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

	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

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

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 14 ^th 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

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.

     “ 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.

     “ 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.

     “ 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

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.

     “ 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.

     “ 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,

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.

     “ 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.

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;

          (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.

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

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

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

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

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

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.

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.

     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

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

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.

      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.

      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

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

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

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.

      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.

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;

          (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;

          (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,

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.

          (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

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.

      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.

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

(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.

          (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.

          (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.

          (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,

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

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

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

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

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

(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

(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.

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

(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

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,

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

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

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

          (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

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. ]

     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 14 ^th day of February, 2011.

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

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

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

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.

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.

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.

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.

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-1

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

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

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

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

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

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

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.

     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.

Schedule 2.1(a)

List of Protected Partners

The Summit Group, Inc.

Schedule 2.1(b)

Liability Amount

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

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

	(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.

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

Exhibit 10.3

TRANSITION SERVICES AGREEMENT

     This Transition Services Agreement (this “ Agreement ”) is entered into as of this 14th day of February, 2011, by and between The Summit Group, Inc., a South Dakota corporation (“ SGI ”), and Summit Hotel OP, LP, a Delaware limited partnership (“ Summit OP ”).

Recitals

     A. Summit Hotel Properties, LLC, a South Dakota limited liability company (the “ Predecessor ”), and its subsidiaries are engaged in the business of owning premium-branded limited-service and select-service hotels in the upscale and midscale without food and beverage segments of the U.S. lodging industry (the “ Business ”).

     B. SGI and its Affiliates (as defined in Section 5 hereof) currently provide services to the Predecessor and its subsidiaries that enable the Predecessor and its subsidiaries to conduct the Business.

     C. The Predecessor and Summit OP are parties to that certain Agreement and Plan of Merger, dated as of August 5, 2010 (the “Merger Agreement”), pursuant to which, among other things, the Predecessor has agreed to merge with and into Summit OP with Summit OP surviving such merger, and, as a matter of law, Summit OP will succeed to all of the assets and liabilities of the Predecessor, including, without limitation, the assets and liability attributable to the Business.

     D. In order to facilitate the transition of the Business to Summit OP, Summit OP desires SGI to provide, and SGI is willing to provide or cause its Affiliates to provide certain transitional services to Summit OP and its Affiliates, on the terms and conditions set forth herein.

Agreement

     NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties do hereby agree as follows:

     Section 1. Services . During the Term (as defined in Section 4 hereof), SGI shall provide, or cause its Affiliates to provide to the Summit Entities (as defined below) such services related to the Business as the Summit Entities shall reasonably request from time to time (the “ Services ”). Services shall be provided to the Summit Entities at reasonable times and upon reasonable notice, as mutually agreed to by the parties. For purposes of this Agreement, the term “ Summit Entities ” shall mean Summit Hotel Properties, Inc., a Maryland corporation (“ Summit REIT ”), Summit OP and their respective subsidiaries.

     Section 2. Fees .

          (a) SGI and its Affiliates shall provide Services hereunder to the Summit Entities at their fully-loaded cost. In addition, Summit OP shall reimburse SGI or its Affiliates

for any actual and reasonable out-of-pocket costs or expenses incurred by SGI or its Affiliates in connection with providing Services hereunder.

          (b) Not more than thirty (30) days following the end of each calendar month during the Term, if any costs or out-of-pocket expenses have been incurred and not previously reimbursed, SGI shall invoice Summit OP for the Services performed by SGI or its Affiliates for the Summit Entities under this Agreement during the preceding calendar month. All such invoices shall be paid by Summit OP in full within thirty (30) days after receipt thereof. Summit OP shall pay all federal, state, and local taxes based upon or arising out of such Services having been rendered under this Agreement.

     Section 3. Limitation on Damages . IN NO EVENT SHALL A PARTY OR ITS RESPECTIVE AFFILIATES OR ANY OF THEIR PARTNERS, MEMBERS, STOCKHOLDERS, MANAGERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES OR SUBCONTRACTORS BE LIABLE REGARDLESS OF THE FORM OF ACTION OR LEGAL THEORY FOR INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND RELATED TO THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT INCLUDING WITHOUT LIMITATION LOST PROFITS, LOSS OF DATA (OTHER THAN LIABILITY FOR THE COST OF REENTRY OF SUCH DATA) OR BUSINESS INTERRUPTION.

     Section 4. Effective Time; Service Period .

          (a) This Agreement shall become effective, without further action by either party, upon the consummation of Summit REIT’s initial public offering (the “ Effective Time ”). This Agreement shall continue indefinitely, provided that either party may terminate this Agreement upon thirty (30) days advanced written notice to the other party (the “ Term ”). Further, either party may terminate this Agreement immediately upon written notice to the other party upon the material breach or failure by the other to perform its obligations hereunder (including any nonpayment referred to in Section 2 above), which material breach or failure is not cured within ten (10) days after written notice of such breach or failure is given by the non-breaching party to the breaching party, or, in the case of nonpayment, which nonpayment is not cured within fifteen (15) days after written notice is given.

          (b) The provisions of Section 2 , Section 3 , Section 4(b) , Section 5 , Section 6 and Section 7 shall survive any termination of this Agreement or any Services provided hereunder.

     Section 5. Indemnification . Summit OP hereby agrees to indemnify, protect and hold SGI, its Affiliates and their respective employees, agents, officers, directors, partners, members, managers, stockholders and representatives (each, an “ Indemnified Party ”) harmless from and against any and all claims, liabilities, damages, including costs or expenses related thereto and reasonable attorneys’ fees, incurred by any Indemnified Party as a result of SGI or its Affiliates providing Services to the Summit Entities pursuant to this Agreement, except for losses directly resulting from the gross negligence or willful misconduct of an Indemnified Party. For purposes of this Agreement, the term “Affiliate” shall mean, with respect to any person or entity, another

person or entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such person or entity.

or to such other place and with such other copies as either party may designate as to itself by written notice to the others.

          (b) No Third Party Beneficiaries . Except as expressly provided herein, nothing herein is intended to confer upon any person, other than the parties and their respective permitted assignees, any rights, obligations or liabilities under or by reason of this Agreement.

          (c) No Assignment . Neither this Agreement nor any rights or obligations hereunder shall be assignable by either of the parties hereto, provided that either party may delegate all or any portion of its obligations to perform Services under this Agreement to one or more of its Affiliates.

          (d) Independent Contractor . The parties hereto understand and agree that this Agreement does not make either of them an agent or legal representative of the other for any purpose whatsoever. No party is granted, by this Agreement or otherwise, any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of any other party, or to bind any other party in any manner whatsoever. Each party expressly acknowledges (i) that each party is an independent contractor with respect to the other

in all respects, including, without limitation, the provision of the Services, and (ii) that the parties are not Partners, joint venturers, employees or agents of or with each other.

          (e) Modifications and Amendments . This Agreement may be amended, modified, or supplemented only by written agreement of the parties.

          (f) Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of South Dakota, without regard to laws that may be applicable under conflicts of laws principles.

          (g) Headings . The underlined headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

          (h) Counterparts . This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement with the same effect as if the counterpart signatures were upon the same instrument.

          (i) No Representations or Warranties . The parties acknowledge that neither party has made or is making any representations or warranties whatsoever to the other, implied or otherwise, under this Agreement.

          (j) Successors . This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors.

[ Signatures appear on the following page. ]

      IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the date first above written.

EXHIBIT 10.4

EXECUTION COPY

AMENDED AND RESTATED HOTEL MANAGEMENT AGREEMENT

      THIS AMENDED AND RESTATED HOTEL MANAGEMENT AGREEMENT (this “Agreement” ) is made as of the 14th day of February, 2011, between the lessee entities set forth on Exhibit A attached hereto and made a part hereof (collectively, “Owner” ) and INTERSTATE MANAGEMENT COMPANY, LLC ( “Operator” ), a Delaware limited liability company.

RECITALS

     A. Owner and its affiliates lease from Summit Hotel OP, LP, a Delaware limited partnership (the “ OP ”), and its affiliates described on Exhibit A (each a “ Land Holder ” and collectively, the “ Land Holders ”, whether held as a Land Holder or as a ground lessee) the hotel properties described in Exhibit A (each a “ Hotel ” and collectively, the “ Hotels ”) pursuant to one or more Lease Agreements (each, a “ Lease ”). Summit Hotel OP is substantially owned by Summit Hotel Properties, Inc., a Maryland corporation (the “ REIT ”).

     B. The Hotels, together with certain other hotels and lodging assets owned by Land Holders and leased by Owner, comprise a portfolio of hotels, which prior to the date hereof were managed by The Summit Group Inc. (“ Prior Manager ”) pursuant to the terms of five (5) certain management agreements of varying dates entered into between 2003 and 2007 (as amended, the “ Existing Management Agreements ”).

     C. Owner desires Operator to assume management of the Hotels.

     D. Pursuant to an Assignment and Assumption Agreement of even date herewith (the “ Assignment ”), Prior Manager has assigned all of its right, title and interest in the Existing Management Agreements to Operator, and Operator has assumed the obligations of Prior Manager under the Existing Management Agreements to the extent arising on or after the date of the Assignment, on the terms and conditions set forth in the Assignment.

     E. Owner and Operator desire to amend, restate and replace the Existing Management Agreements with this Agreement, and evidence their agreement with respect to the operation, direction, management, and supervision of the Hotels individually as more particularly set forth below.

      NOW, THEREFORE , for and in consideration of the premises, and other good and valuable consideration, Owner and Operator agree as follows:

ARTICLE I

THE HOTEL

1.1. Owner and Operator acknowledge that each Hotel consists of and contains:

A. A building (the “Building” ) with guest rooms and suites, restaurant(s), lounge(s), and

conference and meeting rooms together with the parcel of land on which the Building is located and any outdoor parking areas or other facilities located on such land, all as more fully described on Exhibit B attached hereto and made a part hereof;

B. Mechanical systems and built-in installations (the “Installations” ) in each Building including, but not limited to, heating, ventilation, air conditioning, electrical and plumbing systems, elevators and escalators, and built-in laundry, refrigeration and kitchen equipment;

C. Furniture, furnishings, wall coverings, floor coverings, window treatments, fixtures and hotel equipment and vehicles (the “FF&E” );

D. Chinaware, glassware, silverware, linens, and other items of a similar nature (the “Operating Equipment” );

E. Stock and inventories of paper supplies, cleaning materials and similar consumable items and food and beverage (the “Operating Supplies” ); and

F. Any whirlpool, fitness center, spa, on-site parking, pool , beach, club facilities, retail facilities, restaurants and related amenities or facilities for each Hotel.

ARTICLE II

OPERATING TERM

2.1. This Agreement shall have a term (the “Operating Term” ) commencing on the date hereof (the “Commencement Date” ) and expiring on the tenth (10th) anniversary of the Commencement Date (the “Initial Term” ), unless sooner terminated in accordance with the provisions of this Agreement or unless extended as provided by the terms of this Agreement or as otherwise provided by the written agreement of Owner and Operator. This Agreement shall automatically renew for additional terms of thirty (30) days each (each, a “ Renewal Term ”) unless either party gives the other party written notice of termination at least sixty (60) days prior to the end of the Initial Term or thirty (30) days prior to the end of the then-current Renewal Term. Owner and Operator, by mutual written agreement, may renew this Agreement for a longer term and, in such case, such longer term shall be a Renewal Term. Any and all reference contained herein to Term shall be deemed to include the Operating Term, the Initial Term and the Renewal Term(s).

ARTICLE III

APPOINTMENT AND ENGAGEMENT OF OPERATOR

3.1. Owner hereby engages Operator as the exclusive operator of the Hotels during the Term and Operator hereby accepts such engagement.

3.2. Subject to the terms of this Agreement and the applicable Budgets, Operator shall have control and discretion in all aspects of the operation, direction, management and supervision of the Hotels. Such control and discretion of Operator shall include, without limitation, the determination

of credit policies (including entering into agreements with credit card organizations), terms of admittance, charges for rooms, food and beverage policies, employee wage, benefits and severance policies, entertainment and amusement policies, leasing, licensing and granting of concessions for commercial space at the Hotels, and all phases of advertising, promotion and publicity relating to the Hotels. Notwithstanding the foregoing, Operator acknowledges that the contracts with credit card vendors listed on Exhibit C attached hereto are required to remain in effect following the Commencement Date pursuant to the terms of the such contracts, and that Operator will not terminate such agreements (other than as permitted under the terms of such agreements) without Owner’s prior written consent.

3.3. Operator shall operate, manage and maintain each Hotel and all of its facilities and activities in a diligent and careful manner in accordance with the following standards (the “ Hotel Standard ”) in order to maintain the condition and character of such Hotel and with the primary goal of maximizing the Gross Operating Profit (as defined herein) of such Hotel:

     (a) in a manner that is equal to or better than the operation of similar hotels in the area of such Hotel and other similar hotels operated by Operator, to the extent consistent with the Budgets and such Hotel’s facilities; and

     (b) in accordance with the standards imposed by the hotel franchise agreement, if any, applicable to such Hotel (a “ Franchise Agreement ”).

3.4. Operator shall make its senior executives available to meet with Owner at least once each quarter and, in addition, at Owner’s reasonable request, consult with and advise Owner concerning all policies and procedures affecting all phases of the conduct of business at the Hotels. Operator shall in all events consult with Owner before implementing any material changes in policies and procedures relating to the Hotels. Operator shall make the Key Hotel Personnel (as defined in Section 4.7) for each Hotel available through the General Manager of such Hotel to meet with Owner at least once per month and at additional times (including by teleconference) from time to time upon Owner’s reasonable request, to review the operations of the Hotel and current matters of import, and in each instance, Owner shall give Operator adequate advance notice, in no event to be less than three (3) days advance notice. Operator shall in all events meet with Owner before implementing any material changes in policies and procedures relating to any Hotel. Owner shall not contact any other Hotel Employee regarding the operations of the Hotels.

3.5. During the Term, Operator, as agent and for the account of Owner, shall in accordance with the Budgets (as defined in Section 8.4) and the other applicable provisions of this Agreement, and only to the extent Owner has provided sufficient funds therefor, either through Hotels operations or directly from Owner:

A.

Recruit, train, direct, supervise, employ and dismiss on-site staff (the “Hotel Employees” ) for the operation of the Hotels, and in connection therewith establish and maintain an affirmative action plan for the Hotels; provided, however, no employment agreement for any Hotel Employee shall contain an automatic renewal provision without the prior written consent of the Owner specifically referring to such renewal provision;

	B.		Develop and implement advertising, marketing, promotion, publicity and other similar programs for the Hotels;
	C.		(i) Negotiate and enter into leases, licenses and concession agreements for stores, office space and lobby space at the Hotels (including without limitation, car rental counters and gift shops) and commercial space, if any, that is adjacent to or otherwise part of the Hotels (including without limitation, rooftop antennas) (collectively, the “Leases” ), collect the rent under such Leases and otherwise administer the Leases and (ii) negotiate and enter into contracts for the provision of services to the Hotels; provided that, Operator shall not, without Owner’s consent, enter into any such Leases or contracts for terms in excess of one (1) year, unless such Lease or contract may be terminated without cause and without payment of any penalty on no less than sixty (60) days’ notice;
	D.		Upon receipt of all necessary information from Owner, apply for, process and take all necessary steps to procure and keep in effect in Owner’s name (or, if required by the licensing authority, in Operator’s name or both) all licenses and permits and the sales tax registration(s) required for the operation of the Hotels;
	E.		Pursuant to a separate written agreement on terms and conditions set forth therein, Operator’s affiliate will purchase all FF&E, Operating Equipment and Operating Supplies necessary for the operation of the Hotels; provided, however, Owner may purchase any of the FF&E, Operating Equipment or Operating Supplies used in connection with the operation of the Hotels, as an operating or capital expense, as appropriate, of the Hotels, in which case Owner will provide to Operator sufficient information for Operator to maintain accurate books and records regarding sales tax accruals and pay such accruals out of Total Revenues from the Hotel. At the request of Owner, Operator shall put out for competitive bid the purchase of FF&E, Operating Equipment or Operating Supplies used in connection with the operation of the Hotels as contemplated in this Section E;
	F.		Provide routine accounting and purchasing services as required in the ordinary course of business;
	G.		Comply with all applicable laws, ordinances, regulations, rulings and orders of governmental authorities affecting or issued in connection with the Hotel, as well as with orders and requirements of any board of fire underwriters or any other body which may exercise similar functions, so long as Owner promptly delivers to Operator any notice of violation thereof received by Owner;
	H.		Subject to the Budgets, cause all needed repairs and maintenance to the Hotel of which Operator is aware to be made, and unless otherwise set forth in the Budgets, any expense for repairs and maintenance that exceeds Five Thousand Dollars ($5,000) shall require Owner’s prior approval and shall be put out for a minimum of three (3) competitive bids unless otherwise approved by Owner. Notwithstanding

the foregoing, such prior approval and bids shall not be required for ;any expenses regardless of amount which, in Operator’s reasonable judgment, are immediately necessary to prevent immediate material damage to a Hotel or the health or safety of its occupants ( “Emergency Expenses” ); provided that, Operator shall make good faith attempts to contact and notify Owner of the need for such Emergency Expenses prior to incurring them and in all events shall notify Owner within twenty-four (24) hours after Operator becomes aware of such emergency;

	I.		Subject to Section 3.6 below, use commercially reasonable efforts to operate the Hotels in accordance with any mortgage or deed of trust on the Hotels and/or Franchise Agreement (collectively, “Major Agreements” ); provided, however, Operator shall have no responsibility for causing the payment of any Fixed Charges or Owner Expenses (as defined in Section 7.2), unless expressly set forth in this Agreement;
	J.		At the direction of Owner, in its sole discretion and pursuant to a separate written agreement between Owner and Operator (or its affiliates), provide project coordination services to the Owner and its general contractor to aid in any construction or remodeling at the Hotels;
	K.		Use good faith efforts to identify, and provide recommendations to Owner regarding the use of, any vendor relationships established by Operator, in order to implement potential cost savings and operational efficiencies for the Hotels; and
	L.		Provide such other services as are required under the terms of this Agreement or as are customarily performed without additional fee by management companies of similar properties in the areas of the Hotels.

3.6. Notwithstanding any other provision of this Agreement to the contrary, Operator’s obligations with respect to any Major Agreement shall be limited to the extent (i) complete and accurate copies and/or summaries of the relevant provisions thereof have been delivered to Operator sufficiently in advance to allow Operator to perform such obligations and (ii) the provisions thereof and/or compliance with such provisions by Operator (1) are applicable to the day-to-day operation, maintenance and non-capital repair and replacement of the Hotels or any portion thereof, (2) do not require contribution of capital or payments of Operator’s own funds, (3) do not materially increase Operator’s obligations hereunder or materially decrease Operator’s other rights hereunder, provided however, that Operator acknowledges and agrees that standards, expectations, responsibilities and limitations prescribed by franchisors are not deemed to materially increase Operator’s obligations or materially decrease its rights hereunder (4) do not limit or purport to limit any corporate activity or transaction with respect to Operator or its affiliates or any other activity, transfer, transaction, property or other matter involving Operator or its affiliates other than at the sites of the Hotels, and (5) are otherwise within the scope of Operator’s duties under this Agreement. Owner acknowledges and agrees, without limiting the foregoing, that any failure of Operator or the Hotels to comply with the provisions of any Major Agreement arising out of (A) the condition of the Hotels, and/or the failure of the Hotels to comply with the provisions of such Major Agreement, prior to Operator’s assuming the day-to-day management thereof, (B) construction activities at the Hotels, (C) inherent

limitations in the design and/or construction of, location of and/or parking at the Hotels, (D) instructions from Owner to operate any Hotel in a manner inconsistent with the Major Agreements and/or (E) Owner’s failure to approve any matter requested by Operator in Operator’s reasonable good faith business judgment as necessary or appropriate to achieve compliance with any Major Agreement, shall not be deemed a breach by Operator of its obligations under this Agreement. Operator shall be entitled to rely on the copies of the Franchise Agreements provided by Owner.

ARTICLE IV

AGENCY; HOTEL EMPLOYEES

4.1. In the performance of its duties as Operator of the Hotels, Operator shall act solely as agent of Owner. Nothing in this Agreement shall constitute or be construed to be or create a partnership or joint venture between Owner and Operator. Except as otherwise provided in this Agreement, (a) all debts and liabilities to third persons incurred by Operator in the course of its operation and management of the Hotels in accordance with the provisions of this Agreement shall be the debts and liabilities of Owner only and (b) except to the extent provided in Section 23.1, Operator shall not be liable for any such obligations by reason of its management, supervision, direction and operation of the Hotel as agent for Owner. Operator may so inform third parties with whom it deals on behalf of Owner and may take any other reasonable steps to carry out the intent of this paragraph.

4.2. All Hotel Employees shall be employees of Operator or an affiliate. All compensation (including without limitation all wages, fringe benefits and severance payments) of the Hotel Employees shall be an Operating Expense (as defined in Section 10.2) and shall be borne by Owner and paid or reimbursed to Operator out of the Agency Account (as hereinafter defined) or if the amounts therein are insufficient by Owner upon demand therefor by Operator. Owner acknowledges and agrees that (a) Operator shall have the right to institute bonus programs for the Hotel Employees so long as such policies are reasonable and customary in the industry and (b) Operator shall have the right to institute severance payment policies for the Hotel Employees so long as such policies are consistent with Operator’s severance payment policies in effect from time to time for other similar hotels managed by Operator and its affiliates. Operator’s current severance payment policy is attached hereto as Exhibit D , and Operator shall obtain Owner’s prior consent before implementing any material changes to such policy at the Hotels.

4.3. Operator may, subject to the Budgets, enroll the Hotel Employees in retirement, health and welfare employee benefit plans substantially similar to corresponding plans implemented in other hotels with similar service levels managed by Operator or similar hotels in the areas of the Hotel. Such plans may be joint plans for the benefit of employees at more than one hospitality property owned, leased or managed by Operator or its affiliates. Employer contributions to such plans (including any withdrawal liability incurred upon termination of this Agreement) and reasonable administrative fees which Operator may expend in connection therewith shall be the responsibility of Owner and shall be an Operating Expense. The administrative expenses of any joint plans will be equitably apportioned by Operator among properties covered by such plan. The apportionment for each Hotel shall be based upon the total costs of the administrative expenses multiplied by a fraction, the numerator of which is the total payroll expense of the Hotel, and the denominator of which is the total payroll expense of all hotels participating in the joint plans. Owner hereby acknowledges and

agrees that (a) any employee benefit plan withdrawal liability and (b) compliance with the provisions of the Worker Adjustment and Retraining Notification Act and/or any similar state or local laws (together with all rules and regulations promulgated thereunder and including without limitation any such state or local laws, the “WARN Act” ) upon any disposition of a Hotel, upon any termination of this Agreement or upon the occurrence of any other event giving rise to the application of the WARN Act are the responsibility and obligation of Owner, and Owner hereby agrees to indemnify, defend and hold Operator harmless from and against any cost, expense, obligation, claim or other liability which Operator may incur arising out of or in connection with any employee benefit plan withdrawal liability or any breach or claimed breach of the WARN Act in connection with any such disposition, termination or other occurrence; provided, however, in the event that Operator receives notice of termination of this Agreement with sufficient time to comply with the WARN Act but fails to satisfy the applicable WARN Act requirements, then Operator shall indemnify, defend, and hold harmless Owner from and against any cost, expense, obligation, claim or other liability which Owner may incur arising out of such failure by Operator.

4.4. Operator, in its discretion but subject to the Budgets (unless otherwise approved by Owner), may, as an Operating Expense of the Hotels, (i) provide lodging for Operator’s executive employees to the extent they are visiting the Hotels in connection with the performance of Operator’s services and allow them the use of Hotel facilities and (ii) provide the General Manager of the Hotels and other Hotel Employees temporary living quarters within the Hotels and the use of all Hotel facilities, in either case without charge, as the case may be, but for no more than an aggregate of sixty (60) days without the Owner’s prior written consent.

4.5. Operator shall not be liable for any failure of the Hotels to comply prior to the Commencement Date with any federal, state, local and foreign statutes, laws, ordinances, regulations, rules, permits, judgments, orders and decrees affecting labor union activities, civil rights or employment in the United States, including, without limitation, the Civil Rights Act of 1870, 42 U.S.C. §1981, the Civil Rights Acts of 1871, 42 U.S.C. §1983 the Fair Labor Standards Act, 29 U.S.C. §201, et seq. , the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq. , as amended, the Age Discrimination in Employment Act of 1967, 29 U.S.C. §621, et seq. , the Rehabilitation Act, 29 U.S.C. §701, et seq. , the Americans With Disabilities Act of 1990, 29 U.S.C. §706, 42 U.S.C. §12101, et seq. , the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 301, et seq. , the Equal Pay Act, 29 U.S.C. §201, et seq. , the National Labor Relations Act, 29 U.S.C. §151, et seq. , and any regulations promulgated pursuant to such statutes (collectively, as amended from time to time, and together with any similar laws now or hereafter enacted, the “Employment Laws” ).

4.6. Operator shall from time to time develop and implement policies, procedures and programs for the Hotels (collectively, the “Employment Policies” ) reasonably designed to effect compliance with the Employment Laws. The Employment Policies shall be consistent with industry standards from time to time for reputable hotel management companies.

4.7 Notwithstanding anything stated herein to the contrary, the hiring of any new candidates for the Key Hotel Personnel positions shall be subject to Owner’s approval, not to be unreasonably withheld so long as the candidate is reasonably qualified to perform the position based on the candidate’s education and experience. If requested by Owner, Operator shall make a candidate for a Key Hotel Personnel position available to interview with Owner’s representative at Owner’s offices

(or other mutually agreeable location) at a mutually agreeable reasonable time. In the event Owner fails to respond in writing to a request for approval from Operator within five (5) days of the latter of (i) such request, or (ii) the provision to Owner of a written summary of such candidate’s education, professional experience and qualifications, Owner shall be deemed to have provided such approval. If Owner becomes dissatisfied with the performance of any Key Hotel Personnel, Owner may meet with senior management of the Operator to resolve such dissatisfaction. Operator will give Owner not less than fourteen (14) days prior notice of any proposed transfer of any Key Hotel Personnel. For the purposes hereof, “ Key Hotel Personnel ” shall be defined as the following individuals, to the extent employed at a Hotel: General Manager.

4.8 Operator, as the sole employer, shall have the duty and responsibility to negotiate with any labor union lawfully entitled to represent its Hotel Employees. Operator shall consult with Owner before and during any discussions about strategies, objectives, tactics, proposals and agreements as well as keep the Owner fully informed as to the progress of any negotiations and any agreements that are reached. Nothing in this Section 4.8 shall require Operator to employ persons belonging to labor unions. In addition, Operator shall consult with Owner during the course of any negotiations with such labor union. Operator shall use diligent efforts to settle and compromise all controversies and disputes arising under any labor union contracts affecting the Hotel Employees upon such terms and conditions as Operator reasonably deems to be in Owner’s best interests. Notwithstanding any term of this Agreement Operator may enter into no labor union agreement, settlement or compromise that shall be binding upon Owner (either directly or as a successor under any agreement or indirectly as an agreement covering union representation or Operator’s policies with respect to wages and conditions applicable to the Hotels) without the prior written consent of Owner, which consent shall not be unreasonably withheld or delayed.

ARTICLE V

PROVISION OF FUNDS

5.1. In performing its services under this Agreement, Operator shall act solely as agent and for the account of Owner. Operator shall not be deemed to be in default of its obligations under this Agreement to the extent it is unable to perform any obligation due to the lack of available funds from the operation of the Hotels or as otherwise provided by Owner.

5.2. Operator shall in no event be required (i) to advance any of its funds (whether by waiver or deferral of its management fees or otherwise) for the operation of the Hotels or (ii) to incur any liability unless Owner shall have furnished Operator with funds necessary for the discharge thereof prior to incurring such liability.

5.3 Owner acknowledges that prior to and during the two (2) weeks following the Commencement Date, Manager will undertake certain transition activities which are necessary to effectuate Manager’s take-over of management of the Hotels, and that Manager will incur expenses in connection with such transition activities, which are described and estimated in the transition budget (“Transition Budget”) attached hereto as Exhibit E . Owner expressly agrees to reimburse Operator for fifty percent (50%) of the expenses incurred in connection with the transition activities during such period, which are not to exceed the amounts set forth in the Transition Budget unless

otherwise approved by Owner, whether incurred prior to or following the Commencement Date. Owner agrees to pay such amounts within thirty (30) days after written demand by Operator, as issued from time to time.

ARTICLE VI

CENTRALIZED SERVICES; MULTI-PROPERTY PROGRAMS;
INFORMATION TECHNOLOGY

6.1. Operator may, subject to the Budgets, provide or cause its affiliated companies to provide for the Hotels and their guests the full benefit of any reservations system hereafter established by Operator or its affiliates and provide, or cause its affiliated companies to provide, such aspects of any accounting or purchasing services, other group benefits and services, revenue management services, on-site sales training, associate satisfaction surveys, Operator’s national training program and other training as are made available generally to similar properties managed by Operator (individually and collectively, “Centralized Services” ). Subject to the provisions of the applicable Budget, Operator or such of Operator’s affiliated companies as provide Centralized Services shall be entitled to be reimbursed for each Hotel’s share of the total costs that are reasonably incurred in providing such Centralized Services on a system-wide basis to hotels and motels managed by Operator or its affiliates which costs may include, without limitation, salaries (including payroll taxes and employee benefits) of employees and officers of Operator and its affiliates, costs of all equipment employed in the provision of such services and a reasonable charge for overhead. Each Hotel’s share of such costs shall be determined in an equitable manner by Operator (which shall be reasonably satisfactory to Owner) and substantiated to Owner after each Fiscal Year (as hereinafter defined), shall be an Operating Expense of the Hotels and shall be borne by Owner and paid or reimbursed to Operator out of the Agency Account or if the amounts therein are insufficient by Owner upon demand therefor by Operator. Operator shall maintain and make available to Owner invoices or other evidence supporting all of the charges for Centralized Services. Notwithstanding the foregoing, Operator’s fee for providing centralized accounting services shall be the Accounting Fee (as defined in Section 9.2 hereof). Owner acknowledges and agrees that (i) Operator has disclosed to Owner the types of Centralized Services Operator currently makes available to properties which it operates, (ii) the Hotels are likely to receive substantial benefit from its participation in such Centralized Services, (iii) Operator is not obligated to provide such Centralized Services under Article III of this Agreement, (iv) Operator is entitled to payment for such Centralized Services in the manner set forth above in addition to its Basic Fee and Incentive Fee, and (v) the receipt by Operator of any such payment does not breach any fiduciary or other duty which Operator may have to Owner. A list of the Centralized Services currently offered by Operator to hotels operated by Operator is attached hereto as Exhibit F .

6.2. Owner acknowledges and agrees that Operator may, subject to the Budgets, enter into certain purchasing, maintenance, service or other contracts with respect to the Hotels (collectively, “Multi-Property Programs” ) pursuant to which Operator or affiliates of Operator receive rebates, discounts, cash or other incentives, administration fees, concessions, profit participations, stock or stock options, investment rights or similar payments or economic consideration (collectively, “Operator Rebates” ) from or in, as applicable, the vendors or suppliers of goods or services provided under such Multi-Property Programs. Owner acknowledges and agrees that (i) Operator

has disclosed to Owner the types of Multi-Property Programs Operator currently makes available to properties which it operates and (ii) subject to the last sentence of this Section, (1) the Hotels are likely to receive substantial benefit from its participation in such Multi-Property Programs which the Hotels could not obtain on their own and for which Operator is not adequately compensated by its Basic Fee and Incentive Fee and (2) any and all Operator Rebates are the sole property of Operator and not Owner. To the extent any such Operator Rebate is specifically designated for one or more Hotels, Operator shall disclose to the amount of such Operator Rebate to Owner. To the extent the Operator Rebates from the Multi-Property Programs exceed all costs and expenses in managing and overseeing the Multi-Property Programs during any Fiscal Year, such excess shall be allocated ratably among all of the hotels that participated in the Multi-Property Programs by using such excess (i) to develop — both internally and externally — and establish additional associate training programs; (ii) to compensate third-party experts who provided such training; and (iii) to provide other benefits for the hotels such as third-party food and beverage consulting expertise. The excess is allocated by multiplying the amount of such excess by a fraction, the numerator of which is the total amount of purchases through the Multi-Property Programs made by a Hotel and the denominator of which is the total amount of purchases through the Multi-Property Programs made by all of the hotels managed by Operator that participate in the Multi-Property Programs. The Owner has the right to require that (i) one or more of the purchasing, maintenance, service or other goods, services or other benefits contracted for in the Multi-Property Programs may be purchased from a provider designated by Owner other than the party providing the Multi-Property Programs, and (ii) Operator put out for competitive bid any one or more goods or services provided through the Multi-Property Program; provided that, Owner cannot require early termination of a contract within a Multi-Property Program unless such early termination is permitted by the terms of such contract.

6.3. The Hotels shall incur, as an Operating Expense, subject to the Budgets, fees for certain information technology services, including, but not limited to: (i) de-centralized accounting support services, pursuant to Section 9.2, (ii) Operator’s IT Central Support Services (support desk and e-mail services), (iii) Operator’s IT Delphi System Support (centralized sales and catering software application), (iv) license fees equal to the Operator’s actual costs for use of certain Microsoft software applications at the Hotels, and (v) Virtual Private Network ( “VPN” ) Connectivity and Support (connection to Operator’s software applications via secure internet connection). For purposes of the VPN, Operator may install hardware at the Hotels, which shall be Owner’s property, and the cost thereof shall be chargeable as an Operating Expense. In addition, Owner shall pay the costs of all information technology equipment, software and costs associated with business process changes from time to time to (i) comply with the operating standards required by the Major Agreements, (ii) make reasonable adaptations to changing technology, (iii) be otherwise consistent with industry standards for similar hotel operations, and (iv) achieve and sustain compliance on an on-going basis with the then current Payment Card Industry Data Security Standards and other applicable information security and operating rules and regulations of the credit card associations, and applicable data protection and privacy laws and regulations. A list of the fees payable to Operator pursuant to this Section 6.3 (the “IT Fees” ) is included in Exhibit F , subject to change as set forth in the Budgets for each Fiscal Year. Commencing on the Commencement Date and continuing throughout the term, such fees shall be incurred by the Hotels and payable to Operator on a monthly basis. All IT Fees shall be an Operating Expense, shall be included in and subject to the Budgets and shall be paid or reimbursed to Operator out of the Agency Account or, if the funds therein are insufficient, by Owner.

6.4 To the extent requested by Owner, Operator may provide project management services in connection with the procurement and installation of additional information technology for the Hotels on terms and conditions (including separate fees for such services) mutually agreed upon by Owner and Operator.

ARTICLE VII

WORKING CAPITAL AND BANK ACCOUNTS

7.1. Owner will provide Operator with working capital for the Hotels in the amount of Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000) (the “ Working Capital ”). Owner shall at all times provide, either from Total Revenues or from other funds of Owner, sufficient funds as determined in the good faith business judgment of Operator to constitute normal working capital for the uninterrupted and efficient operation of the Hotels (but which, in no event, shall be an amount less than the Working Capital), including without limitation funds sufficient to operate, maintain and equip the Hotels in accordance with all Major Agreements and to maintain the Hotels in accordance with the Hotel Standard. The Working Capital amount required under this Section 7.1 shall be increased (but not decreased) annually on the first day of each succeeding Fiscal Year by the same percentage as any percentage increase in the CPI (as defined in Section 8.6) from the first day of the prior Fiscal Year through the first day of such succeeding Fiscal Year.

Upon Operator’s written notice to Owner that additional funds are required to pay necessary Operating Expenses (including but not limited to payroll expenses), Owner shall provide the funds necessary to pay such Operating Expenses within three (3) business days following Owner’s receipt of such notice. Any such failure to provide such funding shall constitute a breach under this Agreement. If Operator chooses to fund any such expenses (which shall be totally at Operator’s sole discretion), Operator may, in addition to all other rights, repay itself as soon as any funds are available, and pay itself interest upon such sum from the date payment was made at a rate equal to the Prime Rate plus three hundred (300) basis points.

7.2. All funds received by Operator in the operation of the Hotels, including working capital furnished by Owner, shall be deposited in a special account or accounts (the “Agency Account” ) in such federally insured bank, savings and loan or trust company as may be selected by Owner and reasonably approved by Operator. Any successor or substitute bank, savings and loan or trust company shall be selected in the same manner. Operator shall pay all Operating Expenses and Fixed Charges on behalf of Owner from the Agency Account; provided, however, that Operator shall not be obligated to pay any Operating Expenses or Fixed Charges in the event that such funds are not currently available in the Agency Account. Upon Owner’s written request and direction, Operator shall pay on behalf of Owner from the Agency Account (but only to the extent that such funds are available in the Agency Account following the payment of all Operating Expenses and Fixed Charges), such other fixed expenses as may be requested by Owner (e.g., debt service, ground lease payments, capital costs, etc.) (“ Owner Expenses ”); provided, however, Operator will not be required to pay such Owner Expenses until Operator receives Owner’s written request and direction to do so (including copies of any material agreements) (“ Owner’s Expense Notice ”). Owner agrees to provide Owner’s Expense Notice at least thirty (30) days prior to the date on which the first

payment by Operator is due, and such Owner’s Expense Notice shall only be revocable upon thirty (30) days prior written notice from Owner.

7.3. A. The Agency Account shall be in the name of the Hotel(s), with Operator as agent for Owner (bearing Owner’s Federal tax identification number), and shall be under the control of Operator. The FF&E Reserve Account (as defined in Section 11.1) shall be in the name of Owner and under the control of Owner. Checks or other documents of withdrawal from the Agency Account shall be signed only by Operator’s representatives, provided that such representatives shall be bonded or otherwise insured in a manner reasonably satisfactory to Owner. The premiums for bonding or other insurance shall be an Operating Expense except for premiums for bonding off-site executive employees of Operator. No later than ninety (90) days following the expiration or termination of this Agreement, all remaining amounts in the Agency Account shall be transferred to Owner. The Operator shall not co-mingle any Agency Account funds with any other funds of Operator or funds from hotels that are not Hotels.

     B. Except for the payroll account referred to below, Operator shall not maintain, for the deposit of revenues generated at the Hotels, any bank account in Operator’s sole name. Working Capital shall be adjusted as appropriate in the mutual judgment of Owner and Operator, and within three (3) business days of written notice, Owner shall advance additional funds deemed necessary to maintain Working Capital or Operator shall return any amounts deemed unnecessary to maintain as Working Capital as is requested by Owner and reasonably approved by Operator. At such time as Owner enters into a credit facility with a Lender, provided that such credit facility provides for the payment of necessary disbursements, checks and transfers by Operator on behalf of Owner, Operator shall arrange such daily sweeps of cash into such accounts as is requested by Owner, so long as there is sufficient money available to pay payroll and normal operating expenses.

     C. All sums received from the operation of the Hotels and any and all items paid by Operator arising by virtue of management of the Hotels shall pass through the Agency Account. Nothing herein contained shall be construed to deprive Operator of the right to maintain separate payroll accounts or petty cash funds and to make payments therefrom as the same are customary in the hotel business.

ARTICLE VIII

BOOKS, RECORDS AND STATEMENTS; BUDGETS

8.1. Operator shall keep full and accurate books of account and other records reflecting the results of the operation of the Hotels in accordance with the “Uniform System of Accounts for the Lodging Industry” (Tenth Revised Edition 2006, as further revised from time to time) as adopted by the American Hotel & Lodging Educational Institute (the “Uniform System” ) with such exceptions as may be required by the provisions of this Agreement; provided, however, that Operator may, with prior notice to Owner, make such modifications to the methodology in the Uniform System as are consistent with Operator’s standard practice in accounting for its operations under management contracts generally and applicable to substantially all of the hotels managed by Operator, so long as such modifications do not affect the determination of Total Revenues, Operating Expenses or Fixed Charges under Article X. Except for the books and records which may be kept in Operator’s home

office or other suitable location pursuant to the adoption of a central billing system or other centralized service, the books of account and all other records relating to or reflecting the operation of the Hotels shall be kept at the Hotels and shall be available to Owner and its representatives at all reasonable times for examination, audit, inspection and transcription. All of such books and records including, without limitation, books of account, guest records and front office records, shall be the property of Owner. Upon any termination of this Agreement, physical possession of all of such books and records shall be transferred to Owner, but shall thereafter be available to Operator at all reasonable times for inspection, audit, examination and transcription for a period of five (5) years. Owner shall reimburse Operator for any costs or expenses incurred by Operator in connection with any assistance requested by Owner to determine the inventory of books and records for retention, which determination shall be Owner’s responsibility; provided, however, that Owner shall be specifically required to, and Operator may, retain a copy of all sales tax returns and supporting documents relating to all tax reporting periods for the Hotels covered by the Term.

8.2. Operator shall deliver to Owner within ten (10) business days after the end of each month, the following items for each Hotel and a consolidated report for all Hotels (collectively, the “Monthly Reports” ):

	A.		A balance sheet as of the last day of such month;
	B.		A source and use of funds statement for such month;
	C.		An income and expense statement for such month;
	D.		Detailed departmental income and expense statements for such month;
	E.		A report listing updated operating projections and forecasts for the remainder of the Fiscal Year;
	F.		A variance report showing expense line-items that exceed the Budget by more than Five Hundred Dollars ($500); and
	G.		Such other monthly reports as Owner may reasonably request and to which Operator agrees in writing.

The Monthly Reports shall be prepared in accordance with the Uniform System and/or other applicable generally accepted accounting principles as promulgated by the Financial Accounting Standards Board and approved by the Securities and Exchange Commission (“ GAAP ”) but in all events consistent with this Agreement. In addition to the Monthly Reports, the Operator shall allow the Owner reasonable access at Owner’s request to Operator’s internal electronic reporting software systems to review information related to the Hotels.

8.3. Year-end unaudited financial statements for each Hotel and a consolidated report for all Hotels (including a balance sheet, income statement and statement of sources and uses of funds) shall be prepared and delivered to Owner within twenty-five (25) days following Fiscal Year end. Owner may request that the financial statements be audited by an independent certified public

accountant. Such accountant shall address any findings, reports or opinions that concern Operator’s work under this Agreement to both Operator and Owner. Owner shall pay the cost of such audit and Operator shall provide reasonable assistance with such accountant in the preparation of such statements.

8.4. On or before each November 1 during the Term, Operator shall submit to Owner for the next Fiscal Year the following items for each Hotel (collectively, the “Budgets” ):

	A.		An operating budget (the “Operating Budget” ) setting forth in reasonable line-item detail the projected income from and expenses of all aspects of the operations of the Hotel;
	B.		A capital budget (the “Capital Budget” ) setting forth in reasonable line-item detail proposed capital projects and expenditures for the Hotel including but not limited to FF&E expenditures which, if any, will be expensed in the then current Fiscal Year in accordance with GAAP;
	C.		A marketing and strategic sales plan for the Hotel;
	D.		A cash flow analysis for the Hotel; and
	E.		Such other reports or projections as Owner may reasonably request and to which Operator agrees in writing.

Owner and Operator shall start meetings and discussions for the Budgets no later than October 1 of each Fiscal Year. The Operating Budget shall include: a detailed operating budget showing estimated Gross Operating Profit, department profits, all Operating Expenses and Fixed Charges; a marketing plan, marketing and sales strategies, objectives and tactics, a detailed competitive analysis and everything else typically included in a hotel marketing plan including projections of average daily room rates and average daily occupancy; a cash flow forecast; projections for and limits on discounted and complementary rooms and services, estimated corporate reimbursements to Operator and its affiliates, including without limitation, Centralized Services and Multi-Property Programs and Operator Rebates. All of the foregoing information shall be set forth in reasonable detail, including by month and compared by month, quarter and year to the prior year, and, where appropriate, with the basis for all assumptions expressly set forth. Owner shall review the proposed Budgets and deliver to Operator its comments and suggested changes within fourteen (14) days after Owner’s receipt of such Operating Budget and Capital Budget, respectively. Within ten (10) days after receiving Owner’s objection(s) to the proposed Budgets, Owner and Operator shall meet at the applicable Hotel (or such other location as they may agree) and endeavor in good faith to resolve such objections and arrive at approved Budgets. Operator shall submit revised Budgets within fourteen (14) days of any meeting. Owner shall thereafter have fourteen (14) days to review the revised Budgets and advise Operator in writing of any objections to thereto. Owner’s notice shall include a reasonably detailed explanation of each objection. This process shall continue until there is an approved Operating Budget and Capital Budget. If Owner approves any proposed Budgets, whether before or after any such exchange of comments and suggestions, then such proposed Budgets shall become the approved Budgets for the Fiscal Year to which it relates. Operator shall

not be deemed to have made any guarantee, warranty of representation whatsoever in connection with the Budgets or with respect to the economic performance or profitability of the Hotels, and Owner acknowledges that the Budgets and any other projections previously or hereafter prepared by Operator are intended only to be reasonable estimates and that actual results may vary due to unanticipated events and circumstances occurring subsequent to the date of such Budgets or projection and unforeseen circumstances, including but not limited to, cost of labor, material, services and supplies, casualty, law, economic or market conditions may make adherence to the Budgets impracticable. If the Owner and Operator cannot agree upon the Budgets, the parties agree to submit their claims to either PKF Consulting or HVS (or other mutually agreeable hospitality consultant) to act as a mediator to assist the parties in finalization of the Budgets.

8.5. Upon approval of the Budgets by Owner, Operator shall use diligent and commercially reasonable efforts to operate the Hotels substantially in accordance with the Budgets. Operator shall not, without Owner’s prior approval:

	A.		Incur any expense for any line-item in the Operating Budget which causes the aggregate expenditures for such line-item to exceed the budgeted amount by the lesser of (i) 10% or (ii) $5,000 for the applicable fiscal period set forth in the Operating Budget, provided that, aggregate expenses shall not exceed those provided in the Operating Budget by more than two percent (2%) and provided further that, Operator may at Owner’s cost and expense, without Owner’s approval, (x) pay any expenses (the “Necessary Expenses” ) regardless of amount, which are necessary for the continued operation of the Hotels in accordance with the requirements of any Major Agreement and the operational standards set forth in this Agreement and which are not within the reasonable control of Operator (including, but not limited to, those for insurance, taxes, utility charges and debt service), (y) pay Emergency Expenses regardless of amount; provided that, Operator shall make good faith attempts to contact and notify Owner of the need for such Emergency Expenses prior to incurring them and in all events shall notify Owner within twenty-four (24) hours after Operator becomes aware of such emergency, and/or (z) pay any third-party operating expenses which are commercially desirable to be incurred in order to obtain unbudgeted Hotel revenue in the ordinary course of operating the Hotels in accordance with the then current business plan provided that such unbudgeted revenue is reasonably certain and sufficient in Operator’s reasonable professional judgment to offset such expenses ( “Opportunity Expenses” ); provided, that such additional expenses shall be proportionally equal to or less than the projected additional revenue to be realized.
	B.		Incur any expense for any line-item in the Capital Budget which causes the aggregate expenditures for such capital line-item or related series of capital line-items to exceed the budgeted amount by the lesser of (i) 10% or (ii) $5,000, provided that Operator may, without Owner’s approval, pay any Emergency Expenses which are capital in nature; provided that, Operator shall make good faith attempts to contact and notify Owner of the need for such Emergency Expenses prior to incurring them and in all events shall notify Owner within twenty-four (24) hours after Operator becomes aware of such emergency.

8.6. If the Budgets (or any component of the Budgets) with respect to any Fiscal Year are disapproved by Owner as provided in Section 8.4 then, until approval of the Budgets (or such components) by Owner, Operator until the resolution of such dispute shall cause the Hotels to be operated substantially in accordance with most recent approved Budgets, except for, or as modified by, (a) those components of such Budgets for the applicable Fiscal Year approved by Owner, (b) an adjustment to the disputed Budgets so as to increase (but not decrease) disputed expense items by the same percentage as any percentage increase in the Consumer Price Index — All Urban Consumers (U.S. City Average) (1982-1984 =100), or any successor index thereto appropriately adjusted (the “CPI” ), from the CPI in effect on the first day of the first month of the Fiscal Year applicable to such last approved Budget to the CPI in effect on the first day of the first month of the Fiscal Year applicable to the disputed Budgets, (c) Necessary Expenses which shall be paid as required, (d) Emergency Expenses which shall be paid as required and (e) Opportunity Expenses.

8.7 Notwithstanding any provisions of this Agreement granting Operator the authority to enter into contracts, perform repairs and improvements, or incur expenditures on behalf of Owner, Operator shall not be authorized to take any actions or incur any expenditures that would be inconsistent with the Operating Budgets described in Section 8.4 (but subject to the right of Operator to deviate from such Budgets to the extent permitted in Sections 8.5 and 8.6).

8.8. Owner recognizes the necessity for regular replacement of FF&E (the “ FF&E Replacements ”). Owner in its sole and absolute discretion agrees to expend such amounts for FF&E Replacements as shall be approved in the Budgets. For the avoidance of doubt, any approval of FF&E Replacements and capital expenditures in any Budgets, shall only be the starting point and the actual implementation and timing of such FF&E Replacements and capital expenditures shall be subject to approval by Owner in its sole and absolute discretion. Owner acknowledges that, in order for the Operator to be able to operate the Hotels in accordance with the Hotel Standard, it is necessary that Owner exercise reasonable discretion in determining the amounts necessary for FF&E Replacements and the actual timing of such FF&E Replacements and capital expenditures. Each contract to provide FF&E and for capital expenditures must be approved by Owner. For routine FF&E Replacements, after contract approval, (a) Operator may incur any expenditure for FF&E Replacements during any Fiscal Year which has been specifically approved in the Budgets without further Owner’s approval and (b) Owner shall fund payments therefor from the FF&E Reserve Account (as defined in Section 11.1) (or from other Owner funds) directly to the vendor and handle all processing and accounting of such payments. For capital projects and non-routine FF&E Replacements (a) if Owner desires Operator to coordinate such items, such arrangements shall be subject to Owner and Operator (or its affiliate) entering into a separate written agreement pursuant to Section 3.5(E) hereof and (b) Owner shall fund payments therefor from the FF&E Reserve Account (or from other Owner funds) directly to the vendor and handle all processing and accounting of such payments. Notwithstanding the foregoing, Operator shall be permitted to incur and pay Emergency Expenses as permitted under Sections 3.5(H), Article 8 and Article 14.

All proceeds from the sale of FF&E no longer needed for the operation of the Hotels shall be distributed to Owner, subject to the terms of any Major Agreements.

8.9 The Operator will give Owner and its agents access to the accounting working papers related

to the Hotels from the Operator’s accountants and the SAS 70 certification or any deficiencies with respect thereto noted by their auditor. The Operator shall cooperate with and supply such certifications as are reasonably required from those providing services to or for a public “reporting company” under the applicable statutes and rules of the Securities and Exchange Commission, including, without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes Oxley Act of 2002 and other applicable laws, all as amended or replaced, and Operator will with its auditors assist the Owner and its affiliates in any SAS 70 compliance or similar audit. With respect to Operator’s centralized accounting office in Dallas, Texas, such papers and reports shall be supplied free of charge. Owner shall pay the cost of obtaining such reports for any other centralized accounting office servicing the Hotels.

ARTICLE IX

MANAGEMENT FEES
AND PAYMENTS TO OPERATOR AND OWNER

9.1. Owner shall pay to Operator, on a monthly basis, for services rendered under this Agreement a management fee (the “Basic Fee” ) equal to three percent (3.0%) of Total Revenues during any Fiscal Year or portion thereof.

9.2. In addition to the Basic Fee, Owner shall pay to Operator, on a monthly basis, for its centralized accounting services a fee (the “Accounting Fee” ) during the Term and for three (3) months after the termination of this Agreement equal to One Thousand Five Hundred Dollars ($1,500) per month for Hotels with ninety (90) or more rooms and One Thousand Three Hundred Seventy-Five Dollars ($1,375) per month for Hotels with less than ninety (90) rooms. The Accounting Fee shall be increased (but not decreased) annually on the first day of each succeeding Fiscal Year by the lesser of (i) the same percentage as any percentage increase in the CPI from the first day of the prior Fiscal Year through the first day of such succeeding Fiscal Year and (ii) three percent (3%).

9.3. In addition to the Basic Fee and the Accounting Fee, commencing with the Fiscal Year beginning January 1, 2011 Owner shall pay to Operator an incentive management fee (the “Incentive Fee ”) equal to ten percent (10%) of the amount by which actual aggregate EBITDA (as defined in Article X) for all the Hotels exceeds Sixty Five Million Dollars ($65,000,000), subject to adjustment for increases and decreases in the number of Hotels as described in this Section 9.3 (the “ Incentive Fee Threshold ”). If a Hotel is removed from this Agreement during a Fiscal Year, for purposes of the Incentive Fee calculation (i) the Incentive Fee Threshold for such Fiscal Year and thereafter shall be reduced by an amount equal to the actual trailing 12-month EBITDA of such Hotel as of the effective date of termination of with respect to such Hotel and (ii) the actual EBITDA of such Hotel for such Fiscal Year through the date of termination shall be removed from the aggregate year-end EBITDA for all the Hotels. If a Hotel is added to this Agreement during a Fiscal Year pursuant to Section 24.1, for purposes of the Incentive Fee calculation (i) the Incentive Fee Threshold for such Fiscal Year and thereafter shall be increased by an amount equal to the actual trailing 12-month EBITDA of such Hotel as of the date such Hotel was added to this Agreement and (ii) the actual EBITDA of such Hotel for such Fiscal Year (including any portion of such Fiscal Year occurring prior to the date such Hotel was added to the Management Agreement) shall be added to

the aggregate year-end EBITDA for all the Hotels. Notwithstanding the foregoing, the total Incentive Fee payable to Operator for all the Hotels for any Fiscal Year (or partial Fiscal Year) shall not exceed one and one half percent (1.5%) of Total Revenues of all the Hotels for such Fiscal Year (or partial Fiscal Year). In any case in which the effective date of termination falls prior to the end of a calendar month, the trailing 12-month EBITDA shall be determined as of the end of the prior month. Examples of the foregoing calculations are attached hereto on Exhibit G .

9.4. In each month during the Term, Operator shall be paid out of the Agency Account the following payments for the preceding month: (a) the Basic Fee, (b) the Accounting Fee, and (c) any expense reimbursements due to Operator, as determined from the monthly income and expense statement. Such payment shall be due and made upon delivery of the income and expense statement for such month and shall be deducted by Operator out of the Agency Account. The Incentive Fee for any Fiscal Year or partial Fiscal Year during the Term shall be paid to Operator within thirty (30) days after the end of the Fiscal Year or partial Fiscal Year at the time of delivery of the income and expense statement for the Fiscal Year or partial Fiscal Year, shall be payable based upon the computation of the Incentive Fee on a cumulative basis through the end of the Fiscal Year or partial Fiscal Year and shall be subject to adjustment as provided in Section 9.6.

9.5. On or before the tenth (10th) day following the last day of each calendar month (or such other fiscal period as Owner and Operator may determine) of each Fiscal Year during the Term, after (a) payment of Operating Expenses, Fixed Charges and, to the extent the same are to be paid by Operator under this Agreement, debt service, ground rent, capital costs and other amounts, (b) payment or reserving of installments on account of the Incentive Fee, (c) deposits to the FF&E Reserve Account in accordance with the Budget, (d) any required payment to Operator pursuant to Section 9.6 below and (e) retention of working capital as required under Section 7.1 above, all remaining funds in the Agency Account shall be paid to Owner.

9.6. At the end of each Fiscal Year and following receipt by Owner of the annual financial statements set forth in Section 8.3 (or, if audited, following Owner’s receipt of such audited financial statements), an adjustment will be made, if necessary, based on the audit so that Operator shall have received the accurate Basic Fee and Incentive Fee for such Fiscal Year. Within thirty (30) days of receipt by Owner and Operator of such audit, Operator shall either (a) place in the Agency Account or remit to Owner, as appropriate, any excess amounts Operator may have received for such fees during such calendar year or (b) be paid out of the Agency Account or by Owner, as appropriate, any deficiency in the amounts due Operator for the Basic Fee and the Incentive Fee. If such annual audit does not reveal that adjustment should be made to the calculation of the fees payable to Operator, the calculation of the fees shall be deemed final unless Owner objects to such calculation within one hundred twenty (120) days after the end of the applicable Fiscal Year.

9.7. Owner shall be liable for and shall pay or indemnify Operator for any applicable sales, use, excise consumption or similar taxes that are payable to any taxing jurisdiction with respect to any fees, reimbursements or other amounts due to Operator under this Agreement to ensure that the net amount of such fees, reimbursements or other amounts received by Operator shall be equal to the full amount that Operator would have otherwise received if no such taxes applied to such amounts. This Section 9.7 does not apply to federal or state income taxes payable by Operator as a result of its gross or net income relating to any fees collected under this Agreement.

ARTICLE X

CERTAIN DEFINITIONS

10.1. A. The term “Total Revenues” shall mean all income, revenue and proceeds resulting directly or indirectly from the operation of the Hotels and all of its facilities (net of refunds and credits to guests and other items deemed “Allowances” under the Uniform System) which are properly attributable under the Uniform System to the period in question, but in all cases subject to the terms of this Agreement. Subject to Section 10.1(B), Total Revenues shall include, without limitation, all amounts derived from:

(i) The rentals of rooms, banquet facilities and conference facilities;

(ii) The sale of food and beverage whether sold in a bar, lounge or restaurant, delivered to a guest room, sold through an in-room facility or vending machines, provided in meeting or banquet rooms or sold through catering operations, including for any events held off-site of Hotel premises;

(iii) Charges for admittance to or the use of any parking facilities, recreational facilities or any entertainment events at the Hotels;

(iv) Rentals paid under Leases (percentage rent based on the receipts of the tenant, licensee or concessionaire paid to the Hotel or Owner is included in such rentals, but the underlying receipts of any tenant, licensee or concessionaire are not);

(v) Charges for other Hotel services or amenities, including, but not limited to, telephone service, in-room movies, laundry services and spa services; and

(vi) The gross revenue amount on which the proceeds of business interruption or similar insurance are determined, with respect to any period for which such proceeds are received.

     B. Total Revenues shall not include:

(i) Sales or use taxes or similar governmental impositions collected by Owner or Operator;

(ii) Tips, service charges and other gratuities received by Hotel Employees;

(iii) Proceeds of insurance except as set forth in Section 10.1(A);

(iv) Proceeds of the sale or condemnation of the Hotels, any interest therein or any other asset of Owner not sold in the ordinary course of business, or the proceeds of any loans or financings;

(v) Capital contributed by Owner to the Hotels; and

(vi) The receipts of any tenant, licensee or concessionaire under a Lease.

10.2. A. The term “Operating Expenses” shall mean all costs and expenses of maintaining, conducting and supervising the operation of the Hotels and all of their facilities which are properly attributable under the Uniform System to the period in question, but in all cases subject to the terms of this Agreement. Operating Expenses shall include, without limitation:

	(i)		The cost of all Operating Equipment and Operating Supplies;
	(ii)		Salaries and wages of Hotel Employees, including costs of payroll taxes, employee benefits and severance payments. The salaries or wages of off-site employees or off-site executives of Operator shall not be Operating Expenses, provided that if it becomes necessary for an off-site employee or executive of Operator to temporarily perform services at a Hotel of a nature normally performed by Hotel Employees, his salary (including payroll taxes and employee benefits) for such period only as well as his traveling expenses shall be Operating Expenses and reimbursed to Operator;
	(iii)		The cost of all other goods and services obtained in connection with the operation of the Hotels including, without limitation, heat and utilities, laundry, landscaping and exterminating services and office supplies;
	(iv)		The cost of all non-capital repairs to and maintenance of the Hotels;
	(v)		Insurance premiums (or the allocable portion thereof in the case of blanket policies) for all insurance maintained under Article XII (other than insurance against physical damage to the Hotels) and losses incurred on any self-insured risks (including deductibles);
	(vi)		All taxes, assessments, permit fees, inspection fees, and water and sewer charges and other charges (other than income or franchise taxes) payable by or assessed against Owner with respect to the operation of the Hotels, excluding Property Taxes (as defined in Section 10.3);
	(vii)		Legal fees and fees of any independent certified public accountant for services directly related to the operation of the Hotels and their facilities;
	(viii)		All expenses for advertising the Hotel and all expenses of sales promotion and public relations activities;
	(ix)		All out-of-pocket expenses and disbursements reasonably incurred by Operator, pursuant to, in the course of, and directly related to, the management and operation of the Hotels under this Agreement, which fees and disbursements shall be paid out of the Agency Account or paid or

reimbursed by Owner to Operator upon demand. Without limiting the generality of the foregoing, such charges may include all reasonable travel, telephone, telegram, facsimile, air express and other incidental expenses and any fees or expenditures required for Operator to operate the Hotels in the given jurisdiction, but, except as otherwise provided in this Agreement, shall not include any of the regular expenses of the central offices maintained by Operator, other than offices maintained at the Hotels for the management of the Hotels. Operator shall maintain and make available to Owner invoices or other evidence supporting such charges;

	(x)		The Accounting Fee and any fees or tax levied on those charges by the local jurisdiction;
	(xi)		Periodic payments made in the ordinary course of business under any applicable Franchise Agreement;
	(xii)		Any other item specified as an Operating Expense in this Agreement; and
	(xiii)		Any other cost or charge classified as an Operating Expense or an Administrative and General Expense under the Uniform System unless specifically excluded under the provisions of this Agreement.

     B. Operating Expenses shall not include:

	(i)		Amortization and depreciation;
	(ii)		The making of or the repayment of any loans or any interest thereon;
	(iii)		The costs of any alterations, additions or improvements which for Federal income tax purposes or under the Uniform System or GAAP must be capitalized and amortized over the life of such alteration addition or improvement;
	(iv)		Payments on account of any equipment lease that is to be capitalized under GAAP;
	(v)		Payments under any ground lease, space lease or easement agreement;
	(vi)		Payments into or out of the FF&E Reserve Account; or
	(vii)		Any item defined as a Fixed Charge in Section 10.3.

10.3. “Fixed Charges” shall mean the cost of the following items relating to the Hotels or their facilities which are properly attributable under the Uniform System to the period in question:

(i) Real estate taxes, assessments, personal property taxes and any other ad valorem taxes

imposed on or levied in connection with the Hotels, the Installations and the FF&E (collectively, “Property Taxes” );

	(ii)		Insurance against physical damage to the Hotels; and
	(iii)		The Basic Fee.

10.4. “Gross Operating Profit” shall mean the amount, if any, by which Total Revenues exceed Operating Expenses.

10.5. “EBITDA” for any period shall mean the amount, if any, by which Gross Operating Profit for such period exceeds Fixed Charges.

10.6. “Fiscal Year” shall mean each twelve (12) consecutive calendar month period or partial twelve (12) consecutive calendar month period within the Term commencing on January 1st (or, with respect to the first year of the Term, the Commencement Date) and ending on December 31st (or, with respect to the last year of the Term, the expiration or earlier termination of the Term) unless Owner and Operator otherwise agree.

10.7. “ Operating Loss ” shall mean the amount, if any, by which Operating Expenses exceed Total Revenues.

ARTICLE XI

FF&E RESERVE

11.1. In addition to the Agency Account established by Operator pursuant to Section 7.2, Owner shall establish an account in Owner’s name at the same institution (or other institution mutually agreed upon by Owner and Operator) to be used for replacements, substitutions and additions to the FF&E (the “FF&E Reserve Account” ). For the replacements, substitutions and additions for Fiscal Year 2011, following the Commencement Date, Owner shall fund the FF&E Reserve Account from amounts allocated from the proceeds of the initial public offering of stock by Owner’s affiliate or from other sources of capital available to Owner or Owner’s affiliates. Thereafter, to the extent directed by Owner at its sole discretion, during each Fiscal Year beginning in 2012 there shall be allocated and paid on a monthly basis to the FF&E Reserve Account from Total Revenues or other funds provided by Owner an amount equal to four percent (4%) of Total Revenues for such Fiscal Year or such amount as may be required under the Major Agreements, whichever is greater. So long as Operator complies with any direction by Owner to deposit amounts into the FF&E Reserve Account and to the extent funds are available to so comply, Owner shall be solely responsible for complying with any FF&E Reserve requirements under the Major Agreements.

11.2. All funds in the FF&E Reserve Account, together with any interest earned thereon and the proceeds of any sale of FF&E (which proceeds shall, to the extent directed by Owner at its sole discretion, be deposited in the FF&E Reserve Account) shall be used solely for purposes of replacing or refurbishing the FF&E in accordance with the applicable Capital Budget. Any funds remaining in the FF&E Reserve Account at the end of a Fiscal Year may, at Operator’s sole

discretion, be carried forward to the next Fiscal Year. The FF&E Reserve Account may be pledged to any lender to the Hotels. Notwithstanding anything contained herein to the contrary, no additional FF&E Reserve Account shall be required to the extent any lender(s) require an FF&E reserve.

ARTICLE XII

INSURANCE

12.1. The following insurance with respect to each Hotel, to the extent such insurance is commercially available, shall be obtained by Owner and maintained throughout the Term at Owner’s sole cost and expense in the amounts as set forth on Exhibit H .

12.2. Operator shall obtain the following insurance with respect to the Hotel Employees and shall maintain such insurance during the Term of this Agreement at Owner’s sole cost and expense:

	A.		Worker’s compensation insurance or insurance required by similar employee benefit acts having a minimum per occurrence limit as Owner may deem advisable against all claims which may be brought for personal injury or death of Hotel Employees, but in any event not less than amounts prescribed by applicable state law;
	B.		Fidelity insurance, in such amounts and with such deductibles as Owner may require, covering Hotel Employees (including executive employees of Operator) or in job classifications normally insured in other hotels it manages in the United States or otherwise required by law; and
	C.		Employment Practices Liability Insurance ( “Employment Insurance” ) with reasonable limits and deductibles.

12.3. All insurance policies obtained by Owner in accordance with Section 12.1 shall name Owner as the insured party and shall name as additional insured parties (a) Operator, its subsidiaries, affiliates, directors, officers and employees and (b) such other parties as may be required by the terms of the Major Agreements as appropriate. Owner’s coverage shall be primary and non-contributory to any insurance obtained by the Operator.

12.4. All insurance policies shall be in such form and with such companies having a Best’s Rating of A+ or better as shall be reasonably satisfactory to Owner and/or Operator and provided Owner has given Operator detailed written notice of such requirements, shall comply with the requirements of any Major Agreement. Insurance may be provided under blanket or master policies covering one or more other hotels owned by Owner. The portion of the premium for any blanket or master policy which is allocated to each Hotel as an Operating Expense or Fixed Charge shall be determined in an equitable manner by Owner and reasonably approved by Operator and paid out of the Agency Account or, if the funds therein are insufficient, by Owner upon demand therefor by Operator. Such amount shall be determined by a suitable and customary formula applying the specific hotel exposures against appropriate rates to determine the premium allocation for each Hotel.

12.5. All insurance policies shall specify that they cannot be canceled or modified on less than thirty (30) days prior written notice to both Owner and Operator and any additional insureds (or such longer period as may be required under a Major Agreement, provided that Operator has been advised in writing of such period) and shall provide that claims shall be paid notwithstanding any act or negligence of Owner, or Operator unilaterally or on behalf of Owner, including without limitation their respective agents or employees.

12.6. All insurance policies shall provide, to the extent customarily obtainable from the insurance company providing such insurance, that the insurance company will have no right of subrogation against Owner, Operator any party to a Major Agreement or any of their respective agents, employees, partners, members, officers, directors or beneficial owners.

12.7. Owner and Operator hereby release one another from any and all liability, to the extent of the waivers of subrogation obtained under Section 12.6, associated with any damage, loss or liability with respect to which property insurance coverage is provided pursuant to this Article or otherwise.

12.8. The proceeds of any insurance claim (other than proceeds payable to third parties under the terms of the applicable policy) shall be deposited into the Agency Account to the extent of Owner’s interest therein unless otherwise required by the terms of a Major Agreement.

12.9. Operator shall have the right to pay for, or reimburse itself for, insurance required under this Article XII out of the Agency Account. Notwithstanding anything to the contrary set forth in this Agreement, Operator shall have no obligation to obtain or maintain any insurance set forth in this Article if funds from Total Revenues or funds otherwise provided by Owner are not made available to Operator to purchase the same.

12.10. Subject to the provisions of the Budgets and with the prior written consent of the Owner, Operator may act, directly or indirectly, in a brokerage capacity with respect to the insurance required under this Article or as a direct insurer or reinsurer with respect to the same.

ARTICLE XIII

PROPERTY TAXES

13.1. Provided that funds from Total Revenues or funds otherwise provided by Owner are available, and provided that Operator has received written notice thereof sufficiently in advance to make such payments, Operator shall pay all Property Taxes on behalf of Owner not less than ten (10) days prior to the applicable due dates. Upon Owner’s request, Operator shall promptly furnish Owner with proof of payment of Property Taxes.

13.2. Owner may contest the validity or amount of any Property Tax (a “ Tax Contest ”), and Operator agrees to cooperate with Owner in a Tax Contest and execute any documents or pleadings required for such purpose, provided that the facts set forth in such documents or pleadings are accurate and that such cooperation or execution does not impose any liability on Operator. All costs and expenses incurred by Owner and Operator in connection with a Tax Contest shall be Fixed Expenses.

ARTICLE XIV

REPAIRS AND MAINTENANCE

14.1. Operator shall perform ordinary repairs and maintenance at the Hotels, subject to the Budgets and Owner providing sufficient funding, to keep the Hotels in compliance with the Hotel Standard. Ordinary repairs shall include only those which are normally expenses under GAAP. The cost of ordinary repairs shall be paid from Total Revenues and shall be treated as an Operating Expense.

14.2. Operator shall, from time-to-time, make or cause to be made replacements and renewals to the FF&E of the Hotels and shall make Routine Capital Expenditures (as defined below) in accordance with the Budgets and from the FF&E Reserve Account. Costs of the foregoing shall be expensed in the then-current Fiscal Year in accordance with GAAP. As used herein, Routine Capital Expenditures shall mean expenses which are classified as capital expenditures under GAAP and shall consist of non-material expenditures; by way of example, repainting interiors of the Hotels, resurfacing parking lots and other miscellaneous expenditures.

14.3. Operator shall prepare an annual estimate of non-Routine Capital Expenditures to the Hotels, including without limitation the structure, the exterior façade, the mechanical, electrical, heating, ventilating, air conditioning, or plumbing systems. Operator shall submit the estimate to the Owner for its approval at the time of the annual budgeting process as part of the Capital Budget.

14.4. After notice to Owner, if practicable, Operator may take appropriate remedial action without Owner consent in the event of: (i) an emergency threatening the health and safety of a Hotel or its guests or employees; or (ii) if the expenditures are necessary to avoid Operator’s exposure to any civil or criminal liability. Operator shall make good faith attempts to contact and notify Owner of prior to undertaking such remedial action and in all events shall notify Owner within twenty-four (24) hours after Operator takes such action. Operator shall have the right to participate in any decisions that affect any conditions as described in this Section 14.4.

14.5. If Owner directly performs or contracts for repair, maintenance, refurbishing, construction or renovations at a Hotel, Owner must coordinate, and require its contractors and subcontractors to coordinate, with Operator including, but not limited to, causing any Owner employees, contractors or subcontractors to comply with safety and security rules of the Hotel and communicate on a regular basis the activities being performed at the Hotel to assure the health, safety and efficient operation of the Hotel and its guests and employees. Owner must comply with all laws, obtain all necessary permits and shall provide Operator copies of any permits prior to commencement of any such activities.

ARTICLE XV

COVENANTS AND REPRESENTATIONS

15.1. Owner represents, warrants and covenants that it holds good and marketable leasehold title to the Hotels and that Land Holder holds good and marketable fee or leasehold title to the Hotels,

except for easements or encumbrances that do not adversely affect the operation of the Hotels, mortgages or liens for taxes, assessment levies or other public charges not yet due or payable.

15.2. Owner covenants and represents that, at a minimum, it has conducted Environmental Phase I surveys at the time Owner acquired or leased the Hotels and that there are no Hazardous Materials on any portion of the Hotels or their surrounding sites; that no Hazardous Materials have been released or discharged on the Hotels or their surrounding sites, in either case in violation of applicable law. Owner agrees that it has provided Operator with all information and reports regarding the environmental condition of the Hotels and any hazards that are contained in or around the Hotels, including, but not limited to, any Environmental Phase I or Phase II reports that may have been performed. Owner shall update Operator immediately upon any change of this information or status. In the event of the discovery of any Hazardous Materials on any portion of the Hotels or their surrounding sites, Owner shall promptly remove such Hazardous Materials that are at the Hotels in violation of applicable law and shall remedy the problem in accordance with all laws, rules and regulations of any governmental authority. Owner shall indemnify, defend and hold Operator harmless from and against all losses, expenses and liabilities (including but not limited to any professional fees incurred by Operator to assess the situation or obtain advice on how to proceed) in the event of a violation of this section or Owner’s failure to act promptly in accordance with this Section, except to the extent Operator is required to indemnify Owner under Section 23.1 hereof. Hazardous Materials shall mean any substance or material identified by any law, rule or regulation as being hazardous to the health and safety or guests or employees and requiring the monitoring, clean up or removal of such substance. Hazardous Materials shall include, but not be limited to, asbestos, lead-based paint and PCB’s.

15.3. Owner represents, warrants and covenants that neither it, nor any of its affiliates (or any of their respective principals, partners or funding sources), is nor will become (i) a person designated by the U.S. Department of Treasury’s Office of Foreign Asset Control as a “specially designated national or blocked person” or similar status, (ii) a person described in Section 1 of U.S. Executive Order 13224 issued on September 23, 2001; (iii) a person otherwise identified by a government or legal authority as a person with whom Owner or Operator is prohibited from transacting business; (iv) directly or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government; or (v) a person acting on behalf of a government of any country that is subject to an embargo by the United States government. Owner agrees that it will notify Operator in writing immediately upon the occurrence of any event which would render the foregoing representations and warranties contained in this Section 15.3 incorrect.

15.4. Owner represents, warrants and covenants: (A) that it is familiar with the United States Foreign Corrupt Practices Act, 15 U.S.C. §§ 778dd-2 (the “FCPA” ), a copy of which is available at http://www.usdoj.gov/criminal/fraud/fcpa.html , and the purposes of the FCPA, and in particular, the FCPA’s prohibition of the payment or the gift of any item of value, either directly or indirectly, by a company organized under the laws of the United States of America, or any of its states, to an official of a foreign government for the purpose of influencing an act or decision in such person’s official capacity, or inducing such person to use influence with the foreign government to assist a company in obtaining or retaining business for, with, or in that foreign country or directing business to any person or company or obtaining an improper advantage, and (B) that it has not taken, and during the Term of this Agreement it will not take, any action that would constitute a violation of the FCPA or

any similar law.

15.5. Owner represents, warrants and covenants that it is in full compliance with all Major Agreements, that Owner has not received any notice of breach of any of such Major Agreements and that Owner will maintain full compliance with all such Major Agreements during the Term of this Agreement. Owner agrees to promptly provide to Operator copies of any notice of default or breach received under any Major Agreement. Notwithstanding the foregoing, the Franchise Agreement defaults set forth on Schedule 15.5 shall not be deemed Events of Default under this Agreement unless Owner fails to cure such defaults within the applicable cure periods required by the Hotel’s franchisor.

15.6. Owner represents, warrants and covenants as follows:

	A.		Owner is duly organized, validly existing and qualified to conduct its business, and has full power and authority to enter into and fully perform and comply with the terms of this Agreement.
	B.		Neither the execution and delivery of this Agreement nor its performance by Owner will conflict with or result in a breach of any contract, agreement, law, rule or regulation to which it is bound.
	C.		This Agreement is valid and enforceable against Owner in accordance with its terms and each instrument to be executed by Owner pursuant to this Agreement or in connection herewith will, when executed and delivered, be valid and enforceable against Owner in accordance with its terms, subject to the effect of (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and (ii) the application of general principles of equity (regardless of whether enforcement is considered in proceedings at law or in equity).
	D.		There is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding (whether federal, state, local or foreign) pending or, to Owner’s knowledge, threatened against Owner or any equity holder of Owner or of Owner’s affiliates or their equity holders or any of their respective properties, assets, rights or business before any court or governmental department, commission, board, bureau, agency or instrumentality or any arbitrator, that may have a material adverse effect on Owner or that draws into question the validity of this Agreement or the ability of Owner to perform its obligations hereunder.

15.7. Operator represents, warrants and covenants as follows:

	A.		Operator is duly organized, validly existing and qualified to conduct its business, and has full power and authority to enter into and fully perform and comply with the terms of this Agreement.
	B.		Neither the execution and delivery of this Agreement nor its performance by

Operator will conflict with or result in a breach of any contract, agreement, law, rule or regulation to which it is bound.

	C.		This Agreement is valid and enforceable against Operator in accordance with its terms and each instrument to be executed by Operator pursuant to this Agreement or in connection herewith will, when executed and delivered, be valid and enforceable against Operator in accordance with its terms, subject to the effect of (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and (ii) the application of general principles of equity (regardless of whether enforcement is considered in proceedings at law or in equity).
	D.		There is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding (whether federal, state, local or foreign) pending or, to Operator’s knowledge, threatened against Operator or any member of Operator or of Operator’s affiliates or their members or any of their respective properties, assets, rights or business before any court or governmental department, commission, board, bureau, agency or instrumentality or any arbitrator, that may have a material adverse effect on Operator or that draws into question the validity of this Agreement or the ability of Operator to perform its obligations hereunder.
	E.		Neither it, nor any of its affiliates (or any of their respective principals, partners or funding sources), is nor will become (i) a person designated by the U.S. Department of Treasury’s Office of Foreign Asset Control as a “specially designated national or blocked person” or similar status, (ii) a person described in Section 1 of U.S. Executive Order 13224 issued on September 23, 2001; (iii) a person otherwise identified by a government or legal authority as a person with whom Owner or Operator is prohibited from transacting business; (iv) directly or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government; or (v) a person acting on behalf of a government of any country that is subject to an embargo by the United States government. Operator agrees that it will notify Owner in writing immediately upon the occurrence of any event which would render the foregoing representations and warranties contained in this Section 15.7(E) incorrect.
	F.		That (1) it is familiar with the United States Foreign Corrupt Practices Act, 15 U.S.C. §§ 778dd-2 (the “FCPA” ), a copy of which is available at http://www.usdoj.gov/criminal/fraud/fcpa.html , and the purposes of the FCPA, and in particular, the FCPA’s prohibition of the payment or the gift of any item of value, either directly or indirectly, by a company organized under the laws of the United States of America, or any of its states, to an official of a foreign government for the purpose of influencing an act or decision in such person’s official capacity, or inducing such person to use influence with the foreign government to assist a company in obtaining or retaining business for, with, or in that foreign country or directing business to any person or company or obtaining an improper advantage, and (2) it has not taken, and during the Term of this Agreement it will not take, any

action that would constitute a violation of the FCPA or any similar law.

15.8. Operator hereby agrees, for the benefit of Owner, its successors and assigns, that Operator will not own, operate, lease or otherwise have an interest in, directly or indirectly, in any hotel in the Competitive Set of a Hotel during the Operating Term except for those Hotels shown on the attached Exhibit I unless expressly permitted by Owner. If Operator elects to do so without Owner’s consent, Owner’s sole remedy shall be termination of this Agreement solely with respect to the Hotel(s) for which the other hotel is in their Competitive Set, without payment of any termination fee, upon at least thirty (30) days prior written notice to Operator.

ARTICLE XVI

DAMAGE OR DESTRUCTION; CONDEMNATION

16.1. If a Hotel is damaged by fire or other casualty, Operator shall promptly notify Owner. This Agreement shall remain in full force and effect subsequent to such casualty; provided that:

     A. either party may terminate this Agreement upon thirty days prior written notice to the other party if (i) Owner shall elect to close such Hotel as a result of such casualty (except on a temporary basis for repairs or restoration) or (ii) Owner shall determine in good faith not to proceed with the restoration of such Hotel; and

     B. Owner or Operator may terminate this Agreement upon thirty days prior written notice to the other party if twenty percent (20%) or more of the rooms in such Hotel are unavailable for rental for a period of sixty (60) days or more as a result of such casualty; provided that, if Owner terminates this Agreement pursuant to this Section 16.1(B), such termination shall be deemed an At-Will Termination (as defined in Section 19.3).

16.2. If all or any portion of a Hotel becomes the subject of a condemnation proceeding or if Operator learns that any such proceeding may be commenced, Operator shall promptly notify Owner upon Operator’s receipt of written notice thereof. Either party may terminate this Agreement with respect to a Hotel on thirty (30) days written notice to the other party if (a) all or substantially all of such Hotel is taken through condemnation or (b) less than all or substantially all of such Hotel is taken, but, in the reasonable judgment of the party giving the termination notice, such Hotel cannot, after giving effect to any restoration as might be reasonably accomplished through available funds from the condemnation award, be profitably operated as a hotel similar to that of the Hotel immediately prior to such condemnation.

16.3. Any condemnation award or similar compensation shall be the property of Owner, provided that Operator shall have the right to bring a separate proceeding against the condemning authority for any damages and expenses specifically incurred by Operator as a result of such condemnation.

ARTICLE XVII

REIT PROVISIONS

17.1. From the Commencement Date through the end of the Term:

     (a) no wagering activities shall be conducted at or in connection with any Hotel by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with the applicable Hotel; and

     (b) Operator shall qualify as an “eligible independent contractor” as defined in Section 856(d)(9) of the Internal Revenue Code of 1986, as amended (the “ Code ”), with respect to Lessee and the REIT. To that end, Operator shall satisfy the following requirements:

     (i) Operator shall not own, directly or indirectly (within the meaning of Section 856(d)(5) of the Code), more than thirty-five percent (35%) of the outstanding stock of the REIT;

     (ii) No more than thirty-five percent (35%) of the ownership interest in Operator’s assets or net profits shall be owned, directly or indirectly, by one or more persons owning thirty-five percent (35%) or more of the outstanding stock of the REIT; and

     (iii) As of the Commencement Date and as of the commencement of any Renewal Term (each, a “ Renewal Commencement Date ”), Operator shall be (or shall, within the definition of Section 856(d)(9)(F), be related to a person (“ Related Person ”) that is) actively engaged in the trade or business of operating “qualified lodging facilities” (defined below) for a person who is not a “related person” within the meaning of Section 856(d)(9)(F) of the Code with respect to the REIT (“ Unrelated Persons ”). In order to meet this requirement, Operator shall, as of the Commencement Date and each Renewal Commencement Date, reasonably project that it (or any Related Person) will derive at least 10% of both its revenue and profit from operating “qualified lodging facilities” (defined below) that Operator or a Related Person operates as of the Commencement Date and each Renewal Commencement Date, as applicable, for Unrelated Persons for (i) the one-year period following the Commencement Date or the Renewal Commencement Date, as applicable, and (ii) the Initial Term or the Renewal Term, as applicable. Upon request from the REIT, Operator shall provide documentation reasonably necessary to verify the representation in the preceding sentence. A “qualified lodging facility,” as defined in Section 856(d)(9)(D) of the Code, means a “lodging facility” (defined below), unless wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility. A “lodging facility” is a hotel, motel or other establishment more than one-half of the dwelling units in which are used on a transient basis, and includes customary amenities and facilities operated as part of, or associated with, the lodging facility so long as such amenities and facilities are customary for other properties of a comparable size and class owned by other owners unrelated to the REIT.

ARTICLE XVIII

EVENTS OF DEFAULT

18.1. The following shall constitute events of default for which the non-defaulting party may terminate this Agreement with respect to any individual Hotel or Hotels as described below:

	A.		If either party shall be in default in the payment of any amount required to be paid under the terms of this Agreement, and such default continues for a period of ten (10) days after written notice from the non-defaulting party;
	B.		If either party shall be in material default of its obligations under this Agreement that is reasonably likely to result in a threat to the health and safety of a Hotel’s employees or guests, then this Agreement may be terminated upon written notice from the non-defaulting party if such default is not immediately cured;
	C.		If either party shall be in material default in the performance of its other obligations under this Agreement, and such default continues for a period of thirty (30) days after written notice from the non-defaulting party, provided that if such default cannot by its nature reasonably be cured within such thirty (30) day period, an event of default shall not occur if and so long as the defaulting party promptly commences and diligently pursues the curing of such default;
	D.		If either party shall (i) make an assignment for the benefit of creditors, (ii) institute any proceeding seeking relief under any federal or state bankruptcy or insolvency laws, (iii) institute any proceeding seeking the appointment of a receiver, trustee, custodian or similar official for its business or assets or (iv) consent to the institution against it of any such proceeding by any other person or entity (an “Involuntary Proceeding” );
	E.		If an Involuntary Proceeding shall be commenced against either party and shall remain undismissed for a period of sixty (60) days;
	F.		If Owner violates Sections 15.3 or 15.4 hereof, in which case Operator may terminate this Agreement immediately; or
	G.		If Operator violates any provision of Article XVII hereof, in which case Owner may terminate this Agreement immediately.

18.2. Unless otherwise stated in Section 18.1 hereof, if any event of default shall occur, the non-defaulting party may terminate this Agreement with respect to the applicable Hotel(s) on five (5) days prior notice to the defaulting party.

18.3. The right of termination set forth in Section 18.2 shall not be in substitution for, but shall be in addition to, any and all rights and remedies for breach of contract available in law or at equity.

18.4. Neither party shall be deemed to be in default of its obligations under this Agreement if and to the extent that such party is unable to perform such obligation as a result of fire or other casualty, act of God, strike or other labor unrest, unavailability of materials, war, terrorist activity, riot or other civil commotion or any other cause beyond the control of such party (a “Force Majeure Event” ) (which shall not include the inability of such party to meet its financial obligations).

18.5. Each of the parties hereto irrevocably waives any right such party may have against the other party hereto at law, in equity or otherwise to any consequential damages, punitive damages or exemplary damages.

18.6. Notwithstanding anything to the contrary contained in this Agreement, if, within thirty (30) days after receiving Operator’s written request, Owner fails to approve any changes, repairs, alterations, improvements, renewals or replacements to a Hotel which Operator determines in its reasonable judgment are necessary to (i) protect such Hotel, Owner and/or Operator from innkeeper liability exposure, (ii) ensure material compliance with any applicable code requirements pertaining to life safety systems requirements or (iii) ensure material compliance with any applicable state, local or federal employment law, including without limitation the Americans with Disabilities Act, then Operator may terminate this Agreement with respect to such Hotel upon thirty (30) days’ written notice to Owner delivered at any time after the expiration of Owner’s thirty (30) day approval period. Owner shall pay to Operator the At-Will Termination Fee (as defined in Section 19.3) upon any termination of this Agreement pursuant to this Section, which At-Will Termination Fee shall be due and payable upon the effective date of the termination of this Agreement with respect to such Hotel.

ARTICLE XIX

TERMINATION OF AGREEMENT

19.1. Upon termination of this Agreement with respect to any individual Hotel, the rights and obligations of the parties will cease with respect to such Hotel except as to fees and reimbursements due the Operator and other claims of liabilities of either party which accrued or arose before the effective date of termination, but shall remain in full force and effect with respect to all other Hotels. Upon termination of this Agreement for any reason during the Term of this Agreement, Operator and Owner agree to sign any documents reasonably necessary to effect such termination or change in management for the applicable Hotel(s) and Owner shall pay to Operator all amounts due under this Agreement with respect to such Hotel(s) through the effective date of termination.

19.2. In addition to the other termination rights provided in this Agreement:

     A. Beginning with Fiscal Year 2011, if a Hotel fails to achieve as of the end of any Fiscal Year (i) actual Gross Operating Profit of at least eighty-seven and one-half percent (87.5%) of the budgeted Gross Operating Profit for such Hotel for such Fiscal Year, AND (ii) eighty-seven and one-half percent (87.5%) of such Hotel’s RevPAR Benchmark (collectively, a “ Performance Failure ”), subject to clauses (B) and (C) below, Owner may terminate this Agreement with respect to such Hotel upon sixty (60) days prior written notice to Operator with no termination fee or similar compensation. The effectiveness of any such notice of termination, however, shall be stayed until

completion of the applicable cure periods set forth in clause (B) below.

     B. Notwithstanding the foregoing:

          (i) If a Performance Failure occurs with respect to a Fiscal Year, but the Hotel achieves as of the end of the immediately following Fiscal Year (1) actual Gross Operating Profit of at least eighty-seven and one-half percent (87.5%) of the budgeted Gross Operating Profit for such Hotel for such Fiscal Year, OR (2) eighty-seven and one-half percent (87.5%) of such Hotel’s RevPAR Benchmark, then the Performance Failure shall be deemed cured and Owner shall have no right to terminate for such Performance Failure (and any notice of termination with respect thereto shall be deemed null and void).

          (ii) If Owner notifies Operator that Owner elects to terminate this Agreement with respect to a Hotel for a Performance Failure, Operator shall have a right exercisable no more than two (2) times per Hotel, in its sole discretion, to cure the Performance Failure by, within thirty (30) days of receipt of Owner’s termination notice, making a payment to Owner equal to the amount by which eighty-seven and one-half percent (87.5%) of the budgeted Gross Operating Profit for such Hotel exceeds actual Gross Operating Profit for such Hotel for such Fiscal Year. In such case, Owner’s notice of termination shall be deemed null and void. Upon the occurrence of a third Performance Failure (but subject to clause (B)(i) above), Owner shall have the right to terminate this Agreement with respect to such Hotel without the payment of a termination fee upon sixty (60) days prior written notice to Operator.

For purposes hereof:

      “RevPAR Benchmark” means the Hotel’s RevPAR Index for the trailing 12-months ending on the Commencement Date.

      “RevPAR Index” means the RevPAR Index included in the STR Report produced for the Hotel by Smith Travel Research or, if Smith Travel Research no longer is in existence at any time during the Term, the successor of Smith Travel Research or such other industry resource that is equally as reputable as Smith Travel Research will be substituted, in order to obtain substantially the same result as would be obtained if Smith Travel Research has not ceased to be in existence.

      “Competitive Set” for each Hotel means the hotels listed on Exhibit J attached hereto, or such other hotels as may be reasonably agreed upon by Owner and Operator from time to time during the Term. The Owner and Operator shall discuss at least once a year, and upon any major change to an existing hotel in the Competitive Set, the composition of the Competitive Set. Any changes to a Hotel’s Competitive Set must be mutually agreed upon by Owner and Operator.

     C. In the event of the occurrence of any Force Majeure Event (as defined below), Owner shall not be entitled to exercise its termination right under this Section 19.2 with respect to any period of time in which such Force Majeure Event occurred or is continuing.

19.3. In addition to the other termination rights provided in this Agreement and notwithstanding anything contained therein to the contrary:

     A. (i) Owner may terminate this Agreement with respect to an individual Hotel upon the sale of such Hotel to a bona fide unaffiliated third party, so long as (a) Owner provides to Operator at least sixty (60) days prior written notice of termination, (b) all amounts due Operator under this Agreement with respect to such Hotel have been paid in full, and(c) subject to clause (ii) below, Owner pays Operator the Sale Termination Fee (as defined below) on the effective date of termination.

          For the purposes of this Section 19.3(A), the “ Sale Termination Fee ” shall be equal to an amount which would provide Operator with a thirty percent (30%) Internal Rate of Return (as defined below) with respect to the following cash flows for such Hotel: (x) the Hotel Allocated Value (as defined below) as the initial outflow and (y) as inflows, as and when paid to Operator:

(1) fifty percent (50%) of the Basic Fees and Accounting actually collected by Operator for such terminated Hotel for each Fiscal Year from the date the Hotel was added to this Agreement through the date of termination of this Agreement with respect to such Hotel; plus

(2) if for any given Fiscal Year, an Incentive Fee was earned and collected by Operator under Section 9.3 and the EBITDA Percentage (as defined below) of the terminated Hotel is above the mean of all the Hotels’ EBITDA Percentage for such Fiscal Year, fifty percent (50%) of the Incentive Fee allocable to the terminated Hotel and actually collected by Operator for each Fiscal Year from the date the Hotel was added to this Agreement through the date of termination of this Agreement with respect to such Hotel.

The Incentive Fee allocable to the terminated Hotel for each Fiscal Year, if applicable, shall be calculated by multiplying the actual Incentive Fee, if any, for each Fiscal Year by a fraction, the numerator of which is the trailing 12-month EBITDA of the terminated Hotel, and the denominator of which is the aggregate 12-month EBITDA for all Hotels that were covered by this Agreement in determining the Incentive Fee for the Fiscal Year in question.

          (ii) If Owner and Operator add an Additional Hotel (as defined in Section 24.1) to this Agreement:

     (a) within nine (9) months following the termination of this Agreement pursuant to Section 19.3(A)(i) with respect to a Hotel (the “ Replacement Window Period ”), and

     (b) with an expiration date with respect to such Additional Hotel that is equal to the original expiration date plus the number of days following commencement of the Replacement Window Period required by Owner to add the Additional Hotel to this Agreement,

then the payment of the Sale Termination Fee with respect to such terminated Hotel shall (x) if not yet paid to Operator, be offset or (y) if paid to Operator, be credited against future Sale Termination Fees due and payable from Owner. The amount of the offset or credit shall be determined by multiplying the Sale Termination Fee by a fraction, the numerator of which is the aggregate projected fifty percent (50%) of Basic Fees and Accounting Fees allocable to the Additional Hotel for the next 12-months and the denominator of which is the aggregate fifty percent (50%) of projected aggregate Basic Fees and Accounting Fees allocable to the terminated Hotel, for the next 12-months (determined by such terminated Hotel’s Budget). Further, if Owner and Operator add an Additional Hotel to this Agreement during a time period outside of a Replacement Window Period, Owner shall receive a credit with respect to future terminations of Hotels subject to the this Agreement (i.e., those terminated following the addition of such Additional Hotel to this Agreement) equal for each such Additional Hotel to the present value of the aggregate fifty percent (50%) of projected Basic Fees and Accounting Fees allocable to the Additional Hotel, discounted at a rate of thirty percent (30%). Projected Basic Fees for an Additional Hotel shall be calculated by multiplying (i) the mean of the actual Total Revenues of such Additional Hotel for the prior three (3) Fiscal Years by (ii) the Basic Fee set forth in Section 9.1 hereof, and increasing such product by the CPI. Projected Accounting Fees for an Additional Hotel shall be the Accounting Fee set forth in Section 9.2 hereof multiplied by twelve (12).

     B. In addition, and notwithstanding anything contained in this Agreement to the contrary, Owner may terminate this Agreement with respect to up to five (5) Hotels during any Fiscal Year, with or without cause, so long as (i) Owner provides to Operator at least sixty (60) days prior written notice of termination, (ii) all amounts due Operator under this Agreement with respect to such Hotels have been paid in full, and (iii) Owner pays Operator the At Will Termination Fee (as defined below) on the effective date(s) of termination. For the purposes of this Section 19.3(B), the “ At Will Termination Fee ” shall be equal to the Sale Termination Fee; provided, however, solely for the first (5) terminations with respect a Hotel, if the effective date of such termination occurs on or before the end of the eighteenth (18th) month following the Commencement Date, the Internal Rate of Return (as defined below) in such calculation shall be twenty percent (20%) instead of thirty percent (30%).

     C. For the purposes of this Agreement:

     (i) “ EBITDA Percentage ” for any period shall mean EBITDA for such period divided by Total Revenues for such period.

     (ii) “ Hotel Allocated Value ” shall mean the dollar amount set forth on Exhibit K with respect to each Hotel.

     (iii) “ Internal Rate of Return ” shall mean the internal rate of return calculated for a stream of payments using the XIRR function on Microsoft Excel.

19.4. Operator and Owner agree that upon termination, there may be certain adjustments to the final accounting for which information may not be available at the time of the final accounting and the parties agree to readjust such amounts and make the required cash adjustments when such information becomes available; provided, however, but subject to the provisions of Article XXIII

hereof, all accounts shall be deemed final ninety (90) days after termination of the Agreement.

19.5. Operator shall release to Owner any of Owner’s funds and accounts controlled by Operator, except as stated herein.

19.6. With the exception of employment records, Operator shall provide or make available to Owner all books and records with respect to a Hotel upon termination of this Agreement with respect to such Hotel.

19.7. To the extent permitted by applicable laws, Operator shall cooperate with Owner to assign any permits or licenses to Owner or the subsequent manager or owner; provided that (i) Owner give Operator sufficient time to effect such transfers; (ii) Owner shall cooperate and require that the new manager and/or owner to cooperate with Operator with respect to such transfers; (iii) Owner shall pay or reimburse any costs or expenses, including reasonable attorney fees, incurred by Operator in connection with these efforts.

19.8. All software and hardware, used at the Hotel which is owned, licensed or proprietary to Operator or its affiliated companies shall remain the exclusive property of Operator. Operator shall have the right to remove such software and hardware, and Owner access to any proprietary systems without compensation to Owner. Owner assumes all liability and shall indemnify Operator if Owner uses illegally licensed software.

19.9. Intentionally Deleted.

19.10. Owner shall cause the succeeding employer to hire a sufficient number of employees at the Hotel to avoid the occurrence of a “closing” under the WARN Act and shall otherwise comply with its obligations under Section 4.3 hereof, or shall provide Operator with sufficient notice of termination to allow Operator to comply with the WARN Act and avoid any liability thereunder.

ARTICLE XX

ASSIGNMENT

20.1. Operator shall not assign or pledge this Agreement without the prior written consent of Owner; provided that, Operator may, without the consent of Owner, assign this Agreement to (a) any entity controlling, controlled by or under common control with Operator (control being deemed to mean the ownership of fifty percent (50%) or more of the stock or other beneficial interest in such entity and/or the power to direct the day-to-day operations of such entity); (b) any entity which is the successor by merger, consolidation or reorganization of Operator or Operator’s general partner, managing member or parent corporation or (c) the purchaser of all or substantially all of the hotel management business of Operator or Operator’s general partner, managing member or parent corporation, unless any such assignment results in a Change in Control of Operator or Interstate Hotels & Resorts, Inc. (“ IHR ”). For purposes of this Agreement, a “ Change in Control ” of Operator or IHR shall mean a change of fifty percent (50%) or more of the voting control of Operator or IHR, in a single transaction or series of transactions constituting a single transaction (unless arising from the issuance in an underwritten public offering by IHR of voting stock or

instruments convertible into voting stock) that, within six (6) months following the closing of such transaction, results in (i) a change in a majority of the members of the Board of Directors of IHR and (ii) at the direction of such newly constituted Board of Directors, a substantial change in the identity of the operating team responsible for the portfolio of Hotels owned by Owner and operated under this Agreement. If Operator assigns this Agreement under subsection (a), (b) or (c) above and such assignment results in a Change in Control of Operator or IHR, then Owner, as its sole remedy, shall have the right to terminate this Agreement upon at least sixty (60) days’ prior written notice to Operator and upon any such termination, Operator shall not be entitled to any termination fee or similar compensation. If Operator assigns this Agreement under subsection (a), (b) or (c) above and such assignment does not result in a Change in Control of Operator or IHR, and such assignee agrees in writing to be bound by this Agreement and assumes in writing all of Operator’s obligations under this Agreement from and after the effective date of such assignment, Owner agrees to attorn to the assignee.

     Nothing in this Agreement shall prohibit or be deemed to prohibit any pledge by Operator of the Basic Fee, Incentive Fee or any other amounts received by Operator under this Agreement to any lender as collateral security for debt of Operator and/or Operator’s affiliates.

20.2. Owner shall not assign or pledge this Agreement without the prior written consent of Operator; provided that, Owner may assign this Agreement without Operator’s consent to any person or entity acquiring Owner’s leasehold interest and/or Land Holder’s fee or leasehold interest in a Hotel as of the effective date of such acquisition if (a) Owner provides Operator with thirty (30) days prior written notice of such assignment, and (b) such assignee agrees in writing to be bound by this Agreement and assumes in writing all of Owner’s obligations under this Agreement from and after the effective date of such assignment.

20.3. Upon any permitted assignment of this Agreement and the assumption of this Agreement by the assignee, the assignor shall be relieved of any obligation or liability under this Agreement arising after the effective date of the assignment.

		c/o Interstate Hotels & Resorts, Inc.
		4501 N. Fairfax Drive, Suite 500
		Arlington, VA 22203
		Attention: Executive Vice President and General Counsel
		Facsimile No.: (703) 542-0965

or to such other addresses as Operator and Owner shall designate in the manner provided in this Section 21.1. Any notice or other communication shall be deemed given (a) on the date three (3) business days after it shall have been mailed, if sent by certified mail, (b) on the business day it shall have been sent by facsimile transmission (unless sent on a non-business day or after business hours in which event it shall be deemed given on the following business day), or (c) on the date received if it shall have been given to a nationally-recognized overnight courier service.

ARTICLE XXII

SUBORDINATION; ESTOPPELS; RECOGNITION

22.1. Operator acknowledges and agrees that its rights under this Agreement are subject and subordinate to the lien of any first mortgage or deed of trust loan, or any junior mortgage or deed of trust loan held by an institutional investor, encumbering one or more Hotels whether now or hereafter existing; provided, however, that (i) Operator shall not be obligated to waive or forbear from receiving, on a current basis and as and when due under this Agreement, any and all fees due to it under this Agreement prior to an event of default under any such mortgage or deed of trust and (ii) Operator shall not be obligated to waive, or to forbear from exercising (unless and to the extent Operator receives adequate assurance, in Operator’s good faith business judgment, that it will be paid or reimbursed for any and all amounts due to Operator under this Agreement during the period of any such forbearance, which period will not exceed 60 days in any event) any right it may have to terminate this Agreement pursuant to Article 18 above. The provisions of this Section 22.1 shall be self operative but Operator agrees to execute and deliver promptly any document or certificate containing such other terms as may be customary and reasonable confirming such subordination as Owner or the holder of any such lien may reasonably request.

22.2. If any person or entity making or holding a loan to be secured by a mortgage or deed of trust encumbering one or more Hotels shall request that Operator agree to modifications of this Agreement, Operator shall enter into an agreement setting forth such modifications provided that the same do not adversely affect the rights or obligations of Operator under this Agreement. Such modifications may include, but shall not be limited to, Operator’s agreement to give simultaneous notice of, and the opportunity to cure within the applicable cure period set forth herein, any defaults on the part of Owner to such person or entity.

22.3. Owner and Operator agree that from time to time upon the request of the other party or a party to a Major Agreement, it shall execute and deliver within ten (10) days after the request a certificate confirming that this Agreement is in full force and effect, stating whether this Agreement has been modified and supplying such other information as the requesting party may reasonably require.

ARTICLE XXIII

INDEMNIFICATION

23.1. Operator hereby agrees to indemnify, defend and hold Owner (and Owner’s agents, principals, shareholders, partners, members, officers, directors and employees) harmless from and against all liabilities, losses, claims, damages, costs and expenses (including, but not limited to, reasonable attorneys’ fees and expenses) that may be incurred by or asserted against any such party and that arise from (a) the fraud, willful misconduct or gross negligence of the off-site employees of Operator or Key Hotel Personnel, (b) the breach by Operator of any provision of this Agreement caused by the fraud, willful misconduct or gross negligence of the off-site employees of Operator or Key Hotel Personnel, or (c) any action taken by Operator which is beyond the scope of Operator’s authority under this Agreement. Owner shall promptly provide Operator with written notice of any claim or suit brought against it by a third party which might result in such indemnification. Owner shall cooperate with the Operator or its counsel in the preparation and conduct of any defense to any such claim or suit.

23.2. Except as provided in Section 23.1, Owner hereby agrees to indemnify, defend and hold Operator (and Operator’s agents, principals, shareholders, partners, members, officers, directors and employees) harmless from and against all liabilities, losses, claims, damages, costs and expenses (including, but not limited to, reasonable attorneys’ fees and expenses; and any additional tax (excluding any tax that is based on net or gross income of Operator or its affiliates) and interest and penalties thereon) that may be incurred by or asserted against Operator and that arise from or in connection with (a) the performance of Operator’s services under this Agreement, (b) any act or omission (whether or not willful, tortious, or negligent) of Owner or any third party or (c) or any other occurrence related to the Hotels and/or Operator’s duties under this Agreement whether arising before, during or after the Term. Operator shall promptly provide Owner with written notice of any claim or suit brought against it by a third party which might result in such indemnification. Operator shall cooperate with the Owner or its counsel in the preparation and conduct of any defense to any such claim or suit.

23.3. Supplementing the provisions of Sections 23.1 and 23.2, if any claim shall be made against Owner and/or Operator which is based upon a violation or alleged violation of the Employment Laws (an “Employment Claim” ), the Employment Claim shall fall within Operator’s indemnification obligations under Section 23.1 ONLY IF it is based upon (a) the willful misconduct or gross negligence of Operator’s off-site employees or Key Hotel Personnel or (b) Operator’s breach of its obligations under Section 4.6 and shall otherwise fall within Owner’s indemnification obligations under Section 23.2.

23.4. If any action, lawsuit or other proceeding shall be brought against any party (the “Indemnified Party” ) hereunder arising out of or based upon any of the matters for which such party is indemnified under this Agreement, such Indemnified Party shall promptly notify the party required to provide indemnification hereunder (the “Obligor” ) in writing (which may be in the form of email) thereof and Obligor shall promptly assume the defense thereof (including without limitation the employment of counsel selected by Obligor) unless otherwise agreed to by the parties as provided herein, such defense to be subject to the consent of the Indemnified Party, which consent

shall not be unreasonably withheld (provided, however, by way of illustration and not limitation, it shall be reasonable for the Indemnified Party to deny consent to any settlement that requires the Indemnified Party to admit guilt or liability). The Indemnified Party shall cooperate with the Obligor in the defense of any such action, lawsuit or proceeding, on the condition that the Obligor shall reimburse the Indemnified Party for any out-of-pocket costs and expenses incurred in connection therewith. The Obligor shall have the right to negotiate settlement or consent to the entry of judgment with respect to the matters indemnified hereunder; provided, however, that if any such settlement or consent judgment contemplates any action or restraint on the part of the Indemnified Party, then such settlement or consent judgment shall require the written consent of the Indemnified Party, which consent shall not be unreasonably withheld. In addition to the foregoing, the Indemnified Party shall have the right (at its own expense) to employ separate counsel in any such action and to participate in the defense thereof. An Indemnified Party may settle any action on its own behalf (i.e., with respect to its own liability and with no requirement of Obligor to admit guilt or liability) only with the prior written consent of Obligor, which consent shall not be unreasonably withheld (provided, however, by way of illustration and not limitation, it shall be reasonable for Obligor to deny consent to any settlement that requires Obligor to expend funds in an amount Obligor determines in good faith is inappropriate so long as the Indemnified Party remains adequately protected at all times). In the event that Obligor fails to use reasonable efforts to defend or compromise any action, lawsuit or other proceeding for which an Indemnified Party is indemnified hereunder or as the parties may agree, the Indemnified Party may, at Obligor’s expense and without limiting Obligor’s liability under the applicable indemnity, assume the defense of such action and the Obligor shall pay the charges and expenses of such attorneys and other persons on a current basis within thirty (30) days of submission of invoices or bills therefor. In the event the Obligor is Owner and Owner neglects or refuses to pay such charges, Operator may pay such charges out of the Agency Account and deduct such charges from any amounts due Owner, or add such charges to any amounts due Operator from Owner under this Agreement. If Operator is the Obligor and Operator neglects or refuses to pay such charges, the amount of such charges shall be deducted from any amounts due Operator under this Agreement.

23.5. The provisions of this Article shall survive the termination of this Agreement with respect to acts, omissions and occurrences arising during the Operating Term.

ARTICLE XXIV

MISCELLANEOUS

24.1. In the event that Operator and Owner desire to add a Hotel to this Agreement after the date of this Agreement (an “ Additional Hotel ”), such Hotel shall become subject to the terms of this Agreement upon the date of execution by Operator and Owner of a Joinder and Amendment Agreement in the form of Exhibit L attached hereto and made a part hereof.

24.2. Owner and Operator shall execute and deliver all other appropriate supplemental agreements and other instruments, and take any other action necessary to make this Agreement fully and legally effective, binding, and enforceable as between them and as against third parties; provided, however, that neither party shall be required to execute any other document or instrument or perform any other action that would materially increase its liability or decrease its rights under this Agreement.

24.3. This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof, superseding all prior agreements or undertakings, oral or written. Owner acknowledges that in entering into this Agreement, Owner has not relied on any projection of earnings, statements as to the possibility of future success, or other similar matter which may have been prepared by Operator.

24.4. The headings of the titles to the articles of this Agreement are inserted for convenience only and are not intended to affect the meaning of any of the provisions hereof.

24.5. A waiver of any of the terms and conditions of this Agreement may be made only in writing and shall not be deemed a waiver of such terms and conditions on any future occasion.

24.6. This Agreement shall be binding upon and inure to the benefit of Owner and Operator and their respective successors and permitted assigns.

24.7. This Agreement shall be construed, both as to its validity and as to the performance of the parties, in accordance with the laws of the state of Maryland without reference to its conflict of laws provisions.

24.8. This Agreement may be executed in any number of counterparts each of which shall, when executed, be deemed to be an original and all of which shall be deemed to be one and the same instrument. Signatures on this Agreement delivered by facsimile shall be deemed to be original signatures for all purposes of this Agreement.

24.9. Any capitalized terms used within this Agreement which were not defined in this Agreement shall have the same meanings given to such terms in the Master Agreement.

ARTICLE XXV

SPECIAL FRANCHISE/LICENSE AGREEMENT PROVISIONS

So long as any Hotel is subject to a Franchise Agreement with Holiday Inn or another member of the InterContinental Hotels Group (“ IHG ”), the following applies solely with respect to such Hotel(s) and their respective Franchise Agreements:

     (1) Operator agrees to accept, abide by and be subject to all rules, regulations, inspections and requirements of Holiday Inn and/or IHG.

     (2) If the Franchise Agreement shall terminate, the Operator shall cease to operate such Hotel as a Holiday Inn Express Hotel or Holiday Inn Hotel, as the case may be.

     (3) If there is any conflict between the terms of this Agreement and the terms of the Franchise Agreement, the terms of the Franchise Agreement shall govern and control.

     (4) Notwithstanding the consent of Holiday Inn and IHG to this Agreement, Owner and

all guarantors shall remain liable to Holiday Inn and/or IHG under the terms of Franchise Agreement.

[ SIGNATURES APPEAR ON THE FOLLOWING PAGES ]

      IN WITNESS WHEREOF , Operator and Owner have duly executed this Agreement the day and year first above written.

OWNER:

SUMMIT HOTEL TRS 002, LLC

SUMMIT HOTEL TRS 003, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 004, LLC

SUMMIT HOTEL TRS 005, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 006, LLC

SUMMIT HOTEL TRS 009, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 011, LLC

SUMMIT HOTEL TRS 012, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

[ signatures continue on the following pages ]

SUMMIT HOTEL TRS 015, LLC

SUMMIT HOTEL TRS 016, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 017, LLC

SUMMIT HOTEL TRS 018, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 019, LLC

SUMMIT HOTEL TRS 020, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 021, LLC

SUMMIT HOTEL TRS 022, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 023, LLC

SUMMIT HOTEL TRS 025, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

[ signatures continue on the following pages ]

SUMMIT HOTEL TRS 028, LLC

SUMMIT HOTEL TRS 029, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 031, LLC

SUMMIT HOTEL TRS 032, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 035, LLC

SUMMIT HOTEL TRS 038, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 039, LLC

SUMMIT HOTEL TRS 041, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary

SUMMIT HOTEL TRS 042, LLC

SUMMIT HOTEL TRS 043, LLC

a Delaware limited liability company

a Delaware limited liability company

By:

/s/ Christopher Eng

By:

/s/ Christopher Eng

Name:

Christopher Eng

Name:

Christopher Eng

Title:

Secretary

Title:

Secretary