Document:

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                                                                   EXHIBIT 10.12

                                 LOAN AGREEMENT

                                 BY AND BETWEEN

                          SUMMIT HOTEL PROPERTIES, LLC
                    A SOUTH DAKOTA LIMITED LIABILITY COMPANY

                                       AND

                     ING LIFE INSURANCE AND ANNUITY COMPANY,
                           A CONNECTICUT CORPORATION,

                          DATED AS OF DECEMBER 23, 2005

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                                 LOAN AGREEMENT

     THIS AGREEMENT is made and entered into as of December __, 2005 by and
between SUMMIT HOTEL PROPERTIES, LLC, a South Dakota limited liability company,
("BORROWER"), and ING LIFE INSURANCE AND ANNUITY COMPANY, a Connecticut
corporation ("LENDER").

                                   WINESSETH:

          WHEREAS, Borrower has requested that Lender make that certain loan
(the "LOAN") to Borrower in the principal amount of $34,150,000.00, and

          WHEREAS, Lender is willing to make the Loan to Borrower on the terms
and subject to the conditions and requirements set forth in this Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties to this Agreement hereby agree as
follows:

                                    ARTICLE I

                           DEFINITIONS; CONSTRUCTION

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

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

          "AGREEMENT" shall mean this Loan Agreement, as amended, supplemented
or modified from time to time.

          "ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean the Assignment,
Consent and Subordination Regarding Management Agreement executed this date by
Borrower in favor of Lender, and any modifications or replacements thereof or
therefor.

          "ASSIGNMENTS OF RENTS AND LEASES" shall mean the Assignment of Rents
and Leases executed this date by Borrower in favor of Lender.

          "BORROWER" shall have the meaning given such term in the preamble to
this Agreement and shall include its successors and assigns.

          "BUSINESS DAY" shall mean any day excluding Saturday, Sunday and any
other day on which banks in Atlanta, Georgia are customarily closed.

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          "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

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

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

          "ENVIRONMENTAL INDEMNIFICATION AGREEMENT' shall mean collectively the
Environmental Indemnification Agreements executed this date by Borrower in favor
of Lender, and any extensions, renewals, modifications or replacements thereof
or therefor.

          "EVENT OF DEFAULT" shall have the meaning provided in ARTICLE VII
HEREOF.

          "IMPROVEMENTS" shall mean all improvements constructed on the Land.

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

          "LEASES" shall have the meaning given such term in the Security
Instruments.

          "LENDER" shall have the meaning given such term in the preamble to
this Agreement and shall include such Persons' successors and assigns.

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

          "LOAN" shall have the meaning given such term in the preamble to this
Agreement.

          "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note,
the Security Documents, and any other certificates or written undertakings of
Borrower in favor of Lender delivered contemporaneously with the delivery of
this Agreement, other than the Environmental Indemnification Agreement.

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

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          "MORTGAGE" shall mean collectively the Deeds of Trust, Security
Agreements, Financing Statements, and Fixture Filings executed this date by
Borrower for the benefit of Lender, to be recorded in the real estate records of
the county where the Property is located, and any extensions, renewals,
modifications or replacements thereof or therefor.

          "NOTE" shall mean that certain Promissory Note executed by Borrower
and payable to the order of Lender in the original principal amount of
$34,150,000.00 as evidence of the Loan, and any extensions, renewals,
modifications or replacements thereof or therefor.

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

          "PERSON" shall mean any individual, partnership, limited partnership,
limited liability company, firm, corporation, association, joint venture, trust
or other entity, or any government or political subdivision or agency,
department or instrumentality thereof.

          "PROPERTY" shall mean, collectively, the property, including the Land
and all improvements, fixtures and related personal property located thereon.

          "REQUIREMENTS" shall have the meaning given such term in SECTION 4.12
hereof.

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

          "SECURITY INSTRUMENTS" shall mean, collectively, the Mortgage, the
Assignment of Rents and Leases, the UCC Financing Statements, and other security
instruments executed this date by Borrower in favor of Lender, to be recorded in
the real estate records of the county where the Property is located, and any
extensions, renewals, modifications or replacements thereof or therefor.

          "TAXES" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, now or hereafter imposed or levied by the United States of America, or
any state or local government or by any department, agency or other political
subdivision or taxing authority thereof or therein and all

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interest, penalties, additions to tax and similar liabilities with respect
thereto other than taxes on the income of Lender.

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

                                   ARTICLE II

                                      LOANS

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

     SECTION 2.02 NOTE; REPAYMENT OF PRINCIPAL AND INTEREST. Borrower's
obligations to pay to Lender the principal of and interest on the Loan shall be
evidenced by the Note. The Loan shall bear interest at the rate or rates per
annum specified in the Note and such interest shall be calculated and shall be
paid and shall accrue in the manner specified in the Note.

                                   ARTICLE III

                                  GENERAL TERMS

     SECTION 3.01 FEES. In consideration of Lender's entering into this
Agreement and making the Loan hereunder, Borrower agrees to pay (from deposits
previously delivered to Lender) to Lender, on the date of the funding of the
Loan hereunder, a processing fee in the amount of $20,000.00, which processing
fee shall be deemed fully earned upon Lender's execution and delivery of this
Agreement and the funding of the Loan.

     SECTION 3.02 PAYMENTS, PREPAYMENTS AND COMPUTATIONS. Except as may be
otherwise specifically provided herein, all payments by Borrower with respect to
the Loan or any other Obligations under this Agreement or any of the other Loan
Documents or the Environmental Indemnification Agreement shall be made without
defense, set-off or counterclaim to Lender not later than 2:00 p.m. (Eastern
Time) on the date when due and shall be made in lawful money of the United
States of America in immediately available funds. Any payment received by Lender
on a non-Business Day or after 2:00 p.m. (Eastern Time) on any Business Day
shall be deemed received by Lender at the opening of its business on the next
Business Day. Whenever any payment to be made hereunder or under the Note or any
of the other Loan Documents or the Environmental Indemnification Agreement shall
be stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest thereon shall be payable at the applicable rate
during such extension. Interest shall be calculated on the basis of a

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year consisting of 360 days and with twelve thirty-day months, except that
interest due and payable for less than a full month shall be calculated by
multiplying the actual number of days elapsed in such period by a daily interest
rate based on a 360-day year. The Loan may not be prepaid in whole or in part
except as specifically provided in the Note.

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

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

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

     SECTION 3.06 PROHIBITION ON DRY CLEANERS. Borrower shall not, during the
term of the Loan, conduct or permit any tenant to conduct any dry cleaning
operations on or at the Property.

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

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

<TABLE>
<CAPTION>
                            PRINCIPAL    ALLOCATION
        PROPERTY            ALLOCATION   PERCENTAGE
        --------           -----------   ----------
<C>                        <C>           <C>
(1) Courtyard Marriott,
   3076 Kirby Parkway      $ 6,100,000      17.86%
(2) Residence Inn, 9314
   Poplar Pike             $ 4,650,000      13.62%
(3) Fairfield Inn, 9320
   Poplar Pike             $ 3,725,000      10.91%
(4) Hampton Inn, 6201
   Roger Avenue            $ 8,925,000      26.13%
(5) Holiday Inn Express,
   2613 South Vista        $ 2,750,000       8.05%
(6) Hampton Inn, 6635
   Gateway Blvd. West      $ 8,000,000      23.43%
                           -----------     ------
TOTAL                      $34,150,000     100.00%
                           ===========     ======
</TABLE>

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

(ii) Promptly following Lender's receipt of Borrower's Release Request, Lender
     shall determine the release price (the "RELEASE PRICE") payable for each
     parcel of Property, which shall be an amount equal one hundred twenty
     percent (120%) ("RELEASE FACTOR") of the then remaining Principal
     Allocation for each such Property based upon the Allocation Percentage for
     such Property multiplied by the then outstanding principal balance of the
     Loan ("AMORTIZED PRINCIPAL ALLOCATION"). For example, if Borrower submitted
     a request for a release of Property (1) Courtyard Marriott, 3076 Kirby
     Parkway in accordance with the conditions herein set forth, the calculation
     would be as follows:

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

                              and

     (b)  Amortized Principal
          Allocation          = 17.86% x outstanding principal balance of Note

     (c)  Assuming a principal balance of $34,150,000, the Property (1) release
          price would be calculated as: 1.20 x 0.1786 x $34,150,000 = $7,319,028

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<PAGE>

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

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

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

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

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

     SECTION 3.08 SUBSTITUTION OF COLLATERAL. Notwithstanding the provisions of
this Agreement or any of the Loan Documents to the contrary, Borrower may submit
a written request ("SUBSTITUTION REQUEST"), upon at least ninety (90) days prior
notice, that Lender permit a substitution (each a "SUBSTITUTION") of a
substitute property (each a "SUBSTITUTE PROPERTY") (which previously has not
been the subject of inclusion in the collateral for the Loan) for any individual
Property on Schedule I (in such capacity a "REPLACED PROPERTY") upon and subject
to the following terms and conditions:

     (a)  Borrower must submit a Substitution Request, identifying the proposed
          Substitute Property and the proposed Replaced Property at least ninety
          (90) days prior to the proposed closing date for the Substitution.
          Lender shall evaluate the request for the proposed Substitution and
          the proposed Substitute Property pursuant to its then customary
          underwriting and pricing criteria. The amount of the "PRINCIPAL
          ALLOCATION" Lender would determine to allocate to the Substitute
          Property must be at least equal to the amount of the then remaining
          Principal Allocation for the proposed Replaced Property, and the
          loan-to-value ratio for the Lender's proposed

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          Principal Allocation for the Substitute Property, based upon a current
          MAI appraisal in accordance with SUBPARAGRAPH (H) below, must be at
          least equal to the then current loan-to-value ratio for the proposed
          Replaced Property. In its underwriting and pricing analysis, Lender
          may review items such as, but not limited to, location, occupancy,
          lease term, rollover, tenant exposure, tenant's credit, average daily
          room rates and operating statements.

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

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

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

     (e)  Borrower shall not be permitted to request and close more than a total
          of two (2) Substitutions during the Loan term.

     (f)  Borrower shall pay a processing fee to Lender equal to $25,000 at
          closing of each approved Substitution. A "SUBSTITUTION DEPOSIT' of
          $5,000 shall be required with submission of a Substitution Request,
          which deposit shall be applied to the processing fee at closing of the
          Substitution. The deposit and processing fee contemplated by this
          subsection are in addition to attorneys' fees and expenses incurred in
          the documentation of such Substitution and in the review of due
          diligence.

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

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<PAGE>

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

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

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

     (k)  Borrower shall be required to supply for Lender's review and approval
          due diligence materials relating to the Substitute Property prior to
          closing of the Substitution including those items required for closing
          of this Loan, and such other materials as may then be customarily
          required as part of its then current commercial loan closing policies,
          procedures, standards and practices for properties of similar type and
          in similar locations as the Substitute Property, including, without
          limitation, a current as-built ALTA survey, proof of adequate
          insurance, title insurance in conformance with the requirements for
          the closing of this Loan, proof of compliance with governmental
          regulations, tenant estoppel

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<PAGE>

          certificates, subordination, non-disturbance and attornment
          agreements, franchise agreements and comfort letters. The Lender
          shall, at the Borrowers' sole cost and expense, receive for its review
          and approval all additional due diligence materials in any way
          relating to the Substitute Property, including but not limited to,
          appraisal, hazardous substance report, seismic report and engineer
          report as required by Lender in its sole discretion. The items listed
          in this subsection are not exhaustive.

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

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

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

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

                                       10

<PAGE>

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

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

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

Borrower hereby represents and warrants to Lender as follows:

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

     SECTION 4.02 FINANCIAL STATEMENTS. Borrower covenants and agrees that it
will keep and maintain books and records of account, or cause books and records
of account to be kept and maintained in the manner prescribed in PARAGRAPH 25 of
the Mortgage.

                                       11
<PAGE>

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

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

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

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

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

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

     SECTION 4.09 [INTENTIONALLY OMITTED]

                                       12

<PAGE>

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

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

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

     SECTION 4.13 CONDITION OF LAND AND IMPROVEMENTS. Neither the Land nor the
Improvements have been injured or damaged by fire or other casualty which has
not been restored.

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

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

     SECTION 4.16 RESTRICTIONS. To the best of Borrower's knowledge, the Land is
not subject to: (i) any use or occupancy restrictions, except those imposed by
applicable zoning laws and regulations, except any such restrictions described
in the mortgagee title policy(ies) delivered to Lender in connection with the
Loan and those restrictions set forth in the Security

                                       13

<PAGE>

Instruments; (ii) special taxes or assessments; (iii) utility tap-in fees,
except those generally applicable throughout the tax districts in which the Land
is located; or (iv) charges or restrictions, whether existing of record or
arising by operation of law, unrecorded agreement, the passage of time or
otherwise, except any such charges or restrictions described in the mortgagee
title policy(ies) delivered to Lender in connection with the Loan.

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

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

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

     SECTION 4.20 ACCESS. All streets and roads necessary for access to the Land
have been completed, dedicated to public use and accepted for maintenance for
all necessary governmental entities. Lender acknowledges that the access to the
Property located in Fort Smith, Arkansas is on a private road, and that Borrower
has an easement to use such access.

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

     SECTION 4.22 BROKERAGE COMMISSIONS. All real estate and land brokerage
commissions payable in connection with the acquisition of the Land, construction
of the

                                       14

<PAGE>

Improvements and the Loan, and all brokerage commissions or finders fees due and
payable in connection with the current terms of any of the Leases, have been
paid in full, or will be paid in full upon the execution of this Agreement.

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

                                    ARTICLE V

                                    COVENANTS

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

     SECTION 5.01 OPERATING STATEMENTS AND RENT ROLL. Borrower shall deliver to
Lender operating statements and rent rolls as required in PARAGRAPH 25 of the
Mortgage.

     SECTION 5.02 BOOKS AND RECORDS. Borrower shall keep its books, records and
accounts in accordance with accepted industry standards and as required
hereunder and under the Loan Documents.

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

     SECTION 5.04 PAYMENT OF TAXES AND CLAIMS. Borrower will pay and discharge
or cause to be paid and discharged all Taxes, assessments and governmental
charges or levies imposed upon it or upon its respective income and profits or
upon any of its property, real, personal or mixed or upon any part thereof,
before the same shall become in default as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might become a Lien or
charge upon such properties or any part thereof. Notwithstanding anything
contained herein to the contrary, Borrower shall not be required to pay or
discharge any Taxes, assessments and governmental charges or levies and liens
for labor, materials, supplies or otherwise so long as the Borrower shall in
good faith contest the same or the validity thereof by appropriate legal
proceedings which shall operate to prevent the collection of the levy, lien or
imposition so

                                       15

<PAGE>

contested and the sale of the Premises, or any part thereof, to satisfy any
obligation arising therefrom, provided that the Borrower shall give such
security as may be demanded by the Lender to insure such payments and prevent
any sale or forfeiture of the Premises by reason of such nonpayment, failure of
performance or contest by Borrower. Any such contest shall be prosecuted with
due diligence and the Borrower shall promptly after final determination thereof
pay the amount of any levy, lien or imposition so determined, together with all
interest and penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this paragraph, Borrower shall (and if
Borrower shall fail so to do, Lender may but shall not be required to) pay any
such levy, lien or imposition notwithstanding such contest if in the reasonable
opinion of the Lender, the Premises shall be in jeopardy or in danger of being
forfeited or foreclosed.

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

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

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

     SECTION 5.08 FISCAL YEAR. Borrower shall not change its fiscal year except
upon prior written notice to Lender.

     SECTION 5.09 ESTOPPEL CERTIFICATES. Borrower shall, from time to time, upon
request by Lender, promptly execute, acknowledge and deliver to Lender a
certificate of Borrower stating the amount of principal and interest then owing
on the Obligations, whether or not any setoffs or defenses exist with respect to
all or any part of the Obligations, and, if any such setoffs

                                       16

<PAGE>

or defenses exist, stating in detail the specific facts relating to each such
setoff or defense. Any such certificate may be relied upon by any prospective
assignee of Lender.

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

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

     SECTION 5.12 NO JOINT VENTURE. Neither the provisions of any of the Loan
Documents or the Environmental Indemnification Agreement nor the acts of the
parties thereto shall be construed to create a partnership or joint venture
between Borrower and Lender.

     SECTION 5.13 LOANS BV PARTNERS AND AFFILIATES. Borrower agrees that any
loan or other advance heretofore or hereafter made to Borrower by a partner,
member or any Affiliate shall be subordinate in all respects to the Loan, and
Borrower agrees that, following any Event of Default, and until repayment of the
Obligations, Borrower shall make no repayment to the partner, member or
Affiliate of any such loan or advance.

                                   ARTICLE VI

                              FURTHER DISBURSEMENTS

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

                                   ARTICLE VII

                                EVENTS OF DEFAULT

     SECTION 7.01 EVENTS OF DEFAULT. Each of the following events shall
constitute an Event of Default under this Agreement:

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

                                       17
<PAGE>

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

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

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

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

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

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

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

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

                                       18

<PAGE>

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

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

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

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

     SECTION 7.04 REMEDIES CUMULATIVE. The foregoing remedies are cumulative of,
and in addition to, and not restrictive or in lieu of, the other remedies
provided for herein and the remedies provided for or allowed by the other Loan
Documents or the Environmental Indemnification Agreement, or provided for or
allowed by law, or in equity.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     SECTION 8.01 NOTICES.

     (a) All notices, demands, requests, and other communications desired or
required to be given hereunder ("NOTICES"), shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.

     (b) All Notices shall be deemed given and effective upon the earlier to
occur of (i) the hand delivery of such Notice to the address for Notices; (ii)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above. All Notices shall be addressed to
the following addresses:

                                       19

<PAGE>

     Borrower:         Summit Hotel Properties, LLC
                       c/o The Summit Group, Inc.
                       2701 South Minnesota Avenue, Suite 6
                       Sioux Falls, South Dakota 57105
                       Attention: Hulyn Farr

     With a copy to:   Hagen, Wilka & Archer, P.C.
                       600 South Main Avenue, Suite 102
                       Sioux Falls, South Dakota 57104
                       Attention: Jennifer L. Larsen, Esq.

     Lender:           ING Life Insurance and Annuity Company
                       c/o ING Investment Management LLC
                       5780 Powers Ferry Road, NW, Suite 300
                       Atlanta, Georgia 30327-4349
                       Attention: Mortgage Loan Servicing Department

     and to:           ING Investment Management at LLC
                       5780 Powers Ferry Road, NW, Suite 300
                       Atlanta, Georgia 30327-4349
                       Attention: Real Estate Law Department

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

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

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

                                       20

<PAGE>

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

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

     SECTION 8.05 TIME OF ESSENCE. Time is of the essence of this Agreement and
each of the other Loan Documents and the Environmental Indemnification
Agreement.

     SECTION 8.06 GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the laws
of the State of Tennessee, without regard to principles of conflicts of laws
thereof.

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

     SECTION 8.08 EFFECTIVENESS; SURVIVAL.

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

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

     SECTION 8.09 SEVERABILITY. In case any provision in or Obligation under
this Agreement or the other Loan Documents or the Environmental Indemnification
Agreement shall be invalid,

                                       21

<PAGE>

illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

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

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

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

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

     SECTION 8.14 JURY TRIAL WAIVER; CONSENT TO FORUM.

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

     (b) BORROWER ALSO AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL
INDEMNIFICATION AGREEMENTS OR TO ENFORCE ANY JUDGMENT OBTAINED AGAINST BORROWER
IN CONNECTION WITH THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENT, MAY BE BROUGHT BY
LENDER IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE

                                       22

<PAGE>

STATE IN WHICH LENDER'S ADDRESS SHOWN ABOVE IS LOCATED, OR IN ANY ONE OR MORE
OTHER STATE OR FEDERAL COURTS SITTING IN ANY COUNTY AND STATE IN WHICH ANY OF
THE PROPERTY IS LOCATED. BORROWER IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR FUTURE
OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
ENVIRONMENTAL INDEMNIFICATION AGREEMENTS.

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

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       23

<PAGE>

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

                                        BORROWER:

                                        SUMMIT HOTEL PROPERTIES, LLC, a South
                                        Dakota limited liability company

                                        By: The Summit Group, Inc., a South
                                            Dakota corporation, Company Manager

                                        By: /s/ Kerry W. Boekelheide
                                            ------------------------------------
                                            Kerry W. Boekelheide, President

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       24

<PAGE>

                   [SIGNATURES CONTINUED FROM PRECEDING PAGE]

                                        LENDER:

                                        ING LIFE INSURANCE AND ANNUITY COMPANY,
                                        a Connecticut corporation

                                        By: ING Investment Management, LLC,
                                            as Authorized Agent

                                        By: /s/ Gregory R. Michaud
                                            ------------------------------------
                                        Name: Gregory R. Michaud
                                        Title: Vice President

                                       25

<PAGE>

                                   SCHEDULE I

                              [LIST OF PROPERTIES]

(1)  Courtyard by Marriott- 3076 Kirby Parkway, Memphis, Shelby County,
     Tennessee 38115

(2)  Residence Inn - 9314 Poplar Pike, Germantown, Shelby County, Tennessee
     38138

(3)  Fairfield Inn - 9320 Poplar Pike, Germantown, Shelby County, Tennessee
     38138

(4)  Hampton Inn - 6201-C Rogers Avenue, Fort Smith, Sebastian County, Arkansas
     72903

(5)  Holiday Inn Express - 2613 South Vista Avenue, Boise, Ada County, Idaho
     83705

(6)  Hampton Inn & Suites - 6635 Gateway Blvd. West, El Paso, El Paso County,
     Texas 79925<PAGE>

                                                                   EXHIBIT 10.13

                                                                  EXECUTION COPY

                               DEED OF TRUST NOTE

$17,000,000                                                        July 31, 1998

     For value received, DANA SUITES/BELL HOSPITALITY, L.L.C., a Delaware
limited liability company, having its principal place of business at 2481 Route
9, Fishkill, New York 12524, as successor by consolidation to Dana Suites,
L.L.C., a Delaware limited liability company, and Bell Hospitality, L.L.C., a
Delaware limited liability company (hereinafter referred to as "Maker"),
promises to pay to the order of CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,
a Delaware limited liability company ("Payee"), having its principal office at
11 Madison Avenue, New York, New York 10010, or at such place as the holder
hereof may from time to time designate in writing, the principal sum of
SEVENTEEN MILLION and 00/100 DOLLARS ($17,000,000.00) in lawful money of the
United States of America, with interest thereon to be computed on the unpaid
principal balance from time to time outstanding at the Applicable Interest Rate
(as hereinafter defined), and to be paid in installments as follows:

     A.   Prior to the Resizing Date, a payment of interest only computed at the
          Initial Term Interest Rate (as hereinafter defined) (i) on the date
          hereof, in the amount of Thirty-Eight Thousand Nine Hundred
          Fifty-Eight and 33/100 Dollars ($38,958.33) with respect to the
          interest accrual period from the date hereof to and including August
          10, 1998 and (ii) on the eleventh day" of September, 1998 and on the
          eleventh day of each calendar month thereafter (each a "Payment Date")
          up to and including the eleventh day of October, 1999, which date is
          the Resizing Date, in the amount of One Hundred Six Thousand Two
          Hundred Fifty and 00/100 Dollars ($106,250.00)

     B.   On each Payment Date after the Resizing Date, up to and including the
          Payment Date occurring on November 11, 2024; a monthly payment equal
          to the level monthly payment of principal and interest resulting from.
          calculating a twenty-five (25) year amortization schedule using as the
          principal amount the Resized Loan Amount and as the interest rate, the
          Resized Interest Rate (the "MONTHLY PAYMENT AMOUNT"); each of such
          monthly payments under this Paragraph B to be applied (i) to the
          payment of interest computed at the Resized Interest Rate (as
          hereinafter defined) and (ii) the balance applied toward the reduction
          of the principal sum of the Loan;

<PAGE>

                                                                               2

and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on the eleventh day of November 2024
(the "Maturity Date"). Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed and a three-hundred
sixty (360) day year. For purposes of making payments hereunder, but not for
purposes of calculating interest accrual periods, if the eleventh (11th) day of
a given month is not a Business Day (as hereinafter defined), then amounts due
on the Payment Date for such month (including payments due on the Maturity Date)
shall be due on the next succeeding Business Day. All amounts due under this
Note shall be payable without setoff, counterclaim or any other deduction
whatsoever. Maker shall, in addition, pay the fees and set-up costs of the
Servicer (as defined in the Deed of Trust referred to below), in accordance with
Paragraph 62 of the Deed of Trust (as defined below), and the costs and expenses
due under the Cash Management Agreement (as defined below).

     1.   As used in this Note:

          (a) The term "ALLOCATED LOAN AMOUNT" shall have the meaning ascribed
     to such term in the Deed of Trust.

          (b) The term "ANNUAL BUDGET" shall mean an annual budget submitted by
     Maker to Payee in accordance with the terms of Paragraph 9(b) herein.

          (c) The term "ANTICIPATED REPAYMENT DATE" shall mean October 11, 2009.

          (d) The term "APPLICABLE INTEREST RATE" shall mean from (i) the date
     of this Note through but not including the Resizing Date, the Initial Term
     Interest Rate, (ii) from the Resizing Date through but not including the
     Anticipated Repayment Date, the Resized Interest Rate and (iii) from and
     after the Anticipated Repayment Date through and including the date this
     Note is paid in full, the Extended Term Rate.

          (e) The term "APPROVED ANNUAL BUDGET" shall mean each Annual Budget
     approved by Payee in accordance with terms herein.

          (f) The term "ASSIGNMENT OF LEASES" shall mean that certain Assignment
     of Leases and Rents of even date herewith executed by Maker in favor of
     Payee.

          (g) The term "BUSINESS DAY" shall mean a day other than a (i) Saturday
     or Sunday, or (ii) any day on which commercial banks in New York City are
     not open for general banking business.

          (h) The term "CAPITAL EXPENDITURES" shall mean for any period, the
     amount expended for items capitalized under generally accepted accounting
     principles including

<PAGE>

                                                                               3

     expenditures for building improvements or major repairs, leasing
     commissions and tenant improvements, to the extent not funded from a
     deferred maintenance escrow under a separate agreement.

          (i) The term "CASH EXPENSES" shall mean for any period, the operating
     expenses for the Trust Property as set forth in an Approved Annual Budget
     to the extent that such expenses are actually incurred by Maker, minus
     payments into the Tax and Insurance Impound Fund, the Debt Service Reserve
     and the FF&E Escrow Fund (all such funds and reserves as defined in the
     Deed of Trust).

          (j) The term "CASH MANAGEMENT AGREEMENT" shall mean have the meaning
     ascribed to such term in the Deed of Trust.

          (k) The term "DEBT" shall mean, collectively, the whole of the
     principal sum of this Note, together with all interest accrued and unpaid
     thereon and all other sums due under the Loan Documents.

          (l) The "DEBT SERVICE COVERAGE RATIO" shall have the meaning ascribed
     to such term in the Deed of Trust.

          (m) The term "DEED OF TRUST" shall mean that certain Deed of Trust,
     Assignment of Leases and Rents and Security Agreement of even date herewith
     in the amount of this Note given by Maker for the use and benefit of
     Payee covering the fee estate of Maker in certain premises as more
     particularly described therein.

          (n) The term "DEFAULT RATE" shall mean, a rate per annum which equal
     to the lesser of (a) the maximum rate permitted by applicable law, or (b)
     five percent (5%) above the Applicable Interest Rate.

          (o) The term "DEFEASANCE OPTION" shall mean the right and option of
     Maker to release either Individual Trust Property that comprises the Trust
     Property or the entire Trust Property from the lien of the Deed of Trust in
     accordance with the provision set forth in Paragraph 57 of the Deed of
     Trust.

          (p) The term "EXTENDED TERM RATE" shall mean (1) a rate per annum
     equal to the greater of (i) the Resized Interest Rate plus five (5)
     percentage points" or (ii) the Treasury Rate plus five (5) percentage
     points or (2) for so long as the Note is an asset of a trust, partnership,
     corporation or other entity formed in connection with a Securitization (as
     defined in the Deed of Trust) pursuant to which securities rated by any
     Rating Agency (as defined in the Deed of Trust) have been issued, a rate
     per annum equal to the Resized Interest Rate plus two (2) percentage
     points.

<PAGE>

                                                                               4

          (q) The term "EXCESS CASH FLOW" shall mean, for any period, the sum
     (determined in accordance with generally accepted accounting principles,
     consistently applied) of (i) Net Operating Income, plus (ii) depreciation
     and amortization (to the extent deducted in determining Net Operating
     Income) for such period, plus (iii) disbursements from the Tax and
     Insurance Impound Fund, the Debt Service Reserve and the FF&E Escrow Fund
     or any other escrows or reserves approved by Payee or provided for under
     the Loan Documents, but only to the extent disbursed by Maker and not
     applied to the payment of, or reimbursement for, taxes, insurance and other
     amounts for which such reserves were set aside, minus (i) actual payments
     of the regularly scheduled principal and interest payments (calculated at
     the Applicable Interest Rate, or at the Default Rate, if applicable) due
     and payable in accordance with this Note during an applicable period, minus
     (ii) actual Capital Expenditures in excess of payments from the FF&E Escrow
     Fund and funding of reserves for working capital and Extraordinary Expenses
     as approved by Payee in its sole discretion, and minus (iii) payments into
     the Tax and Insurance Impound Fund, the Debt Service Reserve, the Cash
     Sweep Reserve and the FF&E Escrow Fund and other reserves required under
     the Loan Documents (to the extent not already deducted in determining Net
     Operating Income).

          (r) The term "EXTRAORDINARY EXPENSE" shall mean an extraordinary
     operating expense or capital expense not set forth in the Approved Annual
     Budget or allotted for in the FF&E Escrow Fund, or any other reserves
     required under the Loan Documents.

          (s) The term "INDIVIDUAL TRUST PROPERTY" shall have the meaning
     ascribed to such term in the Deed of Trust.

          (t) The term "INITIAL TERM INTEREST RATE" shall mean a rate of seven
     and one-half percent (7.50%) per annum until the Resizing Date.

          (u) The term KEY PRINCIPALS shall mean collectively, Michael H.
     Dubroff and Doug Heltne and their respective heirs, successors and assigns,
     each individually, a Key Principal.

          (v) The term "LOAN" shall mean that certain loan made by Payee to
     Maker contemporaneously herewith.

          (w) The term "LOAN DOCUMENTS" shall mean collectively this Note, the
     Deed of Trust, the Assignment of Leases, the Cash Management Agreement, and
     any and all other documents securing, evidencing, or guaranteeing all or
     any portion of the Loan or otherwise executed and/or delivered in
     connection with this Note and the Loan, including, without limitation, that
     certain Guaranty Agreement dated of even date herewith made jointly and
     severally by Michael H. Dubroff, Doug Heltne and Maker.

<PAGE>

                                                                               5

          (x) The term "LOCK BOX EVENT" shall mean the earliest to occur of (i)
     the date that is six (6) months prior to the Anticipated Repayment Date;
     (ii) an Event of Default under the Deed of Trust or any of the Loan
     Documents; (iii) any breach or default under either Management Agreement or
     either Franchise Agreement (as both are defined in the Deed of Trust) that
     remains uncured by Maker beyond the applicable grace period, if any and
     (iv) any failure of the Test DSCR to equal or exceed 1.15 to 1.

          (y) The term "MEZZANINE LOAN" shall have the meaning ascribed to such
     term in Paragraph 7(b)(ii) hereof.

          (z) The term "NET CAPITAL EXPENDITURES" shall mean for any period the
     amount by which Capital Expenditures during such period exceeds
     reimbursements for such items during such period from any escrow or reserve
     fund established pursuant to the Loan Documents.

          (aa) The term "RESIZED INTEREST RATE" shall mean a rate per annum,
     applicable from and after the Resizing Date, equal to the weighted average,
     calculated in the reasonable judgment of Payee of the (i) Initial Term
     Interest Rate (weighted by the ratio of the principal balance of the Loan
     prior to the Resizing Date to the principal balance of the Loan as of the
     Resizing Date) and (ii) fixed rate per annum equal to the Treasury Rate
     plus 200 basis points (weighted by the ratio of the amount, if any, by
     which the principal balance of the Loan shall be increased as of the
     Resizing Date to the principal balance of the Loan as of the Resizing
     Date). The Resized Interest Rate shall be calculated on or before the
     Resizing Date pursuant to Paragraph 7 hereof.

          (bb) The term "RESIZED LOAN AMOUNT" shall have the meaning ascribed to
     such term in Paragraph 7(a) hereof.

          (cc) The term "RESIZING DATE" shall mean October 11, 1999.

          (dd) The term "SERVICER" shall have the meaning ascribed to such term
     in the Deed of Trust.

          (ee) The term "TEST DSCR" shall mean the Debt Service Coverage Ratio,
     calculated by Payee or Servicer on a cash basis no later than sixty (60)
     days after the end of each calendar quarter, for the twelve (12) month
     period ending on the date of calculation, calculated utilizing actual Net
     Operating Income for the entire Trust Property, unless expressly stated to
     the contrary herein (without taking into account any of the assumptions or
     adjustments set forth in Paragraph 18(c)(i)(A), (B), (C) and (D) of the

<PAGE>

                                                                               6

     Deed of Trust) and using the actual aggregate debt service on the Loan and
     the Mezzanine Loan, if any, for such twelve (12) month period.

          (ff) The term "TREASURY RATE" shall mean (i) as of the Resizing Date,
     for purposes of calculating the Resized Interest Rate and the Resized Loan
     Amount, the yield, calculated by linear interpolation (rounded to the
     nearest one-thousandth of one percent (i.e., 0.001%)) of the yields of
     noncallable United States Treasury obligations with terms (one longer and
     one shorter) most nearly as possible to ten (10) years, and (ii) as of the
     Anticipated, Repayment Date, for purposes of calculating the Extended Term
     Interest Rate, the yield, calculated by linear interpolation (rounded to
     the nearest one-thousandth of one percent (i.e., 0.001%)) of the yields of
     noncallable United States Treasury obligations with terms (one longer and
     one shorter) most nearly' approximating the period from the Anticipated
     Repayment Date to the Maturity Date, in all cases as determined by Payee on
     the basis of Federal Reserve Statistical Release H.15-Selected Interest
     Rates under the heading U.S. Governmental Security/Treasury Constant
     Maturities, or other recognized source of financial market information
     selected by Payee.

          (gg) The term "TRUST PROPERTY" shall have the meaning ascribed to such
     term in the Deed of Trust.

          (hh) The term "YIELD MAINTENANCE PREMIUM" shall have the meaning
     ascribed to such term in the Deed of Trust.

     2. This Note is evidence of the Loan and of the obligation of the Maker to
repay the Loan in accordance with the terms hereof. This Note is secured inter
alia by (a) the Deed of Trust, (b) the Assignment of Leases, and (c) the other
Loan Documents.

     3. If any sum payable under this Note is not paid on or before the date on
which it is due, Maker shall pay to Payee upon demand an amount equal to the
lesser of three percent (3%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray a portion of the expenses incurred by Payee
in handling and processing such delinquent payment and to compensate Payee for
the loss of the use of such delinquent payment. If the day when any payment
required under this Note is due is not a Business Day, then payment shall be due
on the first Business Day thereafter.

     4. The Debt or any portion thereof, shall without notice become immediately
due and payable at the option of Payee if any payment required in this Note is
not paid on or before the date on which it is due or upon the happening of any
other Event of Default (as defined in the Deed of Trust). In the event that it
should become necessary to employ counsel to collect or enforce the Debt or to
protect or foreclose the security therefor, Maker also shall pay on demand

<PAGE>

                                                                               7

all costs of collection incurred by Payee, including attorneys' fees and costs
reasonably incurred for the services of counsel whether or not suit be brought.

     5. Maker does hereby agree that upon the occurrence of an Event of Default
(including upon the failure of Maker to pay the Debt in full on the Maturity
Date), Payee shall be entitled to receive and Maker shall pay interest on the
entire unpaid principal sum and any other amounts due at the Default Rate,
together with the Yield Maintenance Premium (as defined in the Deed of Trust) if
any, that would be required under the Defeasance Option, assuming a Defeasance
of each Individual Trust Property comprising the Trust Property.

     6. Maker hereby agrees that upon the occurrence of an Event of Default
Maker shall pay to Payee on the eleventh day of each month while such Event of
Default continues, an aggregate amount equal to the Excess Cash Flow for the
prior month, such Excess Cash Flow to be applied by Payee to the payment of the
Debt in such order as Payee shall determine in its sole discretion, including,
without limitation, alternating applications thereof between interest and
principal. Interest at the Default Rate and Excess Cash Flow shall both be
computed from the occurrence of the Event of Default until the actual receipt
and collection of the Debt. Interest at the Default Rate shall be added to the
Debt and shall be secured by the Deed of Trust. This paragraph, however, shall
not be construed as an agreement or privilege to extend the date of the payment
of the Debt, nor as a waiver of any other right or remedy accruing to Payee by
reason of the occurrence of any Event of Default; the acceptance of any payment
of Excess Cash Flow shall not be deemed to cure or constitute a waiver of any
Event of Default; and Payee retains its rights under this Note to accelerate and
to continue to demand payment of the Debt upon the happening of any Event of
Default despite any payment of Excess Cash Flow.

     7. (a) Sixty days prior to the Resizing Date, Payee may notify Maker that
Maker must provide at Maker's sole cost and expense a new or updated appraisal
in form and substance acceptable to Payee and from an appraiser acceptable to
Payee, which appraiser used to prepare the appraisals provided in connection
with the closing of the Loan, Hospitality Valuation Services International,
shall be deemed so approved, dated not more than 45 days before the Resizing
Date for each Individual Trust Property. Prior to the Resizing Date, whether or
not Payee requires such new appraisal, Payee shall re-underwrite the Loan
applying its standard underwriting criteria for loans and properties of the
size, type and nature of the Loan and the Trust Property and, no later than 30
days before the Resizing Date, Payee will send Maker a notice (the "RESIZING
NOTICE") setting forth the new principal amount of the Loan resulting from such
re-underwriting ("RESIZED LOAN AMOUNT"), together with the Resized Interest
Rate, the Monthly Payment Amount and the revised Allocated Loan Amount for each
Individual Trust Property. The Resized Loan Amount shall be a principal amount
that (A) will provide a loan to value percentage of not greater than 80% and (B)
will result in a Debt Service Coverage Ratio of at least 1.40 to 1, calculated
utilizing (i) Net Operating Income generated by both Individual Trust Properties
for the twelve (12) month period ending on the date of calculation and (ii) the
greater of the (x) assumed level-

<PAGE>
\
                                                                               8

monthly debt service payments resulting from calculating a twenty-Five (25) year
amortization schedule using as the principal amount the Resized Loan Amount and
as the interest rate the Treasury Rate plus two hundred (200) basis points or
(y) assumed level-monthly debt service payments using as the principal amount
the Resized Loan Amount multiplied by a debt service constant of 10.90%.

          (b) (i) If the Resized Loan Amount calculated in accordance with
     Paragraph 7(a) above is greater than the original Loan amount, then on the
     Resizing Date, Payee will fund such excess to Maker as an increase to the
     principal amount of the Loan. In connection with the foregoing, Payee and
     Maker will amend the Loan Documents (including this Note) to reflect the
     Resized Loan Amount, the Resized Interest Rate, the Monthly Payment Amount
     and the revised Allocated Loan Amount for each Individual Trust Property.

               (ii) If the Resized Loan Amount is less than the original
          principal amount of the Loan, Payee will propose, in the Resizing
          Notice, the terms of a mezzanine financing ("MEZZANINE LOAN") that
          will cover such shortfall. In no event may the projected Debt Service
          Coverage Ratio through the Anticipated Repayment Date, calculated
          using the Resized Loan Amount assuming a minimum debt service constant
          of 10.90%, combined with the actual debt service on the Mezzanine
          Loan, be less than 1.0 to 1. The Mezzanine Loan shall be structured
          and priced in a manner consistent with Payee's standard mezzanine
          financing products, at a commercially reasonable interest rate based
          on a five (5) year amortization schedule, will mature no later than
          the Anticipated Repayment Date and may be collateralized by a pledge
          of the equity interests in Maker or may be convertible into a
          preferred equity interest in Maker, in each case as more fully set
          forth in the Resizing Notice. If the Mezzanine Loan is entered into,
          then on the Resizing Date, Payee and Maker will amend the Cash
          Management Agreement (or enter into a second Cash Management Agreement
          in connection with the Mezzanine Loan) to reflect the debt service on
          the Mezzanine Loan.

          (c) If the Resized Loan Amount is less than the original Loan amount,
     then within 10 days of receiving Payee's Resizing Notice, Maker shall
     respond in writing that it will either (i) accept the Mezzanine Loan or
     accept mezzanine financing from a third-party lender (not affiliated with
     Payee) which third-party lender shall be approved by Payee in Payee's sole
     discretion upon terms and conditions and governed by loan documents
     approved by Payee in Payee's sole discretion which approval shall be
     further conditioned on such third party lender's entering into an
     intercreditor agreement with Payee in form and substance to be determined
     by Payee in Payee's sole discretion (and in either case make any prepayment
     of the Loan necessary to meet the Debt Service Coverage Ratio test set
     forth in clause (b)(ii) above or (ii) prepay the Loan to the Resized Loan
<PAGE>

                                                                               9

     Amount. Any prepayment made hereunder shall be made no later than the
     Resizing Date, and shall be permitted notwithstanding the limitations set
     forth in Paragraph 8 below, but shall be made together with the Yield
     Maintenance Premium, calculated in accordance with Paragraph 57 of the Deed
     of Trust. Failure of Maker to make any prepayment of the Loan or accept the
     Mezzanine Loan or enter into any mezzanine financing required hereunder on
     or before the Resizing Date shall constitute an Event of Default without
     further notice or demand by Payee and the Loan shall become fully recourse
     to Maker for the amount of the shortfall described in clause (b)(ii) above,
     provided that the amount of such Debt which shall be fully recourse to
     Maker under this clause (c) shall not exceed TWO MILLION FIVE HUNDRED
     THOUSAND DOLLARS AND 00/100 CENTS ($2,500,000.00). In the event Maker shall
     accept the Mezzanine Loan, Maker and Payee shall enter into binding
     documents evidencing and governing the Mezzanine Loan on Payee's standard
     forms appropriately modified to reflect the specific terms of the Mezzanine
     Loan, which documents will be effective as of the Resizing Date.

          (d) Effective from and after the Resizing Date, the principal amount
     of the Loan shall be the Resized Loan Amount and the interest rate shall be
     the Resized Interest Rate. As of the Resizing Date, the Maker shall obtain,
     at its sole cost and expense, an endorsement to Payee's mortgagee's title
     insurance policy confirming that the lien of the Deed of Trust continues to
     be a first lien on the Trust Property securing the Resized Loan Amount
     subject to no prior liens or encumbrances other than the Permitted
     Encumbrances and such other matters as Payee shall reasonably require. If
     Payee's title insurer and/or Payee reasonably require that any of the Loan
     Documents be amended upon the Resizing Date, Maker and Payee will, at the
     expense of Maker, amend the Loan Documents, including, without limitation,
     Exhibit B of the Deed of Trust to reflect, as is applicable, the Resized
     Loan Amount, the Resized Interest Rate, the Monthly Payment Amount and the
     revised Allocated Loan Amount for each Individual Trust Property. In the
     event the Loan Documents are amended in accordance with this Paragraph
     7(d), Maker shall cause to be delivered to Payee an opinion of counsel
     reasonably acceptable to Payee as to the due authorization and delivery of
     the documents and instruments amending the Loan and evidencing and
     governing the Mezzanine Loan and/or the enforceability of such documents
     and instruments. Maker shall pay all of Payee's cost and expenses incurred
     in effecting the resizing of the Loan (including, without limitation,
     reasonable attorneys' fees). Satisfaction of the foregoing requirements
     shall be a condition precedent to the resizing of the Loan by Payee.

     8. This Note may not be prepaid prior to the Anticipated Repayment Date;
provided, however, Maker shall have the right and option to release the Trust
Property from the lien of the Deed of Trust in accordance with the terms and
provisions of the Defeasance Option. Notwithstanding the foregoing sentence, on
the Payment Date that is no more than sixty (60) days prior to the Anticipated
Repayment Date (the "OPTIONAL PREPAYMENT DATE") or on any Payment

<PAGE>

                                                                              10

Date thereafter, the Maker may, at its option and upon thirty (30) days prior
written notice from Maker to Payee, prepay in whole, without any premium or
penalty, or in part the outstanding principal balance of this Note and any other
amounts outstanding, provided, however, that any partial prepayment shall be in
an amount equal to one hundred twenty-five percent (125%) of the Allocated Loan
Amount under the Deed of Trust allocated to the Individual Trust Property which
is proposed to be released from the lien of the Deed of Trust with respect to
such partial prepayment, to be applied toward the reduction of the outstanding
principal balance of this Note. Any prepayment prior to the Anticipated
Repayment Date on a date other than a Payment Date, shall, in any event, include
interest through the following Payment Date. In the event of a full or partial
prepayment occurring after the Optional Prepayment Date in accordance with the
foregoing provision, Payee may cause the release of one or both of the
Individual Trust Properties, as the case may be, from the lien of this Deed of
Trust and the other Loan Documents upon the satisfaction of the following
conditions:

          (a) all accrued and unpaid interest and all other sums due under the
     Note and under the other Loan Documents allocated to each Individual Trust
     Property being released, the fee of the Servicer and any other charges with
     respect to such prepayment up to the date of such prepayment and release
     (the "PREPAYMENT RELEASE DATE"), including, without limitation, all costs
     and expenses incurred by Payee or its agents in connection with such
     prepayment and release, shall be paid in full on or prior to the Prepayment
     Release Date; and

          (b) if such prepayment results in the release of only one Individual
     Trust Property from the lien of the Deed of Trust, the Debt Service
     Coverage Ratio for the remaining Individual Trust Property (computed as of
     the immediately preceding Payment Date using the Net Operating Income
     generated by the remaining Individual Trust Property) shall equal or exceed
     the greater of (i) 1.45 to 1; (ii) the Debt Service Coverage Ratio for the
     entire Trust Property on the closing of the Loan and (iii) the Debt Service
     Coverage Ratio immediately prior to the release of the Individual Trust
     Property from the lien of the Deed of Trust, and in addition, Maker shall
     deliver to Payee on or prior to the Prepayment Release Date:

               (i) a certificate of Maker certifying that all of the
          requirements set forth in this Paragraph 8 have been satisfied;

               (ii) an opinion of counsel for Maker in form and substance and
          delivered by counsel satisfactory to Payee in its sole discretion
          stating, among other things, that any REMIC Trust formed pursuant to a
          Securitization (as defined in the Deed of Trust) will not fail to
          maintain its status as a "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
          within the meaning of Section 860D of the Code as a result of such
          release;

<PAGE>

                                                                              11

               (iii) evidence in writing from the applicable Rating Agencies (as
          defined in the Deed of Trust) to the effect that the release will not
          result in a downgrading, withdrawal or qualification of the respective
          ratings in effect immediately prior to such release for any securities
          issued in connection with the securitization which are then
          outstanding; and

               (iv) such other certificates, documents or instruments as Payee
          may reasonably require.

Upon compliance with the requirements of this paragraph, the applicable
Individual Trust Property shall be released from the lien of the Deed of Trust
and the other Loan Documents. Maker will, at Maker's expense, execute and
deliver any agreements reasonably requested by Payee to release the lien of the
Deed of Trust from such applicable Individual Trust Property. If prior to the
Anticipated Repayment Date and following the occurrence of any Event of Default,
Maker shall tender payment of an amount sufficient to satisfy the Debt at any
time prior to a sale of the Trust Property or either Individual Trust Property,
either through foreclosure or the exercise of the other remedies available to
Payee under the Deed of Trust, such tender by Maker shall be deemed to be
voluntary and Maker shall pay, in addition to the Debt, the Yield Maintenance
Premium, if any, that would be required under the Defeasance Option.

     9. (a) Prior to the Resizing Date and thereafter if the resized loan amount
calculated using a debt service constant of 11.33% instead of 10.90%, would be
less than SEVENTEEN MILLION AND 00/100 DOLLARS ($17,000,000) and, in any event,
upon the occurrence of a Lock Box Event and thereafter until the Anticipated
Repayment Date, Maker shall cause all Rents to be deposited directly into the
Clearing Account required by the Cash Management Agreement in the manner
provided therein and all amounts so received shall be allocated on each Payment
Date in the following order of priority, in each case to the extent sufficient
funds remain therefor:

               (i) First, to the Tax and Insurance Impound Fund in accordance
          with the terms and conditions of Paragraph 6 of the Deed of Trust;

               (ii) Second, (A) prior to the Resizing Date, to the monthly
          payment of interest computed at the Initial Term Interest Rate and (B)
          on or after the Resizing Date, to pay the Monthly Payment Amount;

               (iii) Third, to the Payee for any other amounts due under the
          Loan Documents;

<PAGE>

                                                                              12

               (iv) Fourth, from and after the Resizing Date, to the FF&E Escrow
          Fund, in accordance with the terms and conditions of Paragraph 6 of
          the Deed of Trust;

               (v) Fifth, to the Debt Service Reserve, the amount, if any,
          required to be deposited therein in accordance with the terms and
          conditions of Paragraph 6 of the Deed of Trust;

               (vi) Sixth, for monthly Cash Expenses pursuant to the terms and
          conditions of the related Approved Annual Budget;

               (vii) Seventh, for monthly Net Capital Expenditures, pursuant to
          the terms and conditions of the related Approved Annual Budget;

               (viii) Eighth, for Extraordinary Expenses approved by Payee, if
          any; and

               (ix) Lastly, any excess amounts to the Cash Sweep Reserve in
          accordance with the terms and conditions of Paragraph 6 of the Deed of
          Trust.

     Nothing in Paragraph 9(a) above shall limit, reduce or otherwise affect
Maker's obligations to make payments of the Monthly Payment of monthly payments
to the Tax and Insurance Impound Fund, the FF&E Escrow Fund, the Cash Sweep
Reserve and the Debt Service Reserve due hereunder and under the other Loan
Documents, whether or not Rents are available to make such payments.

          (b) For each fiscal year during the term of the Loan, the Maker shall
     submit to the Payee for the Payee's written approval an Annual Budget not
     later than sixty (60) days prior to the commencement of such fiscal year,
     in form satisfactory to Payee setting forth in reasonable detail budgeted
     monthly operating income and monthly operating capital and other expenses
     for each Individual Trust Property. Each Annual Budget shall contain, among
     other things, limitations on management fees, third party service fees, and
     other expenses as the Maker may reasonably determine. Payee shall have the
     right to approve such Annual Budget which approval shall not be
     unreasonably withheld, and in the event that Payee objects to the proposed
     Annual Budget submitted by Maker, Payee shall advise Maker of such
     objections within fifteen (15) days after receipt thereof (and deliver to
     Maker a reasonably detailed description of such objections which shall be
     limited to reasonable adjustments that are necessary to assure the
     operation and maintenance of the Trust Property in accordance with the Loan
     Documents) and Maker shall within three (3) days after receipt of notice of
     any such objections revise such Annual Budget and resubmit the same to
     Payee. Payee shall advise Maker of any objections to such revised Annual
     Budget within ten (10) days after receipt thereof (and deliver to

<PAGE>

                                                                              13

     Maker a reasonably detailed description of such objections) and Maker shall
     revise the same in accordance with the process described in this
     subparagraph until the Payee approves an Annual Budget, provided, however,
     that if Payee shall not advise Maker of its objections to any proposed
     Annual Budget within the applicable time period set forth in this
     paragraph, then such proposed Annual Budget shall be deemed approved by
     Payee. Until such time that Payee approves a proposed Annual Budget, the
     most recently Approved Annual Budget shall apply; provided that, such
     Approved Annual Budget shall be adjusted to reflect actual increases in
     real estate taxes, insurance premiums and utilities expenses.

     10. In the event that the Maker does not pay the Debt in full prior to the
Anticipated Repayment Date, the provisions of Paragraph 9(b) as set forth above
shall remain in full force and effect, and the following subparagraphs also
shall apply.

          (a) From and after the Anticipated Repayment Date, interest shall
     accrue on the unpaid principal balance from time to time outstanding on
     this Note at the Extended Term Rate. Interest accrued at the Extended Term
     Rate and not paid pursuant to this Paragraph 10 shall be deferred and added
     to the Debt and shall earn interest at the Extended Term Rate to the extent
     permitted by applicable law (such accrued interest is hereinafter defined
     as "Accrued Interest"). All of the Debt, including any Accrued Interest,
     shall be due and payable on the Maturity Date.

          (b) Maker shall cause all Rents to be deposited directly into the
     Clearing Account required by the Cash Management Agreement in the manner
     provided therein and all amounts so received shall be allocated on each
     Payment Date in the following order of priority, in each case to the extent
     sufficient funds remain therefor:

               (i) First, to the Tax and Insurance Impound Fund in accordance
          with the terms and conditions of Paragraph 6 of the Deed of Trust;

               (ii) Second, to pay the Monthly Payment Amount;"

               (iii) Third, to the Payee for any other amounts due under the
          Loan Documents;

               (iv) Fourth, to the FF&E Escrow Fund, in accordance with the
          terms and conditions of Paragraph 6 of the Deed of Trust;

               (v) Fifth, to the Debt Service Reserve, the amount, if any,
          required to be deposited therein in accordance with the terms and
          conditions of Paragraph 6 of the Deed of Trust;

<PAGE>

                                                                              14

               (vi) Sixth, for monthly Cash Expenses pursuant to the terms and
          conditions of the related Approved Annual Budget;

               (vii) Seventh, for monthly Net Capital Expenditures, pursuant to
          the terms and conditions of the related Approved Annual Budget;

               (viii) Eighth, for Extraordinary Expenses approved by Payee, if
          any;

               (ix) Ninth, to the Payee to be applied against the outstanding
          principal due under this Note until such principal amount is paid in
          full;

               (x) Tenth, to the Payee for Accrued Interest, until all such
          Accrued Interest has been repaid; and

               (xi) Lastly, to pay to the Maker any excess amounts.

          (c) In the event that the Maker must incur an Extraordinary Expense,
     for purposes of Paragraphs 9 and 10 hereof, then the Maker shall promptly
     deliver to Payee a reasonably detailed explanation of such proposed
     Extraordinary Expense for the Payee's approval, which approval may be
     granted or denied in the Payee's sole discretion.

          (d) Nothing in this Paragraph 10 shall limit, reduce or otherwise
     affect Maker's obligations to make payments of the Monthly Payment Amount,
     payments to the Tax and Insurance Impound Fund, the FF&E Escrow Fund, and
     the Debt Service Reserve due hereunder and under the other Loan Documents,
     whether or not Rents are available to make such payments.

     11. It is expressly stipulated and agreed to be the intent of Maker and
Payee at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Payee to contract for, charge,
take, reserve, or receive a greater amount of interest than under state law) and
that this paragraph (and the similar paragraph contained in the Deed of Trust)
shall control every other covenant and agreement in this Note and the other Loan
Documents. If the applicable law (state or federal) is ever judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Debt, or if Payee's exercise of the
option to accelerate the Maturity Date, or if any prepayment or the exercise of
any Defeasance Option by Maker results in Maker having paid any interest in
excess of that permitted by applicable law, then it is Payee's express intent
that all excess amounts theretofore collected by Payee shall be credited on the
principal balance of this Note and all other Debt and the provisions of this
Note and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new

<PAGE>

                                                                              15

documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Payee for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Payee to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned interest
at the time of such acceleration.

     12. This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Maker or Payee, but only by an agreement in writing signed by the party against
whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought. Whenever used, the singular number shall
include the plural, the plural the singular, and the words "PAYEE" and "MAKER"
shall include their respective successors, assigns, heirs, executors and
administrators. The obligations and liabilities of each of the Key Principals
shall be joint and several and if Maker consists of more than one person or
party, the obligations and liabilities of each such person or party comprising
the Maker shall be joint and several.

     13. Maker and all others who may become liable for the payment of all or
any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, protest, notice of protest, notice of nonpayment,
notice of intent to accelerate the maturity hereof and of acceleration. No
release of any security for the Debt or any person liable for payment of the
Debt, no extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of the Loan Documents
made by agreement between Payee and any other person or party shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Maker, and any other person or party who may become liable under
the Loan Documents for the payment of all or any part of the Debt.

     14. Subject to the qualifications below, Payee shall not enforce the
liability and obligation of Maker or any of the Key Principals to perform and
observe the obligations contained in this Note, the Deed of Trust or the other
Loan Documents by any legal, equitable or other action or proceeding wherein a
judgment shall be sought against Maker or any of the Key Principals, except that
Payee may bring a foreclosure action, an action for specific performance or any
other appropriate action or proceeding to enable Payee to enforce and realize
upon its interest under this Note, the Deed of Trust and the other Loan
Documents, or in the Trust Property or either Individual Trust Property, the
Rents, or any other collateral given to Payee pursuant to the Loan Documents;
provided, however, that, except as specifically provided herein, any judgment in
any such action or proceeding shall be enforceable against Maker only to the

<PAGE>

                                                                              16

extent of Maker's interest in the Trust Property or either Individual Trust
Property, in the Rents and in any other collateral given to Payee, and Payee, by
accepting this Note, the Deed of Trust and the other Loan Documents, agrees that
it shall not sue for, seek or demand any deficiency judgment against Maker in
any such action or proceeding under or by reason of or under or in connection
with this Note, the Deed of Trust or the other Loan Documents. The provisions of
this paragraph shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan Documents;
(b) impair the right of Payee to name Maker as a party defendant in any action
or suit for foreclosure and sale under the Deed of Trust; (c) affect the
validity or enforceability of or any guaranty made in connection with the Loan
or any of the rights and remedies of the Payee thereunder; (d) impair the right
of Payee to obtain the appointment of a receiver; (e) impair the enforcement of
the Assignment of Leases executed in connection herewith; or (f) constitute a
waiver of the right of Payee to enforce the liability and obligation of Maker
against Maker or any of the Key Principals, by money judgment or otherwise, to
the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Payee (including attorneys' fees and costs reasonably
incurred) arising out of or in connection with the following:

               (i) fraud or intentional misrepresentation by Maker or any Key
          Principal in connection with the Loan;

               (ii) the gross negligence or willful misconduct by Maker or any
          Key Principal;

               (iii) physical waste of the Trust Property or either Individual
          Trust Property which materially affects the value thereof;

               (iv) the breach of any representation, warranty, covenant or
          indemnification provision in that certain Hazardous Substances
          Indemnity Agreement of even date herewith given by Maker and the Key
          Principals to Payee or in the Deed of Trust concerning Environmental
          Laws, Hazardous Substances and Asbestos (as such terms are defined in
          the Deed of Trust);

               (v) the misappropriation of any personal property from or the
          removal or disposal of any portion of the Trust Property or either
          Individual Trust Property or any part thereof;

               (vi) the misapplication or conversion by Maker of (A) any
          insurance proceeds paid by reason of any loss, damage or destruction
          to the Trust Property, (B) any awards or other amounts received in
          connection with the condemnation of all or a portion of the Trust
          Property or either Individual Trust Property or a
<PAGE>

                                                                              17

          portion thereof, (C) any security deposits or Rents following an Event
          of Default, or (D) any Rents paid more than one month in advance;

               (vii) failure to pay charges for labor or materials or taxes or
          other charges that can create liens on any portion of the Trust
          Property or either Individual Trust Property; and

               (viii) any security deposits collected with respect to the Trust
          Property or either Individual Trust Property which are not delivered
          to Payee upon a foreclosure of the Trust Property or either Individual
          Trust Property or action in lieu thereof, except to the extent any
          such security deposits were applied in accordance with the terms and
          conditions of any of the Leases (as defined in the Deed of Trust)
          prior to the occurrence of the Event of Default that gave rise to such
          foreclosure or action in lieu thereof.

     Notwithstanding anything to the contrary in this Note or any of the Loan
Documents, (A) Payee shall not be deemed to have waived any right which Payee
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured by
the Deed of Trust or to require that all collateral shall continue to secure all
of the Debt owing to Payee in accordance with the Loan Documents, and (B) the
Debt shall become fully recourse JOINTLY AND SEVERALLY to Maker and each of the
Key Principals in the event that: (i) the first full monthly payment of interest
under this Note is not paid when due; (ii) Maker fails to maintain its status as
a single purpose entity, as required by, and in accordance with the terms and
provisions of the Deed of Trust; (iii) Maker fails to obtain Payee's prior
written consent to any subordinate financing or other voluntary lien encumbering
the Trust Property or either Individual Trust Property; (iv) Maker fails to
obtain Payee's prior written consent to any assignment, transfer, or conveyance
of the Trust Property' or either Individual Trust Property or any interest
therein as required by the Deed of Trust; (v) subject "to the limitation set
forth in Section 7(c) hereof with respect to the amount of Debt which shall
become recourse in connection with a default under Section 7 hereof, if the
Resized Loan Amount calculated in accordance with Section 7(a) hereof is less
than the original Loan Amount, Maker fails on or before the Resizing Date to
cause the Loan to be prepaid and/or fails to enter into any mezzanine financing,
as required by Section 7 hereof or (vi) subject to clauses (X), (Y) and (Z) of
this paragraph, following an Event of Default, Maker or any of the Key
Principals takes any action, asserts any claim, participates in or is a party to
any activity, action or proceeding intended to, or the likely result of which
would be to, delay, enjoin, impede, hinder or prevent Payee's exercise of its
rights and remedies at law, in equity, under the Deed of Trust or under any of
the other Loan Documents, including without limitation (A) the filing, whether
by Maker or any of the Key Principals, or the filing by any third party against
Maker at the insistence of Maker or any of the Key Principals, of a
reorganization, liquidation or other similar bankruptcy proceeding under Title
11 of the United States Code or under any other federal or state

<PAGE>

                                                                              18

debtor relief law (a "BANKRUPTCY CASE") or (B) the institution or filing whether
by Maker or any of the Key Principals on behalf of Maker, or the institution or
Filing by any third party at the insistence of any of the Key Principals or
Maker, of any suit or other proceeding to hinder, enjoin, impede or delay the
exercise by Payee of such rights and remedies (a "COMMON LAW ACTION"). For
purposes of this paragraph:

          (X) it shall be conclusively deemed that any Bankruptcy Case or Common
     Law Action was not instituted at the insistence of Maker or any of the Key
     Principals if such Maker or any of the Key Principals contests the filing
     of any such proceeding to the extent reasonably requested by Payee;

          (Y) notwithstanding anything contained herein to the contrary,
     following an Event of Default that relates to or arose from a breach or
     failure by Maker under this Agreement or any of the other Loan Documents
     that cannot be cured by the payment of a sum of money, Maker and each Key
     Principal shall not be liable under this clause (v) by reason of such Maker
     raising or interposing good faith, legitimate defenses or claims (excluding
     the filing or commencement of a Bankruptcy Case) that are not expressly
     prohibited or that have not otherwise been expressly waived pursuant to the
     Deed of Trust or the other Loan Documents during the exercise by Payee of
     its rights and remedies at law, in equity, under the Deed of Trust or
     under any of the other Loan Documents. However, if the court in which such
     rights and remedies are being adjudicated shall determine that such
     defenses or claims were groundless, unwarranted, frivolous or were intended
     primarily to hinder, delay or impede the exercise by Payee of such rights
     and remedies, then the Maker and each of the Key Principals shall be and
     remain jointly and severally liable to the full extent set forth in the
     Deed of Trust and other Loan Documents; and

          (Z) notwithstanding anything contained herein to the contrary, the
     liability of Maker or each Key Principal under clause (v) above shall cease
     and terminate if any general partner or managing member of the Maker or any
     Key Principal shall (1) cause Maker to convey title to the Trust Property
     or applicable Individual Trust Property to Payee or its designee by deed
     in form and substance satisfactory to Payee within sixty (60) days after
     written demand given after the occurrence of an Event of Default by Payee
     to Maker directing such conveyance or (2) cause Maker to permit Payee to
     acquire title to the Trust Property or applicable Individual Trust Property
     through an uncontested judicial foreclosure, if Payee shall so elect in the
     foregoing notice.

     15. Maker (and the undersigned representative of Maker, if any) represents
that Maker has full power, authority and legal right to execute, deliver and
perform its obligations pursuant to this Note, the Deed of Trust and the other
Loan Documents and that this Note, the Deed of Trust and the other Loan
Documents constitute valid and binding obligations of Maker.

<PAGE>

                                                                              19

     16. All notices or other communications required or permitted to be given
pursuant hereto shall be given in the manner specified in the Deed of Trust
directed to the parties at their respective addresses as provided therein.

     17. MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE
OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MAKER,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. PAYEE IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY MAKER.

     18. This Note shall be governed by and construed in accordance with the
laws of the State of Arizona and the applicable laws of the United States of
America.

<PAGE>

Maker has duly executed this Note the day and year first above written.

                                        MAKER:

                                        Dana Suites/Bell Hospitality. L.L.C.
                                        a Delaware limited liability company

                                        By: DSDH, Inc.,
                                            a Delaware corporation
                                            Its managing member

                                        By: /s/ Michael H. Dubroff
                                            ------------------------------------
                                            Michael H. Dubroff
                                            President

Pay to the order of ________________,
without recourse.

Credit Suisse First Boston Mortgage
Capital LLC, a Delaware limited
liability company

By:
    ---------------------------------
Name:
      -------------------------------
Its Authorized Signatory

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