Exhibit 10.1LOAN AGREEMENT     THIS LOAN AGREEMENT (“Loan Agreement”) is made and entered into as of this 25th day of July,2006, by and between M&I MARSHALL & ILSLEY BANK (“Lender”) and SUMMIT HOTEL PROPERTIES, LLC, aSouth Dakota limited liability company (the “Borrower”).W I T N E S S E T H :     WHEREAS, Lender has agreed to make up to a $14,080,000.00 loan to finance the construction ofa 146 room hotel and related improvements thereon (the “Project”).     NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained andother good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties agree as follows:     1. Definitions. The following definitions shall apply to this Loan Agreement:     1.1. Architect. The Architect is Peter Villard.     1.2. Business Day. Business Day shall mean any day except a Saturday, Sundayor a day on which banks in Milwaukee, Wisconsin are authorized or required by law to close.     1.3. Capital Lease. Capital Lease shall mean a financing mechanism that meetsany one of the following criteria: (i) ownership (title) to the leased asset passes to thelessee by the end of the lease term for a relatively nominal amount as compared to the fairmarket of such asset; (ii) pursuant to the lease, lessee has an option to purchase theleased asset at the end (or near the end) of the lease term for a relatively nominal amountas compared to the fair market value of such asset; (iii) the lease term is equal to orgreater than 75% of the estimated economic life of the leased asset; or (iv) the net presentvalue of the lease payments equals or exceeds 90% of the current market value of the leasedasset.     1.4. City. The City shall be the City of Bloomington, Minnesota.     1.5. Collateral Security Documents. The Collateral Security Documents shallinclude the following documents, each of which has been executed by Borrower in favor ofLender and dated as of an even date herewith unless otherwise noted:          1.5.1. Real Estate Mortgage, Security Agreement, Financing Statement and Assignment ofLeases and Rents (“Mortgage”).          1.5.2. Collateral Assignment of Contract Rights.          1.5.3. General Business Security Agreement.
 

 
          1.5.4. UCC Financing Statement.          1.5.5. Collateral Assignment of Licenses, Approvals and Permits.          1.5.6. Reserved.          1.5.7. The Collateral Security Documents shall also include all other documents andinstruments, at any time, executed, which evidence or secure the Loan.          1.5.8. Subordination, Non-Disturbance and Attornment Agreement regarding the ManagementAgreement.          1.5.9. Estoppel Certificate regarding the Management Agreement.          1.5.10. Franchise Letter.          1.5.11. Borrower Organizational Perfection Certificate.          1.5.12. Assignment of General Contractor’s Contract.          1.5.13. Assignment of Architect’s Contract.          1.5.14. Cross Collateralization Agreement executed by Borrower.     1.6. Construction Budget. The Construction Budget is the budget attachedhereto as **EXHIBIT B**, as previously approved by Lender.     1.7. Debt Service Coverage Ratio. Debt Service Coverage Ratio shall mean aratio of the Net Operating Income attributable to the Project for any twelve (12)consecutive months to the sum of (i) the aggregate of all principal and interest paymentsdue Lender under the Note during the same twelve (12) month period, and (ii) any and allother payments of principal and interest that Borrower is obligated to pay attributable tothe Project (whether such obligation is undertaken prior to or subsequent to the datehereof) during the same twelve (12) month period (“Other Debt”). Other Debt shall include,but is not limited to, debt financing categorized as a Capital Lease.     1.8. Disbursing Agreement. The Disbursing Agreement is the agreement executedby and between Borrower, Lender and Title Insurance Company and pursuant to which the Loanproceeds are to be disbursed.     1.9. Estoppel Certificate. The Estoppel Certificate is the Certificate to beexecuted in favor of Lender by the Manager of the Management Agreement and such affidavitshall be in form and content acceptable to Lender.     1.10. Existing Indebtedness. Borrower is indebted to First National Bank ofOmaha pursuant to the loan documents executed on June 24, 2005, as amended on November 30,2005. Such loan documents provide for a credit line in the amount of Fifty Million Dollars($50,000,000.00).
2

 
     1.11. Franchise Agreement. The Franchise Agreement is the Franchise Agreementdated March 28, 2006, by and between Promus Hotels, Inc. and Borrower relating to theoperation of the 146-room hotel on the Real Estate.     1.12. General Contractor. The General Contractor is Stahl ConstructionCompany.     1.13. Licenses, Approvals and Permits. The Licenses, Approvals and Permitsshall be those licenses, approvals and permits issued by the appropriate federal, state orlocal governments or quasi-governmental agencies required for Borrower to construct andoperate the Project on the Real Estate.     1.14. Reserved.     1.15. Loan. The Loan amount shall not exceed the lesser of 80% of total costof the Project as set forth in the Construction Budget or $14,080,000.00. The proceeds ofsuch Loan shall be used for the construction of a 146 room hotel and related improvementsthereon in accordance with Construction Budget and the Plans and Specifications.     1.16. Loan Documents. The Loan Documents shall include, but not be limited to,the Collateral Security Documents, the Note, the Disbursing Agreement and this LoanAgreement.     1.17. Management Agreement. The Management Agreement is the ManagementAgreement dated as of February 11, 2004, which was amended by that certain First Amendmentto Management Agreement dated April 24,2006 by and between Borrower and The Summit Group, aSouth Dakota corporation (“Manager”) and Borrower, pursuant to which Manager shall managethe 146 room hotel once completed on behalf of Borrower.     1.18. Net Operating Income. Net Operating Income shall mean the gross incomereceived from operation of the Project minus the Operating Expenses.     1.19. Note. The Note is the $14,080,000.00 Mortgage Note executed by Borrowerin favor of Lender on a date even herewith, the proceeds of which shall be disbursed underthe Loan Agreement.     1.20. Operating Expenses. Operating Expenses shall mean all expenses incurredby Borrower with respect to the Project, whether or not now foreseen, determined on anaccrual basis (including reasonably foreseeable expenses not occurring annually), including,but not limited to, the following: real estate taxes and special assessments (or anysubstitutes hereafter collected by any governmental authority in lieu thereof or in additionthereto), payroll taxes, federal and state unemployment taxes and social security taxes;insurance, including but not limited to, fire (including, but not limited to, endorsementsfor extended coverage, vandalism and malicious mischief and theft and mysteriousdisappearance), public liability, water damage, worker’s compensation and business andrental interruption insurance; water and sewer charges; license, permit and inspection fees;costs of wages and salaries of operating personnel including other
3

 
compensation and fringe benefits; management fees pursuant to the Management Agreement;auditors’ fees and legal fees; materials and supplies, including charges for telephone,telegraph, postage, stationery supplies and other materials and expenses required foroperation of the Project; repairs to and maintenance of any portion of the Project,including costs of materials, supplies, tools and equipment used in connection therewith andincluding the repaving of parking areas, replanting of landscaped areas and replacing anybuilding components; costs incurred in connection with the operation, maintenance, repair,inspection and servicing (including outside maintenance contracts) of electrical, plumbing,heating, air-conditioning and mechanical equipment and the cost of materials, supplies,tools and equipment used in connection therewith; cost of services (including heat, airconditioning, electricity, gas, water and other utilities for the operation and maintenanceof any portion of the Project); any costs allocable to the Project under any easementsbenefiting the Real Estate for parking and/or access; and all other expenses and costsnecessary or desirable to be incurred for the purpose of operating and maintaining theProject in good and workmanlike condition, whether or not similar to the foregoing. Shouldany governmental agency or political subdivision impose any taxes and/or assessments,whether or not now customary or within the contemplation of the parties hereto, either byway of substitution for taxes and assessments presently levied and assessed against theProject, or in addition thereto, including, but not limited to, any tax or assessmentlevied, assessed or imposed upon or measured by the rental payable hereunder, such taxesand/or assessments shall be deemed to constitute an Operating Expense hereunder.Notwithstanding the above, Operating Expenses shall not include: principal or interestpayments on the Note, Capital Leases, or any other obligation of Borrower; capitalimprovements to the 146-room hotel located on the Real Estate other than routine maintenanceexpenses; or, other non-recurring expenses funded with non-operating cash sources, includingbut not limited to loan proceeds, investor equity, or hotel sale proceeds.     1.21. Permitted Liens and Encumbrances. Permitted Liens and Encumbrances shallbe those liens and encumbrances permitted by Exhibit B to the Mortgage.     1.22. Plans and Specifications. The Plans and Specifications are the plans andspecifications for the construction of Project, as prepared by the Architect.     1.23. Project. The Project is the construction of 146 room hotel on the RealEstate, all of which shall be constructed in accordance with the Construction Budget and thePlans and Specifications.     1.24. Property. The Property is the 146-room hotel to be located on the RealEstate.     1.25. Real Estate. The Real Estate is the real property described on **EXHIBITA**, attached hereto.
4

 
     1.26. Secured Assets. The Secured Assets shall mean all of the personalproperty of Borrower related to the Property as described in the General Business SecurityAgreement and the Collateral Assignment of Contract Rights.     1.27. Statement of Accounts. Statements of Accounts shall be defined as thatdocumentation provided periodically by the financial institutions where cash, marketablesecurities and bonds related to the Property are held in deposit or on account for Borrower.     1.28. Subordination Agreement. The Subordination Agreement is theSubordination, Non-Disturbance and Attornment Agreement to be executed by Lender and theManager under the Management Agreement and shall be in form and content reasonablyacceptable to Lender.     1.29. Title Commitment. The Title Commitment shall be the commitmentreferenced in Section 2.5.     1.30. Title Insurance Company. The Title Insurance Company shall be ChicagoTitle as approved by Lender.     1.31. Zoning Letters. The Zoning Letters shall be the zoning letters issued bythe City relating to Borrower’s construction and operation of the Project on the RealEstate.     2. Conditions Precedent. This Loan Agreement shall become effective uponsatisfaction of the conditions set forth in this Section; provided, however, constructiondisbursements for the Loan shall not be made until the conditions set forth in Section 3.1.1 and3.1.2 are satisfied.     2.1. Loan Documents. The Borrower shall have executed each of the LoanDocuments it is required to execute.     2.2. Borrower’s Limited Liability Company Documents. Borrower shall havefurnished Lender copies, certified to Lender by a manager of Borrower to be true and correctas of the date hereof, of the Articles of Organization and the Third Amended and RestatedOperating Agreement of Borrower, plus any amendments thereto, of Borrower and a BorrowingResolution authorizing the execution and delivery of the Loan Documents. Borrower shallalso deliver a satisfactory Certificate of Existence for Borrower issued by the Secretary ofState for the State of South Dakota and a Certificate of Authority for Borrower issued bythe Secretary of State for the State of Minnesota authorizing the Borrower to conductbusiness in the State of Minnesota. Lastly, the Borrower shall furnish copies of thefollowing documents for The Summit Group, Inc., Borrower’s manager: Articles ofIncorporation, Bylaws and Certificate of Existence issued by the Secretary of State for theState of South Dakota.     2.3. Appraisal. Lender shall have received an appraisal by an appraiseracceptable to Lender, in its reasonable discretion, showing that as of the date ofcompletion, the Project and the Real Estate shall have a value of $17,600,000.00.
5

 
     2.4. Insurance. Borrower shall have furnished to Lender the policies, orcertificates evidencing such policies, of insurance required in Section 5.3.     2.5. Title Insurance. Borrower shall have furnished to Lender a commitment foran ALTA form of mortgage title policy and attached endorsements, as requested by Lender,issued by the Title Insurance Company, in form and content reasonably satisfactory to Lenderto the effect that the Title Insurance Company will issue its mortgagee’s title policy inthe amount of the Loan, insuring that Borrower owns fee simple title to the Real Estatesubject only to the Permitted Liens and Encumbrances and insuring that the Mortgageconstitutes a first and valid lien on the Real Estate, subject only to such Permitted Liensand Encumbrances.     2.6. Compliance with Laws. Borrower shall have provided Lender withsatisfactory evidence of compliance by the Real Estate and the Project, with respect to bothpresent and contemplated future uses, of all applicable laws, regulations, ordinances andcodes, including, but not limited to, zoning and subdivision laws, regulations, ordinancesand codes.     2.7. Approvals and Permits. Borrower shall have provided Lender with copies ofall governmental approvals and permits required to construct the Project in Borrower’spossession or control as of the date hereof.     2.8. Plans and Specifications. Borrower shall have delivered, and Lender shallhave the right to approve or disapprove in its reasonable discretion, a complete set of thePlans and Specifications to Lender.     2.9. Phase I Environmental Assessment Report. An environmental assessmentreport prepared by a qualified environmental engineer approved by Lender confirming that theReal Estate complies with all applicable environmental laws, rules and regulations.     2.10. Construction Budget. Borrower shall have delivered, and Lender shallhave the right to approve or disapprove in its reasonable discretion, the ConstructionBudget to Lender.     2.11. Construction Contracts. To the extent available, Borrower shall havedelivered to Lender, and Lender shall have the right to approve or disapprove in itsreasonable discretion, certified copies of all construction contracts, including, but notlimited to, all subcontractor contracts, necessary to complete the Project.     2.12. Disbursing Agreement. Borrower shall have complied with all other termsand conditions of the Disbursing Agreement.     2.13. Utilities. Borrower shall have delivered to Lender evidence thatsanitary sewer, water, electricity, natural gas, cable television and other necessaryutilities are available to the Real Estate and the Project in a manner and at a time andcost reasonably acceptable to Lender.
6

 
     2.14. Loan Fee. The Loan Fee shall equal one half (1/2) point or (0.005%) ofthe Loan.     2.15. Geotechnical Evaluation. The Borrower shall provide the Lender with aGeotechnical Evaluation prepared by an engineer which is acceptable to Lender, at itsreasonable discretion, which report states that the soil is sufficient for the constructionof the Project.     2.16. Legal Opinion. Lender shall receive from an attorney acceptable toLender, a legal opinion in form, scope and content acceptable to Lender in its solediscretion, which may, among other things reasonably requested by Lender, confirm thelegality, validity and enforceability of the Loan Documents.     2.17. Survey. Borrower shall have furnished Lender with an ALTA/ASCM Surveyprepared by a licensed surveyor reasonably satisfactory to Lender, which shows (i) allfoundations, improvements, driveways and fences, if any, on the real estate, (ii) alleasements and roads of right-of-ways and setback lines, if any, affecting the real estate,(ii) the dimensions, boundaries and square footage of the real estate, (iv) no encroachmentsby improvements on the real estate or by improvements located on the adjoining propertyexist, and (iv) such additional information that may be required by Lender, and itsreasonable discretion.     2.18. Assignment of General Contractor’s Contract. Borrower shall havefurnished Lender with a copy of the Assignment of General Contractor’s Contract, in form andsubstance reasonably acceptable to Lender, assigning the contract for the construction ofthe Project with the General Contractor to the Borrower.     2.19. Assignment of Architect’s Contract. Borrower shall have furnished Lenderwith a copy of the Assignment of Architect’s Contract, in form and substance reasonablyacceptable to Lender, assigning the contract for the architectural services necessary toconstruct the Project with the Architect to the Borrower.     2.20. Architect’s Contract. Borrower shall have furnished Lender with a copyof the Architect’s Contract for architectural services necessary to construct the Project,in form and substance reasonably acceptable to Lender.     2.21. Architect’s Certificate. Borrower shall have furnished Lender with anoriginal Architect’s Certificate, in form and substance reasonably acceptable to Lender,from the Architect relating to the Architect’s Contract for architectural services necessaryto construct the Project.     2.22. Management Agreement. Borrower shall have furnished and Lender shallhave reviewed and approved a certified copy of the Management Agreement. Lenderacknowledges receipt and its approval of the Management Agreement.     2.23. Searches. Lender shall have conducted, reviewed and approved a UCCsearch, federal tax lien search, bankruptcy search, pending civil suit search and judgmentlien search of Borrower and Borrower’s manager, The Summit Group, Inc., in thosejurisdictions that Lender reasonably requires.
7

 
     2.24. Franchise Agreement. Borrower shall have furnished and Lender shall havereviewed and approved a certified copy of the Franchise Agreement. Lender acknowledgesreceipt and its approval of the Franchise Agreement.     2.25. Manager Consent to Transaction. Manager shall have executed anddelivered to Lender a Manager’s Estoppel Affidavit pursuant to which it shall, among otherthings, represent that the Management Agreement is in effect and that the Manager shallmanage the Property pursuant to the Management Agreement.     2.26. Franchisor Consent. Promus Hotels, Inc. shall have executed anddelivered to Lender a Comfort Letter related to the Property in the standard form used byPromus Hotels, Inc.     2.27. Borrower’s Initial Equity Deposit. Borrower shall have provided Lenderwith evidence, satisfactory to Lender, in its sole discretion, that Borrower has contributed$3,520,000.00 to the construction of the Project. If Borrower has not previouslycontributed the amount to Borrower’s equity as set forth in the Construction Budget,Borrower shall deposit no later than August 11, 2006 with Lender $3,520,000.00 (“InitialEquity Deposit”). The Initial Equity Deposit shall be held by Lender in an interest bearingaccount and shall be used to fund the construction disbursements described herein prior toLender disbursing any Loan proceeds set forth herein.     2.28. Plans and Specifications. Prior to the commencement of verticalconstruction, Borrower shall have delivered to Lender, and Lender shall have the right toapprove or disapprove, in its sole discretion, a complete set of the Plans andSpecifications.     3. Loan Disbursements. Proceeds of the Loan shall be disbursed as follows:     3.1 Construction Loan Disbursements.     3.1.1. Periodic Disbursements. The Loan proceeds may be disbursed inseveral advances in accordance with the Disbursing Agreement and the followingconditions (except for the final disbursement of proceeds pursuant to the Loan whichshall be disbursed in accordance with Section 3.1.2); provided the following aresubmitted to Lender:     3.1.1.1. A draw request, on a satisfactory form to Lender, in itsreasonable discretion, certified by Borrower, Architect and GeneralContractor setting forth, among other things (i) an itemized list of thetype of work completed for which payment is requested, (ii) the originalestimated cost to complete such work, (iii) the amount requested, (iv) theamount previously disbursed for such work, (v) the estimated cost ofcompleting such work, and (vi) that no Event of Default exists pursuant tothis Loan Agreement, no default exists pursuant to the constructioncontracts and no condition exists, with respect to the Loan Documentsor construction contracts that with the passage of time or giving of notice,or both, would constitute an Event of Default pursuant to the Loan Agreementor a default pursuant to the construction contracts.
8

 
     3.1.1.2. All other items required by the Disbursing Agreement.     3.1.2. Final Construction Disbursement. Subject to the terms andconditions hereof, Lender agrees to make the final disbursement under the Loan;provided, Lender shall be satisfied that the construction has been completed in agood and workmanlike manner in accordance with the Plans and Specifications andBorrower shall submit to Lender the following:     3.1.2.1. The items required in Section 3.1.1.     3.1.2.2. A Certificate of Completion of the Project, in form andcontent satisfactory to Lender executed by Borrower, General Contractor andArchitect.     3.1.2.3. A Certificate of Occupancy for the Project as issued by theCity.     3.1.2.4. Proper update endorsements to the Title Commitment (or thepolicy if issued) in the face amount of the total sum outstanding under theLoan insuring the Mortgage as a first lien on the Real Estate, subject onlyto the Permitted Liens and Encumbrances.     3.2. Additional Conditions as to Construction Loan Disbursements.     3.2.1. Change Orders. The Borrower shall deliver to Lender revisedstatements of estimated costs of construction of the Project showing changes in orvariations from the Construction Budget, as soon as such changes are known to theBorrower; provided that such revised statements are only required to cover changesinvolving amounts of $30,000.00 or more for individual changes, or if the aggregatecost of all such changes is more than $100,000.00.     3.2.2. Loan In Balance. Borrower agrees that the Loan must at alltimes remain in balance. The Borrower shall from time to time furnish Lenderreasonably satisfactory evidence of the Borrower’s ability to pay for all costs ofcompleting the Project, and if the estimated cost of completing the Project exceedsthe then remaining balance of proceeds available under the Loan, Borrower shall payout of Borrower’s own funds the next sums coming due for such work until the Loan isbrought back into balance before the Lender shall be required to disburse anyfurther sums hereunder.     3.2.3. Completion of Construction. Construction of the Project shallbe completed in an orderly manner, but in any event on or before the date that isone year from the date of commencement of construction.
9

 
     3.2.4. Liens. Upon demand by Lender, if any intervening liens orother matters affecting title, which in Lender’s reasonable opinion materiallyjeopardize its security interest in the Project or the Real Estate, are disclosed byany means, Lender may withhold payment of further advances until such interveningliens or such other matters have been waived by Lender in writing or satisfied.Borrower shall immediately have any such liens or such other matters satisfied ofrecord and the existence of any such lien or encumbrance shall, if not removedwithin thirty (30) days or if adequate steps satisfactory to Lender are not takenwithin thirty (30) days to insure removal, constitute an Event of Default.Notwithstanding the foregoing, Borrower may, in good faith and with reasonablediligence, contest the validity or amount of any lien; provided, Borrower providesLender reasonable security that such lien shall not materially jeopardize Lender’ssecurity interest in the Project or the Real Estate.     3.2.5. Segregation of Loan Proceeds. Lender shall, at its option, beentitled to segregate and earmark sufficient proceeds of the Loan for the purpose ofpaying all sums due or to become due Lender under this Agreement, including but notlimited to, reasonable fees, interest, and all out-of-pocket expenses incurredrelative to this Agreement and the Loan. Lender shall also be entitled to advancesuch proceeds to itself in payment of such sums as they become due and payable, allwithout further order or consent of the Borrower. Lender shall give Borrower noticeof any such action.     3.2.6. Status of Disbursements. The Borrower agrees that all moneysdisbursed by Lender pursuant to the Loan (including amounts payable to and deductedby Lender) shall (i) constitute loans made to the Borrower under this Agreement (ii)shall be evidenced by the Note and (iii) that interest shall be computed thereon asprescribed by the Note from the date the Borrower’s Loan accounts are charged withthe amount of the advance. Upon disbursement of any amount pursuant to the Loan,Lender is authorized to record the date and the amount of each disbursement and anysuch recordation shall constitute prima facie evidence of the accuracy of theinformation so recorded.     3.2.7. Objection to Requested Disbursement. If (i) Lender reasonablydetermines that the quality or dollar value of the work performed or the materialfurnished as represented by the draw requests delivered to Lender does notcorrespond with the actual work performed or materials actually furnished, or (ii)the work performed does not conform with the Plans and Specifications or theConstruction Budget, then Lender shall notify the Borrower of its objection to suchpayment and, until such time as such objection is corrected to the reasonablesatisfaction of Lender, Lender may withhold such requested payment. If suchobjection is not corrected within ten (10) days after the date of notification tothe Borrower of Lender’s objection, or, if greater, the time reasonably required tocorrect such objection, Lender may withhold any future advances.
10

 
     3.2.8. Inspections. The Borrower shall be responsible for makinginspections of the Project during the course of construction and shall determine toits own satisfaction that the work done or material supplied by the contractorshave been properly done or supplied in accordance with applicable contracts withsuch contractors. Lender, in addition, may conduct such inspections of the Projectand the Real Estate as Lender shall reasonably deem necessary for the protection ofits interest. Unless an Event of Default exists hereunder, Borrower shall not berequired to pay the costs of more than one inspection per month made for the benefitof Lender. Lender may also take such steps as it may reasonably deem appropriate toverify the application of the Loan proceeds to work done and material furnished forthe Project and to vary the disbursement procedures set forth herein and in theDisbursing Agreement, if the same becomes necessary to assure the proper applicationof the Loan proceeds.     3.2.9. No Liability of Lender. It is expressly understood and agreedthat Lender assumes no liability or responsibility for the satisfactory completionof the Project, nor for the adequacy of funds advanced by it pursuant hereto tocomplete the Project, nor for inspection during construction, nor for any other actson the part of the Borrower or the contractors to be performed in the constructionof the Project. Any inspections or reviews conducted by or for Lender shall besolely for its own benefit, and shall not lessen or modify any of Borrower’sobligations or responsibilities hereunder.     3.2.10. Frequency of Disbursements. Lender shall not be required tomake more than one (1) Loan disbursement in any calendar month. Loan disbursementsmay only be made on a Business Day.     4. Representations and Warranties. The Borrower represents, warrants and certifiesto Lender that:     4.1. Execution of Loan Documents. The Loan Documents have been duly executedand delivered by the Borrower so that such documents constitute the legally enforceableobligation of the Borrower in accordance with their respective terms.     4.2. Financial Statements. All financial statements, information and otherdata furnished by Borrower to Lender are complete and correct in all material respects anddisclose all contingent obligations which are material individually or in the aggregate.Such financial statements accurately and fairly represent each applicable party’s financialcondition and operating results as of such date and since such date there has been nomaterial change in the Borrower’s financial condition or results of operations sufficient tomaterially impair the Borrower’s ability to repay the Loan or make Borrower’s additionalequity deposit in accordance with Section 5.12 below.     4.3. Operation of Real Estate and Project. To Borrower’s actual knowledge, thepresent and proposed operation and use of the Real Estate and the Project do not violate anyapplicable law, ordinance, code, rule, regulation, order or any restrictive covenant or anysimilar land use restriction binding on the Real Estate or the Project.
11

 
     4.4. Utilities. All water, sewer, electric, telephone, natural gas anddrainage facilities and all other utilities required by law and by the normal operation ofthe Projecthave been installed to the boundary lines of the Real Estate, are or will be connectedpursuant to valid permits and are adequate to fully comply with all requirements of law; orthe same may be extended to the Real Estate and the cost for such extension is included inthe Construction Budget.     4.5. Ownership of Real Estate. As of the date hereof, and at all timesthereafter until the Loan has been paid in full, the Borrower will be the fee simple ownerof the applicable portion of the Real Estate described in the Mortgage executed by theBorrower, free and clear of all liens, encumbrances, leases, management agreements, serviceagreements, rental agreements, occupancy agreements, claims and charges except as may beapproved, in writing by Lender, except for the Permitted Liens and Encumbrances.Notwithstanding the above, Borrower shall be entitled to secure loans, leases, CapitalLeases, and other similar financing instruments secured by a lien upon the Real Estate orthe Secured Assets, so long as such lien is junior to the security interest held by Lenderand such liens, in the aggregate, do not exceed $250,000.     4.6. No Default. The Borrower is not in default under any agreement to whichit is a party to include the Prior Loans, the effect of which would materially adverselyaffect performance by Borrower of its obligations pursuant to the terms and provisions ofthe Loan Documents. To Borrower’s actual knowledge, neither the execution and delivery ofthe Loan Documents nor any other document executed and delivered by Borrower in connectionwith the Loan, nor the consummation of the Loan, nor compliance with the terms andprovisions thereof, violate any presently existing law, order, writ, injunction or decree ofany court or governmental department, commission, board, bureau, agency or instrumentalityor constitutes a default under any indenture, mortgage, deed of trust, agreement or contractof any kind to which the Borrower may be bound.     4.7. No Legal Proceedings. There are no actions, suits or proceedings pendingor, to Borrower’s knowledge, threatened against Borrower, the Project or the Real Estatebefore any court or any governmental, administrative, regulatory, adjudicatory orarbitrational body or agency of any kind which will materially adversely affect performanceby the Borrower of its obligations pursuant to the terms and provisions of the LoanDocuments.     4.8. Insurance. Borrower has not received any notice from any insurer of anydefects or inadequacies in the Real Estate or the Project which would materially adverselyaffect the insurability of the Real Estate or the Project.     4.9. Liens and Encumbrances. Except for the Permitted Liens and Encumbrances,Borrower has not taken, suffered or permitted any action, the effect of which would be toestablish or cause the inception or priority of any construction or materialman’s lien,statutory or otherwise, or other lien, charge or encumbrance upon the Real Estate or theSecured Assets to be prior or superior to the liens and security interests of the CollateralSecurity Documents.
12

 
     4.10. Insolvency. The Borrower has not filed any petition nor has any petitionbeen filed against it in bankruptcy or insolvency or reorganization or for the appointmentof a receiver or trustee or for the arrangement of debts, nor has the Borrower or theReal Estate been the subject of such action, nor has such action been threatened by oragainst it and/or the Real Estate. The Borrower is not insolvent nor will it be renderedinsolvent by the consummation of the Loan.     4.11. Plans and Specifications. To the extent controllable by Borrower, theProject will be constructed substantially in accordance with the Plans and Specifications.     4.12. Construction Budget. The Project will be constructed substantially inaccordance with the Construction Budget, or the Borrower shall deposit funds required tokeep the loan in balance as discussed in Section 3.2.2 hereunder.     4.13. Management Agreement. The Management Agreement is in full force andeffect and has not been modified, supplemented, amended or changed in any manner. No eventof default has occurred pursuant to the Management Agreement and Borrower does not know ofany event or circumstances which with the passage of time or the giving of notice, or both,would constitute an event of default pursuant to the Management Agreement.     4.13. Franchise Agreement. The Franchise Agreement is in full force and effectand has not been modified, supplemented, amended or changed in any manner. No event ofdefault has occurred pursuant to the Franchise Agreement and Borrower does not know of anyevent or circumstances which with the passage of time or the giving of notice, or both,would constitute an event of default pursuant to the Franchise Agreement.     4.14. Nature of Borrower’s Representations and Warranties. The representationsand warranties made in this Agreement shall remain true and correct in all material respectsand shall survive so long as any of the obligations have not been satisfied or the Loan orany part thereof shall remain outstanding, and for any applicable statute of limitationsperiod thereafter. All representations and warranties made in this Agreement or in anycertificate or other document delivered to Lender by or on behalf of Borrower pursuant to orin connection with the Loan shall be deemed to have been relied upon by Lender, itssuccessors and assigns, notwithstanding any investigation heretofore or hereafter made by oron behalf of Lender. The representations and warranties contained herein have been madeafter diligent inquiry calculated to ascertain the truth and accuracy of the subject matterof each of such representations and warranties. All of such representations and warrantiesare true and correct in all material respects and do not omit any material fact necessary tomake such representations and warranties not misleading.     4.15. Existing Indebtedness. Borrower acknowledges that the ExistingIndebtedness to First National Bank of Omaha remains unpaid and constitutes valid andexisting debt obligations of Borrower.     5. Covenants of Borrower. While this Loan Agreement is in effect, and until the Loanhas been repaid in full, Borrower shall comply with the covenants set forth below:     5.1. Modification to Project and Real Estate. Except as contemplated hereinand except as permitted in Section 3.2.1 hereof, the Borrower shall not make anymodifications or additions to the Project without the prior express written consent ofLender, which consent shall not be unreasonably withheld.
13

 
     5.2. Liens. The Borrower shall not create or permit to be outstanding anymortgage, encumbrance, or lien on the Real Estate or the Secured Assets except the PermittedLiens and Encumbrances, or as otherwise permitted hereunder.     5.3. Insurance. The Borrower shall at all times maintain in effect and furnishthe Lender with insurance policies and proof of payment of premiums as follows:     5.3.1. Worker’s Compensation. Borrower shall cause appropriateWorker’s Compensation coverage to be maintained in force at all times during theterm of the Note, and upon request of Lender, shall furnish Lender evidence of thesame.     5.3.2. Construction Insurance. During the process of construction,policies of All Risk Builder’s Risk Completed Value insurance with all endorsementswhich are generally maintained by prudent real estate developers covering theProject in at least the amount of the estimated cost to complete the Project, withloss payable endorsements in favor of Lender or its assigns.     5.3.3. Casualty Insurance. After completion of construction, Borrowershall maintain an All Risk Casualty Insurance Policy with Vandalism and MaliciousMischief Endorsements, a Full Replacement Cost Endorsement, Contingent Liabilityfrom Operation of Building Laws Endorsement, Demolition Cost Endorsement andIncreased Cost of Construction Endorsement insuring against loss by fire, wind andall other applicable hazards in the amount of 100% of the replacement cost of theProject and Lender shall be named as mortgagee and loss payee.     5.3.4. Comprehensive General Public Liability Insurance. Borrowershall maintain Comprehensive General Public Liability and Property Damage Insurancecovering the Real Estate with combined single limits for bodily injury, propertydamage and personal injury of at least Two Million Dollars ($2,000,000.00) peraccident or occurrence. In addition, Borrower shall maintain a $10,000,000.00umbrella policy for Comprehensive General Public Liability and Property Damage.     5.3.5. Flood Insurance. If any portion of the Real Estate is locatedwithin a flood plain and flood insurance is available, Borrower shall maintain FloodInsurance acceptable to Lender in Lender’s reasonable discretion.     5.3.6. Additional Insurance Requirements. The insurance maintained byBorrower under Section 5.3.3., shall bear a standard noncontributory first mortgageeendorsement in favor of Lender or assigns and shall provide that proceeds related tothe Project under such policies shall be paid to Lender as required by the Mortgageand disbursed in accordance with the provisions of the Mortgage. Lender shall benamed as an additional insured under the policymaintained pursuant to Section 5.3.4. All insurance policies shall be writtenby companies having a Best’s rating of “A” and a financial size category rating ofClass X or larger. All insurance policies shall provide that they may not becancelled without at least thirty (30) days written notice of intention to cancelgiven by the applicable insurance company to Lender.
14

 
     5.4. Taxes and Assessments. Notwithstanding anything contained herein to thecontrary, the Borrower shall pay and discharge, when due, all taxes, assessments and othergovernment charges upon the Real Estate and the Secured Assets, which, if unpaid, might bylaw become a lien or charge upon the Real Estate or the Secured Assets; provided, that anysuch taxes, assessments, or government charges need not be paid so long as the Borrower iscontesting such payment in good faith by appropriate proceedings which will avoidforeclosure of liens securing such items and sufficient security, as determined at thereasonable discretion of Lender, is provided to Lender.     5.5. Compliance with Laws. Borrower will comply in all material respects withthe requirements of all applicable environmental, health, safety and sanitation laws, rules,regulations and orders of regulatory and administrative authorities and, without limitingthe generality of the foregoing, promptly undertake and diligently pursue to completionappropriate and legally authorized remedial and clean-up action in the event of any releaseof oil or hazardous material or substance.     5.6. Prohibition against Fundamental Changes. Without the prior writtenconsent of Lender, Borrower shall not enter into any transaction which either shall causethe Class C Member to own less than 45% of the outstanding sharing ratios of the Borrower(as defined in Borrower’s Third Amended and Restated Operating Agreement), or cause theownership of the Class C Member to be beneficially held by any person other than The SummitGroup, Inc., Kerry W. Boekelheide, or any of their affiliates, immediate family members, orheirs. Furthermore, the Borrower shall not liquidate, wind up or dissolve itself (or sufferany liquidation or dissolution); or convey, sell, lease, transfer or otherwise dispose of,in one transaction or a series of transactions, all or substantially all of its business, orassets..     5.7. Expenses. Except as otherwise limited herein, pay and save Lenderharmless and indemnify Lender against liability for the payment of all reasonableout-of-pocket expenses and reasonable counsel fees and expenses incurred by Lender inconnection with this transaction including, but not limited to, the preparation of the LoanDocuments, recording and filing fees, prosecution or defense of any action or proceeding orother litigation affecting Borrower, the Real Estate or the Secured Assets and all costs ofcollection of the Note.     5.8. Use of Proceeds. The proceeds of the Loan shall be used solely toreimburse Borrower for (i) actual expenses incurred by or on behalf of Borrower for theconstruction of the Project in accordance with the Plans and Specifications and inaccordance with the Construction Budget, and (ii) after the occurrence of an Event ofDefault, to the extent Lender in its sole discretion elects to apply such proceeds, to anycharges or expenses due from Borrower to Lender under the Loan Documents.
15

 
     5.9. Financial Statements. Throughout the term of this Loan Agreement,Borrower shall furnish or cause to be furnished to the Lender the following:     5.9.1. Borrower’s Annual Financial Statements. As soon as available,and in any event within one-hundred twenty (120) days after the close of each fiscalyear of the Borrower, a copy of the financial statements of Borrower, includingbalance sheets and statements of profit and loss, audited by an independentcertified public accounting firm chosen by Borrower.     5.9.2. Real Estate Operating Statements. As soon as available, and inany event within sixty (60) days after the close of each fiscal year of theBorrower, a copy of the operating statements of the Property.     5.9.3. Additional Information. Borrower shall cause to be furnished toLender such additional information concerning the financial condition of Borrower asLender may reasonably request from time to time. The Borrower will permitrepresentatives of the Lender to have free access during regular business hours tothe Real Estate and to inspect all books, records, and contracts of the Borrowerrelating to the Real Estate, the Project and the Secured Assets. Once theconstruction of the Project is complete, unless an Event of Default shall becontinuing, Borrower shall not be required to pay the Lender’s costs of inspectionof the Real Estate or Borrower’s books, record and contracts more frequently thanonce per year. Such inspections by Lender shall not entitle Lender to re-audit thebooks and records of Borrower.     5.10. Management Agreement, Franchise Agreement or Service Agreements.Borrower shall not enter into, modify, amend, supplement, terminate or cancel the ManagementAgreement, the Franchise Agreement, without Lender’s prior written consent, which consentmay not be unreasonably withheld, conditioned or delayed.     5.11. Governmental Approvals. Borrower shall obtain all approvals from allgovernmental authorities necessary or required to proceed with the development and operationof the Project.     5.12. Borrower’s Additional Equity Deposit. Within sixty (60) business daysfollowing the issuance of the Certificate of Occupancy by the City, described in Section3.1.2.3, Borrower shall deliver to Lender the difference between the (i) Total ProjectEquity (defined below) and (ii) the Initial Equity Deposit. The term “Total Project Equity”shall equal the actual aggregate cost of the Project less 65% of the appraised value of theProject as determined pursuant to the appraisal described in Section 2.3 above.     6. Defaults.     6.1. Any of the following events shall constitute an Event of Default under this LoanAgreement:
16

 
     6.1.1. Default Pursuant to Note. The Borrower shall default in thepayment of principal or interest due under the Note and such default shall continuefor a period of ten (10) days following the due date of such payment.     6.1.2. Default Pursuant to Loan Documents. Except for a defaultpursuant to Section 6.1.1, there shall be a default in the performance or observanceof any covenants or conditions required to be performed or observed by the Borrowerunder the terms of the Loan Documents and such breach shall continue for a period ofthirty (30) days after written notice to the Borrower specifying such breach;provided, however, if such default cannot reasonably be cured within such thirty(30) days, Borrower shall not be deemed to be in default if Borrower commencescuring such breach within fifteen (15) days after written notice and thereafterdiligently completes the curing of such breach, provided that Lender’s security forthe Loan, in Lender’s sole opinion, is not materially impaired by such delay andprovided, further, that Borrower shall in no event have longer than one hundredtwenty (120) days to completely cure such default.     6.1.3. Breach of Warranty or Representation. Any representation orwarranty made by the Borrower in the Loan Documents or as part of the Loan or in anycertificate or document furnished as part of the Loan shall prove untrue in anymaterial respect on the date as of which they were made or as of the date on whichthey were to be effective.     6.1.4. Insolvency. The Borrower shall admit in writing its inabilityto pay its debts or shall make an assignment for the benefit of its creditors; orshall be adjudicated a bankrupt; or shall file a voluntary petition in bankruptcy orto effect a plan or other arrangement with creditors, or to liquidate assets of theBorrower under court supervision; or shall have applied for the appointment of areceiver, trustee or custodian for any of its assets; or a trustee, receiver orcustodian shall have been appointed for any assets of the Borrower and such trustee,receiver or custodian shall not have been discharged within ninety (90) days afterthe date of his appointment.     6.1.5. Damage to Real Estate, Project or Secured Assets. If theimprovements on the Real Estate, or the Secured Assets are, in the reasonablejudgment of the Lender, materially injured or destroyed and Borrower does not takeprompt action to collect insurance proceeds and/or commence restoration inaccordance with the provisions of the Mortgage.     6.1.6. Inspection of Real Estate. If the Lender is not permitted, atall reasonable times upon prior reasonable notice and pursuant to the other termsand conditions herein, to enter and inspect the Real Estate, Project and the SecuredAssets.     6.1.7. Warrants and Attachments. Any warrant, attachment, executionor other writ shall be issued or levied upon the Real Estate or the Secured Assetsor any property, real or personal, owned by Borrower shall remain undischarged,unstayed or unbonded for a period in excess of ninety (90) days.
17

 
     6.1.8. Default Pursuant to Existing Indebtedness. The occurrence of anevent of default, after expiration of any applicable cure period, pursuant to theExisting Indebtedness loan documents or any loan agreement, mortgage, note,assignment of leases and rents or other document evidencing or securing the ExistingIndebtedness by Borrower to the First National Bank of Omaha.     6.1.9. Material Contracts. If the Management Agreement, the FranchiseAgreement or any contract which is material to Borrower’s business (“MaterialContracts”) is materially modified or amended without the Lender’s consent or if oneof the Material Contracts is terminated other than by the expiration of its term ora breach or an event of default occurs under one of the Material Contracts on thepart of Borrower to perform.     6.1.10. Default Pursuant to the Cambria Suites Hotel Construction Loan.The occurrence of an Event of Default as defined in that certain Loan Agreement byand between Lender and Borrower dated of even date herewith for the construction ofa 113 room, five-story Cambria Suite hotel and related improvements on the RealEstate.     6.2. Occurrence of Default. Upon the occurrence of an Event of Default, unlesssuch Event of Default is subsequently waived in writing by Lender, Lender shall be entitled,at the option of Lender, to exercise any or all of the following rights and remedies:     6.2.1. Suspend Disbursements. Lender may suspend its obligation tomake disbursements pursuant to the Loan.     6.2.2. Accelerate Payments. Lender may declare the entire unpaidprincipal balance due pursuant to the Note to be immediately due and payable,together with accrued and unpaid interest, without further notice to or demand onthe Borrower. Notwithstanding the foregoing, if Borrower becomes insolvent, makesan assignment for the benefit of its creditors, becomes the subject of an “order forrelief” within the meaning of the U.S. Bankruptcy Code, files a petition inbankruptcy, or for reorganization, is adjudged bankrupt, has filed against them aninvoluntary petition pursuant to the U.S. Bankruptcy Code or has a receiver,trustee, custodian or a liquidator appointed to take control of any of its real orpersonal property and such receiver, trustee, custodian or liquidator is notdischarged within sixty (60) days of their appointment, then the entire unpaidprincipal balance due pursuant to the Note and all accrued and unpaid interestthereon shall automatically and without the option of the Lender become immediatelydue and payable.
18

 
     6.2.3. Take Over Construction. If construction of the Project is notcompleted, Lender may, but shall not be obligated to, take over and complete theconstruction of the Project in accordance with Plans and Specifications approved byLender with such changes as Lender may, in its reasonable discretion, deemappropriate, all at the risk and expense of the Borrower. Lender may assume orreject any contracts entered into by the Borrower in connection with theProject and Lender may enter into additional or different contracts for services,labor and for materials necessary, in the discretion of Lender, to complete theProject. Lender may pay, compromise and settle all claims in connection with theProject. All reasonable sums, including reasonable attorney fees, charges and feesfor supervision and inspection of the construction, and for any other necessarypurpose in the sole discretion of Lender, expended by Lender in completing theProject shall be deemed advances made by Lender to the Borrower, and the Borrowershall be liable to Lender for the repayment of such sums, together with interest onsuch amounts from the date of their expenditure at the default rate specified in theNote. Lender may, in its discretion, at any time, abandon work on the Project afterhaving commenced such work and may recommence such work at any time, it beingunderstood that nothing in this Section shall impose any obligation on Lender tocomplete the Project. For the purpose of carrying out the provisions of thisSection, the Borrower irrevocably appoints Lender as its attorney-in-fact, with fullpower of substitution, to execute and deliver all such documents, pay and receivesuch funds, and take such action as may be necessary in the judgment of Lender tocomplete the Project.     6.2.4. Other Remedies. Lender may exercise all enforcement remediesspecified or permitted in the Collateral Security Documents or any remedy availableto Lender at law or in equity.     7. Re-platting Privilege. Provided no Event of Default exists, Borrower shall beallowed, to re-plat and subdivide the Real Estate into two separate parcels such that one hotel issituated on each newly-created parcel (the newly-created parcel on which the Hampton Inn & Suiteshotel, or its successor, is situated shall be referred to herein as the “Hampton Parcel” andnewly-created parcel on which the Cambria Suites, or its successor, is situated shall be referredto herein as the “Cambria Parcel”, and the Hampton Parcel and Cambria Parcels may be individuallyreferred to herein as a “Property” and shall be collectively referred to herein as the “NewParcels”), subject to the following conditions:          7.1. Borrower shall deliver to Lender a survey and legal description of the Hampton Parcel andthe Cambria Parcel that show and provide for a common property line between the New Parcels in alocation acceptable to Lender in its reasonable discretion;          7.2. Lender shall be provided with such evidence as Lender may reasonably require in order toverify that no violation of zoning, parking or subdivision requirements with respect to the NewParcels shall exist upon completion of the re-platting or subdivision, or that appropriatevariances were obtained with respect to the New Parcels;          7.3. Lender shall be provided with evidence reasonably satisfactory to it that any and allnecessary governmental approvals of the subdivision and replatting of the New Parcels have beenobtained;          7.4. Lender shall receive an endorsement to its loan title policy with respect to the NewParcels in form and substance satisfactory to Lender in its sole discretion insuring that theHampton Parcel and the Cambria Parcel each has access to the same publicly dedicatedstreets as prior to the creation of the New Parcels and amending the legal description to includethe legal descriptions of the New Parcels;
19

 
          7.5. Borrower shall pay all costs, fees, and expenses incurred in connection with the release,including, without limitation, recording fees, title charges and Lender’s reasonable attorney’sfees;          7.6. Borrower shall have created easements for utilities, signage, drainage, parking, ingressand egress and other appropriate purposes in, on and over the New Parcels for the benefit of boththe Hampton Parcel and Cambria Parcel to the extent reasonably required by Lender and sucheasements shall be insured as appurtenances in Lender’s loan title policy via endorsement;          7.7 Borrower and any guarantors of the Loan shall reaffirm their respective obligationspursuant to a ratification agreement in form and substance satisfactory to Lender;          7.8. The release shall not affect any obligations of Borrower or guarantors, if any, under theLoan Documents;          7.9. Borrower must obtain separate tax parcel numbers for the Hampton Parcel and the CambriaParcel;          7.10. Borrower must provide preliminary plans, drawings and surveys reasonably required byLender at least twenty (20) days prior to making application to any governmental authority for theproposed re-plat or subdivision, and such preliminary plans, drawing and surveys shall be subjectto Lender’s review and approval prior to making such application, which approval shall not beunreasonably withheld.     8. Property Release Privilege. Provided no Event of Default exists, and in theevent that the Real Estate has been re-platted or subdivided pursuant to Section 7 above, theBorrower may partially or entirely prepay either or both of the loans secured by the Real Estate,upon twenty (20) days prior written notice to Lender. Upon payment in full of all principal andinterest outstanding under a loan, Lender shall immediately release its mortgage and securityinterest from the respective property financed by the paid loan. The parties hereto acknowledgethat the loan in the original principal amount of $14,080,000 financed the Hampton Inn & Suites,and the loan in the original principal amount of $10,400,000 financed the Cambria Suites.     9. Additional Matters.     9.1. Heirs, Assigns, Waiver, Etc. The provisions of this Loan Agreement shallinure to the benefit of and be binding upon Borrower and Lender, and their respective heirs,legal representatives, successors and assigns; provided, however, that this Loan Agreementmay not be assigned by the Borrower without the prior written consent of Lender. No delayon the part of Lender in exercising any right, power or privilege shall operate as a waiverthereof. The rights and remedies of Lender specified in this Loan Agreement shall be inaddition to and not exclusive of any other rights and remedies which Lender, by operation oflaw, would otherwise possess.
20

 
     9.2. Survival of Representations and Warranties. All agreements,representations, and warranties made in this Loan Agreement shall survive the execution ofthe Loan Documents and shall continue until the Note is repaid in full.     9.3. Governing Law. This Loan Agreement shall be governed by the laws of theState of Wisconsin.     9.4. Amendment of Loan Agreement. This Loan Agreement may not be changedorally, but only by an agreement in writing signed by the parties hereto.     9.5. Indemnification. Borrower hereby agrees to hold and save Lender harmlessand indemnify it against and from all claims, liabilities, damages, losses or expenses(including reasonable attorney fees) of any kind incurred by Lender and arising from or outof the use, occupancy or possession of the Real Estate or otherwise in any way connected tothe Loan; provided, however if and to the extent such claims, liabilities, damages, lossesor expenses of any kind are incurred by Lender solely because of Lender’s negligence orwillful act or omission, then Borrower shall not be required to hold and save Lenderharmless or indemnify Lender.     9.6. Notices. Any notice to be given hereunder shall be in writing, addressedto the party at the address stated below and shall be (i) delivered in person to thereceiving party by the other party, his agent or a professional courier service, (ii) sentby United States certified or registered mail, postage prepaid, return receipt requested, or(iii) sent by telecopy to the receiving party at the telecopy phone number stated below.Any such notice shall be deemed effective upon the earlier of the actual receipt of thenotice or (i) if delivered in person, then when such notice is delivered to an individual atthe receiving party’s address who is apparently authorized to accept deliveries, (ii) ifsent by United States certified or registered mail, then one day after such notice orelection is deposited with the United States Postal Service, or (iii) if sent by telecopy,then at the time sent and confirmed by the sender’s transmitted copy of such notice.        Lender: M&I Marshall & Ilsley Bank  770 North Water  Milwaukee, WI 53202  Attn: Michael J. Fruin  Telecopy No. (414) 765-7625        Borrower: Summit Hotel Properties, LLC  2701 S. Minnesota Ave., Suite #6  Sioux Falls, SD 57105  Attn: Hulyn Farr  Telecopy No. (605) 362-9388     9.7. Severability. Any provision of this Agreement which is prohibited orunenforceable shall be ineffective to the extent of such prohibition or unenforceabilitywithout invalidating the remaining provisions hereof.
21

 
     9.8. Headings. Section and subsection headings in this Agreement are includedherein for convenience only and shall not constitute a part of this Agreement for anypurpose.     9.9. VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATEDBY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS LOAN AGREEMENT OR THE OTHER LOANDOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT COURT OF MILWAUKEE COUNTY, WISCONSIN. BORROWERHEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION ORPROCEEDING COMMENCED BY LENDER IN SUCH COURT. BORROWER WAIVES ANY CLAIM THAT MILWAUKEECOUNTY, WISCONSIN OR THE EASTERN DISTRICT OF WISCONSIN IS AN INCONVENIENT FORUM OR ANIMPROPER FORUM BASED ON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET FORTHIN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY LENDER, OF ANY JUDGMENTOBTAINED IN ANY OTHER FORUM OR THE TAKING, BY LENDER, OF ANY ACTION TO ENFORCE THE SAME INANY OTHER APPROPRIATE JURISDICTION, AND BORROWER HEREBY WAIVES THE RIGHT, IF ANY, TOCOLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.     9.10. WAIVER OF TRIAL BY JURY. LENDER AND BORROWER ACKNOWLEDGE AND AGREE THATANY CONTROVERSY WHICH MAY ARISE UNDER THIS LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS ORWITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN WOULD BE BASED UPONDIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDINGARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY AJUDGE SITTING WITHOUT A JURY.
22

 
IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement on the day, month and yearfirst above written.         M&I MARSHALL & ILSLEY BANK         By: */s/ Michael J. Fruin*             Michael J. Fruin, Vice President           By: */s/ Geoffrey R. Nauth*           Name: Geoffrey R. Nauth    Its: Vice President  
23

 
           SUMMIT HOTEL PROPERTIES, LLC               By: */s/ Kerry W. Boekelheide*                 Kerry W. Boekelheide             Chief Executive Officer  
24

 
**EXHIBIT A****Legal Description**Lot 1, Block 1, Summit Hotel Properties, according to the recorded plat thereof, Hennepin County,MinnesotaAbstract Property