Document:

exv10w22

Exhibit 10.22

LOAN AGREEMENT

     THIS LOAN AGREEMENT (this “Agreement”) is made as of February 29, 2008 (the “Closing Date”),
by and between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“Lender”), and SUMMIT
HOSPITALITY V, LLC, a South Dakota limited liability company (“Borrower”).

AGREEMENT:

     In consideration of the mutual covenants and provisions of this Agreement, the parties agree
as follows:

     1. Definitions. The following terms shall have the following meanings for all purposes of this
Agreement:

     “ADA” means the Americans with Disabilities Act of 1990, as such act may be amended from time
to time.

     “Affiliate” means any Person that directly or indirectly controls, is under common control
with, or is controlled by any other Person. For purposes of this definition, “controls”, “under
common control with” and “controlled by” mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person, whether through
ownership of voting securities or otherwise.

     “Amended and Restated Note” means the amended and restated note to be executed by Borrower in
the form attached to this Agreement as Exhibit B. The Amended and Restated Note shall amend
and restate the Note in its entirety and shall be executed by Borrower as of the date of the Final
Disbursement.

     “Anti-Money Laundering Laws” means all applicable laws, regulations and government guidance on
the prevention and detection of money laundering, including 18 U.S.C. § § 1956 and 1957, and the
BSA.

     “Applicable Regulations” means all applicable statutes, regulations, rules, ordinances, codes,
licenses, permits, orders and approvals of each Governmental Authority having jurisdiction over the
Premises, including, without limitation, all health, building, fire, safety and other codes,
ordinances and requirements, all applicable standards of the National Board of Fire Underwriters
and the ADA and all policies or rules of common law, in each case, as amended, and any judicial or
administrative interpretation thereof, including any judicial order, consent, decree or judgment
applicable to any of the Borrower Parties.

     “Architect’s Agreement” has the meaning set forth in the Disbursement Agreement.

     “Borrower’s Architect” has the meaning set forth in the Disbursement Agreement.

     “Borrower Parties” means, collectively, Borrower and any guarantors of the Loan (including, in
each case, any predecessors-in-interest).

     “BSA” means the Bank Secrecy Act (31 U.S.C. § § 5311 et. seq.), and its implementing
regulations, Title 31 Part 103 of the U.S. Code of Federal Regulations.

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     “Budget” has the meaning set forth in the Disbursement Agreement.

     “Business Day” means any day on which Lender is open for business other than a Saturday,
Sunday or a legal holiday, ending at 5:00 P.M. Phoenix, Arizona time.

     “Change of Control” means a change in control of any of the Borrower Parties, including,
without limitation, a change in control resulting from direct or indirect transfers of voting stock
or partnership, membership or other ownership interests, whether in one or a series of
transactions. For purposes of this definition, “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of any of
the Borrower Parties, as applicable, and a Change of Control will occur if any of the following
occur: (a) any merger or consolidation by any of the Borrower Parties, as applicable, with or into
any other entity; or (b) if any “Person” as defined in Section 3(a)(9) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Section 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) of the Exchange Act, who, subsequent to
the Closing, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of
securities of any of the Borrower Parties, as applicable, representing 50% or more of the combined
voting power of Borrower’s then outstanding securities (other than indirectly as a result of the
redemption by any of the Borrower Parties, as applicable, of its securities).

     Notwithstanding the foregoing, the following shall not be deemed a Change of Control, so long
as The Summit Group, Inc. remains the Company Manager of the Guarantor and retains at least 45% of
the Sharing Ratios and Kerry W. Boekelheide retains voting control of The Summit Group, Inc.: (i) a
transfer of an aggregate of 49% or less of Class A Membership Interests or Class A-1 Membership
Interests in Guarantor; (ii) a transfer of an aggregate of 49% or less of Class B Membership
Interests in Guarantor; (iii) a transfer of an aggregate of 49% or less of Class C Membership
Interests in Guarantor; or (iv) a transfer of an aggregate of 49% or less of ownership interests in
The Summit Group, Inc. Also notwithstanding the foregoing, transfers of ownership or beneficial
interests in The Summit Group, Inc. to a trust for the benefit of family members for estate or tax
planning purposes shall not be a Change of Control so long as Kerry W. Boekelheide retains voting
control of The Summit Group, Inc. and exercises control, directly or indirectly, over the
operations and business of The Summit Group, Inc. Initially capitalized terms used in this
paragraph which are not defined herein shall have the definitions as set forth in the Third Amended
and Restated Operating Agreement for Summit Hotel Properties, LLC dated July 25, 2005.

     “Closing” means the disbursement of the Loan Amount by Title Company as contemplated by this
Agreement.

     “Code” means Title 11 of the United States Code, 11 U.S.C. Sec. 101 et seq., as amended.

     “Completion Date” has the meaning set forth in the Disbursement Agreement.

     “Contract Documents” has the meaning set forth in the Disbursement Agreement.

     “Debt Service Coverage Ratio” has the meaning set forth in Section 6.J.

     “Default Rate” has the meaning set forth in the Note.

     “Development Documents” has the meaning set forth in the Disbursement Agreement.

     “Disbursement Agreement” means the Disbursement Agreement dated as of the date hereof executed
by Borrower, Lender and Title Company.

     “Disbursements” has the meaning set forth in the Disbursement Agreement.

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     “Entity” means any entity that is not a natural person.

     “Environmental Indemnity Agreement” means the environmental indemnity agreement dated as of
the date of this Agreement executed by Borrower for the benefit of the Indemnified Parties and such
other parties as are identified in such agreement with respect to the Premises, as the same may be
amended from time to time.

     “Event of Default” has the meaning set forth in Section 9.

     “Fee” means an underwriting, site assessment, valuation, construction, processing and
commitment fee equal to 0.65% of the Loan Amount.

     “Final Disbursement” has the meaning set forth in the Disbursement Agreement.

     “Final Disbursement Date” means the date of the Final Disbursement.

     “Franchise Agreement” means the franchise, license or area development agreements with
Franchisor for the conduct of business at the Premises as a Permitted Concept, together with all
amendments, modifications and supplements thereto.

     “Franchisor” means Choice Hotels International, Inc., a Delaware corporation, and its
successors,.

     “GAAP” means generally accepted accounting principles consistently applied.

     “General Contract” has the meaning set forth in the Disbursement Agreement.

     “General Contractor” has the meaning set forth in the Disbursement Agreement.

     “Governmental Authority” means any governmental authority, agency, department, commission,
bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or
supervisory or regulatory authority over the Premises or any of the Borrower Parties.

     “Guarantor” means Summit Hotel Properties, LLC, a South Dakota limited liability company.

     “Improvements” means the improvements to be constructed upon the Land as contemplated by the
Disbursement Agreement.

     “Indemnified Parties” means Lender, the trustees under the Mortgage, if applicable, and any
person or entity who is or will have been involved in the origination of the Loan, any person or
entity who is or will have been involved in the servicing of the Loan, any person or entity in
whose name the encumbrance created by the Mortgage is or will have been recorded, persons and
entities who may hold or acquire or will have held a full or partial interest in the Loan
(including, but not limited to, investors or prospective investors in any Securitization,
Participation or Transfer, as well as custodians, trustees and other fiduciaries who hold or have
held a full or partial interest in the Loan for the benefits of third parties), as well as the
respective directors, officers, shareholders, partners, members, employees, lenders, agents,
servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants,
successors and assigns of any and all of the foregoing (including, but not limited to, any other
person or entity who holds or acquires or will have held a participation or other full or partial
interest in the Loan or the Premises, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender’s assets and business).

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     “Indemnity Agreements” means all indemnity agreements executed for the benefit of any of the
Borrower Parties or any prior owner, lessee or occupant of the Premises in connection with
Hazardous Materials, including, without limitation, the right to receive payments under such
indemnity agreements.

     “Initial Equity Contribution” has the meaning set forth in the Disbursement Agreement.

     “Initial Loan Amount” means that portion of the Loan to be advanced to Borrower at the
Closing.

     “Land” means the parcels of real estate legally described on Exhibit A attached hereto, and
all rights, privileges and appurtenances associated therewith.

     “Lender Entities” means, collectively, Lender (including any predecessor-in-interest to
Lender) and any Affiliate of Lender (including any Affiliate of any predecessor-in-interest to
Lender).

     “Loan” means the loan for the Premises described in Section 2.

     “Loan Amount” means $11,400,000.00.

     “Loan Documents” means, collectively, this Agreement, the Note, the Mortgage, the Disbursement
Agreement, the Environmental Indemnity Agreement, the UCC-1 Financing Statements, the Authorization
Regarding Information form previously delivered on behalf of the Borrower Parties to Lender and all
other documents, instruments and agreements executed in connection therewith or contemplated
thereby, as the same may be amended from time to time.

     “Loan Pool” means: (a) in the context of a Securitization, any pool or group of loans that are
a part of such Securitization; (b) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and (c) in the context of a Participation, all
loans as to which participating interests are granted to the same participant.

     “Management Agreement” means that certain Management Agreement dated April 12, 2007 entered
into between Borrower and Manager, which Management Agreement relates to the Premises in addition
to other hotel properties.

     “Manager” means The Summit Group, Inc., a South Dakota corporation.

     “Material Adverse Effect” means a material adverse effect on (a) the Premises, including,
without limitation, the operation of the Premises as a Permitted Concept, or (b) Borrower’s ability
to perform its obligations under the Loan Documents.

     “Mortgage” means the deed of trust, deed to secure debt or mortgage dated as of the date of
this Agreement executed by Borrower for the benefit of Lender with respect to the Premises, as the
same may be amended from time to time.

     “Note” means the promissory note dated as of the date of this Agreement executed by Borrower
in favor of Lender evidencing the Loan, as such Note shall be amended and restated by the Amended
and Restated Note and as the Note may be otherwise amended, restated or substituted from time to
time.All references in the Loan Documents to the Note which are applicable to the period
of time from and after the execution and delivery of the Amended and Restated Note shall mean the
Amended and Restated Note.

     “Obligations” has the meaning set forth in the Mortgage.

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     “OFAC Laws and Regulations” means Executive Order 13224 issued by the President of the United
States of America, the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of
Federal Regulations), the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of
the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations
(Title 31 Part 597 of the U.S. Code of Federal Regulations), and the Cuban Assets Control
Regulations (Title 31 Part 515 of the U.S. Code of Federal Regulations), and all other present and
future federal, state and local laws, ordinances, regulations, policies, lists (including, without
limitation, the Specially Designated Nationals and Blocked Persons List) and any other requirements
of any Governmental Authority (including, without limitation, the United States Department of the
Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate,
terrorist acts and acts of war, each as hereafter supplemented, amended or modified from time to
time, and the present and future rules, regulations and guidance documents promulgated under any of
the foregoing, or under similar laws, ordinances, regulations, policies or requirements of other
states or localities.

     “Other Agreements” means, collectively, all agreements and instruments between, among or by
(a) any of the Borrower Parties or any Affiliate of any of the Borrower Parties (including any
Affiliate of any predecessor-in-interest to any of the Borrower Parties), and, or for the benefit
of, (b) any of the Lender Entities, including, without limitation, promissory notes and guaranties;
provided, however, the term “Other Agreements” shall not include the agreements and instruments
defined as the Loan Documents.

     “Participation” means one or more grants by Lender or any of the other Lender Entities to a
third party of a participating interest in notes evidencing obligations to repay secured or
unsecured loans owned by Lender or any of the other Lender Entities or any or all servicing rights
with respect thereto.

     “Permitted Concept” means a Cambria Suites hotel.

     “Permitted Exceptions” means those recorded easements, restrictions, liens and encumbrances
set forth as exceptions in the title insurance policy issued by Title Company to Lender and
approved by Lender in its sole discretion in connection with the closing of the Loan.

     “Person” means any individual, corporation, partnership, limited liability company, trust,
unincorporated organization, Governmental Authority or any other form of entity.

     “Personal Property” has the meaning set forth in the Mortgage.

     “Premises” means, collectively, the Land and the Improvements (as such terms are defined in
the Mortgage).

     “Restoration” has the meaning set forth in the Mortgage.

     “Schedule of Values” has the meaning set forth in the Disbursement Agreement.

     “Securitization” means one or more sales, dispositions, transfers or assignments by Lender or
any of the other Lender Entities to a special purpose corporation, trust or other entity identified
by Lender or any of the other Lender Entities of notes evidencing obligations to repay secured or
unsecured loans owned by Lender or any of the other Lender Entities (and, to the extent applicable,
the subsequent sale, transfer or assignment of such notes to another special purpose corporation,
trust or other entity identified by Lender or any of the other Lender Entities), and the issuance
of bonds, certificates, notes or other instruments evidencing interests in pools of such loans,
whether in connection with a permanent asset securitization or a sale of loans in anticipation of a
permanent asset securitization. Each Securitization shall be undertaken in accordance with all
requirements which may be imposed by the investors or the rating agencies involved in each such
sale, disposition, transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations.

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     “Site and Utility Plans” means the site and utility plans prepared by Borrower’s Architect
which shall be drawn to the same scale as the ALTA survey described in Section 4.B and depict the
Improvements (including all utilities) as they are to be constructed pursuant to the Contract
Documents and all other items that would be depicted in the “As Built Survey” of the Premises to be
delivered to Lender pursuant to the Disbursement Agreement.

     “Title Company” means Lawyers Title Insurance Corporation.

     “Transfer” means one or more sales, transfers or assignments by Lender or any of the other
Lender Entities to a third party of notes evidencing obligations to repay secured or unsecured
loans owned by Lender or any of the other Lender Entities or any or all servicing rights with
respect thereto.

     “UCC-1 Financing Statements” means such UCC-1 Financing Statements as Lender shall file with
respect to the transactions contemplated by this Agreement.

     “UCC” has the meaning set forth in the Mortgage.

     “U.S. Publicly-Traded Entity” is an Entity whose securities are listed on a national
securities exchange or quoted on an automated quotation system in the U.S. or a wholly-owned
subsidiary of such an Entity.

     2. Transaction. On the terms and subject to the conditions set forth in the Loan Documents,
Lender shall make the Loan. The Loan will be evidenced by the Note and secured by the Mortgage.
Borrower shall construct the Improvements on the Land in accordance with the terms and conditions
of the Disbursement Agreement and Lender shall make Disbursements pursuant to the terms and
conditions of the Disbursement Agreement to fund the costs of such construction. The funding of the
Initial Loan Amount shall occur simultaneously with the Closing. Borrower shall repay the
outstanding principal amount of the Loan together with interest thereon in the manner and in
accordance with the terms and conditions of the Note and the other Loan Documents. At the time of
the Final Disbursement, the Note shall be amended and restated by the Amended and Restated Note.
The Amended and Restated Note will mature on the first day of the month immediately following the
month in which the tenth anniversary of the Final Disbursement Date occurs. The Loan made pursuant
to this Agreement, the construction by Borrower of the Improvements pursuant to the Disbursement
Agreement and the granting of the security interest in the Premises pursuant to the Mortgage are
not severable and shall be considered a single integrated transaction.

     3. Escrow Agent; Closing Costs. Borrower and Lender hereby employ Title Company to act as
escrow agent in connection with the transactions described in this Agreement. Borrower and Lender
will deliver to Title Company all documents, pay to Title Company all sums and do or cause to be
done all other things necessary or required by this Agreement, in the reasonable judgment of Title
Company, to enable Title Company to comply herewith and to enable any title insurance policy
provided for herein to be issued. Title Company shall not cause the transaction to close unless and
until it has received written instructions from Lender and Borrower to do so. Title Company is
authorized to pay, from any funds held by it for Lender’s or Borrower’s respective credit all
amounts necessary to procure the delivery of such documents and to pay, on behalf of Lender and
Borrower, all charges and obligations payable by them, respectively. Borrower will pay all charges
payable by it to Title Company. Title Company is authorized, in the event any conflicting demand is
made upon it concerning these instructions or the escrow, at its election, to hold any documents or
funds deposited hereunder until an action shall be brought in a court of competent jurisdiction to
determine the rights of Borrower and Lender or to interplead such documents or funds in an action
brought in any such court. Deposit by Title Company of such documents and funds, after deducting
therefrom its charges and its expenses and attorneys’ fees incurred in connection with any such
court action, shall relieve Title Company of all further liability and responsibility for such
documents and funds. Title Company’s receipt of this Agreement and opening of an escrow pursuant to
this Agreement shall be deemed to constitute conclusive evidence of Title

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Company’s agreement to be bound by the terms and conditions of this Agreement pertaining to Title
Company. Disbursement of any funds shall be made by check, certified check or wire transfer, as
directed by Borrower and Lender. Title Company shall be under no obligation to disburse any funds
represented by check or draft, and no check or draft shall be payment to Title Company in
compliance with any of the requirements hereof, until it is advised by the bank in which such check
or draft is deposited that such check or draft has been honored. Title Company is authorized to act
upon any statement furnished by the holder or payee, or a collection agent for the holder or payee,
of any lien on or charge or assessment in connection with the Premises, concerning the amount of
such charge or assessment or the amount secured by such lien, without liability or responsibility
for the accuracy of such statement. The employment of Title Company as escrow agent shall not
affect any rights of subrogation under the terms of any title insurance policy issued pursuant to
the provisions thereof. Notwithstanding the foregoing, the terms and conditions of this Agreement
shall not limit or affect Title Company’s liability or obligations under the Disbursement
Agreement.

     4. Closing Conditions. The obligation of Lender to consummate the transaction contemplated by
this Agreement is subject to the fulfillment or waiver of each of the following conditions:

     A. Title Insurance Commitments. Lender shall have received for the Premises a preliminary
title report and irrevocable commitment to insure title in the amount of the Loan, by means of a
mortgagee’s, ALTA extended coverage policy of title insurance (or its equivalent, in the event such
form is not issued in the jurisdiction where the Premises is located) issued by Title Company
showing Borrower vested with good and marketable fee title in the real property comprising such
Premises, committing to insure Lender’s first priority lien upon and security interest in such real
property subject only to Permitted Exceptions, and containing such endorsements as Lender may
reasonably require.

     B. Survey. Lender shall have received (1) a current ALTA survey of the Premises or its
equivalent, the form and substance of which shall be satisfactory to Lender in its reasonable
discretion and (2) the Site and Utility Plans. Lender shall have obtained a flood certificate
indicating that the location of the Premises is not within the 100-year flood plain or identified
as a special flood hazard area as defined by the Federal Emergency Management Agency, or if the
Premises is in such a flood plain or special flood hazard area, Borrower shall have provided Lender
with evidence of flood insurance maintained on the Premises in an amount and on terms and
conditions reasonably satisfactory to Lender.

     C. Environmental. Lender shall have completed such environmental due diligence of the Premises
as it deems necessary or advisable in its sole discretion, and Lender shall have approved the
environmental condition of the Premises in its sole discretion.

     D. Compliance With Representations, Warranties and Covenants. All of the representations and
warranties set forth in Section 5 shall be true, correct and complete as of the Closing
Date, and Borrower shall be in compliance with each of the covenants set forth in Section 6
as of the Closing Date. No event shall have occurred or condition shall exist or information shall
have been disclosed by Borrower or discovered by Lender which has had or would be reasonably likely
to have a Material Adverse Effect on the Premises, any of the Borrower Parties or Lender’s
willingness to consummate the transaction contemplated by this Agreement, as determined by Lender
in its sole and absolute discretion.

     E. Proof of Insurance. Borrower shall have delivered to Lender certificates of insurance and
copies of insurance policies showing that all insurance required by the Loan Documents and
providing coverage and limits satisfactory to Lender are in full force and effect.

     F. Legal Opinions. Borrower shall have delivered to Lender such legal opinions as Lender may
reasonably require all in form and substance reasonably satisfactory to Lender and its counsel.

     G. Fee and Closing Costs. Borrower shall have paid the Fee to Lender and shall have paid all
costs of the transactions described in this Agreement, including, without limitation, the cost of
title

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insurance premiums and all endorsements required by Lender, survey charges, UCC and litigation
search charges, the attorneys’ fees of Borrower, reasonable attorneys’ fees (not to exceed
$7,500.00) and expenses of Lender, the cost of the environmental due diligence undertaken pursuant
to Section 4.C, Lender’s site inspection costs and fees, stamp taxes, mortgage taxes,
transfer fees, escrow, filing and recording fees and UCC filing and recording fees (including
preparation, filing and recording fees for UCC continuation statements). Borrower shall have also
paid all real and personal property and other applicable taxes and assessments and other charges
relating to the Premises which are due and payable on or prior to the Closing Date as well as taxes
and assessments due and payable subsequent to the Closing Date but which Title Company requires to
be paid at Closing as a condition to the issuance of the title insurance policy described in
Section 4.A.

     H. Franchise Agreement. Lender shall have received a certificate (the “Franchisor
Certificate”) from Franchisor in form and substance acceptable to Lender which provides that the
Premises has been approved by Franchisor. If the Franchise Agreement has been entered into prior to
the Closing, the Franchisor Certificate shall also provide that the Franchise Agreement is valid,
binding and in full force and effect, with a term (inclusive of existing renewal options) which
will expire after the scheduled maturity date of the Note, and no events have occurred which could
constitute a default under the Loan Documents, and, to the extent Franchisor has a right of first
refusal in the Franchise Agreement that extends to the sale, transfer or conveyance of the
Premises, Franchisor waives all such rights of first refusal set forth in the Franchise Agreement
as to Lender and its successors and assigns.

     I. Development Documents; Borrower’s Architect Certification. (1) Lender, in its sole and
absolute discretion, shall have approved the Contract Documents, the Budget, the Schedule of
Values, the Architect’s Agreement, if Borrower is a party to the Architect’s Agreement, the General
Contract, the Borrower’s Architect and the General Contractor; Borrower shall have caused the
General Contractor to deliver a list to Lender and Title Company, certified by the General
Contractor, of (a) all materialmen, laborers, subcontractors, suppliers and any other parties
(collectively, the “Vendors”) who may claim statutory or common law liens as a result of furnishing
material or labor to the Premises or any portion thereof or interest therein, (b) the work or
materials the Vendors will perform or supply, and (c) the cost of such work or materials; and
Borrower shall have executed or delivered, as applicable, all Development Documents, including,
without limitation, a consent of the General Contractor to the collateral assignment of the General
Contract (the “Consent of General Contractor”), all in form and substance acceptable to Lender.

     (2) Borrower shall have delivered to Lender evidence in form and substance reasonably
satisfactory to Lender that the plans and specifications for the Improvements are in compliance
with all applicable building and zoning codes, ordinances and requirements.

     J. Management Agreement. The Management Agreement shall be in full force and effect. Lender
shall have approved the Management Agreement in its sole discretion and Manager and Borrower shall
have delivered to Lender such subordination agreements, collateral assignments of management
agreement and consents to collateral assignment of management agreement as Lender may require in
its sole discretion.

     K. Closing Documents. At or prior to the Closing Date, Lender or the Borrower Parties, as may
be appropriate, shall have executed and delivered or shall have caused to be executed and delivered
to Lender, or as Lender may otherwise direct, the Loan Documents and such other documents, payments
(including, without limitation, the Initial Equity Contribution), instruments and certificates, as
Lender may require in form acceptable to Lender.

     L. Letter of Credit. Borrower shall have delivered to Lender an irrevocable letter of credit
(“Letter of Credit”), in the amount of $2,000,000, in a form and from a lending institution
acceptable to Lender. The issuing bank must be rated a minimum of “AA” by Standard & Poor’s or
Moody’s. Borrower expressly acknowledges and agrees that any downgrade of the issuing bank and/or
any failure to

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maintain the Letter of Credit will constitute an Event of Default. Provided that at any time
following the issuance of a Certificate of Occupancy, Borrower shall have the option to pay, in one
or more installments (including regular monthly installments of principal and interest), the
principal balance of the Loan down by an amount of $1,455,000, at which time the requirement of the
Letter of Credit will be reduced by $1,000,000. Following the principal reduction of $1,455,000, if
Borrower elects to make additional principal payments through regular monthly installments of
principal and interest or otherwise, the Letter of Credit will be reduced on a dollar-for-dollar
basis. Furthermore, any requirement for the Letter of Credit will be terminated upon the Premises
achieving a Debt Service Coverage Ratio of 1:1.40 on a rolling 12-month basis.

     Upon fulfillment or waiver of all of the above conditions, Lender shall deposit funds
necessary to close this transaction with the Title Company and this transaction shall close in
accordance with the terms and conditions of this Agreement.

     5. Representations and Warranties of Borrower. The representations and warranties of Borrower
contained in this Section are being made by Borrower as of the Closing Date to induce Lender to
enter into this Agreement and consummate the transactions contemplated herein and shall survive the
Closing. Borrower represents and warrants to Lender as follows:

     A. Financial Information. (1) Borrower has delivered to Lender certain financial statements
and other information concerning the Borrower Parties in connection with the transaction described
in this Agreement (collectively, the “Financial Information”). The Financial Information is true,
correct and complete in all material respects; there have been no amendments to the Financial
Information since the date such Financial Information was prepared or delivered to Lender. Borrower
understands that Lender is relying upon the Financial Information and Borrower represents that such
reliance is reasonable. All annual financial statements included in the Financial Information were
prepared in accordance with GAAP and fairly present as of the date of such financial statements the
financial condition of each individual or entity to which they pertain. No change has occurred with
respect to the financial condition of any of the Borrower Parties or the Premises as reflected in
the Financial Information, which has not been disclosed in writing to Lender or has had, or could
reasonably be expected to result in, a Material Adverse Effect.

     (2) Borrower has delivered to Lender the Contract Documents. The Contract Documents have been
approved by the Borrower Parties and the General Contractor and will enable the Improvements to be
constructed for the use of the Premises as a Permitted Concept.

     B. Organization and Authority. Each of the Borrower Parties (other than individuals), as
applicable, is duly organized or formed, validly existing and in good standing under the laws of
its state of incorporation or formation. Borrower is qualified as a foreign corporation,
partnership or limited liability company, as applicable, to do business in each state where the
Premises is located, and each of the Borrower Parties is qualified as a foreign corporation,
partnership or limited liability company, as applicable, to do business in any other jurisdiction
where the failure to be qualified would reasonably be expected to result in a Material Adverse
Effect. All necessary action has been taken to authorize the execution, delivery and performance by
the Borrower Parties of this Agreement and the other Loan Documents. The person(s) who have
executed this Agreement on behalf of Borrower are duly authorized so to do. Borrower is not a
“foreign corporation”, “foreign partnership”, “foreign trust”, “foreign estate” or “foreign person”
(as those terms are defined by the Internal Revenue Code of 1986, as amended). Borrower’s U.S.
Federal Tax Identification number, Organization Identification number and principal place of
business are correctly set forth on the signature page of this Agreement. None of the Borrower
Parties, and no individual or entity owning directly or indirectly any interest in any of the
Borrower Parties, is an individual or entity whose property or interests are subject to being
blocked under any of the OFAC Laws and Regulations or is otherwise in violation of any of the OFAC
Laws and Regulations; provided, however, the representation contained in this sentence shall not
apply to any Person to the extent such Person’s interest is in or through a U.S. Publicly-Traded
Entity.

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     C. Enforceability of Documents. Upon execution by the Borrower Parties, this Agreement and the
other Loan Documents shall constitute the legal, valid and binding obligations of the Borrower
Parties, respectively, enforceable against the Borrower Parties in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
liquidation, reorganization and other laws affecting the rights of creditors generally and general
principles of equity.

     D. Litigation. There are no suits, actions, proceedings or investigations pending, or to the
best of its knowledge, threatened against or involving the Borrower Parties or the Premises before
any arbitrator or Governmental Authority, except for such suits, actions, proceedings or
investigations which, individually or in the aggregate, have not had, and would not reasonably be
expected to result in, a Material Adverse Effect.

     E. Absence of Breaches or Defaults. The Borrower Parties are not, and the authorization,
execution, delivery and performance of this Agreement and the other Loan Documents will not result,
in any breach or default under any other document, instrument or agreement to which any of the
Borrower Parties is a party or by which any of the Borrower Parties, the Premises or any of the
property of any of the Borrower Parties is subject or bound, except for such breaches or defaults
which, individually or in the aggregate, have not had, and would not reasonably be expected to
result in, a Material Adverse Effect. The authorization, execution, delivery and performance of
this Agreement and the other Loan Documents will not violate any applicable law, statute,
regulation, rule, ordinance, code, rule or order. The Premises is not subject to any right of first
refusal, right of first offer or option to purchase or lease granted to a third party.

     F. Utilities. All utility services and easements necessary for the construction of the
Improvements and the operation thereof as a Permitted Concept are available at the boundaries of
the Land, including water supply, storm and sanitary sewer facilities, gas, electric and telephone
facilities.

     G. Zoning; Compliance With Laws. The Premises is in compliance with all applicable zoning
requirements, and the use of the Premises as a Permitted Concept does not constitute a
nonconforming use under applicable zoning requirements. The Borrower Parties and the Premises are
in compliance with all Applicable Regulations except for such noncompliance which has not had, and
would not reasonably be expected to result in, a Material Adverse Effect.

     H. Area Development; Wetlands. No condemnation or eminent domain proceedings affecting the
Premises have been commenced or, to the best of Borrower’s knowledge, are contemplated. Neither the
Premises, nor to the best of Borrower’s knowledge, the real property bordering the Premises, are
designated by any Governmental Authority as a wetlands.

     I. Licenses and Permits; Access. All required licenses and permits, both governmental and
private, to begin construction of the Improvements are in full force and effect, except for such
licenses and permits the failure of which to obtain has not had, and would not reasonably be
expected to result in, a Material Adverse Effect. Adequate rights of access to public roads and
ways are available to the Premises for unrestricted ingress and egress and otherwise to permit
utilization of the Premises for their intended purposes, and all such public roads and ways have
been completed and dedicated to public use.

     J. Environmental. The representations and warranties of Borrower set forth in Section 2 of the
Environmental Indemnity Agreement, together with the corresponding definitions, are incorporated by
reference into this Agreement as if stated in full in this Agreement.

     K. Title to Premises; First Priority Lien. Fee title to the real property comprising the
Premises is vested in Borrower, free and clear of all liens, encumbrances, charges and security
interests of any nature whatsoever, except the Permitted Exceptions. Borrower is owner of all
Personal Property, free and clear of all liens, encumbrances, charges and security interests of any
nature whatsoever, and

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no Affiliate of Borrower owns any of the Personal Property. Upon Closing, Lender shall have a first
priority lien upon and security interest in the Premises pursuant to the Mortgage and the UCC-1
Financing Statements.

     L. No Mechanics’ Liens. Except as set forth on Exhibit C attached hereto, there are no
delinquent accounts payable or mechanics’ liens in favor of any materialman, laborer, or any other
person or entity in connection with labor or materials furnished to or performed on any portion of
the Premises; and no work has been performed or is in progress nor have materials been supplied to
the Premises or agreements entered into for work to be performed or materials to be supplied to the
Premises prior to the date hereof, which will be delinquent on or before the Closing Date.

     M. Franchisor Provisions. The Premises have been approved by Franchisor and Franchisor has
either entered into a franchise, license or area development agreement with Borrower with respect
to the Premises or has agreed to enter into such agreement with Borrower upon the completion of the
construction of the Improvements. If such franchise, license or area development agreement has been
entered into prior to the date of this Agreement: (1) Borrower has delivered to Lender a true,
correct and complete copy of the Franchise Agreement; (2) the Franchise Agreement is the only
agreement in effect with Franchisor with respect to the Premises; (3) the Franchise Agreement is in
full force and effect and constitutes the legal, valid and binding obligations of the parties to
the Franchise Agreement, enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, liquidation, reorganization and other laws
affecting the rights of creditors generally and general principles of equity; (4) none of the
Borrower Parties has assigned, transferred, mortgaged, hypothecated or otherwise encumbered the
Franchise Agreement or any rights thereunder or any interest therein, and none of the Borrower
Parties has received any notice that Franchisor has made any assignment, pledge or hypothecation of
all or any part of its rights or interest in the Franchise Agreement; (5) no notice of default from
Franchisor has been received under the Franchise Agreement which has not been cured and no notice
of default to Franchisor has been given under the Franchise Agreement which has not been cured; (6)
no event has occurred and no condition exists which, with the giving of notice or the lapse of time
or both, would constitute a default under the Franchise Agreement; and (7) theFranchise
Agreement has a term (inclusive of existing renewal options) which will expire after the scheduled
maturity date of the Amended and Restated Note.

     N. Money Laundering. (1) Borrower has taken all reasonable measures, in accordance with all
applicable Anti-Money Laundering Laws, with respect to each holder of a direct or indirect interest
in the Borrower Parties, to assure that funds invested by such holders in the Borrower Parties are
derived from legal sources; provided, however, none of the foregoing shall apply to any Person to
the extent that such Person’s interest is in or through a U.S. Publicly-Traded Entity.

     (2) To Borrower’s knowledge after making due inquiry, neither any of the Borrower Parties nor
any holder of a direct or indirect interest in the Borrower Parties (a) is under investigation by
any Governmental Authority for, or has been charged with, or convicted of, any violation of any
Anti-Money Laundering Laws, or drug trafficking, terrorist-related activities or other money
laundering predicated crimes or a violation of the BSA, (b) has been assessed civil penalties under
these or related laws, or (c) has had any of its funds seized or forfeited in an action under these
or related laws; provided, however, none of the foregoing shall apply to any Person to the extent
that such Person’s interest is in or through a U.S. Publicly-Traded Entity.

     (3) Borrower has taken reasonable steps, consistent with industry practice for comparable
organizations and in any event as required by law, to ensure that the Borrower Parties are and
shall be in compliance with all (a) Anti-Money Laundering Laws and (b) OFAC Laws and Regulations.

     O. Management Agreement. Borrower has delivered to Lender a true, correct and complete copy of
the Management Agreement. The Management Agreement is the only agreement in effect with Manager
with respect to the Premises. The Management Agreement is in full force and effect and

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constitutes the legal, valid and binding obligations of the parties to the Management Agreement,
enforceable in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, liquidation, reorganization and other laws affecting the rights
of creditors generally and general principles of equity. As it relates to the Premises, Borrower
has not assigned, transferred, mortgaged, hypothecated or otherwise encumbered the Management
Agreement or any rights thereunder or any interest therein, and Borrower has not received any
notice that Manager has made any assignment, pledge or hypothecation of all or any part of its
rights or interest in the Management Agreement. No notice of default from Manager has been received
under the Management Agreement that has not been cured and no notice of default to Manager has been
given under the Management Agreement which has not been cured. No event has occurred and no
condition exists which, with the giving of notice or the lapse of time or both, would constitute a
default under the Management Agreement.

     6. Covenants. Borrower covenants to Lender from and after the Closing Date and until all of
the Obligations are satisfied in full, as follows:

     A. Payment of the Note. Borrower shall punctually pay, or cause to be paid, the principal,
interest and all other sums to become due in respect of the Note and the other Loan Documents in
accordance with the Note and the other Loan Documents. Borrower shall authorize Lender to establish
arrangements whereby all scheduled payments made in respect of the Obligations are transferred by
Automated Clearing House Debit initiated by Lender directly from an account at a U.S. bank in the
name of Borrower to such account as Lender may designate or as Lender may otherwise designate.

     B. Title. Borrower shall maintain good and marketable fee simple title to the real property
comprising the Premises, and title to the Personal Property and the remainder of the Premises, free and clear of all liens, encumbrances, charges and other exceptions to title, except the
Permitted Exceptions or except as permitted by the Loan Documents. Lender shall have valid first
liens upon and security interests in the Premises, including the Personal Property, pursuant to the
Mortgage and the UCC-1 Financing Statements.

     C. Organization and Status of Borrower; Preservation of Existence. Each of the Borrower
Parties (other than individuals), as applicable, shall be validly existing and in good standing
under the laws of its state of incorporation or formation. Borrower shall be qualified as a foreign
corporation, partnership or limited liability company to do business in each state where the
Premises is located, and each of the Borrower Parties shall be qualified as a foreign corporation,
partnership or limited liability company in any other jurisdiction where the failure to be
qualified would reasonably be expected to result in a Material Adverse Effect. Borrower shall
preserve its current form of organization and shall not change its legal name, its state of
formation, nor, in one transaction or a series of related transactions, merge with or into, or
consolidate with, any other entity without providing, in each case, Lender with 30 days’ prior
written notice and obtaining Lender’s prior written consent (to the extent such consent is required
under Section 7 of this Agreement). In addition, Borrower shall require, and shall take reasonable
measures to comply with the requirement, that no individual or entity owning directly or indirectly
any interest in any of the Borrower Parties is an individual or entity whose property or interests
are subject to being blocked under any of the OFAC Laws and Regulations or is otherwise in
violation of any of the OFAC Laws and Regulations; provided, however, the covenant contained in
this sentence shall not apply to any Person to the extent that such Person’s interest is in or
through a U.S. Publicly-Traded Entity.

     D. Licenses and Permits. From and after the Completion Date, all required licenses and
permits, both governmental and private, to use and operate the Premises as a Permitted Concept
shall be maintained in full force and effect.

     E. Compliance With Laws Generally. The use and occupation of the Premises, and the condition
thereof, including, without limitation, any Restoration, shall comply with all Applicable

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Regulations now or hereafter in effect, including, without limitation, the OFAC Laws and
Regulations and Anti-Money Laundering Laws. In addition, the Borrower Parties shall comply with all
Applicable Regulations now or hereafter in effect. Without limiting the generality of the other
provisions of this Section, Borrower shall comply with the ADA, and all regulations promulgated
thereunder, as it affects the Premises.

     F. Compliance With Environmental Provisions. The covenants, obligations and agreements of
Borrower set forth in Sections 3 through 7 of the Environmental Indemnity Agreement, together with
the corresponding definitions, are incorporated by reference into this Agreement as if stated in
full in this Agreement.

     G. Financial Statements. From and after the Completion Date, within 45 days after the end of
each fiscal quarter and within 120 days after the end of each fiscal year of Borrower, Borrower
shall deliver to Lender (1) complete financial statements of the Borrower Parties including a
balance sheet, profit and loss statement, statement of cash flows and all other related schedules
for the fiscal period then ended; (2) income statements for the business at the Premises; (3)
standard hotel data of rooms sold and rooms available, as well as gross revenue breakdown of room
revenue from other revenue, so that occupancy ADR and RevPar Statistics can be calculated; and (4)
such other financial information as Lender may reasonably request in order to establish compliance
with the financial covenants in the Loan Documents, including, without limitation, Section
6.J of this Agreement. All such annual financial statements shall be prepared in accordance
with GAAP from period to period, and shall be certified to be accurate and complete by Borrower (or
the Treasurer or other appropriate officer of Borrower). In the event the property and business at
the Premises is ordinarily consolidated with other business for financial statement purposes, such
financial statements shall be prepared on a consolidated basis showing separately the sales,
profits and losses, assets and liabilities pertaining to the Premises with the basis for allocation
of overhead of other charges being clearly set forth. The financial statements delivered to Lender
need not be audited, but Borrower shall deliver to Lender copies of any audited financial
statements of Borrower which may be prepared, as soon as they are available. Borrower shall also
cause to be delivered to Lender copies of any financial statements required to be delivered to
Borrower by any tenants of the Premises.

     H. Lost Note. Borrower shall, if the Note is mutilated, destroyed, lost or stolen (a “Lost
Note”), promptly deliver to Lender, upon receipt from Lender of an affidavit and indemnity in a
form reasonably acceptable to Lender and Borrower stipulating that the Note has been mutilated,
destroyed, lost or stolen, in substitution therefor, a new promissory note containing the same
terms and conditions as the Lost Note with a notation thereon of the unpaid principal and accrued
and unpaid interest. Borrower shall provide fifteen (15) days’ prior notice to Lender before making
any payments to third parties in connection with the Lost Note.

     I. Inspections. Borrower shall, during normal business hours (or at any time in the event of
an emergency) and at reasonable intervals, (1) provide Lender and Lender’s officers, employees,
agents, advisors, attorneys, accountants, architects, and engineers with access to the Premises,
all drawings, plans, and specifications for the Premises in possession of any of the Borrower
Parties, all engineering reports relating to the Premises in the possession of any of the Borrower
Parties, the files, correspondence and documents relating to the Premises, and the financial books
and records, including lists of delinquencies, relating to the ownership, operation, and
maintenance of the Premises (including, without limitation, any of the foregoing information stored
in any computer files), (2) allow such persons to make such inspections, tests, copies, and
verifications as Lender considers necessary, and (3) if Borrower is in breach of the Debt Service
Coverage Ratio requirement set forth in the following subsection J, pay expenses reasonably
incurred by Lender from time to time in conducting such inspections, tests, copies and
verifications upon demand (such amounts to bear interest at the Default Rate if not paid upon
demand until paid).

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     J. Debt Service Coverage Ratio. From and after the Completion Date, Guarantor shall maintain a
Debt Service Coverage Ratio of at least 1.25:1 before distribution payouts and 1.0:1 after
distribution payouts, as determined as of Guarantor’s fiscal year end. For purposes of this
Section, the term “Debt Service Coverage Ratio” shall mean with respect to the twelve month period
of time immediately preceding the date of determination, the ratio calculated for such period of
time, each as determined in accordance with GAAP, of (1) earnings before Interest Expense, income
taxes, Depreciation and Amortization, plus or minus other non-recurring renovation/remodel expenses
funded with the proceeds of a loan or other non-operating sources to (2) principal and interest
payments on the aggregate first mortgage term debt.

     For purposes of this Section, the following terms shall be defined as set forth below:

     “Depreciation and Amortization” shall mean the depreciation and amortization accruing during
any period of determination with respect to Borrower and the other Borrower Parties, collectively,
as determined in accordance with GAAP.

     “Interest Expense” shall mean for any period of determination, the sum of all interest accrued
or which should be accrued in respect of all Debt of Borrower and the other Borrower Parties,
collectively, as determined in accordance with GAAP.

     K. Affiliate Transactions. Unless otherwise approved by Lender, all transactions between
Borrower and any of its Affiliates shall be on terms substantially as advantageous to Borrower as
those which could be obtained by Borrower in a comparable arm’s length transaction with a
non-Affiliate of Borrower.

     L. Compliance Certificates. Within 90 days after the end of each fiscal year of Borrower,
Borrower shall deliver a compliance certificate to Lender in a form to be provided by Lender in
order to establish that Borrower is in compliance in all material respects with all of its
obligations, duties and covenants under the Loan Documents.

     M. Franchise Agreement. From and after the Completion Date, the Franchise Agreement shall be
maintained in full force and effect. No event shall occur nor shall any condition exist which, with
the giving of notice or the lapse of time or both, would constitute a breach or default under the
Franchise Agreement. Borrower shall give prompt notice to Lender of any claim of default by or to
the franchisee under the Franchise Agreement and shall provide Lender with a copy of any default
notice given or received by the franchisee under the Franchise Agreement and any information
submitted or referenced in support of such claim of default. Borrower shall also give prompt notice
to Lender of any extensions or renewals of the Franchise Agreement and the expiration or
termination of the Franchise Agreement.

     N. Use of Disbursements. Borrower will use the Disbursements solely to construct the
Improvements, and it will not require and will not avail itself of any other extension of credit
for such purpose without Lender’s prior written consent; provided that, Borrower may use those
certain credit facilities obtained by Borrower from either First National Bank of Omaha or Fortress
Credit Corp., for the foregoing purposes without Lender’s prior written consent.

     O. Contract Documents. Following approval by Lender, the Contract Documents, including,
without limitation, the location of the Improvements depicted on the Site and Utility Plans, will
not be changed or altered in any respect without Lender’s prior written consent except as allowed
in the Disbursement Agreement.

     P. OFAC Laws and Regulations. Borrower shall immediately notify Lender in writing if any
individual or entity owning directly or indirectly any interest in any of the Borrower Parties or
any director, officer, member, manager or partner of any of such holders is an individual or entity
whose property or interests are subject to being blocked under any of the OFAC Laws and Regulations
or is otherwise in

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violation of any of the OFAC Laws and Regulations, or is under investigation by any governmental
entity for, or has been charged with, or convicted of, drug trafficking, terrorist-related
activities or any violation of Anti-Money Laundering Laws, has been assessed civil penalties under
these or related laws, or has had funds seized or forfeited in an action under these or related
laws; provided, however, the covenant contained in this sentence shall not apply to any Person to
the extent that such Person’s interest is in or through a U.S. Publicly-Traded Entity.

     Q. Management Agreement. The Management Agreement shall be maintained in full force and
effect. No event shall occur nor shall any condition exist which, with the giving of notice or the
lapse of time or both, would constitute a breach or default under the Management Agreement.
Borrower shall give prompt notice to Lender of any claim of default by or to the Manager under the
Management Agreement and shall provide Lender with a copy of any default notice given or received
by the Manager under the Management Agreement and any information submitted or referenced in
support of such claim of default. Borrower shall also give prompt notice to Lender of the
expiration or termination of the Management Agreement.

     7. Prohibition on Change of Control and Pledge. A. Without limiting the terms and conditions
of Section 3.09 of the Mortgage, Borrower agrees that, from and after the Closing Date and until
all of the Obligations are satisfied in full, without the prior written consent of Lender: (1) no
Change of Control shall occur; and (2) no interest in any of the Borrower Parties shall be pledged,
encumbered, hypothecated or assigned as collateral for any obligation of any of the Borrower
Parties (each, a “Pledge”). In addition, no interest in any of the Borrower Parties, or in any
individual or person owning directly or indirectly any interest in any of the Borrower Parties,
shall be transferred, assigned or conveyed to any individual or person whose property or interests
are subject to being blocked under any of the OFAC Laws and Regulations or who is in violation of
any of the OFAC Laws and Regulations, and any such transfer, assignment or conveyance shall not be
effective until the transferee has provided written certification to Borrower and Lender that (x)
the transferee or any person who owns directly or indirectly any interest in transferee, is not an
individual or entity whose property or interests are subject to being blocked under any of the OFAC
Laws and Regulations or is otherwise in violation of the OFAC Laws and Regulations, and (y) the
transferee has taken reasonable measures to assure than any individual or entity who owns directly
or indirectly any interest in transferee, is not an individual or entity whose property or
interests are subject to being blocked under any of the OFAC Laws and Regulations or is otherwise
in violation of the OFAC Laws and Regulations; provided, however, the covenant contained in this
sentence shall not apply to any Person to the extent that such Person’s interest is in or through a
U.S. Publicly-Traded Entity.

     B. Lender’s consent to a Change of Control or Pledge shall be subject to the satisfaction of
such conditions as Lender shall determine in its sole discretion, including, without limitation,
(1) the execution and delivery of such modifications to the terms of the Loan Documents as Lender
shall request, (2) the proposed Change of Control or Pledge having been approved by each of the
rating agencies which have issued ratings in connection with any Securitization of the Loan as well
as any other rating agency selected by Lender, and (3) the proposed transferee having agreed to
comply with all of the terms and conditions of the Loan Documents (including any modifications
requested by Lender pursuant to clause (1) above). In addition, any such consent shall be
conditioned upon payment by Borrower to Lender of (a) a fee equal to one percent (1%) of the then
outstanding principal balance of the Note and (b) all out-of-pocket costs and expenses incurred by
Lender in connection with such consent, including, without limitation, reasonable attorneys’ fees.
Lender shall not be required to demonstrate any actual impairment of its security or any increased
risk of default hereunder in order to declare the Obligations immediately due and payable upon a
Change of Control or Pledge in violation of this Section. The provisions of this Section shall
apply to every Change of Control or Pledge regardless of whether voluntary or not, or whether or
not Lender has consented to any previous Change of Control or Pledge.

     8. Transaction Characterization. A. It is the intent of the parties hereto that this Agreement
and the other Loan Documents are a contract to extend a financial accommodation (as such

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term is used in the Code) for the benefit of Borrower and that the Loan Documents evidence one
unitary, unseverable transaction pertaining to the Premises.

     B. It is the intent of the parties hereto that the business relationship created by the Loan
Documents is solely that of creditor and debtor and has been entered into by both parties in
reliance upon the economic and legal bargains contained in the Loan Documents. None of the
agreements contained in the Loan Documents is intended, nor shall the same be deemed or construed,
to create a partnership (either de jure or de facto) between Borrower and Lender, to make them
joint venturers, to make Borrower an agent, legal representative, partner, subsidiary or employee
of Lender, nor to make Lender in any way responsible for the debts, obligations or losses of
Borrower.

     9. Default and Remedies. A. Each of the following shall be deemed an event of default by
Borrower (each, an “Event of Default”):

     (1) If any representation or warranty of any of the Borrower Parties set forth in any of the
Loan Documents is false in any material respect when made, or if any of the Borrower Parties
renders any statement or account which is false in any material respect.

     (2) If any principal, interest or other monetary sum due under the Note, the Mortgage or any
other Loan Document is not paid within five days after the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lender shall not be entitled to
exercise its rights and remedies set forth below unless and until Lender shall have given Borrower
written notice thereof and a period of five days from the delivery of such notice shall have
elapsed without such Event of Default being cured.

     (3) If Borrower fails to observe or perform any of the other covenants, conditions, or
obligations of this Agreement; provided, however, if any such failure does not involve the payment
of any monetary sum, is not willful or intentional, does not place any rights or interest in
collateral of Lender in immediate jeopardy, and is within the reasonable power of Borrower to
promptly cure after receipt of notice thereof, all as determined by Lender in its reasonable
discretion, then such failure shall not constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and until Lender shall have given Borrower notice thereof and a
period of 30 days shall have elapsed, during which period Borrower may correct or cure such
failure, upon failure of which an Event of Default shall be deemed to have occurred hereunder
without further notice or demand of any kind being required. If such failure cannot reasonably be
cured within such 30-day period, as determined by Lender in its reasonable discretion, and Borrower
is diligently pursuing a cure of such failure, then Borrower shall have a reasonable period to cure
such failure beyond such 30-day period, which shall not exceed 90 days after receiving notice of
the failure from Lender. If Borrower shall fail to correct or cure such failure within such 90-day
period, an Event of Default shall be deemed to have occurred hereunder without further notice or
demand of any kind being required.

     (4) If any of the Borrower Parties becomes insolvent within the meaning of the Code, files or
notifies Lender that it intends to file a petition under the Code, initiates a proceeding under any
similar law or statute relating to bankruptcy, insolvency, reorganization, winding up or adjustment
of debts (collectively, an “Action”), becomes the subject of either a petition under the Code or an
Action, or is not generally paying its debts as the same become due. Notwithstanding the foregoing,
the filing of an involuntary bankruptcy proceeding against any of the Borrower Parties shall not be
an Event of Default herein provided that such case or proceeding is dismissed with prejudice within
60 days of the filing thereof.

     (5) If there is an “Event of Default” or a breach or default, after the passage of all
applicable notice and cure or grace periods, under any of the Other Agreements, or any other Loan
Document.

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     (6) If a final, nonappealable judgment is rendered by a court against any of the Borrower
Parties which (a) has a Material Adverse Effect on the operation of the Premises as a Permitted
Concept, or (b) is in an amount greater than $100,000.00 and not covered by insurance, and, in
either case, is not discharged or provision made for such discharge within 60 days from the date of
entry of such judgment.

     (7) If there is a breach or default, after the passage of all applicable notice and cure or
grace periods, under the Franchise Agreement, or if the Franchise Agreement terminates or expires
prior to the payment in full of the Note in accordance with its terms and a substitute agreement
for the terminated or expired agreement is not entered into with Franchisor prior to such
expiration or termination, which substitute agreement shall be in form and substance reasonably
satisfactory to Lender and shall expire after the scheduled maturity date of the Note.

     (8) If there is a breach or default, after the passage of all applicable notice and cure or
grace periods, under the Management Agreement, or if the Management Agreement terminates or expires
prior to the payment in full of the Note in accordance with its terms and a substitute agreement
for the terminated or expired agreement is not entered into with Manager prior to such expiration
or termination, which substitute agreement shall be in form and substance reasonably satisfactory
to Lender and shall expire after the scheduled maturity date of the Note.

     B. Upon the occurrence and during the continuance of an Event of Default, subject to the
limitations set forth in subsection A, Lender may declare all or any part of the obligations of
Borrower under the Note, this Agreement and any other Loan Document to be due and payable, and the
same shall thereupon become due and payable without any presentment, demand, protest or notice of
any kind except as otherwise expressly provided herein, and Borrower hereby waives notice of intent
to accelerate the obligations secured by the Mortgage and notice of acceleration. Thereafter,
Lender may exercise, at its option, concurrently, successively or in any combination, all remedies
available at law or in equity, including without limitation any one or more of the remedies
available under the Note, the Mortgage or any other Loan Document. Neither the acceptance of this
Agreement nor its enforcement shall prejudice or in any manner affect Lender’s right to realize
upon or enforce any other security now or hereafter held by Lender, it being agreed that Lender
shall be entitled to enforce this Agreement and any other security now or hereafter held by Lender
in such order and manner as it may in its absolute discretion determine. No remedy herein conferred
upon or reserved to Lender is intended to be exclusive of any other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the
Loan Documents to Lender, or to which Lender may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed expedient by Lender.

     10. Indemnity; Release. A. Initially capitalized terms in this Section that are not otherwise
defined in this Agreement shall have the meanings set forth in the Environmental Indemnity
Agreement. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and
hold harmless each of the Indemnified Parties for, from and against any and all claims, suits,
liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement and damages of whatever kind or nature
(including, without limitation, attorneys’ fees, court costs and other costs of defense)
(collectively, “Losses”) (excluding Losses suffered by an Indemnified Party directly arising out of
such Indemnified Party’s gross negligence or willful misconduct; provided, however, that the term
“gross negligence” shall not include gross negligence imputed as a matter of law to any of the
Indemnified Parties solely by reason of Borrower’s interest in the Premises or Borrower’s failure
to act in respect of matters which are or were the obligation of Borrower under the Loan Documents
and the Development Documents), and costs of Remediation (whether or not performed voluntarily),
engineers’ fees, environmental consultants’ fees, and costs of investigation (including but not
limited to sampling, testing, and analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas) imposed upon or incurred by or asserted
against any Indemnified Parties, and directly or indirectly arising out of or in any way relating
to any one or more

GECC Contract No. 14336001

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of the following: (1) any presence of any Hazardous Materials in, on, above, or under the Premises
introduced to the Premises prior to or during the ownership of the Premises by Borrower; (2) any
past, present or Threatened Release in, on, above, under or from the Premises regarding Hazardous
Materials introduced to the Premises prior to or during the ownership of the Premises by Borrower;
(3) any activity by Borrower, any person or entity affiliated with Borrower or any tenant or other
user of the Premises in connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production, manufacturing,
processing, refining, control, management, abatement, removal, handling, transfer or transportation
to or from the Premises of any Hazardous Materials at any time located in, under, on or above the
Premises; (4) any activity by Borrower, any person or entity affiliated with Borrower or any tenant
or other user of the Premises in connection with any actual or proposed Remediation of any
Hazardous Materials at any time located in, under, on or above the Premises, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including but not limited to
any removal, remedial or corrective action; (5) any past, present or threatened non-compliance or
violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Premises or operations thereon, regarding Hazardous Materials introduced to the
Premises prior to or during the ownership of the Premises by Borrower, including but not limited to
any failure by Borrower, any person or entity affiliated with Borrower or any tenant or other user
of the Premises to comply with any order of any Governmental Authority in connection with any
Environmental Laws; (6) the imposition, recording or filing or the threatened imposition, recording
or filing of any Environmental Lien encumbering the Premises regarding Hazardous Materials
introduced to the Premises prior to or during the ownership of the Premises by Borrower; (7) any
administrative processes or proceedings or judicial proceedings in any way connected with any
matter addressed in this Agreement; (8) any past, present or threatened injury to, destruction of
or loss of natural resources in any way connected with the Premises regarding Hazardous Materials
introduced to the Premises prior to or during the ownership of the Premises by Borrower, including
but not limited to costs to investigate and assess such injury, destruction or loss; (9) any acts
of Borrower, any person or entity affiliated with Borrower or any tenant or other user of the
Premises in arranging for disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Materials owned or possessed by Borrower, any person or entity
affiliated with Borrower or any tenant or other user, at any facility or incineration vessel owned
or operated by another person or entity and containing such or similar Hazardous Materials; (10)
any acts of Borrower, any person or entity affiliated with Borrower or any tenant or other user of
the Premises, in accepting any Hazardous Materials for transport to disposal or treatment
facilities, incineration vessels or sites selected by Borrower, any person or entity affiliated
with Borrower or any tenant or other user of the Premises, from which there is a Release, or a
Threatened Release of any Hazardous Materials which causes the incurrence of costs for Remediation;
(11) any personal injury, wrongful death, or property damage arising under any statutory or common
law or tort law theory regarding Hazardous Materials introduced to the Premises prior to or during
the ownership of the Premises by Borrower, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an abnormally dangerous
activity on or near the Premises; (12) any disclosures of information, financial or otherwise, (x)
made by (i) Lender or Lender’s employees, officers, agents and designees to Franchisor or any third
party as contemplated by Section 11.R of this Agreement, or (ii) any employee, officer, agent or
representative of Franchisor to Lender or any other Indemnified Party, or (y) obtained from any
credit reporting agency with respect to Borrower, any guarantor of the Loan, any Affiliate of
Borrower, any of the other Borrower Parties or any operator or lessee of the Premises; or (13) any
misrepresentation or inaccuracy in any representation or warranty by Borrower or material breach or
failure to perform by Borrower of any covenants or other obligations pursuant to this Agreement.
Notwithstanding the above, Borrower shall not be liable for the acts of tenants or other users
occurring after the Borrower no longer owns the Premises.

     B. Excluding losses suffered by Lender directly arising out of Lender’s gross negligence or
willful misconduct; provided, however, that the term “gross negligence” shall not include gross
negligence imputed as a matter of law to Lender solely by reason of Borrower’s interest in the
Premises or Borrower’s failure to act in respect of matters which are or were the obligation of
Borrower under the Loan Documents, Borrower fully and completely releases, waives and covenants not
to assert any claims,

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liabilities, actions, defenses, challenges, contests or other opposition against Lender, however
characterized, known or unknown, foreseen or unforeseen, now existing or arising in the future,
relating to this Agreement and any Hazardous Materials, Releases or Remediation on, at or affecting
the Premises.

     11. Miscellaneous Provisions.

     A. Notices. All notices, consents, approvals or other instruments required or permitted to be
given by either party pursuant to this Agreement or any of the other Loan Documents shall be in
writing and given by (i) hand delivery, (ii) facsimile, (iii) express overnight delivery service or
(iv) certified or registered mail, return receipt requested, and shall be deemed to have been
delivered upon (a) receipt, if hand delivered, (b) transmission, if delivered by facsimile, (c) the
next Business Day, if delivered by express overnight delivery service, or (d) the third Business
Day following the day of deposit of such notice with the United States Postal Service, if sent by
certified or registered mail, return receipt requested. Notices shall be provided to the parties
and addresses (or facsimile numbers, as applicable) specified below. If to Borrower: Summit
Hospitality V, LLC, 2701 S. Minnesota Avenue, Suite 6, Sioux Falls, South Dakota 57105, Attention:
Hulyn Farr, Telephone: (605) 361-9566, Telecopy: (605) 362-9388; and if to Lender: General Electric
Capital Corporation, 8377 East Hartford Drive, Suite 200 Scottsdale, Arizona 85255, Attention:
Collateral Management, Telephone: 480-585-4500, Telecopy: 480-585-2225.

     B. Real Estate Commission. Lender and Borrower represent and warrant to each other that they
have dealt with no real estate or mortgage broker, agent, finder or other intermediary in
connection with the transactions contemplated by this Agreement or the other Loan Documents. Lender
and Borrower shall indemnify and hold each other harmless from and against any costs, claims or
expenses, including attorneys’ fees, arising out of the breach of their respective representations
and warranties contained within this Section.

     C. Waiver and Amendment; Document Review. (1) No provisions of this Agreement or the other
Loan Documents shall be deemed waived or amended except by a written instrument unambiguously
setting forth the matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a waiver of the same
or any other matter on any future occasion.

     (2) In the event Borrower makes any request upon Lender requiring Lender or Lender’s attorneys
to review or prepare (or cause to be reviewed or prepared) any documents, plans, specifications or
other submissions in connection with or arising out of this Agreement or any of the other Loan
Documents, then Borrower shall (a) reimburse Lender promptly upon Lender’s demand for all
out-of-pocket costs and expenses incurred by Lender in connection with such review or preparation,
including, without limitation, reasonable attorneys’ fees, and (b) pay Lender a reasonable
processing and review fee.

     D. Captions. Captions are used throughout this Agreement and the other Loan Documents for
convenience of reference only and shall not be considered in any manner in the construction or
interpretation hereof.

     E. Lender’s Liability. Notwithstanding anything to the contrary provided in this Agreement or
the other Loan Documents, it is specifically understood and agreed, such agreement being a primary
consideration for the execution of this Agreement and the other Loan Documents by Lender, that (1)
there shall be absolutely no personal liability on the part of any shareholder, director, officer
or employee of Lender, with respect to any of the terms, covenants and conditions of this Agreement
or the other Loan Documents, (2) Borrower waives all claims, demands and causes of action against
Lender’s officers, directors, employees and agents in the event of any breach by Lender of any of
the terms, covenants and conditions of this Agreement or the other Loan Documents to be performed
by Lender and (3) Borrower shall look solely to the assets of Lender for the satisfaction of each
and every remedy of Borrower in the event of any breach by Lender of any of the terms, covenants
and conditions of this Agreement or the

GECC Contract No. 14336001

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other Loan Documents to be performed by Lender, such exculpation of liability to be absolute and
without any exception whatsoever.

     F. Severability. The provisions of this Agreement and the other Loan Documents shall be deemed
severable. If any part of this Agreement or the other Loan Documents shall be held invalid, illegal
or unenforceable, the remainder shall remain in full force and effect, and such invalid, illegal or
unenforceable provision shall be reformed by such court so as to give maximum legal effect to the
intention of the parties as expressed therein.

     G. Construction Generally. This Agreement and the other Loan Documents have been entered into
by parties who are experienced in sophisticated and complex matters similar to the transaction
contemplated by this Agreement and the other Loan Documents and are entered into by both parties in
reliance upon the economic and legal bargains contained therein and shall be interpreted and
construed in a fair and impartial manner without regard to such factors as the party which prepared
the instrument, the relative bargaining powers of the parties or the domicile of any party.
Borrower and Lender were each represented by legal counsel competent in advising them of their
obligations and liabilities hereunder.

     H. Further Assurances. Borrower will, at its sole cost and expense, do, execute, acknowledge
and deliver or cause to be done, executed, acknowledged and delivered all such further acts,
documents, conveyances, notes, mortgages, deeds of trust, assignments, security agreements,
financing statements and assurances as Lender shall from time to time reasonably require or deem
advisable to carry into effect the purposes of this Agreement and the other Loan Documents, to
perfect any lien or security interest granted in any of the Loan Documents and for the better
assuring and confirming of all of Lender’s rights, powers and remedies under the Loan Documents.

     I. Attorneys’ Fees. In the event of any judicial or other adversarial proceeding between the
parties concerning this Agreement or the other Loan Documents, the prevailing party shall be
entitled to recover its reasonable attorneys’ fees and other costs in addition to any other relief
to which it may be entitled.

     J. Entire Agreement. This Agreement and the other Loan Documents, together with any other
certificates, instruments or agreements to be delivered in connection therewith, constitute the
entire agreement between the parties with respect to the subject matter hereof, and there are no
other representations, warranties or agreements, written or oral, between Borrower and Lender with
respect to the subject matter of this Agreement and the other Loan Documents. Notwithstanding
anything in this Agreement and the other Loan Documents to the contrary, with respect to the
Premises, upon the execution and delivery of this Agreement by Borrower and Lender, any bid
proposals or loan commitments with respect to the transactions contemplated by this Agreement shall
be deemed null and void and of no further force and effect and the terms and conditions of this
Agreement shall control notwithstanding that such terms and conditions may be inconsistent with or
vary from those set forth in such bid proposals or loan commitments.

     K. Forum Selection; Jurisdiction; Venue; Choice of Law. Borrower acknowledges that this
Agreement and the other Loan Documents were substantially negotiated in the State of Arizona, this
Agreement and the other Loan Documents were executed by Lender in the State of Arizona and
delivered by Borrower in the State of Arizona, all payments under the Note will be delivered in the
State of Arizona and there are substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of any action or proceeding arising out
of this Agreement or any of the other Loan Documents, the parties hereto hereby expressly submit to
the jurisdiction of all federal and state courts located in the State of Arizona and Borrower
consents that it may be served with any process or paper by registered mail or by personal service
within or without the State of Arizona in accordance with applicable law. Furthermore, Borrower
waives and agrees not to assert in any such action, suit or proceeding that it is not personally
subject to the jurisdiction of such courts, that the action,

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suit or proceeding is brought in an inconvenient forum or that venue of the action, suit or
proceeding is improper. It is the intent of the parties hereto that all provisions of this
Agreement and the Note shall be governed by and construed under the laws of the State of Arizona,
without giving effect to its principles of conflicts of law. To the extent that a court of
competent jurisdiction finds Arizona law inapplicable with respect to any provisions of this
Agreement or the Note, then, as to those provisions only, the laws of the state where the Premises
is located shall be deemed to apply. Nothing in this Section shall limit or restrict the right of
Lender to commence any proceeding in the federal or state courts located in the state in which the
Premises is located to the extent Lender deems such proceeding necessary or advisable to exercise
remedies available under this Agreement or the other Loan Documents.

     L. Counterparts. This Agreement and the other Loan Documents may be executed in one or more
counterparts, each of which shall be deemed an original.

     M. Assignments by Lender; Binding Effect. Lender may assign in whole or in part its rights
under this Agreement, including, without limitation, in connection with any Transfer, Participation
or Securitization. Upon any unconditional assignment of Lender’s entire right and interest,
including all Lender’s duties and obligations, hereunder, Lender shall automatically be relieved,
from and after the date of such assignment, of liability for the performance of any obligation of
Lender contained herein. This Agreement and the other Loan Documents shall be binding upon and
inure to the benefit of Borrower and Lender and their respective successors and permitted assigns,
including, without limitation, any United States trustee, any debtor in possession or any trustee
appointed from a private panel.

     N. Survival. Except for the conditions of Closing set forth in Section 4, which shall
be satisfied or waived as of the Closing Date, all representations, warranties, agreements,
obligations and indemnities of Borrower and Lender set forth in this Agreement and the other Loan
Documents shall survive the Closing.

     O. Waiver of Jury Trial and Punitive, Consequential, Special and Indirect Damages. BORROWER
AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THIS WAIVER BY THE PARTIES HERETO
OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF
THEIR BARGAIN. FURTHERMORE, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM
THE OTHER AND ANY OF THE OTHER’S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER OR ANY OF THE OTHER’S AFFILIATES, OFFICERS,
DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT CONTEMPLATED HEREIN
OR RELATED HERETO. THE WAIVER BY BORROWER AND LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN.

     P. Transfers, Participations and Securitizations. (1) A material inducement to Lender’s
willingness to complete the transactions contemplated by the Loan Documents is Borrower’s agreement
that Lender may, at any time, complete a Transfer, Participation or Securitization with respect to
the Note, Mortgage or any of the other Loan Documents or any or all servicing rights with respect
thereto.

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     (2) Borrower agrees to cooperate in good faith with Lender in connection with any such
Transfer, Participation or Securitization of the Note, Mortgage or any of the other Loan Documents,
or any or all servicing rights with respect thereto, including, without limitation (a) providing
such documents, financial and other data, and other information and materials (the “Disclosures”)
which would typically be required with respect to the Borrower Parties and the Manager by a
purchaser, transferee, assignee, servicer, participant, investor or rating agency involved with
respect to such Transfer, Participation or Securitization, as applicable; provided, however, the
Borrower Parties, and the Manager shall not be required to make Disclosures of any confidential
information or any information which has not previously been made public unless required by
applicable federal or state securities laws; and (b) amending the terms of the transactions
evidenced by the Loan Documents to the extent necessary so as to satisfy the requirements of
purchasers, transferees, assignees, servicers, participants, investors or selected rating agencies
involved in any such Transfer, Participation or Securitization, so long as such amendments would
not have a Material Adverse Effect upon the Borrower Parties or the transactions contemplated
hereunder. Lender shall be responsible for preparing at its expense any documents evidencing the
amendments referred to in the preceding subitem (b).

     (3) Borrower consents to Lender providing the Disclosures, as well as any other information
which Lender may now have or hereafter acquire with respect to the Premises or Manager or the
financial condition of the Borrower Parties to each purchaser, transferee, assignee, servicer,
participant, investor or rating agency involved with respect to each Transfer, Participation or
Securitization, as applicable. Lender and Borrower (and their respective Affiliates) shall each pay
their own attorneys’ fees and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.

     (4) Notwithstanding anything to the contrary contained in this Agreement or the other Loan
Documents: (a) an Event of Default or a breach or default, after the passage of all applicable
notice and cure or grace periods, under any Loan Document or Other Agreement which relates to a
loan or sale/leaseback transaction which has not been the subject of a Securitization,
Participation or Transfer shall not constitute an Event of Default or a breach or default, as
applicable, under any Loan Document or Other Agreement which relates to a loan which has been the
subject of a Securitization, Participation or Transfer; (b) an Event of Default or a breach or
default, after the passage of all applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan which is included in any Loan Pool shall not
constitute an Event of Default or a breach or default, as applicable, under any Loan Document or
Other Agreement which relates to a loan which is included in any other Loan Pool; (c) the Loan
Documents and Other Agreement corresponding to the loans in any Loan Pool shall not secure the
obligations of any of the Borrower Parties contained in any Loan Document or Other Agreement which
does not correspond to a loan in such Loan Pool; and (d) the Loan Documents and Other Agreement
which do not correspond to a loan in any Loan Pool shall not secure the obligations of any of the
Borrower Parties contained in any Loan Document or Other Agreement which does correspond to a loan
in such Loan Pool.

     Q. Estoppel Certificate. At any time, and from time to time, each party agrees, promptly and
in no event later than fifteen (15) days after a request from the other party, to execute,
acknowledge and deliver to the other party a certificate in the form supplied by the other party,
certifying: (a) to its knowledge, whether there are then any existing defaults by it or the other
party in the performance of their respective obligations under this Agreement or any of the other
Loan Documents, and, if there are any such defaults, specifying the nature and extent thereof; (b)
that no notice of default has been given or received by it under this Agreement or any of the other
Loan Documents which has not been cured, except as to defaults specified in the certificate; (c)
the capacity of the person executing such certificate, and that such person is duly authorized to
execute the same on behalf of it; and (d) any other information reasonably requested by the other
party in connection with this Agreement and the other Loan Documents.

GECC Contract No. 14336001

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     R. Borrower authorizes its banks, creditors, suppliers, customers, and Franchisor to disclose
and release to Lender and its representatives any and all information they may request from time to
time regarding (a) any depository, loan or other credit account of Borrower; (b) the status of the
Franchise Agreement; (c) the affairs and financial condition of Borrower, any other Borrower Party,
or any operator or lessee of the Premises; and (d) the business operations at the Premises,
including unit level and entity level operating results. Borrower also authorizes Lender and its
representatives to obtain personal and business credit reports and asset reports with respect to
Borrower and the other Borrower Parties and to answer questions about its credit experience with
Borrower and the other Borrower Parties. All of the information which Lender or its representatives
obtain from time to time in accordance with this Section, together with any and all other
information which Lender or its representatives now possess or in the future may acquire with
respect to Borrower, any of the other Borrower Parties, the Collateral, or the business operations
at the Premises, is referred to collectively as the “Borrower Information.” Borrower authorizes
Lender to disclose the Borrower Information to (i) Lender’s Affiliates and professional advisors
and consultants; (ii) Franchisor, upon written request by Franchisor; and (iii) any proposed
transferee, purchaser, assignee, servicer, participant, investor, or ratings agency, with respect
to any proposed Lender Transfer or sale of any of the Collateral. Borrower also authorizes to
distribute to, or publish for the use by, any third-parties for statistical analysis purposes the
unit-level or corporate level operating results for the Premises and Borrower prepared by Lender
from financial statements obtained from Borrower; provided, however, that such results shall not be
identified as relating to Borrower or any of the other Borrower Parties.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE FOLLOWS]

GECC Contract No. 14336001

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     IN WITNESS WHEREOF, Borrower and Lender have entered into this Agreement as of the
date first above written.

	 	 	 	 	 	 	 

	 

	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION,

a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	
	 	Printed Name:	 	 
	 

	 		 	Its: 	 	 

	 	 	 	 	 

	 

	 	BORROWER:	 	 
	 
	 	 	 	 
	 

	 	SUMMIT HOSPITALITY V, LLC,

a South Dakota limited liability company
	 	 

	 	 	 	 	 

	 

	 	BY: SUMMIT HOTEL PROPERTIES, LLC, a South
	 	 
	 

	 	Dakota limited liability company, its Sole Member	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	            /s/ Kerry W. Boekelheide
 	 
	 		 Printed Name:   Kerry W. Boekelheide 	 
	 		 Its: Chief Executive Officer 	 
	 

GECC Contract No. 14336001

GECC Property No. 54335

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24

 

	 	 	 	 	 	 	 

	STATE OF 
ARIZONA 

	 	 	)

	 	 
	 
	 

	 	 	)	 	SS.	 
	COUNTY OF
MARICOPA

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me on                                         , 2008
by                    ,            of General Electric Capital Corporation,
a Delaware corporation, on behalf of the corporation.

Notary Public

My Commission Expires:

	 	 	 	 	 	 	 

	STATE OF ARIZONA 

	 	 	)

	 	 
	 
	 

	 	 	)	 	SS.	 
	COUNTY OF MARICOPA

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me on February 26, 2008 by Kerry W.
Boekelheide, the Chief Executive Officer of Summit Hotel Properties, LLC, a South Dakota limited
liability company, the Sole Member of Summit Hospitality V, LLC, a South Dakota limited liability
company (the “Company”), on behalf of the Company.

/s/
Jennifer L. Curry

Notary Public

My Commission Expires:

3/24/2011

GECC Contract No. 14336001

GECC Property No.          

San Antonio, TX

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EXHIBIT A

DESCRIPTION OF PREMISES

(To be attached)

GECC Contract No. 14336001

GECC Property No. 54335

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EXHIBIT B

Form of Amended and Restated Note

[attached]

GECC Contract No. 14336001

GECC Property No. 54335

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Exhibit C

(Disclosures per Section 5L)

None

GECC Contract No. 14336001

GECC Property No. 54335

San Antonio, TXexv10w23

Exhibit 10.23

CONSTRUCTION LOAN AGREEMENT

(Arizona — Income Property)

By and Between

SUMMIT HOTEL PROPERTIES, LLC,

as Borrower

and

COMPASS BANK,

as Bank

 

 

CONSTRUCTION LOAN AGREEMENT

(Arizona — Income Property)

     This Construction Loan Agreement (“Agreement”) is dated for reference purposes as of September
17, 2008, between SUMMIT HOTEL PROPERTIES, LLC, a South Dakota limited liability company (the
“Borrower”), and COMPASS BANK, an Alabama banking corporation (the “Bank”).

Factual Background

     A. Bank has agreed to make a construction loan to Borrower in the maximum principal amount
(the “Maximum Loan Amount”) of Nineteen Million Two Hundred Fifty Thousand and No/100 Dollars
($19,250,000.00) (the “Loan”). Borrower will use the Loan to construct a 164-room Courtyard
Marriott Hotel and related improvements (the “Improvements”) on real property (the “Land”) owned by
Borrower and located in Coconino County, Arizona, as described in Exhibit A. Borrower will also use
the Loan to pay other costs and expenses related to the acquisition and development of the Land.
Borrower intends to complete construction of the Improvements on or before November 17, 2009 (the
“Completion Date”).

     B. The Improvements are described in plans and specifications (the “Plans and Specifications”)
which were prepared by Mind’s Eye Architecture, Inc.. The Improvements will be constructed by
Wespac Construction, Inc. (“Contractor”). Exhibit C more fully describes the Improvements and Plans
and Specifications.

     C. Borrower is executing a promissory note (the “Note”) payable to Bank evidencing the Loan.
The Note is to be secured by a Deed of Trust, Assignment of Rents and Leases, Security Agreement
and Fixture Filing (the “Deed of Trust”) covering the Land and Improvements and certain other
property. In this Agreement, the “Property” refers to all or any part of the property affected by
the Deed of Trust, or any interest in all or any part of it, as the context may require.

     D. Borrower is also executing an Environmental Indemnity Agreement (the “Borrower’s
Indemnity”) in connection with the Loan. In Borrower’s Indemnity, Borrower agrees to indemnify Bank
and certain other Indemnified Parties (as identified in that indemnity) against liability arising
from certain environmental, construction and other risks which may result from Bank making the Loan
to Borrower. Notwithstanding any provision of any Loan Document, Borrower’s obligations under
Borrower’s Indemnity are not secured by the Deed of Trust.

     E. This Agreement, the Note and the Deed of Trust, together with all of their exhibits, and
all other documents which evidence, guaranty, secure or otherwise pertain to the Loan, collectively
constitute the “Loan Documents.” The Loan Documents include the documents marked on the attached
Exhibit D.

 

 

     Therefore, Bank and Borrower agree as follows:

Agreement

1. Disbursement.

     1.1 Cost Breakdown.

          (a) Bank shall make disbursements of the Loan based on a detailed breakdown in the form
attached hereto as Exhibit B (“cost breakdown”) of construction, financing and other development
costs. The initial cost breakdown, prepared by Borrower and approved by Bank, is attached as
Exhibit B.

          (b) Borrower shall submit to Bank an updated cost breakdown on a monthly basis during the term
of the Loan. Bank shall have the right to review and approve any revised cost breakdown, which
approval shall not be unreasonably withheld or delayed. The most recently approved cost breakdown
supercedes all previously approved cost breakdowns, Bank shall make disbursements of the Loan based
on the most recently approved cost breakdown.

          (c) If Borrower shall request, except for line items in the cost breakdown relating to
interest reserve, Bank shall not unreasonably withhold its consent to the reallocation of
undisbursed sums in any line item to other line items in the budget provided all of the following
terms and conditions are satisfied:

          (i) Borrower notifies Bank of the amount of the requested reallocation;

          (ii) Such request shall be made no more frequently than once per month;

          (iii) No Event of Default shall have occurred and be continuing; and

          (iv) On an aggregate basis, all undisbursed funds in the cost breakdown category for hard
costs or soft costs must be sufficient to fully pay all amounts allocated to such category, as
determined by Bank in its reasonable discretion.

     1.2 Loan in Balance; Borrower’s Funds Account.

          (a) As a material condition of the Loan and as a condition precedent to Bank’s duty to
disburse proceeds of the Loan, Borrower shall pay all project costs in excess of the Maximum Loan
Amount. Bank shall be obligated to disburse proceeds of the Loan only when the Loan is “in
balance.” Bank shall be obligated to disburse proceeds of the Loan only at such times as Borrower
has invested sufficient funds into the payment of project costs so that, in Bank’s reasonable
judgment, the undisbursed portion of the Loan shall be sufficient to complete the Improvements and
pay all project costs (including interest reserve). The determination as to whether or not the Loan
is “in balance” may be made by Bank at any time, including with each request for a disbursement of
the Loan. Project cost categories listed as contingencies on the cost breakdown shall be deemed to
be a project cost for purposes of loan balancing, provided

2

 

such contingency items may be reduced based on completion of construction, as determined by Bank.
Pursuant to the terms hereof, Borrower shall have the right to reallocate budget line items.
Borrower shall, within fifteen (15) days after written notice from Bank that the Loan is not “in
balance,” at Borrower’s option, either deposit with Bank in an interest bearing account being
maintained at Bank in the name of Borrower (the “Borrower’s Funds Account”), the amount necessary
to put the Loan “in balance,” or pay all project costs until such time as the Loan is “in balance.”

          (b) Borrower and Bank hereby acknowledge and agree that, in determining whether the Loan is
“in balance,” Bank shall look at project totals with respect to hard costs and soft costs and not
on an individual line item basis under any hard costs or soft costs category.

          (c) At any time, Bank may evaluate the sufficiency of undisbursed Loan funds allocated for
payment of interest (“Interest Reserve”), exercising its reasonable judgment in light of cost
overruns or change orders. Based on Bank’s evaluation of this data, the Loan may be “out of
balance.” If this happens, Bank may exercise its rights under clause (a) above, or if it so
chooses, Bank may make written demand on Borrower to pay all future interest out of Borrower’s own
funds until the Interest Reserve is sufficient in Bank’s reasonable judgment to cover any and all
such amounts which might become due during the remaining term of the Loan.

     1.3 Disbursement Conditions, Amounts and Procedures.

          The Disbursement Schedule attached as Exhibit E sets forth disbursement conditions, amounts
and procedures applicable to the Loan. Bank shall disburse the Loan as described in Exhibit E and
elsewhere in this Agreement.

     1.4 Loan Fee.

     Together with the execution hereof, Borrower shall pay to the Bank on behalf of the Bank a
loan fee in immediately available funds in the amount of One Hundred Thousand and 00/100 Dollars
($100,000.00).

     1.5 Loan Phases.

     The Loan shall consist of three phases, the “Construction Period”, the “Stabilization Period”
and the “Permanent Period”. The “Construction Period” shall consist of the construction period for
construction and completion of the Improvements, which shall commence on the date of the first
construction advance under this Agreement, not to exceed sixty (60) days after the closing date of
the Loan, and continue for a period of twelve (12) months. The “Stabilization Period” shall
commence on the end of the Construction Period and continue for a period of eighteen (18) months.
The “Permanent Period” shall commence on the end of the Stabilization Period and extend for seven
(7) years from that date.

2. Covenants of the Borrower.

     Borrower promises to keep each of the covenants set forth below, unless Bank has waived
compliance in writing.

3

 

     2.1 Commencement and Completion of Improvements.

          (a) Borrower shall commence construction on or before November 17, 2008, and, thereafter,
diligently continue construction to completion.

          (b) By the Completion Date, Borrower shall have completed construction of all buildings and
common areas which are part of the Improvements, which shall consist of the structural components,
operating systems and all other elements of such buildings, subject to any Force Majeure Event
which shall extend the Completion Date for the same period of time as any Force Majeure Event
(subject to any time limitations in the definition of “Force Majeure Event”). The Improvements
shall be deemed complete for all purposes of this Agreement when they have been substantially
completed in accordance with the Plans and Specifications, as evidenced by the written
certification of the inspecting architect in a form reasonably satisfactory to Bank, and Bank has
received evidence reasonably satisfactory to it that:

          (i) The completed Improvements have been inspected and finally approved by the appropriate
governmental authorities;

          (ii) All costs and liens relating to the completed Improvements have been paid or discharged.

     2.2 Requirements.

          Borrower shall construct the Improvements in a good and workmanlike manner in accordance with
sound building practices as well as the Plans and Specifications. Borrower shall comply with all
existing and future laws, regulations, orders, building codes, restrictions and requirements of,
and all agreements with and commitments to, all governmental, judicial or legal authorities having
jurisdiction over the Property, including those pertaining to the construction, sale or leasing of
the Improvements, and with all recorded covenants and restrictions affecting the Property (all
collectively, the “Requirements”).

     2.3 Changes.

          (a) Borrower agrees to provide Bank with copies of all change orders, together with all
additional documents that Bank may reasonably require. These documents may include the following:
(i) Plans and Specifications indicating the change; (ii) a written description of the change and
related working drawings; and (iii) a written estimate of the cost of the change.

          (b) Borrower shall obtain Bank’s prior written approval, which approval shall not be
unreasonably withheld or delayed, of any change in the Plans and Specifications which:

          (i) adversely affects the value of Bank’s security; or

          (ii) regardless of cost, is a material change in structure or design; or

          (iii) would delay completion of the Improvements beyond the Completion Date.

4

 

          (c) Borrower shall also obtain Bank’s prior written approval, which approval shall not be
unreasonably withheld or delayed, of any change in the Plans and Specifications, the general
contract or any subcontract (whether positive or negative) which exceeds One Hundred Thousand and
No/100 Dollars ($100,000.00) in amount. Also, the prior written approval of Bank shall be obtained
for any change in any work or materials which, when added to all prior changes not previously
approved by Bank, exceeds Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in aggregate
amount (whether positive or negative).

          (d) In addition, Borrower shall obtain Bank’s prior written approval of all material changes
in the scope or general conditions of the Construction Contract (as such term is defined in Exhibit
C), or any other contracts for the construction of the Improvements. Finally, Borrower shall obtain
from the appropriate governmental entity all approvals of any material changes in plans,
specifications, work, materials or contracts that are required by any of the Requirements.

     2.4 Construction Information and Verification.

          (a) Bank shall have the right to request additional information from Borrower from time to
time during the term of the Loan. Bank may request the following information, if Bank, through any
inspecting architect or construction administrator, reasonably determines that there has been a
material and adverse change in the construction of the Improvements. In such case, and within
fifteen (15) days after receiving written notice from Bank, Borrower shall deliver to Bank all of
the following information and documents that Bank may reasonably request:

          (i) A current, complete and correct list showing the name, address and telephone number of
each contractor, subcontractor and material supplier engaged in connection with the construction of
the Improvements, and the total dollar amount of each contract and subcontract (including any
changes) together with the amounts paid through the date of the list;

          (ii) True and correct copies of the most current versions of all executed contracts and
subcontracts identified in the list described in clause (i) above, including any changes;

          (iii) A current construction progress schedule showing the progress of construction and the
projected sequencing and completion times for uncompleted work, all as of the date of the schedule;
and

          (iv) Any update to any item described above, which Borrower may have previously delivered to
Bank.

          (b) Upon the occurrence and continuation of an Event of Default, or if Bank, through any
inspecting architect or construction administrator, reasonably determines that there has been a
material and adverse change in the construction of the Improvements and provides prior written
notice to Borrower, Borrower expressly authorizes Bank to contact the Architect, Contractor or any
contractor, subcontractor, material supplier, surety or any governmental authority or agency to
verify any information disclosed in accordance with this Section.

5

 

          (c) If based on the reports of the inspecting architect and based on any construction progress
schedule or other materials submitted by Borrower, Bank, in its reasonable judgment, determines
that the Improvements will not be completed by the Completion Date, subject to a Force Majeure
Event (subject to any time limitations in the definition of “Force Majeure Event”), Bank may
request Borrower in writing to reschedule the work of construction to permit timely completion.
Within fifteen (15) days after receiving such a request from Bank, Borrower shall deliver to Bank a
revised construction progress schedule showing completion of the Improvements by the Completion
Date, subject to a Force Majeure Event (subject to any time limitations in the definition of “Force
Majeure Event”).

     2.5 Permits, Licenses and Approvals.

          Borrower shall properly obtain, comply with and keep in effect all permits, licenses and
approvals which are required to be obtained from governmental bodies in order to construct, occupy
and lease the Land and Improvements. At Bank’s request, Borrower shall promptly deliver copies of
all such permits, licenses and approvals to Bank.

     2.6 Purchase of Materials; Conditional Sales Contracts.

          Borrower shall not purchase or contract for any materials, equipment, furnishings, fixtures or
articles of personal property to be placed or installed on the Land or in any Improvements under
any security agreement or other agreement where the seller reserves or purports to reserve title or
the right of removal or repossession, or the right to consider them personal property after their
incorporation in the work of construction, unless Bank in each instance has authorized Borrower to
do so in writing.

     2.7 Site Visits; Right to Stop Work.

          (a) Bank shall have the right at any reasonable time to enter and visit the Property for the
purposes of performing an appraisal, observing the work of construction and examining all
materials, plans, specifications, working drawings and other matters relating to the construction.
For purposes of these site visits, Borrower shall at all times maintain a full set of working
drawings at the construction site or at Borrower’s office. Bank shall also have the right to
examine, copy and review the books, records, accounting data and other documents of Borrower and
its contractors in Borrower’s possession which relate to the Property or construction of the
Improvements, and in connection therewith, Bank may conduct lien waiver audits. In each instance,
Bank shall give Borrower at least one (1) business days’ prior written notice before entering the
Property. Bank shall make best faith efforts to avoid interfering with Borrower’s use of the
Property when exercising any of the rights granted in this Section.

          (b) If Bank, through any inspecting architect or construction administrator, in its reasonable
judgment, determines that any work or materials fail to conform to the Requirements, Bank may
withhold disbursements relating to any such non-conformity until the matter is corrected. If this
occurs, Borrower shall promptly correct the work to Bank’s reasonable satisfaction. No such action
by Bank shall affect Borrower’s obligation to complete the Improvements on or before the Completion
Date.

6

 

          (c) Bank is under no duty to visit the construction site, or to observe construction or to
examine any books or records. Any site visit, observation or examination by Bank shall be solely
for the purpose of protecting Bank’s rights and interests. No site visit, observation or
examination by Bank shall impose any liability on Bank or result in a waiver of any default of
Borrower, provided, however, Bank shall be responsible and liable for its own actions during any
site visit. In no event shall any site visit, observation or examination by Bank be a
representation that there has been or shall be compliance with the Plans and Specifications, that
the construction is free from defective materials or workmanship, or that the construction complies
with the Requirements or any other applicable governmental law. Neither Borrower nor any other
party is entitled to rely on any site visit, observation or examination by Bank. Bank owes no duty
of care to protect Borrower or any other party against, or to inform Borrower or any other party
of, any negligent or defective design or construction of the Improvements, or any other adverse
condition affecting the Property.

     2.8 Protection Against Lien Claims.

          Borrower shall promptly pay or otherwise discharge all claims and liens for labor done and
materials and services furnished in connection with the construction of the Improvements. Borrower
shall have the right to contest in good faith any claim or lien, provided that it does so
diligently and without prejudice to Bank or delay in completing the Improvements. Upon Bank’s
request, Borrower shall promptly provide a bond, cash deposit or other security which Bank in the
exercise of its reasonable judgment determines to be satisfactory.

     2.9 Signs and Publicity.

          At Bank’s request, and at Bank’s cost and expense, and subject to Borrower’s review and
approval, Borrower shall post signs on the Property for the purpose of identifying Bank as the
construction lender, subject to compliance with all applicable laws and restrictions. Borrower
shall not post such signs that identify Bank as the construction lender, except with Bank’s prior
written consent in each instance.

     2.10 Insurance.

     (a) Policies of insurance evidencing bodily injury, death or property damage liability
coverages in amounts not less than $1,000,000.00 (combined single limit), and an excess/umbrella
liability coverage in an amount not less than $5,000,000.00 shall be in effect with respect to
Borrower. Such policies must be written on an occurrence basis so as to provide blanket contractual
liability, broad form property damage coverage, and coverage for products and completed operations.

     (b) “Special Cause of Loss” insurance on the Improvements in an amount not less than the full
insurable value on a replacement cost basis of the insured Improvements. During the construction
period, such policy shall be written in the so-called “Builder’s Risk Completed Value Non-Reporting
Form” (or “Reporting Form” if the Improvements are a single family residential development) with no
coinsurance requirement and shall contain a provision granting the insured permission to complete.

7

 

     (c) If applicable, evidence of worker’s compensation insurance coverage reasonably
satisfactory to Bank.

     (d) If the Land, or any part thereof, lies within a “special flood hazard area” as designated
on maps prepared by the Department of Housing and Urban Development, a National Flood Insurance
Association standard flood insurance policy, plus insurance from a private insurance carrier if
necessary, for the duration of the Loan in the amount of the full insurable value of the
Improvements.

     (e) Such other insurance as Bank may reasonably require, which may include, without
limitation, rent abatement and/or business loss.

All insurance policies shall (i) be issued by an insurance company having a rating of “A” VII or
better by A.M. Best Co., in Best’s Rating Guide, (ii) name Bank as an additional insured on all
liability insurance and as mortgagee and loss payee on all casualty insurance, (iii) provide that
Bank is to receive thirty (30) days written notice prior to non-renewal or cancellation, (iv) be
evidenced by a certificate of insurance to be held by Bank, and (v) be in form and amounts
reasonably acceptable to Bank.

     2.11 Income from Property.

          Borrower shall first apply all income from leases, and all other income derived from the
Property, to pay costs and expenses associated with the ownership, maintenance, development,
operation and marketing of the Land and Improvements, including all amounts then required to be
paid under the Loan Documents, before using or applying such income for any other purpose or using
any interest reserve.

     2.12 Payment of Expenses.

          Borrower shall pay Bank’s reasonable costs and expenses incurred in connection with the
making, disbursement and administration of the Loan, as well as any revisions, extensions, renewals
or “workouts” of the Loan, and in the exercise of any of Bank’s rights or remedies under this
Agreement, except to the extent prohibited by law. Such costs and expenses for making the Loan
include charges for title insurance (including endorsements), filing, recording and escrow charges,
fees for appraisal, architectural and engineering review, construction services and environmental
services, legal fees and expenses of Bank’s counsel and any other reasonable fees and costs for
services, provided Bank may not charge Borrower for any in-house or internal reviews or functions.
Borrower acknowledges that amounts payable under this Section are not included in any loan or
commitment fees for the Loan. All such sums incurred by Bank and not immediately reimbursed by
Borrower shall be considered an additional loan to Borrower secured by the Deed of Trust and shall
bear interest at the Default Rate provided in the Note from the date of Bank’s demand for payment.
Notwithstanding anything contained herein to the contrary, Borrower and Bank hereby acknowledge and
agree that, prior to closing the Loan, Bank shall have provided Borrower a detailed settlement
statement or a list of closing costs that will be paid by Borrower closing up the loan pursuant to
the terms and conditions of this Section 2.12. As a condition precedent to closing the Loan, the
parties must

8

 

mutually agree on the amount and items set forth on any such settlement statement or closing list.

     2.13 Financial and Other Information of Borrower.

          Borrower shall keep true and correct financial books and records, using generally accepted
accounting principles (“GAAP”), or such other accounting principles as Bank in its reasonable
judgment may find acceptable from time to time. Borrower shall provide to Bank the following:

          (a) Annual Borrower. Commencing December 31, 2008, as soon as available, and in any
event within one hundred (120) days of the end of each fiscal year of Borrower during the term of
the Loan, Borrower shall furnish to Bank Borrower’s consolidated audited annual financial
statements including balance sheet, income statement, cash flow and schedule of contingent
liabilities, in form and substance satisfactory to Bank respecting the condition of Borrower.

          (b) Quarterly Borrower. Commencing September 30, 2008, as soon as available, and, in
any event, within forty-five (45) days of the end of each fiscal quarter, during the term of the
Loan, Borrower shall cause to be furnished to Bank quarterly internally prepared on a tax basis
financial statements including balance sheet and income statement for such fiscal quarter, prepared
by Borrower in form and substance satisfactory to Bank respecting the condition of the Project.

          (c) Annual Project. Commencing December 31, 2009, as soon as available, and, in any
event, within one hundred (120) days of the end of each fiscal year, during the term of the Loan,
Borrower shall cause to be furnished to Bank internally prepared on a tax basis annual financial
statements including balance sheet and income statement, in form and substance satisfactory to Bank
respecting the condition of the Project.

          (d) Quarterly Project. Commencing March 31, 2010, as soon as available, and, in any
event, within forty-five (45) days of the end of each fiscal quarter, during the term of the Loan,
Borrower shall cause to be furnished to Bank quarterly internally prepared on a tax basis financial
statements including balance sheet and income statement for such fiscal quarter, prepared by
Borrower in form and substance satisfactory to Bank respecting the condition of the Project.

          (e) Compliance Certificate. With each such set of financial statements, a certificate
executed by the manager of Borrower (a) stating that such statements are true and correct in all
material respects, and (b) a statement that no Event of Default has occurred and is continuing or
if an Event of Default has occurred and is continuing, a statement specifying the nature and period
of existence thereof and the action that Borrower is taking or proposes to take with respect
thereto.

     2.15 Notices.

          Borrower shall promptly notify Bank in writing of:

9

 

          (a) Any litigation affecting Borrower or any manager of Borrower where the amount claimed is
Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) or more;

          (b) Any written communication that Borrower may receive from any governmental, judicial or
legal authority, giving notice of any claim or assertion that the Land or any Improvements fail in
any respect to comply with any of the Requirements or any other applicable governmental law;

          (c) Any material and adverse change in the physical condition of the Property (including any
damage suffered as a result of earthquakes or floods) or Borrower’s financial condition or
operations;

          (d) Any material default by the Contractor or any subcontractor, material supplier or surety,
or any known material adverse change in the financial condition or operations of any of them; and

          (e) Any material default of Borrower under any other material agreement, contract or order.

     2.16 Intentionally Deleted.

     2.17 Performance of Acts.

          Upon request by Bank, Borrower shall perform all acts which may be reasonably necessary or
advisable to perfect any lien or security interest provided for in the Loan Documents or to carry
out the intent of the Loan Documents.

     2.18 Negative Covenants.

          Without Bank’s prior written consent, Borrower shall not:

          (a) engage in any business activities substantially different from Borrower’s present
business; or

          (b) liquidate or dissolve Borrower’s business.

     2.19 Transfer of Assets to a Trust.

          Borrower shall not transfer any of its properties or assets to a trust unless (a) the trust
agreement governing the trust to which the assets are to be transferred has been reviewed by the
Bank and the Bank determines in its sole discretion that such transfer will not be adverse to the
Bank’s interest and (b) the trustee of such trust issues a guaranty of payment in favor of Bank for
the Loan and all of Borrower’s obligations under the Loan Documents in such form as is acceptable
to Bank in its sole discretion.

10

 

     2.20 Appraisals.

          (a) If required by law, or if an Event of Default occurs and is continuing, Bank shall have
the right to order appraisals of the project from time to time from an appraiser selected by Bank,
which appraisal shall comply with all federal and state standards for appraisals and otherwise
shall be satisfactory to Bank in all material respects. Borrower agrees to pay the reasonable cost
and expense for all appraisals ordered by Bank pursuant to this paragraph.

          (b) In addition to the rights under subparagraph (a) above, Bank shall have the right to order
appraisals of the project, but no more often than once per twelve (12) calendar months, commencing
after the first anniversary date of the Loan, from an appraiser selected by Bank, which appraisal
shall comply with all federal and state standards for appraisals and otherwise shall be
satisfactory to Bank in all material respects. Borrower agrees to pay the reasonable cost and
expense for all appraisals ordered by Bank pursuant to this paragraph.

     2.21 Hedge Agreement.

          All obligations of Borrower to Bank under the Loan Documents will include all obligations
incurred by the Borrower under any agreement between Borrower and Bank or any affiliate of Bank,
including, but not limited to, an ISDA Master Agreement, whether now existing or hereafter
executed, which provides for an interest rate, currency, equity, credit or commodity swap, cap,
floor or collar, spot or foreign currency exchange transaction, cross currency rate swap, currency
option, any combination or option with respect to any of the foregoing or similar transactions, for
the purpose of hedging the Borrower’s exposure to fluctuations in interest rates, exchange rates,
currency, stock, portfolio or loan valuations or commodity prices (each, a “Hedge
Agreement”).

3. Intentionally Deleted.

4. Representations and Warranties.

          Borrower promises that each representation and warranty set forth below is true, accurate and
correct as of the date of this Agreement. Each Draw Request, as defined in Section 3.1 of Exhibit
E, shall be deemed to be a reaffirmation of each and every representation and warranty made by
Borrower in this Agreement.

     4.1 Authority.

          Borrower has complied with any and all laws and regulations concerning its organization,
existence and the transaction of its business. Borrower has the right and power to own the Property
and to develop the Land and Improvements as contemplated in the Loan Documents.

     4.2 Compliance.

          Borrower is familiar and has substantially complied with all of the Requirements. Borrower has
properly obtained, or will obtain, all permits, licenses and approvals necessary to construct or
lease the Improvements in accordance with all Requirements, including those

11

 

pertaining to zoning, and Borrower has delivered, or will deliver, true and correct copies of them
to Bank, upon Bank’s request.

     4.3 Enforceability.

          Borrower is authorized to execute, deliver and perform under the Loan Documents. The Loan
Documents are valid and binding obligations of Borrower.

     4.4 No Violation.

          Borrower is not in material violation of any law, regulation or ordinance, or any order of any
court or governmental entity. No provision or obligation of Borrower contained in any of the Loan
Documents materially violates any of the Requirements, any other applicable law, regulation or
ordinance, or any order or ruling of any court or governmental entity. No such provision or
obligation conflicts with, or constitutes a material breach or material default under, any
agreement binding or regulating the Property.

     4.5 No Claims.

          To Borrower’s actual knowledge, there are no claims, actions, proceedings or investigations
pending against Borrower or affecting the Property except for those previously disclosed by
Borrower to Bank in writing. To Borrower’s actual knowledge, there has been no threat of any such
claim, action, proceeding or investigation, except for those previously disclosed by Borrower to
Bank in writing.

     4.6 Financial Information.

          All financial information which has been and will be delivered to Bank, including all
information relating to the financial condition of Borrower or the manager of Borrower or the
Property, fairly and accurately represents the financial condition being reported on. All such
information was prepared in accordance with GAAP, unless otherwise noted. There has been no
material adverse change in any financial condition reported to Bank.

     4.7 Accuracy.

          To Borrower’s actual knowledge, all reports, documents, instruments, information and forms of
evidence which have been delivered to Bank concerning the Loan or required by the Loan Documents
are accurate, correct and sufficiently complete to give Bank true and accurate knowledge of their
subject matter. To Borrower’s actual knowledge, none of them contains any material
misrepresentation or material omission.

     4.8 Loan in Balance; Adequacy of Loan.

          The Loan is “in balance” and the undisbursed Loan funds, together with any sums provided or to
be provided by Borrower as shown in the cost breakdown, are sufficient to construct the
Improvements through completion and to accomplish the purposes contemplated by the Loan Documents.

12

 

     4.9 Taxes.

          Borrower has filed all required state, federal and local income tax returns and has paid all
taxes which are due and payable. Borrower knows of no basis for any additional assessment of taxes.

     4.10 Utilities.

          All utility services, including gas, water, sewage, electrical and telephone, which are
necessary to construct and occupy the Improvements are available at or within the boundaries of the
Land. In the alternative, Borrower has taken all steps necessary to assure that all utility
services will be available upon completion of the Improvements. Borrower will provide will serve
letters to Bank upon obtaining the necessary approvals for such utilities.

     4.11 Borrower Not a “Foreign Person”.

          Borrower is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended from time to time.

     4.12 Intentionally Deleted.

     4.13 Maximum Loan-to-Value Ratio. Borrower agrees that (i) during the Construction
Period and the Stabilization Period, the maximum loan-to-value ratio shall not exceed 70% of the
prospective market value of the Property based on an MAI appraisal, and (ii) during the Permanent
Period, the maximum loan-to-value ratio shall not exceed 65% of the “as-stabilized” appraised value
of the Property. If Bank at any time determines that such ratios have been exceeded, Bank may make
written demand on Borrower to repay principal of the Loan in an amount sufficient, in Bank’s
reasonable judgment, to cause the maximum loan-to-value ratios to be met. Borrower shall make any
such payment of principal within thirty (30) days after Bank’s demand.

     4.14 Maximum Loan-to-Cost Ratio. Borrower agrees that (i) during the Construction
Period and the Stabilization Period, the maximum loan-to-cost ratio shall not exceed 70% of the
total Property costs, and (ii) during the Permanent Period, the maximum loan-to-cost ratio shall
not exceed 65% of the total Property costs. If Bank at any time determines that such ratios have
been exceeded, Bank may make written demand on Borrower to repay principal of the Loan in an amount
sufficient, in Bank’s reasonable judgment, to cause the maximum loan-to-cost ratios to be met.
Borrower shall make any such payment of principal within thirty (30) days after Bank’s demand.

     4.15 Debt Service Coverage Ratio. As tested on an annual basis, Borrower covenants to
comply and maintain at all times during the term of the Loan, a Debt Service Coverage Ratio of no
less than 1.50 to 1.0. As used herein, (a) “Debt Service Coverage Ratio” shall be calculated
consistent with the principles used in the preparation of the internally prepared tax-basis
financial statements, as earnings before interest, income taxes, depreciation, amortization and
non-recurring renovation/remodel expenses funded with the proceeds of a Loan or other

13

 

loans of the Borrower or other non-operating sources, divided by principal and interest payments on
the aggregate first mortgage term debt scheduled and paid during the trailing four (4) quarters.

5. Conditions Precedent to Closing.

     The following shall be conditions precedent to Bank’s obligations to close the Loan herein
contemplated. Upon closing of the Loan, the conditions set forth herein shall be deemed satisfied,
unless otherwise agreed to by Bank and Borrower.

     5.1 Financial Statements of Borrower and Other Financial Information.

          Borrower shall deliver to Bank all financial statements and other financial information
currently required under the Loan Documents, including but not limited to Section 2.13 (the
“Financial Information”), certified as being true, correct and complete in all material respects by
the Company Manager of Borrower.

     5.2 Organizational Documents.

          Borrower shall provide, at Borrower’s cost and expense, all organization documents requested
by Bank in its reasonable discretion.

     5.3 Title Insurance Commitment; Survey.

          Borrower has delivered to Bank a commitment to issue an ALTA extended coverage lender’s policy
of title insurance (the “Title Policy”) underwritten by an insurer approved by Bank, in its
reasonable discretion (the “Title Company”), in the amount of the Loan and insuring the lien of the
Deed of Trust to be a first priority lien on the Property, subject only to such exceptions and
conditions to title as Bank has approved in its reasonable discretion. Borrower has delivered to
Bank an ALTA Survey of the Land, certified to Bank, which survey shall be satisfactory to Bank in
all material respects.

     5.4 Insurance.

          Borrower shall provide evidence that there is in effect the insurance coverages set forth in
Section 2.10.

     5.5 Taxes.

          Borrower has provided to Bank evidence that all taxes and assessments levied against or
affecting the Property have been paid current; or in the event Borrower has commenced a legal or
administrative challenge to any such tax or assessment, evidence that such liability has been
bonded over, or that funds for the payment thereof (in the amount of the original assessment) have
been escrowed with an independent third party with provisions for the payment thereof reasonably
satisfactory to Bank. If requested by Bank, Borrower shall also provide a sales tax clearance
letter from the appropriate taxing authority.

14

 

     5.6 Appraisal.

          Bank shall have received, reviewed and approved, in Bank’s reasonable discretion, an appraisal
of the Property in form and content acceptable to Bank in its reasonable discretion showing that
the maximum loan-to-value ratio, using a prospective market value, does not exceed 70%, and the
maximum loan-to-cost ratio does not exceed 70%.

     5.7 Environmental Site Assessment.

          Bank shall have received, reviewed and approved, in Bank’s discretion, a Phase I Environmental
Site Assessment in form and content acceptable to Bank in its reasonable discretion. In addition,
Bank shall have received a reliance letter from the environmental engineer, which shall be
satisfactory to Bank.

     5.8 Construction Analysis.

          Bank shall have performed and approved, in its reasonable discretion, a construction analysis
as to the Property.

     5.9 General Information.

          If requested by Bank, Borrower shall provide Bank with legible copies of all ongoing
construction agreements to which Borrower is a party to for any and all construction on the
Property, (and all permits therefor, if any) for the Property.

     5.10 Loan Documents.

          Borrower shall have executed or obtained the execution of, and delivered to Bank, all
applicable documents and instruments in form and content required by Bank and its counsel,
including, without limitation, the Loan Documents listed on Exhibit D, and any and all other such
documentation reasonably required by Bank.

     5.11 Opinion Letters.

          If required by Bank, Borrower has delivered to Bank a favorable opinion from Borrower’s
independent counsel, opining to such matters as Bank may require, in form and substance reasonably
satisfactory to Bank in its reasonable discretion.

     5.12 Fees.

          Borrower has paid to Bank, in immediately available funds, all fees and costs called for under
this Agreement.

     5.13 Debt Service Coverage Ratio.

          Borrower shall provide evidence that the Property is in compliance with Section 4.15.

15

 

     5.14 Miscellaneous.

          Borrower has delivered to Bank any other item reasonably deemed necessary to Bank, and has
fulfilled any other condition reasonably required by Bank.

6. Default and Remedies.

     6.1 Events of Default.

          Borrower will be in default under this Agreement upon the occurrence of any one or more of the
following events (“Events of Default”):

          (a) Borrower fails to make any payment of principal or deposit of funds demanded by Bank under
this Agreement or any Loan Document within ten (10) days after written notice from Bank; or

          (b) Borrower fails to comply with any other covenant contained in this Agreement or any Loan
Document which calls for the payment of money, and does not cure that failure within ten (10) days
after written notice from Bank; or

          (c) Borrower becomes insolvent or the subject of any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships;
provided, however, with respect to any involuntary proceeding, Borrower shall have sixty (60) days
to have such proceeding dismissed before constituting an Insolvency Proceeding or an Event of
Default hereunder (“Insolvency Proceeding”); or

          (d) Borrower dissolves, terminates or liquidates, or any of these events happens to any
managing member if Borrower is a limited liability company or to its Company Manager; or

          (e) Borrower’s Company Manager ceases for any reason to act in that capacity; or

          (f) An Accelerating Transfer (as defined in the Deed of Trust) occurs; or

          (g) Any representation or warranty made or given in any of the Loan Documents proves to be
false or misleading in any material respect; or

          (h) Construction of the Improvements is abandoned for a period of fifteen (15) consecutive
days, or construction of the Improvements is not completed within fifteen (15) days after the
Completion Date, subject to any Force Majeure Event subject to any time limitations in the
definition of “Force Majeure Event”; or

          (i) Any governmental, judicial or legal authority having jurisdiction over the Property orders
or requires that construction of the Improvements be stopped in whole or in part, or any required
approval, license or permit is withdrawn or suspended, and the order, requirement, withdrawal or
suspension remains in effect either (i) for a period of fifteen (15)

16

 

consecutive days (“Initial Cure Period”), or (ii) for a total period of thirty (30) days, so long
as Borrower begins within the Initial Cure Period and diligently continues to take steps to remove
the effect of the order, requirement, withdrawal or suspension, and Bank, exercising reasonable
judgment, determines that Borrower is reasonably likely to prevail; or

          (j) Borrower is in default under Construction Contract, any other contract for the
construction of the Improvements, either (i) for an Initial Cure Period of ten (10) consecutive
days, or (ii) for a total period of thirty (30) days, so long as Borrower begins within the Initial
Cure Period and diligently continues to cure the default, and Bank, exercising reasonable judgment,
determines that the cure cannot reasonably be completed at or before expiration of the Initial Cure
Period; or

          (k) Borrower fails to comply with any provision contained in this Agreement other than those
provisions elsewhere referred to in this Section, and does not cure that failure either (i) within
an Initial Cure Period of thirty (30) consecutive days after written notice from Bank, or (ii)
within sixty (60) days after such written notice, so long as Borrower begins within the Initial
Cure Period and diligently continues to cure the failure, and Bank, exercising reasonable judgment,
determines that the cure cannot reasonably be completed at or before expiration of the Initial Cure
Period; or

          (l) Under any of the Loan Documents, an Event of Default (as defined in that document) occurs;
or

          (m) The Bank fails to have an enforceable first lien on or security interest in any property
given as security for the Loan (except as otherwise agreed by the Bank in writing); or

          (n) A lawsuit or suits are filed against Borrower, or a judgment or judgments are entered
against Borrower, or any government authority takes action that materially adversely affects the
construction of the Improvements, Borrower’s intended use of the Property or Borrower’s ability to
repay the Loan; or

          (o) There is a material and adverse change in Borrower’s or Indemnitor’s financial condition,
or an event or condition that materially impairs the construction of the Improvements, Borrower’s
intended use of the Property or Borrower’s or Indemnitor’s ability to repay the Loan.

          (p) Borrower agrees that the occurrence of an Event of Default under the Hedge Agreement shall
constitute an Event of Default under the Note, and Bank shall thereafter have all rights and
remedies following the occurrence of an Event of Default under both the Note and the Hedge
Agreement.

          (q) Any failure, breach or default by Borrower under the Other Loans, it being the intention
and agreement of Bank and Borrower to cross-default the Loan and the Other Loans with one another.
As used in this paragraph, “Other Loans” shall mean any existing or future loans by Bank to
Borrower or related entities.

17

 

     6.2 Remedies.

          (a) If an Event of Default occurs under this Agreement, Bank may exercise any right or remedy
which they have under any of the Loan Documents, or which is otherwise available at law or in
equity or by statute, and all of Bank’s rights and remedies shall be cumulative. If any Event of
Default occurs, Bank’s obligation to lend under the Loan Documents shall automatically terminate,
and Bank in its sole discretion may withhold any one or more disbursements. No disbursement of Loan
funds by Bank shall cure any default of Borrower, unless Bank agrees otherwise in writing in each
instance.

          (b) If Borrower becomes the subject of any Insolvency Proceeding, all of Borrower’s
obligations under the Loan Documents shall automatically become immediately due and payable upon
the filing of the petition commencing such proceeding, all without notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of
any kind or character. Upon the occurrence of any other Event of Default, all of Borrower’s
obligations under the Loan Documents may become immediately due and payable without notice of
default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, all at Bank’s option, exercisable in its sole
discretion. If such acceleration occurs, Bank may apply the undisbursed Loan funds, and any sums in
the Account, the Borrower’s Funds Account to the obligations of Borrower under the Loan Documents,
in any order and proportions that Bank in its sole discretion may choose.

          (c) Also upon any Event of Default, Bank shall have the right in its sole discretion to enter
and take possession of the Property, whether in person, by Bank or by court-appointed receiver, and
to take any and all actions which Bank in its sole discretion may consider necessary to complete
construction of the Improvements, including making changes in plans, specifications, work or
materials and entering into, modifying or terminating any contractual arrangements, all subject to
Bank’s right at any time to discontinue any work without liability. If Bank chooses to complete the
Improvements, it shall not assume any liability to Borrower or any other person for completing the
Improvements, or for the manner or quality of construction of the Improvements, and Borrower
expressly waives any such liability. If Bank exercises any of the rights or remedies provided in
this clause (c), that exercise shall not make Bank, or cause Bank to be deemed to be, a partner or
joint venturer of Borrower. Bank in its sole discretion may choose to complete construction in its
own name. All sums which are expended by Bank in completing construction shall be considered to
have been disbursed to Borrower and shall be secured by the Deed of Trust and any other collateral
held by Bank in connection with the Loan; any sums of principal shall be considered to be an
additional loan to Borrower bearing interest at the Default Rate, as defined in the Note, and shall
be secured by the Deed of Trust and any other collateral held by Bank in connection with the Loan.
For these purposes Bank, in its sole discretion, may reallocate any line item or cost category of
the cost breakdown.

7. Jury Waiver.

     THE UNDERSIGNED AND BANK HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT,

18

 

TORT OR OTHERWISE) BETWEEN THE UNDERSIGNED AND BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
DOCUMENT OR ANY OTHER RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN BANK AND BORROWER. THIS
PROVISION IS A MATERIAL INDUCEMENT TO BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE
OTHER LOAN DOCUMENTS.

8. Miscellaneous Provisions.

     8.1 No Waiver; Consents.

          Each waiver by Bank must be in writing, and no waiver shall be construed as a continuing
waiver. No waiver shall be implied from Bank’s delay in exercising or failure to exercise any right
or remedy against Borrower or any security. Consent by Bank to any act or omission by Borrower
shall not be construed as a consent to any other or subsequent act or omission or as a waiver of
the requirement for Bank’s consent to be obtained in any future or other instance. All rights and
remedies of Bank are cumulative.

     8.2 Purpose and Effect of Bank Approval.

          Bank’s approval of any matter in connection with the Loan shall be for the sole purpose of
protecting Bank’s security and rights. No such approval shall result in a waiver of any default of
Borrower. In no event shall Bank’s approval be a representation of any kind with regard to the
matter being approved.

     8.3 No Commitment to Increase Loan.

          From time to time, Bank may approve changes to the Plans and Specifications at Borrower’s
request, and may also require Borrower to make corrections to the work of construction (as may be
reasonably required to bring the construction into conformance with the Plans and Specifications),
all on and subject to the terms and conditions of this Agreement. Borrower acknowledges that no
such action or other action by Bank shall in any manner commit or obligate Bank to increase the
amount of the Loan.

     8.4 No Third Parties Benefited.

          This Agreement is made and entered into for the sole protection and benefit of Bank and
Borrower and their permitted successors and assigns. No trust fund is created by this Agreement and
no other persons or entities shall have any right of action under this Agreement or any right to
the Loan funds.

     8.5 Joint and Several Liability.

          If more than one person or entity is signing this Agreement as Borrower, their obligations
under this Agreement shall be joint and several.

19

 

     8.6 Notices.

          All notices given under this Agreement shall be in writing and shall be given by personal
delivery, overnight receipted courier (such as Federal Express), or by registered or certified
United States mail, postage prepaid, sent to the party at its address appearing below its
signature. Notices shall be effective upon receipt or when proper delivery is refused. Addresses
for notice may be changed by either party by notice to the other party in accordance with this
Section. Service of any notice on any one Borrower shall be effective service on Borrower for all
purposes.

     8.7 Authority to File Notices.

          Borrower irrevocably appoints Bank as its attorney-in-fact, with full power of substitution,
to file for record, at Borrower’s cost and expense and in Borrower’s name, any notices of
completion, notices of cessation of labor, or any other notices that Bank in its reasonable
discretion may consider necessary or desirable to protect its security, if Borrower fails to do so.
The appointment granted in this Section shall be deemed to be a power coupled with an interest.

     8.8 Actions.

          Bank shall have the right, but not the obligation, to commence, appear in, and defend any
action or proceeding which would affect its security or its rights, duties or liabilities relating
to the Loan, the Property, or any of the Loan Documents. Borrower shall pay promptly on demand all
of Bank’s reasonable out-of-pocket costs, expenses, and legal fees and expenses of Bank’s counsel
incurred in those actions or proceedings.

     8.9 Attorneys’ Fees.

          If any lawsuit or arbitration is commenced which arises out of or relates to this Agreement,
the Loan Documents or the Loan, including any alleged tort action, regardless of which party
commences the action, the prevailing party shall be entitled to recover from each other party such
sums as the court (but not the jury) or arbitrator may adjudge to be reasonable attorneys’ fees in
the action, arbitration, or proceeding, in addition to costs and expenses otherwise allowed by law.
Any such attorneys’ fees incurred by either party in enforcing a judgment in its favor under this
Agreement shall be recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys fees obligation is intended to be severable from the other provisions
of this Agreement and to survive and not be merged into any such judgment. In all other situations,
including any matter arising out of or relating to any Insolvency Proceeding, Borrower agrees to
pay all of Bank’s costs and expenses, including reasonably attorneys’ fees, which may be incurred
in enforcing or protecting Bank’s rights or interests. From the time(s) incurred and after thirty
(30) days’ written notice by Bank until paid in full to Bank, all such sums shall bear interest at
the Default Rate.

     8.10 Governing Law and Jurisdiction.

          This Agreement and the Loan Documents shall be governed by, and construed in accordance with,
the laws of the State of Arizona. Borrower and Bank hereby submit to

20

 

jurisdiction and venue in Maricopa County, Arizona, and agrees that any and all litigation or
arbitration proceedings shall be maintained in Maricopa County, Arizona. Without limiting the
generality of the foregoing, Borrower hereby waives and agrees not to assert by way of motion,
defense, or otherwise in such suit, action, or proceeding, any claim that Borrower is not
personally subject to the jurisdiction of the courts of the State of Arizona, Maricopa County and
the United State District Court for the State of Arizona, that such suit, action, or proceeding is
brought in an inconvenient forum, or that the venue of such suit, action, or proceeding is
improper.

     8.11 Heirs, Successors and Assigns.

          The terms of this Agreement shall bind and benefit the heirs, personal representatives,
successors and assigns of the parties; provided, however, that Borrower may not assign this
Agreement or any Loan funds, or assign or delegate any of its rights or obligations, without the
prior written consent of Bank in each instance. Bank may not assign (unless Bank remains as the
agent for the Loan), but shall have the right, from time to time, to grant one or more
participations in the Loan without the Borrower’s consent or approval, so long as Bank is the sole
servicing and sole administrative agent for the Loan and Borrower shall have no obligation to deal
with any other third party.

     8.12 Relationships With Other Bank Customers.

          From time to time, Bank may have business relationships with Borrower’s customers, suppliers,
contractors, members, tenants, partners, shareholders, officers or directors, or with businesses
offering products or services similar to those of Borrower, or with persons seeking to invest in,
borrow from or lend to Borrower. Borrower agrees that Bank may extend credit to such parties and
may take any action it may deem necessary to collect the credit, regardless of the effect that such
extension or collection of credit may have on Borrower’s financial condition or operations.
Borrower further agrees that in no event shall Bank be obligated to disclose to Borrower any
information concerning any other Bank customer.

     8.13 Improvement District.

          Borrower shall not consent to, vote in favor of, or directly or indirectly advocate or assist
in the incorporation of any part of the Property into any improvement or community facilities
district, special assessment district or other district without Bank’s prior written consent in
each instance.

     8.14 Restriction on Personal Property.

          Borrower shall not sell, convey, or otherwise transfer or dispose of its interest in any
personal property in which Bank has a security interest, or contract to do any of the foregoing,
without the prior written consent of Bank in each instance, unless Borrower replaces such property
with like kind property.

21

 

     8.15 Force Majeure.

          If the work of construction is affected and delayed by matters beyond Borrower’s control,
including, without limitation, by fire, earthquake or other acts of God, strike, lockout, acts of
public enemy, riot, insurrection, or governmental regulation of the sale or transportation of
materials, supplies or labor (“Force Majeure Event”), Borrower must notify Bank in writing within
five (5) calendar days after the event occurs which causes the delay. So long as no Event of
Default has occurred and is continuing, Bank shall extend the Completion Date by a period of time
equal to the period of the delay, but not more than a total of thirty (30) days.

     8.16 Severability.

          The invalidity or unenforceability of any one or more provisions of this Agreement shall in no
way affect any other provision. If any court of competent jurisdiction determines any provision of
this Agreement or any of the other Loan Documents to be invalid, illegal or unenforceable, that
portion shall be deemed severed from the rest, which shall remain in full force and effect as
though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents.

     8.17 Interpretation.

          Whenever the context requires, all words used in the singular will be construed to have been
used in the plural, and vice versa, and each gender will include any other gender. The captions of
the sections of this Agreement are for convenience only and do not define or limit any terms or
provisions. The word “include(s)” means “include(s), without limitation,” and the word “including”
means “including, but not limited to.” No listing of specific instances, items or matters in any
way limits the scope or generality of any language of this Agreement.

     8.18 Amendments.

          This Agreement may not be modified or amended except by a written agreement signed by the
parties.

     8.19 Counterparts.

          This Agreement and any attached consents or exhibits requiring signatures may be executed in
counterparts, and all counterparts shall constitute but one and the same document.

     8.20 Language of Agreement.

          The language of this Agreement shall be construed as a whole according to its fair meaning,
and not strictly for or against any party.

     8.21 Exchange of Information.

          The Borrower agrees that the Bank may exchange or disclose financial information about the
Borrower or the Property with or to any Compass Bank affiliates or other related entities.

22

 

     8.22 Survival.

          The representations, warranties, acknowledgments and agreements set forth herein shall survive
the date of this Agreement.

     8.23 Further Performance.

          Borrower, whenever and as often as they shall be requested by Bank, shall execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered such further instruments and
documents and to do any and all things as may be requested in order to carry out the intent and
purpose of this Agreement and the other Loan Documents.

     8.24 Time is of the Essence.

          Time is of the essence in the performance of this Agreement and the other Loan Documents, and
each and every term thereof.

     8.25 Recitals; Exhibits.

          The Recitals to this Agreement set forth above are true, complete, accurate and correct and
such recitals are hereby incorporated by reference. The exhibits to this Agreement are hereby
incorporated by reference.

     8.26 Integration and Relation to Loan Commitment.

          The Loan Documents (a) integrate all the terms and conditions mentioned in or incidental to
this Agreement, (b) supersede all oral negotiations and prior writings with respect to their
subject matter, including Bank’s loan commitment to Borrower, and (c) are intended by the parties
as the final expression of the agreement with respect to the terms and conditions set forth in
those documents and as the complete and exclusive statement of the terms agreed to by the parties.
No representation, understanding, promise or condition shall be enforceable against any party
unless it is contained in the Loan Documents. If there is any conflict between the terms,
conditions and provisions of this Agreement and those of any other agreement or instrument,
including any other Loan Document, the terms, conditions and provisions of this Agreement shall
prevail.

     8.27 USA PATRIOT ACT NOTIFICATION. The following notification is provided to Borrower
pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies each person or entity that
opens an account, including any deposit account, treasury management account, loan, other extension
of credit, or other financial services product. What this means for Borrower: When Borrower opens
an account, if Borrower is an individual, Bank will ask for Borrower’s name, taxpayer
identification number, residential

23

 

address, date of birth, and other information that will allow Bank to identify Borrower and, if
Borrower is not an individual, Bank will ask for Borrower’s name, taxpayer identification number,
business address, and other information that will allow Bank to identify Borrower. Bank may also
ask, if Borrower is an individual, to see Borrower’s driver’s license or other identifying
documents and, if Borrower is not an individual, to see Borrower’s legal organizational documents
or other identifying documents.

     8.28 Government Regulation.

          Borrower shall not (a) be or become subject at any time to any law, regulation, or list of any
government agency (including, without limitation, the U.S. Office of Foreign Asset Control list)
that prohibits or limits Bank from making any advance or extension of credit to Borrower or from
otherwise conducting business with Borrower, or (b) fail to provide documentary and other evidence
of Borrower’s identity as may be requested by Bank at any time to enable Bank to verify Borrower’s
identity or to comply with any applicable law or regulation, including, without limitation, Section
326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

	 	 	 
	Exhibits
	Exhibit A —
	 	Legal Description

	Exhibit B —
	 	Cost Breakdown

	Exhibit C —
	 	Description of Improvements, Contracts, and Plans and Specifications

	Exhibit D —
	 	Loan Documents

	Exhibit E —
	 	Disbursement Schedule

[SIGNATURE PAGES FOLLOW]

24

 

     IN WITNESS WHEREOF, Borrower and Bank have executed this Agreement as of the date
first above written.

	 	 	 	 	 
	 	SUMMIT HOTEL PROPERTIES, LLC, a South

Dakota limited liability company

 	 
	 	By:  	/s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	Address:

2701 S. Minnesota Avenue, Suite #6

Sioux Falls, South Dakota 57105

Attn: Hulyn Farr

With a copy to:

Hagen, Wilka & Archer, LLP

600 S. Main Street, Suite 102

P.O. Box 964

Sioux Falls, South Dakota 57104-0964

Attn: Jennifer Larsen

 	 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	COMPASS BANK, an Alabama banking corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address:

2850 East Camelback Road, Suite 140

Phoenix, Arizona 85016

With a copy to:

Snell & Wilmer l.l.p.

One Arizona Center

400 East Van Buren

Phoenix, Arizona 85004-2202

Attention: Craig K. Williams, Esq.

 	 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

EXHIBIT A

 

 

EXHIBIT B — COST BREAKDOWN

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total	 	 	Borrower	 	 	Compass	 
	Item	 	Budget	 	 	Funds	 	 	Loan	 
	Land
	 	$	3,500,000	 	 	$	3,500,000	 	 	$	0	 
	Construction Costs
	 	$	11,412,682	 	 	$	118,800	 	 	$	11,293,882	 
	Add-on Site/Construction Costs
	 	$	2,980,000	 	 	$	2,454,585	 	 	$	525,415	 
	Architect & Engineering
	 	$	900,000	 	 	$	718,739	 	 	$	181,261	 
	Franchise Fee
	 	$	70,000	 	 	$	70,000	 	 	$	0	 
	Permits & Fees
	 	$	550,000	 	 	$	97,370	 	 	$	452,630	 
	Professional Dev./Loan Fees
	 	$	710,000	 	 	$	371,417	 	 	$	338,583	 
	Signage
	 	$	150,000	 	 	$	—	 	 	$	150,000	 
	Phone & Audio Equipment
	 	$	110,000	 	 	$	—	 	 	$	110,000	 
	PMS/POS
	 	$	91,000	 	 	$	—	 	 	$	91,000	 
	Internet High Speed
	 	$	40,000	 	 	$	—	 	 	$	40,000	 
	Interest Reserve
	 	$	1,900,000	 	 	$	849,479	 	 	$	1,050,521	 
	Fixtures, Furniture & Equipment
	 	$	2,900,000	 	 	$	1,436	 	 	$	2,898,564	 
	Start-Up/Organization Costs
	 	$	900,000	 	 	$	38,594	 	 	$	861,406	 
	Contingency
	 	$	1,187,718	 	 	$	—	 	 	$	1,187,718	 
	 
	 	 	 	 	 	 	 	 	 	$	0	 
	TOTAL PROJECT COSTS
	 	$	27,401,400	 	 	$	8,220,420	 	 	$	19,180,980	 

 

 

EXHIBIT C

DESCRIPTION OF IMPROVEMENTS,

CONTRACTS, AND PLANS AND SPECIFICATIONS

(Arizona-Income Property)

     1. Improvements

          When completed, the Improvements will consist of a 164-room Courtyard Marriott Hotel located
at 2650-2800 S. Beulah Boulevard, Flagstaff, Arizona, together with all fixtures, common areas,
parking and appurtenances now or later to be located on the Land.

     2. Reserved

     3. Construction Contractor

          Borrower has engaged Wespac Construction, Inc., to act as the Contractor for the construction
of the Improvements. The Contractor’s license number is                                                             . The contract between
Borrower and the Contractor governing this engagement (the
“Construction Contract”) is entitled AIA (TBD) and dated        
                                                     . Borrower shall require the Contractor to perform in accordance with the terms and conditions of the Construction Contract.

     4. Plans and Specifications

          The Plans and Specifications described below were prepared by the Architect for the use of
Borrower and the Contractor in constructing the Improvements.

	 	 	 

	Job No.

	 	Preparer

 

 

EXHIBIT D

LOAN DOCUMENTS

(Arizona-Income Property)

     For purposes of this Agreement, the “Loan Documents” are defined to include all documents
marked below, together with the exhibits to each of them, as one or more of them may be extended,
modified or renewed from time to time with the prior written consent of Bank in each instance. The
Loan Documents will also include any document to be executed in the future with Bank’s consent that
identifies itself in writing as a Loan Document in connection with the Loan.

     1. Credit and Security Documents

          þ This Agreement.

          þ The Note dated September 17, 2008.

          þ The Deed of Trust dated September 17, 2008.

          þ State of South Dakota Uniform Commercial Code Financing Statement Form UCC-1.

          þ Assignment of Contracts, Plans and Specifications executed by Borrower as of September
17, 2008, and its Consents thereto.

          þ Environmental Indemnity Agreement dated September 17, 2008.

     2. Evidence of Authority

          þ Certificate authorizing Borrower to:

               þ Borrow;

executed by all of it members, authorizing the Sole Member to execute all Loan Documents on behalf
of Borrower.

          þ LLC Resolution to:

               þ Borrow on behalf of Borrower;

 

 

EXHIBIT E

DISBURSEMENT SCHEDULE

(Arizona-Income Property)

I. Conditions to Disbursement

     Before Bank becomes obligated to make any disbursement under this Agreement, all conditions to
the disbursement shall have been satisfied at Borrower’s sole cost and expense in a manner
acceptable to Bank in the exercise of its reasonable judgment.

     No waiver of any condition to disbursement shall be effective unless it is expressly made by
Bank in writing. If Bank makes a disbursement before fulfillment of one or more required
conditions, that disbursement alone shall not be a waiver of such conditions, and Bank reserves the
right to require their fulfillment before making any subsequent disbursements. If all conditions
are not satisfied, Bank, acting in its reasonable judgment, may disburse as to certain items or
categories of costs and not others.

     1.1 Loan Closing and First Disbursement

          The Bank is not required to make the first disbursement until all conditions to close the Loan
are satisfied, including, without limitation, Section 5 of this Agreement. In addition, those
conditions include the following:

          (a) Bank shall have received a Draw Request, as defined and described in Section 3.1 of this
Exhibit E.

          (b) The Deed of Trust shall have been duly recorded in a first priority lien position.

          (c) The initial cost breakdown attached to this Agreement as Exhibit B shall have been
approved by Bank, which item has been delivered to Bank and approved by Bank.

          (d) The Plans and Specifications shall have been approved by Bank.

          (e) Bank shall have received a soils report (“Soils Report”) that was prepared within three
(3) years prior to the Loan closing by a qualified registered soils engineer satisfactory to Bank
(the “Soils Engineer”) which item has been delivered to Bank and approved by Bank.

          (f) Bank shall have received, reviewed and approved, in Bank’s sole and absolute discretion,
an appraisal of the Property in form and content acceptable to Bank in its sole and absolute
discretion showing that the maximum loan-to-value and maximum loan-to-cost limitations set forth in
this Agreement will be met.

          (g) Bank shall have received, reviewed and approved, in Bank’s sole and absolute discretion, a
Phase I Environmental Site Assessment in form and content acceptable to Bank in its sole and
absolute discretion.

 

 

1.2 Subsequent Disbursements

          After having made the first disbursement, Bank shall not be required to make any further
disbursements if:

          (a) Bank fails to receive a Draw Request or Bank in its reasonable judgment considers any Draw
Request to be incomplete, based on Bank’s observations while visiting the construction site; or

          (b) The Improvements are materially damaged and not repaired, unless Bank receives funds from
Borrower or insurance proceeds sufficient to pay for all repairs in a timely manner; or

          (c) The Property or any interest in it is affected by eminent domain or condemnation
proceedings; or

          (d) For any reason the title insurer fails or refuses at Bank’s request to issue a
disbursement endorsement or its equivalent, that Bank in its reasonable judgment may require; or

          (e) A stop notice or notice of claim of lien is recorded against the Land the Improvements,
unless such lien is discharged either by the claimant upon payment by Borrower or by Borrower
recording a surety bond in accordance with applicable Arizona law, or providing other surety
reasonably acceptable to Bank; or

          (f) The Loan is “out of balance” according to Section 1.2 of this Agreement, and Borrower
fails to comply with any demand by Bank to deposit funds; or

          (g) Under any of the Loan Documents, an Event of Default (as defined in that document) has
occurred and is continuing.

II. Disbursement Amounts

     Set forth in the Loan Amount column of the cost breakdown is a “Loan Disbursement Budget”
broken down by line items. From each line item, Bank shall disburse Loan funds in a total amount
not to exceed the Loan Disbursement Budget for that line item, taking into account all prior
disbursements, any applicable retention requirements, and any reallocation of funds to which Bank
has consented. Any and all sums on deposit in the Borrower’s Funds Account (“Borrower’s Funds”)
shall be disbursed as described below.

     2.1 Disbursements of Soft Costs (Financing Related Costs)

          Bank shall make one or more disbursements from each of these line items, without retentions.

2

 

     2.2 Disbursements of Certain Hard Costs Requiring Retention (Development and Construction Costs)

          (a) From each of these line items , Bank shall make periodic disbursements as construction
progresses. Each disbursement shall be equal to ninety percent (90%) of the amount applied for in
the applicable Draw Request. Until the conditions set forth in clause (b) below have been
satisfied, Bank shall retain the remaining undisbursed portions of all three line items, which
shall equal ten percent (10%) of the aggregate dollar amount to be disbursed by Bank from those
line items, whether consisting of Loan funds, Borrower’s Funds or a combination of both; provided,
however, upon Borrower’s request, Bank may release retention on a trade by trade basis, upon final
completion of such work, so long as (i) no Event of Default exists under the Loan Documents, (ii)
the Loan is “in balance” as determined by Bank, (iii) Bank has confirmed final completion of all
such work and received such invoices and lien waivers for such work as Bank may require, and (iv)
Borrower is otherwise in compliance with all of the terms and conditions of the Loan Documents,
including, without limitation, the disbursement terms and conditions set forth in this exhibit.

          (b) Bank shall disburse that aggregate retention upon satisfaction of the following
conditions:

          (i) The Improvements shall have been completed in accordance with Section 2.1 of this
Agreement.

          (ii) Bank shall have received evidence that a valid Notice of Completion has been recorded.

          (iii) Bank shall have received a Draw Request for such retention, which shall include written
certification by the Contractor that the completed Improvements (excluding any tenant improvements)
conform to the Plans and Specifications.

          (iv) Borrower shall have provided endorsements to Bank’s title insurance policy insuring
lien-free completion of such Improvements as well as first-lien priority of the disbursement.

          (v) No event may have occurred and be continuing if it is defined as an Event of Default under
any of the Loan Documents, or if the event with notice or the passage of time would be such an
Event of Default.

          (vi) If required by Bank, which requirement, if any, may be postponed until after disbursement
of retainage, Borrower has provided to Bank an “as-built” ALTA Survey of the Property.

          (vii) If required by Bank, Borrower shall have provided to Bank executed AIA Form G706
(Contractor’s Affidavit of Payments of Debts), and AIA Form G706A (Contractor’s Affidavit of
Release of Liens).

3

 

          (viii) If required by Bank, Borrower shall have provided to Bank executed AIA Form G704 or
other document satisfactory to Bank by the inspecting Contractor and Borrower.

     2.3 Disbursement of Interest Reserve

               Subject to Section 1.1(c) of the Agreement, any funds in the Interest Reserve shall be
disbursed from time to time to pay interest as and when it may become due on the Loan. All
disbursements from the Interest Reserve shall be made first from any Borrower’s Funds which may be
allocated to that line item.

III. Disbursement Procedures

          The disbursement procedures described below shall apply to the Loan funds and also to any
Borrower’s Funds which may be on deposit in the Borrower’s Funds Account.

     3.1 Draw Requests

          (a) For each disbursement, Borrower shall submit to Bank a written request signed by Borrower
and the Contractor, together with such documentation and information as Bank may reasonably require
(collectively, a “Draw Request”). For disbursements concerning line items other than Construction
Costs, Borrower shall submit a written request signed by the Borrower. Each Draw Request shall be
acceptable in form and substance to Bank in the exercise of its reasonable judgment, and shall
include such items of information and documentation, including invoices, canceled checks, lien
waivers and other evidence as Bank may require to show that Borrower is in compliance with the Loan
Documents. If Bank so requires, any given Draw Request shall also include written certification by
the Architect and the Contractor that the Improvements as constructed to date conform to the Plans
and Specifications.

          (b) In each Draw Request, Borrower shall request disbursement for one or more specified line
items of the cost breakdown. Borrower may submit a Draw Request projected to month end to Bank on
or about the twenty-fifth (25th) day of each month, unless Bank agrees to make disbursements more
frequently than once a month and agrees to complete its review of such Draw Request, and make
payment on approved Draw Requests, within seven (7) business days, subject to Force Majeure Events.
Borrower shall use all Loan funds strictly for the purposes for which they were disbursed by Bank.

          (c) Unless Borrower has notified Bank in writing to the contrary, each Draw Request shall
constitute Borrower’s representation and warranty to Bank that (i) the Loan is “in balance,” (ii)
all prior disbursements, as well as that currently being requested, were and will be used in strict
compliance with the costs breakdown, and (iii) no Event of Default has occurred.

     3.2 Debit of Loan at Closing

          As of the day the Loan closes, Bank is authorized to make payments on Borrower’s behalf by
debiting the Loan funds and disbursing such amounts to itself, as disclosed to Borrower at closing.

4

 

     3.3 Account

          Unless Bank and Borrower have otherwise agreed in writing, Bank if it so chooses may make
disbursements into Borrower’s checking account No.                                                              (the “Account”),
maintained at Bank. The Account shall be non-interest-bearing.

     3.4 Disbursements to Other Parties

          Unless Bank and Borrower have otherwise agreed in writing, upon the occurrence and
continuation of an Event of Default, Bank, if it so chooses, may make disbursements directly to the
Contractor, subcontractors, laborers or material suppliers.

     3.5 Payments

          Acting in its reasonable judgment, Bank may use Loan funds to pay Loan funds owing to Bank,
interest on the Loan, reasonable legal fees and expenses of Bank’s attorneys which are payable by
Borrower, and such other sums as may be owing from time to time by Borrower to Bank with respect to
the Loan, in accordance with this Agreement, provided Bank may not charge Borrower for any in-house
or internal reviews or functions.

     3.6 Interest on Disbursements

          Interest on each disbursement, whether initiated by Borrower or Bank, shall be payable from
the time Bank debits the Loan funds in the amount of the disbursement.

     3.7 Authorized Signers

          Borrower authorizes either JoLynn Sorum or Hulyn Farr to sign all Draw Requests and other
documents in connection with the administration of the Loan.

5

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