Document:

exv10w1

Exhibit 10.1

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

SUMMIT HOTEL OP, LP

a Delaware limited partnership

dated as of February 14, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 

	ARTICLE I DEFINED TERMS	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II FORMATION OF THE PARTNERSHIP	 	 	11	 
	 	2.01	 	 	Formation of the Partnership
	 	 	11	 
	 	2.02	 	 	Name
	 	 	11	 
	 	2.03	 	 	Registered Office and Agent; Principal Office
	 	 	11	 
	 	2.04	 	 	Term and Dissolution
	 	 	11	 
	 	2.05	 	 	Filing of Certificate and Perfection of Limited Partnership
	 	 	12	 
	 	2.06	 	 	Certificates Describing Partnership Units
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III BUSINESS OF THE PARTNERSHIP	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS	 	 	13	 
	 	4.01	 	 	Capital Contributions
	 	 	13	 
	 	4.02	 	 	Additional Capital Contributions and Issuances of Additional Partnership Units
	 	 	13	 
	 	4.03	 	 	Additional Funding
	 	 	16	 
	 	4.04	 	 	LTIP Units
	 	 	17	 
	 	4.05	 	 	Conversion of LTIP Units
	 	 	20	 
	 	4.06	 	 	Capital Accounts
	 	 	23	 
	 	4.07	 	 	Percentage Interests
	 	 	23	 
	 	4.08	 	 	No Interest on Contributions
	 	 	23	 
	 	4.09	 	 	Return of Capital Contributions
	 	 	24	 
	 	4.10	 	 	No Third-Party Beneficiary
	 	 	24	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V PROFITS AND LOSSES; DISTRIBUTIONS	 	 	24	 
	 	5.01	 	 	Allocation of Profit and Loss
	 	 	24	 
	 	5.02	 	 	Distribution of Cash
	 	 	26	 
	 	5.03	 	 	REIT Distribution Requirements
	 	 	28	 
	 	5.04	 	 	No Right to Distributions in Kind
	 	 	28	 
	 	5.05	 	 	Limitations on Return of Capital Contributions
	 	 	28	 
	 	5.06	 	 	Distributions Upon Liquidation
	 	 	28	 
	 	5.07	 	 	Substantial Economic Effect
	 	 	28	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER	 	 	29	 
	 	6.01	 	 	Management of the Partnership
	 	 	29	 
	 	6.02	 	 	Delegation of Authority
	 	 	31	 
	 	6.03	 	 	Indemnification and Exculpation of Indemnitees
	 	 	31	 
	 	6.04	 	 	Liability of the General Partner
	 	 	33	 
	 	6.05	 	 	Partnership Obligations
	 	 	34	 
	 	6.06	 	 	Outside Activities
	 	 	34	 
	 	6.07	 	 	Employment or Retention of Affiliates
	 	 	35	 
	 	6.08	 	 	Summit REIT’s Activities
	 	 	35	 

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	 	6.09	 	 	Title to Partnership Assets
	 	 	35	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII CHANGES IN GENERAL PARTNER	 	 	36	 
	 	7.01	 	 	Transfer of the General Partner’s Partnership Interest
	 	 	36	 
	 	7.02	 	 	Admission of a Substitute or Additional General Partner
	 	 	38	 
	 	7.03	 	 	Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner
	 	 	38	 
	 	7.04	 	 	Removal of General Partner
	 	 	39	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS	 	 	40	 
	 	8.01	 	 	Management of the Partnership
	 	 	40	 
	 	8.02	 	 	Power of Attorney
	 	 	40	 
	 	8.03	 	 	Limitation on Liability of Limited Partners
	 	 	40	 
	 	8.04	 	 	Common Unit Redemption Right
	 	 	40	 
	 	8.05	 	 	Registration
	 	 	43	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX TRANSFERS OF PARTNERSHIP INTERESTS	 	 	48	 
	 	9.01	 	 	Purchase for Investment
	 	 	48	 
	 	9.02	 	 	Restrictions on Transfer of Partnership Units
	 	 	48	 
	 	9.03	 	 	Admission of Substitute Limited Partner
	 	 	49	 
	 	9.04	 	 	Rights of Assignees of Partnership Units
	 	 	50	 
	 	9.05	 	 	Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner
	 	 	50	 
	 	9.06	 	 	Joint Ownership of Partnership Units
	 	 	51	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS	 	 	51	 
	 	10.01	 	 	Books and Records
	 	 	51	 
	 	10.02	 	 	Custody of Partnership Funds; Bank Accounts
	 	 	51	 
	 	10.03	 	 	Fiscal and Taxable Year
	 	 	52	 
	 	10.04	 	 	Annual Tax Information and Report
	 	 	52	 
	 	10.05	 	 	Tax Matters Partner; Tax Elections; Special Basis Adjustments
	 	 	52	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI AMENDMENT OF AGREEMENT; MERGER	 	 	53	 
	 	11.01	 	 	Amendment of Agreement
	 	 	53	 
	 	11.02	 	 	Merger of Partnership
	 	 	54	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XII GENERAL PROVISIONS	 	 	54	 
	 	12.01	 	 	Notices
	 	 	54	 
	 	12.02	 	 	Survival of Rights
	 	 	54	 
	 	12.03	 	 	Additional Documents
	 	 	54	 
	 	12.04	 	 	Severability
	 	 	54	 
	 	12.05	 	 	Entire Agreement
	 	 	54	 
	 	12.06	 	 	Pronouns and Plurals
	 	 	55	 
	 	12.07	 	 	Headings
	 	 	55	 
	 	12.08	 	 	Counterparts
	 	 	55	 
	 	12.09	 	 	Governing Law
	 	 	55	 

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EXHIBITS

EXHIBIT A—Partners, Capital Contributions and Percentage Interests

EXHIBIT B—Notice of Exercise of Common Unit Redemption Right

EXHIBIT C-1—Certification of Non-Foreign Status (For Redeeming Limited Partners That Are Entities)

EXHIBIT C-2—Certification of Non-Foreign Status (For Redeeming Limited Partners That Are
Individuals)

EXHIBIT D—Notice of Election by Partner to Convert LTIP Units into Common Units

EXHIBIT E—Notice of Election by Partnership to Force Conversion of LTIP Units into Common Units

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FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

SUMMIT HOTEL OP, LP

RECITALS

     Summit Hotel OP, LP (the “Partnership”) was formed as a limited partnership under the laws of
the State of Delaware, pursuant to a Certificate of Limited Partnership filed with the Secretary of
State of the State of Delaware on June 30, 2010 and an Agreement of Limited Partnership entered
into as of June 30, 2010 by Summit Hotel Properties, Inc., a Maryland corporation (“Summit REIT”),
as the original general partner, and Summit REIT, as the original limited partner of the
Partnership. On December 7, 2010, a Certificate of Amendment to the Certificate of Limited
Partnership was filed with the Secretary of State of the State of Delaware to reflect the
withdrawal of Summit REIT as the original general partner of the Partnership and the admission of
Summit Hotel GP, LLC, a Delaware limited liability company, as the successor general partner of the
Partnership effective as of November 30, 2010. This First Amended and Restated Agreement of
Limited Partnership is entered into this 14th day of February, 2011 among Summit Hotel
GP, LLC (the “General Partner”), Summit REIT, as the original limited partner of the Partnership,
and any additional Limited Partner that is admitted from time to time to the Partnership and listed
on Exhibit A attached hereto.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing, of mutual covenants between the parties
hereto, and of other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree to amend and restate the Agreement of Limited
Partnership to read in its entirety as follows:

ARTICLE I

DEFINED TERMS

     The following defined terms used in this Agreement shall have the meanings specified below:

     “Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from
time to time.

     “Additional Funds” has the meaning set forth in Section 4.03 hereof.

     “Additional Securities” means any: (1) shares of capital stock of Summit REIT now or
hereafter authorized or reclassified that has dividend rights, or rights upon liquidation, winding
up and dissolution, that are superior or prior to the REIT Shares (“Preferred Shares”), (2) REIT
Shares, (3) shares of capital stock of Summit REIT now or hereafter authorized or reclassified that
has dividend rights, or rights upon liquidation, winding up and dissolution, that are junior in
rank to the REIT Shares (“Junior Shares”) and (4) (i) rights, options, warrants or convertible or
exchangeable securities having the right to subscribe for or purchase REIT Shares, Preferred

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Shares or Junior Shares, or (ii) indebtedness issued by Summit REIT that provides any of the
rights described in clause (4)(i) of this definition (any such securities referred to in clause
(4)(i) or (ii) of this definition, “New Securities”).

     “Adjustment Events” has the meaning set forth in Section 4.04(a)(i) hereof.

     “Administrative Expenses” means (i) all administrative and operating costs and expenses
incurred by the Partnership, (ii) administrative costs and expenses of the General Partner and
Summit REIT, including any salaries or other payments to directors, officers or employees of the
General Partner and Summit REIT, and any accounting and legal expenses of the General Partner and
Summit REIT, which expenses, the Partners hereby agree are expenses of the Partnership and not the
General Partner or Summit REIT, and (iii) to the extent not included in clauses (i) or (ii) above,
REIT Expenses; provided, however, that Administrative Expenses shall not include
any administrative costs and expenses incurred by the General Partner or Summit REIT that are
attributable to Properties or interests in a Subsidiary that are owned by the General Partner or
Summit REIT other than through its ownership interest in the Partnership.

     “Affiliate” means, (i) any Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person, (ii) any other Person that owns, beneficially,
directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of
such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such
Person or any Person controlling, controlled by or under common control with such Person. For the
purposes of this definition, “control” (including the correlative meanings of the terms “controlled
by” and “under common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities or partnership interests,
contract or otherwise.

     “Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of
the date of contribution as agreed to by such Partner and the General Partner. The names and
addresses of the Partners, number of Partnership Units issued to each Partner, and the Agreed Value
of non-cash Capital Contributions as of the date of contribution is set forth on Exhibit A,
as it may be amended or restated from time to time.

     “Agreement” means this First Amended and Restated Agreement of Limited Partnership, as it may
be amended, supplemented or restated from time to time.

     “Articles” means the Articles of Amendment and Restatement of Summit REIT filed with the State
Department and Assessments and Taxation of the State of Maryland, as amended, supplemented or
restated from time to time.

     “Board of Directors” means the Board of Directors of Summit REIT.

     “Capital Account” has the meaning set forth in Section 4.06 hereof.

     “Capital Account Limitation” has the meaning set forth in Section 4.05(b) hereof.

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     “Capital Contribution” means the total amount of cash, cash equivalents, and the Agreed Value
of any Property or other asset contributed or agreed to be contributed, as the context requires, to
the Partnership by each Partner pursuant to the terms of the Agreement. Any reference to the
Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor
holder of the Partnership Interest of such Partner.

     “Cash Amount” means an amount of cash per Common Unit equal to the Value of the REIT Shares
Amount on the Specified Redemption Date.

     “Certificate” means any instrument or document that is required under the laws of the State of
Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and
sworn to by the Partners of the Partnership (either by themselves or pursuant to the
power-of-attorney granted to the General Partner in Section 8.02 hereof) and filed for recording in
the appropriate public offices within the State of Delaware or such other jurisdiction to perfect
or maintain the Partnership as a limited partnership, to effect the admission, withdrawal or
substitution of any Partner of the Partnership, or to protect the limited liability of the Limited
Partners as limited partners under the laws of the State of Delaware or such other jurisdiction.

     “Certificate of Formation” means the Certificate of Formation of the General Partner filed
with the Secretary of State of the State of Delaware, as amended or supplemented from time to time.

     “Change of Control” means, as to either the General Partner or Summit REIT, the occurrence of
any of the following: (i) the sale, lease or transfer, in one or a series of related transactions,
of 80% or more of the assets of the General Partner or Summit REIT, taken as a whole, to any Person
or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), other than an Affiliate of the General Partner or Summit REIT; or (ii) the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act, or any successor provision), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than an Affiliate of the General Partner or Summit REIT in a single
transaction or in a related series of transactions, by way of merger, share exchange, consolidation
or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act, or any successor provision) of more than 50% of the total voting power of
the membership interest of the General Partner or more than 50% of the total voting power of the
voting capital stock of Summit REIT.

     “Code” means the Internal Revenue Code of 1986, as amended, and as hereafter amended from time
to time. Reference to any particular provision of the Code shall mean that provision in the Code
at the date hereof and any successor provision of the Code.

     “Commission” means the U.S. Securities and Exchange Commission.

     “Common Partnership Unit Distribution” has the meaning set forth in Section 4.04(a)(ii)
hereof.

     “Common Redemption Amount” means either the Cash Amount or the REIT Shares Amount, as selected
by Summit REIT pursuant to Section 8.04(b) hereof.

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     “Common Unit” means a Partnership Unit which is designated as a Common Unit of the
Partnership.

     “Common Unit Economic Balance” has the meaning set forth in Section 5.01(g) hereof.

     “Common Unit Redemption Right” has the meaning set forth in Section 8.04(a) hereof.

     “Common Unit Transaction” has the meaning set forth in Section 4.05(f) hereof.

     “Constituent Person” has the meaning set forth in Section 4.05(f) hereof.

     “Conversion Date” has the meaning set forth in Section 4.05(b) hereof.

     “Conversion Factor” means a factor of 1.0, as adjusted as provided in this definition and in
Section 6.08. The Conversion Factor will be adjusted in the event that Summit REIT (i) declares or
pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all
holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares
or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares. In each of
such events, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the
record date for such dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date and, provided further, that in the
event that an entity other than an Affiliate of Summit REIT shall become General Partner pursuant
to any merger, consolidation or combination of the General Partner or Summit REIT with or into
another entity (the “Successor Entity”), the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by the number of shares of the Successor Entity into which one REIT Share is
converted pursuant to such merger, consolidation or combination, determined as of the date of such
merger, consolidation or combination. Any adjustment to the Conversion Factor shall become
effective immediately after the effective date of such event retroactive to the record date, if
any, for such event. If, however, the General Partner receives a Notice of Redemption after the
record date, if any, but prior to the effective date of such event, the Conversion Factor shall be
determined as if the General Partner had received the Notice of Redemption immediately prior to the
record date for event.

     “Conversion Notice” has the meaning set forth in Section 4.05(b) hereof.

     “Conversion Right” has the meaning set forth in Section 4.05(a) hereof.

     “Defaulting Limited Partner” means a Limited Partner that has failed to pay any amount owed to
the Partnership under a Partnership Loan within 15 days after demand for payment thereof is made by
the Partnership.

     “Distributable Amount” has the meaning set forth in Section 5.02(d) hereof.

     “Economic Capital Account Balances” has the meaning set forth in Section 5.01(g) hereof.

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     “Equity Incentive Plan” means any equity incentive or compensation plan hereafter adopted by
the Partnership or Summit REIT, including, without limitation, Summit REIT’s 2011 Equity Incentive
Plan.

     “Event of Bankruptcy” as to any Person means (i) the filing of a petition for relief as to
such Person as debtor or bankrupt under the Bankruptcy Code of 1978, as amended, or similar
provision of law of any jurisdiction (except if such petition is contested by such Person and has
been dismissed within 90 days); (ii) the insolvency or bankruptcy of such Person as finally
determined by a court proceeding; (iii) the filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; or (iv) the commencement of any proceedings relating to such Person
as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by
such Person or by another, provided that if such proceeding is commenced by
another, such Person indicates his approval of such proceeding, consents thereto or acquiesces
therein, or such proceeding is contested by such Person and has not been finally dismissed within
90 days.

     “Excepted Holder Limit” has the meaning set forth in the Articles.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Forced Conversion” has the meaning set forth in Section 4.05(c) hereof.

     “Forced Conversion Notice” has the meaning set forth in Section 4.05(c) hereof.

     “General Partner” means Summit Hotel GP, LLC and any person who becomes a substitute or
additional General Partner as provided herein, and any of their successors as General Partner.

     “General Partner Loan” means a loan extended by the General Partner to a Defaulting Limited
Partner in the form of a payment on a Partnership Loan by the General Partner to the Partnership on
behalf of the Defaulting Limited Partner.

     “General Partnership Interest” means the Partnership Interest held by the General Partner in
its capacity as the general partner of the Partnership, which Partnership Interest is an interest
as a general partner under the Act. The General Partnership Interest will be a number of Common
Units held by the General Partner equal to one-tenth of one percent (0.1%) of all outstanding
Partnership Units. All other Partnership Units owned by the General Partner and any Partnership
Units owned by any Affiliate or Subsidiary of the General Partner shall be considered to constitute
a Limited Partnership Interest.

     “Indemnified Party” has the meaning set forth in Section 8.05(f) hereof.

     “Indemnifying Party” has the meaning set forth in Section 8.05(f) hereof.

     “Indemnitee” means (i) any Person made a party to a proceeding by reason of its status as (A)
the General Partner or (B) a director of the General Partner or an officer or employee of the
Partnership, the General Partner, Summit REIT or any Subsidiary thereof, and (ii) such other

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Persons (including Affiliates of the General Partner, Summit REIT or the Partnership) as the
General Partner may designate from time to time (whether before or after the event giving rise to
potential liability), in its sole and absolute discretion.

     “Independent Director” means a director of Summit REIT who meets the NYSE requirements for an
independent director as set forth from time to time.

     “Junior Shares” has the meaning set forth in the definition of “Additional Securities.”

     “Limited Partner” means any Person named as a Limited Partner on Exhibit A attached
hereto, as it may be amended or restated from time to time, and any Person who becomes a Substitute
Limited Partner or any additional Limited Partner, in such Person’s capacity as a Limited Partner
in the Partnership.

     “Limited Partnership Interest” means a Partnership Interest held by a Limited Partner at any
particular time representing a fractional part of the Partnership Interest of all Limited Partners,
and includes any and all benefits to which the holder of such a Limited Partnership Interest may be
entitled as provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and of the Act. Limited
Partnership Interests may be expressed as a number of Common Units, LTIP Units or other Partnership
Units.

     “Liquidating Gains” has the meaning set forth in Section 5.01(g) hereof.

     “LTIP Unit” means a Partnership Unit which is designated as an LTIP Unit and which has the
rights, preferences and other privileges designated in Section 4.04 hereof and elsewhere in this
Agreement in respect of holders of LTIP Units, including both vested LTIP Units and Unvested LTIP
Units. The allocation of LTIP Units among the Partners shall be set forth on Exhibit A as
it may be amended or restated from time to time.

     “LTIP Unitholder” means a Partner that holds LTIP Units.

     “Loss” has the meaning set forth in Section 5.01(h) hereof.

     “Majority in Interest” means Limited Partners holding more than fifty percent (50%) of the
Percentage Interests of the Limited Partners.

     “New Securities” has the meaning set forth in the definition of “Additional Securities”.

     “Notice of Redemption” means the Notice of Exercise of Common Unit Redemption Right
substantially in the form attached as Exhibit B hereto.

     “NYSE” means the New York Stock Exchange.

     “Offer” has the meaning set forth in Section 7.01(c) hereof.

     “Offering” means the underwritten initial public offering of REIT Shares.

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     “Partner” means any General Partner or Limited Partner, and “Partners” means the General
Partner and the Limited Partners.

     “Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(i)(5).

     “Partnership” has the meaning set forth in the recitals to this Agreement.

     “Partnership Interest” means an ownership interest in the Partnership held by a Partner, and
includes any and all benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Partnership Interest may be expressed as a number of Common
Units, LTIP Units or other Partnership Units.

     “Partnership Loan” means a loan from the Partnership to the Partner on the day the Partnership
pays over the excess of the Withheld Amount over the Distributable Amount to a taxing authority.

     “Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(d). In
accordance with Regulations Section 1.704-2(d), the amount of Partnership Minimum Gain is
determined by first computing, for each Partnership nonrecourse liability, any gain the Partnership
would realize if it disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately computed gains. A
Partner’s share of Partnership Minimum Gain shall be determined in accordance with Regulations
Section 1.704-2(g)(1).

     “Partnership Record Date” means the record date established by the General Partner for the
distribution of cash pursuant to Section 5.02 hereof, which record date shall be the same as the
record date established by Summit REIT for a distribution to its stockholders of some or all of its
portion of such distribution.

     “Partnership Unit” means a fractional, undivided share of the Partnership Interests of all
Partners issued hereunder, and includes Common Units, LTIP Units and any other class or series of
Partnership Units that may be established after the date hereof in accordance with the terms
hereof. The number of Partnership Units outstanding and the Percentage Interests represented by
such Partnership Units are set forth on Exhibit A hereto, as it may be amended or restated
from time to time.

     “Partnership Unit Designation” has the meaning set forth in Section 4.02(a)(i) hereof.

     “Percentage Interest” means the percentage determined by dividing the number of Partnership
Units of a Partner by the sum of the number of Partnership Units of all Partners.

     “Person” means any individual, partnership, corporation, limited liability company, joint
venture, trust or other entity.

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     “Preferred Shares” has the meaning set forth in the definition of “Additional Securities”.

     “Profit” has the meaning set forth in Section 5.01(h) hereof.

     “Property” means any property or other investment in which the Partnership, directly or
indirectly, holds an ownership interest.

     “Redeeming Limited Partner” has the meaning set forth in Section 8.04(a) hereof.

     “Redemption Shares” has the meaning set forth in Section 8.05(a) hereof.

     “Regulations” means the Federal Income Tax Regulations issued under the Code, as amended and
as subsequently amended from time to time. Reference to any particular provision of the
Regulations shall mean that provision of the Regulations on the date hereof and any successor
provision of the Regulations.

     “REIT” means a real estate investment trust under Sections 856 through 860 of the Code.

     “REIT Expenses” means (i) costs and expenses relating to the formation and continuity of
existence and operation of Summit REIT and any Subsidiaries thereof (which Subsidiaries shall, for
purposes hereof, be included within the definition of Summit REIT), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable to any director,
officer or employee of Summit REIT, (ii) costs and expenses relating to any public offering and
registration, or private offering, of securities by Summit REIT, and all statements, reports, fees
and expenses incidental thereto, including, without limitation, underwriting discounts and selling
commissions applicable to any such offering of securities, and any costs and expenses associated
with any claims made by any holders of such securities or any underwriters or placement agents
thereof, (iii) costs and expenses associated with any repurchase of any securities by Summit REIT,
(iv) costs and expenses associated with the preparation and filing of any periodic or other reports
and communications by Summit REIT under federal, state or local laws or regulations, including
filings with the Commission, (v) costs and expenses associated with compliance by Summit REIT with
laws, rules and regulations promulgated by any regulatory body, including the Commission and any
securities exchange, (vi) costs and expenses associated with any health, dental, vision,
disability, life insurance, 401(k) plan, incentive plan, bonus plan or other plan providing for
compensation or benefits for the employees of Summit REIT, (vii) costs and expenses incurred by
Summit REIT relating to any issuance or redemption of Partnership Interests and (viii) all other
operating or administrative costs of Summit REIT incurred in the ordinary course of its business on
behalf of or related to the Partnership.

     “REIT Shares” means shares of common stock, par value $0.01 per share, of Summit REIT (or
Successor Entity, as the case may be).

     “REIT Shares Amount” means the number of REIT Shares equal to the product of (X) the number of
Common Units offered for redemption by a Redeeming Limited Partner, multiplied by (Y) the
Conversion Factor as adjusted to and including the Specified Redemption Date; provided that
in the event Summit REIT issues to all holders of REIT Shares rights,

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options, warrants or convertible or exchangeable securities entitling the holders of REIT
Shares to subscribe for or purchase additional REIT Shares, or any other securities or property
(collectively, the “Rights”), and such Rights have not expired at the Specified Redemption Date,
then the REIT Shares Amount shall also include such Rights issuable to a holder of the REIT Shares
Amount on the record date fixed for purposes of determining the holders of REIT Shares entitled to
Rights.

     “Restriction Notice” has the meaning set forth in Section 8.04(f) hereof.

     “Rights” has the meaning set forth in the definition of “REIT Shares Amount” herein.

     “Rule 144” has the meaning set forth in Section 8.05(c) hereof.

     “S-3 Eligible Date” has the meaning set forth in Section 8.05(a) hereof.

     “Safe Harbor Election” has the meaning set forth in Section 11.01 hereof.

     “Safe Harbor Interest” has the meaning set forth in Section 11.01 hereof.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Service” means the Internal Revenue Service.

     “Stock Ownership Limit” has the meaning set forth in the Articles.

     “Specified Redemption Date” means the first business day of the calendar quarter that is at
least 60 calendar days after the receipt by the General Partner of a Notice of Redemption.

     “Subsidiary” means, with respect to any Person, any corporation or other entity of which a
majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity
interests is owned, directly or indirectly, by such Person.

     “Subsidiary Partnership” means any partnership or limited liability company in which the
General Partner, Summit REIT, the Partnership, or a wholly owned Subsidiary of the General Partner,
Summit REIT or the Partnership owns a partnership or limited liability company interest.

     “Substitute Limited Partner” means any Person admitted to the Partnership as a Limited Partner
pursuant to Section 9.03 hereof.

     “Successor Entity” has the meaning set forth in the definition of “Conversion Factor” herein.

     “Summit REIT” has the meaning set forth in the recitals to this Agreement.

     “Survivor” has the meaning set forth in Section 7.01(d) hereof.

     “Tax Matters Partner” has the meaning set forth within Section 6231(a)(7) of the Code.

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     “Trading Day” means a day on which the principal national securities exchange on which a
security is listed or admitted to trading is open for the transaction of business or, if a security
is not listed or admitted to trading on any national securities exchange, shall mean any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

     “Transaction” has the meaning set forth in Section 7.01(c) hereof.

     “Transfer” has the meaning set forth in Section 9.02(a) hereof.

     “TRS” means a taxable REIT subsidiary (as defined in Section 856(l) of the Code) of Summit
REIT.

     “Unvested LTIP Units” has the meaning set forth in Section 4.04(c) hereof.

     “Value” means, with respect to any security, the average of the daily market prices of such
security for the ten consecutive Trading Days immediately preceding the date of such valuation.
The market price for each such Trading Day shall be: (i) if the security is listed or admitted to
trading on the NYSE or any other national securities exchange, the last reported sale price,
regular way, on such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day, (ii) if the security is not listed or admitted to
trading on the NYSE or any other national securities exchange, the last reported sale price on such
day or, if no sale takes place on such day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated by Summit REIT, or (iii) if the security
is not listed or admitted to trading on the NYSE or any national securities exchange and no such
last reported sale price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation source designated by
Summit REIT, or if there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than ten days prior to the
date in question) for which prices have been so reported; provided that if there are no bid
and asked prices reported during the ten days prior to the date in question, the value of the
security shall be determined by Summit REIT acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate. In the event the
security includes any additional rights (including any Rights), then the value of such rights shall
be determined by Summit REIT acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

     “Vested LTIP Units” has the meaning set forth in Section 4.04(c) hereof.

     “Vesting Agreement” means each or any, as the context implies, agreement or instrument entered
into by an LTIP Unitholder upon acceptance of an award of LTIP Units under an Equity Incentive
Plan.

     “Withheld Amount” means any amount required to be withheld by the Partnership to pay over to
any taxing authority as a result of any allocation or distribution of income to a Partner.

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ARTICLE II

FORMATION OF THE PARTNERSHIP

     2.01 Formation of the Partnership. The Partnership was formed as a limited
partnership pursuant to the provisions of the Act and upon the terms and conditions set forth in
this Agreement. Except as expressly provided herein to the contrary, the rights and obligations of
the Partners and administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all purposes.

     2.02 Name. The Name of the Partnership shall be “Summit Hotel OP, LP” and the
Partnership’s business may be conducted under any other name or names deemed advisable by the
General Partner, including the name of the General Partner or any Affiliate thereof. The words
“Limited Partnership,” “LP,” “L.P.” or “Ltd.” or similar words or letters shall be included in the
Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may change the name of
the Partnership at any time and from time to time and shall notify the Partners of such change in
the next regular communication to the Partners; provided, however, failure to so notify the
Partners shall not invalidate such change or the authority granted hereunder.

     2.03 Registered Office and Agent; Principal Office. The registered office of the
Partnership in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street,
Wilmington, DE 19801, and the registered agent for service of process on the Partnership in the
State of Delaware at such registered office is The Corporation Trust Company, a Delaware
corporation. The principal office of the Partnership is located at 2701 South Minnesota Avenue,
Suite 6, Sioux Falls, South Dakota 57105, or such other place as the General Partner may from time
to time designate. Upon such a change of the principal office of the Partnership, the General
Partner shall notify the Partners of such change in the next regular communication to the Partners;
provided, however, failure to so notify the Partners shall not invalidate such change or the
authority granted hereunder. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems necessary or desirable.

     2.04 Term and Dissolution.

          (a) The term of the Partnership shall continue in full force and effect until dissolved upon
the first to occur of any of the following events:

          (i) the occurrence of an Event of Bankruptcy as to a General Partner or the
dissolution, death, removal or withdrawal of a General Partner unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof; provided that if a
General Partner is on the date of such occurrence a partnership, the dissolution of such
General Partner as a result of the dissolution, death, withdrawal, removal or Event of
Bankruptcy of a partner in such partnership shall not be an event of dissolution of the
Partnership if the business of such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General Partner and such
partners comply with any other applicable requirements of this Agreement;

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          (ii) the passage of 90 days after the sale or other disposition of all or substantially
all of the assets of the Partnership (provided that if the Partnership receives an
installment obligation as consideration for such sale or other disposition, the Partnership
shall continue, unless sooner dissolved under the provisions of this Agreement, until such
time as such installment obligations are paid in full);

          (iii) the redemption of all Limited Partnership Interests (other than any Limited
Partnership Interests held by the General Partner), unless the General Partner determines to
continue the term of the Partnership by the admission of one or more additional Limited
Partners; or

          (iv) the dissolution of the Partnership upon election by the General Partner.

          (b) Upon dissolution of the Partnership (unless the business of the Partnership is continued
pursuant to Section 7.03(b) hereof), the General Partner (or its trustee, receiver, successor or
legal representative) shall amend or cancel the Certificate and liquidate the Partnership’s assets
and apply and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i) defer liquidation of,
or withhold from distribution for a reasonable time, any assets of the Partnership (including those
necessary to satisfy the Partnership’s debts and obligations), or (ii) distribute the assets to the
Partners in kind.

     2.05 Filing of Certificate and Perfection of Limited Partnership. The General Partner
shall execute, acknowledge, record and file at the expense of the Partnership the Certificate and
any and all amendments thereto and all requisite fictitious name statements and notices in such
places and jurisdictions as may be necessary to cause the Partnership to be treated as a limited
partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in
which the Partnership conducts business.

     2.06 Certificates Describing Partnership Units. At the request of a Limited Partner,
the General Partner, at its option, may issue a certificate summarizing the terms of such Limited
Partner’s interest in the Partnership, including the class or series and number of Partnership
Units owned and the Percentage Interest represented by such Partnership Units as of the date of
such certificate. Any such certificate (i) shall be in form and substance as determined by the
General Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the following
effect:

THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF SUMMIT HOTEL OP, LP, AS
AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME, AND (B) ANY APPLICABLE FEDERAL
OR STATE SECURITIES OR BLUE SKY LAWS.

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ARTICLE III

BUSINESS OF THE PARTNERSHIP

     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
provided, however, that such business shall be limited to and conducted in such a
manner as to permit Summit REIT at all times to qualify as a REIT, unless Summit REIT otherwise
ceases to, or the Board of Directors determines, pursuant to Section 5.7 of the Articles, that
Summit REIT shall no longer, qualify as a REIT, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership of interests in any
entity engaged in any of the foregoing and (iii) to do anything necessary or incidental to the
foregoing. In connection with the foregoing, and without limiting Summit REIT’s right in its sole
and absolute discretion to cease qualifying as a REIT, the Partners acknowledge that the status of
Summit REIT as a REIT and the avoidance of income and excise taxes on Summit REIT inures to the
benefit of all the Partners and not solely to the General Partner or its Affiliates.
Notwithstanding the foregoing, the Limited Partners agree that Summit REIT may terminate or revoke
its status as a REIT under the Code at any time. Summit REIT shall also be empowered to do any and
all acts and things necessary or prudent to ensure that the Partnership will not be classified as a
“publicly traded partnership” taxable as a corporation for purposes of Section 7704 of the Code.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS

     4.01 Capital Contributions. The General Partner and each Limited Partner has made a
capital contribution to the Partnership in exchange for the Partnership Units set forth opposite
such Partner’s name on Exhibit A hereto, as it may be amended or restated from time to time
by the General Partner to the extent necessary to reflect accurately sales, exchanges or other
Transfers, redemptions, Capital Contributions, the issuance of additional Partnership Units or
similar events having an effect on a Partner’s ownership of Partnership Units.

     4.02 Additional Capital Contributions and Issuances of Additional Partnership Units.
Except as provided in this Section 4.02 or in Section 4.03 hereof, the Partners shall have no right
or obligation to make any additional Capital Contributions or loans to the Partnership. The
General Partner may contribute additional capital to the Partnership, from time to time, and
receive additional Partnership Interests, in the form of Partnership Units, in respect thereof, in
the manner contemplated in this Section 4.02.

          (a) Issuances of Additional Partnership Units.

          (i) General. As of the effective date of this Agreement, the Partnership
shall have two classes of Partnership Units, entitled “Common Units” and “LTIP Units.” The
General Partner is hereby authorized to cause the Partnership to issue such additional
Partnership Interests, in the form of Partnership Units, for any Partnership purpose at any
time or from time to time to the Partners (including the General Partner) or to other
Persons for such consideration and on such terms and conditions as shall be established by
the General Partner in its sole and absolute discretion, all without the

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approval of any Limited Partners. The General Partner’s determination that
consideration is adequate shall be conclusive insofar as the adequacy of consideration
relates to whether the Partnership Units are validly issued and fully paid. Any additional
Partnership Units issued thereby may be issued in one or more classes, or one or more series
of any of such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers and duties
senior to the then-outstanding Partnership Units held by the Limited Partners, all as shall
be determined by the General Partner in its sole and absolute discretion and without the
approval of any Limited Partner, subject to Delaware law that cannot be preempted by the
terms hereof and as set forth in a written document hereafter attached to and made an
exhibit to this Agreement (each, a “Partnership Unit Designation”), including, without
limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Units; (ii) the right of each such class
or series of Partnership Units to share in Partnership distributions; and (iii) the rights
of each such class or series of Partnership Units upon dissolution and liquidation of the
Partnership; provided, however, that no additional Partnership Units shall
be issued to the General Partner or Summit REIT (or any direct or indirect wholly owned
Subsidiary of the General Partner or Summit REIT) unless:

          (1) (A) the additional Partnership Units are issued in connection with an
issuance of REIT Shares or other capital stock of, or other interests in, Summit
REIT, which REIT Shares, capital stock or other interests have designations,
preferences and other rights, all such that the economic interests are substantially
similar to the designations, preferences and other rights of the additional
Partnership Units issued to the General Partner or Summit REIT (or any direct or
indirect wholly owned Subsidiary of the General Partner or Summit REIT) by the
Partnership in accordance with this Section 4.02 and (B) the General Partner or
Summit REIT (or any direct or indirect wholly owned Subsidiary of the General
Partner or Summit REIT) shall make a Capital Contribution to the Partnership in an
amount equal to the cash consideration received by Summit REIT from the issuance of
such REIT Shares, capital stock or other interests in Summit REIT;

          (2) (A) the additional Partnership Units are issued in connection with an
issuance of REIT Shares or other capital stock of, or other interests in, Summit
REIT pursuant to a taxable share dividend declared by Summit REIT, which REIT
Shares, capital stock or interests have designations, preferences and other rights,
all such that the economic interests are substantially similar to the designations,
preferences and other rights of the additional Partnership Units issued to the
General Partner or Summit REIT (or any direct or indirect wholly owned Subsidiary of
the General Partner or Summit REIT) by the Partnership in accordance with this
Section 4.02, (B) if Summit REIT allows the holders of its REIT Shares to elect
whether to receive such dividend in REIT Shares or other capital stock of or, other
interests in Summit REIT or cash, the Partnership will give the Limited Partners
(excluding the General Partner, Summit REIT or any direct or indirect Subsidiary of
the General Partner or Summit REIT) the same election to elect to receive (I)
Partnership Units or cash or, (II) at the

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election of Summit REIT, REIT Shares, capital stock or other interests in
Summit REIT or cash, and (C) if the Partnership issues additional Partnership Units
pursuant to this Section 4.02(a)(i)(2), then an amount of income equal to the value
of the Partnership Units received will be allocated to those holders of Common Units
that elect to receive additional Partnership Units;

          (3) the additional Partnership Units are issued in exchange for property owned
by the General Partner or Summit REIT (or any direct or indirect wholly owned
Subsidiary of the General Partner or Summit REIT) with a fair market value, as
determined by the General Partner, in good faith, equal to the value of the
Partnership Units; or

          (4) the additional Partnership Units are issued to all Partners in proportion
to their respective Percentage Interests.

Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Units for less than fair market value, so long as the
General Partner concludes in good faith that such issuance is in the interests of the
Partnership. Upon the issuance of any additional Partnership Units, the General Partner
shall amend Exhibit A as appropriate to reflect such issuance.

          (ii) Upon Issuance of Additional Securities. Summit REIT shall not issue any
Additional Securities (other than REIT Shares issued in connection with an exchange pursuant
to Section 8.04 hereof or REIT Shares or other capital stock of or other interests in Summit
REIT issued in connection with a taxable stock dividend as described in Section
4.02(a)(i)(2) hereof) or Rights other than to all holders of REIT Shares, Preferred Shares,
Junior Shares, or New Securities, as the case may be, unless (A) the General Partner shall
cause the Partnership to issue to the General Partner or Summit REIT (or any direct or
indirect wholly owned Subsidiary of the General Partner or Summit REIT) Partnership Units or
Rights having designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the Additional Securities, and (B) Summit
REIT, directly or through the General Partner (or any direct or indirect wholly owned
Subsidiary of the General Partner or another direct or indirect wholly owned Subsidiary of
Summit REIT), contributes the proceeds from the issuance of such Additional Securities and
from any exercise of Rights contained in such Additional Securities to the Partnership;
provided, however, that Summit REIT is allowed to issue Additional
Securities in connection with an acquisition of Property to be held directly by Summit REIT,
but if and only if, such direct acquisition and issuance of Additional Securities have been
approved by a majority of the Independent Directors. Without limiting the foregoing, Summit
REIT is expressly authorized to issue Additional Securities for less than fair market value,
and the General Partner is authorized to cause the Partnership to issue to the General
Partner or Summit REIT (or any direct or indirect wholly owned Subsidiary of the General
Partner or Summit REIT) corresponding Partnership Units, so long as (x) the General Partner
concludes in good faith that such issuance is in the best interests of Summit REIT, the
General Partner and the Partnership and (y) Summit REIT, directly or through the General
Partner (or any direct or indirect wholly owned Subsidiary of the General Partner or another
direct or indirect wholly

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owned Subsidiary of Summit REIT), contributes all proceeds from such issuance to the
Partnership, including without limitation, the issuance of REIT Shares and corresponding
Partnership Units pursuant to a stock purchase plan providing for purchases of REIT Shares
at a discount from fair market value or pursuant to stock awards, including stock options
that have an exercise price that is less than the fair market value of the REIT Shares,
either at the time of issuance or at the time of exercise, and restricted or other stock
awards approved by the Board of Directors. For example, in the event Summit REIT issues
REIT Shares for a cash purchase price and Summit REIT, directly or through the General
Partner (or any direct or indirect wholly owned Subsidiary of the General Partner or another
direct or indirect wholly owned Subsidiary of Summit REIT), contributes all of the proceeds
of such issuance to the Partnership as required hereunder, the General Partner or Summit
REIT (or any direct or indirect wholly owned Subsidiary of the General Partner or Summit
REIT) shall be issued a number of additional Partnership Units equal to the product of (A)
the number of such REIT Shares issued by Summit REIT, the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of which is 100%, and the
denominator of which is the Conversion Factor in effect on the date of such contribution.

          (b) Certain Contributions of Proceeds of Issuance of REIT Shares. In connection with
any and all issuances of REIT Shares, Summit REIT, directly or through the General Partner (or any
direct or indirect wholly owned Subsidiary of the General Partner or another direct or indirect
wholly owned Subsidiary of Summit REIT), shall make Capital Contributions to the Partnership of the
proceeds therefrom, provided that if the proceeds actually received and contributed by
Summit REIT, directly or through the General Partner (or any direct or indirect wholly owned
Subsidiary of the General Partner or another direct or indirect wholly owned Subsidiary of Summit
REIT), are less than the gross proceeds of such issuance as a result of any underwriter’s discount,
commissions, placement fees or other expenses paid or incurred in connection with such issuance,
then Summit REIT, directly or through the General Partner (or any direct or indirect wholly owned
Subsidiary of the General Partner or another direct or indirect wholly owned Subsidiary of Summit
REIT), shall be deemed to have made a Capital Contribution to the Partnership in the amount equal
to the sum of the net proceeds of such issuance plus the amount of such underwriter’s discount,
commissions, placement fees or other expenses paid by Summit REIT, and the Partnership shall be
deemed simultaneously to have reimbursed such discount, commissions, placement fees and expenses as
an Administrative Expense for the benefit of the Partnership for purposes of Section 6.05(b).

          (c) Repurchases of Summit REIT Securities. If Summit REIT shall repurchase shares of
any class or series of its capital stock, the purchase price thereof and all costs incurred in
connection with such repurchase shall be reimbursed to Summit REIT by the Partnership pursuant to
Section 6.05 hereof and the General Partner shall cause the Partnership to redeem an equivalent
number of Partnership Units of the appropriate class or series held by Summit REIT (or any direct
or indirect wholly owned Subsidiary of Summit REIT) (which, in the case of REIT Shares, shall be a
number equal to the quotient of the number of such REIT Shares divided by the Conversion Factor).

     4.03 Additional Funding. If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds (“Additional Funds”) for

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any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such
funds from outside borrowings, or (ii) elect to have the General Partner or any of its Affiliates
provide such Additional Funds to the Partnership through loans or otherwise.

     4.04 LTIP Units.

          (a) Issuance of LTIP Units. Notwithstanding anything contained herein to the
contrary, the General Partner may from time to time issue LTIP Units to Persons who provide
services to the Partnership, the General Partner or Summit REIT for such consideration as the
General Partner may determine to be appropriate, and admit such Persons as Limited Partners.
Subject to the following provisions of this Section 4.04 and the special provisions of Sections
4.05 and 5.01(g) hereof, LTIP Units shall be treated as Common Units, with all of the rights,
privileges and obligations attendant thereto. For purposes of computing the Partners’ Percentage
Interests, holders of LTIP Units shall be treated as Common Unit holders and LTIP Units shall be
treated as Common Units. In particular, the Partnership shall maintain at all times a one-to-one
correspondence between LTIP Units and Common Units for conversion, distribution and other purposes,
including, without limitation, complying with the following procedures:

          (i) If an Adjustment Event (as defined below) occurs, then the General Partner shall
make a corresponding adjustment to the LTIP Units to maintain a one-for-one conversion and
economic equivalence ratio between Common Units and LTIP Units. The following shall be
“Adjustment Events”: (A) the Partnership makes a distribution on all outstanding Common
Units in Partnership Units, (B) the Partnership subdivides the outstanding Common Units into
a greater number of units or combines the outstanding Common Units into a smaller number of
units, or (C) the Partnership issues any Partnership Units in exchange for its outstanding
Common Units by way of a reclassification or recapitalization of its Common Units. If more
than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once
using a single formula that takes into account each and every Adjustment Event as if all
Adjustment Events occurred simultaneously. For the avoidance of doubt, the following shall
not be Adjustment Events: (x) the issuance of Partnership Units in a financing,
reorganization, acquisition or other similar business Common Unit Transaction, (y) the
issuance of Partnership Units pursuant to any employee benefit or compensation plan or
distribution reinvestment plan or (z) the issuance of any Partnership Units to the General
Partner or Summit REIT (or any direct or indirect wholly owned Subsidiary of the General
Partner or Summit REIT) in respect of a capital contribution to the Partnership of proceeds
from the sale of Additional Securities by Summit REIT. If the Partnership takes an action
affecting the Common Units other than actions specifically described above as “Adjustment
Events” and in the opinion of the General Partner such action would require an adjustment to
the LTIP Units to maintain the one-to-one correspondence described above, the General
Partner shall have the right to make such adjustment to the LTIP Units, to the extent
permitted by law and by any Equity Incentive Plan and Vesting Agreement, in such manner and
at such time as the General Partner, in its sole discretion, may determine to be appropriate
under the circumstances. If an adjustment is made to the LTIP Units, as herein provided, the
Partnership shall promptly file in the books and records of the Partnership an officer’s
certificate setting forth such adjustment and a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive

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evidence of the correctness of such adjustment absent manifest error. Promptly after
filing of such certificate, the Partnership shall deliver a notice to each LTIP Unitholder
setting forth the adjustment to his or her LTIP Units and the effective date of such
adjustment; provided, however, the failure to deliver such notice shall not invalidate the
adjustment or the authority granted hereunder, and

          (ii) The LTIP Unitholders shall, when, as and if authorized and declared by the General
Partner out of assets legally available for that purpose, be entitled to receive
distributions in an amount per LTIP Unit equal to the distributions per Common Unit (the
“Common Partnership Unit Distribution”), paid to holders of Common Units on such Partnership
Record Date established by the General Partner with respect to such distribution. So long
as any LTIP Units are outstanding, no distributions (whether in cash or in kind) shall be
authorized, declared or paid on Common Units, unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP Units.

          (b) Priority. Subject to the provisions of this Section 4.04, the special provisions
of Sections 4.05 and 5.01(g) hereof and any Vesting Agreement, the LTIP Units shall rank pari passu
with the Common Units as to the payment of regular and special periodic or other distributions and
distribution of assets upon liquidation, dissolution or winding up. As to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, any
class or series of Partnership Units which by its terms specifies that it shall rank junior to, on
a parity with, or senior to the Common Units shall also rank junior to, or pari passu with, or
senior to, as the case may be, the LTIP Units. Subject to the terms of any Vesting Agreement, an
LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the same extent, and subject
to the same restrictions as holders of Common Units are entitled to transfer their Common Units
pursuant to Article IX.

          (c) Special Provisions. LTIP Units shall be subject to the following special
provisions:

          (i) Vesting Agreements. LTIP Units may, in the sole discretion of the General
Partner, be issued subject to vesting, forfeiture and additional restrictions on transfer
pursuant to the terms of a Vesting Agreement. The terms of any Vesting Agreement may be
modified by the General Partner from time to time in its sole discretion, subject to any
restrictions on amendment imposed by the relevant Vesting Agreement or by the Equity
Incentive Plan, if applicable. LTIP Units that have vested under the terms of a Vesting
Agreement are referred to as “Vested LTIP Units”; all other LTIP Units shall be treated as
“Unvested LTIP Units.”

          (ii) Forfeiture. Unless otherwise specified in the Vesting Agreement, upon the
occurrence of any event specified in a Vesting Agreement as resulting in either the right of
the Partnership or the General Partner to repurchase LTIP Units at a specified purchase
price or some other forfeiture of any LTIP Units, then if the Partnership or the General
Partner exercises such right to repurchase or forfeiture in accordance with the applicable
Vesting Agreement, the relevant LTIP Units shall immediately, and without any further
action, be treated as cancelled and no longer outstanding for any purpose.

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Unless otherwise specified in the Vesting Agreement, no consideration or other payment
shall be due with respect to any LTIP Units that have been forfeited, other than any
distributions declared with respect to a Partnership Record Date prior to the effective date
of the forfeiture. In connection with any repurchase or forfeiture of LTIP Units, the
balance of the portion of the Capital Account of the LTIP Unitholder that is attributable to
all of his or her LTIP Units shall be reduced by the amount, if any, by which it exceeds the
target balance contemplated by Section 5.01(g) hereof, calculated with respect to the LTIP
Unitholder’s remaining LTIP Units, if any.

          (iii) Allocations. LTIP Unitholders shall be entitled to certain special
allocations of gain under Section 5.01(g) hereof.

          (iv) Redemption. The Common Unit Redemption Right provided to Limited Partners
under Section 8.04 hereof shall not apply with respect to LTIP Units unless and until they
are converted to Common Units as provided in clause (v) below and Section 4.05 hereof.

          (v) Conversion to Common Units. Vested LTIP Units are eligible to be converted
into Common Units in accordance with Section 4.05 hereof.

          (d) Voting. LTIP Unitholders shall (a) have the same voting rights as the holders of
Common Units, with all Vested LTIP Units and Unvested LTIP Units voting as a single class with the
Common Units and having one vote per LTIP Unit; and (b) have the additional voting rights that are
expressly set forth below. So long as any LTIP Units remain outstanding, the Partnership shall
not, without the affirmative vote of the holders of a majority of the LTIP Units (Vested LTIP Units
and Unvested LTIP Units) outstanding at the time, given in person or by proxy, either in writing or
at a meeting (voting separately as a class), amend, alter or repeal, whether by merger,
consolidation or otherwise, the provisions of this Agreement applicable to LTIP Units so as to
materially and adversely affect (as determined in good faith by the General Partner) any right,
privilege or voting power of the LTIP Units or the LTIP Unitholders as such, unless such amendment,
alteration, or repeal affects equally, ratably and proportionately the rights, privileges and
voting powers of the holders of Common Units; but subject, in any event, to the following
provisions:

          (i) With respect to any Common Unit Transaction (as defined in Section 4.05(f) hereof),
so long as the LTIP Units are treated in accordance with Section 4.05(f) hereof, the
consummation of such Common Unit Transaction shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP
Unitholders as such; and

          (ii) Any creation or issuance of any Partnership Units or of any class or series of
Partnership Interest including without limitation additional Common Units or LTIP Units,
whether ranking senior to, junior to, or on a parity with the LTIP Units with respect to
distributions and the distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such rights, preferences, privileges
or voting powers of the LTIP Units or the LTIP Unitholders as such.

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     The foregoing voting provisions will not apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required will be effected, all outstanding LTIP Units
shall have been converted into Common Units.

     4.05 Conversion of LTIP Units.

          (a) Subject to the provisions of this Section 4.05, an LTIP Unitholder shall have the right
(the “Conversion Right”), at such holder’s option, at any time to convert all or a portion of such
holder’s Vested LTIP Units into Common Units; provided, however, that a holder may not
exercise the Conversion Right for less than 1,000 Vested LTIP Units or, if such holder holds less
than 1,000 Vested LTIP Units, all of the Vested LTIP Units held by such holder. LTIP Unitholders
shall not have the right to convert Unvested LTIP Units into Common Units until they become Vested
LTIP Units; provided, however, that when an LTIP Unitholder is notified of the
expected occurrence of an event that will cause such LTIP Unitholder’s Unvested LTIP Units to
become Vested LTIP Units, such LTIP Unitholder may give the Partnership a Conversion Notice
conditioned upon and effective as of the time of vesting and such Conversion Notice, unless
subsequently revoked by the LTIP Unitholder, shall be accepted by the Partnership subject to such
condition. The General Partner shall have the right at any time to cause a conversion of Vested
LTIP Units into Common Units. In all cases, the conversion of any LTIP Units into Common Units
shall be subject to the conditions and procedures set forth in this Section 4.05.

          (b) A holder of Vested LTIP Units may convert such LTIP Units into an equal number of fully
paid and non-assessable Common Units, giving effect to all adjustments (if any) made pursuant to
Section 4.04 hereof. Notwithstanding the foregoing, in no event may a holder of Vested LTIP Units
convert a number of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such
Limited Partner, to the extent attributable to its ownership of LTIP Units, divided by (y) the
Common Unit Economic Balance, in each case as determined as of the effective date of conversion
(the “Capital Account Limitation”).

     In order to exercise the Conversion Right, an LTIP Unitholder shall deliver a notice (a
“Conversion Notice”) in the form attached as Exhibit D to the Partnership (with a copy to
the General Partner) not less than ten nor more than 60 days prior to a date (the “Conversion
Date”) specified in such Conversion Notice; provided, however, that if the General
Partner has not given to the LTIP Unitholders notice of a proposed or upcoming Common Unit
Transaction (as defined in Section 4.05(f) hereof) at least 30 days prior to the effective date of
such Common Unit Transaction, then LTIP Unitholders shall have the right to deliver a Conversion
Notice until the earlier of (x) the tenth day after such notice from the General Partner of a
Common Unit Transaction or (y) the third Trading Day immediately preceding the effective date of
such Common Unit Transaction. A Conversion Notice shall be provided in the manner provided in
Section 12.01 hereof. Each LTIP Unitholder covenants and agrees with the Partnership that all
Vested LTIP Units to be converted pursuant to this Section 4.05(b) shall be free and clear of all
liens. Notwithstanding anything herein to the contrary, a holder of LTIP Units may deliver a
Notice of Redemption pursuant to Section 8.04(a) hereof relating to those Common Units that will be
issued to such holder upon conversion of such LTIP Units into Common Units in advance of the
Conversion Date; provided, however, that the redemption of such Common Units by the
Partnership shall in no event take place until after the Conversion Date. For clarity, it is noted

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that the objective of this paragraph is to put an LTIP Unitholder in a position where, if such
holder so wishes, the Common Units into which such holder’s Vested LTIP Units will be converted can
be tendered to the Partnership for redemption simultaneously with such conversion, with the further
consequence that, if Summit REIT elects to assume the Partnership’s redemption obligation with
respect to such Common Units under Section 8.04(b) hereof by delivering to such holder the REIT
Shares Amount, then such holder can have the REIT Shares Amount issued to such holder
simultaneously with the conversion of such holder’s Vested LTIP Units into Common Units. The
General Partner and LTIP Unitholder shall reasonably cooperate with each other to coordinate the
timing of the events described in the foregoing sentence.

          (c) The Partnership, at any time at the election of the General Partner, may cause any number
of Vested LTIP Units held by an LTIP Unitholder to be converted (a “Forced Conversion”) into an
equal number of Common Units, giving effect to all adjustments (if any) made pursuant to Section
4.04 hereof; provided, however, that the Partnership may not cause Forced
Conversion of any LTIP Units that would not at the time be eligible for conversion at the option of
such LTIP Unitholder pursuant to Section 4.05(b) hereof. In order to exercise its right of Forced
Conversion, the Partnership shall deliver a notice (a “Forced Conversion Notice”) in the form
attached as Exhibit E to the applicable LTIP Unitholder not less than ten nor more than 60
days prior to the Conversion Date specified in such Forced Conversion Notice. A Forced Conversion
Notice shall be provided in the manner provided in Section 12.01 hereof and shall be revocable by
the General Partner at any time prior to the Forced Conversion.

          (d) A conversion of Vested LTIP Units for which the holder thereof has given a Conversion
Notice or the Partnership has given a Forced Conversion Notice shall occur automatically after the
close of business on the applicable Conversion Date without any action on the part of such LTIP
Unitholder, as of which time such LTIP Unitholder shall be credited on the books and records of the
Partnership with the issuance as of the opening of business on the next day of the number of Common
Units issuable upon such conversion. After the conversion of LTIP Units as aforesaid, the
Partnership shall deliver to such LTIP Unitholder, upon his or her written request, a certificate
of the General Partner certifying the number of Common Units and remaining LTIP Units, if any, held
by such person immediately after such conversion. The Assignee of any Limited Partner pursuant to
Article IX hereof may exercise the rights of such Limited Partner pursuant to this Section 4.05 and
such Limited Partner shall be bound by the exercise of such rights by the Assignee.

          (e) For purposes of making future allocations under Section 5.01(g) hereof and applying the
Capital Account Limitation, the portion of the Economic Capital Account Balance of the applicable
LTIP Unitholder that is treated as attributable to his or her LTIP Units shall be reduced, as of
the date of conversion, by the product of the number of LTIP Units converted and the Common Unit
Economic Balance.

          (f) If the Partnership, the General Partner or Summit REIT shall be a party to any Common Unit
Transaction (including without limitation a merger, consolidation, unit exchange, self tender offer
for all or substantially all Common Units or other business combination or reorganization, or sale
of all or substantially all of the Partnership’s assets, but excluding any Common Unit Transaction
which constitutes an Adjustment Event) in each case as a result of which Common Units shall be
exchanged for or converted into the right, or the

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holders of Common Units shall otherwise be entitled, to receive cash, securities or other
property or any combination thereof (each of the foregoing being referred to herein as a “Common
Unit Transaction”), then the General Partner shall, subject to the terms of any applicable Equity
Incentive Plan or Vesting Agreement, exercise immediately prior to the Common Unit Transaction its
right to cause a Forced Conversion with respect to the maximum number of LTIP Units then eligible
for conversion, taking into account any allocations that occur in connection with the Common Unit
Transaction or that would occur in connection with the Common Unit Transaction if the assets of the
Partnership were sold at the Common Unit Transaction price or, if applicable, at a value determined
by the General Partner in good faith using the value attributed to the Partnership Units in the
context of the Common Unit Transaction (in which case the Conversion Date shall be the effective
date of the Common Unit Transaction).

     In anticipation of such Forced Conversion and the consummation of the Common Unit Transaction,
the Partnership shall use commercially reasonable efforts to cause each LTIP Unitholder to be
afforded the right to receive in connection with such Common Unit Transaction in consideration for
the Common Units into which such LTIP Unitholder’s Units will be converted the same kind and amount
of cash, securities and other property (or any combination thereof) receivable upon the
consummation of such Common Unit Transaction by a holder of the same number of Common Units,
assuming such holder of Common Units is not a Person with which the Partnership consolidated or
into which the Partnership merged or which merged into the Partnership or to which such sale or
transfer was made, as the case may be (a “Constituent Person”), or an affiliate of a Constituent
Person. In the event that holders of Common Units have the opportunity to elect the form or type
of consideration to be received upon consummation of the Common Unit Transaction, prior to such
Common Unit Transaction the General Partner shall give prompt written notice to each LTIP
Unitholder of such election, and shall use commercially reasonable efforts to afford the LTIP
Unitholders the right to elect, by written notice to the General Partner, the form or type of
consideration to be received upon conversion of each LTIP Unit held by such holder into Common
Units in connection with such Common Unit Transaction. If an LTIP Unitholder fails to make such an
election, such holder (and any of its transferees) shall receive upon conversion of each LTIP Unit
held by such LTIP Unitholder (or by any of such LTIP Unitholder’s transferees) the same kind and
amount of consideration that a holder of a Common Unit would receive if such Common Unit holder
failed to make such an election.

     Subject to the rights of the Partnership and the General Partner under any Vesting Agreement
and any Equity Incentive Plan, the Partnership shall use commercially reasonable efforts to cause
the terms of any Common Unit Transaction to be consistent with the provisions of this Section
4.05(f) and to enter into an agreement with the successor or purchasing entity, as the case may be,
for the benefit of any LTIP Unitholders whose LTIP Units will not be converted into Common Units in
connection with the Common Unit Transaction that will (i) contain provisions enabling the holders
of LTIP Units that remain outstanding after such Common Unit Transaction to convert their LTIP
Units into securities as comparable as reasonably possible under the circumstances to the Common
Units and (ii) preserve as far as reasonably possible under the circumstances the distribution,
special allocation, conversion, and other rights set forth in this Agreement for the benefit of the
LTIP Unitholders.

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     4.06 Capital Accounts. A separate capital account (a “Capital Account”) shall be
established and maintained for each Partner in accordance with Regulations Section
1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership Interest in
exchange for more than a de minimis Capital Contribution, (ii) the Partnership distributes to a
Partner more than a de minimis amount of Partnership property as consideration for a Partnership
Interest, (iii) the Partnership is liquidated within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g) or (iv) the Partnership grants a Partnership Interest (other than a de minimis
Partnership Interest) as consideration for the provision of services to or for the benefit of the
Partnership to an existing Partner acting in a Partner capacity, or to a new Partner acting in a
Partner capacity or in anticipation of being a Partner, the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the General Partner, in its
sole and absolute discretion, and taking into account Section 7701(g) of the Code) in accordance
with Regulations Section 1.704-1(b)(2)(iv)(f); provided that the issuance of any LTIP Unit
shall be deemed to require a revaluation pursuant to this Section 4.06. When the Partnership’s
property is revalued by the General Partner, the Capital Accounts of the Partners shall be adjusted
in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require such
Capital Accounts to be adjusted to reflect the manner in which the unrealized gain or loss inherent
in such property (that has not been reflected in the Capital Accounts previously) would be
allocated among the Partners pursuant to Section 5.01 hereof if there were a taxable disposition of
such property for its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the date of the
revaluation. In making those adjustments to the Capital Accounts of the Partners occurring during
any taxable year in which this Agreement is effective, the General Partner shall allocate the
adjustments, to the extent possible and in its sole and absolute discretion, to cause the Capital
Account attributable to each Common Unit to be equal in amount; provided that the General
Partner shall not make any allocation that could cause any holder of Partnership Units to recognize
income or gain for federal income tax purposes.

     4.07 Percentage Interests. If the number of outstanding Common Units or other class
or series of Partnership Units increases or decreases during a taxable year, each Partner’s
Percentage Interest shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to a percentage equal to the number of Common Units or other class
or series of Partnership Units held by such Partner divided by the aggregate number of Common Units
or other class or series of Partnership Units, as applicable, outstanding after giving effect to
such increase or decrease. If the Partners’ Percentage Interests are adjusted pursuant to this
Section 4.07, the Profits and Losses for the taxable year in which the adjustment occurs shall be
allocated between the part of the year ending on the day when the Partnership’s property is
revalued by the General Partner and the part of the year beginning on the following day either (i)
as if the taxable year had ended on the date of the adjustment or (ii) based on the number of days
in each part. The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in which the adjustment
occurs. The allocation of Profits and Losses for the earlier part of the year shall be based on
the Percentage Interests before adjustment, and the allocation of Profits and Losses for the later
part shall be based on the adjusted Percentage Interests.

     4.08 No Interest on Contributions. No Partner shall be entitled to interest on its
Capital Contribution.

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     4.09 Return of Capital Contributions. No Partner shall be entitled to withdraw any
part of its Capital Contribution or its Capital Account or to receive any distribution from the
Partnership, except as specifically provided in this Agreement. Except as otherwise provided
herein, there shall be no obligation to return to any Partner or withdrawn Partner any part of such
Partner’s Capital Contribution for so long as the Partnership continues in existence.

     4.10 No Third-Party Beneficiary. No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in
equity, it being understood and agreed that the provisions of this Agreement, except as provided in
Section 6.03(h), shall be solely for the benefit of, and may be enforced solely by, the parties to
this Agreement and their respective successors and assigns. None of the rights or obligations of
the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the Partnership or pledged or
encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners. In addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation of the Act.
However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this
Agreement, any Limited Partner is obligated to return such money or property, such obligation shall
be the obligation of such Limited Partner and not of the General Partner. Without limiting the
generality of the foregoing, a deficit Capital Account of a Partner shall not be deemed to be a
liability of such Partner nor an asset or property of the Partnership.

ARTICLE V

PROFITS AND LOSSES; DISTRIBUTIONS

     5.01 Allocation of Profit and Loss.

          (a) Profit. Profit of the Partnership for each fiscal year of the Partnership shall
be allocated to the Partners in accordance with their respective Percentage Interests.

          (b) Loss. Loss of the Partnership for each fiscal year of the Partnership shall be
allocated to the Partners in accordance with their respective Percentage Interests.

          (c) Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any
expense of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations
Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage
Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the
meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the
“economic risk of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1),
(iii) if there is a net decrease in Partnership Minimum Gain within the meaning of Regulations
Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth
in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(f) and the ordering rules
contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain within the meaning of Regulations

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Section 1.704-2(i)(4) for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704(2)(g), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations
Section 1.704-2(j). The manner in which it is reasonably expected that the deductions attributable
to nonrecourse liabilities will be allocated for purposes of determining a Partner’s share of the
nonrecourse liabilities of the Partnership within the meaning of Regulations Section 1.752-3(a)(3)
shall be in accordance with a Partner’s Percentage Interest.

          (d) Qualified Income Offset. If a Partner receives in any taxable year an adjustment,
allocation or distribution described in subparagraphs (4), (5) or (6) of Regulations Section
1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account
that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable
years) items of income and gain in an amount and manner sufficient to eliminate such deficit
Capital Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b),
items of expense or loss shall be allocated to such Partner in an amount necessary to offset the
income or gain previously allocated to such Partner under this Section 5.01(d).

          (e) Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the
extent that such allocation would cause a deficit in such Partner’s Capital Account (after
reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and
(6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to the General
Partner. After the occurrence of an allocation of Loss to the General Partner in accordance with
this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b), Profit first shall
be allocated to the General Partner in an amount necessary to offset the Loss previously allocated
to the General Partner under this Section 5.01(e).

          (f) Allocations Between Transferor and Transferee. If a Partner transfers any part or
all of its Partnership Interest, the distributive shares of the various items of Profit and Loss
allocable among the Partners during such fiscal year of the Partnership shall be allocated between
the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended
on the date of the transfer or (ii) based on the number of days of such fiscal year that each was a
Partner without regard to the results of Partnership activities in the respective portions of such
fiscal year in which the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the transferor and the
transferee Partner.

          (g) Special Allocations Regarding LTIP Units. Notwithstanding the provisions of
Sections 5.01(a) and (b) hereof, Liquidating Gains shall first be allocated to the LTIP Unitholders
until their Economic Capital Account Balances, to the extent attributable to their ownership of
LTIP Units, are equal to (i) the Common Unit Economic Balance, multiplied by (ii) the number of
their LTIP Units. For this purpose, “Liquidating Gains” means net capital

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gains realized in connection with the actual or hypothetical sale of all or substantially all
of the assets of the Partnership, including but not limited to net capital gain realized in
connection with an adjustment to the value of Partnership assets under Section 704(b) of the Code.
The “Economic Capital Account Balances” of the LTIP Unit holders will be equal to their Capital
Account balances to the extent attributable to their ownership of LTIP Units. Similarly, the
“Common Unit Economic Balance” shall mean (i) the Capital Account balance of Summit REIT, plus the
amount of Summit REIT’s share of any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum
Gain, in either case to the extent attributable to Summit REIT’s direct or indirect ownership of
Common Units and computed on a hypothetical basis after taking into account all allocations through
the date on which any allocation is made under this Section 5.01(g), divided by (ii) the number of
Common Units directly or indirectly owned by Summit REIT. Any such allocations shall be made among
the LTIP Unitholders in proportion to the amounts required to be allocated to each under this
Section 5.01(g). The parties agree that the intent of this Section 5.01(g) is to make the Capital
Account balance associated with each LTIP Unit to be economically equivalent to the Capital Account
balance associated with Common Units directly or indirectly owned by Summit REIT (on a per-Unit
basis).

          (h) Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain,
expense or loss referred to in this Agreement shall be determined in accordance with federal income
tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit
and Loss shall not include items of income, gain and expense that are specially allocated pursuant
to Sections 5.01(c), (d)or (e) hereof. All allocations of income, Profit, gain, Loss and expense
(and all items contained therein) for federal income tax purposes shall be identical to all
allocations of such items set forth in this Section 5.01, except as otherwise required by Section
704(c) of the Code and Regulations Section 1.704-1(b)(4). With respect to properties acquired by
the Partnership, the General Partner shall have the authority to elect the method to be used by the
Partnership for allocating items of income, gain and expense as required by Section 704(c) of the
Code with respect to such properties, and such election shall be binding on all Partners.

     5.02 Distribution of Cash.

          (a) Subject to Sections 5.02(c), (d) and (e) hereof and to the terms of any Partnership Unit
Designation, the Partnership shall distribute cash at such times and in such amounts as are
determined by the General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other distribution period)
in proportion with their respective Common Units on the Partnership Record Date.

          (b) In accordance with Section 4.04(a)(ii), the LTIP Unitholders shall be entitled to receive
distributions in an amount per LTIP Unit equal to the Common Partnership Unit Distribution.

          (c) If a new or existing Partner acquires additional Partnership Units in exchange for a
Capital Contribution on any date other than a Partnership Record Date (other than Partnership Units
acquired by the General Partner or Summit REIT (or any direct or indirect wholly owned Subsidiary
of the General Partner or Summit REIT ) in connection with the

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issuance of additional REIT Shares or Additional Securities), the cash distribution
attributable to such additional Partnership Units relating to the Partnership Record Date next
following the issuance of such additional Partnership Units shall be reduced in the proportion to
(i) the number of days that such additional Partnership Units are held by such Partner bears to
(ii) the number of days between such Partnership Record Date and the immediately preceding
Partnership Record Date.

          (d) Notwithstanding any other provision of this Agreement, the General Partner is authorized
to take any action that it determines to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other federal, state or
local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code. To the extent that the Partnership is required to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income to a Partner or
assignee (including by reason of Section 1446 of the Code), either (i) if the actual amount to be
distributed to the Partner (the “Distributable Amount”) equals or exceeds the Withheld Amount, the
entire Distributable Amount shall be treated as a distribution of cash to such Partner, or (ii) if
the Distributable Amount is less than the Withheld Amount, the excess of the Withheld Amount over
the Distributable Amount shall be treated as a Partnership Loan from the Partnership to the Partner
on the day the Partnership pays over such amount to a taxing authority. A Partnership Loan shall
be repaid upon the demand of the Partnership or, alternatively, through withholding by the
Partnership with respect to subsequent distributions to the applicable Partner or assignee. In the
event that a Limited Partner fails to pay any amount owed to the Partnership with respect to the
Partnership Loan within 15 days after demand for payment thereof is made by the Partnership on the
Limited Partner, the General Partner, in its sole and absolute discretion, may elect to make the
payment to the Partnership on behalf of such Defaulting Limited Partner. In such event, on the
date of payment, the General Partner shall be deemed to have extended a General Partner Loan to the
Defaulting Limited Partner in the amount of the payment made by the General Partner and shall
succeed to all rights and remedies of the Partnership against the Defaulting Limited Partner as to
that amount. Without limitation, the General Partner shall have the right to receive any
distributions that otherwise would be made by the Partnership to the Defaulting Limited Partner
until such time as the General Partner Loan has been paid in full, and any such distributions so
received by the General Partner shall be treated as having been received by the Defaulting Limited
Partner and immediately paid to the General Partner.

     Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to this Section
5.02(d) shall bear interest at the lesser of (i) 300 basis points above the base rate on corporate
loans at large United States money center commercial banks, as published from time to time in
The Wall Street Journal, or (ii) the maximum lawful rate of interest on such obligation,
such interest to accrue from the date the Partnership or the General Partner, as applicable, is
deemed to extend the loan until such loan is repaid in full.

          (e) In no event may a Partner receive a distribution of cash with respect to a Partnership
Unit if such Partner is entitled to receive a cash dividend or other distribution of cash as the
holder of record of a REIT Share for which all or part of such Partnership Unit has been or will be
redeemed.

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     5.03 REIT Distribution Requirements. The General Partner shall use commercially
reasonable efforts to cause the Partnership to distribute amounts sufficient to enable Summit REIT
to pay distributions to its stockholders that will allow Summit REIT to (i) meet its distribution
requirement for qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid any
federal income or excise tax liability imposed by the Code, other than to the extent Summit REIT
elects to retain and pay income tax on its net capital gain.

     5.04 No Right to Distributions in Kind. No Partner shall be entitled to demand
property other than cash in connection with any distributions by the Partnership.

     5.05 Limitations on Return of Capital Contributions. Notwithstanding any of the
provisions of this Article V, no Partner shall have the right to receive, and the General Partner
shall not have the right to make, a distribution that includes a return of all or part of a
Partner’s Capital Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities to a Partner for
the return of his Capital Contribution, does not exceed the fair market value of the Partnership’s
assets.

     5.06 Distributions Upon Liquidation.

          (a) Upon liquidation of the Partnership, after payment of, or adequate provision for, debts
and obligations of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts in accordance with
their respective positive Capital Account balances.

          (b) For purposes of Section 5.06(a) hereof, the Capital Account of each Partner shall be
determined after all adjustments made in accordance with Sections 5.01 and 5.02 hereof resulting
from Partnership operations and from all sales and dispositions of all or any part of the
Partnership’s assets.

          (c) Any distributions pursuant to this Section 5.06 shall be made by the end of the
Partnership’s taxable year in which the liquidation occurs (or, if later, within 90 days after the
date of the liquidation). To the extent deemed advisable by the General Partner, appropriate
arrangements (including the use of a liquidating trust) may be made to assure that adequate funds
are available to pay any contingent debts or obligations.

     5.07 Substantial Economic Effect. It is the intent of the Partners that the
allocations of Profit and Loss under the Agreement have substantial economic effect (or be
consistent with the Partners’ interests in the Partnership in the case of the allocation of losses
attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted
by the Regulations promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.

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ARTICLE VI

RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER

     6.01 Management of the Partnership.

          (a) Except as otherwise expressly provided in this Agreement, the General Partner shall have
full, complete and exclusive discretion to manage and control the business of the Partnership for
the purposes herein stated, and shall make all decisions affecting the business and assets of the
Partnership. Subject to the restrictions specifically contained in this Agreement, the powers of
the General Partner shall include, without limitation, the authority to take the following actions
on behalf of the Partnership:

          (i) to acquire, purchase, own, operate, lease and dispose of any real property and any
other property or assets including, but not limited to, notes and mortgages that the General
Partner determines are necessary or appropriate in the business of the Partnership;

          (ii) to construct buildings and make other improvements on the properties owned or
leased by the Partnership;

          (iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership Units or
any securities (including secured and unsecured debt obligations of the Partnership, debt
obligations of the Partnership convertible into any class or series of Partnership Units, or
Rights relating to any class or series of Partnership Units) of the Partnership;

          (iv) to borrow or lend money for the Partnership, issue or receive evidences of
indebtedness in connection therewith, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such indebtedness, and
secure indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s
assets;

          (v) to pay, either directly or by reimbursement, all operating costs and general
administrative expenses of the Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement;

          (vi) to guarantee or become a co-maker of indebtedness of any Subsidiary of the General
Partner or the Partnership, refinance, increase the amount of, modify, amend or change the
terms of, or extend the time for the payment of, any such guarantee or indebtedness, and
secure such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on
the Partnership’s assets;

          (vii) to use assets of the Partnership (including, without limitation, cash on hand)
for any purpose consistent with this Agreement, including, without limitation, payment,
either directly or by reimbursement, of all operating costs and general and administrative
expenses of Summit REIT, the General Partner, the Partnership or any Subsidiary of the
foregoing, to third parties or to Summit REIT or the General Partner as set forth in this
Agreement;

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          (viii) to lease all or any portion of any of the Partnership’s assets, whether or not
the terms of such leases extend beyond the termination date of the Partnership and whether
or not any portion of the Partnership’s assets so leased are to be occupied by the lessee,
or, in turn, subleased in whole or in part to others, for such consideration and on such
terms as the General Partner may determine and to further lease property from third parties,
including ground leases;

          (ix) to prosecute, defend, arbitrate or compromise any and all claims or liabilities in
favor of or against the Partnership, on such terms and in such manner as the General Partner
may determine, and similarly to prosecute, settle or defend litigation with respect to the
Partners, the Partnership or the Partnership’s assets;

          (x) to file applications, communicate and otherwise deal with any and all governmental
agencies having jurisdiction over, or in any way affecting, the Partnership’s assets or any
other aspect of the Partnership’s business;

          (xi) to make or revoke any election permitted or required of the Partnership by any
taxing authority;

          (xii) to maintain such insurance coverage for public liability, fire and casualty, and
any and all other insurance for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in
such amounts and such types, as it shall determine from time to time;

          (xiii) to determine whether or not to apply any insurance proceeds for any property to
the restoration of such property or to distribute the same;

          (xiv) to establish one or more divisions of the Partnership, to hire and dismiss
employees of the Partnership or any division of the Partnership, and to retain legal
counsel, accountants, consultants, real estate brokers and such other persons as the General
Partner may deem necessary or appropriate in connection with the Partnership business and to
pay therefor such reasonable remuneration as the General Partner may deem reasonable and
proper;

          (xv) to retain other services of any kind or nature in connection with the Partnership
business, and to pay therefor such remuneration as the General Partner may deem reasonable
and proper;

          (xvi) to negotiate and conclude agreements on behalf of the Partnership with respect to
any of the rights, powers and authority conferred upon the General Partner;

          (xvii) to maintain accurate accounting records and to file promptly all federal, state
and local income tax returns on behalf of the Partnership;

          (xviii) to distribute Partnership cash or other Partnership assets in accordance with
this Agreement;

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          (xix) to form or acquire an interest in, and contribute property to, any further
limited or general partnerships, joint ventures or other relationships that it deems
desirable (including, without limitation, the acquisition of interests in, and the
contributions of property to, its Subsidiaries and any other Person in which it has an
equity interest from time to time);

          (xx) to establish Partnership reserves for working capital, capital expenditures,
contingent liabilities or any other valid Partnership purpose;

          (xxi) to merge, consolidate or combine the Partnership with or into another Person;

          (xxii) to enter into and perform obligations under underwriting or other agreements in
connection with issuances of securities by the Partnership or the General Partner or any
affiliate thereof;

          (xxiii) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” taxable as a
corporation under Section 7704 of the Code or an “investment company” or a subsidiary of an
investment company under the Investment Company Act of 1940; and

          (xxiv) to take such other action, execute, acknowledge, swear to or deliver such other
documents and instruments, and perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and conduct of the business and
affairs of the Partnership (including, without limitation, all actions consistent with
allowing Summit REIT at all times to qualify as a REIT unless Summit REIT voluntarily
terminates or revokes its REIT status) and to possess and enjoy all of the rights and powers
of a general partner as provided by the Act.

          (b) Except as otherwise provided herein, to the extent the duties of the General Partner
require expenditures of funds to be paid to third parties, the General Partner shall not have any
obligations hereunder except to the extent that Partnership funds are reasonably available to it
for the performance of such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual funds for payment to
third parties or to undertake any individual liability or obligation on behalf of the Partnership.

     6.02 Delegation of Authority. The General Partner may delegate any or all of its
powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal with
any Person for the transaction of the business of the Partnership, which Person may, under
supervision of the General Partner, perform any acts or services for the Partnership as the General
Partner may approve.

     6.03 Indemnification and Exculpation of Indemnitees.

          (a) The Partnership shall indemnify an Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses),
judgments, fines, settlements, and other amounts arising from any and all claims,

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demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee
may be involved, or is threatened to be involved, as a party or otherwise, unless it is established
that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property
or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause
to believe that the act or omission was unlawful. The termination of any proceeding by judgment,
order or settlement does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any proceeding by
conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner
contrary to that specified in this Section 6.03(a). Any indemnification pursuant to this Section
6.03 shall be made only out of the assets of the Partnership.

          (b) The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an
Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.03 has been met, and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct
has not been met.

          (c) The indemnification provided by this Section 6.03 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any
vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who
has ceased to serve in such capacity.

          (d) The Partnership may purchase and maintain insurance, as an expense of the Partnership, on
behalf of the Indemnitees and such other Persons as the General Partner shall determine, against
any liability that may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership’s activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of this Agreement.

          (e) For purposes of this Section 6.03, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan
or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of
this Section 6.03; and actions taken or omitted by the Indemnitee with respect to an employee
benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that
is not opposed to the best interests of the Partnership.

          (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.

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          (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section
6.03 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

          (h) The provisions of this Section 6.03 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.

          (i) Any amendment, modification or repeal of this Section 6.03 or any provision hereof shall
be prospective only and shall not in any way affect the indemnification of an Indemnitee by the
Partnership under this Section 6.03 as in effect immediately prior to such amendment, modification
or repeal with respect to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when claims relating to such matters may arise or be
asserted.

     6.04 Liability of the General Partner.

          (a) Notwithstanding anything to the contrary set forth in this Agreement, neither the General
Partner, nor any of its directors, officers, agents or employees shall be liable for monetary
damages to the Partnership or any Partners for losses sustained or liabilities incurred as a result
of errors in judgment or mistakes of fact or law or of any act or omission if any such party acted
in good faith. The General Partner shall not be in breach of any duty that the General Partner may
owe to the Limited Partners or the Partnership or any other Persons under this Agreement or of any
duty stated or implied by law or equity provided the General Partner, acting in good faith, abides
by the terms of this Agreement.

          (b) The Limited Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership, the Limited Partners and Summit REIT’s stockholders collectively, that the General
Partner is under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the tax consequences of
some, but not all, of the Limited Partners) in deciding whether to cause the Partnership to take
(or decline to take) any actions. In the event of a conflict between the interests of the
stockholders of Summit REIT on the one hand and the Limited Partners on the other, the General
Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either the
stockholders of Summit REIT or the Limited Partners; provided, however, that for so
long as the General Partner owns a controlling interest in the Partnership, any such conflict that
the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner
not adverse to either the stockholders of Summit REIT or the Limited Partners shall be resolved in
favor of the stockholders of Summit REIT. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred or benefits not derived by the Limited Partners
in connection with such decisions.

          (c) Subject to its obligations and duties as General Partner set forth in Section 6.01 hereof,
the General Partner may exercise any of the powers granted to it under this Agreement and perform
any of the duties imposed upon it hereunder either directly or by or

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through its agents. The General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by it in good faith.

          (d) Notwithstanding any other provisions of this Agreement or the Act, any action of the
General Partner on behalf of the Partnership or any decision of the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith belief that such action or
omission is necessary or advisable in order (i) to protect the ability of Summit REIT to continue
to qualify as a REIT or (ii) to prevent Summit REIT from incurring any taxes under Section 857,
Section 4981 or any other provision of the Code, is expressly authorized under this Agreement and
is deemed approved by all of the Limited Partners.

          (e) Any amendment, modification or repeal of this Section 6.04 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the General Partner’s or any
of its officers’, directors’, agents’ or employees’ liability to the Partnership and the Limited
Partners under this Section 6.04 as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when claims relating to such matters may arise or be
asserted.

     6.05 Partnership Obligations.

          (a) Except as provided in this Section 6.05 and elsewhere in this Agreement (including the
provisions of Articles V and VI hereof regarding distributions, payments and allocations to which
it may be entitled), the General Partner shall not be compensated for its services as general
partner of the Partnership.

          (b) All Administrative Expenses shall be obligations of the Partnership, and the General
Partner or Summit REIT shall be entitled to reimbursement by the Partnership for any expenditure
(including Administrative Expenses) incurred by it on behalf of the Partnership that shall be made
other than out of the funds of the Partnership. All reimbursements hereunder shall be
characterized for federal income tax purposes as expenses of the Partnership incurred on its
behalf, and not as expenses of the General Partner or Summit REIT.

     6.06 Outside Activities. Subject to Section 6.08 hereof, the Certificate of Formation
and any agreements entered into by the General Partner or its Affiliates with the Partnership or a
Subsidiary, any officer, director, employee, agent, trustee, Affiliate or member of the General
Partner, the General Partner, Summit REIT and any stockholder of Summit REIT shall be entitled to
and may have business interests and engage in business activities in addition to those relating to
the Partnership, including business interests and activities substantially similar or identical to
those of the Partnership. Neither the Partnership nor any of the Limited Partners shall have any
rights by virtue of this Agreement in any such business ventures, interest or activities. None of
the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any such business ventures, interests or activities,
and the General Partner and Summit REIT shall have no obligation pursuant to this Agreement to
offer any interest in any such business ventures, interests and activities to the Partnership or
any Limited Partner, even if such opportunity is of a character that, if presented to the
Partnership or any Limited Partner, could be taken by such Person.

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     6.07 Employment or Retention of Affiliates.

          (a) Any Affiliate of the General Partner may be employed or retained by the Partnership and
may otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager, furnisher of
goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any
compensation, price or other payment therefor that the General Partner determines to be fair and
reasonable.

          (b) The Partnership may lend or contribute to its Subsidiaries or other Persons in which it
has an equity investment, and such Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the General Partner. The foregoing
authority shall not create any right or benefit in favor of any Subsidiary or any other Person.

          (c) The Partnership may transfer assets to joint ventures, other partnerships, corporations or
other business entities in which it is or thereby becomes a participant upon such terms and subject
to such conditions as the General Partner deems are consistent with this Agreement and applicable
law.

     6.08 Summit REIT’s Activities. Summit REIT agrees that, generally, all business
activities of Summit REIT, including activities pertaining to the acquisition, development,
ownership of or investment in hotel properties or other property, shall be conducted through the
Partnership or one or more Subsidiaries of the Partnership; provided, however, that
Summit REIT may make direct acquisitions or undertake business activities if such acquisitions or
activities are made in connection with the issuance of Additional Securities by Summit REIT or the
business activity has been approved by a majority of the Independent Directors. If, at any time,
Summit REIT acquires material assets (other than Partnership Units or other assets on behalf of the
Partnership) without transferring such assets to the Partnership, the definition of “REIT Shares
Amount” may be adjusted, as reasonably determined by the General Partner, to reflect only the fair
market value of a REIT Share attributable to Partnership Units directly or indirectly owned by
Summit REIT and other assets held on behalf of the Partnership.

     6.09 Title to Partnership Assets. Title to Partnership assets, whether real, personal
or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership interest in such
Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be
held in the name of the Partnership, the General Partner, Summit REIT or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner or Summit REIT.
Summit REIT hereby declares and warrants that any Partnership assets for which legal title is held
in the name of the General Partner or Summit REIT or any nominee or Affiliate of the General
Partner or Summit REIT shall be held by the General Partner or Summit REIT for the use and benefit
of the Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner or Summit REIT shall use its commercially reasonable
efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon
as reasonably practicable. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which legal title to such
Partnership assets is held.

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ARTICLE VII

CHANGES IN GENERAL PARTNER

     7.01 Transfer of the General Partner’s Partnership Interest.

          (a) Other than to an Affiliate of Summit REIT, the General Partner shall not transfer all or
any portion of its General Partnership Interests, and the General Partner shall not withdraw as
General Partner, except as provided in or in connection with a transaction contemplated by Sections
7.01(c), (d) or (e) hereof.

          (b) The General Partner agrees that its General Partnership Interest will at all times be in
the aggregate at least 0.1%.

          (c) Except as otherwise provided in Section 7.01(d) or (e) hereof, neither the General Partner
nor Summit REIT shall engage in any merger, consolidation or other combination with or into another
Person or sale of all or substantially all of its assets (other than in connection with a change in
the General Partner’s state of organization or organizational form or Summit REIT’s state of
incorporation or organizational form), in each case which results in a Change of Control of the
General Partner or Summit REIT (a “Transaction”), unless at least one of the following conditions
is met:

          (i) the consent of a Majority in Interest (other than the General Partner or any
Subsidiary of the General Partner or Summit REIT) is obtained;

          (ii) as a result of such Transaction, all Limited Partners (other than the General
Partner, Summit REIT and any Subsidiary of the General Partner or Summit REIT, and, in the
case of LTIP Unitholders, subject to the terms of any applicable Equity Incentive Plan or
Vesting Agreement) will receive, or have the right to receive, for each Partnership Unit an
amount of cash, securities or other property equal or substantially equivalent in value, as
determined by the General Partner in good faith, to the product of the Conversion Factor and
the greatest amount of cash, securities or other property paid in the Transaction to a
holder of one REIT Share in consideration of one REIT Share, provided that if, in
connection with such Transaction, a purchase, tender or exchange offer (“Offer”) shall have
been made to and accepted by the holders of more than 50% of the outstanding REIT Shares,
each holder of Partnership Units (other than the General Partner, Summit REIT and any
Subsidiary of the General Partner or Summit REIT) shall be given the option to exchange its
Partnership Units for an amount of cash, securities or other property equal or substantially
equivalent in value, as determined by the General Partner in good faith, to the greatest
amount of cash, securities or other property that such Limited Partner would have received
had it (A) exercised its Common Unit Redemption Right pursuant to Section 8.04 hereof and
(B) sold, tendered or exchanged pursuant to the Offer the REIT Shares received upon exercise
of the Common Unit Redemption Right immediately prior to the expiration of the Offer; or

          (iii) either the General Partner or Summit REIT, as applicable, is the surviving entity
in the Transaction and either (A) the holders of REIT Shares do not receive cash, securities
or other property in the Transaction or (B) all Limited Partners

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(other than the General Partner, Summit REIT, and any Subsidiary of the General Partner
or Summit REIT, and, in the case of LTIP Unitholders, subject to the terms of any applicable
Equity Incentive Plan or Vesting Agreement) receive for each Partnership Unit an amount of
cash, securities or other property (expressed as an amount per REIT Share) equal or
substantially equivalent in value, as determined by the General Partner in good faith, to
the product of the Conversion Factor and the greatest amount of cash, securities or other
property (expressed as an amount per REIT Share) received in the Transaction by any holder
of REIT Shares.

          (d) Notwithstanding Section 7.01(c) hereof, either of the General Partner or Summit REIT, as
applicable, may merge with or into or consolidate with another entity if immediately after such
merger or consolidation (i) substantially all of the assets of the successor or surviving entity
(the “Survivor”), other than Partnership Units held directly or indirectly by the General Partner
or Summit REIT, are contributed, directly or indirectly, to the Partnership as a Capital
Contribution in exchange for Partnership Units, or for economically equivalent partnership
interests issued by a Subsidiary Partnership established at the direction of the Board of
Directors, with a fair market value equal to the value of the assets so contributed as determined
by the Survivor in good faith and (ii) the Survivor expressly agrees to assume all obligations of
the General Partner and Summit REIT hereunder. Upon such contribution and assumption, the Survivor
shall have the right and duty to amend this Agreement as set forth in this Section 7.01(d). The
Survivor shall in good faith arrive at a new method for the calculation of the Cash Amount, the
REIT Shares Amount and Conversion Factor for a Partnership Unit after any such merger or
consolidation so as to approximate the existing method for such calculation as closely as
reasonably possible. Such calculation shall take into account, among other things, the kind and
amount of securities, cash and other property that was receivable upon such merger or consolidation
by a holder of REIT Shares or options, warrants or other rights relating thereto, and which a
holder of Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this Agreement shall provide
for adjustment to such method of calculation, which shall be as nearly equivalent as may be
practicable to the adjustments provided for with respect to the Conversion Factor. The Survivor
also shall in good faith modify the definition of REIT Shares and make such amendments to Section
8.04 hereof so as to approximate the existing rights and obligations set forth in Section 8.04
hereof as closely as reasonably possible. The above provisions of this Section 7.01(d) shall
similarly apply to successive mergers or consolidations permitted hereunder.

     In respect of any transaction described in the preceding paragraph, each of the General
Partner and Summit REIT is required to use its commercially reasonable efforts to structure such
transaction to avoid causing the Limited Partners (other than the General Partner, Summit REIT or
any Subsidiary thereof) to recognize a gain for federal income tax purposes by virtue of the
occurrence of, or their participation in, such transaction, provided such efforts are
consistent with and subject in all respects to the exercise of the Board of Directors’ fiduciary
duties to the stockholders of Summit REIT under applicable law.

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          (e) Notwithstanding anything in this Article VII,

          (i) The General Partner may transfer all or any portion of its General Partnership
Interest to (A) any wholly owned Subsidiary of the General Partner or (B) the owner of all
of the ownership interests of the General Partner, and following a transfer of all of its
General Partnership Interest, may withdraw as General Partner; and

          (ii) Summit REIT may engage in a transaction required by law or by the rules of any
national securities exchange or over-the-counter interdealer quotation system on which the
REIT Shares are listed or traded.

     7.02 Admission of a Substitute or Additional General Partner. A Person shall be
admitted as a substitute or additional General Partner of the Partnership only if the following
terms and conditions are satisfied:

          (a) the Person to be admitted as a substitute or additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a
counterpart thereof and such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General Partner, and a certificate evidencing the
admission of such Person as a General Partner shall have been filed for recordation and all other
actions required by Section 2.05 hereof in connection with such admission shall have been
performed;

          (b) if the Person to be admitted as a substitute or additional General Partner is a
corporation or a partnership, it shall have provided the Partnership with evidence satisfactory to
counsel for the Partnership of such Person’s authority to become a General Partner and to be bound
by the terms and provisions of this Agreement; and

          (c) counsel for the Partnership shall have rendered an opinion (relying on such opinions from
other counsel as may be necessary) that the admission of the Person to be admitted as a substitute
or additional General Partner is in conformity with the Act, that none of the actions taken in
connection with the admission of such Person as a substitute or additional General Partner will
cause (i) the Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner’s limited liability.

     7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner.

          (a) Upon the occurrence of an Event of Bankruptcy as to the General Partner (and its removal
pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of the General
Partner (except that, if the General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of the General Partner if the business of the
General Partner is continued by the remaining partner or partners), the Partnership shall be
dissolved and terminated unless the Partnership is continued pursuant to Section 7.03(b) hereof.
The merger of the General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to be the withdrawal,
dissolution or removal of the General Partner.

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          (b) Following the occurrence of an Event of Bankruptcy as to the General Partner (and its
removal pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of the
General Partner (except that, if the General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner
in, such partnership shall be deemed not to be a dissolution of the General Partner if the business
of such General Partner is continued by the remaining partner or partners), the Limited Partners,
within 90 days after such occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof
and any other provisions of this Agreement, a substitute General Partner by consent of a Majority
in Interest. If the Limited Partners elect to continue the business of the Partnership and admit a
substitute General Partner, the relationship with the Partners and of any Person who has acquired
an interest of a Partner in the Partnership shall be governed by this Agreement.

     7.04 Removal of General Partner.

          (a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, the General
Partner, the General Partner shall be deemed to be removed automatically; provided,
however, that if the General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution or Event of Bankruptcy of a partner in such partnership shall be
deemed not to be a dissolution of the General Partner if the business of the General Partner is
continued by the remaining partner or partners. The Limited Partners may not remove the General
Partner, with or without cause.

          (b) If the General Partner has been removed pursuant to this Section 7.04 and the Partnership
is continued pursuant to Section 7.03 hereof, the General Partner shall promptly transfer and
assign its General Partnership Interest in the Partnership to the substitute General Partner
approved by a Majority in Interest in accordance with Section 7.03(b) hereof and otherwise be
admitted to the Partnership in accordance with Section 7.02 hereof. At the time of assignment, the
removed General Partner shall be entitled to receive from the substitute General Partner the fair
market value of the General Partnership Interest of such removed General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General Partner and a
Majority in Interest (excluding the General Partner and any Subsidiary of the General Partner)
within ten days following the removal of the General Partner. In the event that the parties are
unable to agree upon an appraiser, the removed General Partner and a Majority in Interest
(excluding the General Partner and any Subsidiary of the General Partner) each shall select an
appraiser. Each such appraiser shall complete an appraisal of the fair market value of the removed
General Partner’s General Partnership Interest within 30 days of the General Partner’s removal, and
the fair market value of the removed General Partner’s General Partnership Interest shall be the
average of the two appraisals; provided, however, that if the higher appraisal
exceeds the lower appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the removed General Partner’s
General Partnership Interest no later than 60 days after the removal of the General Partner. In
such case, the fair market value of the removed General Partner’s General Partnership Interest
shall be the average of the two appraisals closest in value.

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          (c) The General Partnership Interest of a removed General Partner, during the time after
default until transfer under Section 7.04(b) hereof, shall be converted to that of a special
Limited Partner; provided, however, such removed General Partner shall not have any
rights to participate in the management and affairs of the Partnership, and shall not be entitled
to any portion of the income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead, such removed General
Partner shall receive and be entitled only to retain distributions or allocations of such items
that it would have been entitled to receive in its capacity as General Partner, until the transfer
is effective pursuant to Section 7.04(b) hereof.

          (d) All Partners shall have given and hereby do give such consents, shall take such actions
and shall execute such documents as shall be legally necessary and sufficient to effect all the
foregoing provisions of this Section 7.04.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

     8.01 Management of the Partnership. The Limited Partners shall not participate in the
management or control of Partnership business nor shall they transact any business for the
Partnership, nor shall they have the power to sign for or bind the Partnership, such powers being
vested solely and exclusively in the General Partner. The Limited Partners covenant and agree not
to hold themselves out in a manner that could reasonably be considered in contravention of the
terms hereof by any third party.

     8.02 Power of Attorney. Each Limited Partner by entry into this Agreement through
execution, execution by power of attorney or other consent, hereby irrevocably appoints the General
Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and in its name,
place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or
record, at the appropriate public offices, any and all documents, certificates and instruments
(including, without limitation, this Agreement and all amendments or restatements thereof) as may
be deemed necessary or desirable by the General Partner to carry out fully the provisions of this
Agreement and the Act in accordance with their terms, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the Limited Partner, or
the transfer by the Limited Partner of any part or all of its Partnership Interest.

     8.03 Limitation on Liability of Limited Partners. No Limited Partner shall be liable
for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall
be liable to the Partnership only to make payments of its Capital Contribution, if any, as and when
due hereunder. After its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital Contributions or other
payments or lend any funds to the Partnership.

     8.04 Common Unit Redemption Right.

          (a) Subject to Sections 8.04(b), (c), (d), (e) and (f) hereof and the provisions of any
agreements between the Partnership and one or more Limited Partners with respect to Common Units
(including any LTIP Units that are converted into Common Units) held by them,

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each Limited Partner (other than the General Partner, Summit REIT or any Subsidiary of the
General Partner or Summit REIT, shall have the right (the “Common Unit Redemption Right”) to
require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common
Units held by such Limited Partner at a redemption price equal to and in the form of the Common
Redemption Amount to be paid by the Partnership, provided that (i) such Common Units shall
have been outstanding for at least one year (or such lesser time as determined by the General
Partner in its sole and absolute discretion), and (ii) subject to any restriction agreed to in
writing between the Redeeming Limited Partner and the General Partner. The Common Unit Redemption
Right shall be exercised pursuant to a Notice of Exercise of Redemption Right in the form attached
hereto as Exhibit B delivered to the Partnership (with a copy to the General Partner) by
the Limited Partner who is exercising the Common Unit Redemption Right (the “Redeeming Limited
Partner”) and such notice shall be irrevocable unless otherwise agreed upon by the General Partner.
In such event, the Partnership shall deliver the Cash Amount to the Redeeming Limited Partner.
Notwithstanding the foregoing, the Partnership shall not be obligated to satisfy such Common Unit
Redemption Right if the General Partner elects to cause Summit REIT to purchase the Common Units
subject to the Notice of Redemption pursuant to Section 8.04(b) hereof. No Limited Partner may
deliver more than two Notices of Redemption during each calendar year unless otherwise agreed upon
by the General Partner. A Limited Partner may not exercise the Common Unit Redemption Right for
less than one thousand (1,000) Common Units or, if such Limited Partner holds less than one
thousand (1,000) Common Units, all of the Common Units held by such Limited Partner. The Redeeming
Limited Partner shall have no right, with respect to any Common Units so redeemed, to receive any
distribution paid with respect to Common Units if the record date for such distribution is on or
after the Specified Redemption Date.

          (b) Notwithstanding the provisions of Section 8.04(a) hereof, if a Limited Partner exercises
the Common Unit Redemption Right by delivering to the Partnership a Notice of Redemption, then the
Partnership may, in its sole and absolute discretion, elect to cause Summit REIT to purchase
directly and acquire some or all of, and in such event Summit REIT agrees to purchase and acquire,
such Common Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT
Shares Amount, as elected by Summit REIT (in its sole and absolute discretion) on the Specified
Redemption Date, whereupon Summit REIT shall acquire the Common Units offered for redemption by the
Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of
such Common Units.

     In the event Summit REIT purchases Common Units with respect to the exercise of a Common Unit
Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming
Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Common Unit
Redemption Right, and each of the Redeeming Limited Partner, the Partnership and Summit REIT shall
treat the transaction between Summit REIT and the Redeeming Limited Partner for federal income tax
purposes as a sale of the Redeeming Limited Partner’s Common Units to Summit REIT. Each Redeeming
Limited Partner agrees to execute such documents as Summit REIT may reasonably require in
connection with the issuance of REIT Shares upon exercise of the Common Unit Redemption Right.

     Each Redeeming Limited Partner covenants and agrees that all Common Units subject to a Notice
of Redemption will be delivered to the Partnership or Summit REIT free and clear of all

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liens, claims and encumbrances whatsoever and should any such liens, claims or encumbrances
exist or arise with respect to such Common Units, neither the Partnership nor Summit REIT shall be
under any obligation to acquire such Common Units.

          (c) Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner
shall not be entitled to exercise the Common Unit Redemption Right if the delivery of REIT Shares
to such Limited Partner on the Specified Redemption Date by Summit REIT pursuant to Section 8.04(b)
hereof (regardless of whether or not Summit REIT would in fact purchase the Common Units pursuant
to Section 8.04(b) hereof) would (i) result in such Limited Partner or any other Person (as defined
in the Articles) owning, directly or indirectly, REIT Shares in excess of the Stock Ownership Limit
or any Excepted Holder Limit (each as defined in the Articles) and calculated in accordance
therewith, except as provided in the Articles, (ii) result in REIT Shares being owned by fewer than
100 persons (determined without reference to any rules of attribution), (iii) result in Summit REIT
being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause Summit REIT to
own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a
TRS) of Summit REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the
meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Summit REIT to fail to qualify as
a REIT under the Code, including, but not limited to, as a result of any “eligible independent
contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified lodging
facility” (as defined in Section 856(d)(9)(D) of the Code) on behalf of a TRS failing to qualify as
such, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with
any other distribution of REIT Shares or Common Units for purposes of complying with the
registration provisions of the Securities Act. Summit REIT, in its sole and absolute discretion,
may waive the restriction on redemption set forth in this Section 8.04(c).

          (d) Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04
shall be paid on the Specified Redemption Date; provided, however, that the General
Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 90
days to the extent required for Summit REIT to cause additional REIT Shares to be issued to provide
financing to be used to make such payment of the Cash Amount and may also delay such Specified
Redemption Date to the extent necessary to effect compliance with applicable requirements of the
law. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04
shall be paid on the Specified Redemption Date; provided, however, that the General
Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180
days to the extent required for Summit REIT to cause additional REIT Shares to be issued and may
also delay such Specified Redemption Date to the extent necessary to effect compliance with
applicable requirements of the law. Notwithstanding the foregoing, Summit REIT agrees to use its
commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units
hereunder to occur as quickly as reasonably possible.

          (e) Notwithstanding any other provision of this Agreement, the General Partner is authorized
to take any action that it determines to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other federal, state,
local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Common Unit
Redemption Right. If a Redeeming Limited Partner believes that it is

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exempt from such withholding upon the exercise of the Common Unit Redemption Right, such
Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as
Exhibit C-1 or Exhibit C-2, as applicable, and any similar forms or certificates
required to avoid or reduce the withholding under federal, state, local or foreign law or such
other form as the General Partner may reasonably request. If the Partnership, Summit REIT or the
General Partner is required to withhold and pay over to any taxing authority any amount upon a
Redeeming Limited Partner’s exercise of the Common Unit Redemption Right and if the Common
Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an
amount received by such Partner in redemption of its Common Units. If, however, the Common
Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive
any portion of the Common Redemption Amount, the Common Redemption Amount shall be treated as an
amount received by such Partner in redemption of its Common Units, and the Partner shall contribute
the excess of the Withheld Amount over the Common Redemption Amount to the Partnership before the
Partnership is required to pay over such excess to a taxing authority.

          (f) Notwithstanding any other provision of this Agreement, the General Partner may place
appropriate restrictions on the ability of the Limited Partners to exercise their Common Unit
Redemption Rights as and if deemed necessary or reasonable to ensure that the Partnership does not
constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General
Partner determines that imposing such restrictions is necessary, the General Partner shall give
prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which
notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that,
in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the
Partnership being treated as a “publicly traded partnership” under Section 7704 of the Code.

     8.05 Registration. Subject to the terms of any agreement between the General Partner
and a Limited Partner with respect to Common Units held by such Limited Partner:

          (a) Shelf Registration of the REIT Shares. Following the date on which Summit REIT
becomes eligible to use a registration statement on Form S-3 for the registration of securities
under the Securities Act (the “S-3 Eligible Date”) Summit REIT shall file with the Commission a
shelf registration statement under Rule 415 of the Securities Act (a “Registration Statement”), or
any similar rule that may be adopted by the Commission, covering (i) the issuance of REIT Shares
issuable upon redemption of the Common Units held by such Limited Partner as of the date of this
Agreement (“Redemption Shares”) and/or (ii) the resale by the holder of the Redemption Shares;
provided, however, that Summit REIT shall be required to file only two such
registrations in any 12-month period. In connection therewith, Summit REIT will:

          (1) use commercially reasonable efforts to have such Registration Statement declared
effective;

          (2) register or qualify the Redemption Shares covered by the Registration Statement
under the securities or blue sky laws of such jurisdictions within the United States as
required by law, and do such other reasonable acts and things as may be required of it to
enable such holders to consummate the sale or other disposition in

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such jurisdictions of the Redemption Shares; provided, however, that
Summit REIT shall not be required to (i) qualify as a foreign corporation or consent to a
general or unlimited service or process in any jurisdictions in which it would not otherwise
be required to be qualified or so consent or (ii) qualify as a dealer in securities; and

          (3) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission in connection with a Registration Statement.

     Summit REIT further agrees to supplement or make amendments to each Registration Statement, if
required by the rules, regulations or instructions applicable to the registration form utilized by
Summit REIT or by the Securities Act or rules and regulations thereunder for such Registration
Statement. Each Limited Partner agrees to furnish to Summit REIT, upon request, such information
with respect to the Limited Partner as may be required to complete and file the Registration
Statement.

     In connection with and as a condition to Summit REIT’s obligations with respect to the filing
of a Registration Statement pursuant to this Section 8.05, each Limited Partner agrees with Summit
REIT that:

          (w) it will provide in a timely manner to Summit REIT such information with respect to the
Limited Partner as reasonably required to complete the Registration Statement or as otherwise
required to comply with applicable securities laws and regulations;

          (x) it will not offer or sell its Redemption Shares until (A) such Redemption Shares have been
included in a Registration Statement and (B) it has received notice that the Registration Statement
covering such Redemption Shares, or any post-effective amendment thereto, has been declared
effective by the Commission, such notice to have been satisfied by the posting by the Commission on
www.sec.gov of a notice of effectiveness;

          (y) if Summit REIT determines in its good faith judgment, after consultation with counsel,
that the use of the Registration Statement, including any pre- or post-effective amendment thereto,
or the use of any prospectus contained in such Registration Statement would require the disclosure
of important information that Summit REIT has a bona fide business purpose for preserving as
confidential or the disclosure of which, in the judgment of Summit REIT, would impede Summit REIT’s
ability to consummate a significant transaction, upon written notice of such determination by
Summit REIT (which notice shall be deemed sufficient if given through the issuance of a press
release or filing with the Commission and, if such notice is not publicly distributed, the Limited
Partner agrees to keep the subject information confidential and acknowledges that such information
may constitute material non-public information subject to the applicable restrictions under
securities laws), the rights of each Limited Partner to offer, sell or distribute its Redemption
Shares pursuant to such Registration Statement or prospectus or to require Summit REIT to take
action with respect to the registration or sale of any Redemption Shares pursuant to a Registration
Statement (including any action contemplated by this Section 8.05) will be suspended until the date
upon which Summit REIT notifies such Limited Partner in writing (which notice shall be deemed
sufficient if given through the issuance of a press release or filing with the Commission and, if
such notice is not publicly distributed, the

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Limited Partner
agrees to keep the subject information confidential and acknowledges that such information may
constitute material non-public information subject to the applicable restrictions under securities
laws) that suspension of such rights for the grounds set forth in this paragraph is no longer
necessary; provided, however, that Summit REIT may not suspend such rights for an
aggregate period of more than 180 days in any 12-month period; and

          (z) in the case of the registration of any underwritten equity offering proposed by Summit
REIT (other than any registration by Summit REIT on Form S-8, or a successor or substantially
similar form, of an employee stock option, stock purchase or compensation plan or of securities
issued or issuable pursuant to any such plan, each Limited Partner will agree, if requested in
writing by the managing underwriter or underwriters administering such offering, not to effect any
offer, sale or distribution of any REIT Shares or Redemption Shares (or any option or right to
acquire REIT Shares or Redemption Shares) during the period commencing on the tenth day prior to
the expected effective date (which date shall be stated in such notice) of the registration
statement covering such underwritten primary equity offering or, if such offering shall be a
“take-down” from an effective shelf registration statement, the tenth day prior to the expected
commencement date (which date shall be stated in such notice) of such offering, and ending on the
date specified by such managing underwriter in such written request to the Limited Partners;
provided, however, that no Limited Partner shall be required to agree not to effect
any offer, sale or distribution of its Redemption Shares for a period of time that is longer than
the greater of 90 days or the period of time for which any senior executive of Summit REIT is
required so to agree in connection with such offering. Nothing in this paragraph shall be read to
limit the ability of any Limited Partner to redeem its Common Units in accordance with the terms of
this Agreement.

          (b) Listing on Securities Exchange. If Summit REIT lists or maintains the listing of
REIT Shares on any securities exchange or national market system, it shall, at its expense and as
necessary to permit the registration and sale of the Redemption Shares hereunder, list thereon,
maintain and, when necessary, increase such listing to include such Redemption Shares.

          (c) Registration Not Required. Notwithstanding the foregoing, Summit REIT shall not
be required to file or maintain the effectiveness of a registration statement relating to
Redemption Shares after the first date upon which, in the opinion of counsel to Summit REIT, all of
the Redemption Shares covered thereby could be sold by the holders thereof either (i) pursuant to
Rule 144 under the Securities Act, or any successor rule thereto (“Rule 144”) without limitation as
to amount or manner of sale or (ii) pursuant to Rule 144 in one transaction in accordance with the
volume limitations contained in Rule 144(e).

          (d) Allocation of Expenses. The Partnership shall pay all expenses in connection with
the Registration Statement, including without limitation (i) all expenses incident to filing with
the Financial Industry Regulatory Authority, Inc., (ii) registration fees, (iii) printing expenses,
(iv) accounting and legal fees and expenses, except to the extent holders of Redemption Shares
elect to engage accountants or attorneys in addition to the accountants and attorneys engaged by
Summit REIT or the Partnership, which fees and expenses for such accountants or attorneys shall be
for the account of the holders of the Redemption Shares, (v) accounting expenses incident to or
required by any such registration or qualification and

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(vi) expenses of complying with the securities or blue sky laws of any jurisdictions in connection
with such registration or qualification; provided, however, neither the Partnership
nor Summit REIT shall be liable for (A) any discounts or commissions to any underwriter or broker
attributable to the sale of Redemption Shares, or (B) any fees or expenses incurred by holders of
Redemption Shares in connection with such registration that, according to the written instructions
of any regulatory authority, the Partnership or Summit REIT is not permitted to pay.

          (e) Indemnification.

          (i) In connection with the Registration Statement, the General Partner and the
Partnership agree to indemnify each holder of Redemption Shares and each Person who controls
any such holder of Redemption Shares within the meaning of Section 15 of the Securities Act,
against all losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) caused by any untrue, or alleged untrue, statement of a material fact
contained in the Registration Statement, preliminary prospectus or prospectus (as amended or
supplemented if Summit REIT shall have furnished any amendments or supplements thereto) or
caused by any omission or alleged omission, to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses are caused by any untrue statement,
alleged untrue statement, omission, or alleged omission based upon information furnished to
Summit REIT by the Limited Partner of the holder for use therein. Summit REIT and each
officer, director and controlling person of Summit REIT and the Partnership shall be
indemnified by each Limited Partner or holder of Redemption Shares covered by the
Registration Statement for all such losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) caused by any untrue, or alleged untrue,
statement or any omission, or alleged omission, based upon information furnished to Summit
REIT by the Limited Partner or the holder for use therein.

          (ii) Promptly upon receipt by a party indemnified under this Section 8.05(e) of notice
of the commencement of any action against such indemnified party in respect of which
indemnity or reimbursement may be sought against any indemnifying party under this Section
8.05(e), such indemnified party shall notify the indemnifying party in writing of the
commencement of such action, but the failure to so notify the indemnifying party shall not
relieve it of any liability that it may have to any indemnified party otherwise than under
this Section 8.05(e) unless such failure shall materially adversely affect the defense of
such action. In case notice of commencement of any such action shall be given to the
indemnifying party as above provided, the indemnifying party shall be entitled to
participate in and, to the extent it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the reasonable fees and expenses of such counsel (other than reasonable
costs of investigation) shall be paid by the indemnified party unless (i) the indemnifying
party agrees to pay the same, (ii) the indemnifying party fails to assume the defense of
such action with counsel reasonably satisfactory to the indemnified party or (iii) the named
parties to any such action

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(including any impleaded parties) have been advised by such counsel that representation of such indemnified
party and the indemnifying party by the same counsel would be inappropriate under applicable
standards of professional conduct (in which case the indemnified party shall have the right
to separate counsel and the indemnifying party shall pay the reasonable fees and expenses of
such separate counsel, provided that, the indemnifying party shall not be liable for more
than one separate counsel). No indemnifying party shall be liable for any settlement of any
proceeding entered into without its consent.

          (f) Contribution.

          (i) If for any reason the indemnification provisions contemplated by Section 8.05(e)
hereof are either unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then the party
that would otherwise be required to provide indemnification or the indemnifying party (in
either case, for purposes of this Section 8.05(f), the “Indemnifying Party”) in respect of
such losses, claims, damages or liabilities, shall contribute to the amount paid or payable
by the party that would otherwise be entitled to indemnification or the indemnified party
(in either case, for purposes of this Section 8.05(f), the “Indemnified Party”) as a result
of such losses, claims, damages, liabilities or expense, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified
Party, as well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact related to information supplied by the
Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party.

          (ii) The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8.05(f) were determined by pro rata allocation (even if the holders
were treated as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately preceding
paragraph. No person or entity determined to have committed a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.

          (iii) The contribution provided for in this Section 8.05(f) shall survive the
termination of this Agreement and shall remain in full force and effect regardless of any
investigation made by or on behalf of any Indemnified Party.

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ARTICLE IX

TRANSFERS OF PARTNERSHIP INTERESTS

     9.01 Purchase for Investment.

          (a) Each Limited Partner, by its signature below or by its subsequent admission to the
Partnership, hereby represents and warrants to the General Partner and to the Partnership that the
acquisition of such Limited Partner’s Partnership Units is made for investment purposes only and
not with a view to the resale or distribution of such Partnership Units.

          (b) Subject to the provisions of Section 9.02 hereof, each Limited Partner agrees that such
Limited Partner will not sell, assign or otherwise transfer such Limited Partner’s Partnership
Units or any fraction thereof, whether voluntarily or by operation of law or at judicial sale or
otherwise, to any Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) hereof.

     9.02 Restrictions on Transfer of Partnership Units.

          (a) Subject to the provisions of Sections 9.02(b) and (c) hereof, no Limited Partner may
offer, sell, assign, hypothecate, pledge or otherwise transfer all or any portion of such Limited
Partner’s Partnership Units, or any of such Limited Partner’s economic rights as a Limited Partner,
whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a
“Transfer”) without the consent of the General Partner, which consent may be granted or withheld in
its sole and absolute discretion; provided, however, that the term Transfer does
not include (a) any redemption of Common Units by the Partnership or Summit REIT, or acquisition of
Common Units by Summit REIT, pursuant to Section 8.04 or (b) any redemption of Partnership
Units pursuant to any Partnership Unit Designation. The General Partner may require, as a
condition of any Transfer to which it consents, that the transferor assume all costs incurred by
the Partnership in connection therewith (including, but not limited to, cost of legal counsel).

          (b) No Limited Partner may withdraw from the Partnership other than as a result of a permitted
Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or a Transfer pursuant
to Section 9.05 hereof) of all of such Limited Partner’s Partnership Units pursuant to this Article
IX or pursuant to a redemption of all of such Limited Partner’s Common Units pursuant to Section
8.04 hereof. Upon the permitted Transfer or redemption of all of a Limited Partner’s Common Units,
such Limited Partner shall cease to be a Limited Partner.

          (c) No Limited Partner may effect a Transfer of its Partnership Units, in whole or in part,
if, in the opinion of legal counsel for the Partnership, such proposed Transfer would require the
registration of the Partnership Units under the Securities Act or would otherwise violate any
applicable federal or state securities or blue sky law (including investment suitability
standards).

          (d) No Transfer by a Limited Partner of its Partnership Units, in whole or in part, may be
made to any Person if (i) in the opinion of legal counsel for the Partnership, such Transfer would
result in the Partnership being treated as an association taxable as a corporation

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(other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code),
(ii) in the opinion of legal counsel for the Partnership, it would adversely affect the ability of
Summit REIT to continue to qualify as a REIT or subject Summit REIT to any additional taxes under
Section 857 or Section 4981 of the Code, (iii) the General Partner determines, in its sole and
absolute discretion, that such Transfer, along or in connection with other Transfers, could cause
the Partnership Units to be treated as readily tradable on an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of
the Code, provided that the General Partner may presume that any proposed Transfer of Partnership
Units during calendar year 2011 will cause the Partnership Units to be treated as readily tradable
on a “secondary market (or the substantial equivalent thereof)“or (iv) in the opinion of legal
counsel for the Partnership, such Transfer is reasonably likely to cause the Partnership to fail to
satisfy the 90% qualifying income test described in Section 7704(c) of the Code.

          (e) Any purported Transfer in contravention of any of the provisions of this Article IX shall
be void ab initio and ineffectual and shall not be binding upon, or recognized by, the General
Partner or the Partnership.

          (f) Prior to the consummation of any Transfer under this Article IX, the transferor and/or the
transferee shall deliver to the General Partner such opinions, certificates and other documents as
the General Partner shall request in connection with such Transfer.

     9.03 Admission of Substitute Limited Partner.

          (a) Subject to the other provisions of this Article IX, an assignee of the Partnership Units
of a Limited Partner (which shall be understood to include any purchaser, transferee, donee or
other recipient of any disposition of such Partnership Units) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner, which consent may be given
or withheld by the General Partner in its sole and absolute discretion, and upon the satisfactory
completion of the following:

          (i) The assignee shall have accepted and agreed to be bound by the terms and provisions
of this Agreement by executing a counterpart or an amendment thereof, including a revised
Exhibit A, and such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a Limited Partner.

          (ii) To the extent required, an amended Certificate evidencing the admission of such
Person as a Limited Partner shall have been signed, acknowledged and filed in accordance
with the Act.

          (iii) The assignee shall have delivered a letter containing the representation set
forth in Section 9.01(a) hereof and the representations and warranties set forth in Section
9.01(b) hereof.

          (iv) If the assignee is a corporation, partnership, limited liability company or trust,
the assignee shall have provided the General Partner with evidence

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satisfactory to counsel for the Partnership of the assignee’s authority to become a
Limited Partner under the terms and provisions of this Agreement.

          (v) The assignee shall have executed a power of attorney containing the terms and
provisions set forth in Section 8.02 hereof.

          (vi) The assignee shall have paid all legal fees and other expenses of the Partnership
and the General Partner and filing and publication costs in connection with its substitution
as a Limited Partner.

          (vii) The assignee shall have obtained the prior written consent of the General Partner
to its admission as a Substitute Limited Partner, which consent may be given or denied in
the exercise of the General Partner’s sole and absolute discretion.

          (b) For the purpose of allocating Profits and Losses and distributing cash received by the
Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the
records of the Partnership as, a Partner upon the filing of the Certificate described in Section
9.03(a)(ii) hereof or, if no such filing is required, the later of the date specified in the
transfer documents or the date on which the General Partner has received all necessary instruments
of transfer and substitution.

          (c) The General Partner and the Substitute Limited Partner shall cooperate with each other by
preparing the documentation required by this Section 9.03 and making all official filings and
publications. The Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.

     9.04 Rights of Assignees of Partnership Units.

          (a) Subject to the provisions of Sections 9.01 and 9.02 hereof, except as required by
operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize
the assignment by any Limited Partner of its Partnership Units until the Partnership has received
notice thereof.

          (b) Any Person who is the assignee of all or any portion of a Limited Partner’s Partnership
Units, but does not become a Substitute Limited Partner and desires to make a further assignment of
such Partnership Units, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an assignment of its
Partnership Units.

     9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.
The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or
a final adjudication that a Limited Partner is incompetent (which term shall include, but not be
limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the
business of the Partnership shall continue if an order for relief in a bankruptcy proceeding is
entered against a Limited Partner, the trustee or receiver of his estate or, if such Limited
Partner dies, such Limited Partner’s executor, administrator or trustee, or, if such Limited
Partner is finally adjudicated incompetent, such Limited Partner’s committee,

-50-

 

guardian or conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing such Limited Partner’s estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of such Limited
Partner’s Partnership Units and to join with the assignee in satisfying conditions precedent to the
admission of the assignee as a Substitute Limited Partner.

     9.06 Joint Ownership of Partnership Units. A Partnership Unit may be acquired by two
individuals as joint tenants with right of survivorship, provided that such individuals
either are married or are related and share the same home as tenants in common. The written
consent or vote of both owners of any such jointly held Partnership Unit shall be required to
constitute the action of the owners of such Partnership Unit; provided, however,
that the written consent of only one joint owner will be required if the Partnership has been
provided with evidence satisfactory to the counsel for the Partnership that the actions of a single
joint owner can bind both owners under the applicable laws of the state of residence of such joint
owners. Upon the death of one owner of a Partnership Unit held in a joint tenancy with a right of
survivorship, the Partnership Unit shall become owned solely by the survivor as a Limited Partner
and not as an assignee. The Partnership need not recognize the death of one of the owners of a
jointly-held Partnership Unit until it shall have received certificated notice of such death. Upon
notice to the General Partner from either owner, the General Partner shall cause the Partnership
Unit to be divided into two equal Partnership Units, which shall thereafter be owned separately by
each of the former owners.

ARTICLE X

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

     10.01 Books and Records. At all times during the continuance of the Partnership, the
General Partner shall keep or cause to be kept at the Partnership’s specified office true and
complete books of account in accordance with generally accepted accounting principles, including:
(a) a current list of the full name and last known business address of each Partner, (b) a copy of
the Certificate Limited Partnership and all certificates of amendment thereto, (c) copies of the
Partnership’s federal, state and local income tax returns and reports, (d) copies of this Agreement
and any financial statements of the Partnership for the three most recent years and (e) all
documents and information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing, shall be entitled to
a copy of such records if reasonably requested.

     10.02 Custody of Partnership Funds; Bank Accounts.

          (a) All funds of the Partnership not otherwise invested shall be deposited in one or more
accounts maintained in such banking or brokerage institutions as the General Partner shall
determine, and withdrawals shall be made only on such signature or signatures as the General
Partner may, from time to time, determine.

          (b) All deposits and other funds not needed in the operation of the business of the
Partnership may be invested by the General Partner. The funds of the Partnership shall not be
commingled with the funds of any Person other than the General Partner except for such

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commingling as may necessarily result from an investment in those investment companies
permitted by this Section 10.02(b).

     10.03 Fiscal and Taxable Year. The fiscal and taxable year of the Partnership shall
be the calendar year unless otherwise required by the Code.

     10.04 Annual Tax Information and Report. Within 75 days after the end of each fiscal
year of the Partnership, the General Partner shall furnish to each person who was a Limited Partner
at any time during such year the tax information necessary to file such Limited Partner’s
individual tax returns as shall be reasonably required by law.

     10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.

          (a) The General Partner shall be the Tax Matters Partner of the Partnership. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all actions authorized and
required, respectively, by the Code for the Tax Matters Partner. The General Partner shall have
the right to retain professional assistance in respect of any audit of the Partnership by the
Service and all out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the event the General
Partner receives notice of a final Partnership adjustment under Section 6223(a)(2) of the Code, the
General Partner shall either (i) file a court petition for judicial review of such final adjustment
within the period provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail a written notice to
all Limited Partners, within such period, that describes the General Partner’s reasons for
determining not to file such a petition.

          (b) All elections required or permitted to be made by the Partnership under the Code or any
applicable state or local tax law shall be made by the General Partner in its sole and absolute
discretion.

          (c) In the event of a transfer of all or any part of the Partnership Interest of any Partner,
the Partnership, at the option of the General Partner, may elect pursuant to Section 754 of the
Code to adjust the basis of the Properties. Notwithstanding anything contained in Article V of
this Agreement, any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account in establishing,
maintaining or computing Capital Accounts for the other Partners for any purpose under this
Agreement. Each Partner will furnish the Partnership with all information necessary to give effect
to such election.

          (d) The Partners, intending to be legally bound, hereby authorize the Partnership to make an
election (the “Safe Harbor Election”) to have the “liquidation value” safe harbor provided in
Proposed Treasury Regulation § 1.83-3(1) and the Proposed Revenue Procedure set forth in Internal
Revenue Service Notice 2005-43, as such safe harbor may be modified when such proposed guidance is
issued in final form or as amended by subsequently issued guidance (the “Safe Harbor”), apply to
any interest in the Partnership transferred to a service provider while the Safe Harbor Election
remains effective, to the extent such interest meets the Safe Harbor requirements (collectively,
such interests are referred to as “Safe Harbor

-52-

 

Interests”). The Tax Matters Partner is authorized and directed to execute and file the Safe
Harbor Election on behalf of the Partnership and the Partners. The Partnership and the Partners
(including any person to whom an interest in the Partnership is transferred in connection with the
performance of services) hereby agree to comply with all requirements of the Safe Harbor (including
forfeiture allocations) with respect to all Safe Harbor Interests and to prepare and file all U.S.
federal income tax returns reporting the tax consequences of the issuance and vesting of Safe
Harbor Interests consistent with such final Safe Harbor guidance. The Partnership is also
authorized to take such actions as are necessary to achieve, under the Safe Harbor, the effect that
the election and compliance with all requirements of the Safe Harbor referred to above would be
intended to achieve under Proposed Treasury Regulation § 1.83-3, including amending this Agreement.

          (e) Each Limited Partner shall be required to provide such information as reasonably requested
by the Partnership in order to determine whether such Limited Partner (i) owns, directly or
constructively (within the meaning of Section 318(a) of the Code, as modified by Section 856(d)(5)
of the Code and Section 7704(d)(3) of the Code), five percent (5%) or more of the of the value of
the Partnership or (ii) owns, directly or constructively (within the meaning of Section 318(a) of
the Code, as modified by Section 856(d)(5) of the Code and Section 7704(d)(3) of the Code), ten
percent (10%) or more of (a) the stock, by voting power or value, of a tenant (other than a
“taxable REIT subsidiary” within the meaning of Section 856(d) of the Code) of the Partnership that
is a corporation or (b) the assets or net profits of a tenant of the Partnership that is a
noncorporate entity.

ARTICLE XI

AMENDMENT OF AGREEMENT; MERGER

     11.01 Amendment of Agreement.

     The General Partner’s consent shall be required for any amendment to this Agreement. The
General Partner, without the consent of the Limited Partners, may amend this Agreement in any
respect; provided, however, that the following amendments shall require the consent
of a Majority in Interest (other than the General Partner or any Subsidiary of the General
Partner):

          (a) any amendment affecting the operation of the Conversion Factor or the Common Unit
Redemption Right (except as otherwise provided herein) in a manner that adversely affects the
Limited Partners in any material respect;

          (b) any amendment that would adversely affect the rights of the Limited Partners to receive
the distributions payable to them hereunder, other than with respect to the issuance of additional
Partnership Units pursuant to Section 4.02 hereof;

          (c) any amendment that would alter the Partnership’s allocations of Profit and Loss to the
Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof;

          (d) any amendment that would impose on the Limited Partners any obligation to make additional
Capital Contributions to the Partnership; or

-53-

 

          (e) any amendment to this Article XI.

     11.02 Merger of Partnership.

     The General Partner, without the consent of the Limited Partners, may (i) merge or consolidate
the Partnership with or into any other domestic or foreign partnership, limited partnership,
limited liability company or corporation or (ii) sell all or substantially all of the assets of the
Partnership in a transaction pursuant to which the Limited Partners (other than the General
Partner, Summit REIT or any Subsidiary of the General Partner or Summit REIT) receives
consideration as set forth in Section 7.01(c)(ii) hereof or the transaction complies with Sections
7.01(c)(iii) or 7.01(d) hereof and may amend this Agreement in connection with any such transaction
consistent with the provisions of this Article XI; provided, however, that the
consent of a Majority in Interest shall be required in the case of any other (a) merger or
consolidation of the Partnership with or into any other domestic or foreign partnership, limited
partnership, limited liability company or corporation or (b) sale of all or substantially all of
the assets of the Partnership.

ARTICLE XII

GENERAL PROVISIONS

     12.01 Notices. All communications required or permitted under this Agreement shall be
in writing and shall be deemed to have been given when delivered personally, by email, by press
release, by posting on the Web site of the General Partner, or upon deposit in the United States
mail, registered, first-class postage prepaid return receipt requested, or via courier to the
Partners at the addresses set forth in Exhibit A attached hereto, as it may be amended or
restated from time to time; provided, however, that any Partner may specify a
different address by notifying the General Partner in writing of such different address. Notices
to the General Partner and the Partnership shall be delivered at or mailed to its principal office
address set forth in Section 2.03 hereof. The General Partner and the Partnership may specify a
different address by notifying the Limited Partners in writing of such different address.

     12.02 Survival of Rights. Subject to the provisions hereof limiting transfers, this
Agreement shall be binding upon and inure to the benefit of the Partners and the Partnership and
their permitted respective legal representatives, successors, transferees and assigns.

     12.03 Additional Documents. Each Partner agrees to perform all further acts and
execute, swear to, acknowledge and deliver all further documents that may be reasonable, necessary,
appropriate or desirable to carry out the provisions of this Agreement or the Act.

     12.04 Severability. If any provision of this Agreement shall be declared illegal,
invalid or unenforceable in any jurisdiction, then such provision shall be deemed to be severable
from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity
or unenforceability shall not affect the remainder hereof. To the extent permitted under
applicable law, the severed provision shall be interpreted or modified so as to be enforceable to
the maximum extent permitted by law.

     12.05 Entire Agreement. This Agreement and exhibits attached hereto constitute the
entire Agreement of the Partners and supersede all prior written agreements and prior and

-54-

 

contemporaneous oral agreements, understandings and negotiations with respect to the subject
matter hereof.

     12.06 Pronouns and Plurals. When the context in which words are used in the Agreement
indicates that such is the intent, words in the singular number shall include the plural and the
masculine gender shall include the neuter or female gender as the context may require.

     12.07 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement or any particular
Article.

     12.08 Counterparts. This Agreement may be executed by hand or by power of attorney in
several counterparts, each of which shall be deemed to be an original copy and all of which
together shall constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.

     12.09 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

[Signature page follows.]

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     IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this First
Amended and Restated Agreement of Limited Partnership, all as of the 14th day of
February, 2011.

	 	 	 	 	 
	 	GENERAL PARTNER:

SUMMIT HOTEL GP, LLC,

a Delaware limited liability company

 	 
	 	By:  	Summit Hotel Properties, Inc.,
 	 
	 	 	a Maryland corporation, its Sole Member 	 
	 	 	 	 
	 	By:  	            /s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	Executive Chairman 	 
	 
	 	LIMITED PARTNER:

SUMMIT HOTEL PROPERTIES, INC.,

a Maryland corporation

 	 
	 	By:  	/s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	Executive Chairman 	 
	 

Signature Page to First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP

 

 

	 	 	 	 	 
	 	LIMITED PARTNER:

THE SUMMIT GROUP, INC.

a South Dakota corporation

 	 
	 	By:  	            /s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	Executive Chairman 	 
	 

Signature Page to First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP

 

 

	 	 	 	 	 
	 	LIMITED PARTNER:

 	 
	 	By:  	            /s/ Gary Tharaldson
 	 
	 	 	  	GARY THARALDSON 	 
	 	 	  	 	 
	 

Signature Page to First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP

 

 

EXHIBIT A

(As of February 14, 2011)

	 	 	 	 	 	 	 	 	 
	 	 	Partnership Units	 	 
	Name and Address of Partner	 	(Type and Amount)	 	Percentage Interest
	 
	 	 	 	 	 	 	 	 
	GENERAL PARTNER:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Summit Hotel GP, LLC

c/o Summit Hotel Properties, Inc.

2701 South Minnesota Avenue,
Suite 6

Sioux Falls, SD 57105
	 	37,378 Common Units	 	 	0.1000	%
	 
	 	 	 	 	 	 	 	 
	LIMITED PARTNERS:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Summit Hotel Properties, Inc.

2701 South Minnesota Avenue,
Suite 6

Sioux Falls, SD 57105
	 	27,240,622 Common Units	 	 	72.8788	%
	 
	 	 	 	 	 	 	 	 
	Other Limited Partners listed on

Schedule 1
attached hereto and

incorporated by reference herein
	 	10,100,000 Common Units	 	 	27.0212	%
	 
	 	 	 	 	 	 	 	 
	TOTAL:
	 	37,378,000 Common Units	 	 	100	%

Exhibit A-1

 

 

Schedule 1 to Exhibit A

Exhibit A-2

 

 

EXHIBIT B

NOTICE OF EXERCISE OF REDEMPTION RIGHT

     In accordance with Section 8.04 of the Agreement of Limited Partnership, as amended (the
“Agreement”) of Summit Hotel OP, LP, the undersigned hereby irrevocably (i) presents for redemption
________ Common Units in Summit Hotel OP, LP in accordance with the terms of the Agreement and the
Common Unit Redemption Right referred to in Section 8.04 thereof, (ii) surrenders such Common Units
and all right, title and interest therein and (iii) directs that the Cash Amount or REIT Shares
Amount (as defined in the Agreement) as determined by the General Partner deliverable upon exercise
of the Common Unit Redemption Right be delivered to the address specified below, and if REIT Shares
(as defined in the Agreement) are to be delivered, such REIT Shares be registered or placed in the
name(s) and at the address(es) specified below. The undersigned hereby represents, warrants and
certifies that the undersigned (a) has title to such Common Units, free and clear of the rights and
interests of any person or entity other than the Partnership or the General Partner; (b) has the
full right, power and authority to cause the redemption of the Common Units as provided herein; and
(c) has obtained the approval of all persons or entities, if any, having the right to consent to or
approve the Common Units for redemption.

	 	 	 	 	 

	Dated:        
                
  ,     
         
	 	 	 	 
	 
	 	 	 	 
	Name of Limited Partner:

	 	 

	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

(Signature of Limited Partner or Authorized

Representative)
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

(Mailing Address)
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

(City) (State) (Zip Code)
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed by:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

If REIT Shares are to be issued, issue to:

Name:

Please insert Social Security or Identifying Number:

Exhibit B-1

 

 

EXHIBIT C-1

CERTIFICATION OF NON-FOREIGN STATUS

(FOR REDEEMING LIMITED PARTNERS THAT ARE ENTITIES)

     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), in the
event of a disposition by a non-U.S. person of a partnership interest in a partnership in which (i)
50% or more of the value of the gross assets consists of United States real property interests
(“USRPIs”), as defined in Section 897(c) of the Code, and (ii) 90% or more of the value of the
gross assets consists of USRPIs, cash, and cash equivalents, the transferee will be required to
withhold 10% of the amount realized by the non-U.S. person upon the disposition. To inform Summit
Hotel GP, LLC (the “General Partner”) and Summit Hotel OP, LP (the “Partnership”) that no
withholding is required with respect to the redemption by ____________ (“Partner”) of its Common
Units in the Partnership, the undersigned hereby certifies the following on behalf of Partner:

	1.	 	Partner is not a foreign corporation, foreign partnership, foreign trust, or foreign estate,
as those terms are defined in the Code and the Treasury regulations thereunder.

	2.	 	Partner is not a disregarded entity as defined in Treasury Regulation Section
1.1445-2(b)(2)(iii).

3. The U.S. employer identification number of Partner is ____________.

	4.	 	The principal business address of Partner is: _________________________,
__________________________ and Partner’s place of incorporation is ____________.

	5.	 	Partner agrees to inform the General Partner if it becomes a foreign person at any time
during the three-year period immediately following the date of this notice.

	6.	 	Partner understands that this certification may be disclosed to the Internal Revenue Service
by the General Partner and that any false statement contained herein could be punished by
fine, imprisonment, or both.

	 	 	 	 	 
	 	PARTNER: 

 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit C-1-1

 

 

Under penalties of perjury, I declare that I have examined this certification and, to the best of
my knowledge and belief, it is true, correct, and complete, and I further declare that I have
authority to sign this document on behalf of Partner.

	 	 	 	 	 
	 	 	 
	Date:                      	  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit C-1-2

 

 

EXHIBIT C-2

CERTIFICATION OF NON-FOREIGN STATUS

(FOR REDEEMING LIMITED PARTNERS THAT ARE INDIVIDUALS)

     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), in the
event of a disposition by a non-U.S. person of a partnership interest in a partnership in which (i)
50% or more of the value of the gross assets consists of United States real property interests
(“USRPIs”), as defined in Section 897(c) of the Code, and (ii) 90% or more of the value of the
gross assets consists of USRPIs, cash, and cash equivalents, the transferee will be required to
withhold 10% of the amount realized by the non-U.S. person upon the disposition. To inform Summit
Hotel GP, LLC (the “General Partner”) and Summit Hotel OP, LP (the “Partnership”) that no
withholding is required with respect to my redemption of my Common Units in the Partnership, I,
___________, hereby certify the following:

1. I am not a nonresident alien for purposes of U.S. income taxation.

2. My U.S. taxpayer identification number (social security number) is ____________.

3. My home address is: _____________________.

	4.	 	I agree to inform the General Partner promptly if I become a nonresident alien at any time
during the three-year period immediately following the date of this notice.

	5.	 	I understand that this certification may be disclosed to the Internal Revenue Service by the
General Partner and that any false statement contained herein could be punished by fine,
imprisonment, or both.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

Under penalties of perjury, I declare that I have examined this certification and, to the best of
my knowledge and belief, it is true, correct, and complete.

	 	 	 	 	 
	 	 	 
	Date:                      	  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit C-2-1

 

 

EXHIBIT D

NOTICE OF ELECTION BY PARTNER TO CONVERT

LTIP UNITS INTO COMMON UNITS

     The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert the number of
LTIP Units in Summit Hotel OP, LP (the “Partnership”) set forth below into Common Units in
accordance with the terms of the Agreement of Limited Partnership of the Partnership, as amended;
and (ii) directs that any cash in lieu of Common Units that may be deliverable upon such conversion
be delivered to the address specified below. The undersigned hereby represents, warrants, and
certifies that the undersigned (a) has title to such LTIP Units, free and clear of the rights or
interests of any other person or entity other than the Partnership or the General Partner; (b) has
the full right, power, and authority to cause the conversion of such LTIP Units as provided herein;
and (c) has obtained the consent to or approval of all persons or entities, if any, having the
right to consent to or approve such conversion.

	 	 	 	 	 	 	 

	Name of Holder:
	 	 	 	 	 	 
	 	 	(Please Print: Exact Name as Registered with Partnership)

	 
	 	 	 	 	 	 
	Number of LTIP Units to be Converted:	 	 
	 
	 	 	 	 	 	 
	Date of this Notice:	 	 	 	 

 

     (Signature of Holder: Sign Exact Name as Registered with Partnership)

 

     (Street Address)

      

	 	 	 	 	 

	(City)
	 	(State)
	 	(Zip Code)

	 	 	 

	Signature Guaranteed by:
	 	 
	 

	 	 

Exhibit D-1

 

 

EXHIBIT E

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF

LTIP UNITS INTO COMMON UNITS

     Summit Hotel OP, LP (the “Partnership”) hereby elects to cause the number of LTIP Units held
by the holder of LTIP Units set forth below to be converted into Common Units in accordance with
the terms of the Agreement of Limited Partnership of the Partnership, as amended, effective as of
____________ (the “Conversion Date”).

	 	 	 	 	 	 	 

	Name of Holder:
	 	 	 	 	 	 
	 	 	(Please Print: Exact Name as Registered with Partnership)

	 
	 	 	 	 	 	 
	Number of LTIP Units to be Converted:	 	 
	 
	 	 	 	 	 	 
	Date of this Notice:	 	 	 	 

Exhibit E-1exv10w2

Exhibit 10.2

TAX PROTECTION AGREEMENT

THIS TAX PROTECTION AGREEMENT (this “Agreement”) is made and entered into as of February 10, 2011
by and among SUMMIT HOTEL OP, LP, a Delaware limited partnership (the “Partnership”), and THE
SUMMIT GROUP, INC., a South Dakota corporation and Class B member (the “Member”) in Summit Hotel
Properties, LLC, a South Dakota limited liability company (the “Merging Entity”).

WHEREAS, pursuant to that certain Merger Agreement, dated as of August 5, 2010, (the “Merger
Agreement”), the Merging Entity will merge into the Partnership, with the Partnership surviving,
with the Member, along with the other members of the Merging Entity, exchanging its interest in the
Merging Entity for partnership units of limited partnership interest in the Partnership (“Units”);

WHEREAS, it is intended for federal income tax purposes that the Partnership will be treated as a
continuation of the Merging Entity for federal income tax purposes;

WHEREAS, in consideration for the agreement of the Merging Entity to consummate the merger of the
Merging Entity into the Partnership, the parties desire to enter into this Agreement regarding
certain tax matters as set forth herein; and

WHEREAS, the Partnership desires to evidence its agreement regarding amounts that may be payable in
the event of certain actions being taken by the Partnership regarding certain debt obligations of
the Partnership and its subsidiaries.

NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties,
covenants and agreements contained herein and in the Merger Agreement, the parties hereto hereby
agree as follows:

ARTICLE 1

DEFINITIONS

To the extent not otherwise defined herein, capitalized terms used in this Agreement have the
meanings ascribed to them in the Partnership Agreement (as defined below).

          “Bottom Guarantee” has the meaning set forth in Section 2.1.

          “Closing Date” means the date on which the Merger will be effective.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Consent” means the prior written consent to do the act or thing for which the consent
is required or solicited, which consent may be executed by a duly authorized officer or agent of
the party granting such consent.

          “Deficit Restoration Obligation” means a written obligation by a Protected Partner to
restore part or all of its deficit capital account in the Partnership upon the occurrence

 

 

of certain events (which written obligation may provide for an indemnity in favor of the
general partner of the Partnership).

          “Guaranteed Amount” means the aggregate amount of each Guaranteed Debt that is
guaranteed at any time by Partner Guarantors.

          “Guaranteed Debt” means any loans incurred (or assumed) by the Partnership or any of
its subsidiaries that are guaranteed by Partner Guarantors at any time after the Closing Date
pursuant to Article 2 hereof.

          “Indirect Owner” means, in the case of a Protected Partner that is an entity that is
classified as a partnership, disregarded entity or subchapter S corporation for federal income tax
purposes, any person owning an equity interest in such Protected Partner, and in the case of any
Indirect Owner that itself is an entity that is classified as a partnership, disregarded entity or
subchapter S corporation for federal income tax purposes, any person owning an equity interest in
such entity.

          “Liability Amount” means, for each Protected Partner, the amount set forth next to
such Protected Partner’s name on Schedule 2.1(b) hereto.

          “Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section
1.752-1(a)(2).

          “Partner Guarantors” means those Protected Partners who have guaranteed any portion of
the Guaranteed Debt.

          “Partnership” has the meaning set forth in the Preamble.

          “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of
February 14, 2011, as amended, and as the same may be
further amended in accordance with the terms thereof.

          “Protected Partner” means those persons set forth as Protected Partners on Schedule
2.1(a), and any person who (i) acquires Units from a Protected Partner in a transaction in which
gain or loss is not recognized in whole or in part and in which such transferee’s adjusted basis
for federal income tax purposes is determined in whole or in part by reference to the adjusted
basis of the Protected Partner in such Units, (ii) has notified the Partnership of its status as a
Protected Partner and (iii) provides all documentation reasonably requested by the Partnership to
verify such status, but excludes any person that ceases to be a Protected Partner pursuant to this
Agreement.

          “REIT” means Summit Hotel Properties, Inc., a Maryland corporation.

          “Tax Protection Period” means the period commencing on the Closing Date and ending,
with respect to a Protected Partner, at the earlier of such time as (i) such Protected Partner (or
one or more successor Protected Partners) has disposed of 100% of the Units received, directly or
indirectly, in the Merger by such Protected Partner in one or more taxable

2

 

transactions or (ii) the tenth anniversary of the closing of an underwritten initial public
offering of the common stock of the REIT.

          “Units” has the meaning set forth in the Recitals.

ARTICLE 2

ALLOCATION OF LIABILITIES; GUARANTEE AND DEFICIT RESTORATION

OBLIGATION OPPORTUNITY

     2.1 Minimum Liability Allocation. During the Tax Protection Period, the Partnership
will offer to each Protected Partner the opportunity, in the Partnership’s discretion, either (i)
to enter into a “bottom dollar guarantee” of certain liabilities of the Partnership (substantially
in the form set forth in Schedule 2.1(c)) pursuant to which the lender for the guaranteed liability
is required to pursue all other collateral and security for the guaranteed liability (other than
any “bottom dollar guarantees”) prior to seeking to collect on such a guarantee, and the lender
shall have recourse against the guarantee only if, and solely to the extent that, the total amount
recovered by the lender with respect to the guaranteed liability after the lender has exhausted its
remedies is less than the aggregate of the guaranteed amounts with respect to such liability, and
the maximum aggregate liability of each partner for all guaranteed liabilities shall be limited to
the amount actually guaranteed by such partner (a “Bottom Guarantee”) or (ii) to enter into a
Deficit Restoration Obligation, in either case in such amount or amounts so as to cause a special
allocation of partnership liabilities to such Protected Partner for purposes of Section 752 of the
Code in an amount equal to such Protected Partner’s Liability Amount (determined as of the Closing
Date) and to cause a special allocation of partnership liabilities for purposes of Section 465 of
the Code that increases the Protected Partner’s “at risk” amount by an amount equal to such
Protected Partner’s Liability Amount (determined as of the Closing Date).

     2.2. Repayment or Refinancing of Guaranteed Debt. If the Partnership, at any time
during the Tax Protection Period applicable to a Partner Guarantor, repays or refinances all or any
portion of any Guaranteed Debt, the Partnership will use commercially reasonable efforts to ensure
that (i) after taking into account such repayment, each Partner Guarantor would be entitled to
include in its basis for its Units an amount of Guaranteed Debt equal to its Liability Amount, or
(ii) alternatively, the Partnership, not less than thirty (30) days prior to such repayment or
refinancing, offers to the applicable Partner Guarantor the opportunity, in the Partnership’s
discretion, either (A) to enter into a Bottom Guarantee with respect to other indebtedness of the
Partnership, or (B) to enter into a Deficit Restoration Obligation, in either case in an amount
sufficient so that, taking into account such Bottom Guarantee of such other Partnership
indebtedness or such Deficit Restoration Obligation, as applicable, each Partner Guarantor who
makes such Bottom Guarantee or enters into a Deficit Restoration Obligation in the amount specified
by the Partnership would be entitled to include in its adjusted tax basis for its Units debt equal
to the Liability Amount (determined as of the Closing Date) for such Partner Guarantor.

     2.3 Deficit Restoration Obligation. The Partnership will use commercially reasonable
efforts to maintain an amount of indebtedness of the Partnership that would be

3

 

considered “recourse” indebtedness (taking into account all of the facts and circumstances
related to the indebtedness, the Partnership and the general partner) equal to or greater than the
sum of the amounts subject to a Deficit Restoration Obligation of all Protected Partners and other
partners in the Partnership. The Deficit Restoration Obligation shall be conclusively presumed to
cause the Protected Partner to be allocated an amount of liabilities equal to the Deficit
Restoration Obligation amount of such Protected Partner for purposes of Sections 465 and 752 of the
Code, provided that (1) the Partnership maintains an amount of debt that is considered “recourse”
indebtedness (determined for purposes of Section 752 of the Code and taking into account all of the
facts and circumstances related to the indebtedness, the Partnership and the general partner) equal
to the aggregate Deficit Restoration Obligation amounts of all partners of the Partnership and (2)
all other terms and conditions of the Partnership Agreement with respect to such Deficit
Restoration Obligation are met.

ARTICLE 3

REMEDIES FOR BREACH

     3.1 Monetary Damages. In the event that the Partnership breaches its obligations set
forth in Article 2 with respect to a Protected Partner the Protected Partner’s sole right shall be
to receive from the Partnership, and the Partnership shall pay to such Protected Partner as
damages, an amount equal to the aggregate federal, state and local income taxes incurred by the
Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise
recognized by, such Protected Partner with respect to its Units by reason of such breach. For the
avoidance of doubt, so long as the Partnership provides the opportunity to a Protected Partner to
enter into a Bottom Guarantee or Deficit Restoration Obligation pursuant to the forms attached
hereto or otherwise agreed to by the parties and the Partnership uses commercially reasonable
efforts to maintain outstanding the relevant partnership liabilities in accordance with Article 2,
the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined
that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code
an amount of partnership liabilities equal to such Protected Partner’s Liability Amount or is not
treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of
the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such
Protected Partner’s Liability Amount. Furthermore, the Partnership shall have no liability
pursuant to this Section 3.1 if the Partnership merges into another entity treated as a partnership
for federal income tax purposes or the Protected Partner accepts an offer to exchange its OP Units
for equity interests in another entity treated as a partnership for federal income tax purposes so
long as, in either case, such successor entity assumes or agrees to assume the Partnership’s
obligations pursuant to this Agreement.

          For purposes of computing the amount of federal, state, and local income taxes required to be
paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable
as a result thereof actually allowed in computing federal income taxes shall be taken into account,
and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the
highest federal, state and local marginal income tax rates that would be applicable to such
Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and
type of such income or gain) for the year with respect to which the taxes must be paid, without
regard to any deductions, losses or credits that may be available to such Protected Partner (or
Indirect Owner) that would reduce or offset its actual taxable income or

4

 

actual tax liability if such deductions, losses or credits could be utilized by the Protected
Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or
Indirect Owner), either in the current year, in earlier years, or in later years).

     3.2 Process for Determining Damages. If the Partnership has breached or violated any
of the covenants set forth in Article 2 (or a Protected Partner asserts that the Partnership has
breached or violated any of the covenants set forth in Article 2), the Partnership and the
Protected Partner (or Indirect Owner) agree to negotiate in good faith to resolve any disagreements
regarding any such breach or violation and the amount of damages, if any, payable to such Protected
Partner (or Indirect Owner) under Section 3.1. If any such disagreement cannot be resolved
by the Partnership and such Protected Partner (or Indirect Owner) within sixty (60) days after the
receipt of notice from the Partnership of such breach and the amount of income to be recognized by
reason thereof (or, if applicable, receipt by the Partnership of an assertion by a Protected
Partner that the Partnership has breached or violated any of the covenants set forth in Article 2),
the Partnership and the Protected Partner shall jointly retain a nationally recognized independent
public accounting firm (“an Accounting Firm”) to act as an arbitrator to resolve as expeditiously
as possible all points of any such disagreement (including, without limitation, whether a breach of
any of the covenants set forth Article 2 has occurred and, if so, the amount of damages to which
the Protected Partner is entitled as a result thereof, determined as set forth in Section
3.1). All determinations made by the Accounting Firm with respect to the resolution of any
breach or violation of any of the covenants set forth in Article 2 and the amount of damages
payable to the Protected Partner under Section 3.1 shall be final, conclusive and binding
on the Partnership and the Protected Partner. The fees and expenses of any Accounting Firm
incurred in connection with any such determination shall be shared equally by the Partnership and
the Protected Partner, provided that if the amount determined by the Accounting Firm to be owed by
the Partnership to the Protected Partner is more than five percent (5%) higher than the amount
proposed by the Partnership to be owed to such Protected Partner prior to the submission of the
matter to the Accounting Firm, then all of the fees and expenses of any Accounting Firm incurred in
connection with any such determination shall be paid by the Partnership and if the amount
determined by the Accounting Firm to be owed by the Partnership to the Protected Partner is more
than five percent (5%) less than the amount proposed by the Partnership to be owed to such
Protected Partner prior to the submission of the matter to the Accounting Firm, then all of the
fees and expenses of any Accounting Firm incurred in connection with any such determination shall
be paid by the Protected Partner.

     3.3 Required Notices; Time for Payment. In the event that there has been a breach of
Article 2, the Partnership shall provide to each affected Protected Partner notice of the
transaction or event giving rise to such breach not later than at such time as the Partnership
provides to the Protected Partners the IRS Schedule K-1’s to the Partnership’s federal income tax
return. All payments required under this Article 3 to any Protected Partner shall be made to such
Protected Partner on or before April 15 of the year following the year in which the gain
recognition event giving rise to such payment took place; provided that, if the Protected Partner
is required to make estimated tax payments that would include such gain (taking into account all
available safe harbors), the Partnership shall make a payment to the Protected Partner on or before
the due date for such estimated tax payment and such payment from the Partnership shall be in an
amount that corresponds to the amount of the estimated tax being paid by such Protected

5

 

Partner at such time. In the event of a payment required after the date required pursuant to
this Section 3.3, interest shall accrue on the aggregate amount required to be paid from
such date to the date of actual payment at a rate equal to the “prime rate” of interest, as
published in the Wall Street Journal (or if no longer published there, as announced by Citibank,
N.A.) effective as of the date the payment is required to be made.

ARTICLE 4

AMENDMENT OF THIS AGREEMENT; WAIVER OF CERTAIN PROVISIONS;

APPROVAL OF CERTAIN TRANSACTIONS

     4.1 Amendment. This Agreement may not be amended, directly or indirectly (including
by reason of a merger between either the Partnership or the REIT and another entity) except by a
written instrument signed by the Partnership and each of the Protected Partners to be subject to
such amendment, except that the Partnership may amend Schedules 2.1(a) and 2.1(b)
upon a person becoming a Protected Partner as a result of a transfer of Units.

     4.2 Waiver. Notwithstanding the foregoing, upon written request by the Partnership,
each Protected Partner, in its sole discretion, may waive the payment of any damages that are
otherwise payable to such Protected Partner pursuant to Article 3 hereof. Such a waiver shall be
effective only if obtained in writing from the affected Protected Partner.

ARTICLE 5

MISCELLANEOUS

     5.1 Additional Actions and Documents. Each of the parties hereto hereby agrees to
take or cause to be taken such further actions, to execute, deliver, and file or cause to be
executed, delivered and filed such further documents, and will obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.

     5.2 Assignment. No party hereto shall assign its or his rights or obligations under
this Agreement, in whole or in part, except by operation of law, without the prior written consent
of the other parties hereto, and any such assignment contrary to the terms hereof shall be null and
void and of no force and effect.

     5.3 Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the Protected Partners and their respective successors and permitted assigns,
whether so expressed or not. This Agreement shall be binding upon the Partnership and any entity
that is a direct or indirect successor, whether by merger, transfer, spin-off or otherwise, to all
or substantially all of the assets of the Partnership (or any prior successor thereto as set forth
in the preceding portion of this sentence), provided that none of the foregoing shall result in the
release of liability of the Partnership hereunder. The Partnership covenants with and for the
benefit of the Protected Partners not to undertake any transfer of all or substantially all of the
assets of either entity (whether by merger, transfer, spin-off or otherwise) unless the transferee
has acknowledged in writing and agreed in writing to be bound by this Agreement, provided that

6

 

the foregoing shall not be deemed to permit any transaction otherwise prohibited by this
Agreement.

     5.4 Modification; Waiver. No failure or delay on the part of any party hereto 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, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the parties hereunder are cumulative and not
exclusive of any rights or remedies which they would otherwise have. No modification or waiver of
any provision of this Agreement, nor consent to any departure by any party therefrom, shall in any
event be effective unless the same shall be in writing, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No notice to or
demand on any party in any case shall entitle such party to any other or further notice or demand
in similar or other circumstances.

     5.5 Representations and Warranties Regarding Authority; Noncontravention. The
Partnership has the requisite power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by the Partnership and the
performance of each of its obligations hereunder have been duly authorized by all necessary
partnership action on the part of the Partnership. This Agreement has been duly executed and
delivered by the Partnership and constitutes a valid and binding obligation of the Partnership,
enforceable against the Partnership in accordance with its terms, except as such enforcement may be
limited by (i) applicable bankruptcy or insolvency laws (or other laws affecting creditors’ rights
generally) or (ii) general principles of equity. The execution and delivery of this Agreement by
the Partnership does not, and the performance of each of its respective obligations hereunder will
not, conflict with, or result in any violation of (i) the Partnership Agreement or (ii) any other
agreement applicable to the Partnership, other than, in the case of clause (ii), any such conflicts
or violations that would not materially adversely affect the performance by the Partnership of its
obligations hereunder.

     5.6 Captions. The Article and Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.

     5.7 Notices. All notices and other communications given or made pursuant hereto shall
be in writing, shall be deemed to have been duly given or made as of the date delivered, mailed or
transmitted, and shall be effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like changes of address)
or sent by electronic transmission to the telecopier number specified below:

	 	(i)	 	if to the Partnership, to:

Summit Hotel OP, LP

2701 South Minnesota Avenue, Suite 6

Sioux Falls, South Dakota 57105

7

 

Attention: Chris Eng, Esq.

Telecopier No. (605) 362-9388

	 	(ii)	 	if to a Protected Partner, to the address on file with the
Partnership.

Each party may designate by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand, request, or
communication which shall be hand delivered, sent, mailed, telecopied or telexed in the manner
described above, or which shall be delivered to a telegraph company, shall be deemed sufficiently
given, served, sent, received or delivered for all purposes at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, or (with respect to a telecopy or telex)
the answerback being deemed conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.

     5.8 Counterparts. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement and each of which shall be deemed an original.

     5.9 Governing Law. The interpretation and construction of this Agreement, and all
matters relating thereto, shall be governed by the laws of the State of Delaware, without regard to
the choice of law provisions thereof.

     5.10 Consent to Jurisdiction; Enforceability.

          5.10.1 This Agreement and the duties and obligations of the parties hereunder shall be
enforceable against any of the parties in the courts of the State of South Dakota. For such
purpose, each party hereto and the Protected Partners hereby irrevocably submits to the
nonexclusive jurisdiction of such courts and agrees that all claims in respect of this Agreement
may be heard and determined in any of such courts.

          5.10.2 Each party hereto hereby irrevocably agrees that a final judgment of any of the courts
specified above in any action or proceeding relating to this Agreement shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

     5.11 Severability. If any part of any provision of this Agreement shall be invalid or
unenforceable in any respect, such part shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of such provision or the
remaining provisions of this Agreement.

     5.12 Costs of Disputes. Except as otherwise expressly set forth in this Agreement,
the nonprevailing party in any dispute arising hereunder shall bear and pay the costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses) incurred by the prevailing
party or parties in connection with resolving such dispute.

     5.13 Enforcement by Protected Partners. The Protected Partners are the beneficiaries
of this Agreement and shall be able to enforce this Agreement as if they were parties to this
Agreement.

8

 

     IN WITNESS WHEREOF, the Partnership and the Member have caused this Agreement to be signed by
their respective officers, general partners, or delegates thereunto duly authorized all as of the
date first written above.

	 	 	 	 	 
	 	SUMMIT HOTEL OP, LP,

a Delaware limited partnership

 	 
	 	By:  	Summit Hotel GP, LLC,
 	 
	 	 	a Delaware limited liability company, 	 
	 	 	its General Partner 	 
	 	 	 
	 	By:  	                    Summit Hotel Properties, Inc.,
 	 
	 	 	a Maryland corporation, 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                                             /s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	President 	 
	 
	 	THE SUMMIT GROUP, INC.

a South Dakota corporation

 	 
	 	By:  	/s/ Kerry W. Boekelheide
 	 
	 	 	Name:  	Kerry W. Boekelheide 	 
	 	 	Title:  	Chairman and CEO 	 

9

 

	 	 	 	 	 

SCHEDULES AND EXHIBITS TO THE TAX PROTECTION AGREEMENT

	 	 	 

	Schedule 2.1(a)

	 	List of Protected Partners
	Schedule 2.1(b)

	 	Liability Amount
	Schedule 2.1(c)

	 	Form of Guarantee Agreement

10

 

Schedule 2.1(a)

List of Protected Partners

The Summit Group, Inc.

11

 

Schedule 2.1(b)

Liability Amount

	 	 	 	 	 
	Protected Partner	 	Liability Amount **/
	The Summit Group, Inc.
	 	$	13,763,798	 

 

			
	**/	 	The estimated “negative tax capital account” of a Partner in the Partnership on the
closing date of the IPO that would be recognized as a result of the repayment of liabilities with
IPO proceeds, as determined by the Partnership in its sole discretion.

 

 

Schedule 2.1(c)

Form of Guaranty 1/

GUARANTEE

     This Guarantee is made and entered into as of the __ day of _______ 20__, by the persons
listed on Exhibit A annexed hereto (the “Guarantors”) for the benefit of the Lender
set forth on Exhibit B annexed hereto and made a part hereof (the “Lender,” which
term shall include any person or entity who hereafter holds the Note (as defined below) in
accordance with the terms thereof).

RECITALS

 

			
	1/ 	 	This Form of the Guarantee Agreement is
for Guaranteed Debt where the following conditions all are applicable:

	 	(i)	 	there are no other guarantees in effect with
respect to such Guaranteed Debt;
	 
	 	(ii)	 	the collateral securing such Guaranteed Debt
is not collateral for any other indebtedness
that is senior to or pari passu with such
Guaranteed Debt;
	 
	 	(iii)	 	no additional guarantees with respect to
such Guaranteed Debt will be entered into during
the applicable Tax Protection Period;
	 
	 	(iv)	 	the lender with respect to such Guaranteed
Debt is not the Partnership or other entity in
which the Partnership owns a direct or indirect
interest, the REIT, any other partner in the
Partnership, or any person related to any
partner in the Partnership as determined for
purposes of Treasury Regulations
Section 1.752-2; and
	 
	 	(v)	 	none of the REIT, nor any other partner in
the Partnership, nor any person related to any
partner in the Partnership as determined for
purposes of Treasury Regulations Section 1.752-2
shall have provided, or shall thereafter
provide, collateral for, or otherwise shall have
entered, or thereafter shall enter, into a
relationship that would cause such person or
entity to be considered to bear risk of loss
with respect to such Guaranteed Debt, as
determined for purposes of Treasury Regulations
Section 1.752-2.

          If, and to the extent that, one or more of these conditions is not
applicable, appropriate changes to the attached Form of Guaranty will be
required in order to cause the various conditions set forth in Article 2 of the
Tax Protection Agreement to be satisfied.

 

 

     WHEREAS, the Lender has loaned to the borrower set forth on Exhibit B (the
“Borrower”) the amount set forth opposite such Lender’s name on Exhibit B, which
loan (i) is evidenced by the promissory note described on Exhibit C hereto (the
“Note”), (ii) has a current outstanding balance in the amount set forth on Exhibit
B annexed hereto, and (iii) is secured by a mortgage or deed of trust on the collateral
described on Exhibit D annexed hereto (the “Deed of Trust,” with the property and
other assets securing such Deed of Trust referred to as the “Collateral”);

     WHEREAS, the Borrower is either Summit Hotel OP, LP, a Delaware limited partnership (the
“Partnership”), or a subsidiary of the Partnership in which the Partnership owns a 98% or
greater interest in the subsidiary;

     WHEREAS, the Guarantors are limited partners in the Partnership; and

     WHEREAS, the Guarantors are executing and delivering this Guarantee to guarantee a portion of
the Borrower’s payments with respect to the Note, subject to and otherwise in accordance with the
terms and conditions hereinafter set forth.

     NOW THEREFORE, in consideration of the foregoing recitals and facts and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, each of
the Guarantors hereby agree as follows:

     1. Guarantee and Performance of Payment.

     (a) The Guarantors hereby irrevocably and unconditionally guarantee the collection by the
Lender of, and hereby agree to pay to the Lender upon demand (following (1) foreclosure of the Deed
of Trust, exercise of the powers of sale thereunder and/or acceptance by the Lender of a deed to
the Collateral in lieu of foreclosure, and (2) the exhaustion of the exercise of any and all
remedies available to the Lender against the Borrower, including, without limitation, realizing
upon the assets of the Borrower other than the Collateral against which the Lender may have
recourse), an amount equal to the excess, if any, of the Guaranteed Amount set forth on Exhibit
B over the Lender Proceeds (as hereinafter defined) (which excess is referred to as the
“Aggregate Guarantee Liability”). The amounts payable by each Guarantor in respect of the
guarantee obligations hereunder shall be in the same proportion as the dollar amounts listed next
to such Guarantor’s name on Exhibit A attached hereto bears to the total Guaranteed Amount
set forth on Exhibit A, provided that, notwithstanding anything to the contrary contained
in this Guarantee, each Guarantor’s aggregate obligation under this Guarantee shall be limited to
the dollar amount set forth on Exhibit A attached hereto next to such Guarantor’s name.
The Guarantors’ obligations as set forth in this paragraph 1(a) are hereinafter referred to as the
“Guaranteed Obligations.”

     (b) For the purposes of this Guarantee, the term “Lender Proceeds” shall mean the
aggregate of (i) the Foreclosure Proceeds (as hereinafter defined) plus (ii) all amounts collected
by the Lender from the Borrower (other than payments of principal, interest or other amounts
required to be paid by the Borrower to Lender under the terms of the Note that are paid by the
Borrower to the Lender at a time when no default has occurred under the Note and is continuing) or
realized by the Lender from the sale of assets of the Borrower other than the Collateral.

 

 

     (c) For the purposes of this Guarantee, the term “Foreclosure Proceeds” shall have the
applicable meaning set forth below with respect to the Collateral:

	 	1.	 	If at least one bona fide third party unrelated to the Lender
(and including, without limitation, any of the Guarantors) bids for such
Collateral at a sale thereof, conducted upon foreclosure of the related Deed of
Trust or exercise of the power of sale thereunder, Foreclosure Proceeds shall
mean the highest amount bid for such Collateral by the party that acquires
title thereto (directly or through a nominee) at or pursuant to such sale. For
the purposes of determining such highest bid, amounts bid for the Collateral by
the Lender shall be taken into account notwithstanding the fact that such bids
may constitute credit bids which offset against the amount due to the Lender
under the Note.
	 
	 	2.	 	If there is no such unrelated third-party at such sale of the
Collateral so that the only bidder at such sale is the Lender or its designee,
the Foreclosure Proceeds shall be deemed to be fair market value (the “Fair
Market Value”) of the Collateral as of the date of the foreclosure sale, as
such Fair Market Value shall be mutually agreed upon by the Lender and the
Guarantor or determined pursuant to subparagraph 1(d).
	 
	 	3.	 	If the Lender receives and accepts a deed to the Collateral in
lieu of foreclosure in partial satisfaction of the Borrower’s obligations under
the Note, the Foreclosure Proceeds shall be deemed to be the Fair Market Value
of such Collateral as of the date of delivery of the deed-in-lieu of
foreclosure, as such Fair Market Value shall be mutually agreed upon by the
Lender and the Guarantor or determined pursuant to subparagraph 1(d).

     (d) Fair Market Value of the Collateral (or any item thereof) shall be the price at which a
willing seller not compelled to sell would sell such Collateral, and a willing buyer not compelled
to buy would purchase such Collateral, free and clear of all mortgages but subject to all leases
and reciprocal easements and operating agreements. If the Lender and the Guarantor are unable to
agree upon the Fair Market Value of any Collateral in accordance with subparagraphs (c)1., 2. or 3.
above, as applicable, within twenty (20) days after the date of the foreclosure sale or the
delivery of the deed-in-lieu of foreclosure, as applicable, relating to such Collateral, either
party may have the Fair Market Value of such Collateral determined by appraisal by appointing an
appraiser having the qualifications set forth below to determine the same and by notifying the
other party of such appointment within twenty (20) days after the expiration of such twenty (20)
day period. If the other party shall fail to notify the first party, within twenty (20) days after
its receipt of notice of the appointment by the first party, of the appointment by the other party
of an appraiser having the qualifications set forth below, the appraiser appointed by the first
party shall alone make the determination of such Fair Market Value. Appraisers appointed by the
parties shall be members of the Appraisal Institute (MAI) and shall have at least ten years’
experience in the valuation of properties similar to the Collateral being valued in the greater
metropolitan area in which such Collateral is located. If each party shall appoint an appraiser
having the aforesaid qualifications and if such appraisers

 

 

cannot, within thirty (30) days after the appointment of the second appraiser, agree upon the
determination hereinabove required, then they shall select a third appraiser which third appraiser
shall have the aforesaid qualifications, and if they fail so to do within forty (40) days after the
appointment of the second appraiser they shall notify the parties hereto, and either party shall
thereafter have the right, on notice to the other, to apply for the appointment of a third
appraiser to the chapter of the American Arbitration Association or its successor organization
located in the metropolitan area in which the Collateral is located or to which the Collateral is
proximate or if no such chapter is located in such metropolitan area, in the metropolitan area
closest to the Collateral in which such a chapter is located. Each appraiser shall render its
decision as to the Fair Market Value of the Collateral in question within thirty (30) days after
the appointment of the third appraiser and shall furnish a copy thereof to the Lender and the
Guarantor. The Fair Market Value of the Collateral shall then be calculated as the average of (i)
the Fair Market Value determined by the third appraiser and (ii) whichever of the Fair Market
Values determined by the first two appraisers is closer to the Fair Market Value determined by the
third appraiser; provided, however, that if the Fair Market Value determined by the third appraiser
is higher or lower than both Fair Market Values determined by the first two appraisers, such Fair
Market Value determined by the third appraiser shall be disregarded and the Fair Market Value of
the Collateral shall then be calculated as the average of the Fair Market Value determined by the
first two appraisers. The Fair Market Value of a Property, as so determined, shall be binding and
conclusive upon the Lender and the Guarantors. A Guarantor shall bear the cost of its own appraiser
and, subject to subparagraph 1(e), shall bear all reasonable costs of appointing, and the expenses
of, any other appraiser appointed pursuant to this subparagraph (1)(d).

     (e) Notwithstanding anything in the preceding subparagraphs of this paragraph 1, (i) in no
event shall the aggregate amount required to be paid pursuant to this Guarantee by the Guarantors
as a group with respect to all defaults under the Note and the Deed of Trust securing the
obligations thereunder exceed the Guaranteed Amount set forth on Exhibit B hereto, and (ii)
the aggregate obligation of each Guarantor hereunder with respect to the Guaranteed Obligation
shall be limited to the lesser of (I) the product of (w) the Individual Guarantee Percentage for
such Guarantor set forth on Exhibit A hereto multiplied by (x) the Guaranteed Amount, or
(II) the product of (y) such Guarantor’s Individual Guarantee Percentage multiplied by (z) the
Aggregate Guarantee Liability.

     (f) In confirmation of the foregoing, and without limitation, the Lender must first exhaust
all of its rights and remedies against all property of the Borrower as to which the Lender has (or
may have) a right of recourse, including, without limitation, the institution and prosecution to
completion of appropriate foreclosure proceedings under the Deed of Trust, before exercising any
right or remedy or making any claim, under this Guarantee.

     (g) The obligations under this Guarantee shall be personal to each Guarantor and shall not be
affected by any transfer of all or any part of a Guarantor’s interests in the Partnership;
provided, however, that if a Guarantor has disposed of all of its equity interests in the
Partnership, the obligations of such Guarantor under this Guarantee shall terminate 12 months after
the date of such disposition (the “Termination Date”) provided (i) the Guarantor notifies the
Lender that it is terminating its obligations under this Guarantee as of the Termination Date and
(ii) the fair market value of the Collateral exceeds the outstanding balance of the Note, including
accrued and unpaid interest, as of the Termination Date. Further, no

 

 

Guarantor shall have the right to recover from the Borrower any amounts such Guarantor pays
pursuant to this Guarantee (except and only to the extent that the amount paid to the Lender by
such Guarantor exceeds the amount required to be paid by such Guarantor under the terms of this
Guarantee).

     (h) The obligations of any Guarantor who is an individual as a Guarantor hereunder shall
terminate with respect to such Guarantor one week after the death of such Guarantor if, as a result
of the death of such Guarantor, all property held by the Guarantor on the date of death would have
a basis for federal income tax purposes equal to the fair market value of such property on such
date (unless a later date were to be elected by the executor of the Guarantor’s estate in
accordance with the applicable provisions of the Internal Revenue Code).

     2. Intent to Benefit Lender. This Guarantee is expressly for the benefit of the
Lender. The Guarantors intend that the Lender shall have the right to enforce the obligations of
the Guarantors hereunder separately and independently of the Borrower, subject to the provisions of
paragraph 1 hereof, without any requirement whatsoever of resort by the Lender to any other party.
The Lender’s rights to enforce the obligations of the Guarantors hereunder are material elements of
this Guarantee. This Guarantee shall not be modified, amended or terminated (other than as
specifically provided herein) without the written consent of the Lender. The Borrower shall
furnish a copy of this Guarantee to the Lender contemporaneously with its execution.

     3. Waivers. Each Guarantor intends to bear the ultimate economic responsibility for
the payment hereof of the Guaranteed Obligations to the extent set forth in Paragraph 1 above.
Pursuant to such intent:

          (a) Except as expressly set forth in Paragraph 1 above, each Guarantor expressly waives any
right (pursuant to any law, rule, arrangement or relationship) to compel the Lender, or any
subsequent holder of the Note or any beneficiary of the Deed of Trust to sue or enforce payment
thereof or pursue any other remedy in the power of the Borrower, the Lender or any subsequent
holder of the Note or any beneficiary of the Deed of Trust whatsoever, and failure of the Borrower
or the Lender or any subsequent holder of the Note or any beneficiary of the Deed of Trust to do so
shall not exonerate, release or discharge a Guarantor from its absolute unconditional obligations
under this Guarantee. Each Guarantor hereby binds and obligates itself, and its permitted
successors and assignees, for performance of the Guaranteed Obligations according to the terms
hereof, whether or not the Guaranteed Obligations or any portion thereof are valid now or hereafter
enforceable against the Borrower or shall have been incurred in compliance with any of the
conditions applicable thereto, subject, however, in all respects to the Guarantee Limit and the
other limitations set forth in paragraph 1.

          (b) Each Guarantor expressly waives any right (pursuant to any law, rule, arrangement, or
relationship) to compel any other person (including, but not limited to, the Borrower, the
Partnership, any subsidiary of the Partnership or the Borrower, or any other partner or affiliate
of the Partnership or the Borrower) to reimburse or indemnify such Guarantor for all or any portion
of amounts paid by such Guarantor pursuant to this Guarantee to the extent such amounts do not
exceed the amounts required to be paid by such Guarantor pursuant to paragraph 1 hereof (taking
into account the limitations set forth therein).

 

 

          (c) Except as expressly set forth in Paragraph 1 above, if and only to the extent that the
Borrower has made similar waivers under the Note or the Deed of Trust, each Guarantor expressly
waives: (i) the defense of the statute of limitations in any action hereunder or for the
collection or performance of the Note or the Deed of Trust; (ii) any defense that may arise by
reason of: the incapacity, or lack of authority of the Borrower, the revocation or repudiation
hereof by such Guarantor, the revocation or repudiation of the Note or the Deed of Trust by the
Borrower, the failure of the Lender to file or enforce a claim against the estate (either in
administration, bankruptcy or any other proceeding) of the Borrower; the unenforceability in whole
or in part of the Note, the Deed of Trust or any other document or instrument related thereto; the
Lender’s election, in any proceeding by or against the Borrower under the federal Bankruptcy Code,
of the application of Section 1111(b)(2) of the federal Bankruptcy Code; or any borrowing or grant
of a security interest under Section 364 of the federal Bankruptcy Code; (iii) presentment, demand
for payment, protest, notice of discharge, notice of acceptance of this Guarantee or occurrence of,
or any default in connection with, the Note or the Deed of Trust, and indulgences and notices of
any other kind whatsoever, including, without limitation, notice of the disposition of any
collateral for the Note; (iv) any defense based upon an election of remedies (including, if
available, an election to proceed by non-judicial foreclosure) or other action or omission by the
Lender or any other person or entity which destroys or otherwise impairs any indemnification,
contribution or subrogation rights of such Guarantor or the right of such Guarantor, if any, to
proceed against the Borrower for reimbursement, or any combination thereof; (v) subject to
Paragraph 4 below, any defense based upon any taking, modification or release of any collateral or
guarantees for the Note, or any failure to create or perfect any security interest in, or the
taking of or failure to take any other action with respect to any collateral securing payment or
performance of the Note; (vi) any rights or defenses based upon any right to offset or claimed
offset by such Guarantor against any indebtedness or obligation now or hereafter owed to such
Guarantor by the Borrower; or (vii) any rights or defenses based upon any rights or defenses of the
Borrower to the Note or the Deed of Trust (including, without limitation, the failure or value of
consideration, any statute of limitations, accord and satisfaction, and the insolvency of the
Borrower); it being intended, except as expressly set forth in Paragraph 1 above, that such
Guarantor shall remain liable hereunder, to the extent set forth herein, notwithstanding any act,
omission or thing which might otherwise operate as a legal or equitable discharge of any of such
Guarantor or of the Borrower.

     4. Amendment of Note and Deed of Trust. Without in any manner limiting the generality
of the foregoing, the Lender or any subsequent holder of the Note or beneficiary of the Deed of
Trust may, from time to time, without notice to or consent of the Guarantors, agree to any
amendment, waiver, modification or alteration of the Note or the Deed of Trust relating to the
Borrower and its rights and obligations thereunder (including, without limitation, renewal, waiver
or variation of the maturity of the indebtedness evidenced by the Note, increase or reduction of
the rate of interest payable under the Note, release, substitution or addition of any Guarantor or
endorser and acceptance or release of any security for the Note), it being understood and agreed by
the Lender, however, that the Guarantor’s obligations hereunder are subject, in all events, to the
limitations set forth in Paragraph 1; provided that (i) in the event that the Lender consents to
the release of any Collateral securing the Note pursuant to the Deed of Trust, the Guaranteed
Amount shall be reduced by the Fair Market Value of such Collateral on the date of such release
(determined as set forth in Section 1(d)); and (ii) upon any material change to the Note or the
Deed of Trust, including, without limitation, the maturity date or the

 

 

interest rate of the Note, or upon any release or substitution of any Collateral securing the
Note, within thirty (30) days of any Guarantor’s receipt of actual notice of such event, subject to
the following sentence, such Guarantor may elect to terminate such Guarantor’s obligations under
this Guarantee by written notice to the Lender. Such termination shall take effect on the 31st day
following such actual notice, provided that no default under the Guaranteed Obligation has occurred
and is then continuing.

     5. Termination of Guarantee. Subject to Paragraph 4, this Guarantee is irrevocable as
to any and all of the Guaranteed Obligations.

     6. Independent Obligations. Except as expressly set forth in Paragraph 1, the
obligations of each Guarantor hereunder are independent of the obligations of the Borrower, and a
separate action or actions may be brought by a Lender against the Guarantors, whether or not
actions are brought against the Borrower. Each Guarantor expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which such
Guarantor may now or hereafter have against the Borrower, or any other person directly or
contingently liable for the payment or performance of the Note and the Deed of Trust arising from
the existence or performance of this Guarantee (including, but not limited to, the Partnership,
Summit Hotel Properties, Inc., or any other partner of the Partnership) (except and only to the
extent that a Guarantor makes a payment to the Lender in excess of the amount required to be paid
under Paragraph 1 and the limitations set forth therein).

     7. Understanding With Respect to Waivers. Each Guarantor warrants and represents that
each of the waivers set forth above are made with full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any of said waivers are determined to be contrary to any applicable law
or public policy, such waiver shall be effective only to the maximum extent permitted by law.

     8. No Assignment. No Guarantor shall be entitled to assign his or her rights or
obligations under this Guarantee to any other person without the written consent of the Lender.

     9. Entire Agreement. The parties agree that this Guarantee contains the entire
understanding and agreement between them with respect to the subject matter hereof and cannot be
amended, modified or superseded, except by an agreement in writing signed by the parties.

     10. Notices. Any notice given pursuant to this Guarantee shall be in writing and
shall be deemed given when delivered personally, or sent by registered or certified mail, postage
prepaid, as follows:

     If to the Partnership:

Summit Hotel OP, LP

2701 South Minnesota Avenue, Suite 6

Sioux Falls, South Dakota 57105

Attention: Chris Eng, Esq.

Telecopier No. (605) 362-9388

 

 

or to such other address with respect to which notice is subsequently provided in the manner set
forth above; and

     If to a Guarantor, to the address set forth on Exhibit A hereto, or to such other
address with respect to which notice is subsequently provided in the manner set forth above.

     11. Applicable Law. This Guarantee shall be governed by, interpreted under and
construed in accordance with the laws of the State of Delaware without reference to its choice of
law provisions.

     12. Consent to Jurisdiction; Enforceability

          (a) This Guarantee and the duties and obligations of the parties hereto shall be enforceable
against each Guarantor in the courts of the State of South Dakota. For such purpose, each
Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such courts and agrees
that all claims in respect of this Guarantee may be heard and determined in any of such courts.

          (b) Each Guarantor hereby irrevocably agrees that a final judgment of any of the courts
specified above in any action or proceeding relating to this Guarantee shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

     13. Condition of Borrower. Each Guarantor is fully aware of the financial condition
of the Borrower and is executing and delivering this Guarantee based solely upon its own
independent investigation of all matters pertinent hereto and is not relying in any manner upon any
representation or statement of the Lender or the Borrower. Each Guarantor represents and warrants
that it is in a position to obtain, and hereby assumes full responsibility for obtaining, any
additional information concerning the Borrower’s financial conditions and any other matter
pertinent hereto as it may desire, and it is not relying upon or expecting the Lender to furnish to
it any information now or hereafter in the Lender’s possession concerning the same. By executing
this Guarantee, each Guarantor knowingly accepts the full range of risks encompassed within a
contract of this type, which risks it acknowledges.

     14. Expenses. Each Guarantor agrees that, promptly after receiving Lender’s notice
therefor, such Guarantor shall reimburse Lender, subject to the limitation set forth in
subparagraph 1(e) and to the extent that such reimbursement is not made by Borrower, for all
reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Lender in connection with the collection of the Guaranteed Obligations or any portion
thereof or with the enforcement of this Guarantee.

 

 

     IN WITNESS WHEREOF, the undersigned Guarantors set forth on Exhibit A hereto have
executed this Guarantee as of the date first set forth above.

	 	 	 	 	 
	 	GUARANTORS SET FORTH ON

EXHIBIT A
HERETO:

 	 
	 	By:  	 	 
	 	 	 
	 	By:  	 	 
	 	 	 
	 	By:  	 	 
	 	 	 
	 	By:  	 	 
	 	 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

 

 

	 	 	 	 	 

Exhibit A to Guarantee

	 	 	 	 	 
	Name and Address of Partner Guarantors	 	Guaranteed Amount
	 
	 	 	 	 
	Guarantors, as a group
	 	$	 	 

	 	 	 

	Individual Guarantors:

	 	Individual

Guarantee

Percentage

 

 

Exhibit B to Guarantee

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date of and	 	 	 	 
	 	 	 	 	Principal Amount	 	Debt Balance as of	 	Guaranteed
	Name of Lender	 	Name of Borrower	 	of Loan	 	__/__/__	 	Amount
	 
	 	 	 	 	 	 	 	 

 

 

Exhibit C to Guarantee

Copy of Note

 

 

Exhibit D to Guarantee

Identification of Deed of Trust and

Brief Summary Description of Collateral

14

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