Exhibit 10.1
 
THIRD AMENDMENT TO CREDIT AGREEMENT

THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of May 16, 2012,
among Summit Hotel OP, LP (the “Borrower”), Deutsche Bank AG New York Branch, as
administrative agent (the “Administrative Agent”), and the financial
institutions party to the Credit Agreement referred to below (collectively, the
“Lender Parties”).

PRELIMINARY STATEMENTS:
 
(1)           The Borrower, Summit Hotel Properties, Inc. (the “Parent
Guarantor”), the other guarantors named therein, Administrative Agent, and the
Lender Parties have entered into that certain Credit Agreement dated as of April
29, 2011, as amended by (i) that certain First Letter Amendment dated as of
August 15, 2011 and (ii) that certain Second Letter Amendment and Limited Waiver
dated as of October 21, 2011 (as so amended, the “Credit
Agreement”).  Capitalized terms not otherwise defined in this Amendment have the
same meanings as specified in the Credit Agreement.
 
(2)           The Borrower, the Administrative Agent and the Lenders have agreed
to amend the Credit Agreement on the terms and subject to the conditions
hereinafter set forth.
 
SECTION 1.   Amendments to Credit Agreement.  The Credit Agreement is, upon the
occurrence of the Third Amendment Effective Date (as defined in Section 4
below), hereby amended as follows:
 
(a)   Section 1.01 of the Credit Agreement is hereby amended by amending and
restating the following definitions in their entirety to read as follows:
 
“Borrowing Base Amount” means, at any date of determination, the maximum total
amount available under the Facility, which shall at all times be the lesser of
(i) the aggregate Commitments of the Lenders, (ii) the Total Borrowing Base
Value times the Applicable Percentage, and (iii) the quotient obtained by
dividing (a) the aggregate Adjusted Net Operating Income for all Borrowing Base
Properties by (b) the product of (x) 1.50 and (y) the Mortgage Constant.

“Termination Date” means the earlier of (a) the third anniversary of the Third
Amendment Effective Date, subject to the extension thereof pursuant to Section
2.16 and (b) the date of termination in whole of the Revolving Credit
Commitments, the Swing Line Commitment and the Letter of Credit Commitments
pursuant to Section 2.05 or 6.01.
 
(b)   Section 1.01 of the Credit Agreement is hereby amended by adding thereto
the following new definitions in the appropriate alphabetical order:
 
“Applicable Percentage” means (i) 55%, provided that, at any time after the
Third Amendment Effective Date until July 1, 2013, the Borrower may elect by
notice to the Administrative Agent to increase the Applicable Percentage to 60%
(the “Percentage Increase Election”) effective as of the date of such notice and
(ii) at all times on or after July 1, 2013, 60%.
 
“Third Amendment Effective Date” means May 17, 2012.
 
(c)   Section 1.01 of the Credit Agreement is hereby amended to delete the
following proviso from the last sentence of the definition of Eurodollar Rate:
 
 
 

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“provided, however, that if at any time the Eurodollar Rate calculated as
provided above shall be lower than 0.50% per annum, the Eurodollar Rate shall be
deemed to be 0.50% per annum for the purposes of this Agreement.”
 
(d)   Section 1.01 of the Credit Agreement is hereby amended to replace the
pricing grid in the definition of Applicable Margin with the following pricing
grid:
 
Pricing
Level
Leverage
Ratio
Applicable Margin for
Base Rate Advances
Applicable Margin for
Eurodollar Rate Advances
I
> 5.00:1.00
1.75%
2.75%
II
> 3.50:1.00 but < 5.00:1.00
1.50%
2.50%
III
< 3.50:1.00
1.25%
2.25%

 
(e)   Section 2.08(a)(i) of the Credit Agreement is hereby amended by replacing
“0.50%” with “.375%”.
 
(f)   Section 2.08(a)(ii) of the Credit Agreement is hereby amended by replacing
“0.375%” with “.25%”.
 
(g)   Section 2.16 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
 
“SECTION 2.16.  Extension of Termination Date.  At least 90 days but not more
than 120 days prior to the Termination Date, the Borrower, by written notice to
the Administrative Agent, may request, with respect to the Commitments then
outstanding, a single one-year extension of the Termination Date.  The
Administrative Agent shall promptly notify each Lender of such request and the
Termination Date in effect at such time shall, effective as at the Termination
Date (the “Extension Date”), be extended for an additional one year period,
provided that the Borrower shall have paid the Extension Fees as described in
Section 2.08(d), shall have delivered to Administrative Agent the Appraisals
required by Section 5.03(n), and on the Extension Date the following statements
shall be true and the Administrative Agent shall have received for the account
of each Lender Party a certificate signed by a Responsible Officer of the
Borrower, dated the Extension Date, stating that: (a) the representations and
warranties contained in Section 4.01 are true and correct on and as of the
Extension Date, (b) no Default or Event of Default has occurred and is
continuing or would result from such extension, and (c) the Loan Parties are in
compliance with the covenants contained in Section 5.04 immediately before and,
on a pro forma basis, immediately after the extension, together with supporting
information demonstrating such compliance.  In the event that an extension is
effected pursuant to this Section 2.16 (but subject to the provisions of
Sections 2.05, 2.06 and 6.01), the aggregate principal amount of all Advances
shall be repaid in full ratably to the Lenders on the Termination Date as so
extended.  As of the Extension Date, any and all references in this Agreement,
the Notes, if any, or any of the other Loan Documents to the “Termination Date”
shall refer to the Termination Date as so extended.”
 
(h)   Section 5.03(n) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
 
 
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(n)  Appraisals.  (i) At the expense of the Borrower, (x) on or up to 90 days
prior to October 31, 2013, new Acceptable Appraisals of all Borrowing Base
Assets if requested by the Required Lenders, and (y) if Borrower shall elect to
exercise the one-year extension option set forth in Section 2.16, Acceptable
Appraisals of all Borrowing Base Assets not later than ten (10) Business Days
prior to the Extension Date, and (ii) at the expense of the Lenders, promptly
upon the written request of the Administrative Agent or the Required Lenders,
Acceptable Appraisals of the Borrowing Base Assets that are the subject of such
request.
 
(i)   Section 5.04(a)(i) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
 
(i)           Maximum Leverage Ratio.  Maintain as of each Test Date occurring
during any of the periods indicated below, a Leverage Ratio of not greater than
the correlative ratio indicated:

Period
Leverage Ratio
Closing Date through December 31, 2012
7.25:1.00
January 1, 2013 through June 30, 2013
7.00:1.00
July 1, 2013 through September 30, 2013
6.75:1.00
October 1, 2013 through December 31, 2013
6.50:1.00
January 1, 2014 through March 31, 2014
6.25:1.00
April 1, 2014 through June 30, 2014
6.00:1.00
July 1, 2014 and thereafter
5.75:1.00

 
 
; provided, however, that on and after the date of any Percentage Increase
Election, the Parent Guarantor shall maintain as of each Test Date occurring
during any of the periods indicated below, a Leverage Ratio of not greater than
the correlative ratio indicated:

Period
Leverage Ratio
Closing Date through September 30, 2013
6.75:1.00
October 1, 2013 through December 31, 2013
6.50:1.00
January 1, 2014 through March 31, 2014
6.25:1.00
April 1, 2014 through June 30, 2014
6.00:1.00
July 1, 2014 and thereafter
5.75:1.00

(j)   Section 5.04(a)(iv) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 
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(iv)           Minimum Consolidated Fixed Charge Coverage Ratio.  Maintain as of
each Test Date occurring during any of the periods indicated below, a
Consolidated Fixed Charge Coverage Ratio of not less than the correlative ratio
indicated:

Period
Consolidated Fixed Charge
Coverage Ratio
Closing Date through June 30, 2014
1.40:1.00
July 1, 2014 and thereafter
1.50:1.00

 
 
(k)   Schedule I to the Credit Agreement is hereby amended and restated in its
entirety with Schedule I attached hereto.

SECTION 2.   Representations and Warranties.  The Borrower hereby represents and
warrants that the representations and warranties contained in each of the Loan
Documents (as amended or supplemented to date, including pursuant to this
Amendment) are true and correct on and as of the Third Amendment Effective Date
(defined below), before and after giving effect to this Amendment, as though
made on and as of such date (except for any such representation and warranty
that, by its terms, refers to an earlier date, in which case as of such earlier
date).
 
SECTION 3.   Conditions of Effectiveness.  This Amendment shall become effective
as of the first date (the “Third Amendment Effective Date”) on which, and only
if, each of the following conditions precedent shall have been satisfied:
 
(a)   The Administrative Agent shall have received, in form and substance
reasonably satisfactory to the Administrative Agent:
 
(i)              (x) counterparts of this Amendment executed by the Borrower,
the Administrative Agent and all Lenders, or, as to any of such Lenders, advice
satisfactory to the Administrative Agent that such Lender has executed this
Amendment, and (y) the consent attached hereto (the “Consent”) executed by each
of the Guarantors.
 
(ii)             Evidence that an amendment in form and substance reasonably
satisfactory to the Administrative Agent with respect to each of the existing
Mortgages (the “Mortgage Amendments”) has been duly executed, acknowledged and
delivered by a duly authorized officer of each party thereto on or before such
date and are in form suitable for filing and recording in all filing or
recording offices that the Administrative Agent may deem necessary or desirable.
 
(iii)   A modification and date-down endorsement to the existing Mortgage Policy
for each Mortgaged Property, increasing the insured amount of such existing
Mortgage Policy to an amount reasonably satisfactory to the Administrative
Agent.
 
(iv)   An executed favorable opinion of counsel for the Loan Parties with
respect to the valid existence, corporate power and authority of such Loan
Parties to enter into this Amendment, and as to such other matters as any Lender
Party through the Administrative Agent may reasonably request.
 
 
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(v)   Such advice from local counsel retained by the Borrower as may be
reasonably required by the Administrative Agent, relating to the payment of or
exemption from any documentary stamp, mortgage or intangible taxes in connection
with the Mortgage Amendments.
 
(vi)           If any Mortgaged Property is in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards (a
“Flood Hazard Property”) pursuant to a standard flood hazard determination form
ordered and received by the Administrative Agent, (A) the applicable Subsidiary
Guarantor's written acknowledgment of receipt of written notification from the
Administrative Agent as to the fact that such Mortgaged Property is a Flood
Hazard Property and as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance Program and
(B) copies of the applicable Subsidiary Guarantor’s application for a flood
insurance policy plus proof of premium payment, a declaration page confirming
that flood insurance has been issued, or such other evidence of flood insurance
satisfactory to the Administrative Agent and naming the Administrative Agent as
sole loss payee on behalf of the Secured Parties.
 
(vii)          Evidence that all fees, costs and expenses have been paid in
connection with the preparation, execution, filing and recordation of the
Mortgage Amendments, including, without limitation, reasonable attorneys’ fees
(including the reasonable fees and expenses of Shearman & Sterling LLP), filing
and recording fees, title insurance company premiums, coordination fees,
documentary stamp, mortgage and intangible taxes and title search charges and
other charges incurred in connection with the recordation of the Mortgage
Amendments.
 
(viii)         Such other consents, agreements and confirmations of third
parties relating to the Mortgaged Properties or the Mortgage Amendments as the
Administrative Agent may deem reasonably necessary or desirable and evidence
that all other actions that the Administrative Agent may deem reasonably
necessary or desirable in order to create valid first (subject to Permitted
Encumbrances) and subsisting Liens on the property described in the Mortgages
have been taken.
 
(ix)            Certified copies of (i) the resolutions of the Board of
Directors, general partner or managing member, as applicable, of (A) the
Borrower approving this Amendment and the matters contemplated hereby and
thereby and (B) each Guarantor approving the Consent and the matters
contemplated hereby and thereby and (ii) all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Amendment, the Consent and the matters contemplated hereby and thereby.
 
(x)            A certificate of the Secretary or an Assistant Secretary of (i)
the Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Amendment and (ii) each Guarantor certifying
the names and true signatures of the officers of such Guarantor authorized to
sign the Consent.
 
(b)   The representations and warranties set forth in each of the Loan Documents
shall be correct in all material respects on and as of the Third Amendment
Effective Date, before and after giving effect to this Amendment, as though made
on and as of such date (except for any such representation and warranty that, by
its terms, refers to a specific date other than the Third Amendment Effective
Date, in which case as of such specific date).
 
(c)   No event shall have occurred and be continuing, or shall result from the
effectiveness of this Amendment, that constitutes a Default or an Event of
Default.
 
 
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(d)   The Administrative Agent shall have received payment in full of an
amendment fee equal to 0.25% of the sum of the Commitments of all Lenders, which
fee shall be for the ratable benefit of the Lenders.
 
The effectiveness of this Amendment is conditioned upon the accuracy of the
factual matters described herein.  This Amendment is subject to the provisions
of Section 9.01 of the Credit Agreement.
 
SECTION 4.   Reference to and Effect on the Loan Documents.  (a)  On and after
the effectiveness of this Amendment, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in each of the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.
 
(b)           The Credit Agreement, as specifically amended by this Amendment,
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.
 
(c)           The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any Lender or the
Administrative Agent under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.
 
SECTION 5.   Costs and Expenses.  The Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent) in
accordance with the terms of Section 9.04 of the Credit Agreement.
 
SECTION 6.   Execution in Counterparts.  This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.  Delivery
of an executed counterpart of a signature page to this letter by facsimile or as
an attachment to an electronic mail message in .pdf, .jpeg, .TIFF or similar
electronic format shall be effective as delivery of a manually executed
counterpart of this letter for all purposes.
 
SECTION 7.   Governing Law.  This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
 

 
(Signature pages follow)
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
 
 

 
BORROWER:
               
SUMMIT HOTEL OP, LP,
   
a Delaware limited partnership
               
By:
SUMMIT HOTEL GP, LLC,
     
a Delaware limited liability company,
     
its general partner
                 
By:
SUMMIT HOTEL PROPERTIES, INC.,
       
a Maryland corporation,
       
its sole member
                   
By:
/s/Christopher Eng
         
Name: Christopher Eng
         
Title: Secretary
 

 
(Signatures continued on next page)
 
 
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Agreed as of the date first above written:
 
DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent, Initial Issuing Bank,
Swing Line Bank and a Lender

By:
/s/ George R. Reynolds
   
Name: George R. Reynolds
   
Title: Director
             
By:
/s/ James Rolison
   
Name: James Rolison
   
Title: Managing Director
 

 
(Signatures continued on next page)
 
 
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REGIONS BANK,
as a Lender
 
 
By:
/s/ Michael R. Mellott
   
Name:  Michael R. Mellott
   
Title: Director
 

 
 
(Signatures continued on next page)
 
 
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ROYAL BANK OF CANADA,
as a Lender

 
By:
/s/ Dan LePage
   
Name: Dan LePage
   
Title: Authorized Signatory
 

 
(Signatures continued on next page)
 
 
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KEYBANK NATIONAL ASSOCIATION,
as a Lender

 
By:
/s/ James Komperda
   
Name: James Komperda
   
Title: Vice President
 

 
(Signatures continued on next page)
 
 
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U.S. BANK NATIONAL ASSOCIATION,
as a Lender

 
By:
/s/ Scott C. DeJong
   
Name: Scott C. DeJong
   
Title: Vice President
 

 
(Signatures continued on next page)
 
 
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CONSENT
 
Dated as of May 16, 2012
 
Each of the undersigned, as a Guarantor under the Guaranty set forth in Article
VII of the Credit Agreement dated as of April 29, 2011, in favor of the Lender
Parties party to the Credit Agreement referred to in the foregoing Third
Amendment to Credit Agreement, hereby consents to such Third Amendment to Credit
Agreement and hereby confirms and agrees that notwithstanding the effectiveness
of such Third Amendment to Credit Agreement, the Guaranty is, and shall continue
to be, in full force and effect and is hereby ratified and confirmed in all
respects.  Without limitation of the foregoing, each Guarantor hereby ratifies
the Credit Agreement as amended to date.
 
 

 
SUMMIT HOTEL PROPERTIES, INC.,
     
a Maryland corporation
                             
By:
/s/ Christopher Eng
       
Name: Christopher Eng
       
Title: Secretary
                             
SUMMIT HOSPITALITY I, LLC,
     
a Delaware limited liability company
                               
By:
/s/ Christopher Eng
         
Name: Christopher Eng
         
Title: Secretary
   

 
(Signatures continued on next page)
 
 
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SCHEDULE I
 
COMMITMENTS AND APPLICABLE LENDING OFFICES
 
Name of
Initial
Lender/
Initial
Issuing Bank
Commitments
Domestic Lending
Office
Eurodollar Lending
Office
Revolving
Credit
Letter of
Credit
Swing Line
Deutsche
Bank AG
New York
Branch
$30,000,0000
$15,000,000
$5,000,000
90 Hudson Street, 1st Floor (JCY05-0199),
Jersey City, New Jersey 07302
Attn: Deirdre Wall
Tel: (201) 593-2178
Fax: (201) 593- 2309/2310
90 Hudson Street, 1st Floor (JCY05-0199),
Jersey City, New Jersey 07302
Attn: Deirdre Wall
Tel: (201) 593-2178
Fax: (201) 593-2309/2310
Keybank
National
Association
$25,000,0000
$0
$0
127 Public Square, 8th Floor
Cleveland, OH  44114
127 Public Square, 8th Floor
Cleveland, OH  44114
Royal Bank
of Canada
$25,000,0000
$0
$0
One Liberty Plaza, 3rd Floor,
165 Broadway
New York, NY 10006-1404
Attn: GLA Administrator
Tel: 1-877-332-7455
Fax: (212) 428-2372
One Liberty Plaza, 3rd Floor,
165 Broadway
New York, NY 10006-1404
Attn: GLA Administrator
Tel: 1-877-332-7455
Fax: (212) 428-2372
Regions Bank
$25,000,0000
$0
$0
1900 5th Avenue North, 15th Floor
Birmingham, AL 35203
Attn: Crystal Scales
Tel: (205) 264-4906
Fax: (205) 264-5456
1900 5th Avenue North, 15th Floor
Birmingham, AL 35203
Attn: Crystal Scales
Tel: (205) 264-4906
Fax: (205) 264-5456
U.S. Bank
$20,000,000
$0
$0
400 City Center
Oshkosh, WI 54903
Phone:  920-237-7370
Fax:  920-237-7769
Attn:  Barb Campbell – Work Coordinator
400 City Center
Oshkosh, WI 54903
Phone:  920-237-7370
Fax:  920-237-7769
Attn:  Barb Campbell – Work Coordinator
Totals
$125,000,000
$15,000,000
$5,000,000
   

 
Schedule I