exv10w12






Exhibit 10.12




SEVERANCE AGREEMENT




          THIS SEVERANCE AGREEMENT, effective as of _______ ___, 2010, between SUMMIT HOTEL PROPERTIES,
INC., a Maryland corporation (the “Company”), and Christopher R. Eng (the “Executive”), recites and
provides as follows:




W I T N E S S E T H:




          WHEREAS, the Company desires to employ the Executive to devote substantially all of the
Executive’s business time, attention and efforts to the business of the Company and to serve as the
Vice President, General Counsel and Secretary of the Company; and




          WHEREAS, the Executive desires to be so employed; and




          WHEREAS, the Company desires to provide the Executive protection against certain terminations
of employment on the terms and subject to the conditions hereinafter stated.




          NOW, THEREFORE, in consideration of the premises and mutual obligations hereinafter set forth,
the parties agree as follows:




          1. RECITALS. The above recitals are incorporated by reference herein and made a part
hereof as set forth verbatim.




          2. TERM. The Initial Term of this Agreement (the “Initial Term”) shall be for a
period of three (3) years commencing on _______ __, 201__ (the “Effective Date”), and continuing
until _________ __, 201__, unless terminated earlier as provided herein. If neither the Company
nor the Executive has provided the other with written notice of an intention to terminate this
Agreement at least thirty (30) days before the end of the Initial Term (or any subsequent renewal
period), this Agreement will automatically renew for a twelve (12) month period. For purposes of
this Agreement, the word “Term” means the Initial Term and the period of any extension of the
Initial Term pursuant to the preceding sentence.




          3. COMPENSATION UPON TERMINATION WITH CAUSE, VOLUNTARY TERMINATION, DEATH OR
DISABILITY. This Section 3 applies in the event that the Executive’s employment ends upon a
Termination With Cause, a Voluntary Termination, Death or Disability or any reason other than a
Termination Without Cause or a Voluntary Termination With Good Reason. In any of those events, the
Executive (or the Executive’s estate in the event of the Executive’s death) shall be entitled to
receive the Standard Termination Benefits. The Standard Termination Benefits are the benefits or
amounts described in the following subsections (a) and (b):




               (a) The Executive shall be entitled to receive any compensation (including Base Salary and
Annual Bonus and accrued but unused vacation) that is earned but unpaid as of the Date of
Termination.



               (b) The Executive shall be entitled to receive any benefits due the Executive under the terms
of any employee benefit plan maintained by the Company and under



 









 




the terms of any option, restricted stock or similar equity award; which benefits shall be
paid in accordance with the terms of the applicable plan and any award agreement between the
Executive and the Company.



Except for the Standard Termination Benefits, the Executive shall not be entitled to receive any
compensation after the Date of Termination on account of a Termination With Cause, a Voluntary
Termination, death, Disability or any reason other than a Termination Without Cause or a Voluntary
Termination With Good Reason.




          4. COMPENSATION UPON TERMINATION WITHOUT CAUSE OR VOLUNTARY TERMINATION WITH GOOD
REASON. This Section 4 applies in the event that the Executive’s employment ends upon a
Termination Without Cause or a Voluntary Termination With Good Reason. In any of those events, the
Executive shall be entitled to receive the benefits and amounts described in the following
subsections (a), (b), (c) and (d):




               (a) The Company shall pay or provide the Standard Termination Benefits as defined in Section 3
except that all outstanding options, shares of restricted stock and other equity awards, shall be
vested and exercisable as of the Date of Termination and outstanding options, stock appreciation
rights and similar equity awards shall remain exercisable thereafter until their stated expiration
date as if the Executive’s employment had not terminated.



               (b) The Company shall pay an amount equal to the product of the Multiple (as defined below)
times the Executive’s Base Salary at the rate in effect on the Date of Termination (or, in the case
of a Voluntary Termination for Good Reason, at the rate in effect before a reduction in base salary
that constitutes Good Reason for resignation), such payment to be made in a single cash payment.



               (c) The Company shall pay an amount equal to the product of the Multiple (as defined below)
times the greater of (x) the highest annual bonus paid to the Executive for the three (3) fiscal
years of the Company ended immediately before the Date of Termination or (y) fifty percent (50%) of
the Executive’s Base Salary at the rate in effect on the Date of Termination (or in the case of a
Voluntary Termination for Good Reason, at the rate in effect before a reduction in base salary that
constitutes Good Reason for resignation), such payment to be made in a single cash payment.



               (d) The Company shall pay an amount equal to the product of (x) the Annual Bonus paid to the
Executive for the fiscal year of the Company ended immediately before the Date of Termination and
(y) a fraction, the numerator of which is the number of days the Executive was employed by the
Company during the fiscal year that includes the Date of Termination and the denominator of which
is 365, such payment to be made in a single cash payment.



               (e) The Company shall pay an amount equal to the Multiple (as defined below) times the annual
premium or cost paid by the Company for the health, dental and vision insurance coverage for the
Executive and the Executive’s eligible dependents as in effect on the Date of Termination plus an
amount equal to the Multiple (as defined below) times the annual premium or cost paid by the
Company for the disability and life insurance coverage for



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the Executive as in effect on the Date of Termination, such payment to be made in a single
cash payment.



The Multiple is “one (1.0)” if the Executive’s employment ends upon a Termination Without Cause
before the date of a Change in Control and a Change in Control does not occur within ninety (90)
days after the Date of Termination or if the Executive’s employment ends upon a Voluntary
Termination With Good Reason before the date of a Change in Control. The Multiple is “two (2.0)”
if the Executive’s employment ends upon a Termination Without Cause on or after the date of a
Change in Control or within the ninety (90) day period preceding the date of a Change in Control or
if the Executive’s employment ends upon a Voluntary Termination With Good Reason on or after the
date of a Change in Control.



No benefits will be paid or provided to, or on behalf of, the Executive under this Section 4 unless
the Executive has signed a release and waiver of claims in a form reasonably prescribed by the
Company, releasing the Company and its officers, directors and affiliates from all claims the
Executive has or may have against such parties, and such release and waiver of claims has become
binding and irrevocable on or before the forty-fifth (45th) day after the date the
Executive’s employment ends upon a Termination Without Cause or a Voluntary Termination for Good
Reason. Subject to the Executive’s satisfaction of the requirements of the preceding sentence and
subject to Section 7, the cash benefits payable under this Section 4 shall be paid on the sixtieth
(60th) day after the Executive’s employment ends upon a Termination Without Cause or a
Voluntary Termination for Good Reason; provided, however, that if the Executive’s employment ends
upon a Termination Without Cause and additional amounts become payable under this Section 4 because
a Change in Control occurs within ninety (90) days after the Date of Termination, such additional
amounts shall be paid on the fifth (5th) business day after the date of the Change in
Control or, if later, the sixtieth (60th) day after the Executive’s employment ends upon
a Termination Without Cause.




          5. DEFINITIONS. For the purposes of this Agreement, the following terms shall have
the following definitions:




               (a) “Change in Control” for purposes of this Agreement, has the same meaning as such term is
defined in the Company’s 2010 Equity Incentive Plan.



               (b) Date of Termination means (i) if the Company intends to treat the termination as a
termination based upon the Executive’s Disability, the Executive’s employment with the Company
shall terminate effective on the thirtieth day after the date the Company gives the Executive
written notice of termination (which may not be given before the Executive has been absent from
work on account of a physical or mental illness or physical injury for at least [one hundred fifty
(150) days)] provided that, before such date, the Executive shall not have returned to full-time
performance of the Executive’s duties; (ii) if the Executive’s employment is terminated by reason
of death, the Date of Termination shall be the date of death of the Executive; (iii) if the
Executive’s employment is terminated by reason of Voluntary Termination, the Date of Termination
shall be thirty (30) days from the date the Executive gives the Company written notice of
termination (and the Executive shall be deemed to have terminated his employment by Voluntary
Termination if the Executive voluntarily refuses to provide substantially all the services required
of the Executive’s position with the Company for a period



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greater than four (4) consecutive weeks (excluding periods in which the Executive is not
performing services on account of vacation and periods in which the Executive is not performing
services on account of the Executive’s illness or injury or the illness or injury of a member of
the Executive’s immediate family); in such event, the Date of Termination shall be the day after
the last day of such four-week period); (iv) if the Company intends to treat the termination as a
Termination With Cause, the Company shall provide the Executive written notice of such grounds for
termination and the Executive shall have a period of thirty (30) days to cure such cause to the
reasonable satisfaction of the Board, failing which the Date of Termination shall be the end of
such thirty (30) day period; or (v) if the Executive’s employment is terminated by reason of
Voluntary Termination for Good Reason, the Date of Termination shall be thirty (30) days after the
end of the thirty (30) day cure period.




               (c) “Disability” means that the Executive is “disabled” within the meaning of Section
409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the “Code”).



               (d) “Termination With Cause” means the termination of the Executive’s employment by act of the
Company’s Board of Directors (the “Board”) on account of (i) the Executive’s failure to perform a
material duty or the Executive’s material breach of an obligation set forth in a written agreement
with the Company or a breach of a material and written Company policy other than by reason of
mental or physical illness or injury, (ii) the Executive’s breach of Executive’s fiduciary duties
to the Company, (iii) the Executive’s conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise or (iv) the Executive’s conviction of, or plea of guilty or nolo
contendre to, a felony or crime involving moral turpitude or fraud or dishonesty involving assets
of the Company and that in all cases is described in a written notice from the Board and that is
not cured, to the reasonable satisfaction of the Board, within thirty (30) days after such notice
is received by the Executive.



               (e) “Voluntary Termination” means the Executive’s voluntary termination of his employment
hereunder for any reason other than a Voluntary Termination for Good Reason. For purposes of this
Section 5, the term Voluntary Termination does not include a voluntary refusal to perform services
on account of a vacation taken in accordance with Company policy, the Executive’s failure to
perform services on account of the Executive’s illness or injury or the illness or injury of a
member of the Executive’s immediate family, provided such illness is adequately substantiated at
the reasonable request of the Company, or any other absence from service with the written consent
of the Board.



               (f) Voluntary Termination for “Good Reason” means the Executive’s termination of employment on
account of (i) the Company’s material breach of the terms of a written agreement with the Company
or a direction from the Board that the Executive act or refrain from acting which in either case
would be unlawful or contrary to a material and written Company policy, (ii) a material diminution
in the Executive’s duties, functions and responsibilities to the Company and its affiliates without
the Executive’s consent or the Company preventing the Executive from fulfilling or exercising the
Executive’s material duties, functions and responsibilities to the Company and its affiliates
without the Executive’s consent, (iii) a material reduction in the Executive’s base salary or
annual bonus opportunity or (iv) a requirement that the Executive relocate the Executive’s
employment more than fifty (50) miles from the location of the Executive’s principal office on the
date of this Agreement, without the



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consent of the Executive. The Executive’s resignation shall not be deemed a “Voluntary
Termination for Good Reason” unless the Executive gives the Board written notice (delivered within
thirty (30) days after the Executive knows of the event, action, etc. that the Executive asserts
constitutes Good Reason), the event, action, etc. that the Executive asserts constitutes Good
Reason is not cured, to the reasonable satisfaction of the Executive, within thirty (30) days after
such notice and the Executive resigns effective not later than thirty (30) days after the
expiration of such cure period.




          6. CODE SECTION 280G. The benefits that the Executive may be entitled to receive
under this Agreement and other benefits that the Executive is entitled to receive under other
plans, agreements and arrangements (which, together with the benefits provided under this
Agreement, are referred to as “Payments”), may constitute Parachute Payments that are subject to
Code Sections 280G and 4999. As provided in this Section 6, the Parachute Payments will be reduced
if, and only to the extent that, a reduction will allow the Executive to receive a greater Net
After Tax Amount than the Executive would receive absent a reduction.




     The Accounting Firm will first determine the amount of any Parachute Payments that are payable
to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to
the Executive’s total Parachute Payments.



     The Accounting Firm will next determine the largest amount of Payments that may be made to the
Executive without subjecting the Executive to tax under Code Section 4999 (the “Capped Payments”).
Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped
Payments.



     The Executive will receive the total Parachute Payments or the Capped Payments, whichever
provides the Executive with the higher Net After Tax Amount. If the Executive will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
benefits under this Agreement or any other plan, agreement or arrangement that are not subject to
Section 409A of the Code (with the source of the reduction to be directed by the Participant) and
then by reducing the amount of any benefits under this Agreement or any other plan, agreement or
arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant). The Accounting Firm will notify the Executive and the Company if it
determines that the Parachute Payments must be reduced to the Capped Payments and will send the
Executive and the Company a copy of its detailed calculations supporting that determination.



     As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Section 6, it is possible that amounts
will have been paid or distributed to the Executive that should not have been paid or distributed
under this Section 6 (“Overpayments”), or that additional amounts should be paid or distributed to
the Executive under this Section 6 (“Underpayments”). If the Accounting Firm determines, based on
either the assertion of a deficiency by the Internal Revenue Service against the Company or the
Executive, which assertion the Accounting Firm believes has a high probability of success or
controlling precedent or substantial authority, that an Overpayment has been made, the Executive
must repay to the Company, without interest; provided, however, that no loan will be deemed to have
been made and no amount will be payable by the Executive to



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the Company unless, and then only to the extent that, the deemed loan and payment would either
reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a
refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon
controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting
Firm will notify the Executive and the Company of that determination and the amount of that
Underpayment will be paid to the Executive promptly by the Company.




     For purposes of this Section 6, the term “Accounting Firm” means the independent accounting
firm engaged by the Company immediately before the Change in Control. For purposes of this Section
6, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments,
as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local
income taxes applicable to the Executive on the date of payment. The determination of the Net
After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing
taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable,
in effect on the date of payment. For purposes of this Section 6, the term “Parachute Payment”
means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code
Section 280G and the regulations promulgated or proposed thereunder.



          7. CODE SECTION 409A. This Agreement and the amounts payable and other benefits
provided under this Agreement are intended to comply with, or otherwise be exempt from, Section
409A of the Code (“Section 409A”), after giving effect to the exemptions in Treasury Regulation
section 1.409A-1(b)(3) through (b)(12). This Agreement shall be administered, interpreted and
construed in a manner consistent with Section 409A. If any provision of this Agreement is found
not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be
modified and given effect, in the sole discretion of the Board and without requiring the
Executive’s consent, in such manner as the Board determines to be necessary or appropriate to
comply with, or to effectuate an exemption from, Section 409A; provided, however, that in
exercising its discretion under this Section 7, the Board shall modify this Agreement in the least
restrictive manner necessary and without reducing any payment or benefit due under this Agreement.
Each payment under this Agreement shall be treated as a separate identified payment for purposes of
Section 409A.




     With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the
Executive, as specified under this Agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following limitations: (i) the expenses eligible for
reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable
year, except for any medical reimbursement arrangement providing for the reimbursement of expenses
referred to in Section 105(b) of the Code; (ii) the reimbursement of an eligible expense shall be
made as specified in this Agreement and in no event later than the end of the year after the year
in which such expense was incurred and (iii) the right to reimbursement or in-kind benefit shall
not be subject to liquidation or exchange for another benefit.



     If a payment obligation under this Agreement arises on account of a Change in Control or the
Executive’s termination of employment and such payment obligation constitutes “deferred



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compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving
effect to the exemptions in Treasury Regulation section 1.409A-1(b)(3) through (b)(12)), it shall
be payable only if the Change in Control constitutes a change in ownership or effective control of
the Company, etc. as provided in Treasury Regulation section 1.409A-3(i)(5) or after the
Executive’s separation from service (as defined under Treasury Regulation section 1.409A-1(h));
provided, however, that if the Executive is a specified employee (as defined under Treasury
Regulation section 1.409A-1(i)), any payment that is scheduled to be paid within six months after
such separation from service shall accrue without interest and shall be paid on the first day of
the seventh month beginning after the date of the Executive’s separation from service or, if
earlier, within fifteen days after the appointment of the personal representative or executor of
the Executive’s estate following his death.




          8. TAX WITHHOLDING. All payments to be made under this Agreement shall be reduced by
applicable income and employment tax withholdings.




          9. COVENANTS OF THE EXECUTIVE.




               (a) General Covenants of the Executive. The Executive acknowledges that (i) the principal
business of the Company is acquiring, owning, renovating and developing upscale or mid-scale hotels
without food or beverage facilities (such business, and any and all other businesses that after the
date hereof, and from time to time during the Term, become material with respect to the Company’s
then-overall business, herein being collectively referred to as the “Business”), (ii) the
Company knows of a limited number of persons who have developed the Business; (iii) the Business
is, in part, national in scope; (iv) the Executive’s work for the Company and its subsidiaries has
given and will continue to give the Executive access to the confidential affairs and proprietary
information of the Company and to “trade secrets,” as defined in the South Dakota Uniform Trade
Secrets Act, of the Company and its subsidiaries; (v) the covenants and agreements of the Executive
contained in this Section 9 are essential to the business and goodwill of the Company; and (vi) the
Company would not have entered into this Agreement but for the covenants and agreements set forth
in this Section 9.



               (b) Covenants Against Competition. The covenant against competition herein described shall
apply during the Term and for a period of one (1) year following a termination of the Executive’s
employment with the Company and its subsidiaries for any reason (the “Restriction Period”). During
the Restriction Period the Executive shall not, directly or indirectly, own, manage, control or
participate in the ownership, management, or control of, or be employed or engaged by or otherwise
affiliated or associated with, in an executive, senior management, strategic or professional
capacity, whether as an employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative capacity, that is similar
to an engagement in an executive, senior management, strategic or professional capacity although
otherwise named in any business or venture engaged in the Business and that owns at least
twenty-five (25) hotels, at least one of which is located within twenty-five (25) miles of any
hotel acquired, owned, managed, developed or re-developed by the Company and its subsidiary, or
within twenty-five (25) miles of any hotel the Company is pursuing to acquire, own, manage, develop
or re-develop so long as the pursuit of such began prior to, and remained ongoing at the time of
the termination of the Executive’s employment; provided, however, that,
notwithstanding the foregoing, (i) the Executive may own or participate



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in the ownership of any entity which he owned or managed or participated in the ownership or
management of prior to the Effective Date, which ownership, management or participation has been
disclosed to the Company; and (ii) the Executive may invest in securities of any entity, solely for
investment purposes and without participating in the business thereof, if (A) such securities are
traded on any national securities exchange or the National Association of Securities Dealers, Inc.
Automated Quotation System or equivalent non-U.S. securities exchange, (B) the Executive is not a
controlling person of, or a member of a group which controls, such entity and (C) the Executive
does not, directly or indirectly, own one percent (1%) or more of any class of securities of such
entity. Notwithstanding the foregoing, this Section 9(b) shall not apply after the Executive’s
Termination without Cause or Voluntary Termination for Good Reason.




               (c) Confidentiality. During and after the Executive’s employment with the Company and its
affiliates, except in connection with the business and affairs of the Company and its affiliates:
the Executive shall keep secret and retain in strictest confidence, and shall not use for the
Executive’s benefit or the benefit of others, all confidential matters relating to the Business and
the business of any of its affiliates and to the Company and any of its affiliates, learned by the
Executive heretofore or hereafter directly or indirectly from the Company of any of its
subsidiaries (or any predecessor of either) (the “Confidential Company Information”),
including, without limitation, information with respect to the Business and any aspect thereof,
profit or loss figures, and the Company’s or its affiliates’ (or any of their predecessors)
properties, and shall not disclose such Confidential Company Information to anyone outside of the
Company except with the Company’s express written consent and except for Confidential Company
Information which (i) at the time of receipt or thereafter becomes publicly known through no
wrongful act of the Executive; (ii) is clearly obtainable in the public domain; (iii) was not
acquired by the Executive in connection with the Executive’s employment or affiliation with the
Company; (iv) was not acquired by the Executive from the Company or its representatives or from a
third-party who has an agreement with the Company not to disclose such information; (v) was legally
in the possession of or developed by the Executive prior to the Effective Date; or (vi) is required
to be disclosed by rule of law or by order of a court or governmental body or agency.



               (d) Nonsolicitation. During the Restriction Period, the Executive shall not, without the
Company’s prior-written consent, directly or indirectly, (i) knowingly solicit or knowingly
encourage to leave the employment or other service of the Company or any of its affiliates, any
employee employed by the Company on the Date of Termination or knowingly hire (on behalf of the
Executive or any other person or entity) any employee employed by the Company on the Date of
Termination who has left the employment or other service of the Company or any of its affiliates
(or any predecessor of either) within one (1) year of the termination of such employee’s or
independent contractor’s employment or other service with the Company and its affiliates; or (ii)
whether for the Executive’s own account or for the account of any other person, firm, corporation
or other business organization, intentionally interfere with the Company’s or any of its
affiliates, relationship with, or endeavor to entice away from the Company or any of its
affiliates, any person who during the Executive’s employment with the Company is or was a customer
or client of the Company or any of its affiliates (or any predecessor of either). Notwithstanding
the above, nothing shall prevent the Executive from soliciting loans, investment capital, or the
provision of management services from third parties



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engaged in the Business if the activities of the Executive facilitated thereby do not
otherwise adversely interfere with the operations of the Business.




               (e) Company Property. During and after the Executive’s employment with the Company and its
affiliates, all memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof) made, produced or compiled by the Executive or made available to
the Executive during the Term concerning the Business of the Company and its affiliates shall be
the Company’s property and shall be delivered to the Company at any time on request.
Notwithstanding the above, the Executive’s contacts and contact data base shall not be the
Company’s property. Notwithstanding the above, software, methods and material developed by the
Executive prior to the Term of the Agreement shall not be the Company’s property.



               (f) Rights and Remedies upon Breach. The Executive acknowledges and agrees that any breach by
the Executive of any of the provisions of this section 9 (the “Covenants”) would result in
irreparable injury and damage for which money damages, would not provide an adequate remedy.
Therefore, if the Executive breaches, or threatens to commit a breach of, any of the Covenants, the
Company and its affiliates shall have the right and remedy to have the Covenants specifically
enforced (without posting bond and without the need to prove damages) by any court having equity
jurisdiction, including, without limitation, the right to an entry against the Executive of
restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such covenants. This
right and remedy shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company and its affiliates under law or in equity (including, without limitation,
the recovery of damages). The existence of any claim or cause of action by the Executive, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of the
Covenants. The Company has the right to cease making the payments or benefits to the Executive in
the event of a material breach of any of the Covenants that, if capable of cure and not willful, is
not cured within thirty (30) days after receipt of notice thereof from the Company.



               (g) Severability. The Executive acknowledges and agrees that the Executive has had an
opportunity to seek advice of counsel in connection with this Agreement; and that the Covenants are
reasonable in geographical and temporal scope and in all other respects. If it is determined that
any of the provisions of this Agreement, including, without limitation, any of the Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement
shall not thereby be affected and shall be given full affect, without regard to the invalid
portions.



               (h) Duration and Scope of Covenants. If any court or other decision maker of competent
jurisdiction determines that any of the Covenants, including, without or any part thereof are
unenforceable because of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such provision, as the
case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.



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               (i) Enforceability of Restrictive Covenants; Jurisdictions. The Company and the Executive
intend to and hereby consent to jurisdiction to enforce the Covenants upon the courts of any
jurisdiction within the geographical scope of the Covenants. If the courts of any one or more of
such jurisdictions hold the Covenants wholly unenforceable by reason of breadth of scope or
otherwise it is the intention of the Company and the Executive that such determination not bar or
in any way affect the Company’s right, or the right of any of its affiliates, to the relief
provided above in the courts of any other jurisdiction within the geographical scope of such
Covenants, as to breaches of such Covenants in such other respective jurisdictions, such Covenants
as they relate to each jurisdiction’s being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res judicata [or, prescribe state for
jurisdiction].



          10. NOTICES. All notices or deliveries authorized or required pursuant to this
Agreement shall be deemed to have been given when in writing and personally delivered or three (3)
days following the date when deposited in the U.S. mail, certified, return receipt requested,
postage prepaid, addressed to the parties at the following addresses or to such other addresses as
either may designate in writing to the other party:





			
	               To the Company:	 	Summit Hotel Properties, Inc.

Attn: Corporate Secretary

2701 South Minnesota Avenue, Suite 6

Sioux Falls, South Dakota 57105






			
	               To the Executive:	 	Christopher R. Eng

2701 South Minnesota Avenue, Suite 6

Sioux Falls, South Dakota 57105





          11. ENTIRE AGREEMENT. This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and shall not be modified in any manner
except by instrument in writing signed, by or on behalf of, the parties hereto. This Agreement
shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties
hereto.




          12. ARBITRATION. Any claim or controversy arising out of, or relating to, this
Agreement or its breach, shall be settled by arbitration in Sioux Falls, South Dakota in accordance
with the governing rules of the American Arbitration Association. Judgment upon the award rendered
may be entered in any court of competent jurisdiction. In the event one of the parties hereto
requests an arbitration proceeding under this Agreement, such proceeding shall commence within 30
days from the date of such request. The prevailing party shall be entitled to reasonable
attorney’s fees and costs.




          13. APPLICABLE LAW. This Agreement shall be governed and construed in accordance with
the laws of the State of South Dakota.




          14. NO SETOFF. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by a setoff,
counterclaim, recoupment, defense or other claim, right or action which the Company




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may have against the Executive or others. In no event shall the Executive be obligated to
seek other employment or take other action by way of mitigation of the amounts payable to the
Executive under the provisions of this Agreement.




          15. ASSIGNMENT. The Executive acknowledges that his services are unique and personal.
Accordingly, the Executive may not assign his rights or delegate his duties or obligations under
this Agreement. The Executive’s rights and obligations under this Agreement shall insure to the
benefit of and shall be binding upon the Executive’s successors and assigns.




          16. HEADINGS. Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.




          IN WITNESS WHEREOF, the parties have executed this Agreement as of the ___ day of _______,
2010.




	 	 	 	 	 
	 	SUMMIT HOTEL PROPERTIES, INC.

 	 
	 	By:  	 	 
	 	 	Title: Executive Vice President and

          Chief Financial Officer	 
	 	 	 	 
	 
	 	[EXECUTIVE]

 	 
	 	  	 	 
	 	 	 	 
	 	 	 	 
	 




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