executed by Original
Borrower or Borrower in favor of Lender in connection with the Loan, and any
modifications or replacements thereof or therefor.

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“Assignment of Rents and Leases” shall mean collectively the Assignments of
Rents and Leases executed by Original Borrower or Borrower in connection with
the Loan in favor of Lender, recorded or to be recorded in the real estate
records of the county where the Property is located, and any extensions,
renewals, modifications or replacements thereof or therefor.
 
“Assumption Agreement” shall mean that certain Assignment, Assumption and
Amendatory Agreement dated February 14, 2011 by and among Original Borrower,
Borrower and Lender.
 
“Borrower” shall have the meaning given such term in the preamble to this
Agreement and shall include its successors and assigns.

“Business Day” shall mean any day excluding Saturday, Sunday and any other day
on which banks in Atlanta, Georgia are customarily closed.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Collateral” shall mean any and all of the property which is granted, pledged or
assigned to Lender or in which Lender is otherwise granted a Lien to secure the
obligations pursuant to any and all of the Security Documents.

“Default” shall mean any condition or event which, with notice or lapse of time
or both, would constitute an Event of Default.

“Environmental Indemnification Agreement” shall mean collectively the
Environmental Indemnification Agreements executed by Original Borrower or
Borrower in connection with the Loan in favor of Lender, and any extensions,
renewals, modifications or replacements thereof or therefor.

“Event of Default” shall have the meaning provided in Article VII hereof.

“Improvements” shall mean all improvements constructed on the Land.

“Land” shall mean, collectively, all of the real property described and defined
as “Land” in the Mortgage.

“Leases” shall have the meaning given such term in the Security Instruments.

“Lender” shall have the meaning given such term in the preamble to this
Agreement and shall include such Persons’ successors and assigns.

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“Lien” shall mean any mortgage, deed to secure debt, deed of trust, pledge,
security interest, security deposit, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction).

“Loan” shall have the meaning given such term in the preamble to this Agreement.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Security Documents, and any other certificates or written undertakings of
Original Borrower (as assumed by Borrower) or Borrower in favor of Lender, other
than the Environmental Indemnification Agreement.

“Material Adverse Effect” shall mean a material adverse effect upon, or a
material adverse change in, any of the (i) results of operations, properties, or
financial condition of Borrower, (ii) validity, binding effect or enforceability
of any Loan Document or the Environmental Indemnification Agreement, or (iii)
ability of Borrower to perform its payment obligations or other Obligations
under the Loan Documents or the Environmental Indemnification Agreement.

“Mortgage” shall mean collectively the Deeds of Trusts [or Mortgages, as
applicable], Security Agreements, Financing Statements, and Fixture Filings
executed by Original Borrower or Borrower in connection with the Loan for the
benefit of Lender, recorded or to be recorded in the real estate records of the
county where the Property is located, and any extensions, renewals,
modifications or replacements thereof or therefor.

“Note” shall mean that certain Consolidated, Amended and Restated Promissory
Note executed by Borrower and payable to the order of Lender in the original
principal amount of $67,500,000.00 as evidence of the Loan, and any extensions,
renewals, modifications or replacements thereof or therefor.

“Obligations” shall mean, collectively, all amounts now or hereafter owing to
Lender by Borrower pursuant to the terms of or as a result of this Agreement,
the Note, or any other Loan Documents or the Environmental Indemnification
Agreement, including without limitation, the unpaid principal balance of the
Loan and all interest, fees, expenses and other charges relating thereto or
accruing thereon, as well as any and all other indebtedness, liabilities,
covenants, duties and obligations of Borrower, whether direct or indirect,
absolute or contingent, or liquidated or unliquidated, monetary or non-monetary,
which may be now existing or may hereafter arise under or as a result of any of
the Loan Documents, the Environmental Indemnification Agreement, and together
with any and all renewals, extensions, or modifications of any of the foregoing.

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“Original Loan Agreements” shall mean collectively the following four (4) loan
agreements:
 
(i) Loan Agreement dated December 23, 2005, executed by Original Borrower and
Lender, as may have been modified or amended, as assumed by Borrower pursuant to
the Assumption Agreement;
 
(ii) Loan Agreement dated June 15, 2006, executed by Original Borrower and
Lender, as may have been modified or amended, as assumed by Borrower pursuant to
the Assumption Agreement;
 
(iii) Construction Loan Agreement dated November 1, 2006, executed by Original
Borrower and Lender, as may have been modified or amended, as assumed by
Borrower pursuant to the Assumption Agreement; and
 
(iv) Construction Loan Agreement dated December 22, 2006, executed by Original
Borrower and Lender, as may have been modified or amended, as assumed by
Borrower pursuant to the Assumption Agreement.
 
“Original Notes” shall mean collectively, the following four (4) notes:
 
(i) Promissory Note dated December 23, 2005, made by Original Borrower payable
to the order of Lender in the original principal amount of Thirty-Four Million
One Hundred Fifty Thousand and No/100 Dollars ($34,150,000.00), as may have been
modified or amended, as assumed by Borrower pursuant to that certain Assumption
Agreement; and
 
(ii) Promissory Note dated June 15, 2006, made by Original Borrower payable to
the order of Lender in the original principal amount of Thirty-Six Million Six
Hundred Thousand Eight Hundred and No/100 Dollars ($36,600,800.00), as may have
been modified or amended, as assumed by Borrower pursuant to the Assumption
Agreement,
 
(iii) Construction and Term Promissory Note A dated November 1, 2006, made by
the Original Borrower payable to the order of Lender in the original principal
amount of Six Million Six Hundred Thousand and No/100 Dollars ($6,600,000.00),
as may have been modified or amended, as assumed by Borrower pursuant to the
Assumption Agreement, and
 
(iv) Construction and Term Promissory Note A dated December 22, 2006, made by
the Original Borrower payable to the order of Lender in the original principal
amount of Eight Million Three Hundred Twenty Thousand and No/100 Dollars
($8,320,000.00), as may have been modified or amended, as assumed by Borrower
pursuant to the Assumption Agreement.
 
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“Person” shall mean any individual, partnership, limited partnership, limited
liability company, firm, corporation, association, joint venture, trust or other
entity, or any government or political subdivision or agency, department or
instrumentality thereof.

“Property” shall mean, collectively, the property, including the Land and all
improvements, fixtures and related personal property located thereon.

“Requirements” shall have the meaning given such term in Section 4.12 hereof.

“Security Documents” shall mean, collectively, the Security Instruments, the
Assignment of Management Agreement, and each other affidavit, certificate,
security, mortgage, assignment, financing statements or other collateral
document, whether now existing or hereafter executed and delivered in connection
with, or securing any or all of, the Obligations.

“Security Instruments” shall mean, collectively, the Mortgage, the Assignment of
Rents and Leases, the UCC Financing Statements, and other security instruments
executed by Original Borrower or Borrower in connection with the Loan in favor
of Lender, recorded or to be recorded in the real estate records of the county
where the Property is located, and any extensions, renewals, modifications or
replacements thereof or therefor.

“Taxes” shall mean any present or future taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings or other charges of whatever nature, now
or hereafter imposed or levied by the United States of America, or any state or
local government or by any department, agency or other political subdivision or
taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto other than taxes on the income
of Lender.

Section 1.02         Other Definitional Terms. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole, and not to any particular provision of this
Agreement.  Any pronoun used herein shall be deemed to cover all genders and all
singular terms used herein shall include the plural and vice versa.  Unless
otherwise expressly indicated herein, all references herein to a period of time
which runs “from” or “through” a particular date shall be deemed to include such
date, and all references herein to a period of time which runs “to” or “until” a
particular date shall be deemed to exclude such date.
 
ARTICLE II
 
LOANS

Section 2.01         Disbursement.  Subject to the terms and conditions of this
Agreement, Lender agrees to advance to Borrower the Loan in accordance with the
terms and provisions of the Note.

Section 2.02         Note; Repayment of Principal and Interest.  Borrower’s
obligations to pay to Lender the principal of and interest on the Loan shall be
evidenced by the Note.  The Loan shall bear interest at the rate or rates per
annum specified in the Note and such interest shall be calculated and shall be
paid and shall accrue in the manner specified in the Note.
 
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ARTICLE III
 
GENERAL TERMS

Section 3.01         Fees.  In consideration of Lender’s entering into this
Agreement and making the Loan hereunder, Borrower agrees to pay (from deposits
previously delivered to Lender) to Lender, on the date of the funding of the
Loan hereunder, a processing fee in the amount of $101,250.00, which processing
fee shall be deemed fully earned upon Lender’s execution and delivery of this
Agreement and the funding of the Loan.

Section 3.02          Payments, Prepayments and Computations.  Except as may be
otherwise specifically provided herein, all payments by Borrower with respect to
the Loan or any other Obligations under this Agreement or any of the other Loan
Documents or the Environmental Indemnification Agreement shall be made without
defense, set-off or counterclaim to Lender not later than 2:00 p.m. (Eastern
Time) on the date when due and shall be made in lawful money of the United
States of America in immediately available funds.  Any payment received by
Lender on a non-Business Day or after 2:00 p.m. (Eastern Time) on any Business
Day shall be deemed received by Lender at the opening of its business on the
next Business Day.  Whenever any payment to be made hereunder or under the Note
or any of the other Loan Documents or the Environmental Indemnification
Agreement shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the
applicable rate during such extension.  Interest shall be calculated on the
basis of a year consisting of 360 days and with twelve thirty-day months,
except that interest due and payable for less than a full month shall be
calculated by multiplying the actual number of days elapsed in such period by a
daily interest rate based on a 360-day year.  The Loan may not be prepaid in
whole or in part except as specifically provided in the Note.

Section 3.03         Collateral.  The Obligations shall be secured pursuant to
any or all Security Documents.  Borrower also shall execute or deliver (or cause
to be executed and delivered) any and all financing statements and such other
documents as Lender may reasonably request from time to time in order to perfect
or maintain the perfection of Lender’s Liens under such Security Documents.

Section 3.04          Agreements Regarding Interest and Other Charges.  Borrower
and Lender hereby agree that the only charges imposed or to be imposed by Lender
upon Borrower for the use of money in connection with the Loan is and will be
the interest required to be paid under the provisions of this Agreement as well
as the related provisions of the Note.  In no event shall the amount of interest
due and payable under this Agreement, the Note or any of the other Loan
Documents or the Environmental Indemnification Agreement exceed the maximum rate
of interest allowed by applicable law.  It is the express intent hereof that
Borrower not pay and Lender not receive, directly or indirectly or in any
manner, interest in excess of that which may be lawfully paid under applicable
law.  Any and all charges, fees, and other amounts payable hereunder not
identified as “interest” are not intended, and shall not be deemed, to be
interest.  All interest, and all other charges, fees or other amounts deemed to
be interest notwithstanding the preceding sentence, which are paid or agreed to
be paid to Lender under this Agreement, the Note or any of the other Loan
Documents shall, to the maximum extent permitted by applicable law, be
amortized, allocated and spread on a pro rata basis throughout the entire actual
term of the Loan (including any extension or renewal period), or at Lender’s
election and to the extent permitted by applicable law, credited as a payment of
principal.

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Section 3.05         Letter of Credit.  In the event Lender requires or agrees
to accept a letter of credit with respect to the Loan, said letter of credit,
and any extension, renewal, or replacement thereof, shall be an unconditional,
irrevocable letter of credit issued by a bank approved by Lender and in
substance and form acceptable to Lender.  Any such letter of credit shall not
contain any conditions for its cashing beyond presentation by its authorized
representative.  Its term shall be for not less than three (3) months beyond the
end of the time period, or any extension thereof, specified by Lender for
satisfaction of such requirement.

Section 3.06          Prohibition on Dry Cleaners.  Borrower shall not, during
the term of the Loan, conduct or permit any tenant to conduct any dry cleaning
operations on or at the Property.

Section 3.07          Property Release Privilege.  Provided no Event of Default
(as hereinafter defined) exists, Borrower shall be allowed, subsequent to the
Lockout Period (as that term is defined in the Note), to partially prepay the
Loan, upon thirty (30) days prior written notice to Lender (“Release Request”),
and to thereby obtain a partial release of the Mortgage of any parcel of
Property securing the Loan (the “Release Privilege”) subject to the following
conditions:

(i)
The total principal amount of the Loan to be funded pursuant to this Agreement
is hereby allocated by Lender to each Property comprising the security hereunder
in the following initial amounts (“Principal Allocation”), resulting in the
following percentages of the total Loan amount (“Allocation Percentage”) for
each parcel as follows:

 
Property
 Principal Allocation
 Allocation Percentage
1
 2455 S. Beulah Blvd., Flagstaff, Arizona
$5,905,239.89
8.74850%
2
 6201 Rogers Avenue, Fort Smith, Arkansas
$8,447,601.07
12.51496%
3
 9231 East Arapahoe Rd., Greenwood Village, Colorado
$2,069,941.98
3.06658%
4
 2821 E. Harmony Road, Fort Collins, Colorado
$4,537,710.65
6.72253%
5
 2613 South Vista, Boise, Idaho
$1,261,856.52
1.86942%
6
 975 North Lakeview Pkwy., Vernon Hills, Illinois
$2,113,454.28
3.13104%
7
 8219 West Jefferson Blvd., Fort Wayne, Indiana
$5,221,475.27
7.73552%
8
 855 Centre Street, Ridgeland, Mississippi
$8,087,070.63
11.98085%
9
 801 Ridgewood Road, Ridgeland, Mississippi
$3,512,063.73
5.20306%
10
 9320 Poplar Pike, Memphis, Tennessee
$901,326.09
1.33530%
11
 9314 Poplar Pike , Memphis, Tennessee
$2,486,416.80
3.68358%
12
 2697 Lake Vista Drive, Lewisville, Texas
$764,573.17
1.13270%
13
 6635 Gateway Blvd., El Paso, Texas
$10,766,184.73
15.94990%
14
 10680 South Automall, Sandy, Utah
$4,115,019.80
6.09633%
15
 105 Alex Lane, Charleston, West Virginia
$4,170,964.18
6.17921%
16
 107 Alex Lane, Charleston, West Virginia
$3,139,101.21
4.65052%
 
 TOTAL
$67,500,000.00
100.00%

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As monthly installments of principal and interest are made in accordance with
the terms and conditions of the Note and Loan Documents, the Principal
Allocation for each Property shall be reduced by that Allocation Percentage of
the amortized principal amount paid, but the Allocation Percentage for each
Property shall remain constant until Borrower exercises its Release Privilege,
at which time the Allocation Percentage for each Property shall be redetermined
and reallocated among the remaining Property(ies) by Lender in its sole
discretion.

(ii)
Promptly following Lender’s receipt of Borrower’s Release Request, Lender shall
determine the release price (the “Release Price”) payable for each parcel
of  Property, which shall be an amount equal to the product of (x) one hundred
twenty percent (120%) (“Release Factor”) times (y)  the Allocation Percentage
for such parcel of Property to be released multiplied by the then outstanding
principal balance of the Loan (“Amortized Principal Allocation”).  For example,
if Borrower submitted a request for a release of Property (1) 2455 S. Beulah
Boulevard, Flagstaff, Arizona in accordance with the conditions herein set
forth, the calculation would be as follows:

(a)           Release Price         =           120%           x   Amortized
Principal Allocation
and
 
(b)
Amortized Principal

Allocation              =           8.74850%  x  outstanding principal balance
of Note

 
(c)
Assuming a principal balance of $67,500,000, the Property (1) release price
would be calculated as:
1.20  x
0.0874850 x $67,500,000  =   $7,086,287.87

(iii)
In addition to the Release Price, Borrower also shall pay to Lender,
simultaneously with the Release Price, the “Prepayment Premium” (as that term is
defined in the Note) on such Release Price calculated in accordance with the
Note;

(iv)
Lender shall have the right to apply the Release Price to the Loan in such
manner as Lender may determine in its sole discretion;

 
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(v)
After the Lender has applied the Release Price to the Loan, Lender shall
redetermine and reallocate the Allocation Percentages and redetermine the
Principal Allocations for the remaining parcels of Property, in its sole
discretion, and shall advise Borrower in writing within thirty (30) days of
receipt of the Release Request as to the amounts of the reallocated Allocation
Percentages and Principal Allocations.

(vi)
Borrower shall pay all costs, fees and expenses associated with the Release
Privilege, including without limitation, one hundred percent (100%) of all
attorneys’ fees and expenses incurred by or on behalf of Lender in connection
therewith, and all such sums shall be due and payable on the date of closing and
delivery of the release documentation by Lender;

(vii)
Borrower shall provide Lender with an endorsement to its loan title policies (as
to the Mortgage) with respect to the remaining parcels in form and substance
satisfactory to Lender in its sole discretion insuring the Loan through the date
and time of recording of the release and modification instrument, with no new
exceptions since the date of this Agreement unless approved by Lender in
writing.  To the extent that a released Property adjoined a remaining parcel or
shared common areas, parking, utilities or amenities or services with a
remaining parcel of Property, such endorsement will also (a) insure that the
remaining Property has access to the same publicly dedicated streets as it did
prior to the release and (b) amend the legal description to include only the
remaining parcels;

(viii)
Following any Release hereunder, the remaining collateral must have a minimum
Project Debt Yield (as hereinafter defined) equal to 14.5%.  No Release shall be
permitted hereunder if the application of the Release Price would result in a
reduction of the outstanding Loan balance to an amount less than $33,000,000.00.

“Project Debt Yield” shall be calculated as follows:  the quotient of (A) net
cash flow of all remaining Property other than the portion of the Property
released pursuant to the Release Privilege divided by (B) the projected
outstanding principal balance of the Loan on the date of the release, after
application of the Release Price.

(ix)
In addition to and not in limitation of the requirements for either a
Substitution (as hereinafter defined) or the exercise of a Release Privilege, in
order for either those certain parcels of Property located at 105 Alex Lane,
Charleston, West Virginia or 107 Alex Lane, Charleston, West Virginia
(individually “New Property” or collectively, “New Properties”) to be considered
for a Substitution or the Release Privilege, then the New Property for which a
release is sought, including the particular hotel building and parking for such
building, to the extent possible, shall be separated along the lines of a
natural lot line (each a “Released New Property Parcel”) and Borrower shall
satisfy the following additional requirements:

 
a.
No Event of Default shall have occurred and be continuing under any of the Loan
Documents;

 
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b.
Lender has received and approved (in its reasonable discretion) in writing a
preliminary subdivision plat showing the subdivision of the Released New
Property Parcel from the other New Property (the “Remainder New Property
Parcel”); provided however, that neither Lender's approval of the subdivision
plat or any other documentation related thereto shall constitute a warranty or
representation to anyone by Lender or its agents or representatives as to the
sufficiency or adequacy of such plat or any of its components or any other
conditions of the proposed subdivision of the Released New Property Parcel from
the Remainder New Property Parcel;

 
c.
A new legal description for each of the Released New Property Parcel and the
Remainder New Property Parcel shall be submitted to and subject to the approval
of Lender, in its reasonable discretion;

 
d.
Such proposed subdivision shall not adversely impact the Remainder New Property
Parcel with regards to setbacks, parking and any other restrictions or
requirements imposed by recorded documents, or any applicable law, rule or
regulation;

 
e.
The final subdivision plat shall not materially differ from the preliminary
subdivision plat approved by Lender and shall have received final approval from
all applicable governmental departments and agencies;

 
f.
The New Properties have not decreased in fair market value from the date of this
Agreement, as determined in the sole discretion of Lender;

 
g.
The Released New Property Parcel and the Remainder New Property Parcel have been
legally and validly subdivided and are recognized by the applicable governmental
authority as separately taxed parcels;

 
h.
Borrower shall encumber the Released New Property Parcel with any restrictions
as Lender may reasonably require to protect the Remainder New Property Parcel;

 
i.
Borrower shall provide Lender with an endorsement to its loan title policy with
respect to the Remainder New Property Parcel in form and substance satisfactory
to Lender in its sole discretion insuring the Loan through the date and time of
recording of the release and modification instrument, with no new exceptions
since the original Loan closing unless approved by Lender in writing.  To the
extent that the Released New Property Parcel adjoined or shared common areas,
parking, utilities or amenities or services with the Remainder New Property
Parcel, such endorsement, if requested by Lender, will also (a) insure that the
Remainder New Property Parcel has access to the same publicly dedicated streets
as it did prior to the release and (b) amend the legal description to include
only the Remainder New Property Parcel; provided, however, that if the required
endorsement cannot be delivered, then Borrower shall be required to deliver a
new title insurance policy for the Remainder New Property Parcel to Lender in
form and substance acceptable to Lender; and

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j.
To the extent necessary to accomplish the access described in clause (i) above,
Borrower shall have created easements for utilities, signage, drainage, parking,
ingress and egress and other appropriate purposes in, on and over the Released
New Property Parcel for the benefit of the Remainder New Property Parcel and
such easements shall be insured as appurtenances in Lender’s loan policy via the
endorsement (or policy, as the case may be) required in clause (i), if
applicable.

Section 3.08          Substitution of Collateral.  Notwithstanding the
provisions of this Agreement or any of the Loan Documents to the contrary,
Borrower may submit a written request (“Substitution Request”), upon at least
ninety (90) days prior notice, that Lender permit a substitution (each a
“Substitution”) of a substitute property (each a “Substitute Property”) (which
previously has not been the subject of inclusion in the collateral for the Loan)
for any individual Property on the list in the chart in subparagraph 3.07(i)
herein (in such capacity a “Replaced Property”) upon and subject to the
following terms and conditions:

 
(a)
Borrower must submit a Substitution Request, identifying the proposed Substitute
Property and the proposed Replaced Property at least ninety (90) days prior to
the proposed closing date for the Substitution. Lender shall evaluate the
request for the proposed Substitution and the proposed Substitute Property
pursuant to its then customary underwriting and pricing criteria.  The amount of
the “Principal Allocation” Lender would determine to allocate to the Substitute
Property must be at least equal to the amount of the then remaining Principal
Allocation for the proposed Replaced Property, and the loan-to-value ratio for
the Lender’s proposed Principal Allocation for the Substitute Property, based
upon a current MAI appraisal in accordance with subparagraph (h) below, must be
at least equal to the then current loan-to-value ratio for the proposed Replaced
Property.  In its underwriting and pricing analysis, Lender may review items
such as, but not limited to, location, occupancy, lease term, rollover, tenant
exposure, tenant’s credit, average daily room rates and operating statements.

 
(b)
The owner of the Substitute Property must be the Borrower (such that the
Substitute Property is owned 100% by the same entity as owns all the collateral
constituting the Property).  No properties will be permitted other than limited
service or full service hotels or motels operating under a hotel or motel
franchise acceptable to Lender.  The Substitute Property must be located in the
continental United States.

 
(c)
Lender in its sole discretion shall acknowledge within ten (10) business days of
the Lender’s receipt of the Substitution Request whether the proposed Substitute
Property appears to be acceptable to permit the Substitution.  If in the
Lender’s sole discretion it is determined that the proposed Substitute Property
is equal to or greater in value and quality than the Property, then Lender,
through its loan correspondent, will process the Borrower’s formal request for
Substitution.  The proposal will be reviewed by and presented to Lender’s and
ING Investment Management LLC’s investment review committees pursuant to each of
their then current commercial mortgage loan policies, practices, standards and
procedures.  If the investment review committee approves the formal request for
Substitution, the Substitution will be subject to the other conditions outlined
in this Section 3.08.

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(d)
No more than one (1) Substitution Request shall be considered in any calendar
year for the entire Loan.

 
(e)
Borrower shall not be permitted to request and close more than a total of six
(6) Substitutions during the Loan term.

 
(f)
Borrower shall pay a processing fee to Lender equal to $25,000 at closing of
each of the first three (3) approved Substitutions.  Borrower shall pay a
processing fee to Lender equal to $50,000 at closing of each of the last three
(3) approved Substitutions. A “Substitution Deposit” of $5,000 shall be required
with submission of a Substitution Request, which deposit shall be applied to the
processing fee at closing of the Substitution.  The deposit and processing fee
contemplated by this subsection are in addition to attorneys’ fees and expenses
incurred in the documentation of such Substitution and in the review of due
diligence.

 
(g)
All improvements on the Substitute Property shall have been completed in a good
and workmanlike manner and in compliance, in all material respects, with all
applicable governmental requirements. The Substitute Property must be lien free
and all land, improvements and personal property must be paid for in full.

 
(h)
The appraised fair market “As Is” value of the Substitute Property shall be
equal to or greater than the greater of (x) the then appraised fair market
value, or gross sales proceeds, as the case may be, of the Replaced Property,
and (y) the original appraised value of the Replaced Property as set forth in
the appraisal delivered to Lender in connection with the closing of the loan on
the Replaced Property.  The fair market “As Is” value of the Replaced Property
and Substitute Property shall be determined by a firm of appraisers selected by
Lender’s loan correspondent and approved by the Lender, based on an MAI
appraisal satisfactory to Lender, dated not more than ninety (90) days prior to
the closing of the Substitution.  All costs of such appraisals shall be paid by
the Borrower on or prior to the closing of the Substitution. Lender shall have
the right to readjust the Principal Allocations and Allocation Percentages for
all sixteen (16) properties constituting the Property (or such number remaining
if the Release Privilege previously has been exercised).  The Release Factor set
forth in Subsection 3.07(i) shall remain the same upon closing of the
Substitution.

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(i)
The actual net operating income relating to the Substitute Property (based upon
the trailing twelve (12) month financial results or such shorter period, as
Lender deems appropriate, for a Substitute Property opened for less than one
year) shall equal or exceed the actual net operating income relating (based upon
the trailing twelve (12) month financial results or such shorter period, as
Lender reasonably deems appropriate, for any Substitute Property opened for less
than one year) to the Replaced Property.

 
(j)
Lender’s outside counsel shall prepare and Borrower shall execute (1) amendments
to the Note, the Mortgage, the Assignments of Rents and Leases, the
Environmental Indemnification Agreement, this Agreement and tax and insurance
escrows, and (2) all other Loan Documents Lender shall deem appropriate,
including, but not limited to, any new security instrument, assignment of rents
and leases, environmental indemnities, etc. relating to the Substitute Property
(all of which documentation shall be substantially in the form of the applicable
documents executed in connection with the Loan with such changes thereto as
Lender reasonably deems appropriate to reflect the terms and circumstances of
the Substitution and Substitute Property) (collectively, the “Substitute Loan
Documents”).  The Substitution Loan Documents shall be cross-defaulted and
cross-collateralized with the existing Loan Documents for the Loan.

 
(k)
Borrower shall be required to supply for Lender’s review and approval due
diligence materials relating to the Substitute Property prior to closing of the
Substitution including those items required for closing of this Loan, and such
other materials as may then be customarily required as part of its then current
commercial loan closing policies, procedures, standards and practices for
properties of similar type and in similar locations as the Substitute Property,
including, without limitation, a current as-built ALTA survey, proof of adequate
insurance, title insurance in conformance with the requirements for the closing
of this Loan, proof of compliance with governmental regulations, tenant estoppel
certificates, subordination, non-disturbance and attornment agreements,
franchise agreements and comfort letters.  The Lender shall, at the Borrowers’
sole cost and expense, receive for its review and approval all additional due
diligence materials in any way relating to the Substitute Property, including
but not limited to, appraisal, hazardous substance report, seismic report and
engineer report as required by Lender in its sole discretion.  The items listed
in this subsection are not exhaustive.

 
(l)
The Substitute Loan Documents, financing statements, and other instruments
required to perfect the liens in the Substitute Property and all collateral
under such documents shall be recorded, registered and filed (as applicable) in
such manner as may be required by law to create a valid, perfected lien and
security interest with respect to the Substitute Property and the personal
property related thereto.  The liens created by the Substitute Loan Documents
shall be first liens and security interests on the Substitute Property and the
personal property related thereto, subject only to such exceptions as Lender
shall approve in its sole discretion.  At closing of the Substitution, the
Borrower shall have good and marketable title to the Substitute Property and
good and valid title to any personal property located thereon or used in
connection therewith, in each case satisfactory to the Lender.  The title
policies to the remaining parcels of Property in the Loan must also be endorsed
to bring forward the effective dates thereof through the dates and times of
recording of the modification instruments and showing no new exceptions since
the original Loan closing unless approved by Lender in writing and continuing
all coverage provided in the original Loan title policies.

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(m)
Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents
by the Borrower for the other properties in the Loan, (2) a consent to such
Substitution by any guarantors or indemnitors, if any, and (3) such other
instruments and agreements and such certificates and opinions of counsel, in
form and substance satisfactory to the Lender in connection with such
Substitution as it may reasonably request.

 
(n)
Borrower shall be responsible for all documentary stamp and intangible taxes on
the Substitution and the Mortgage encumbering the Substitute Property and all
other parcels of Property in the Loan that shall arise in connection with such
Substitution.  Lender shall require payment of all such documentary stamp and
intangibles taxes required by law and authorities having jurisdiction as a
condition of closing the Substitution and the corresponding loan modifications
to the Loan, regardless of whether the taxing authority imposes taxes
duplicative of those incurred at the original closing of the Loan.

 
(o)
No Event of Default shall have occurred and be continuing hereunder or under any
other Loan Documents for the Loan on the date of Substitution Request or at
closing of the Substitution.

 
(p)
Lender shall be satisfied that no material adverse change in the financial
condition, operations or prospects of any guarantor, Borrower (or controlling
member of Borrower or general partner or limited partner of Borrower, as
applicable) has occurred after closing of this Loan.

 
(q)
The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred
in connection with any such Substitution and the reasonable out-of-pocket fees
and expenses incurred by Lender, its outside counsel and its loan correspondent
and servicer in connection therewith.  Without limiting the generality of the
foregoing, the Borrower shall, in connection with, and as a condition to, each
Substitution, pay the reasonable fees and expenses of Lender’s counsel, the
reasonable fees and expenses of Lender’s engineers, appraisers, construction
consultants, insurance consultants and other due diligence consultants and
contractors, recording charges, title insurance charges, and documentary stamp
and/or mortgage or similar taxes, transfer taxes.

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Section 3.09         Subordinate Financing.  Notwithstanding anything in the
Loan Documents to the contrary (including, without limitation the provisions of
Paragraph 30(a) of each Mortgage), Borrower may encumber the Property with one
additional deed of trust/mortgage/deed to secure debt (as applicable) (the
“Subordinate Mortgage”), subordinate in every respect to the lien and interest
of this Deed of Trust, for the purpose of securing a single secondary
indebtedness (the “Subordinate Financing”), securing all the Property (secondary
financings on individual portions of the Property not being permitted hereby)
provided that:

(i)           the Subordinate Mortgage, the documentation for the Subordinate
Financing, and the form and terms of the Subordinate Financing are satisfactory
in all respects to Lender;
 
(ii)           all such documentation as Lender may reasonably require shall be
submitted to Lender including, but not limited to, operating statements of all
Property as of the date of the proposed Subordinate Financing for the previous
three (3) Loan Years (a “Loan Year” is a period of twelve consecutive months
commencing on the date hereof if it is the first of the month and otherwise
commencing on the first day of the month immediately following the date hereof,
and the first Loan Year shall include the period, if any, between the date
hereof and the commencement date of the first Loan Year) and a pro forma
operating statement for the current Loan Year, and a then-current MAI appraisal
of the Property, provided at Lender’s expense, by an appraiser approved by
Lender;
 
(iii)           the Net Operating Income (for the purpose of this subparagraph,
Net Operating Income shall mean gross cash operating receipts from the Property
less normal and customary operating expenses incurred in the operation,
management, and maintenance of the Property) shall not be less than one hundred
fifty percent (150%) of the combined aggregate of the Indebtedness (as defined
in the Mortgage) and Subordinate Financing debt service payments (the
Subordinate Financing must begin amortizing upon funding);
 
(iv)           the total of the outstanding principal balance of the
Indebtedness (as defined in the Mortgage) and the Subordinate Financing does not
exceed seventy percent (70%) of the value of the Property as established by a
then-current MAI appraisal;
 
(v)           The beneficiary/mortgagee (as applicable) of the Subordinate
Mortgage securing the Subordinate Financing shall expressly acknowledge the
priority of the debt, liens and security interests of the Indebtedness (as
defined in the Mortgage) and agree to provide Lender with written notice of any
default under the Subordinate Financing in a subordination agreement in form and
substance satisfactory to Lender.  Borrower shall pay any fees, costs or
expenses, including reasonable attorneys’ fees, incurred by Lender in connection
with the Subordinate Financing;
 
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(vi)           Any default under the Subordinate Financing shall at Lender’s
option constitute an Event of Default under this Agreement and the other Loan
Documents;
 
(vii)           If previously waived, Lender shall have the right to reinstate
escrow payments for taxes and insurance premiums;
 
(viii)           No Event of Default shall exist under this Agreement or the
other Loan Documents; and
 
(ix)           All Leases shall be superior to the Subordinate Financing
documents and instruments unless otherwise agreed in writing by Lender.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
Borrower hereby represents and warrants to Lender as follows:

Section 4.01         Organization; Authorization; Valid and Binding
Obligations.  Borrower is a limited partnership duly organized and validly
existing under the laws of the State of Delaware.  Borrower is duly qualified
and authorized to do business and is in good standing in all other states and
jurisdictions where the ownership of property or the nature of the business
transacted by it, makes such qualification necessary, including, without
limitation, the state where the Property is located.  Borrower has all requisite
power and authority to execute and deliver the Loan Documents and the
Environmental Indemnification Agreement, to perform its obligations under such
Loan Documents and the Environmental Indemnification Agreement and to own its
property and carry on its business.  The Loan Documents and the Environmental
Indemnification Agreement have been duly authorized by all requisite corporate,
partnership, limited liability company or other action on the part of Borrower
and duly executed and delivered by authorized officers, partners or other
representatives (as the case may be) of Borrower.  Each of the Loan Documents
and the Environmental Indemnification Agreement constitutes a valid obligation
of Borrower, legally binding upon and enforceable against Borrower in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally or by general principles of equity.

Section 4.02          Financial Statements.   Borrower covenants and agrees that
it will keep and maintain books and records of account, or cause books and
records of account to be kept and maintained in the manner prescribed in
Paragraph 25 of the Mortgage.

Section 4.03         Actions Pending.  There is no action, suit, investigation
or proceeding pending or, to the knowledge of Borrower, threatened against
Borrower, any properties, assets or rights of Borrower other than the Property,
by or before any court, arbitrator or administrative or governmental body that
would have a material adverse effect on Borrower if resulting in a decision not
in favor of Borrower.  There is no action, suit, investigation or proceeding
pending, or, to the knowledge of Borrower, threatened against the Property, by
or before any court, arbitrator or administrative or governmental body involving
an amount in controversy exceeding $100,000.

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Section 4.04          Title to Land.  The Land is free and clear of all liens
and encumbrances, except for the Loan Documents and except as specifically set
forth in the mortgagee title policy(ies) delivered to Lender in connection with
the Loan, and except for unrecorded leases provided to Lender.

Section 4.05          Taxes.  Borrower has filed all federal, state and other
income tax returns prior to the required filing date which, to the knowledge of
Borrower, are required to be filed, and has paid all Taxes as shown on such
returns and on all assessments received by it to the extent that such Taxes have
become due, except such Taxes as are not due or which are being contested in
good faith by Borrower by appropriate proceedings for which adequate reserves
have been established in accordance with sound accounting practices consistently
applied or by any tenant under any Leases, in which case such contest is being
conducted as permitted pursuant to the applicable Lease(s).

Section 4.06         Conflicting Agreements and Other Matters.  Neither the
execution nor delivery of this Agreement, nor fulfillment of or compliance with
the terms and provisions of this Agreement, will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien (other than
any Lien arising under any Loan Document) upon the Property or any other
properties or assets of Borrower, the charter or by-laws or other organizational
documents of Borrower, any award of any arbitrator or any agreement, instrument,
order, judgment, decree, statute, law, rule or regulation to which Borrower, the
Property or any other properties or assets of Borrower is subject.

Section 4.07         Governmental Consent.  Except for any recording or filing
which may be required by applicable law to perfect or maintain the perfection of
Lender’s Liens in the Collateral, no consent, approval or authorization of, or
declaration or filing with, any governmental authority is required for the valid
execution, delivery and performance by Borrower of the Loan Documents or the
Environmental Indemnification Agreement or the consummation of any of the
transactions contemplated by the Loan Documents.

Section 4.08         Disclosure.  To Borrower’s knowledge, neither this
Agreement nor any other document, certificate or statement furnished to Lender
by Borrower in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not materially misleading.

Section 4.09          [INTENTIONALLY OMITTED]

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Section 4.10          Improvements.  All certificates, permits and licenses
required in connection with the ownership, operation and occupancy of
the Property have been issued and are in full force and effect.

Section 4.11          No Default.  The Loan Documents and the Environmental
Indemnification Agreement have been complied with and are in full force and
effect and no defaults or events of default exist thereunder; Borrower has no
knowledge of any facts or circumstances, which with the giving of notice or
passage of time (or both) would constitute a default or event of default
thereunder, and all obligations and agreements required to be performed by
Borrower thereunder have been performed.

Section 4.12         Compliance with Requirements.  To the best of Borrower’s
knowledge, the Improvements have been constructed free from faults and defects,
and in all material respects conform to and comply with all valid and applicable
laws, ordinances, regulations and rules of all governmental entities having
jurisdiction over, and all covenants, conditions, restrictions and reservations
affecting the Land and the Improvements (the “Requirements”). Borrower has no
knowledge of any noncompliance (either substantial or unsubstantial) of the
Improvements with any of the applicable Requirements.

Section 4.13          Condition of Land and Improvements.  Neither the Land nor
the Improvements have been injured or damaged by fire or other casualty which
has not been restored.

Section 4.14         Personalty.  Except as otherwise expressly provided in the
Leases, title to all goods, materials, supplies, equipment, machinery and other
personal property and fixtures used in the operation or maintenance of the
Property, is vested in Borrower free and clear of all liens, encumbrances and
security interests, other than the lien and security interest of the Security
Instruments, and Borrower has not executed any security agreement, purchase
order or other contract or agreement under which any person or other entity is
granted or reserves the right to retain title to, remove or repossess any of
such goods, materials, supplies, equipment, machinery or other personal property
or fixtures.

Section 4.15         Zoning.  Under the applicable zoning ordinance of each
jurisdiction in which each parcel of Land is located, each parcel of Land is
zoned in a zoning classification that permits the use of the Land and
Improvements for all purposes as currently used, without any conditions other
than with respect to which such conditions have been complied in full and
without exception.  Furthermore, to the best of Borrower’s knowledge but without
any independent investigation by Borrower, in the event the Improvements were
damaged or destroyed, the Improvements could be restored or reconstructed as
they now exist without the requirement of any zoning variance or waiver.

Section 4.16         Restrictions.  To the best of Borrower’s knowledge, the
Land is not subject to: (i) any use or occupancy restrictions, except those
imposed by applicable zoning laws and regulations, except any such restrictions
described in the mortgagee title policy(ies) delivered to Lender in connection
with the Loan and those restrictions set forth in the Security Instruments; (ii)
special taxes or assessments; (iii) utility tap-in fees, except those generally
applicable throughout the tax districts in which the Land is located; or (iv)
charges or restrictions, whether existing of record or arising by operation of
law, unrecorded agreement, the passage of time or otherwise, except any such
charges or restrictions described in the mortgagee title policy(ies) delivered
to Lender in connection with the Loan.

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Section 4.17         Status of Service Contracts. To the best of Borrower’s
knowledge, Borrower is not in default under any development, management, service
or other agreements and contracts relating to the operation or management of the
Property in a manner which could reasonably be expected to have a Material
Adverse Effect; there is no material default on the part of any other party to
any of such contracts, there is no material default of Borrower under any such
contracts or the existence of any facts or circumstances, which with the giving
of notice or passage of time (or both), would constitute a material default
under any of such contracts, which defaults could reasonably be expected to have
a Material Adverse Effect.  Such contracts have not been modified or amended in
any material respect since the date true and correct copies of the same were
delivered to Lender by Borrower.  Borrower has not done or omitted to do any act
so as to be estopped from exercising any of its rights under any of such
contracts, and there is no assignment of any of Borrower’s rights under any of
such contracts to any person or entity, other than Lender.

Section 4.18         Status of Leases.  To its knowledge, Borrower is not in
default under any of the Leases, and there is no default on the part of any
other party to any Lease, which defaults could reasonably be expected to have a
Material Adverse Effect.  None of the Leases have been modified or amended in
any material respect since the date true and correct copies of the same were
delivered to Lender by Borrower.  Borrower has not done or omitted to do any act
so as to be estopped from exercising any of its rights under any of the Leases,
and there is no assignment of any of Borrower’s right under any of such
contracts to any person or entity other than Lender.

Section 4.19         Encroachments.  Except as shown on those certain surveys
previously delivered to Lender in connection with the Loan, there are no
encroachments on the Land; there are no strips or gores within or affecting the
boundaries of the Land; and all Improvements are situated entirely within the
boundaries of the Land and within any applicable building lines.

Section 4.20         Access.  All streets and roads necessary for access to the
Land have been completed, dedicated to public use and accepted for maintenance
for all necessary governmental entities.

Section 4.21         Availability of Utilities.  Except as set forth in that
certain Certificate of Borrower executed and delivered in connection herewith,
all utility facilities and services necessary for the full use, occupancy and
operation of the Improvements are available to the Land through public or
private easements or rights-of-way at the boundaries of the Land, including,
without limitation, water, storm and sanitary sewer, electricity and telephone.

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Section 4.22         Brokerage Commissions.  All real estate and land brokerage
commissions payable in connection with the acquisition of the Land, construction
of the Improvements and the Loan, and all brokerage commissions or finders fees
due and payable in connection with the current terms of any of the Leases, have
been paid in full, or will be paid in full upon the execution of this Agreement.

Section 4.23         Composition of Property.  Subject to the matters disclosed
in the title policies delivered to Lender in connection with the Loan, the
Property includes all improvements and land, and other estates and rights
(including, without limitation, any appurtenant easement rights and covenants
and restrictions) which are necessary to allow for the continued use thereof as
hotels/motels, or other uses presently in effect as of the date of this
Agreement, and as may be required by any of the Requirements, or to satisfy all
tenant requirements under the Leases.

ARTICLE V

COVENANTS

For so long as this Agreement is in effect, and unless Lender expressly consents
in writing to the contrary, Borrower covenants and agrees to comply with the
following covenants:

Section 5.01          Operating Statements and Rent Roll.  Borrower shall
deliver to Lender operating statements and rent rolls as required in Paragraph
25 of the Mortgage.

Section 5.02          Books and Records.  Borrower shall keep its books, records
and accounts in accordance with accepted industry standards and as required
hereunder and under the Loan Documents.

Section 5.03          Maintenance of Existence, Properties, Licenses,
Etc.  Except to the extent otherwise permitted hereby, Borrower will do or cause
to be done all things reasonably necessary to preserve, renew and keep in full
force and effect the corporate, partnership or other legal existence of Borrower
and the patents, trademarks, service marks, trade names, service names,
copyrights, licenses, leases, permits, franchises and other rights, that
continue to be useful in some material respect to the business of Borrower or to
the operation of the Property, and at all times maintain, preserve and protect
all licenses, leases, permits, franchises and other rights that continue to be
useful in some related in some material respect to the business of Borrower or
to the operation of the Property.

Section 5.04         Payment of Taxes and Claims.  Borrower will pay and
discharge or cause to be paid and discharged all Taxes, assessments and
governmental charges or levies imposed upon it or upon its respective income and
profits or upon any of its property, real, personal or mixed or upon any part
thereof, before the same shall become in default as well as all lawful claims
for labor, materials and supplies or otherwise, which, if unpaid, might become a
Lien or charge upon such properties or any part thereof.  Notwithstanding
anything contained herein to the contrary, Borrower shall not be required to pay
or discharge any Taxes, assessments and governmental charges or levies and liens
for labor, materials, supplies or otherwise so long as the Borrower shall in
good faith contest the same or the validity thereof by appropriate legal
proceedings which shall operate to prevent the collection of the levy, lien or
imposition so contested and the sale of the Premises, or any part thereof, to
satisfy any obligation arising therefrom, provided that the Borrower shall give
such security as may be demanded by the Lender to insure such payments and
prevent any sale or forfeiture of the Premises by reason of such nonpayment,
failure of performance or contest by Borrower.  Any such contest shall be
prosecuted with due diligence and the Borrower shall promptly after final
determination thereof pay the amount of any levy, lien or imposition so
determined, together with all interest and penalties, which may be payable in
connection therewith.  Notwithstanding the provisions of this paragraph,
Borrower shall (and if Borrower shall fail so to do, Lender may but shall not be
required to) pay any such levy, lien or imposition notwithstanding such contest
if in the reasonable opinion of the Lender, the Premises shall be in jeopardy or
in danger of being forfeited or foreclosed.

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Section 5.05          Parking Requirements.  At all times during the terms of
the Loan, there shall be sufficient parking spaces to satisfy requirements of
all Leases, parking or cross-parking agreements, and applicable zoning
requirements and other Requirements.

Section 5.06          Expenses.  Borrower shall pay all cost, fees, documentary
stamp taxes, intangibles taxes and charges of closing of the Loan, including,
without limitation, Lender’s attorneys’ fees, recording costs, environmental
audit costs, survey and appraisal costs, title examination fees, and title
insurance premiums.

Section 5.07         Indemnity.  Borrower covenants and agrees to indemnify and
hold Lender harmless from and against any and all claims for brokerage fees or
commissions with respect to the making or consummation of the Loan, and all
claims, actions, suits, proceedings, costs, expenses, losses, damages and
liabilities of any kind, including but not limited to attorneys’ fees, expenses,
penalties and interest, which may be asserted against or incurred by Lender by
reason of any matter relating directly to the Loan, and arising out of the
ownership, condition, development, construction, sale, rental or financing of
the Property or any part thereof, other than to the extent arising as a direct
result of the gross negligence or willful misconduct of Lender.  The foregoing
indemnity shall survive the payment and performance of all Obligations to Lender
under the Loan Documents, and should Lender incur any liability for or in
defense of any of the foregoing matters, the amount thereof (and all costs,
expenses and attorneys’ fees incurred by Lender in connection therewith) shall
be added to the principal amount of the Loan and shall bear interest at the
Default Rate (as defined in the Note) to the extent permitted by applicable
law.  Furthermore, Borrower covenants that, upon notice from Lender that any
action or proceeding has been brought against Lender by reason of any such
matters, Borrower shall promptly resist or defend such action or proceeding in a
manner satisfactory to Lender at Borrower’s expense.

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Section 5.08          Fiscal Year.  Borrower shall not change its fiscal year
except upon prior written notice to Lender.

Section 5.09         Estoppel Certificates.  Borrower shall, from time to time,
upon request by Lender, promptly execute, acknowledge and deliver to Lender a
certificate of Borrower stating the amount of principal and interest then owing
on the Obligations, whether or not any setoffs or defenses exist with respect to
all or any part of the Obligations, and, if any such setoffs or defenses exist,
stating in detail the specific facts relating to each such setoff or
defense.  Any such certificate may be relied upon by any prospective assignee of
Lender.

Section 5.10          Replacement of Note.  Upon receipt of notice from Lender
of the loss, theft, destruction or mutilation of the Note, Borrower shall
execute and deliver, in lieu thereof, a replacement note identical in form and
substance to the Note and dated as of the date of the Note, except that such
replacement note shall state on its face that it is a replacement and upon such
execution and delivery all references in the Loan Documents and the
Environmental Indemnification Agreement to such Note so replaced shall be deemed
to refer to such replacement note.

Section 5.11         Notification of Name Change; Location.  Borrower shall
furnish Lender with notice of any change in Borrower’s name or address or
principal place of business within fifteen (15) days of the effective date of
such change, and Borrower shall promptly execute any financing statements or
other instruments deemed necessary by Lender to prevent any filed financing
statement from becoming misleading or losing its perfected status.

Section 5.12         No Joint Venture.  Neither the provisions of any of the
Loan Documents or the Environmental Indemnification Agreement nor the acts of
the parties thereto shall be construed to create a partnership or joint venture
between Borrower and Lender.

Section 5.13         Loans by Partners and Affiliates.  Borrower agrees that any
loan or other advance heretofore or hereafter made to Borrower by a partner,
member or any Affiliate shall be subordinate in all respects to the Loan, and
Borrower agrees that, following any Event of Default, and until repayment of the
Obligations, Borrower shall make no repayment to the partner, member or
Affiliate of any such loan or advance.  Notwithstanding the above, Borrower’s
payments to or on behalf of a partner, member or Affiliate related to one or
more properties that are not included in the Property, and which are from funds
generated from properties other than the Property, shall not be deemed a breach
of this Section 5.13.

ARTICLE VI

FURTHER DISBURSEMENTS

Section 6.01         Further Disbursements.  Borrower agrees that the Note has
been fully disbursed by Lender, and that Lender shall have no further duty
or obligation to make any additional advances or disbursements to Borrower under
the Note.

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ARTICLE VII

EVENTS OF DEFAULT

Section 7.01          Events of Default.  Each of the following events shall
constitute an Event of Default under this Agreement:

(a)           The occurrence of an Event of Default under the Security
Instruments or any of the other Loan Documents or the Environmental
Indemnification Agreement;

(b)           Should any Default occur in the performance or observance of any
term, condition or provision contained in this Agreement which does not relate
to the nonpayment of any monetary sum, and Default is not cured within thirty
(30) days after the Lender gives Borrower written notice thereof or within such
longer period of time, not exceeding an additional thirty (30) days, as may be
reasonably necessary to cure such non-compliance if Borrower is diligently and
with continuity of effort pursuing such cure and the failure is susceptible of
cure within an additional period of thirty days; provided, however, no notice
and cure rights shall be afforded to Borrower for a Default of Paragraphs 15(a),
(b), (d), (e), (f), (g), or (h) of the Mortgage other than those notice and cure
rights granted under such applicable provisions;

(c)           Should any representation or warranty made by Borrower herein or
in any of the other Loan Documents or the Environmental Indemnification
Agreement be false or misleading in any material respect on the date as of which
made (or deemed made); and

(d)           Should Borrower be terminated, liquidated, dissolved or otherwise
cease to exist.

Section 7.02          Remedies.  Upon the occurrence of an Event of Default,
Lender may, in its discretion, exercise one or more of the following remedies:

(a)           Accelerate the maturity of the Obligations and declare the entire
unpaid principal balance of, and any unpaid interest then accrued on, the Note,
together with any Prepayment Premium, without demand or notice of any kind to
Borrower or any other Person, to be immediately due and payable.

(b)           Take all, any or any combination of the actions Lender may take
under any of the other Loan Documents or the Environmental Indemnification
Agreement upon the occurrence of a default or an event of default thereunder,
notwithstanding the fact that the event that is an Event of Default hereunder
may not constitute a default or an event of default under any such other Loan
Document or the Environmental Indemnification Agreement, including, without
limitation acceleration of the Obligations evidenced by the Note and foreclosure
and sale of the Land and the Improvements under the Security Instruments.

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(c)           Perform, or cause to be performed, any obligation, covenant or
agreement that Borrower has failed to perform or comply with, and in such event
all costs and expenses incurred by Lender in performing any such obligation,
covenant or agreement shall be added to the Obligations and shall be secured by
the Security Instruments, and shall bear interest at the Default Rate (as
defined in the Note) from the date paid or incurred by Lender, and the interest
thereon shall also be added to and become a part of the Obligations and shall be
secured by the Security Instruments.

(d)           Continue to act, with respect to Borrower and the Loan, as if no
Event of Default had occurred, which continuance shall not be or be construed as
a waiver of Lender’s rights; and assert the Event of Default and take any action
provided for herein at any time after the occurrence and during the existence of
the Event of Default.

 
(e)
Proceed as authorized by law to obtain payment of the Loan.

(f)           Take all, any, or any combination of the actions Lender may take
under applicable law or equity subject to the limitations on liability of
Borrower contained herein and in the Note and the Security Instruments.

No failure or delay on the part of Lender to exercise any right or remedy
hereunder or under the Loan Documents or the Environmental Indemnification
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder preclude any further exercise thereof
or the exercise of any further right or remedy hereunder or under the Loan
Documents or the Environmental Indemnification Agreement.  No exercise by Lender
of any remedy under the other Loan Documents or the Environmental
Indemnification Agreement shall operate as a limitation on any rights or
remedies of Lender under this Agreement, except to the extent of moneys actually
received by Lender under the other Loan Documents or the Environmental
Indemnification Agreement.

Section 7.03          Costs and Expenses.  All costs and expenses incurred by
Lender in connection with any of the actions authorized in this Article, after
an Event of Default, including without limitation attorneys’ fees, shall be and
constitute a portion of the Loan, secured in the same manner and to the same
extent as the Loan, even though such costs and expenses may cause the amount of
the Loan to exceed the face amount of the Note.  Whenever the terms of this
Agreement require Borrower to pay attorneys’ fees of Lender, such obligation
shall extend only to reasonable attorneys’ fees, without regard to statutory
interpretations, actually incurred at normal hourly rates.

Section 7.04          Remedies Cumulative.  The foregoing remedies are
cumulative of, and in addition to, and not restrictive or in lieu of, the other
remedies provided for herein and the remedies provided for or allowed by the
other Loan Documents or the Environmental Indemnification Agreement, or provided
for or allowed by law, or in equity.
 
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ARTICLE VIII
 
MISCELLANEOUS
 
Section 8.01          Notices.
 
(a)           All notices, demands, requests, and other communications desired
or required to be given hereunder (“Notices”), shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.
 
(b)           All Notices shall be deemed given and effective upon the earlier
to occur of (i) the hand delivery of such Notice to the address for Notices;
(ii) one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above.  All Notices shall be addressed to
the following addresses:
 
Borrower:
Summit Hotel OP, LP
 
c/o Summit Hotel Properties, Inc.
 
2701 South Minnesota Avenue, Suite 6
 
Sioux Falls, South Dakota  57105
 
Attention:  Christopher Eng, General Counsel
   
With a copy to:
Hagen, Wilka & Archer, P.C.
 
600 South Main Avenue, Suite 102
 
Sioux Falls, South Dakota 57104
 
Attention:  Jennifer L. Larsen, Esq.
   
Lender:
ING Life Insurance and Annuity Company
 
c/o ING Investment Management LLC
 
5780 Powers Ferry Road, NW, Suite 300
 
Atlanta, Georgia 30327-4349
 
Attention:  Mortgage Loan Servicing Department
   
and to:
ING Investment Management at LLC
 
5780 Powers Ferry Road, NW, Suite 300
 
Atlanta, Georgia 30327-4349
 
Attention:  Real Estate Law Department

 
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With a copy to:
Bryan Cave LLP
 
One Atlantic Center
 
Fourteenth Floor
 
1201 West Peachtree Street, NW
 
Atlanta, Georgia  30309-3488
 
Attention:  John R. Parks, Esq.

 
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice; provided, however, that the
“copy to” Notice to be given as set forth above is a courtesy copy only; and a
Notice given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.

Section 8.02          No Waiver; Remedies Cumulative.  No failure or delay on
the part of Lender in exercising any right or remedy hereunder and no course of
dealing between Borrower and Lender shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under the
Note preclude any other or further exercise thereof or the exercise of any other
right or remedy hereunder.  The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which Lender would
otherwise have.  No notice to or demand on Borrower not required hereunder or
under any other Loan Document in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of Lender to any other or further action in any
circumstances without notice or demand.

Section 8.03         Successors and Assigns; Sale of Interest. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective legal representatives, successors and permitted assigns of the
parties hereto; provided that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender,
other than to the extent expressly permitted by the Security
Instruments.  Lender may sell or assign all or any part of Lender’s rights,
title or interests hereunder and under the other Loan Documents or the
Environmental Indemnification Agreement without the prior written consent of
Borrower; provided, however that any such assignment shall not increase any of
the obligations of Borrower under the Loan Documents or the Environmental
Indemnification Agreement.  In that event, such successor or assignee shall be
entitled to all of the rights of Lender under the Loan Documents or the
Environmental Indemnification Agreement.

Section 8.04          Modification.  This Agreement shall not be modified or
amended in any respect except by a written agreement executed by the parties in
the same manner as this Agreement is executed.

Section 8.05          Time of Essence.  Time is of the essence of this Agreement
and each of the other Loan Documents and the Environmental Indemnification
Agreement.

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Section 8.06          Governing Law.  This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of Illinois, without regard to principles of conflicts of
laws thereof.

Section 8.07          Counterparts.  This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

Section 8.08          Effectiveness; Survival.

(a)           This Agreement shall become effective on the date on which all of
the parties hereto shall have signed a copy hereof (whether the same or
different copies) and Lender shall have received the same.

(b)           All representations and warranties made herein, in the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the other
Loan Documents, the Environmental Indemnification Agreement, and such other
agreements and documents, the making of the Loan hereunder and the execution and
delivery of the Note, and shall terminate at such time as the Obligations have
been paid and satisfied in full; provided, however, that the Environmental
Indemnification Agreement shall remain in full force and effect in accordance
with the terms thereof notwithstanding any payment and dissatisfaction of the
Obligations.

Section 8.09          Severability.  In case any provision in or Obligation
under this Agreement or the other Loan Documents or the Environmental
Indemnification Agreement shall be invalid, illegal or unenforceable, in whole
or in part, in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 8.10          Independence of Covenants.  All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.  To the extent any of the terms of this Agreement
conflicts with the terms of the other Loan Documents, the terms of this
Agreement shall control.

Section 8.11          Headings Descriptive.  The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.

Section 8.12          Termination of Agreement.  At such time as all Obligations
have been paid and satisfied in full, this Agreement shall terminate; provided
however, that any and all indemnity obligations of Borrower to Lender arising
hereunder or under any of the other Loan Documents, which are expressly stated
to survive satisfaction of the Obligations shall survive the termination of this
Agreement or such other Loan Documents, and provided further that all indemnity
obligations under the Environmental Indemnification Agreement shall survive such
payment and satisfaction of the Obligations as set forth in the Environmental
Indemnification Agreement.

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Section 8.13         Entire Agreement. This Agreement and the other Loan
Documents and the Environmental Indemnification Agreement constitute the entire
agreement between Borrower and Lender with respect to the Loan, the other
Obligations and the Collateral and, except as regards the side letter concerning
insurance escrows, supersede all prior agreements, representations and
understandings related to such subject matters.

Section 8.14          Jury Trial Waiver; Consent to Forum.

(a)           TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR ANY MATTER ARISING
HEREUNDER OR THEREUNDER.

(b)           BORROWER ALSO AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR TO ENFORCE ANY JUDGMENT OBTAINED
AGAINST BORROWER IN CONNECTION WITH THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENT,
MAY BE BROUGHT BY LENDER IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
THE STATE IN WHICH LENDER’S ADDRESS SHOWN ABOVE IS LOCATED, OR IN ANY ONE OR
MORE OTHER STATE OR FEDERAL COURTS SITTING IN ANY COUNTY AND STATE IN WHICH ANY
OF THE PROPERTY IS LOCATED.  BORROWER IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR
FUTURE OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM
THAT ANY SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
ENVIRONMENTAL INDEMNIFICATION AGREEMENTS.

Section 8.15         Exculpation.  The liability of Borrower to pay the
Indebtedness (as defined in the Mortgage) or perform any obligation under this
Agreement or the other Loan Documents is limited to the extent set forth in the
Note.

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Section 8.16          Tax and Insurance Escrow.  Borrower and Lender hereby
agree that all tax and insurance escrow waiver letters issued prior to the date
hereof by Lender or its investment manager, ING Investment Management LLC, in
favor of Original Borrower or Borrower are hereby rescinded, except that certain
escrow waiver letter dated January 11, 2012 shall remain in full force and
effect.

[SIGNATURES BEGIN ON FOLLOWING PAGE]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed and delivered on their behalf as of the date first above stated.

 

  BORROWER:      
SUMMIT HOTEL OP, LP, a Delaware limited partnership
     
By:  Summit Hotel GP, LLC,  a Delaware limited liability company, General
Partner
     
By:  Summit Hotel Properties, Inc., a Maryland corporation,  Sole Member
         
By: /s/ Christopher Eng 
Name: Christopher Eng 
Title: Secretary

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PRECEDING PAGE]

 
LENDER:
 
ING LIFE INSURANCE AND ANNUITY COMPANY, a Connecticut corporation
 
By:          ING Investment Management, LLC, as Authorized Agent
 
 
By: /s/ Daniel M. Siegenthaler
Name:  Daniel M. Siegenthaler
Title:  Vice President 
 

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