NOTE 4 - DEBT OBLIGATIONS

Mortgage loans and notes payable at June 30, 2012 and December 31, 2011, are comprised of the following (dollars in millions):

	2012		2011
	(in millions)		(in millions)

Fixed-rate mortgage loans	$	206.1	$	122.6
Variable-rate mortgage loans		92.3		94.5
	$	298.4	$	217.1

On January 12, 2012, the Company entered into a $19.0 million term loan with Empire Financial Services, Inc. to modify the $19.0 million loan assumed in the acquisition of the Courtyard by Marriott in Atlanta, GA (see Note 3). The interest rate is 6.00% fixed. The loan matures February 1, 2017 and is secured by a first mortgage lien on the hotel. The loan carries a prepayment penalty of one percent (1%) for prepayments occurring before January 13, 2013.

On February 14, 2012, we refinanced the MetaBank loan of $7.0 million. It now matures February 1, 2017, is amortized over approximately 17 years and bears an annual interest rate of 4.95%. There is a prepayment penalty of 3% if the loan is paid off in the first two years, 2% in year 3 and 1% in years 4 and 5. The loan is collateralized by a first mortgage lien on two hotels containing 197 rooms.

On March 2, 2012, we entered into a $5.6 million term loan with General Electric Capital Corporation to purchase the 95-unit Hilton Garden Inn in Birmingham, Alabama. The interest rate is fixed for three years at 5.46%. On the third anniversary of the note, the rate will convert to a variable rate of 90-day LIBOR plus 5.28%. The note matures on April 1, 2017, and is secured by a first priority lien on the 95-unit Hilton Garden Inn in Birmingham, Alabama. The loan may not be prepaid during the first 12 months, and may be prepaid with a 2% prepayment fee during the second loan year, and 1% prepayment during the third loan year. The note is cross-defaulted and cross-collateralized with the $6.5 million note on the 130-unit Hilton Garden Inn in Birmingham, Alabama.

On March 2, 2012, we entered into a $6.5 million term loan with General Electric Capital Corporation to purchase the 130-unit Hilton Garden Inn in Birmingham, Alabama. The interest rate is fixed for three years at 5.46%. On the third anniversary of the note, the rate will convert to a variable rate of 90-day LIBOR plus 5.28%. The note matures on April 1, 2017, and is secured by a first priority lien on the 130-unit Hilton Garden Inn in Birmingham, Alabama. The loan may not be prepaid during the first 12 months, and may be prepaid with a 2% prepayment fee during the second loan year, and 1% prepayment during the third loan year. The note is cross-defaulted and cross-collateralized with the $5.6 million note on the 95-unit Hilton Garden Inn in Birmingham, Alabama.

On February 13, 2012, we closed on the consolidation and refinance of our four loans with ING Life Insurance and Annuity, which four loans collectively had an aggregate outstanding balance of approximately $69.5 million as of December 31, 2011. The loans were consolidated into a single term loan with a principal balance of $67.5 million, maturity date of March 1, 2032, amortized over 20 years and bearing an annual interest rate of 6.10%, collateralized by first mortgage liens on 16 properties containing 1,639 guestrooms. The lender has the right to call the loan so as to be payable in full at March 1, 2019, March 1, 2024 or March 1, 2029. If the loan is repaid prior to maturity, other than if called by the lender, there is a prepayment penalty equal to the greater of (i) 1% of the principal being repaid and (ii) the yield maintenance premium. Pursuant to the consolidation, the mortgages on the Courtyard by Marriott, Missoula, MT and the Courtyard by Marriott, Memphis, TN were released and new mortgages were taken on the Country Inn & Suites and the Holiday Inn Express in Charleston, West Virginia.

On April 4, 2012, we refinanced the National Western Life Insurance and Annuity loan on the SpringHill Suites by Marriott in Scottsdale, Arizona with a $5.25 million term loan with GE Capital Financing Inc. The interest rate is 6.03%. The loan matures May 1, 2017 and is secured by a first mortgage lien on the SpringHill by Marriott hotel in Scottsdale, Arizona. The loan carries a prepayment penalty of one percent (1%) plus defeasance. The loan is cross-defaulted and cross-collateralized with the $9.75 million loan on the Courtyard by Marriott in Scottsdale, Arizona.

On April 4, 2012, we refinanced the National Western Life Insurance and Annuity loan on the Courtyard by Marriott in Scottsdale, Arizona with a $9.75 million term loan with GE Capital Financing Inc. The interest rate is 6.03%. The loan matures May 1, 2017 and is secured by a first mortgage lien on the Courtyard by Marriott hotel in Scottsdale, Arizona. The loan carries a prepayment penalty of one percent (1%) plus defeasance. The loan is cross-defaulted and cross-collateralized with the $5.25 million loan on the SpringHill Suites by Marriott in Scottsdale, Arizona.

On May 16, 2012, the Company assumed an $8.7 million term loan with Banc of America Commercial Mortgage, Inc. The interest rate is 6.41% fixed. The loan matures September 1, 2017 and is secured by a first mortgage lien on the Hilton Garden Inn hotel in Smyrna, TN.

On June 21, 2012, the Company assumed a $5.4 million term loan with Merrill Lynch Mortgage Lending, Inc. The interest rate is 6.3840% fixed. The loan matures August 1, 2016 and is secured by a first mortgage lien on the Hampton Inn hotel in Smyrna, TN.

On June 24, 2012, the Chambers Bank loan of approximately $1.5 million was refinanced, extending the maturity date to June 24, 2014. Summit Hotel Properties, Inc. executed a guaranty limited to non-recourse carve-outs, replacing the guaranty in place from an affiliate of our Predecessor.

On June 29, 2012, the Bank of the Ozarks loan was refinanced, extending the maturity date to July 10, 2017. In addition, Bank of the Ozarks advanced an additional $2.6 million, representing the amount available pursuant to the earn-out provision of the loan, increasing the current outstanding balance to approximately $8.9 million. The interest rate was fixed at 5.75% for three years, with the rate at LIBOR plus 3.75% or a fixed rate of 5.5% thereafter.

We entered into a $125.0 million senior secured revolving credit facility with Deutsche Bank AG New York Branch, as administrative agent, Deutsche Bank Securities Inc., as lead arranger, and a syndicate of lenders including Deutsche Bank AG New York Branch, Royal Bank of Canada, KeyBank National Association, Regions Bank, and U.S. Bank National Association. On May 17, 2012, we entered into a Third Amendment to Credit Agreement, which resulted in the Company being able to borrower a higher percentage of the value of each property in the borrowing base, an extended termination date of the facility, a decrease in the interest rate, a reduction in the unused fee, and a reduction in the leverage requirement and the consolidated fixed charge coverage ratio requirements. The terms of the credit facility, as amended, are described in the summary below.

The facility matures May 16, 2015, with an option to extend for one additional year if we meet certain requirements. Outstanding borrowings on the revolving credit facility are limited to the least of (1) $125.0 million, (2) 60% of the aggregate appraised value of the borrowing base assets and (3) a formula related to the aggregate adjusted net operating income of the borrowing base assets securing the facility. The availability of the credit facility is also subject to a borrowing base having no fewer than 15 properties. As of June 30, 2012, 23 hotel properties are included in the borrowing base and the maximum amount of borrowing permitted by the terms of the credit facility is approximately $88.4 million, of which approximately $32.7 million is available to borrow as of June 30, 2012.