NOTE 11 - DEBT

Our debt is comprised of a senior secured revolving credit facility and term loans secured by various hotel properties. At December 31, 2012 and 2011 our debt included (in thousands):

Lender	Note Reference	Interest Rate at December 31, 2012 a)	Amortization Period (Years)	Maturity Date	Number of Properties Encumbered	2012		2011

Senior Secured Revolving Credit Facility

Deutsche Bank AG New York Branch	b)	3.00% Variable	n/a	May 16, 2015	26	$	58,000	$	11,426

Term Loans

ING Life Insurance and Annuity	c)	6.10% Fixed	20	March 1, 2032	16		66,174		-
		--	--	--	-		-		27,646
		--	--	--	-		-		28,158
		--	--	--	-		-		6,047
		--	--	--	-		-		7,655
Empire Financial Services, Inc.	d)	6.00% Fixed	25	February 1, 2017	1		18,699		-
Bank of America Commercial Mortgage	e)	6.41% Fixed	25	September 1, 2017	1		8,593		-
Merrill Lynch Mortgage Lending Inc.	f)	6.384% Fixed	30	August 1, 2016	1		5,341		-
GE Capital Financial Inc.	g)	6.03% Fixed	25	May 1, 2017	2		14,851		-
National Western Life Insurance		--		--	-		-		13,197
Chambers Bank	h)	6.50% Fixed	20	June 24, 2014	1		1,417		1,507
Bank of the Ozarks	i)	5.75% Fixed	25	July 10, 2017	1		8,778		6,334
MetaBank	j)	4.95% Fixed	17	February 1, 2017	2		6,786		7,058
Bank of Cascades	k)	4.66% Fixed	25	September 30, 2021	1		12,283		12,557
Goldman Sachs		5.67% Fixed	25	July 6, 2016	2		14,376		14,644
BNC National		5.01% Fixed	20	November 1, 2013	1		5,308		5,519
		--	--	--	-		-		5,700
Compass Bank	l)	4.57% Fixed	20	May 17, 2018	1		14,144		16,083
General Electric Capital Corporation	m)	5.46% Fixed	25	April 1, 2017	1		5,481		-
	m)	5.46% Fixed	25	April 1, 2017	1		6,419		-
	n)	5.37% Fixed	20	April 1, 2018	2		7,998		8,315
	n)	5.59% Fixed	25	March 1, 2019	2		10,434		10,709
	n)	4.61% Fixed	25	April 1, 2014	2		10,568		10,860
AIG	o)	6.11% Fixed	20	January 1, 2016	1		14,059		-
First National Bank of Omaha	p)	5.25% Variable	20	February 1, 2014	1		8,241		8,552
	p)	5.25% Variable	20	July 1, 2013	2		14,663		15,137

Total Term Loans					42		254,613		205,678

Total Debt					68	$	312,613	$	217,104

Notes:

a) Interest rates at December 31, 2012 give effect to our use of interest rate swaps, where applicable.

b) This is a $150.0 million facility with Deutsche Bank AG New York Branch as the administrative agent and Deutsche Bank Securities as the lead manager. The syndicate of lenders includes Deutsche Bank, Royal Bank of Canada, KeyBank National Association, Regions Bank, U.S. Bank National Association, and Citibank, N.A. We pay interest on advances at varying rates, based upon, at our option, either (i) 1, 2, 3, or 6-month LIBOR, subject to a floor of 0.50%, plus a LIBOR margin between 2.25% and 2.75%, depending upon the ratio of our outstanding consolidated indebtedness to EBITDA (as defined in the loan documents), or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50% plus the federal funds effective rate, or 1-month LIBOR (incorporating the floor of 0.50%) plus 1.00%, plus a margin between 1.25% and 1.75%, depending upon the ratio of outstanding consolidated indebtedness to EBITDA. Availability under the facility is subject to a borrowing base of properties pledged as collateral and other conditions. At December 31, 2012, the borrowing base was $112.1 million, of which we had $58.0 million borrowed, $1.3 million in standby letters of credit, and $52.8 million available to borrow.

c) On February 13, 2012, we consolidated and refinanced our four loans with ING Life Insurance and Annuity (“ING”) into a single term loan. ING has the right to call the loan in full at March 1, 2019, 2024 and 2029. If the loan is prepaid prior to maturity, other than if called, there is a prepayment penalty equal to the greater of i) 1% of the principal being prepaid or ii) the yield maintenance premium.

d) On January 12, 2012, we entered into a term loan to modify the loan assumed in our acquisition of the Courtyard by Marriott in Atlanta, GA.

e) On May 16, 2012, we assumed a term loan in our acquisition of the Hilton Garden Inn in Smyrna, TN. This loan is subject to defeasance if prepaid.

f) On June 21, 2012, we assumed a term loan in our acquisition of the Hampton Inn & Suites in Smyrna, TN. This loan is subject to defeasance if prepaid.

g) On April 4, 2012, we refinanced two National Western Life Insurance loans with GE Capital Financial Inc. The new loans have prepayment penalties of 1% plus defeasance and are cross-defaulted and cross-collateralized.

h) On June 24, 2012, we refinanced and extended the maturity of this loan. We also replaced a guaranty from an affiliate of our Predecessor with a guaranty from Summit Hotel Properties, Inc. limited to non-recourse carve-outs.

i) On June 29, 2012, we refinanced and extended the maturity of this loan. In addition, we borrowed an additional $2.5 million representing the amount available pursuant to the earn-out provision of the loan. The interest rate is fixed for three years, with the rate variable at 90-day LIBOR plus 3.75% with a floor of 5.5% thereafter.

j) On February 14, 2012, we refinanced and extended the maturity of this loan. The new loan has a prepayment penalty in the first two years of 3%, in year three of 2%, and in years four and five of 1%.

k) The fixed rate of 4.66% resets on September 30, 2016 to the then-current Federal Home Loan Bank of Seattle Intermediate/Long-Term, Advances Five-year Fixed Rate plus 3.00%.

l) This loan has a variable interest rate of 30-day LIBOR plus 350 basis points (3.71% at December 31, 2012). On October 11, 2012, we entered into an interest rate derivative that effectively converted 85% of this loan to a fixed rate.

m) On March 2, 2012, we entered into two term loans for the purchase of two Hilton Garden Inns in Birmingham, AL. The interest rate on these new term loans is fixed for the first three years and then each loan will convert to a variable rate of 90-day LIBOR plus 5.28%. The loans may not be prepaid in the first year and have prepayment penalties in the second year of 2% and in the third year of 1%. These loans are cross-defaulted and cross-collateralized.

n) These loans have a variable interest rate of 90-day LIBOR plus 350 basis points. On May 4, 2012, we entered into interest rate derivatives that effectively converted these loans to a fixed rate. These loans are cross-defaulted and cross-collateralized.

o) On December 20, 2012, we assumed a term loan in our acquisition of the Residence Inn by Marriott in Salt Lake City, UT. This loan has a prepayment penalty of the greater of 1% or the yield maintenance premium.

p) These loans have a variable interest rate of 90 day LIBOR plus 4.0% and a floor of 5.25% and are cross-defaulted and cross-collateralized.

Our total fixed-rate and variable-rate debt at December 31, 2012 and 2011, after giving effective to our interest rate derivatives, follows (in thousands):

	2012		2011

Fixed-rate debt	$	229,587	$	122,630
Variable-rate debt		83,026		94,474

	$	312,613	$	217,104

Maturities of long-term debt for each of the next five years are (in thousands):

2013	$	36,102
2014		10,800
2015		58,370
2016		33,745
2017		67,436
Thereafter		106,160

	$	312,613

The weighted average interest rate for all borrowings was 5.15% and 5.38% at December 31, 2012 and 2011, respectively.

In 2011, we utilized $227.2 million of the net proceeds from our IPO and concurrent private placement to prepay the following mortgage indebtedness in full, including associated costs:

―	$89.3 million to Fortress Credit Corp., including $2.1 million of exit fees, interest and legal fees;
―	$78.2 million to Lehman Brothers Bank, including $1.4 million in extinguishment premium and other transaction costs;
―	$21.4 million to Marshall & Isley Bank; and
―	$38.3 million to First National Bank of Omaha.

Information about the fair value of our fixed-rate debt that is not recorded at fair value follows (in thousands):

	2012				2011
	Carrying Value		Fair Value		Carrying Value		Fair Value		Valuation Technique

Fixed-rate debt	$	188,565	$	193,448	$	122,830	$	122,950	Level 2 - Market approach

At December 31, 2012, we had $41.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value.