Document:

EX-10.1

CRM HOLDINGS, LTD.

and its Subsidiaries

Employment Agreement for James Scardino

CRM HOLDINGS, LTD. and its Subsidiaries

      

Employment Agreement for James Scardino

      

	 	 	 	 	 	 	 	 	 
	 	1.	 	 	Term
	 	 	1	 
	 	2.	 	 	Position, Duties and Responsibilities
	 	 	1	 
	 	3.	 	 	Base Salary
	 	 	2	 
	 	4.	 	 	Initial Restricted Stock Grant
	 	 	2	 
	 	5.	 	 	Incentive Awards
	 	 	2	 
	 	6.	 	 	Other Payments
	 	 	2	 
	 	7.	 	 	Employee Benefit Programs
	 	 	2	 
	 	8.	 	 	Disability
	 	 	2	 
	 	9.	 	 	Reimbursement of Business and Other Expenses
	 	 	3	 
	 	10.	 	 	Termination of Employment
	 	 	3	 
	 	11.	 	 	Confidentiality; Litigation Cooperation; Non-disparagement
	 	 	7	 
	 	12.	 	 	Non-competition
	 	 	8	 
	 	13.	 	 	Non-solicitation
	 	 	9	 
	 	14.	 	 	Remedies
	 	 	9	 
	 	15.	 	 	Resolution of Disputes
	 	 	9	 
	 	16.	 	 	Indemnification
	 	 	.9	 
	 	17.	 	 	Miscellaneous
	 	 	10	 

EMPLOYMENT AGREEMENT

AGREEMENT, made and entered into as of the 5th day of May, 2009 (“Effective Date”)
by and between CRM Holdings, Ltd., a Bermuda company (together with its subsidiaries from time to
time and its successors and assigns, “CRM”), and James Scardino (the “Executive”).

W I T N E S S E T H:

WHEREAS, CRM desires to employ Executive and Executive desires to accept such employment,
pursuant to an agreement embodying the terms of such employment (this “Agreement”).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually acknowledged, CRM and
Executive (individually a “Party” and together the “Parties”) agree to be bound in accordance with
the terms of this Agreement.

	 	1.	 	Term.

(a) The term of Executive’s employment under this Agreement shall commence on the Effective
Date and end on December 31, 2012 (the “Original Term”), unless terminated earlier in accordance
herewith. The Original Term shall be automatically renewed for successive one-year terms (the
“Renewal Terms”) unless at least 30 days prior to the expiration of the Original Term or any
Renewal Term, either Party notifies the other Party in writing that he or it is electing to
terminate this Agreement at the expiration of the then current Term. “Term” shall mean the
Original Term and all Renewal Terms.

(b) The Employment Agreement effective January 1, 2007 between CRM and Executive is hereby
terminated and accordingly shall no longer remain in full force and effect.

	 	2.	 	Position, Duties and Responsibilities.

(a) Generally. Executive shall serve as Chief Executive Officer (“CEO”) of CRM and as
a member of CRM’s Board of Directors (the “Board”), as well as Chief Executive Officer of each of
CRM’s subsidiaries. In any and all such capacities, Executive shall report solely to the Board.
Executive shall have and perform such duties, responsibilities, and authorities as are customary
for the chief executive officer of similar size companies and businesses as CRM, as are consistent
with such positions and status. Executive shall devote substantially all of his business time and
attention (except for periods of vacation or absence due to illness), and his best efforts,
abilities, experience, and talent to the position of CEO of CRM.

(b) Other Activities. During the Term, Executive may (i) serve on the boards of
directors of trade associations and/or charitable organizations, provided that Executive
shall notify the Board of any such position and shall not serve in such position if the Board
reasonably requests that he not do so, (ii) engage in charitable activities and community affairs,
and (iii) manage personal investments and affairs, provided that such activities described in
clauses (i), (ii), and (iii) do not materially interfere with the proper performance of his duties
as CEO or result in a breach of this Employment Agreement.

(c) Place of Employment. Executive’s principal place of employment shall be the
corporate offices of CRM.

	 	3.	 	Base Salary.

Executive shall be paid an annualized salary (“Base Salary”) of $450,000, in accordance with
CRM’s normal pay practices. The Base Salary shall be reviewed by the Compensation Committee (the
“Compensation Committee”) of the Board no less than annually.

4. Initial Restricted Stock Grant.

Executive has been awarded 100,000 “restricted shares” of common shares of CRM as of May 6,
2009. The terms of the grant shall be in accordance with the 2005 CRM Long Term Incentive Plan.

5. Incentive Awards.

Executive shall be eligible to participate in CRM’s annual incentive compensation plan with a
target annual incentive award opportunity of 50% of Base Salary (“Annual Incentive”) and a maximum
bonus opportunity of 100%, based upon Company profitability, stock price and performance criteria
as determined by the Compensation Committee on an annual basis. The Compensation Committee, in its
sole discretion, may pay any portion of the Annual Incentive in cash, restricted stock, or a
combination thereof.

6. Other Payments.

(a) Car Allowance. Executive shall receive a $1,000 a month car allowance, to cover
or contribute toward the cost of owning, operating, maintaining and insuring a motor vehicle of his
choosing.

(b) Vacation. Executive shall be entitled to five (5) weeks of paid vacation annually
and shall take holidays in accordance with CRM’s standard holiday schedule as amended from time to
time.

(c) Relocation Expenses. CRM shall make Executive’s monthly rental payments for the
rental property located in Poughkeepsie, New York. Said costs shall be deemed additional income to
Executive.

	 	7.	 	Employee Benefit Programs.

During the Term, Executive shall be entitled to participate in CRM’s employee benefit plans
and programs as such plans or programs may be in effect from time to time, including, without
limitation, health, medical and dental coverage (together, “Welfare Benefits”).

	 	8.	 	Disability.

During any period that Executive fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness (“Disability Period”), Executive shall continue to
receive his full Base Salary set forth in Section 3 until his employment is terminated pursuant to
Section 10(b) offset, on a dollar-for-dollar basis, by any CRM provided insurance or social
security payments made to Executive relating to such disability.

	 	9.	 	Reimbursement of Business and Other Expenses.

Executive is authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement, and CRM shall reimburse him for all such reasonable business
expenses, subject to documentation in accordance with CRM’s applicable policies.

	 	10.	 	Termination of Employment.

(a) Death. If Executive dies during the Term or any Renewal Term, Executive’s estate
and/or beneficiaries shall be entitled to (and their sole remedies under this Agreement shall be):

(i) Base Salary through the date of Executive’s death in a lump sum within 10
days following the Date of Termination;

(ii) the balance of any incentive awards earned as of December 31 of the prior
year (but not yet paid), (together, with unpaid Base Salary, “Accrued Amounts”),
which incentive awards shall be paid in the form and at the time the incentive
awards are generally paid to employees of the Company;

(iii) pro rata Annual Incentive for the year in which the date of termination
(“Termination Date”) occurs assuming Target performance (“Pro Rata Annual
Incentive”), which Pro Rata Annual Incentive shall be paid in a lump sum within 10
days following the Date of Termination;

(iv) immediate vesting of all unvested and outstanding stock options, (and the
right to exercise all such stock options for one year), the removal of any and all
restrictions regarding any restricted stock or deferred stock units, and the vesting
and settlement of any performance awards at target award levels (together, “Equity
Acceleration”);and

(v) other or additional benefits then due or earned through the Date of
Termination in accordance with applicable plans and programs of CRM
(“Entitlements”).

(b) Disability. If, as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been substantially unable to perform his duties hereunder for a
period of at least 120 consecutive days or 180 non-consecutive days within any 365-day period, the
Company shall have the right to terminate Executive’s employment hereunder for “Disability”, and
such termination in and of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement or any law. In the event Executive’s employment is terminated for Disability, Executive
shall be entitled to (and his sole remedies under this Agreement shall be):

(i) his Accrued Amounts and his Pro Rata Annual Incentive;

(ii) reimbursement pursuant to Section 9 for reasonable expenses incurred, but not paid
prior to such termination of employment; and

(iii) his Entitlements.

(c) Termination by CRM for Cause.

(i) In the event a majority vote of the independent members of the Board
resolves to terminate Executive’s employment for Cause, Executive’s sole remedies
under this Agreement shall be to receive his Accrued Amounts and any Entitlements
through the date of termination. Executive shall not be entitled to receive any
Severance Pay (as defined) or Welfare Benefits continuation, and his equity awards
will be settled in accordance with the terms and conditions of the applicable grant
agreements.

(ii) “Cause” shall mean Executive’s:

(A) breach of any of the material terms or covenants of this Agreement,
specifically including any breach of the covenants set forth in Sections 11, 12 or
13 of this Agreement;

(B) conviction of, or plea of nolo contendre to, any felony, or any act that is
materially and demonstrably injurious to CRM’s financial condition or CRM’s or
Executive’s reputation;

(C) drug or alcohol use which impairs the ability of Executive to perform his
duties hereunder;

(D) engaging in conduct constituting gross neglect or willful misconduct in
carrying out his duties under this Agreement and that is demonstrably injurious to
CRM’s financial condition or CRM’s or Executive’s reputation;

(E) act or omission of dishonesty, fraud, misrepresentation, conflict of
interest or breach of fiduciary duty;

(F) material failure to diligently, faithfully and competently perform a
substantial portion of Executive’s responsibilities, duties, or functions as
specified in this Agreement or as specified by the Board after 30 days advance
written notice by CRM and to the extent possible, a reasonable opportunity to cure
by the Executive;

(G) commission of any act or acts that harm the Company’s reputation, standing
or credibility within the communities it or he operates or with its clients or
suppliers; or

(H) act or series of acts constituting gross neglect and/or willful misconduct
resulting in a restatement of the Company’s financial statements due to material
non-compliance with any financial reporting requirement within the meaning of
Section 304 of The Sarbanes-Oxley Act of 2002.

(d) Voluntary Termination. In the event of a termination of employment by Executive
on his own initiative, which termination may be effective only 30 business days after delivery to
the Company of advance written notice of such termination, other than a termination due to death or
Disability, or by Executive for Good Reason, Executive shall be entitled to receive only his
Accrued Amounts and Entitlements.

(e) Termination by the Company without Cause or by Executive for Good Reason. In the
event a majority vote of the independent members of the Board resolves to terminate Executive’s
employment without Cause (which termination shall be effective as of the date specified by CRM in a
written notice to Executive), other than due to Executive’s death or Disability, or if Executive
terminates his employment for Good Reason (as defined below), Executive’s sole remedies under this
Agreement shall be to receive:

(i) his Accrued Amounts; a pro rata portion of the Annual Incentive would have
been paid for the full year in which the Termination Date occurs based upon actual
performance, payable at the time Annual Incentive payments are generally paid to
employees of the Company; his Entitlements, and continuation of Welfare Benefits (to
the extent permissible under the terms of such plans and applicable law) for 18
months;

(ii) immediate vesting of all unvested and outstanding stock options and the
removal of any and all restrictions regarding any restricted stock or deferred stock
units, and

(iii) severance pay equal to 200% of the Base Salary immediately prior to the
Termination Date (unless a reduction in Base Salary is the reason for a Good Reason
termination, in which case, the Base Salary amount prior to any such reduction),
which severance pay shall be payable in 24 equal monthly payments commencing within
10 days after the effective date of the release provided for in Section 10(i)
hereof.

(f) Termination due to Change in Control. In the event Executive’s employment is
terminated by the Company without Cause or by Executive for Good Reason upon the occurrence of or
within six months following a Change in Control (as defined below), Executive’s sole remedy under
this Agreement shall be to receive:

(i) his Accrued Amounts; a pro rata portion of the Annual Incentive would have
been paid for the full year in which the Termination Date occurs based upon actual
performance, payable at the time Annual Incentive payments are generally paid to
employees of the Company; his Entitlements, and continuation of Welfare Benefits (to
the extent permissible under the terms of such plans and applicable law) for 12
months;

(ii) immediate vesting of all unvested and outstanding stock options and the
removal of any and all restrictions regarding any restricted stock or deferred stock
units, and

(iii) severance pay equal to 300% of the Base Salary immediately prior to the
Termination Date (unless a reduction in Base Salary is the reason for a Good Reason
termination, in which case, the Base Salary amount prior to any such reduction),
which severance pay shall be payable in 24 equal monthly payments commencing within
10 days after the effective date of the release provided for in Section 10(i)
hereof.

(g) Certain definitions. For purposes of this Agreement, the following terms have the
meanings ascribed to them:

“CHANGE IN CONTROL” shall mean any of the following:

(i) any sale, lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of the Company;

(ii) any “person” as such term is used in Section 13(d) and Section 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes,
directly or indirectly, the “beneficial owner” as defined in Rule 13d-3 under the
Exchange Act of securities of the Company that represent 51% or more of the combined
voting power of the Company’s then outstanding voting securities;

(iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board (together with any new directors
whose election by the Board whose nomination by the shareholders of the Company was
approved by a vote of the Board then still in office who are either directors at the
beginning of such period or whose election or nomination for election was so
previously approved) cease for any reason to constitute a majority of the Board then
in office; or

(iv) the Board or the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger,
amalgamation or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent at least 50%
of the total voting power represented by the voting securities of the Company
immediately after such merger, amalgamation or consolidation, or the Board or
shareholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company (in one or a series of
transactions) of all or substantially all of the Company’s assets.

“Good Reason” shall mean Executive’s termination of his employment with CRM
following the occurrence, without Executive’s written consent, of one or more of the
following events (except as a result of a prior termination):

(i)         a material diminution or change, materially adverse to Executive,
in Executive’s positions, titles, or offices as set forth in Section 2(a), status,
rank, nature of responsibilities, or authority within CRM, or a removal of Executive
from or any failure to elect or re-elect or, as the case may be, nominate Executive
to any such positions or offices, including as a member of the Board after delivery
of written notice to the Board by Executive;

(ii) an assignment of any duties to Executive which are materially inconsistent
with his status as CEO (or such other higher ranked position) of CRM;

(iii) any decrease in (i) Executive’s annual Base Salary, excluding a decrease
uniformly imposed on senior executive positions for reasons of financial relief, or
(ii) target Annual Incentive opportunity below 50% of Base Salary; or

(iv)       any other failure by CRM to perform any material obligation under,
or breach by CRM of any material provision of, this Agreement.

Notwithstanding the foregoing, prior to invoking termination for Good Reason under
subparagraphs (i) and (iv), CRM shall first be provided a 30 day cure period from
the date CRM receives from Executive written notice specifying the specific act or
conduct constituting the failure and/or breach in issue and CRM materially fails to
effect such cure within the cure period.

(h) Mitigation and Offset. Executive has no obligation to mitigate payments due him
pursuant to this Agreement.

(i) Release of Employment Claims. As a condition to receipt of the payments and
benefits provided for in this Section 10 (other than Accrued Amounts and any Entitlements),
Executive agrees to execute a release, in a form reasonably satisfactory to CRM, releasing any and
all claims arising out of Executive’s employment (other than enforcement of this Agreement,
Executive’s rights under any of CRM’s incentive compensation and employee benefit plans and
programs, and any claim for any tort for personal injury not arising out of or related to his
termination of employment). Executive shall execute such release during the minimum period
required by law and receipt by CRM of such executed release shall be a condition precedent to CRM’s
obligation to make any payment to Executive hereunder.

	 	11.	 	Confidentiality; Litigation Cooperation; Non-disparagement.

(a) Confidentiality. During the Term and at all times thereafter, Executive shall not
disclose to anyone (except in good faith in the ordinary course of business to a person who is
advised by Executive to keep such information confidential) or make use of any Confidential
Information except in the performance of his duties hereunder or when required to do so by legal
process, by any governmental agency having supervisory authority over the business of CRM or by any
administrative or legislative body (including a committee thereof) that requires him to divulge,
disclose or make accessible such information. In the event that Executive is so ordered, he shall
give prompt written notice to CRM to allow CRM the opportunity to object to or otherwise resist
such order.

For purposes of this Agreement, “Confidential Information” shall mean all information
concerning the business of CRM relating to any of their products, product development, trade
secrets, customers, suppliers, finances, and business plans and strategies. Excluded from the
definition of Confidential Information is information (i) that is or becomes part of the public
domain, other than through the breach of this Agreement by Executive or (ii) regarding CRM’s
business or industry properly acquired by Executive in the course of his career as an executive in
CRM’s industry and independent of Executive’s employment by CRM. For this purpose, information
known or available generally within the trade or industry of CRM shall be deemed to be known or
available to the public.

(b) Litigation Cooperation. Executive agrees to cooperate with CRM, during the Term
and thereafter (including following Executive’s termination of employment for any reason), by
making himself reasonably available to testify on behalf of CRM in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and to assist CRM, in any such action,
suit, or proceeding, by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to CRM, as reasonably requested. CRM
agrees to reimburse Executive, on an after-tax basis, for reasonable expenses actually incurred in
connection with his provision of testimony or assistance.

(c) Non-Disparagement. Executive agrees that, during the Term and thereafter
(including following Executive’s termination of employment for any reason) he will not make
statements or representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly, disparage the products,
services, or actions of CRM or any Affiliate, or it or their respective officers, directors,
employees, advisors, businesses or reputations, provided, however, that Executive shall be
permitted to respond to any statements or communications by the directors and/or executive officers
of CRM which may directly or indirectly, disparage Executive, his business or reputation. However,
nothing in this Agreement shall preclude either of Executive or CRM from making truthful statements
or disclosures required by applicable law, regulation or legal process.

	 	12.	 	Non-competition.

(a) During the Restriction Period (as defined in Section 12(b) below), Executive shall not
engage in Competition with CRM or any Subsidiary. “Competition” shall mean engaging in any
activity ,directly or indirectly, for a Competitor of CRM or any Subsidiary, whether as an
employee, consultant, principal, agent, officer, director, partner, shareholder (except as a less
than one percent shareholder of a publicly traded company) or otherwise. A “Competitor” shall mean
any corporation or other entity which competes with the business conducted by CRM or any
Subsidiary, as determined on the date of termination of Executive’s employment. If Executive
commences employment or becomes a consultant, principal, agent, officer, director, partner, or
shareholder of any entity that is not a Competitor at the time Executive initially becomes employed
or becomes a consultant, principal, agent, officer, director, partner, or shareholder of the
entity, future activities of such entity shall not result in a violation of this provision unless
(x) such activities were contemplated by Executive at the time Executive initially became employed
or becomes a consultant, principal, agent, officer, director, partner, or shareholder of the entity
or (y) Executive commences directly or indirectly overseeing or managing the activities of an
entity which becomes a Competitor during the Restriction Period that are competitive with the
activities of CRM. Executive shall not be deemed indirectly overseeing or managing the activities
of such Competitor which are competitive with the activities of CRM so long as he does not
regularly participate in discussions with regard to the conduct of the competing business.

(b) For the purposes of this Section 12, “Restriction Period” shall mean the period beginning
with the Effective Date and ending with the later of 12 months from the Termination Date or the
last day of the period during which the Executive is to receive severance payments.

(c) Reasonable Restrictions. While the restrictions in Sections 11, 12 and 13 (on
which the Executive has had the opportunity to take independent advice of legal counsel, as the
Executive hereby acknowledges) are considered by the parties to be reasonable in all of the
circumstances, it is agreed that if any such restrictions, by themselves, or taken together, shall
be adjudged to go beyond what is reasonable in all the circumstances for the protection of the
legitimate interests of the Company but would be adjudged reasonable if part or parts of the
wording thereof were deleted, the relevant restriction or restrictions shall apply with such
deletion(s) as may be necessary to make it or them valid and effective.

	 	13.	 	Non-solicitation.

During the Restriction Period, Executive shall not induce employees of CRM to terminate their
employment, nor shall Executive solicit or encourage any of CRM’s customers, or any corporation or
other entity in a joint venture relationship (directly or indirectly) with CRM, to terminate or
diminish their relationship with CRM or to violate any agreement with any of them. During such
period, Executive shall not hire, either directly or through any employee, agent or representative,
any employee of CRM or any person who was employed by CRM anytime within 180 days of such hiring.

	 	14.	 	Remedies.

If Executive breaches any of the provisions contained in Sections 11, 12 or 13 above, CRM (a)
shall have the right to immediately terminate all payments and benefits due under this Agreement
and (b) shall have the right to seek injunctive relief. Executive acknowledges that such a breach
of Sections 11,12 or 13 would cause irreparable injury and that money damages would not provide an
adequate remedy for CRM; provided, however, the foregoing shall not prevent Executive from
contesting the issuance of any such injunction on the ground that no violation or threatened
violation of Section 11, 12 or 13 has occurred.

	 	15.	 	Resolution of Disputes.

Any controversy or claim arising out of or relating to this Agreement or any breach or
asserted breach hereof or questioning the validity and binding effect hereof arising under or in
connection with this Agreement, (other than seeking injunctive relief under Section 14), shall be
resolved by binding arbitration, to be held at an office closest to CRM’s principal offices in
accordance with the rules and procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
All costs and expenses of any arbitration or court proceeding (including fees and disbursements of
counsel) shall be borne by the respective party incurring such costs and expenses. The arbitrator
or court shall award reasonable costs and expenses to a party that substantially prevails in such
arbitration or court proceeding. Each party to this agreement hereby waives and shall not seek a
jury trial in any lawsuit, proceeding, claim, counterclaim, defense or other litigation or dispute
under or in respect of this agreement.

	 	16.	 	Indemnification.

(a) Company Indemnity. CRM agrees that if Executive is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact that he is or was a director, officer or
employee of CRM or is or was serving at the request of CRM as a director, officer, member, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such Proceeding is
Executive’s alleged action in an official capacity while serving as a director, officer, member,
employee or agent, Executive shall be indemnified and held harmless by CRM to the fullest extent
legally permitted or authorized by CRM’s by-laws or resolutions of CRM’s Board or, if greater, by
the laws of the State of New York against all cost, expense, liability and loss (including, without
limitation, attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by Executive in connection therewith, and
such indemnification shall continue as to Executive even if he has ceased to be a director, member,
officer, employee or agent of CRM or other entity and shall inure to the benefit of Executive’s
heirs, executors and administrators. CRM shall advance to Executive all reasonable costs and
expenses to be incurred by him in connection with a Proceeding within 20 days after receipt by CRM
of a written request for such advance. Such request shall include an undertaking by Executive to
repay the amount of such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. The provisions of this Section 16(a) shall not be
deemed exclusive of any other rights of indemnification to which Executive may be entitled or which
may be granted to him, and it shall be in addition to any rights of indemnification to which he may
be entitled under any policy of insurance.

(b) No Presumption Regarding Standard of Conduct. Neither the failure of CRM
(including its Board, independent legal counsel or shareholders) to have made a determination prior
to the commencement of any proceeding concerning payment of amounts claimed by Executive under
Section 16(a) above that indemnification of Executive is proper because he has met the applicable
standard of conduct, nor a determination by CRM (including its Board, independent legal counsel or
stockholders) that Executive has not met such applicable standard of conduct, shall create a
presumption that Executive has not met the applicable standard of conduct.

(c) Liability Insurance. CRM agrees to continue and maintain a directors and
officers’ liability insurance policy covering Executive to the extent CRM provides such coverage
for its other executive officers.

	 	17.	 	Miscellaneous.

(a) Other Benefits. Except as specifically provided in this Agreement, the existence
of this Agreement shall not be interpreted to preclude, prohibit or restrict Executive’s
participation in any other employee benefit or other plans or programs in which he currently
participates.

(b) Assignability; Binding Nature. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors, heirs (in the case of Executive) and
permitted assigns. No rights or obligations of CRM under this Agreement may be assigned or
transferred by CRM except that such rights or obligations may be assigned or transferred in
connection with the sale or transfer of all or substantially all of the assets of CRM, provided
that the assignee or transferee is the successor to all or substantially all of the assets of CRM
and such assignee or transferee assumes the liabilities, obligations and duties of CRM, as
contained in this Agreement, either contractually or as a matter of law. No rights or obligations
of Executive under this Agreement may be assigned or transferred by Executive other than his rights
to compensation and benefits, which may be transferred only by will or operation of law.

(c) Representation. CRM represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of its obligations under this
Agreement will not violate any agreement between it and any other person, firm or organization.
Executive represents and warrants that the performance of his obligations under this Agreement will
not violate any agreement between him and any other person, firm or organization.

(d) Entire Agreement. This Agreement shall become effective as of the Effective Date.
This Agreement contains the entire understanding and agreement between the Parties concerning the
subject matter hereof and, as of the Effective Date, supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or oral, between the
Parties with respect thereto.

(e) Amendment or Waiver. No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by Executive and an authorized officer of CRM. Except
as set forth herein, no delay or omission to exercise any right, power or remedy accruing to any
Party shall impair any such right, power or remedy or shall be construed to be a waiver of or an
acquiescence to any breach hereof. No waiver by either Party of any breach by the other Party of
any condition or provision contained in this Agreement to be performed by such other Party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by Executive or an authorized officer of
CRM, as the case may be.

(f) Severability. In the event that any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.

(g) Survivorship. The respective rights and obligations of the Parties hereunder
shall survive any termination of Executive’s employment to the extent necessary to the intended
preservation of such rights and obligations.

(h) Beneficiaries/References. Executive shall be entitled, to the extent permitted
under any applicable law, to select and change a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following Executive’s death by giving CRM written notice
thereof. In the event of Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.

(i) Governing Law/Jurisdiction. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of New York without reference to principles of conflict of
laws. Subject to the provisions of Section 15 above, CRM and Executive hereby consent to the
jurisdiction of any or all of the following courts for purposes of resolving any dispute under this
Agreement: (i) the United States District Court for New York or (ii) any of the courts of the State
of New York. CRM and Executive further agree that any service of process or notice requirements in
any such proceeding shall be satisfied if the rules of such court relating thereto have been
substantially satisfied. CRM and Executive hereby waive, to the fullest extent permitted by
applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any
defense of inconvenient forum.

(j) Notices. Any notice given to a Party shall be in writing and shall be deemed to
have been given when delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address indicated below or
to such changed address as such Party may subsequently give such notice of:

	 	 	 
	If to CRM:
	 	CRM Holdings, Ltd.

Skandia International House

40 Church Street

Hamilton HM 12 Bermuda

	 	 	 
	If to Executive:
	 	Mr. James Scardino

[address]

[address]

(k) Headings. The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

(l) Counterparts. This Agreement may be executed in two or more counterparts.

(m) Taxes and Withholdings; Section 409A. The payments and benefits to be made
pursuant to this Agreement shall be subject to all applicable withholdings for federal, state and
local income taxes, Social Security, and all other customary withholdings. The Company makes no
representations regarding the tax implications of the compensation, payments and benefits to be
paid to Executive under this Agreement. It is the intention of the parties that payments and
benefits under this Agreement be interpreted to be exempt from or in compliance with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and accordingly, to the maximum
extent permitted, this Agreement shall be interpreted to be exempt from or in compliance with
Section 409A. Notwithstanding anything herein to the contrary, if (i) at the time of Executive’s
“separation from service” (as defined in Treas. Reg. Section 1.409A-1(h)) with CRM other than as a
result of his death, (ii) Executive is a “specified employee” (as defined in Section
409A(a)(2)(B)(i)), (iii) one or more of the payments or benefits received or to be received by
Executive pursuant to this Agreement would constitute deferred compensation subject to Section
409A, and (iv) the deferral of the commencement of any such payments or benefits otherwise payable
hereunder as a result of such separation of service is necessary in order to prevent any
accelerated or additional tax under Section 409A, then CRM will defer the commencement of the
payment of any such payments or benefits hereunder to the extent necessary (without any reduction
in such payments or benefits ultimately paid or provided to Executive) until the date that is six
months following Executive’s separation from service with CRM (or the earliest date as is permitted
under Section 409A of the Code). Any payment deferred during such six-month period shall be paid
in a lump sum on the day following such six-month period. Any remaining payments or benefits shall
be made as otherwise scheduled under this Agreement. Furthermore, to the extent any other payments
of money or other benefits due to Executive hereunder could cause the application of an accelerated
or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral
will make such payment or other benefits compliant under Section 409A, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner determined by CRM that
does not cause such an accelerated or additional tax. To the extent any reimbursements or in-kind
benefits due to Executive under this Agreement constitute deferred compensation under Section 409A
of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner
consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Each payment made under this Agreement
shall be designated as a “separate payment” within the meaning of Section 409A.

(n) Parachute Payments. Notwithstanding anything herein to the contrary, in the event
that Executive would otherwise have received any payments or distributions, whether payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, that constitute
“parachute payments” within the meaning of Section 280G of the Code (the “Parachute Payments”),
Executive shall receive the greater net after-tax amount (taking into account all applicable taxes
payable by Executive, including any excise tax imposed under Section 4999 of the Code (the “ Excise
Tax”)) of (i) the Parachute Payments and (ii) an amount equal to the  Parachute Payments reduced by
the smallest amount necessary to take the Parachute Payments under the Excise Tax threshold.

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

	 	 	 
	CRM HOLDINGS, LTD

	 	

	By:      /s/ Salvatore A. Patafio

	 

	Name:

Title:

	 	Salvatore A. Patafio

Chairman of Compensation Committee

1

	 	 	 
	 	 	By:_/s/ James J. Scardino
	 	 	Name: James Scardino
	 	 	EXHIBIT A
	 	 	Defined Terms

	(a)	 	“Accrued Amounts” has the meaning set forth in Section 10(a).

	(b)	 	“Base Salary” has the meaning set forth in Section 3.

	(c)	 	“Cause” shall have meaning set forth in Section 10(c).

	(d)	 	“Change in Control” shall have meaning set forth in Section 10(g).

	 	 	 
	(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

(m)

(n)

(o)
	 	“Compensation Committee” has the meaning set forth in Section 3.

“Competitor” or “Competition” has the meaning set forth in Section 12(a).

“Confidential Information” has the meaning set forth in Section 11(a).

“Disability” has the meaning set forth in Section 10(b).

“Entitlements” has the meaning set forth in Section 10(a).

“Equity Acceleration” shall have meaning set forth in Section 10(a).

“Good Reason” has the meaning set forth in Section 10(g).

“Proceeding” has the meaning set forth in Section 16(a).

“Pro Rata Annual Incentive” has the meaning set forth in Section 10(a).

“Restriction Period” has the meaning set forth in Section 12(b).

“Stock” means the common shares of CRM, par value $0.01 per share.

	(p)	 	”Target” means the target level of performance and associated Annual Incentive designated by
the Compensation Committee with respect to Executive for that relevant operating period.

	 	 	 
	(q)

(r)

(s)
	 	“Term” has the meaning set forth in Section 1.

“Termination Date” has the meaning set forth in Section 10(a).

“Welfare Benefits” has the meaning set forth in Section 7.

2EX-10.1

FIRST AMENDED AND RESTATED LOAN AGREEMENT

THIS FIRST AMENDED AND RESTATED LOAN AGREEMENT (“Agreement”) is entered into as of August 31,
2009 by and between FIRST NATIONAL BANK OF OMAHA, N.A., a national banking association (“First
National”) as a Lender, Administrative Agent and Collateral Agent for the Lenders, Union Bank &
Trust Company, a Nebraska State Banking Corporation (“Union”) as a Lender, and the other Lenders a
party hereto from time to time, and SUMMIT HOTEL PROPERTIES, LLC (“Summit Hotel”), a South Dakota
limited liability company and SUMMIT HOSPITALITY V, LLC (“Summit Hospitality”), a South Dakota
limited liability company. First National, Union and the other lenders a party hereto from time to
time may be hereinafter collectively referred to as the “Lenders” and individually as a “Lender”.
Summit Hotel and Summit Hospitality may be collectively referred to hereinafter as the “Borrowers”
and individually as a “Borrower”. The Administrative Agent and the Collateral Agent for the
Lenders may be hereinafter collectively referred to as the “Agent”.

WHEREAS, the Borrowers, the Agent, and certain of the Lenders are parties to a Loan Agreement,
dated as of July 20, 2004, as amended (as so amended and as in effect prior to the date hereof, the
“Current Credit Agreement”), pursuant to which the Lenders party thereto have made loans available
to the Borrowers;

WHEREAS, the Borrowers have requested that the Current Credit Agreement be amended and
restated on the terms and conditions set forth herein;

WHEREAS, it is intended that the indebtedness of the Borrowers under this Agreement be a
continuation of the indebtedness of the Borrowers under the Current Credit Agreement; and

WHEREAS, under the terms and conditions of and subject to the limitations contained in this
Agreement, Lenders have approved a revolving line of credit facility in the maximum principal
amount of the lesser of (i) the aggregate Commitments from Lenders or (ii) $28,200,000.00 (the
“Line of Credit”). The Line of Credit will consist of Acquisition Advances, Construction Advances
and letters of credit as provided for in this Agreement. The Advances and other financial
accommodations described in this Agreement may be collectively referred to as the “Loan”.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

ARTICLE I

Loan

1.1. Definitions. Certain capitalized terms not otherwise defined in the body of this
Agreement shall have the meanings given to such terms in Exhibit A attached hereto and incorporated
herein by reference.

1.2. Line of Credit. Subject to the terms of this Agreement and the maximum amount
available for Advances provided for in this Agreement, Lenders severally agree to lend Borrowers,
from time to time until the termination hereof, such sums as a Borrower may request, but which
shall not exceed in the aggregate principal amount at any time outstanding the lesser of (i) the
aggregate Commitments from Lenders, and (ii) Twenty-Eight Million Two Hundred Thousand and No/100
Dollars ($28,200,000.00), with a Five Million and No/100 Dollar ($5,000,000.00) sub-limit on the
Line of Credit to support the issuance of letters of credit by First National only for the account
of Borrowers. The maximum principal amount available under the Line of Credit will be reduced by
the face amount of letters of credit issued under the Line of Credit. Such letters of credit will
be evidenced and governed by First National’s standard letter of credit documentation in effect at
the time of issuance of a letter of credit. In consideration of First National’s issuance of
letters of credit, Borrowers will pay the Agent for the account of First National a fee equal to
one percent (1%) of the face amount of letters of credit outstanding, payable quarterly, in
arrears. Such letters of credit will be deemed a Loan under this Agreement and the other Loan
Documents, secured by the Collateral. In no event shall the outstanding aggregate principal amount
of Advances exceed the aggregate Commitments from Lenders. The Loan will consist of Acquisition
Advances and Construction Advances as described below, and letters of credit. In addition, the
aggregate Commitments will be reduced by the outstanding principal amount of Advances and letters
of credit extended under the Current Loan Agreement. Subject to the conditions and limitations set
forth herein, Advances will be made to Borrowers from time to time during the period commencing on
the date hereof to but not including the Termination Date, unless renewed by written agreement
between Lenders and Borrowers. In addition to the foregoing, the Line of Credit shall be deemed to
automatically terminate if the Agent accelerates the Notes and Advances following an Event of
Default, or if the occurrence of an Event of Default (as defined under Article VI hereof) causes
any Note or Advance to become immediately due and payable.

1.3. Purpose. Borrowers will use the Advances for the following purposes: (i) to
finance the purchase of a Hotel(s) (an Advance used for such purpose shall be hereinafter referred
to as an “Acquisition Advance”); (ii) to fund the development and construction of a Hotel and
related improvements on real property acquired or leased by a Borrower (an Advance to construct a
Hotel and related improvements on Property shall be hereafter referred to as a “Construction
Advance” and the Hotel and related improvements to be financed with each Construction Advance shall
be referred to as a “Project”) and (iii) to support the issuance, for the account of Borrowers, of
letters of credit as described above.

1.4. Limitations on Advances. If the underlying Hotel being acquired or developed has
been owned by the requesting Borrower for less than two (2) years, Acquisition Advances and
Construction Advances shall at no time exceed the lesser of (i) the Project Costs for Property
acquired with such Acquisition Advance or being developed with such Construction Advance or (ii)
sixty-five percent (65%) of the appraised as stabilized value of such Property. If the underlying
Hotel being acquired or developed has been owned by the requesting Borrower for two (2) years or
more, Acquisition Advances and Construction Advances shall at no time exceed sixty-five percent
(65%) of the appraised as stabilized value of such Property. In connection with a request for an
Acquisition Advance or Construction advance, the requesting Borrower will provide the Agent for the
Agent’s approval a Project Budget which includes the total Project Cost of constructing or
acquiring a Project. No Construction Term Note (as defined below) shall exceed sixty-five percent
(65%) of the lesser of (i) the Appraised Value of such Property or (ii) the Total Project Costs for
such Property. Advance supporting the issuance of letters of credit shall at no time exceed the
letter of credit sub-limit provided for in Section 1.1 above at any one time in the aggregate.

1.5. Notes. Each Acquisition Advance will be evidenced by a Term Note in the form
attached hereto as Exhibit B in the principal amount of such Acquisition Advance. Each Term Note
evidencing an Acquisition Advance will be limited to a term of one year and have a maturity date of
the first anniversary date of the Term Note evidencing such Acquisition Advance. The availability
under the Line of Credit for Advances shall be reduced by the aggregate principal balance
outstanding on Term Notes evidencing Acquisition Advances.

Each Construction Advance shall be evidenced by a Construction Note in the maximum principal
amount of the Construction Advance to be executed and delivered by the applicable Borrower to the
Agent prior to the any advances being made under such Construction Note. Advances under a
Construction Note shall be made in accordance with the applicable provisions of this Agreement and
the terms of such Construction Note. The availability for Advances under the Line of Credit shall
be reduced by the maximum principal amount of the Construction Note as of the date of such
Construction Note. Each Construction Note evidencing a Construction Advance shall have a term not
to exceed eighteen (18) months from the date of the Construction Note evidencing such Construction
Advance. Each Construction Note shall be substantially in the form of the Construction Note
attached to this Agreement as Exhibit C and incorporated herein by reference.

The Agent is authorized to record in a manner satisfactory to the Agent, appropriate notations
evidencing the date, type and amount of each Advance, the interest rate applicable thereto, the
date and amount of each payment, and the interest of each Lender therein, which recording shall
constitute prime facie evidence of the accuracy of the information recorded; provided, however,
that the failure to make such recordings shall not affect the obligations of Borrowers under the
Loan or this Agreement or affect the validity of any Advance.

1.6. Repayment. Advances shall be repaid as follows:

(a) Acquisition Advances. Each Term Note evidencing an Acquisition Advance
shall be payable as follows: (i) interest only shall be paid monthly, in arrears on the
dates specified in the applicable Term Note and (ii) the principal balance together with
accrued and unpaid interest shall be due and payable in full on the first anniversary date
of the Term Note evidencing such Acquisition Advance.

(b) Construction Advances. Each Construction Note shall be payable as follows:
(i) interest only shall be payable monthly, in arrears on the dates specified in the
applicable Construction Note; and (ii) the principal balance together with accrued and
unpaid interest shall be due and payable in full on the Maturity Date provided for in each
Construction Note (which Maturity Date shall not be more than 18 months from the date of
such Construction Note); provided, however, that subject to the terms of this Agreement and
provided that no Event of Default has occurred, Borrowers may, on the Maturity Date of such
Construction Note, convert the principal amount outstanding on a Construction Note to a
“Construction Term Note” described below. If Borrowers elect to convert the principal
amount outstanding on a Construction Note to a Construction Term Note, then such
Construction Term Note shall be evidenced by a Construction Term Note in the principal
amount of the principal amount outstanding on the Construction Note being converted executed
by Borrowers in favor of the Agent. Each Construction Term Note will bear interest at the
rate provided for below and will be payable as follows: (y) interest only shall be paid
monthly, in arrears and (z) the principal balance together with accrued and unpaid interest
shall be due and payable in full on the first anniversary date of the Construction Term
Note.

All payments due under this Agreement and the other Loan Documents shall be made in immediately
available funds to the Agent at its office described in the notice provision of this Agreement
unless the Agent gives notice to the contrary. Payments so received at or before 1:00 p.m. Omaha,
Nebraska time on any Business Day shall be deemed to have been received by the Agent on that
Business Day. Payments received after 1:00 p.m. Omaha, Nebraska time on any Business Day shall be
deemed to have been received on the next Business Day, and interest, if payable in respect of such
payment, shall accrue thereon until such next Business Day. The Agent shall remit to each Lender
its Percentage of all payments of principal and interest received by the Agent no later than the
next Business Day after the Agent is deemed to have received such payment.

1.7. Interest. The principal balance of each Term Note evidencing an Acquisition
Advance, each Construction Note evidencing a Construction Advance and each Construction Term Note
will bear interest at a variable per annum rate equal to the greater of (i) the LIBOR Rate plus
four percent (4%), fixed for interest periods of ninety (90) days, or (ii) five and one half
percent (51/2%). In no event will any Note bear interest at a per annum rate less than five and one
half percent (51/2%).

Interest on the Advances will be calculated on the number of days outstanding based upon a
year consisting of three hundred and sixty (360) days. The LIBOR Rate shall initially be set on
the first Business Day on the calendar month of the applicable note, and shall adjust 90 days
thereafter to the LIBOR Rate in effect on the first Business Day of the month in which such
90th day falls. If the Advance is made on any day other than the first Business Day of
a month, the initial LIBOR Rate to be in effect until adjustment as provided for above month shall
be that 90 day LIBOR rate in effect on the first Business Day of the month of in which such Advance
is made. The interest rate charged on any Term Notes, Construction Notes or Construction Term
Notes outstanding under the Current Loan Agreement is hereby amended to the applicable rate
provided for in this Section.

The principal balance of all Notes will bear interest after the occurrence and during the
continuance of any Event of Default and after their maturity date, whether by acceleration or
otherwise, at the variable per annum rate of four percent (4%) in excess of the interest rate
determined above, but not to exceed the maximum rate allowed by law.

1.8. Notice of Borrowing/Disbursements. A Borrower may request an Acquisition Advance
or a Construction Advance by delivering a notice (a “Notice of Borrowing”) to the Agent not less
than thirty (30) Business Days prior to the requested date of funding of such Acquisition Advance
or Construction Advance. Each Notice of Borrowing shall specify the requested date of such
Acquisition Advance or Construction Advance (which shall be a Business Day), and the amount of such
requested Acquisition Advance or Construction Advance. In addition, each Notice of Borrowing shall
include the Property location, franchise or brand of the applicable hotel, the Project Costs and
such other information as may be requested by the Agent. Lenders will not be obligated to fund any
Advances until the conditions set forth in this Agreement have been satisfied. Each Borrower
agrees that the Agent may rely and act upon any Notice of Borrowing the Agent receives from an
individual who the Agent, absent gross negligence or willful misconduct, believes to be a
representative of a Borrower. The Agent will provide the Lenders each Notice of Borrowing received
by the Agent.

The Lenders shall, before 1:00 p.m. central time on the date of funding of an Advance, make
available to the Agent at the Agent’s address referred to in this Agreement for notices in same day
funds, such Lenders’ Percentage of such Advance. After the Agent’s receipt of such funds, the
Agent will make such funds available to the applicable Borrower as provided for in this Agreement.
Notwithstanding the foregoing, unless the Agent shall have received notice from a Lender prior to
the date of funding of any Advance that such Lender will not make available to the Agent such
Lender’s Percentage of such Advance, the Agent may assume that each Lender has made such Percentage
available to the Agent on the date of funding of such Advance in accordance with the first sentence
of this paragraph, and the Agent may, in reliance upon such assumption, make available to the
applicable Borrower on such date a corresponding amount. If and to the extent a Lender shall not
have so made such funds available to the Agent (a “Funding Default”), such Lender agrees to repay
to the Agent forthwith on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the applicable Borrower until the date such
amount is repaid to the Agent, at the customary rate reasonably set by the Agent for the correction
of errors among banks. If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender’s Percentage in such Advance for purposes of this
Agreement. Once a Funding Default has occurred, then the Agent shall no longer have the discretion
under this Section to make funds available to the applicable Borrower on the assumption that the
Lenders will make the corresponding funds available to the Agent. In no event shall the Agent be
obligated to advance funds to the Borrowers (and in no event shall any other Lender have any
liability to the Borrowers) if a Defaulting Lender fails to advance its share of such funds to the
Agent in accordance with the requirements of this Section.

The Agent will deposit the proceeds of any Advance to the requesting Borrower’s designated
deposit account maintained at First National.

1.9 Construction Note Advances. Subject to compliance by Borrowers with the terms and
conditions of this Agreement, Lenders will make advances under a Construction Note to the
applicable Borrower according to the applicable Loan Budget for the Project financed with the
Construction Note (i) for direct construction costs provided for in the Project Budget incurred by
such Borrower in connection with the construction of the Project, and (ii) for costs, other than
such direct construction costs, incurred by the such Borrower in connection with the Construction
Advance or the construction of the Project and approved by the Agent in the Loan Budget
(hereinafter referred to as “Other Project Costs”), as itemized in an Application for Certificate
for Payment, AIA Document G702, together with continuation sheets, AIA Document G703, as the same
may be revised from time to time after the date hereof with the approval of the Agent, or as Other
Project Costs are itemized and provided to the Agent by such Borrower. Lenders will not be
required to make an advance under a Construction Note to a Borrower in an amount in excess of that
set forth in the Loan Budget for any item set forth therein. The Loan Budget may be amended during
the course of construction of a Project to reallocate funds from a budget category in which the
full budgeted amount is not required to another budget category provided that any such reallocation
which results in a variance over five percent (5%) and greater than $5,000.00 as to any such budget
category shall be subject to the prior written approval of the Agent. Lenders will not be
obligated to make aggregate advances under a Construction Note in excess of the amount, from time
to time, of Total Project Costs, unless the Agent deems it advisable to do so. Each request by a
Borrower for an advance under a Construction Note for direct construction costs shall be on AIA
Documents G702 and G703 and for Other Project Costs a certificate of payment in form and substance
satisfactory to the Agent and signed by the such Borrower’s chief financial officer (any such
request being hereinafter referred to as a “Request for Construction Note Advance”). Each Request
for Construction Note Advance shall be delivered to the Agent not less than seven (7) business days
prior to the date upon which an advance under a Construction Note is requested and shall be based
upon the items and descriptions shown in the continuation sheets, and shall be accompanied by (i)
lien waivers or paid invoices in form and content acceptable to the Agent, by the Agent’s architect
engaged to inspect the construction of the Project (the “Inspecting Architect”) and, if applicable,
the title company, executed by each and every individual supplier of labor or material for all
contracts greater than $10,000.00 in the aggregate for all the costs of labor and material provided
on a timely basis for the immediately preceding disbursement (execution of lien waivers are to be
by proper party or parties so authorized to execute on behalf of the supplier or contractor and
shall clearly identify the party executing the waiver, the date, the amount, the item of labor or
materials supplied, the name of the firm, and address of the property and such other documents as
may be required to induce the title company to insure each advance under a Construction Note made
hereunder against all future mechanics’ and materialmen’s liens for labor furnished and material
supplied in connection with the construction of the Project); (ii) the requisitions for payment
from subcontractors and materialmen engaged in the construction of the Project; and (iii) such
other information and documents as may be reasonably requested or required by the Agent. All
requests and requisitions for payment shall be approved by the applicable Borrower’s chief
financial officer or other officer acceptable to the Agent. Advances under a Construction Note
shall be disbursed by the Agent, and each advance under a Construction Note shall be made, in whole
or in part, (i) by crediting the amount thereof to an account of the applicable Borrower to be
maintained with the Agent and designated for the applicable Project, (ii) at the discretion of the
Agent, by paying the general contractor on the Project (the “General Contractor”) or a
subcontractor or materialmen engaged in the construction of the Project, or (iii) in such other
manner as shall be mutually agreed upon by the title company and the Agent. Lenders will not be
obligated to make advances under a Construction Note more frequently than once every thirty (30)
days. The Agent will not be obligated to fund an advance under a Construction Note unless the
Agent is satisfied, in its sole discretion, and the Inspecting Architect is satisfied, that the
conditions precedent to the making of such advance have been satisfied by the applicable Borrower.
Anything in this Agreement or any other agreement made with respect to a Construction Advance to
the contrary notwithstanding, any advance under a Construction Note or approval given by the Agent
or the Inspecting Architect, whether or not before or after an inspection of the Project by the
Agent, the Inspecting Architect or otherwise, shall not be deemed to be an approval by the Agent or
Lenders of any work performed thereon or approval or acceptance by the Agent or Lenders of any work
done or materials furnished with respect thereto or a representation by the Agent or Lenders as to
the fitness of such work or materials. All disbursements by the Agents shall create indebtedness
under the applicable Construction Note. Lenders will fund their Percentage of any advance under a
Construction Note in the manner provided for in Section 1.8 above.

1.10 Advances for Stored Materials. Notwithstanding anything to the contrary
contained in this Agreement, Lenders may make advances under a Construction Note to pay for stored
materials required in connection with the construction of the Project, provided that (i) such
materials are in accordance with the Plans and Specifications approved by the Agent for the
Project, (ii) such materials are securely stored and properly inventoried, (iii) such materials, if
stored off-site, are stored in a bonded warehouse or with a contractor, materialman or fabricator
who bears the risk of loss until delivery and installation of such materials in the Project as part
of the work in place, and who has supplied a bond securing such contractor’s, materialman’s or
fabricator’s obligation to so deliver and install, such bond shall be issued by a company, shall be
in an amount and shall be in form and substance satisfactory to the Agent and shall name the Agent
as a dual obligee, (iv) the bills of sale and contracts under which such materials are being
provided shall be in form and substance satisfactory to the Agent, (v) such materials are insured
against casualty, loss and theft in a manner satisfactory to the Agent, (vi) the applicable
Borrower owns such materials free and clear of all liens and encumbrances of any nature whatsoever
and establishes such ownership by evidence satisfactory to the Agent, (vii) the applicable Borrower
executes and delivers to the Agent such additional security documents as the Agent deems necessary
to create and perfect a first lien in such materials as additional security for the payment of the
Construction Advance, (viii) the aggregate amount of such disbursements for such materials is
verified by the Agent pursuant to the provisions of this Agreement, and (ix) the aggregate amount
of such disbursements for such materials which are stored shall in no event exceed Fifty Thousand
Dollars ($50,000.00).

1.11 Additional Conditions to Advances under a Construction Note. The obligation of
Lenders to make any advances under a Construction Note pursuant to this Agreement (including, but
not limited to the initial advance if applicable) is subject to the following additional conditions
precedent:

(a) Each Request for Construction Note Advance shall be accompanied by a certificate of the
Inspecting Architect in the form attached to the Request for Construction Note Advance based upon
an on-site inspection of the Project made by the Inspecting Architect not more than seven (7) days
prior to the date of such Request for Construction Note Advance, in which the Inspecting Architect
shall (i) certify that the portion of the Project completed as of the date of such inspection has
been completed in accordance with the Plans and Specifications approved by the Agent, and (ii)
state its estimate of (aa) the percentage of construction of the Project completed as of the date
of such inspection on the basis of work in place as part of the Project and the continuation sheets
of the Request for Construction Note Advance, (bb) direct construction costs actually incurred for
work in place as part of the Project as of the date of such inspection, (cc) the actual sum
necessary to complete construction of the Project in accordance with the approved Plans and
Specifications, and (dd) the amount of time from the date of such inspection which will be required
to complete construction of the Project in accordance with the approved Plans and Specifications.

(b) Prior to each advance under a Construction Note, the title company shall have issued (i)
an endorsement to the Title Policy reflecting the amount of all previous advances, insuring the
continued priority of the Mortgage encumbering the Project over mechanic’s liens and showing no
exceptions to the title of the property encumbered thereby other than those exceptions previously
approved by the Agent, and (ii) a commitment to issue an endorsement insuring the priority of the
lien of the deed of trust or mortgage applicable to the Project, subject only to exceptions
previously approved by the Agent in writing, for the full amount of each such advance under such
Construction Note and all previous advances under such Construction Note made by Lenders to the
such Borrower pursuant to this Agreement. Such continuation of title shall contain affirmative
insurance that covenants and restrictions, if any, reported against the fee or leasehold estate
have not been violated by the Project.

(c) Prior to each advance under a Construction Note, the applicable Borrower shall, upon
request of the Agent, furnish the Agent, the title company and the Inspecting Architect with
evidence satisfactory to the Agent, the title company and the Inspecting Architect, showing payment
of all bills and charges for which advances under such Construction Note have been previously made
pursuant to this Agreement. Such Borrower shall also deliver to the Agent, upon request, such
bills, receipts, invoices and other evidence as may reasonably be required by the Agent, the title
company and/or the Inspecting Architect.

(d) Construction of the Project shall comply with all applicable laws, rules, restrictions,
orders and regulations of all governmental authorities with jurisdiction over the Project, and
Borrowers have delivered to the Agent all necessary certificates, authorizations, permits and
licenses which are required to permit the construction and completion of the Project, as issued by
the appropriate governmental authorities. Borrowers, to the extent Borrowers may lawfully do so,
hereby assigns to the Agent all of Borrowers’ right, title and interest in and to such
certificates, authorizations, permits and licenses, as security for the payment of the applicable
Construction Note and the observance and performance by Borrowers of the terms, covenants and
provisions of the Loan Documents.

(e) The applicable Borrower has submitted to the Agent and the Inspecting Architect the Plans
and Specifications. Such Borrower shall have submitted the Plans and Specifications to the General
Contractor and the General Contractor shall have agreed to perform its obligations under the
General Construction Contract in a manner consistent with the requirements of the Plans and
Specifications and to keep the Project within budget. The General Construction Contract and all
major subcontracts shall include a provision for retainage of not more than ten percent (10%) of
all amounts due, which retainage shall be disbursed only upon substantial completion of the Project
and satisfaction of all final disbursement and certification requirements, except as otherwise
approved by the Agent in writing. Each material addition or modification to the Plans and
Specifications shall be approved in writing by the Agent, and, to the extent required by law, by
the appropriate governmental authorities. Such Borrower will construct and equip the Project in
accordance with the Plans and Specifications approved by the Agent free and clear of all liens,
encumbrances and security instruments (other than the Mortgage encumbering the Project and the
other Loan Documents and the permitted encumbrances set forth therein). The Plans and
Specifications as approved by the Agent shall become the property of the Agent upon the occurrence
of an Event of Default. The Project shall be constructed and equipped in compliance with the
requirements of governmental authorities including, without limitation, zoning, building codes, and
laws relating to disabled persons, endangered species, and the environment. The Agent and/or its
representatives (including, without limitation, the Inspecting Architect) shall have the right of
entry and free access to the Project to inspect the Project during normal business hours upon
reasonable notice. Borrowers shall make available to the Inspecting Architect and the Agent, upon
request and at the location where the same are kept, all shop and related drawings used in
connection with the Plans and Specifications and the construction of the Project, and shall provide
copies of such drawings and documents to the Agent and the Inspecting Architect promptly upon
request.

(f) The Inspecting Architect shall be of the opinion that the Project can be completed by its
completion date within budget.

(g) The applicable Borrower shall have delivered to the Agent and the Inspecting Architect a
copy of the Architect Contract for the Project, which Architect Contract shall be in form and
substance satisfactory in all respects to the Agent and to the Inspecting Architect. Such Borrower
will not agree to any material modification or termination of the Architect Contract without the
prior approval of the Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s
right, title and interest in and to the Architect Contract, as security for the payment of the
Construction Note and the observance and performance by Borrowers of the terms, covenants and
provisions of the Loan Documents.

(h) The applicable Borrower shall have delivered to the Agent a copy of the General
Construction Contract, which General Construction Contract shall be in form and substance
satisfactory in all respects to the Agent. Such Borrower will not agree to any material
modification or termination of the General Construction Contract without the prior approval of the
Agent. Such Borrower hereby assigns to the Agent all of such Borrower’s right, title and interest
in and to the General Construction Contract, as security for the payment of the Construction Note
and the observance and performance by Borrowers of the terms, covenants and provisions of the Loan
Documents.

(i) All major subcontracts shall be submitted to the Agent and the Inspecting Architect before
any such major subcontracts are awarded by the applicable Borrower or the General Contractor, and
each major subcontract shall be in form and substance satisfactory in all respects to the Agent. A
subcontract shall be deemed major if the amount due thereunder is $75,000.00 or more. Neither such
Borrower nor the General Contractor will agree to any material modification or termination of any
major subcontract without the prior approval of the Agent. Such Borrower hereby assigns to the
Agent all of such Borrower’s right, title and interest in and to the major subcontracts, as
security for the payment of the Construction Note and the observance and performance by Borrowers
of the terms, covenants and provisions of the Loan Documents.

(j) The applicable Borrower will make available for inspection at all times by the Agent and
the Inspecting Architect copies of all subcontracts other than the major subcontracts, and will
furnish to the Agent and the Inspecting Architect, upon request, copies of the same. Neither such
Borrower nor the General Contractor will agree to any material modification or termination of such
subcontracts without the prior approval of the Agent. Such Borrower hereby assigns to the Agent
all of such Borrower’s right, title and interest in and to such subcontracts, as security for the
payment of the Construction Note and the observance and performance by Borrowers of the terms,
covenants and provisions of the Loan Documents.

(k) The major subcontracts shall be awarded in accordance with the timetable approved by the
Agent and the Inspecting Architect, as the same may be revised from time to time with the approval
of the Agent. If requested by the Agent, the applicable Borrower will cause the Architect, the
General Contractor and the major subcontractors to respectively execute and deliver to the Agent,
contemporaneously with the execution and delivery of their respective contracts, consents or letter
agreements pursuant to the provisions of which the Architect, the General Contractor and the major
subcontractors shall agree to perform their respective contracts at no additional cost or expense
for the benefit of the Agent, in the Event of Default or a foreclosure of the Mortgage encumbering
the Project, which consent or letter agreement shall be in form and substance satisfactory to the
Agent.

(l) Lenders will not be obligated to make an advance under a Construction Note with respect to
any subcontractor or materialman providing work or materials with respect to the Project unless
such subcontractor or materialman is providing such work or materials under a signed contract or
purchase order.

(m) The applicable Borrower will observe and perform all of the terms, covenants and
conditions of the Architect Contract, the General Construction Contract, the subcontracts and any
other contracts relating to the Project on such Borrower’s part to be observed or performed.

(n) The applicable Borrower will comply with and is in compliance with all environmental laws
which are applicable to the Property encumbered by the applicable Mortgage, and shall have
submitted an environmental site assessment in form and content satisfactory to the Agent prepared
by a firm approved by the Agent which establishes the environmental condition of the Property as
satisfactory to the Agent.

(o) The Agent and/or the Inspecting Architect shall have made such site inspection of the
Project site as it deems necessary.

(p) The Agent shall have received the following, in addition to all other conditions to the
initial advance under a Construction Note set forth in this Agreement, from the applicable Borrower
on or before the date of such initial advance:

(1) the applicable Construction Note, duly executed by Borrowers;

(2) the Mortgage and Security Agreement, duly executed by the applicable Borrower,
constituting a valid and perfected first lien on the Project;

(3) Uniform Commercial Code financing statements, in form and substance satisfactory to the
Agent, duly authorized and describing the equipment, machinery, furniture and fixtures and any
personal property collateral covered by the applicable Mortgage and Security Agreement;

(4) Any other applicable Loan Documents duly executed by the applicable Borrower and any other
Person required by the applicable Loan Document;

(5) a duly certified ALTA/ACSM survey showing the boundaries of the land and all improvements
thereon comprising the Project, with flood zone and wetlands certification, of date satisfactory to
the Agent (upon request, Borrowers will supply successive surveys as construction progresses);

(6) evidence of zoning and construction permits;

(7) a complete copy of the Plans and Specifications along with any changes or amendments
thereto;

(8) an MAI Appraisal Report of the Project meeting FIRREA guidelines and acceptable to the
Agent establishing the value of the Project in an amount acceptable to the Agent;

(9) A Phase I environmental site assessment meeting current ASTM Standards and otherwise in
form and scope satisfactory to the Agent and such other reports or studies of the Project as may be
reasonably required by the Agent, performed by an environmental consultant or engineer acceptable
to the Agent, which establishes the environmental condition of the Project as satisfactory to the
Agent;

(10) A soil survey or study performed by engineers acceptable to the Agent which establishes
that the soil condition of the Project is suitable for the construction of the Project thereon;

(11) the Project Budget and Loan Budget, in form and substance satisfactory to the Agent and
the Inspecting Architect;

(12) Evidence satisfactory to the Agent that all installments of general real estate taxes,
special assessments and other levies against the Project have been paid in full;

(13) Evidence satisfactory to the Agent that the construction of the Project and the operation
thereof are in compliance with all governmental requirements and that all utilities necessary or
desirable for the operation of the Project are available to the Project;

(14) Payment of all of the Agent’s costs and expenses incurred in underwriting, documenting,
closing and disbursing the Construction Advance, including, but not limited to, the Agent’s
attorneys’ fees and costs and the costs and expenses of the Inspecting Architect; and

(15) a Federal Emergency Management Agency Standard Agency Flood Hazard Determination
Certificate covering the Hotel securing the Loan.

All conditions and requirements of this Agreement relating to the obligation of Lenders to
make advances under a Construction Note are for the sole benefit of Lenders and no other person or
party (including, without limitation, the General Contractor, major subcontractors, and other
subcontractors and materialmen engaged in the construction of the Project) shall have the right to
rely on the satisfaction of such conditions and requirements by Borrowers as a condition precedent
to Lenders making an advance under a Construction Note. The Required Lenders shall have the
absolute right, in their sole discretion, to waive any such condition or requirement as a condition
precedent to making an advance under a Construction Note.

1.12. Advances Without Receipt of a Draw Request. Notwithstanding anything to the
contrary, the Agent has the irrevocable right at any time and from time to time to apply funds
which Lenders agree to advance hereunder to pay interest on a Construction Note as and when
interest becomes due, and to pay any and all reasonable actual costs of the Agent in connection
with a Construction Advance which shall include all abstracting and recording fees, site inspection
expenses, reasonable attorneys’ fees for preparation and review of documents, and expenses related
to the closing of the Construction Advance.

1.13. Deficiency: The applicable Borrower will submit to the Agent and the Inspecting
Architect the Project Budget detailing by line item the estimated cost of constructing each phase
of the applicable Project, and the Loan Budget prepared by such Borrower which details the
application of the Construction Note proceeds to each phase of the Project. Lenders will not be
obligated to make any advance under a Construction Note, in the reasonable opinion of the Agent or
the Inspecting Architect, at any time, the balance of the Construction Note yet to be advanced by
Lenders is less (the amount by which it is less being hereinafter referred to as the
“Deficiency”) than the actual sum, as estimated by the Agent or the Inspecting Architect, which
will be required to complete construction of the Project in accordance with the Plans and
Specifications and this Agreement and all costs and expenses of any nature whatsoever which will be
incurred in connection with the completion of construction of the Project and all operating
deficits of the Project (including debt service on the Construction Note). Borrowers will, within
ten (10) days after being notified by the Agent that there is or will be a Deficiency, either (i)
invest Borrowers’ own funds in the Project in a manner satisfactory to the Agent an amount equal to
the Deficiency and deliver to the Agent evidence satisfactory to the Agent of such investment,
which investment shall remain invested in the Project until the Construction Advance has been paid
in full, or (ii) deposit with the Agent an amount sufficient to eliminate the Deficiency. Any
amounts deposited by Borrowers with the Agent to pay the Deficiency shall not bear interest, may be
held separate or co-mingled with other funds of the Agent, and shall be applied by the Agent to pay
costs as construction of the Project progresses before any further advances are made on the
Construction Note. Borrowers’ failure to invest in the Project or deposit the funds necessary to
eliminate the Deficiency within five (5) days following notice from the Agent shall constitute an
Event of Default hereunder entitling the Agent to exercise any and all remedies provided for in
this Agreement, otherwise available at law or in equity or in any other Loan Documents. Any
determination of a Deficiency by the Agent or the Inspecting Architect will be deemed conclusive.
If an Event of Default shall occur and be continuing, the Agent, in addition to all other rights
and remedies which it may have, shall have the unconditional right, at its option, to apply, in
whole or in part, any amounts deposited by either Borrower with the Agent with respect to the
Deficiency, to the payment of the Advances in such order and priority as the Required Lenders deem
appropriate.

1.14. Specific Additional Covenants of Borrowers. Each Borrower will comply with each
of the following terms and condition:

(a) The applicable Borrower will obtain and furnish to the Agent within thirty (30)
days after the completion of the Project the originals or copies of all permanent
certificates of occupancy and all other certificates, licenses, consents and other approvals
of the governmental authorities which are required for the use and occupancy of the Project;
and a certificate of completion from the Architect and General Contractor certifying that
work on the Project has been completed in accordance with the Plans and Specifications and
any and all change orders as permitted under this Agreement, and that all labor, services,
materials and supplies used in such work have been paid for and that the completed Project
conforms with all applicable zoning, land use and planning, building and environmental laws
and regulations of the governmental authorities having jurisdiction over the Project. In no
event shall Lenders be required to make the last advance under a Construction Note pursuant
to this Agreement until all such certificates, licenses, consents and approvals have been
obtained and delivered to and approved by the Agent and the Inspecting Architect.

(b) The applicable Borrower will furnish to the Agent from time to time upon request
(i) the names of all persons with whom such Borrower or the General Contractor has
contracted or intends to contract for the construction of the Project or the furnishing of
labor or materials in connection therewith along with the tax identification numbers for all
such persons and copies of their contracts, (ii) a list of all unpaid bills for labor and
materials with respect to construction of the Project, (iii) the Project Budget and Loan
Budget and revisions thereof showing estimated direct construction costs and other costs and
expenses to be incurred in connection with the completion of construction of the Project,
(iv) lien waivers, receipted bills or other evidences of payment of all direct construction
costs and other costs and expenses incurred in connection with the construction of the
Project and any other costs and expenses relating thereto, and (v) such other information
relating to Borrowers, the Project, any indemnitor or other Person connected with Borrowers,
the construction of the Project or any collateral for the Advances or other source of
repayment of the Advances as the Agent may reasonably request.

(c) Borrowers will pay when due all direct construction costs and other costs and
expenses incurred by a Borrower in connection with the construction of the Project or any
repair and restoration of the Project.

(d) Borrowers will pay all reasonable fees and charges incurred in the procuring,
making and administrating of a Construction Advance and any Construction Term Note converted
therefrom, including, without limitation, fees, expenses and attorneys fees incurred by the
Agent, fees of the Inspecting Architect, appraisal fees, and fees and expenses relating to
examination of title, title insurance premiums, environmental assessments and surveys.

(e) The applicable Borrower will execute and/or enter into any easements which the
Agent may determine are necessary to obtain ingress and egress to the Project or for the use
thereof or for the purpose of providing utilities thereto.

(f) The applicable Borrower will comply with all governmental requirements with respect
to the construction, ownership and operation of a Project, and shall pay all taxes and
assessments, general and special, and all other levies or impositions on the Project prior
to delinquency; provided, however, that such Borrower may contest the amount or validity of
any taxes, assessments, levies or impositions on the Project by appropriate legal
proceedings, diligently pursued, provided that (i) such Borrower will first make all
contested payments, under protest if it desires, but if payment under protest is not
permitted by the taxing authority, such contested payment need not be made, (ii) neither the
Project, any part thereof, nor any interest therein shall be in any danger of being sold,
forfeited, lost or interfered with, (iii) Borrowers shall have furnished such security, if
any, as may be required in the proceedings or reasonably requested by the Agent, and (iv)
all expenses incurred in connection with such proceedings shall be paid by Borrowers.

1.15. Change Orders. Notwithstanding anything to the contrary contained in
this Agreement, the applicable Borrower has the right to enter into or to authorize the
entering into of change orders with respect to a Project without obtaining the Agent’s prior
written consent, provided that no such change order will change the gross square feet to be
contained in the Project, the basic layout of the Project, the number of parking spaces to
be contained in the Project, involve the use of materials, fixtures or equipment which will
not be at least equal in quality to the materials, fixtures and equipment originally
specified in or required by the Plans and Specifications, as approved by the Agent and the
Inspecting Architect, or increase the Total Project Cost by more than $10,000.00.

1.16. Inspecting Architect. Borrowers will be responsible for payment of the
Inspecting Architect’s reasonable fees at rates reasonable within the local market.

1.17. Title Insurance. As a condition precedent to the obligation of Lenders
to make the initial advance under a Construction Note, the applicable Borrower shall deliver
to the Agent a construction lender’s title policy (the “Title Policy”) in form satisfactory
to the Agent from a title company acceptable to the Agent, with authorization for the title
company to insure all Construction Note advances by endorsements to the Title Policy or
otherwise, covering the Project and insuring against mechanics lien(s). The Title Policy
shall insure in the amount of the Construction Advance that the Mortgage encumbering the
Project is a valid and subsisting first priority mortgage on the Project and all appurtenant
easements, if any, subject only to exceptions acceptable to the Agent, and containing such
endorsements required by the Agent. The applicable Borrower will deliver to the Agent an
ALTA/ACSM Survey of the Project acceptable to the Agent.

1.18. Conversion of a Construction Advance. Subject to the terms of this
Agreement, and provided that no Event of Default has occurred, on the Maturity Date of a
Construction Note, the applicable Borrower may convert such Construction Note to a
Construction Term Note upon the following terms and conditions precedent:

(1) delivery by Borrowers of a Construction Term Note duly executed by
Borrowers in an amount equal to the outstanding principal balance on the
Construction Note, but not to exceed the maximum amount of a Construction Term Note
as provided for in this Agreement unless approved in writing by the Required
Lenders;

(2) Borrowers have accomplished satisfactory delivery of all items under
Section 7.2 below and this Article I;

(3) delivery of evidence of substantial completion of the Project in accordance
with the approved plans and specifications, as determined by: (a) the Agent and the
Inspecting Architect, (b) an As-Built, ALTA/ACSM Class A Urban Survey of the Project
and appurtenant easements from a surveyor satisfactory to the Agent and the title
company and certified to both of them; (c) issuance of a certificate of occupancy
from the applicable governmental authority and (d) any endorsements to the
applicable title policy required by the Agent;

(4) delivery of all other documentation required by the Agent, in the exercise
of its reasonable judgment otherwise affecting the Project and the applicable
Construction Term Note; and

(5) payment by Company to the Agent of all of the Agent’s costs and expenses
relating to the closing of the Construction Term Note, including, but not limited
to, attorneys’ fees and costs.

1.19. Accordion Feature.

(a) At any time prior to one Business Day before the Termination Date, Borrowers may
request Lenders to effectuate a one-time increase in the aggregate Commitments (a
“Commitment Increase”). Each Lender may, in its sole discretion, participate in such
Commitment Increase (an “Increasing Lender”) or the Agent may locate one or more other banks
or other financial institutions reasonably acceptable to the Agent to become a Lender under
this Agreement (an “Additional Lender”) to participate in such Commitment Increase;
provided, however, that (A) the aggregate amount of the Line of Credit may not exceed
$40,000,000.00, and (B) all Commitments provided pursuant to a Commitment Increase shall be
available on the same terms as those applicable to the existing Commitments and Advances.
Borrowers shall provide prompt notice of any proposed Commitment Increase to the Agent.
Nothing in this Section 1.19 shall be construed to create any obligation on the Agent or any
Lender to agree to or participate in any Commitment Increase requested by Borrowers, to
advance or to commit to advance any credit to Borrowers in excess of its Commitment or to
arrange for any other Person to advance or to commit to advance any credit to Borrowers.

(b) A Commitment Increase shall become effective upon (A) the receipt by the Agent of
(1) an agreement in form and substance reasonably satisfactory to the Agent signed by
Borrowers, each Increasing Lender and each Additional Lender, setting forth the Commitments
of each such Lender and setting forth the agreement of each Additional Lender to become a
party to this Agreement and to be bound by all the terms and provisions hereof binding upon
each Lender, and (2) such evidence of appropriate authorization on the part of Borrowers
with respect to such Commitment Increase as the Agent may reasonably request, and (B)
receipt by the Agent of a certificate of an officer of each Borrower stating that, both
before and after giving effect to such Commitment Increase, no Default or Event of Default
has occurred and is continuing or would result from the Commitment Increase, and that all
representations and warranties made by Borrowers in this Agreement and the other Loan
Documents are true and correct in all material respects, unless such representation or
warranty relates to an earlier date which remains true and correct as of such earlier date.

(c) Notwithstanding any provision contained herein to the contrary, from and after the
date of any Commitment Increase, all calculations and payments of interest on the Advances
shall take into account the actual Commitment of each Lender and the principal amount
outstanding of each Advance made by such Lender during the relevant period of time.

1.20. Conditions to Advances. In addition to the conditions precedent set forth above
and in Article VII below, each request for an Advance will be deemed to constitute a representation
by the Borrowers at the time of the request that no Event of Default (as defined in Article VI
hereof) exists or is imminent and that the representations and warranties of the Borrowers
contained in this Agreement and the other Loan Documents are true in all material respects on or as
of the date of such request for a Loan.

1.21. Fees. In consideration for Lenders making the Loan available to Borrowers,
Borrowers will jointly and severally pay to the Agent for the pro rata account of Lenders (i) a
commitment fee equal to ten (10) basis points of the aggregate Commitments of the Lenders payable
in full at the closing of this Agreement. In addition, Borrowers will jointly and severally pay
the Agent for the account only of the Agent an annual agency fee equal to twelve and one half (121/2)
basis points of the aggregate Commitments of the Lenders payable at the closing of this Agreement.

Additional commitment fees and agency fees which arise due to an increase in a Lender’s
Commitment or the adding of a Lender and such added Lender’s Commitment shall also be due at the
time such increased Commitment or additional Commitment becomes available to Borrowers for
borrowing and shall be prorated based on the amount of the Commitment added by such Lender and the
number of days remaining until the Termination Date.

ARTICLE II

Collateral

Payment of Borrowers’ obligations hereunder, under the Loan and under the Loan Documents shall
be secured and/or supported by the following (hereinafter collectively referred to as the
“Collateral”) until all such obligations are fully and finally paid and performed in full:

2.1. Personal Property. The Loan made pursuant to this Agreement and all other
indebtedness arising hereunder or in connection herewith shall be collateralized and supported by a
security interest, and each Borrower hereby grants to the Agent, a security interest in all of each
Borrower’s respective assets associated with or located at a Hotel encumbered with a Mortgage to
secure the Loan, including, but not limited to, each Borrower’s goods, equipment and inventory, now
owned as well as any and all thereof that may hereafter be acquired by such Borrower, and in and to
all cash and non-cash proceeds (including, without limitation, insurance proceeds), accessions,
accessories and products thereof, and all of such Borrower’s accounts receivable, general
intangibles, payment intangibles, software, chattel paper (whether tangible or electronic), deposit
accounts, documents, investment property and instruments now owned or hereafter arising or acquired
and all cash and non-cash proceeds thereof. Such security interest shall be further evidenced by a
security agreement specific to the applicable Borrower’s assets located at the applicable Hotel in
form and substance acceptable in all respects to the Agent (the “Security Agreement”). Each
Borrower further agrees to authenticate to the Agent and hereby authorizes the Agent to file in all
filing offices the Agent deems necessary, appropriate or desirable such financing statements,
continuations, assignments or other instruments as may be requested by the Agent at any time and
from time to time in order for the Agent to perfect the security interest in the aforementioned
Collateral. Borrowers will each execute in favor of and deliver to the Agent a First Amended and
Restated Security Agreement which will amend and restate any Security Agreement executed in
connection with the Current Loan Agreement.

2.2. Real Property. Contemporaneously with the execution and delivery of a Term Note
or Construction Note, the applicable Borrower will grant and execute in favor of the Agent a first
priority Mortgage and assignment of rents and leases on the Hotel acquired or financed with the
applicable Advance, with such Mortgage in form and substance acceptable to the Agent. Thereafter,
such Mortgage and assignment of rents and leases shall secure the Loan.

2.3. Other Documents. Borrowers agree to furnish such information and to execute such
other documents or undertake any other acts as may be reasonably necessary to attach, perfect and
maintain the security interests and assignments contemplated by this Agreement, or as otherwise
reasonably requested by the Agent from time to time.

ARTICLE III

Representations and Warranties

Each Borrower represents and warrants to Lenders (which representations and warranties will
survive the delivery of the Notes and shall continue so long as any sums remain outstanding under
the Loan, this Agreement or any other Loan Document or Lenders have any Commitments remaining) as
follows:

3.1. Standing. Each Borrower is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of South Dakota. Each Borrower is duly
qualified and is in good standing in every other jurisdiction where such qualification and good
standing is required in order to conduct business in such jurisdiction. Each Borrower has the
power and authority to own its property and to carry on its business.

3.2. Authority. Each Borrower has the full power and authority to execute and deliver
this Agreement and the other Loan Documents, and the same constitute the binding and enforceable
obligations of Borrowers in accordance with their terms. No consent or approval of the members or
manager of either Borrower or any other Person, creditor, governmental department, agency or body
is required as a condition to the effectiveness and validity of the Loan Documents. The execution
of and performance by each Borrower of its obligations under the Loan Documents to which it is a
party has been duly authorized by all appropriate and required limited liability company
proceedings and action and will not violate, conflict with or contravene any provisions (i) of law
or any regulation, order, writ, judgment, injunction, decree, permit, or license applicable to such
Borrower or any of such Borrower’s property, or (ii) of such Borrower’s Articles of Organization,
Operating Agreement or any members’ agreement or other governing or organizational agreement of
such Borrower or such Borrower’s members.

3.3. Litigation. There are no actions, suits, arbitration proceedings or other
proceedings of any nature pending or, to the knowledge of either Borrower, threatened, or any basis
therefor, against or affecting either Borrower or any Collateral at law or in equity, in any court
or before any governmental department or agency or arbitrator or arbitration panel, which may
result in a Material Adverse Effect.

3.4. Conflicting Agreements. There are no provisions of any existing mortgage,
indenture, deed of trust, trust deed, lease, contract or agreement of any nature binding on either
Borrower or affecting the Collateral or either Borrower’s other property, which would conflict with
or in any way prevent the execution, delivery, or performance of the terms of this Agreement and/or
the Loan Documents. Neither Borrower is in default in any respect in the performance, observance
or fulfillment of any obligation, covenant or condition contained in any agreement or instrument to
which it is a party.

3.5. Title and Liens. Each Borrower has good, valid and marketable title of record to
its real, mixed and personal property (including, without limitation, the property constituting
Collateral), all of which is owned free and clear of all mortgages, Liens, pledges, charges,
attachments and other security interests and encumbrances of any nature, except for the Permitted
Liens or as otherwise provided for in this Agreement or disclosed to and approved by Lenders in
writing. In respect of leased property, the applicable Borrower has valid and enforceable
leasehold interests therein.

3.6. Taxes. Each Borrower has filed all federal, state, local, and other tax and
similar returns and has paid or provided for the payment of all taxes assessments and other
governmental charges due thereunder through the date of this Agreement, including without
limitation, all withholding, FICA and franchise taxes. No claims or Liens for unpaid taxes which
are due have been asserted, claimed or threatened against either Borrower.

3.7. Financial Statements. Summit Hotel’s audited financial statements dated as of
December 31, 2008 and internally-prepared interim financial statement dated June 30, 2009, copies
of which have been furnished to Lenders, are complete and correct and fairly and accurately present
the financial condition of each Borrower as of such date and the results of operations for the
period covered by such statements. Since June 30, 2009, there has been no Material Adverse Effect
or change with respect to either Borrower. Neither Borrower has any material liabilities, direct
or contingent, except those disclosed in the foregoing financial statements or as otherwise
disclosed to Lenders in writing. No information, exhibit or report furnished by either Borrower to
Lenders or the Agent in connection with the Loan, this Agreement or any other Loan Document
contains any material misstatement of fact or omits to state a material fact or any fact necessary
to make the statement contained therein incomplete or not materially misleading.

3.8. Other. All statements by either Borrower contained in any certificate,
statement, document or other instrument or writing delivered by or on behalf of either Borrower at
any time pursuant to this Agreement or the other Loan Documents shall constitute representations
and warranties made by Borrowers hereunder. No representation or warranty of either Borrower
contained in this Agreement or any other Loan Document, and no statement contained in any
certificate, schedule, list, financial statement or other instrument furnished to Lenders or the
Agent by or on behalf of Borrowers contains, or will contain, any untrue statement of a material
fact, or omits, or will omit, to state a material fact necessary to make the statements contained
herein or therein not misleading. To the best of each Borrower’s knowledge, all information
material to the transactions contemplated in this Agreement has been expressly disclosed to Lenders
in writing.

3.9. Regulation U. No part of the proceeds of the Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any
such margin stock or to reduce or retire any indebtedness incurred for any such purpose. If
requested by the Agent, Borrowers will furnish to the Agent a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U to the foregoing effect.

3.10 ERISA.

(a) Definitions. The following terms shall have the following definitions:

(1) “Consolidated Entity” shall mean any corporation or other entity which owns at
least 50% of the voting or control rights or interest or other ownership interest in
either Borrower directly or indirectly in any manner, or in which at least 50% of
the voting stock or other ownership interest in such corporation or other entity is
owned by either Borrower directly or indirectly in any manner. If Borrowers have no
Consolidated Entities, the provisions of this Agreement relating to Consolidated
Entities shall be inapplicable without affecting the applicability of such
provisions to Borrowers alone.

(2) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

(3) “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time.

(4) “Pension Event” shall mean, with respect to any Pension Plan, the occurrence of:
(i) any prohibited transaction described in Section 406 of ERISA or in Section 4975
of the Internal Revenue Code; (ii) any Reportable Event; (iii) any complete or
partial withdrawal, or proposed complete or partial withdrawal, of Borrowers or any
Consolidated Entity from such Pension Plan; (iv) any complete or partial
termination, or proposed complete or partial termination, of such Pension Plan; or
(v) any accumulated funding deficiency (whether or not waived), as defined in
Section 302 of ERISA or in Section 412 of the Internal Revenue Code.

(5) “Pension Plan” shall mean any pension plan, as defined in Section 3(2) of ERISA,
which is a multi-employer plan or a single employer plan, as defined in Section 4001
of ERISA, and subject to Title IV of ERISA and which is (i) a plan maintained by
either Borrower or any Consolidated Entity for employees or former employees of
either Borrower or of any Consolidated Entity, (ii) a plan to which either Borrower
or any Consolidated Entity contributes or is required to contribute, (iii) a plan to
which either Borrower or any Consolidated Entity was required to make contributions
at any time during the five (5) calendar years preceding the date of this Agreement
or (iv) any other plan with respect to which either Borrower or any Consolidated
Entity has incurred or may incur liability, including, without limitation,
contingent liability, under Title IV of ERISA either to such plan or to the Pension
Benefit Guaranty Corporation. For purposes of the definitions of the terms “Pension
Event” and “Pension Plan”, each Borrower shall include any trade or business
(whether or not incorporated) which, together with such Borrower or any Consolidated
Entity, is deemed to be a single employer within the meaning of Section 4001(b)(1)
of ERISA.

(6) “Reportable Event” shall mean any event described in Section 4043(b) of ERISA or
in regulations issued thereunder with regard to a Pension Plan.

(b) ERISA Representations and Warranties. Each Borrower represents and warrants to
Lenders that:

(1) No Pension Plan has been terminated, or partially terminated, or is insolvent,
or in reorganization, nor have any proceedings been instituted to terminate or
reorganize any Pension Plan;

(2) Neither Borrower nor any Consolidated Entity has withdrawn from any Pension Plan
in a complete or partial withdrawal, nor has a condition occurred which, if
continued, would result in a complete or partial withdrawal;

(3) Neither Borrower nor any Consolidated Entity has incurred any withdrawal
liability, including, without limitation, contingent withdrawal liability, to any
Pension Plan, pursuant to Title IV of ERISA;

(4) Neither Borrower nor any Consolidated Entity has incurred any liability to the
Pension Benefit Guaranty Corporation other than for required insurance premiums
which have been paid when due;

(5) No Reportable Event has occurred with regard to a Pension Plan;

(6) No Pension Plan or other “employee pension benefit plan”, as defined in Section
3(2) of ERISA, to which either Borrower or any Consolidated Entity is a party has an
accumulated funding deficiency (whether or not waived), as defined in Section 302 of
ERISA or Section 412 of the Internal Revenue Code;

(7) The present value of all benefits vested under any such Pension Plan does not
exceed the value of the assets of such Pension Plan allocable to such vested
benefits;

(8) Each Pension Plan and each other employee benefit plan as defined in
Section 3(2) of ERISA, to which either Borrower or any Consolidated Entity is a
party has received a favorable determination by the Internal Revenue Service with
respect to qualification under Section 401(a) of the Internal Revenue Code;

(9) Each Pension Plan and each other employee benefit plan as defined in
Section 3(2) of ERISA, to which either Borrower or any Consolidated Entity is a
party is in substantial compliance with ERISA, and no such plan or any
administrator, trustee or fiduciary thereof has engaged in a prohibited transaction
defined or described in Section 406 of ERISA or in Section 4975 of the Internal
Revenue Code; and

(10) Neither Borrower nor any Consolidated Entity has incurred any liability or a
trustee or trust established pursuant to Section 4049 of ERISA or to a trustee
appointed pursuant to Section 4042(b) or (c) of ERISA.

(c) ERISA Indemnity. In addition to any other transfer prohibitions set forth herein
and in the other Loan Documents, and not in limitation thereof, neither Borrower shall assign,
sell, pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or rights in
this Agreement or in the Collateral, or attempt to do any of the foregoing or suffer any of the
foregoing, nor shall any shareholder or member of either Borrower assign, sell, pledge, encumber,
transfer, hypothecate or otherwise dispose of any of its rights or interest in such Borrower,
attempt to do any of the foregoing or suffer any of the foregoing, if such action would cause the
Loan or the exercise of any of Lenders’ rights in connection therewith, to constitute a prohibited
transaction under ERISA or the Internal Revenue Code or otherwise result in Lenders being deemed in
violation of any applicable provision of ERISA. Borrowers jointly and severally agree to indemnify
and hold Lenders free and harmless from and against all loss, costs (including attorneys’ fees and
expenses), taxes, damages (including consequential damages), and expenses Lenders may suffer by
reason of the investigation, defense and settlement of claims and in obtaining any prohibited
transaction exemption under ERISA necessary or desirable in the Agent’s sole judgment or by reason
of a breach of the foregoing prohibitions. The foregoing indemnification shall survive repayment
of the Loan.

3.11. Solvency. Each Borrower is and, after consummation of the transactions
contemplated by this Agreement will be, Solvent. “Solvent” shall mean that, as of a particular
date, (i) such Borrower is able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the ordinary course of business;
(ii) such Borrower is not engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Borrower’s property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the industry in which such
Borrower is engaged, (iii) the fair value of the property of such Borrower is greater than the
total amount of liabilities, including, without limitation, contingent liabilities, of such
Borrower and (iv) the present fair salable value of the assets of such Borrower is not less than
the amount that will be required to pay the probable liability of such Borrower on its debts as
they become absolute and matured. In computing the amount of contingent liabilities at any time,
it is intended that such liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.

3.12. Compliance With Law. The business and operations of the Borrowers comply in all
respects with all applicable federal, state, regional, county and local laws, including without
limitation statutes, rules, regulations and ordinances relating to public health, safety or the
environment or disposals to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous substances (including,
without limitation, petroleum, its derivatives, by-products or other hydrocarbons), to exposure to
toxic, hazardous, or other controlled, prohibited or regulated substances, to the transportation,
storage, disposal, management or release of gaseous or liquid substances, and any regulation,
order, injunction, judgment, declaration, notice or demand issued thereunder, except where the
failure to so comply (individually or in the aggregate) would not reasonably be expected to have a
Material Adverse Effect.

ARTICLE IV

Financial and Affirmative Covenants

So long as this Agreement remains in effect, or as long as there is any principal or interest
due under the Loan and Lenders have any Commitments remaining, unless the Required Lenders shall
otherwise consent in writing, Borrowers will:

4.1. Financial Covenants. Summit Hotel shall maintain and comply with the following
financial covenants:

(a). Debt Service Coverage Ratio. Summit Hotel shall maintain at all times, on
a rolling four-quarter average (for Summit Hotel’s four most recent fiscal quarters then
ended), a Debt Service Coverage Ratio of not less than 1.50:1.00. The first quarterly
calculation and measurement of the Debt Service Coverage Ratio shall be September, 2009.

(b). Liquidity Covenant. Borrowers shall establish and maintain at all times
while any Loan remains outstanding unencumbered cash balances in an amount not less than
$4,000,000.00 on a consolidated basis, reserving for, but not limited to, the following:
costs and expenses incurred in connection with capital improvements, repairs, replacements
and capital expenditures to Hotels.

(c). Total Debt. The aggregate Total Debt outstanding at any one time of
Borrowers, The Summit Group, Inc. and any other affiliates or subsidiaries of The Summit
Group, Inc. and either Borrower shall not exceed $450,000,000.00.

4.2. Books and Records; Inspections. Maintain proper books and records and account
for financial transactions in a manner consistent with the preparation of the financial statements
referenced is Section 3.7, and permit the Agent’s officers and/or authorized representatives or
accountants to visit and inspect Borrowers’ respective properties, examine their books and records,
conduct audits of the Collateral and discuss their accounts and business with their respective
officers, accountants and auditors, all at reasonable times upon reasonable notice. Borrowers will
cooperate in arranging for such inspections and audits. Without the prior written consent of the
Required Lenders, neither Borrower will change in any material way the accounting principles upon
which the financial statements referenced in Section 3.7 were prepared and based except for changes
made as a result of changes in or to generally accepted accounting principles.

4.3. Financial Reporting. Deliver to the Agent financial information in such form and
detail and at such times as are satisfactory to the Agent, including, without limitation:

(a) Summit Hotel’s year end financial statements (to include, but not be limited to,
balance sheet, income statement, and net worth reconciliation, each setting forth in
comparative form figures for the preceding fiscal year of Summit Hotel), audited by a
certified public accounting firm selected and approved by the Audit Committee of Summit
Hotel as soon as available and in any event within one hundred twenty (120) days after the
end of each of Summit Hotel’s respective fiscal years;

(b) Summit Hotel’s interim quarterly financial statements (to include its unaudited
balance sheet as of the end of each such period and the related unaudited statements of
income, and statement of changes in financial position for such period and the portion of
the fiscal year through such date, setting forth in each case in comparative form the
figures for the previous year) as soon as available, but in any event within twenty (20)
days after the end of each quarter, signed and certified correct by the Chief Financial
Officer or equivalent of Summit Hotel (subject to normal year-end adjustments);

(c) a quarterly certificate of the chief financial officer of Summit Hotel
substantially in the form of Schedule 4.3(c) attached hereto and incorporated herein by
reference, (i) demonstrating compliance with the financial covenants contained in Section
4.1 by calculation thereof as of the end of each such fiscal period, (ii) stating that no
Event of Default exists, or if any Event of Default does exist, specifying the nature and
extent thereof and what action such Borrower proposes to take with respect thereto and (iii)
certifying that all of the representations and warranties made by such Borrower in this
Agreement and/or in any other Loan Document are true and correct in all material respects on
and as of such date as if made on and as of such date, within twenty-five (25) days after
the end of each quarter; and

(d) Such other financial information concerning Borrowers as the Agent may require from
time to time.

All financial statements required hereunder shall be complete and correct in all respects and shall
be prepared in reasonable detail (consistent with the financial statements referred to in
Subsection 3.7.) and applied consistently throughout the periods reflected therein.

4.4. Payment of Debts, Taxes and Claims. Promptly pay and discharge prior to
delinquency all debts, accounts, liabilities, taxes, assessments and other governmental charges or
levies imposed upon, or due from, either Borrower, as well as all claims of any kind (including
claims for labor, materials and supplies) which, if unpaid, might by law become a lien or charge
upon any of a Borrower’s property, except that nothing herein contained shall be interpreted to
require the payment of any such debt, account, liability, tax, assessment or charge so long as its
validity is being contested in good faith by appropriate legal proceedings and against which, if
requested by the Agent or required by generally accepted accounting principles, reserves
satisfactory to and deposited with the Agent have been made therefor. Any such reserves will
constitute additional Collateral and Borrowers hereby grant the Agent a first priority security
interest in such reserves.

4.5. Insurance. Each Borrower will purchase, pay for in advance, and at all times
maintain insurance including but not limited to: (i) fire, windstorm and other hazards, casualties
and contingencies covered by the “all-risk” form of insurance; (ii) public liability; (iii)
workers’ compensation and (iv) property damage as is customarily maintained by similar businesses
and/or as the Agent from time to time requires. In addition, if a Hotel is located in flood hazard
area, the applicable Borrower will obtain and maintain appropriate flood insurance as is acceptable
to the Agent. The amounts, limits, forms, deductibles, contents and issuer of said policies shall
be subject to the Agent’s reasonable approval. The Agent, as Collateral Agent for Lenders, shall
be named as an additional insured as its interest shall appear and each of said policies covering
the Collateral shall contain a loss payable clause, and any proceeds of such insurance in excess of
$100,000.00 shall be either (in the discretion of the Required Lenders) (i) payable to the
Collateral Agent for application to the Loan and any other sums owing under this Agreement or any
other Loan Document in a manner and priority to be determined by the Required Lenders in their sole
discretion or (ii) if consented to by the Required Lenders, used for restoration or repair with
such proceeds disbursed by the Agent in accordance with procedures established by the Agent. All
such insurance shall provide for noncancellation without at least thirty (30) days prior written
notice to the Agent and shall contain provisions protecting the Collateral Agent’s interests
whether or not any acts by either Borrower or others should result in loss of coverage under such
policies. The originals, certified copies or certificates of such policies, and renewals
evidencing the insurance required hereunder shall be delivered to the Agent, and such insurance
shall be maintained in full force and effect at all times during the period of this Agreement and
while any indebtedness under the Loan remains outstanding.

In the event either Borrower at any time or times hereafter shall fail to obtain or maintain
any of the policies of insurance required above or to pay any premium in whole or in part relating
thereto, then the Lenders, without waiving or releasing any obligation or default by Borrowers
hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain
and maintain such policies of insurance and pay such premium and take any other action with respect
thereto which the Required Lenders deem advisable. All sums so disbursed by Lenders, including,
without limitation, reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be part of Borrowers’ obligations and indebtedness hereunder, secured by the
Collateral and payable jointly and severally by Borrowers to the Agent on demand. UNLESS BORROWERS
PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED UNDER THIS AGREEMENT AND/OR ANY OTHER LOAN
DOCUMENT, LENDERS MAY PURCHASE INSURANCE AT THE BORROWERS’ JOINT AND SEVERAL EXPENSE TO PROTECT
LENDERS’ INTEREST IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT BORROWERS’
RESPECTIVE INTERESTS. THE COVERAGE THAT LENDERS PURCHASE MAY NOT PAY ANY CLAIM THAT A BORROWER MAY
MAKE OR ANY CLAIM THAT IS MADE AGAINST A BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWERS MAY
LATER CANCEL ANY INSURANCE PURCHASED BY LENDERS, BUT ONLY AFTER PROVIDING EVIDENCE THAT BORROWERS
HAVE EACH OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. IF LENDERS
PURCHASE INSURANCE FOR THE COLLATERAL, BORROWERS WILL BE JOINTLY AND SEVERALLY RESPONSIBLE FOR THE
COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES LENDERS
MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE
BORROWERS’ OBLIGATIONS HEREUNDER AND SHALL BE SECURED BY THE COLLATERAL. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWERS MAY BE ABLE TO OBTAIN ON THEIR OWN.

4.6. Property Maintenance. Keep their respective properties in good repair, working
order, and condition and from time to time make any needful and proper repairs, renewals,
replacements, extensions, additions, and improvements thereto so that the business of Borrowers
will be conducted at all times in accordance with prudent business management.

4.7. Existence; Compliance With Laws. Take or cause to be taken such action as from
time to time may be necessary to preserve and maintain their respective existence in their
jurisdiction of organization and qualify and remain qualified as a foreign entity in each
jurisdiction in which such qualification is required and use due diligence to comply with all
statutes, laws, codes, rules, regulations and orders applicable or pertaining to the business or
property of Borrowers, or any part thereof, and with all other lawful government requirements
relating to their respective business and property. Each Borrower will continue to engage in the
same lines of business in which it is presently engaged.

4.8. Litigation; Adverse Events. Promptly inform the Agent of the commencement of any
action, suit, proceeding, arbitration, mediation or investigation against either Borrower, or the
making of any counterclaim against either Borrower, which could be reasonably expected to have a
Material Adverse Effect, and promptly inform the Agent of all Liens against any of either
Borrower’s property, other than Permitted Liens, which could be reasonably expected to have a
Material Adverse Effect, and promptly advise the Agent in writing of any other condition, event or
act which comes to either of their attention that could be reasonably expected to have a Material
Adverse Effect or might materially prejudice Lenders’ rights under this Agreement or the Loan
Documents.

4.9. Notification. Notify the Agent immediately if either of them becomes aware of
the occurrence of any Event of Default (as defined under Article VI hereof) or of any fact,
condition, or event that, only with the giving of notice or passage of time or both, would become
an Event of Default, or if either of them becomes aware of a material adverse change in the
business prospects, financial condition (including, without limitation, proceedings in bankruptcy,
insolvency, reorganization, or the appointment of a receiver or trustee), or results of operations,
or the failure of either Borrower to observe any of its undertakings under the Loan Documents.
Borrowers shall also notify the Agent in writing of any default under any other indenture,
agreement, contract, lease or other instrument to which either Borrower is a party or under which
either Borrower is obligated, and of any acceleration of the maturity of any material indebtedness
of either Borrower which default or acceleration could be reasonably expected to have a Material
Adverse Effect, and Borrowers shall take all steps necessary to remedy promptly any such default,
to protect against any such adverse claim, to defend any such proceeding and to resolve all such
controversies.

4.10. Inspections. Each Borrower shall allow the Agent, its employees, officers,
agents and representatives, at reasonable intervals and during normal business hours, to inspect
such Borrower’s operations, books and records, financial books and records (including the right to
make copies thereof) and to discuss such Borrower’s affairs, finances and accounts with such
Borrower’s managers, principal officers and independent public accountants. Each Borrower shall
permit the Agent, and will cooperate with the Agent in arranging for, inspections at reasonable
intervals of such Borrower’s facilities and audits of the Collateral. Each Borrower acknowledges
that any reports and inspections conducted or generated by the Agent or its agents or
representatives, shall be made for the sole benefit of Lenders and not for the benefit of Borrowers
or any third party, and Lenders do not assume any liability, responsibility or obligation to
Borrowers or any third party by reason of such inspections or reports. The reasonable cost of any
audits or inspections made by Lenders shall be paid or reimbursed jointly and severally by
Borrowers.

4.11. Conduct of Business. Continue to engage in an efficient and economical manner
in the business currently conducted by Borrowers on the date of this Agreement.

ARTICLE V

Negative Covenants

So long as this Agreement remains in effect, or as long as there is any principal or interest
due under the Loan, this Agreement or any of the other Loan Documents or any Commitments remain
outstanding, neither Borrower shall, without the prior written consent of the Required Lenders:

5.1. Liens. Create, incur, assume or suffer to exist any Lien or other encumbrance
upon any of its respective personal properties or assets, whether now owned or hereafter acquired,
except such security interests, mortgages, pledges, liens or other encumbrances (each, a “Permitted
Lien):

(a) created or granted by such Borrower under or pursuant to this Agreement or the other Loan
Documents;

(b) created or granted by such Borrower to Lenders under the Current Loan Agreement and
securing indebtedness arising thereunder;

(c) securing debt allowed in Section 5.4 below incurred in the ordinary course of such
Borrower’s business, consistent with current practices;

(d) Liens for taxes, assessments or governmental charges or levies to the extent not
delinquent or that are being diligently contested in good faith by appropriate proceedings and for
which such Borrower has set aside adequate reserves in accordance with generally accepted
accounting principles;

(e) cash pledges or deposits to secure (A) obligations under workmen’s compensation laws or
similar legislation, (B) public or statutory obligations of such Borrower, (C) bids, trade
contracts, surety and appeal bonds, performance bonds, letters of credit and other obligations of a
similar nature incurred in or necessary to the ordinary course of such Borrower’s business;

(f) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and
repairmen’s liens and other similar liens arising in the ordinary course of business securing
obligations which are not overdue by more than 60 days or which have been fully bonded or are being
diligently contested in good faith by appropriate proceedings and for which adequate reserves have
been set aside in accordance with generally accepted accounting principles;

(g) purchase money Liens or purchase money security interests upon or in property acquired or
held by such Borrower in the ordinary course of business to secure the purchase price of such
property or to secure indebtedness incurred solely for the purpose of financing the acquisition of
any such property to be subject to such Liens or security interests, or Liens or security interests
existing on any such property at the time of acquisition, or extensions, renewals or replacements
of any of the foregoing for the same or a lesser amount, provided that no such Lien or security
interest shall extend to or cover any property other than the property being acquired and no such
extension, renewal or replacement shall extend to or cover property not theretofore subject to the
Lien or security interest being extended, renewed or replaced, and provided, further, that the
aggregate principal amount of indebtedness at any one time outstanding secured by Liens permitted
by this clause (g) shall not exceed $75,000.00 per Hotel;

(h) easements, rights-of-way, zoning and other similar restrictions and encumbrances, which do
not (individually or in the aggregate) materially detract from the use of the property to which
they attach by Borrowers;

(i) liens disclosed in Schedule 3.5 attached to this Agreement and incorporated herein by
reference; and

(j) mortgages or deeds of trust securing permanent financing on Borrowers’ Hotels which are
not Collateral for the Loan.

5.2. Fundamental Changes. Wind up, liquidate, or dissolve; reorganize, merge or
consolidate with or into another entity, or sell, transfer, convey or lease all, substantially all
or any material part of its property, to another Person other than sale of such Borrower’s
inventory in the ordinary course of business; sell or assign any accounts receivable; purchase or
otherwise acquire all or substantially all of the assets of any corporation, partnership, limited
liability company or other entity, or any shares or similar equity interest in any other entity if
such entity is in a business unrelated to the business of such Borrower.

5.3. Conduct of Business. Materially alter the character in which it conducts its
business or the nature of such business conducted at the date hereof.

5.4. Debt. Create, incur, assume or suffer to exist any direct or indirect
indebtedness, except the following (“Permitted Debt”):

(a) Indebtedness under or pursuant to this Agreement or the other Loan Documents;

(b) Accounts payable to trade creditors for goods or services which are not aged more
than the later of (i) ninety (90) days from the billing date, or (ii) ten (10) days from the
due date, or (iii) the “special payment date” offered to such Borrower from time to time by
a particular trade creditors, and current operating liabilities (other than for borrowed
money) which are not more than thirty (30) days past due, in each case incurred in the
ordinary course of business, as presently conducted, and paid within the specified time,
unless contested in good faith and by appropriate proceedings;

(c) Indebtedness to First National under that certain First Amended and Restated Loan
Agreement dated on or about August 31, 2009 in the maximum principal amount of
$35,000,000.00, as such First Amended and Restated Loan Agreement may be amended or
restated;

(d) Indebtedness to the Lenders party to the Current Loan Agreement;

(e) Indebtedness to Fortress Credit Corp. in an amount not to exceed $99,700,000.00
under that certain Loan Agreement between Fortress Credit Corp. and Summit Hotel (the
“Fortress Debt”); and

(f) The indebtedness described in Borrowers’ or Borrowers parent’s quarterly filings
with the Securities Exchange Commission so long as such indebtedness does not exceed Total
Debt.

5.5. Investments. Acquire for investment purposes, investments that would not qualify
as “customary and prudent investments”, consistent with the current investment practices of such
Borrower.

5.6. Loans. Directly or indirectly loan amounts to or guarantee or otherwise become
contingently liable for the debts of any Person, including, but not limited to an affiliate (other
than a wholly owned affiliate), subsidiary, parent of such Borrower, or any shareholder, officer or
employee thereof; or of any officer, employee, manager or member of such Borrower or to any entity
controlled by any such entity, officer, manager, member, shareholder or employee, provided,
however, that Summit Hotel may make loans to Summit Hotel’s employees in an amount not to exceed
$50,000 in the aggregate at any time outstanding.

5.7. Executive Management. Unless the Required Lenders otherwise consent in writing,
Kerry W. Boekelheide shall remain each Borrower’s operations manager and the President of The
Summit Group, Inc., and The Summit Group, Inc. shall be the property manager of each Hotel pursuant
to each Borrower’s Operating Agreement.

5.8 Transactions With Affiliates. Enter into, or cause, suffer or permit to exist,
any arrangement or contract with any of its affiliates or subsidiaries, in each case unless such
arrangement or contract (i) is otherwise permitted by this Agreement, (ii) is in the ordinary
course of business of such Borrower or such affiliate or subsidiary, as the case may be, and (iii)
is on terms no less favorable to such Borrower or such affiliate or subsidiary than if such
arrangement or contract had been negotiated in good faith on an arm’s-length basis with a Person
that is not an affiliate or subsidiary of such Borrower.

5.9. Refinance/Special Loans. Neither Borrower shall refinance any Property where the
principal amount of the debt exceeds seventy percent (70%) of the Appraised Value of such Property.
Any loan proceeds from the refinancing of debt on Property in excess of the payoff balance of such
debt (“Takeout Equity”) shall not be distributed to such Borrower’s members, officers, investors,
affiliates or any other related entity if before or after giving effect to such distribution all
such distributions of Takeout Equity in the aggregate in any fiscal year of such Borrower exceeds
fifteen percent (15%) of such Borrower’s Tangible Net Worth (measured at the time of such
distribution). In addition, without the prior written consent of the Required Lenders, there shall
not be Special Loans outstanding at any time in the aggregate principal amount in excess of 25% of
the aggregate Commitments. The term Special Loans shall mean a Loan where the original principal
amount of such Loan exceeded 100% of the purchase price of the Hotel securing such Loan.

ARTICLE VI

Events of Default

6.1. Events of Default. The occurrence of any one or more of the following events
shall constitute a default by Borrowers under this Agreement (“Event of Default”):

(a) The non-payment, when due, whether by demand, acceleration or otherwise, of any
principal and/or interest payment, fee, expense or other obligation for the payment of money
under the Loan or under any other Loan Document and the same remains unpaid for a period of
ten (10) days after written notice from the Agent to Borrowers of such failure; or

(b) A breach by either Borrower or the occurrence of an event of default under any loan
agreement, promissory note, security agreement or other agreement, lease, contract or
document to which such Borrower is a party or under which it is bound, including, but not
limited to, the Fortress Debt and the indebtedness under the First Amended and Restated Loan
Agreement referenced in Section 5.4(c) above, directly or contingently, beyond any
applicable grace or notice and cure period unless such Borrower is contesting such failure
in good faith through appropriate proceedings, and if requested by the Required Lenders or
required by generally accepted accounting principles, such Borrower has bonded, reserved or
otherwise provided for payment of such indebtedness; or

(c) A breach by either Borrower in the performance or observance of any term, covenant
or provision contained in Sections 4.1, 4.4, 4.5, 4.7, 4.9, 5.1, 5.2, 5.3, 5.4, 5.7 or 5.9
of this Agreement and the same remains unperformed or is not cured within a period of ten
(10) days after written notice from the Agent to Borrowers of such failure; or

(d) A breach by either Borrower in the performance or observance of any agreement,
term, covenant or condition contained in this Agreement (other than (a) or (c) above) or in
the other Loan Documents and such failure shall not have been remedied within a period of
thirty (30) days after written notice is given by the Agent to Borrowers; or

(e) Any information, representation or warranty made herein, in the Loan Documents or
in any other writing furnished to Lenders in connection with the Loan, this Agreement or any
other Loan Document both before and after the execution hereof, shall be or become
incomplete, misleading or false in any material respect, or if any certificate, statement,
representation, warranty or audit furnished by or on behalf of the Borrowers in connection
with this Agreement or any other Loan Document, including those contained or in or attached
to this Agreement or any other Loan Document, or as an inducement by the Borrowers to enter
into, modify, extend, or renew this Agreement, shall prove to be false in any material
respect, or if the Borrowers shall have omitted the listing of a substantial contingent or
unliquidated liability or claim against either Borrower or, if on the date of execution of
this Agreement there shall have been any materially adverse change in any of the facts
disclosed by any such certificate, statement, representation, warranty or audit, which
change shall not have been disclosed by the Borrowers to the Lenders prior to the time of
execution; or

(f) Either Borrower shall (i) fail to pay any indebtedness for borrowed money,
including but not limited to the Fortress Debt and the First Amended and Restated Loan
Agreement referenced in Section 5.4(c) above, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after any applicable grace or notice and cure period, unless
such Borrower is contesting such failure in good faith through appropriate proceedings, and
if requested by the Required Lenders or required by generally accepted accounting
principles, such Borrower has bonded, reserved or otherwise provided for payment of such
indebtedness; or (ii) fail to perform or observe any term, covenant, or condition on its
part to be performed or observed under any agreement or instrument relating to any such
indebtedness, when required to be performed or observed, if the effect of such failure is to
permit the acceleration of the maturity of such indebtedness;

(g) Either Borrower shall (i) generally not pay, or be unable to pay, or admit in
writing its inability to pay its debts as such debts become due; or (ii) makes an assignment
for the benefit of creditors, or petitions or applies to any tribunal for the appointment of
a custodian, receiver, or trustee for it, any Collateral or for a substantial part of its
assets; or (iii) commences any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or (iv) has any such bankruptcy, reorganization,
dissolution, composition or readjustment of debt petition or application filed or any such
proceeding commenced against it which is not discharged within thirty (30) days; or (v)
takes any action indicating consent to, approval of, or acquiescence in any such proceeding,
or order for relief, or the appointment of a custodian, receiver, or trustee for all or any
substantial part of its assets and properties; or (vi) suffers any judgment, writ of
attachment, execution or similar process to be issued or levied against all or a substantial
part of its property or assets which is not released, stayed or bonded within thirty (30)
days and which would be reasonably expected to have a Material Adverse Effect; or

(h) The occurrence of any Event of Default (as defined in the Current Loan Agreement)
under any Advance or other indebtedness which arose under the Current Loan Agreement and
remains outstanding beyond any applicable grace or notice and cure period provided for such
Event of Default in the Current Loan Agreement; or

(i) This Agreement or any of the Loan Documents shall cease for any reason to be in
full force and effect, or either Borrower shall so assert in writing, or the security
interests created by the Loan Documents shall cease to be enforceable or shall not have the
priority purported to be created thereby or either Borrower shall so assert in writing; or

(j) There shall occur the loss, theft, substantial damage to or destruction of any
portion of the Collateral not fully covered by insurance, which by itself or with other such
losses, thefts, damage or destruction of Collateral, has a Material Adverse Effect or there
shall occur the exercise of the right of condemnation or eminent domain for any portion of
the Collateral which by itself or with other such exercises of the right of condemnation or
eminent domain has a Material Adverse Effect; or

(k) Either Borrower transfers, sells, assigns, or conveys all or such part of its
assets or property which could be reasonably expected to have a Material Adverse Effect
other than in the ordinary course of such Borrower’s business consistent with past practices
without the prior written consent of the Required Lenders; or

(l) Any license, permit or other approval required in the operation of either
Borrower’s business is terminated, suspended or revoked for any reason or expires.

6.2. Remedies. Upon the occurrence of an Event of Default beyond any applicable
notice and cure period, the sums payable under the Loan (as well as any other indebtedness of
either Borrower to Lenders) then outstanding, shall become forthwith due and payable in full,
together with interest thereon, and Lenders shall have no obligation to make any further Advances.
The Agent may resort to any and all Collateral, security and to any remedy existing at law or in
equity for the collection of all outstanding indebtedness and the enforcement of the covenants and
provisions of the Loan Documents against the Borrowers. The Agent’s resort to any remedy or
Collateral shall not prevent the concurrent and/or subsequent employment of any joint or several
remedy or claim against either Borrower. The Agent may rescind any acceleration of the Loan
without in any way waiving or affecting its right to accelerate the Loan in the future. Acceptance
of partial payment or partial performance shall not in any way affect or rescind any acceleration
of the Loan made by the Agent. Any collections or payments made after the Agent commences
collection efforts shall, after payment of all expenses relating thereto, be applied (i) first to
interest and principal on the Loan, and (ii) next to any indebtedness owing to the Agent under any
cash management or deposit account relationships with the Borrower, in each case as described in
clauses (i) above all shared by the Lenders ratably in accordance with their Commitments.

6.3. Waiver. Any waiver of an Event of Default by the Required Lenders shall not
extend to or affect any subsequent Event of Default, whether it be the same Event of Default or
not, or impair any right consequent thereon. No failure or delay or discontinuance on the part of
the Agent or the Lenders in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power preclude any other or
further exercise thereof or the exercise of any other right or power thereunder or be deemed an
election of remedies or a waiver of any other right, power, privilege, option or remedy. All
remedies herein and by law afforded will be cumulative and will be available to the Agent and the
Lenders until the debt of the Borrowers hereunder is fully and indefeasibly paid.

6.4. Setoff. In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any Event of Default, each
Lender and each subsequent holder of any Note is hereby authorized by the Borrowers at any time or
from time to time, without notice to the Borrowers or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by certificates of deposit,
whether matured or unmatured, but not including trust accounts, and in whatever currency
denominated) relating or attributable to or associated with a Hotel and any other indebtedness at
any time held or owing by the Lender or that subsequent holder to or for the credit or the account
of either Borrower whether or not matured, against and on account of the obligations and
liabilities of the Borrowers to that Lender or that subsequent holder under the Loan Documents,
including, but not limited to, all claims of any nature of description arising out of or connected
with the Loan Documents, irrespective of whether or not (a) that Lender or that subsequent holder
shall have made any demand hereunder or (b) the principal of or the interest on the Loan and other
amounts due hereunder shall have become due and payable pursuant to Section 6.2 and although said
obligations and liabilities, or any of them, may be contingent or unmatured. The Agent agrees to
notify Borrowers in writing after any such set-off and application made by Lenders; provided,
however, that the failure to give such notice shall not affect the validity of such set-off and
application.

ARTICLE VII

Conditions Precedent

7.1. Conditions Precedent to Closing. As a condition precedent to Closing, Borrowers
shall have delivered to the Agent the following documents:

(a) This Agreement duly executed by the authorized manager(s) of Borrowers;

(b) The Amended and Restated Security Agreements duly executed by authorized manager(s)
of Borrowers;

(c) A Secretary’s Certificate or equivalent with certified copies of the Articles of
Organization and Operating Agreement of each Borrower and an appropriate resolution or
authority of each Borrower duly authorizing the execution and delivery of the Loan Documents
and Borrowers’ performance hereunder and thereunder;

(d) Each Borrower shall have delivered to the Agent a certificate of good standing
dated not more than thirty (30) days prior to the date of this Agreement from the South
Dakota Secretary of State;

(e) Any other documents, instruments and reports as the Agent shall reasonably request;
and

(f) The payment by Borrowers of all the Agent’s fees and expenses relating to the
underwriting, approving, due diligence, documenting, securing, negotiating and closing the
Loan, including, but not limited to, the payment of the Agent’s reasonable attorneys’ fees
and costs.

7.2. Conditions Precedent to Advances. In addition to, but not in duplication of, the
conditions to Construction Advances set forth above, Lenders shall have no obligation to fund an
Advance until the requesting Borrower provides the Agent with or satisfies all of the following
requirements and the Agent approves such requirements:

(a) Such Borrower identifies to Lenders the Hotel being acquired or financed by such
Borrower by Franchise and address;

(b) Such Borrower provides the Agent with the Project Costs of the Hotel being acquired
or financed;

(c) Such Borrower provides the Agent with an MAI Appraisal Report of the Hotel being
acquired or financed meeting FIRREA guidelines and otherwise in form acceptable to the Agent
which establishes the fair market value of such Hotel;

(d) Such Borrower will deliver to the Agent, as Collateral Agent, a lender’s title
policy in form and substance satisfactory to the Agent and issued by a title company
acceptable to the Agent. Such title policy shall insure in the amount of the applicable
Advance that the Mortgage is a valid and subsisting first priority lien on the Hotel and
Property securing the Loan, subject only to exceptions acceptable to the Agent, and
containing such endorsements required by the Agent;

(e) a duly certified ALTA/ACSM urban class survey showing the boundaries of the Hotel
the securing the Loan and all improvements thereon, with flood zone and wetlands
certification, and showing the location of all encroachments, easements and other matters
affecting such Hotel and Property required to be shown in an ALTA urban class survey, with
such survey in form and substance satisfactory to the Agent;

(f) A Phase I environmental site assessment of the Hotel securing the Loan meeting then
current ASTM Standards and otherwise in form and scope satisfactory to the Agent and such
other or further reports or studies of such Hotel as may be reasonably required by the
Agent, performed by an environmental consultant or engineer acceptable to the Agent, which
establishes the environmental condition of such Hotel and Property as satisfactory to the
Agent;

(g) Evidence satisfactory to the Agent that all installments of general real estate
taxes, special assessments and other levies against the Hotel securing the Loan have been
paid in full;

(h) Along with the applicable Note evidencing such Advance, such Borrower will execute
in favor of and deliver to the Collateral Agent a Mortgage and assignment of rents and
leases encumbering the Hotel and Collateral and constituting a valid and perfected first
lien on the Hotel and Collateral and a certificate of insurance naming the Collateral Agent
as loss payee on the casualty insurance policy covering such Hotel and Collateral under a
standard mortgagee clause;

(i) A Security Agreement duly executed by an authorized officer(s) of such Borrower,
together with (i) originals of the financing statements for filing under the Uniform
Commercial Code in all jurisdictions necessary or, in the opinion of the Agent, desirable to
perfect the security interests of the Collateral Agent in the Personal Property Collateral
described in Article II above on the specific Hotel created by the Security Agreement; and
(ii) originals of termination statements relating to any prior financing statements of
record, for filing under the Uniform Commercial Code in all jurisdictions where such prior
financing statements are filed of record;

(j) a certificate of good standing from the Secretary of State in which the applicable
Hotel is located evidencing the applicable Borrower’s authority to conduct business in such
state;

(k) a Federal Emergency Management Agency Standard Agency Flood Hazard Determination
Certificate covering the Hotel securing the Loan; and

(l) Such other matters and requirements as the Agent may reasonably require in
connection with its due diligence and underwriting of a particular Hotel securing such Loan.

ARTICLE VIII

Miscellaneous

8.1. Amendments. Any provision of this Agreement and/or the other Loan Documents may
be amended or waived if, but only if, such amendment or waiver is in writing and is signed by (i)
the Borrowers (ii) the Required Lenders, and (iii) the Agent; provided that:

(a) no increase in the Commitment of any Lender may be made without the written consent of
such Lender, and no extension of the Termination Date will be binding on a Lender without the
written consent of such Lender;

(b) no reduction in the rate of interest or fees on the Loan will be made without the written
consent of each Lender;

(c) no postponement of the scheduled date of payment of the principal or interest amount of
the Loan, or any fees payable hereunder, or reduction of the amount of, waiver or excuse of any
such payment, will be made without the written consent of each Lender;

(d) no change any of the provisions of this Section or the percentage in the definition of the
term “Required Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, may be made without the written consent of each Lender; or

(e) no release of any Collateral for the Loan prior to the time the Loan is indefeasibly paid
in full and the Lenders’ commitment to make Advances has terminated may be made without the written
consent of each Lender.

8.2. Expenses. The Borrowers jointly and severally agree to pay the reasonable
attorneys fees and disbursements of the Agent in connection with the preparation and execution of
the Loan Documents, and any amendments, waivers or consents related thereto, whether or not the
transactions contemplated herein are consummated, and all reasonable recording, filing, title
insurance or other fees, costs and taxes incident to perfecting a Lien upon the Collateral. The
Borrowers further jointly and severally agree to pay the reasonable attorney’s fees and
disbursements of the Agent in connection with the enforcement of the Loan Documents and to
indemnify each Lender and the Agent and any security trustee and their respective directors,
officers and employees, against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or preparation therefor,
whether or not the indemnified Person is a party thereto) which any of them may pay or incur
arising out of or relating to any Loan Document or any of the transactions contemplated thereby or
the direct or indirect application or proposed application of the proceeds of any Advance except as
may arise from the gross negligence or willful misconduct of the party claiming indemnification.
The Borrowers upon demand by the Agent, at any time shall reimburse each such indemnified party for
any legal or other expenses incurred in connection with investigating or defending against any of
the foregoing except if the same is directly due to the gross negligence or willful misconduct of
such indemnified party. Sums due by the Borrowers under this Section shall bear interest at the
highest rate of interest provided for under this Agreement.

8.3. Delay; Waiver. Any waiver of an Event of Default by the Agent or Required
Lenders shall not extend to or affect any subsequent default, whether it be the same Event of
Default or not, nor impair any right consequent thereon. No failure or delay on the part of the
Agent in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. No waiver of any
provision of this Agreement or of any instrument executed hereunder or pursuant hereto or consent
to any departure by Borrowers therefrom shall be effective unless the same shall be in writing,
signed by an officer of the Agent and each Required Lender, and then only to the extent specified.
All rights and remedies of Lenders herein and by law afforded will be cumulative and will be
available to Lenders until the indebtedness of Borrower under the Loan Documents is indefeasibly
paid in full and no Commitments remain outstanding.

8.4. Notices. Any notice, request, authorization, approval or consent made hereunder
shall be in writing and shall be personally delivered or sent by registered or certified mail, and
shall be deemed given when delivered or postmarked and mailed postage prepaid to the following
addresses or when sent by facsimile which confirms receipt to the following facsimile numbers:

	 	 	 
	If to the Agent:
	 	First National Bank of Omaha

1620 Dodge Street

Stop 1050

Omaha, Nebraska 68197

Attn: Marc T. Wisdom

Facsimile: (402) 633-3519

	With a copy to:
	 	Stinson Morrison Hecker LLP

1299 Farnam Street

Suite 1501

Omaha, Nebraska 68102

Attn: James M. Pfeffer

Facsimile: (402) 829-8731

	If to Borrowers:
	 	Summit Hotel Properties, LLC

2701 South Minnesota Avenue

Suite 6

Sioux Falls, South Dakota 57105

Attn: Hulyn Farr

Facsimile: (605) 362-9388

The Agent and Borrowers may designate a change of address by notice given in accordance with
the provisions of this Subsection at least five (5) days before such change is to become effective.

8.5. Transfer or Assignment. This Agreement shall extend to and be binding upon the
successors and assigns of the parties hereto; provided, however, that neither Borrower may assign
or transfer its rights or obligations hereunder without the prior written consent of Lenders, and
any such assignment or transfer without such consent shall be void. Lenders may assign their
Commitments or sell participations in the Loan with the prior written consent of the Agent but
without notice to Borrowers.

8.6. Construction of Agreement. The titles and headings of the Subsections and
paragraphs of this Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe the subject matter of such Subsections and paragraphs
and shall not be given any consideration in the construction of this Agreement.

8.7. Applicable Law; Waiver of Jury Trial. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nebraska, exclusive of its choice of laws
rules. Any legal action or proceeding with respect to this Agreement or any other Loan Document may
be brought in the courts of the State of Nebraska in Douglas County, or of the United States for
the District of Nebraska, and, by execution and delivery of this Agreement, Borrowers hereby
irrevocably accept for themselves and in respect of their property, generally and unconditionally,
the nonexclusive jurisdiction of such courts. Borrowers further irrevocably consent to the service
of process out of any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to it at the address set out
for notices pursuant to Section 8.4, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Agent to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise proceed against Borrowers in any
other jurisdiction. Borrowers hereby irrevocably waive any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waive and agree not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in an inconvenient forum.
THE AGENT, LENDERS AND BORROWERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

8.8. Sharing of Setoffs. Each Lender agrees that if it shall, by exercising any right
of setoff or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest owing with respect to any Loan which is greater than the proportion received
by any other Lender in respect of the aggregate amount of all principal and interest owing with
respect to such Loan, the provisions of Section 1.6 above will apply. The Borrowers agree, to the
fullest extent they may effectively do so under applicable law, that any holder of a participation
in a Loan, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff or counterclaim and other rights with respect to such participation as fully as if such
holder of a participation were a direct creditor of the Borrowers in the amount of such
participation. No right or action of any Lender under this Section with regard to enforcing
sharing of setoffs shall result in any setoff being applied at less than the full amount thereof to
the indebtedness of the Borrowers to any one or more Lenders.

8.9. Entire Agreement. The Loan Documents constitute the entire understanding of the
parties thereto with respect to the subject matter thereof and any prior or contemporaneous
agreements, whether written or oral, with respect thereto are superseded hereby. All of the terms
of the other Loan Documents are incorporated in and made part of this Agreement by reference;
provided, however, that to the extent of any direct conflict between this Agreement and such other
Loan Documents, this Agreement shall prevail and govern.

8.10. Execution in Counterparts; Faxes. This Agreement may be executed in any number
of counterparts, and by the different parties on different counterparts, each of which when
executed shall be deemed an original but all such counterparts taken together shall constitute one
and the same instrument. This Agreement and any of the other Loan Documents may be validly
executed and delivered by fax or other electronic means and by use of multiple counterpart
signature pages.

8.11. Amended and Restated Credit Facility; Liens Unimpaired. This Agreement amends,
restates and replaces the Current Credit Agreement in its entirety. It is the intention and
understanding of the parties that (a) this Agreement shall act as a refinancing of the debt and
other obligations evidenced by the Current Credit Agreement and that this Agreement shall not act
as a novation of such debt and other obligations, (b) all Liens securing the obligations evidenced
by the Current Credit Agreement shall remain in full force and effect and shall secure the Loan and
all other obligations of the Borrowers to the Lenders now or hereafter evidenced by or incurred
under this Agreement or any of the other Loan Documents, and (c) the priority of all Liens securing
the obligations evidenced by the Current Credit Agreement (including, without limitation, all such
Liens granted to or for the benefit of the Collateral Agent referred to in the Current Credit
Agreement and/or any of the Lenders thereunder who are Lenders under this Agreement) shall not be
impaired by the execution, delivery or performance of this Agreement or the other Loan Documents.
Without limiting the foregoing, the parties agree that all security documents pursuant to which the
Agent (including, without limitation, the Collateral Agent referred to in the Current Credit
Agreement) has been granted a Lien on any existing or future property of the Borrowers, and all
other Loan Documents referred to in the Current Credit Agreement, shall in each case remain in full
force and effect except as amended hereby or by any of the other Loan Documents referred to in this
Agreement.

8.12. Exclusion of Consequential and Special Damages. Notwithstanding anything to the
contrary in this Agreement, neither the Agent nor any Lender will be liable for, nor will any
measure of damages against them include, under any theory of liability (whether legal, strict or
equitable), any indirect, consequential, incidental, special or punitive damages or amounts for
business interruption, loss of income, revenue, profits or savings arising out of or relating to
their performance or non-performance under this Agreement or any Loan Document, and the Borrowers
hereby waive any right to pursue or recover any of the foregoing damages.

8.13. USA Patriot Act Notice. Each Lender and the Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrowers, which information includes the
name and address of the Borrowers and other information that will allow such Lender or the Agent,
as applicable, to identify the Borrowers in accordance with the Act.

ARTICLE IX

Agent

9.1 Authorization and Action.

(a) The Lenders from time to time a party hereto hereby irrevocably appoint First National as
the Agent and authorize the Agent to take such actions on their behalf and to exercise such powers
as are delegated to the Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto.

(b) The Agent shall have the same rights and powers in its capacity as a Lender as the other
Lenders and may exercise the same as though it were not the Agent, and the Agent and the Agent’s
affiliates may accept deposits from, lend money to and generally engage in any kind of business
with Borrowers or any of their subsidiaries or affiliate as if it were not the Agent hereunder. The
term “Lender” as used in this Agreement and the other Loan Documents, unless the context otherwise
clearly requires, includes the Agent in its individual capacity as a Lender.

(c) The Agent shall not have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, (i)
the Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an
Event of Default has occurred and is continuing, (ii) the Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to exercise in writing by
the Required Lenders, and (iii) except as expressly set forth in the Loan Documents, the Agent
shall not have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to Borrowers or any of Borrowers’ subsidiaries or affiliates that is
communicated to or obtained by the Agent or any of the Agent’s affiliates in any capacity. The
Agent shall not be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders or in the absence of the Agent’s own gross negligence or willful
misconduct. The Agent will not be deemed to have knowledge of any Event of Default unless and
until written notice thereof is given to the Agent by Borrowers or the other Lenders. Upon the
occurrence of an Event of Default, the Agent shall take such action with respect to the enforcement
of the Liens on the Collateral under the Loan Documents and the preservation and protection thereof
as it shall be directed to take by the Required Lenders, but unless and until the Required Lenders
have given such direction the Agent shall take or refrain from taking such actions as it reasonably
deems appropriate. In no event, however, shall the Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the Agent shall in all
cases be fully justified in failing or refusing to act hereunder or under any other Loan Document
unless it shall be first indemnified to its reasonable satisfaction by the Lenders (other than the
Agent in its capacity as a Lender) against any and all costs, expense, and liability which may be
incurred by it by reason of taking or continuing to take any such action. In all cases in which
this Agreement and the other Loan Documents do not require the Agent to take certain actions, the
Agent shall be fully justified in using its discretion in failing to take or in taking any action
hereunder and thereunder. The Agent will not be responsible for or have any duty to ascertain or
inquire into (A) any statement, warranty or representation made in or in connection with any Loan
Document, (B) the contents of any certificate, report or other document delivered thereunder or in
connection therewith, (C) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth in any Loan Document, (D) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document,
or (E) the satisfaction of any condition set forth in Article VII or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be delivered to the Agent.

(d) The Agent shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper person. The Agent also
may rely upon any statement made to it orally or by telephone and believed by it to be made by the
proper person, and shall not incur any liability for relying thereon. The Agent may consult with
legal counsel (who may be counsel for Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

(e) The Agent may perform any and all its duties and exercise its rights and powers by or
through one or more sub-agents appointed by the Agent. The Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their respective
affiliates and subsidiaries. The exculpatory provisions of the preceding subsections of this
Section 9.1 shall apply to any such sub-agent and to the affiliates and subsidiaries of the Agent
and any such sub-agent, and shall apply to their respective activities in connection with the
administration of the credit facilities provided for herein as well as activities as the Agent.

(f) Subject to the appointment and acceptance of a successor Agent as provided in this
subsection (f), the Agent may resign at any time as Agent by notifying the other Lenders and
Borrowers. Upon any such resignation, Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Lenders other than the Agent and such successor shall
not have accepted such appointment within 30 days after the Agent gives notice of its resignation,
then the Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a Lender or
an affiliate of a Lender. Upon the appointment of a successor Agent as the Agent hereunder, such
successor shall succeed to and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and such retiring Agent shall be discharged from its duties and obligations
hereunder. The fees payable by Borrowers to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrowers and such successor. After the Agent’s
resignation hereunder, the provisions of this Article shall continue in effect for the benefit of
such retiring Agent, its sub-agents and their respective affiliates and subsidiaries in respect of
any actions taken or omitted to be taken by any of them while it was acting as the Agent.

(g) Each Lender acknowledges that it has independently and without reliance upon the Agent or
First National and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that
it will, independently and without reliance upon First National or the Agent and based on such
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder. It is the
responsibility of each Lender to keep itself informed as the creditworthiness of the Borrowers and
the value of the Collateral, and the Agent shall have no liability to any Lender with respect
thereto.

(h) Each Lender agrees to reimburse the Agent for all out-of-pocket costs and expenses
suffered or incurred by the Agent or any security trustee in performing its duties under this
Agreement and under the other Loan Documents or in the exercise of any right or power imposed or
conferred upon the Agent hereby or thereby (except to the extent that such costs and expenses arise
out of the Agent’s or such security trustee’s gross negligence or willful misconduct), to the
extent that the Agent is not promptly reimbursed for the same by the Borrowers, or out of the
Collateral, all such costs and expenses shall be borne by the Lenders ratably in accordance with
their respective Percentages.

9.2. Indemnification. Each Lender other than the Agent agrees to indemnify the Agent
(to the extent not reimbursed by Borrowers), ratably according to the respective Percentage of the
Commitments, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by the Agent under this
Agreement or any other Loan Document, provided that each Lender shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent’s gross negligence or willful misconduct in
connection with the Agent’s acts or omissions with respect to this Agreement and the Loan
Documents. Without limitation of the foregoing, each Lender other than the Agent agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Loan Document to the extent that the Agent is not reimbursed for such
expenses by Borrowers.

ARTICLE X

Yield Protection

10.1. Yield Protection. (a) Increased Costs. If, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation after the date hereof, or
(ii) the compliance with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) issued or made after the date hereof (any such
introduction, change, guideline or request being referred to herein as a “Regulatory Change”),
there shall be reasonably incurred any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Advances accruing interest at the LIBOR Rate, then Borrowers shall
from time to time, upon demand by the Agent, jointly and severally pay to the Agent for the account
of such Lenders, additional amounts sufficient to compensate such Lenders for such increased cost.
A certificate as to the amount of such increased cost and giving a reasonable explanation thereof,
submitted to Borrowers shall constitute such demand and shall be conclusive and binding for all
purposes, absent manifest error.

(b) Capital. If any Lender determines that (i) as a result of a Regulatory Change, compliance
with any law or regulation or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender, whether directly, or indirectly as a result
of commitments of any corporation controlling such Lender (but without duplication), and (ii) the
amount of such capital is increased by or based upon (A) the existence of such Lender’s commitment
to lend hereunder, or (B) the participation in or issuance or maintenance of any Advance and
(C) other similar such commitments, then, upon demand by such Lender, Borrowers shall immediately
and jointly and severally pay to the Agent for the account of such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably determines such increase in capital
to be allocable to the transactions contemplated hereby. A certificate as to such amounts and
giving a reasonable explanation thereof (to the extent permitted by law), submitted to Borrowers
and the Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest
error.

(c) Notices. Each Lender hereby agrees to use commercially reasonable efforts (including the
giving of a notice in accordance with Section 8.4 above) to notify Borrowers of the occurrence of
any event referred to in subsection (a) or (b) of this Section 10.1 promptly after becoming aware
of the occurrence thereof. The failure of either Lender to provide such notice or to make demand
for payment under said subsection shall not constitute a waiver of such Lender’s rights hereunder.

(d) Survival of Obligations. Borrowers’ obligations under this Section 10.1 shall survive the
repayment of all other amounts owing to the Lenders and the Agent under the Loan Documents and the
termination of the Loan. If and to the extent that the obligations of Borrowers under this Section
10.1 are unenforceable for any reason, Borrowers agree to make the maximum contribution to the
payment and satisfaction thereof which is permissible under applicable law.

10.2. Taxes. (a) All payments by Borrowers hereunder and under the other Loan
Documents shall be made free and clear of and without deduction for all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of any Lender, taxes imposed on its net income, and franchise taxes imposed
on it by the jurisdiction under the laws of which such Lender is organized or any political
subdivision thereof and, in the case of any Lender, taxes imposed on its net income, and franchise
taxes imposed on it by the jurisdiction of such Lender’s applicable lending office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”). If either Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any
other Loan Document to any Lender, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to additional sums
payable under this Section 10.2) such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

(b) In addition, each Borrower jointly and severally agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar levies that arise
from any payment made hereunder or under any other Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as “Other Taxes”).

(c) Each Borrower jointly and severally agrees to indemnify each Lender for the full amount of
Taxes and Other Taxes (including any Taxes and any Other Taxes imposed by any jurisdiction on
amounts payable under this Section 10.2) paid by such Lender and any liability (including
penalties, interest and expenses, except for any penalties, interest and expenses caused by the
gross negligence or willful misconduct of such Lender) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within 30 days from the date such Lender makes written demand therefor, which demand
shall be accompanied by a statement providing an explanation of the facts and calculations that
form the basis of such demand.

(d) Within 30 days after the date of any payment of Taxes, Borrowers will furnish to the Agent
the original or a certified copy of a receipt evidencing payment thereof or, if a receipt is
unavailable, such other evidence reasonably satisfactory to the Agent.

(e) Without prejudice to the survival of any other agreement of Borrowers hereunder, the
agreements and joint and several obligations of Borrowers contained in this Section 10.2 shall
survive the repayment of all other amounts owing to the Lenders and the Agent under the Loan
Documents and the termination of the Loan. If and to the extent that the obligations of Borrowers
under this Section 10.2 are unenforceable for any reason, each Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under applicable law.

A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT YOU
(BORROWER) AND US (LENDER) FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE,
UNDERTAKING, OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION
IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF,
CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY
INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

[SIGNATURE PAGES FOLLOW]

1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized officers on the day and year first above written.

SUMMIT HOTEL PROPERTIES, LLC, a South
Dakota limited liability company, by its
Company Manager, THE SUMMIT GROUP, INC.

By: /s/ Kerry W. Boekelheide

Kerry W. Boekelheide, Chief Executive

Officer

SUMMIT HOSPITALITY V, LLC, a South Dakota limited liability company, by its sole member,

SUMMIT HOTEL PROPERTIES, LLC, by its Company Manager, SUMMIT GROUP, INC.

By: /s/ Kerry W. Boekelheide

Kerry W. Boekelheide, Chief Executive

Officer

2

FIRST NATIONAL BANK OF OMAHA, as a Lender

and as Agent

By: /s/ Marc Wisdom

Title:  Vice President

3

UNION BANK & TRUST COMPANY, as a Lender

By: /s/ Sara Mosser

Title: Vice President

EXHIBIT A

(Definitions)

“Administrative Agent” shall mean First National Bank of Omaha and its successors, assigns and
replacements.

“Advance” shall mean and refer collectively to Acquisition Advances and Construction Advances
(including a Construction Advance converted to a Construction Term Note as provided for in the
Agreement).

“Agent” shall mean collectively the Administrative Agent and the Collateral Agent.

“Appraised Value” shall mean the “as stabilized” value of a Hotel, determined in accordance with
Section 7.2(c) of this Agreement.

“Audit Committee” shall mean Summit Hotel’s Audit Committee established pursuant to such Borrower’s
Operating Agreement, which Audit Committee shall contain independent members.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial
banks in Omaha, Nebraska or New York, New York are authorized or required to close or any day on
which dealings between banks are not carried on in U.S. dollar deposits in London, England.

“Collateral Agent” shall mean First National Bank of Omaha and its successors, assigns and
replacements.

“Commitments” shall mean the dollar amount each Lender has committed to lend to Borrowers under the
Line of Credit, which commitments shall be the principal amount indicated in Schedule 1.1 attached
hereto and incorporated herein by reference. The aggregate Commitments available for borrowing
will be reduced by the outstanding principal balance of each Advance outstanding on the date of
determination.

“Debt” shall mean with respect to any Person, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Debt of others secured by (or for which the holder of such Debt has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or
not the Debt secured thereby has been assumed, (g) all guarantees by such Person of Debt of others,
(h) all capital lease obligations (as determined in accordance with generally accepted accounting
principles) of such Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances. The Debt of any Person
shall include the Debt of any other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of
such Debt provide that such Person is not liable therefor.

“Debt Service Coverage Ratio” shall be calculated consistent with the principles used in the
preparation of the financial statements referenced in Section 3.7 of this Agreement as EBITDA
during the trailing four (4) quarters divided by principal and interest payments on the aggregate
first mortgage term debt scheduled and paid during the trailing four (4) quarters. Expenses of
Borrowers funded with loan proceeds from the refinance of a Hotel(s) owned by a Borrower where such
loan proceeds are used for repair and maintenance of such Hotel(s) shall be excluded from the
determination of the Debt Service Coverage Ratio for such Borrower.

“Defaulting Lender” means any Lender that (a) has failed to advance to the Agent any portion of an
Advance required to be funded by such Lender pursuant to this Agreement on the date required to be
funded by such Lender pursuant to this Agreement and such failure is continuing on the date of
determination, (b) has otherwise failed to pay over to the Agent any other amount required to be
paid by such Lender under this Agreement or under any Loan Document within one (1) Business Day of
the date when due, unless the subject of a good faith dispute and such failure is continuing on the
date of determination, or (c) has been deemed insolvent, become the subject of a bankruptcy or
insolvency proceeding or had its assets and/or control frozen or seized by the applicable banking
regulators or other governmental agency.

“EBITDA” shall mean , for either Borrower for any period, the net income of such Borrower before
provision for income taxes, interest expense (including implicit interest expense on capitalized
leases), depreciation expense, amortization expense and non-recurring renovation/remodel expenses
funded with the proceeds of a Loan or other non-operating sources and other non-cash expenses or
charges, excluding (to the extent included): (a) non-operating gains (including extraordinary or
nonrecurring gains, gains from discontinuance of operations and gains arising from the sale of
assets other than the sale of inventory in the ordinary course of such Borrower’s business) during
the relevant period; and (b) similar non-operating losses during such period.

“Hotel” shall mean a limited service hotel owned by a Borrower securing the Loan.

“LIBOR Rate” shall mean the London Interbank Offered Rate for U.S. Dollar Deposits for 90 day
periods as quoted by the Agent from the Bloomberg Finance, L.P. rate sheets, or any successor
thereto, which shall be that rate in effect on the first New York Banking Day of each calendar
month, adjusted for any reserve requirement and any subsequent costs arising from a change in
government regulation, such rate to be reset at the beginning of each succeeding month. The Agent
will tell Borrowers the current LIBOR Rate upon a Borrower’s request. The Agent may designate a
substitute index after notifying Borrowers and the Lenders. The LIBOR Rate is not necessarily the
lowest rate charged by Lenders on their loans. Borrowers understand that Lenders may make loans
based on other rates as well.

“Lien” shall mean , with respect to any asset, any mortgage, lien, pledge, charge, assignment,
security interest or other encumbrance of any kind in respect of such asset.

“Loan Budget” shall mean the budget approved by the Agent for expenditure the of the proceeds of a
Construction Advance and in form, detail and substance satisfactory to the Agent.

“Loan Documents” shall mean collectively each Note, Security Agreement, the Amended and Restated
Security Agreements, Mortgage, letter of credit and letter of credit documentation, financing
statement and/or any other document or instrument executed in connection with the Loan, and all
modifications, amendments, restatements and replacements thereof.

“Loan” shall mean collectively, the Advances, indebtedness evidenced by each Note, indebtedness
(including letters of credit) outstanding under the Current Loan Agreement and any other
indebtedness of either Borrower to Lender under this Agreement or any Loan Document.

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of
whatever nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singularly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or occurrences whether or not
related, a material adverse change in, or a material adverse effect on, (i) the business,
operations, results of operations, financial condition, assets, Collateral or liabilities, of
either Borrower, (ii) the ability of either Borrower to perform any of its obligations under the
Loan Documents to which it is a party, (iii) the rights and remedies of Lenders under any of the
Loan Documents or (iv) the legality, validity or enforceability of any of the Loan Documents.

“Mortgage” shall mean collectively, each mortgage, deed of trust or similar instrument encumbering
a Hotel, and all modifications, amendments, restatements and replacements thereof.

“Notes” shall mean collectively, each Term Note, Construction Note and Construction Term Note, and
all modifications, amendments, restatements and replacements thereof.

“Percentage” shall mean, at any time, with respect to a Lender, expressed as a percentage, a
fraction (i) the numerator of which is such Lender’s Commitment at such time and (ii) the
denominator of which is the aggregate total of all Lenders’ Commitments at such time minus the
letter of credit sublimit.

“Person” shall mean any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, governmental department or authority or other entity.

“Project Budget” shall mean the project budget showing the total cost (including hard and soft
costs) of a Project as approved by the Agent.

“Project Costs” shall mean the total amount of the purchase price, franchise fees, franchise
required expenditures including, but not limited to, capital improvements, signage and computer
systems, architectural expenses, permits and fees, initial working capital and financing and
closing costs relating to a Hotel.

“Property” shall mean a Hotel and all improvements and assets related thereto purchased by a
Borrower and financed with Lenders with an Acquisition Advance.

“Required Lenders” shall mean Lenders holding fifty-one percent (51%) or more of the aggregate
Commitments.

“Special Loan” shall mean a Loan where the original principal amount of such Loan exceeded 100% of
the purchase price of the Hotel securing such Loan.

“Total Debt” shall mean on the date of any determination thereof the aggregate of the Debt
outstanding on the (i) Fortress Loan, plus (ii) any Debt of Borrowers, The Summit Group, Inc. and
any affiliate or subsidiary of either Borrower or The Summit Group, Inc., to the extent of
Borrowers ownership interest in such affiliate or subsidiary, secured by a mortgage, deed of trust
or similar instrument on real property owned or leased by such Borrower, The Summit Group, Inc. or
any such affiliate or subsidiary, including, without limitation, and Loan under this Agreement, the
Current Loan Agreement or under the Loan Agreement with First National described in Section 5.4(c),
plus (iii) any unsecured Debt owed by either Borrower, The Summit Group, Inc., or any affiliate or
subsidiary of either Borrower or The Summit Group, Inc., to First National.

“Tangible Net Worth” shall mean at any date, the excess of total assets over total liabilities,
total assets and Total Liabilities each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the financial statements
referred to in Section 3.7 of this Agreement, and excluding, from the determination of total assets
all assets which would be classified as intangible assets under generally accepted accounting
principles, including, without limitation, goodwill, licenses, patents, trademarks, trade names,
copyrights and franchises, and specifically excluding from the determination of total assets any
loans to a parent, affiliate or subsidiary of the applicable Borrower or any shareholder, officer,
director or employee of the applicable Borrower.

“Termination Date” shall mean the earlier to occur of (i) June 24, 2010 or (ii) the date the Agent
accelerates the Loan after the occurrence of an Event of Default.

“Total Project Cost” shall mean the total cost (including hard and soft costs) of constructing a
Project as set forth in a Project Budget to be provided to the Agent by the applicable Borrower and
approved by the Agent.

All accounting terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles, as in effect in the United States. “Including” (and with
correlative meaning “include”) means including without limiting the generality of any description
preceding such term. This Agreement and the other Loan Documents shall be construed without regard
to any presumption or rule requiring construction against the party causing any such document or
any portion thereof to be drafted. The Section and other headings in this Agreement and any index
in this Agreement are for convenience of reference only and shall not limit or otherwise affect any
of the terms of this Agreement. Similarly, any page footers or headers or similar word processing,
document or page identification numbers in this Agreement or any index or exhibit are for
convenience of reference only and shall not limit or otherwise affect any of the terms of this
Agreement, nor shall there be any requirement that any such footers or other numbers be consistent
from page to page. Unless the context clearly requires otherwise, any reference to a Section of
this Agreement refers to all Sections and Subsections thereunder. Any pronoun used herein shall be
deemed to cover all genders. Defined terms used in this Agreement may be set forth in this Exhibit
or other Sections of this Agreement, and all such definitions defined in the singular shall have a
corresponding meaning when used in the plural and vice versa.

EXHIBIT B

(Term Note Form)

EXHIBIT C

(Construction Note Form)

SCHEDULE 1.1

(Commitments)

	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Letter of Credit Sublimit
	First National
	 	$	23,800,000.00	 	 	$	5,000,000.00	 
	 
	 	 	 	 	 	 	 	 
	Union
	 	$	4,400,000,00	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	28,200,000.00	 	 	$	5,000,000.00	 
	 
	 	 	 	 	 	 	 	 

SCHEDULE 3.5

(Permitted Liens)

SCHEDULE 4.3(c)

(Compliance Certificate)

COMPLIANCE CERTIFICATE

The undersigned certifies that he/she currently is the        of Summit Hotel
Properties, LLC and Summit Hospitality V, LLC (collectively, “Company”), each a South Dakota
limited liability company, and that he/she has individually reviewed the provisions of the First
Amended and Restated Loan Agreement between Company, First National Bank of Omaha as the Agent and
a Lender and the other Lenders a party thereto (First National Bank of Omaha and such other Lenders
are hereinafter collectively referred to as the “Lenders”) dated     , 2009 (as it may be
amended from time to time, the “Loan Agreement”) and that a review of the activities of the Company
since the most recent Compliance Certificate was delivered to Lenders has been made by him/her or
under his/her supervision, with a view to determining whether Company has fulfilled all their
respective obligations under the Loan Agreement, including, but not limited to, the Affirmative,
Financial and Negative Covenants contained in the Loan Agreement. Company hereby certifies to
Lenders that Company has observed and performed each undertaking contained in the Loan Agreement
and that no Event of Default has occurred or is existing under the Loan Agreement or any other Loan
Document. Set forth below are financial covenant measurements for the periods covered by this
Compliance Certificate as required by the Loan Agreement. Also attached hereto are all relevant
facts in reasonable detail to evidence the computations of the financial covenants, which were
computed in accordance with the terms of the Loan Agreement.

For the period between       , 200       and       , 200      .

I. Debt Service Coverage Ratio

Company’s Debt Service Coverage Ratio as of the end of the period covered by Certificate:

      

Required Debt Service Coverage Ratio: 1.5:1.0

Calculation of Debt Service Coverage Ratio:

Earnings        before

Interest       ,

Income taxes       ,

Depreciation       ,

Amortization        and

Non-recurring renovation/remodel expenses funded with the proceeds of a Loan or other non-operating
sources       , divided by

Principal and interest payments on the aggregate first mortgage term debt scheduled and paid during
the trailing 4 quarters       

Equals       .

	II.	 	Liquidity Covenant

Unencumbered cash balances as of the end of the period covered by this Certificate:

$     

	 	 	 	 	 
	Required Liquidity Covenant	 	$4,000,000.00
	III.

	 	Total Debt Covenant
	 	

Total Debt outstanding as of the end of the period covered by this Certificate equals:
$     

Required Total Debt: Not in excess of $450,000,000.00.

	 	 	 
	IV.Special Loans

	 	

	 

	 	

	Aggregate Special Loans Outstanding:

25% of the aggregate Commitments:

	 	     

     

V. Defaults

The undersigned hereby certifies that the above reported information is correct, and that

[ ] No event of default has occurred; or

[ ] An event of default has occurred under the following circumstances:

(Insert detail or attach description)

By:        Date:       

Title:       

4

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