Document:

Execution
Version

 

SHAREHOLDER
AGREEMENT

 

by
and between

 

BIOTIME,
INC. 

 

and

 

JUVENESCENCE
LIMITED

 

Dated:
August 30, 2018

 

    	 	 	 

    	 

    

 

Table
of Contents

 

	 	 	 	Page
	 	 	 	 
	1.	Voting
    Provisions Regarding the Board.	1
	 	1.1	Size
    of the Board	1
	 	1.2	Board
    Composition	1
	 	1.3	Failure
    to Designate a Board Member	2
	 	1.4	Removal
    of Board Members	2
	 	1.5	No
    Liability for Election of Recommended Directors	3
	 	1.6	No
    “Bad Actor” Designees	3
	 	 	 	 
	2.	Protective
    Provisions, Information Rights, Etc.	3
	 	2.1	BioTime
    Specific Protective Provision	3
	 	2.2	Delivery
    of Financial Information	4
	 	2.3	Inspection	4
	 	2.4	Non-Disclosure	4
	 	 	 	 
	3.	Drag-Along
    Right.	4
	 	3.1	Definitions	4
	 	3.2	Actions
    to be Taken	4
	 	3.3	Conditions	5
	 	 	 	 
	4.	Rights
    to Future Stock Issuances.	6
	 	4.1	Right
    of First Offer	6
	 	 	 	 
	5.	Right
    of First Refusal.	7
	 	5.1	Grant	7
	 	5.2	Notice	7
	 	5.3	Consideration;
    Closing	7
	 	 	 	 
	6.	Right
    of Co-Sale.	8
	 	6.1	Exercise
    of Right	8
	 	6.2	Shares
    Includable	8
	 	6.3	Purchase
    and Sale Agreement	8
	 	6.4	Purchase
    by Juvenescence; Deliveries	8
	 	6.5	Additional
    Compliance	8
	 	 	 	 
	7.	Effect
    of Failure to Comply.	8
	 	7.1	Equitable
    Relief	8
	 	7.2	Violation
    of First Refusal Right	9
	 	7.3	Violation
    of Co-Sale Right	9

 

    	 	-i-	 

    	 

    

 

Table
of Contents

(continued)

 

	 	 	Page
	8.	Distributions	9
	 	 	 
	9.	Legend	9
	 	 	 
	10.	Term	9
	 	 	 
	11.	Miscellaneous.	10
	 	11.1	Successors
    and Assigns	10
	 	11.2	Governing
    Law	10
	 	11.3	Counterparts	10
	 	11.4	Titles
    and Subtitles	10
	 	11.5	Notices	10
	 	11.6	Entire
    Agreement; Amendment	11
	 	11.7	Delays
    or Omissions	11
	 	11.8	Severability	11
	 	11.9	Stock
    Splits, Stock Dividends, etc	11
	 	11.10	Further
    Assurances	11
	 	11.11	Dispute
    Resolution	12
	 	11.12	Aggregation
    of Stock	12

 

    	 	-ii-	 

    	 

    

 

SHAREHOLDER
AGREEMENT

 

This
Shareholder Agreement, dated as of August 30, 2018 (this “Agreement”),
is by and between Biotime, Inc., a Delaware corporation (“BioTime”),
and Juvenescence Limited, a British Virgin Islands company (“Juvenescence”).
BioTime and Juvenescence are referred to hereinafter each as a “Party” and collectively as the “Parties.”

 

RECITALS

 

Whereas,
pursuant to that certain Stock Purchase Agreement, dated as of August30, 2018 (the “Purchase Agreement”),
between BioTime, Juvenescence and AgeX Therapeutics, Inc. (“AgeX” or the “Company”),
BioTime sold 14,400,000 shares of AgeX common stock, par value $0.0001 (the “Common Stock,” and such
shares sold, the “AgeX Transaction Shares,” and such transaction, the “AgeX Transaction”)
to Juvenescence; and

 

Whereas,
the Parties are entering into this Agreement to set forth certain arrangements of the Parties among themselves as shareholders
of AgeX following the AgeX Transaction.

 

Now,
Therefore, in consideration of the foregoing
and the respective covenants and agreements set forth in this Agreement, the Parties agree as follows:

 

1.
Voting Provisions Regarding the Board.

 

1.1
Size of the Board. Each Party agrees to vote, or cause to be voted, all Shares (as defined below) owned by such Party,
or over which such Party has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure
that the size of the board of directors of AgeX (the “Board”) shall be set and remain at (i) six directors
prior to a BioTime Distribution (as defined below), or (ii) seven directors following a BioTime Distribution. For purposes of
this Agreement, the term “Shares” shall mean and include any securities of AgeX that the holders of
which are entitled to vote for members of the Board, including without limitation, all shares of Common Stock and any shares of
preferred stock, by whatever name called, now owned or subsequently acquired by a Party, however acquired, whether through stock
splits, stock dividends, reclassifications, recapitalizations, similar events or otherwise. The term “BioTime Distribution”
shall mean any distribution, by dividend, rights offering or otherwise, of Shares to the holders of the common stock of BioTime,
including without limitation the distribution contemplated by that certain Registration Statement on Form 10 filed by AgeX on
June 8, 2018 with the Securities and Exchange Commission, as subsequently amended, or any similar transaction, or any other disposition
of Shares by BioTime that reduces BioTime’s beneficial ownership of the Common Stock of AgeX thereafter (as calculated under
Rule 13d-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

1.2
Board Composition. Each Party agrees to vote, or cause to be voted, all Shares owned by such Party, or over which such
Party has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each
annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the
stockholders, the following persons shall be elected to the Board:

 

(a)
Two individuals designated from time to time by BioTime (collectively, the “BioTime Directors”), for
so long as this Agreement shall remain in effect, which individuals shall initially be Michael West, CEO of AgeX and an individual
that is reasonably acceptable to both parties;

 

    	 	1.	 

    	 

    

 

(b)
Two individuals designated from time to time by Juvenescence (the “Juvenescence Directors”), for so
long as this Agreement shall remain in effect, one of which shall initially be Greg Bailey;

 

(c)
Two individuals not otherwise an Affiliate of BioTime, Juvenescence or AgeX (the “Independent Directors”)
who are (i) independent, (ii) mutually agreed to and designated from time to time by BioTime and Juvenescence for so long as this
Agreement shall remain in effect, and (iii) mutually acceptable to the other members of the Board, including the BioTime Directors;
and

 

(d)
Following the earlier of a BioTime Distribution or the payment of the Delayed Cash Consideration (as defined in the Purchase Agreement),
one additional individual designated from time to time by Juvenescence (the “Juvenescence Additional Director”),
for so long as this Agreement shall remain in effect.

 

With
respect to clauses (a) through (b) above, the Parties agree that the Chairman of AgeX and the Chief Executive Officer of Juvenescence,
as representatives of the Parties, shall confer in good faith as to the designation of the initial BioTime Directors and the second
Juvenescence Director. To the extent that any of clauses (a) through (d) above shall not be applicable, any position on the Board
which would otherwise have been designated in accordance with the terms thereof shall instead be voted upon by all the stockholders
of AgeX entitled to vote thereon or otherwise appointed by the directors remaining in office, in each case in accordance with,
and pursuant to, AgeX’s Certificate of Incorporation and Bylaws.

 

For
purposes of this Agreement, an individual, shareholder, firm, corporation, partnership, association, limited liability company,
trust or any other entity (collectively, a “Person”) shall be deemed an “Affiliate”
of another Person who, directly or indirectly, controls, is controlled by or is under common control with such Person, including,
without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital
fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members
or investment advisers of, or shares the same management company or investment adviser with, such Person.

 

1.3
Failure to Designate a Board Member. In the absence of any designation from the Party with the right to designate a director
as specified above, the director previously designated by such Party and then serving shall be reelected if still eligible and
willing to serve as provided herein and otherwise, such Board seat shall remain vacant.

 

1.4
Removal of Board Members. Each Party also agrees to vote, or cause to be voted, all Shares owned by such Party, or over
which such Party has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:

 

(a)
no director elected pursuant to Sections 1.2 or 1.3 of this Agreement may be removed from office unless (i) such removal is directed
or approved by the affirmative vote of the Party entitled under Section 1.2 to designate that director; or (ii) the Party originally
entitled to designate or approve such director pursuant to Section 1.2 is no longer so entitled to designate or approve such director;

 

(b)
any vacancies created by the resignation, removal or death of a director elected pursuant to Sections 1.2 or 1.3 shall be filled
pursuant to the provisions of this Section 1; and

 

    	 	2.	 

    	 

    

 

(c)
upon the request of any Party entitled to designate a director as provided in Section 1.2(a), 1.2(b) or 1.2(d) to remove such
director, such director shall be removed.

 

The
Parties agree to execute any written consents required to perform the obligations of this Section 1, and the Parties agree at
the request of any Party entitled to designate directors to cause AgeX to call a special meeting of stockholders for the purpose
of electing directors, to the extent necessary and permitted under AgeX’s Certificate of Incorporation and Bylaws.

 

1.5
No Liability for Election of Recommended Directors. No Party, nor any Affiliate of any Party, shall have any liability
as a result of designating a person for election as a director for any act or omission by such designated person in his or her
capacity as a director of AgeX, nor shall any Party have any liability as a result of voting for any such designee in accordance
with the provisions of this Agreement.

 

1.6
No “Bad Actor” Designees. Each Party represents and warrants that, to such Party’s knowledge, none of
the “bad actor” disqualifying events described in Rule 506(d)(1)(i)-(viii) under the Securities Act of 1933, as amended
(the “Securities Act”) (each, a “Disqualification Event”), is applicable to
such Party’s initial designees named above except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii)
or (iii) or (d)(3) is applicable. Any director designee to whom any Disqualification Event is applicable, except for a Disqualification
Event to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable, is hereinafter referred to as a “Disqualified
Designee”. Each Party covenants and agrees (A) not to designate or participate in the designation of any director
designee who, to such Party’s knowledge, is a Disqualified Designee and (B) that in the event such Party becomes aware that
any individual previously designated by any such Party is or has become a Disqualified Designee, such Party shall as promptly
as practicable take such actions as are necessary to remove such Disqualified Designee from the Board and designate a replacement
designee who is not a Disqualified Designee.

 

2.
Protective Provisions, Information Rights,
Etc.

 

2.1
BioTime Specific Protective Provision. At any time during the 24 month period following the date of this Agreement, Juvenescence
shall not cause AgeX to issue or obligate itself to issue shares of any class or series of capital stock other than Exempted Securities
(as defined below) at a price per share of less than $3.20, without the written consent or affirmative vote of BioTime, and any
such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
For purposes of this Section 2.1, “Exempted Securities” shall mean:

 

(a)
shares of Common Stock, Options (as defined below) or Convertible Securities (as defined below) issued as a dividend or distribution
on AgeX’s capital stock;

 

(b)
shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution
on shares of Common Stock;

 

(c)
shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, AgeX or any of its subsidiaries
pursuant to a plan, agreement or arrangement approved by the Board, including the BioTime Directors; or

 

(d)
shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually
issued upon the conversion or exchange of Convertible Securities outstanding as of the date of this Agreement, in each case provided
such issuance is pursuant to the terms of such Option or Convertible Security.

 

    	 	3.	 

    	 

    

 

For
purposes of this Section 2.1, “Option” shall mean rights, options or warrants to subscribe for, purchase
or otherwise acquire Common Stock or Convertible Securities. For purposes of this Section 2.1, “Convertible Securities”
shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for
Common Stock, but excluding Options.

 

2.2
Delivery of Financial Information. Juvenescence shall not restrict, prohibit or impede the obligations of the Company to
deliver to BioTime such financial information as BioTime may be entitled to receive from the Company under the Facilities Agreement
(as defined in the Purchase Agreement) or otherwise.

 

2.3
Inspection. Juvenescence shall use its commercially reasonable efforts to cause AgeX to permit BioTime to visit and inspect
AgeX’s properties; examine AgeX’s books of account and records; and discuss AgeX’s affairs, finances, and accounts
with its officers, during normal business hours of AgeX as may be reasonably requested by BioTime; provided, however, that Juvenescence
shall not be obligated pursuant to this Section 2.3 to cause AgeX to provide access to any information the disclosure of which
would adversely affect the attorney-client privilege between AgeX and its counsel, or based on the advice of its counsel, disclosure
to BioTime would result in a conflict of interest to the material detriment of AgeX.

 

2.4
Non-Disclosure. To the extent any information provided in accordance with the provisions of Section 2.2 or Section 2.3
hereof has not otherwise been disclosed by AgeX, the provision of such information may be made subject to a non-disclosure agreement
mutually acceptable to AgeX and BioTime.

 

3.
Drag-Along Right.

 

3.1
Definitions. A “Sale of AgeX” shall mean a transaction or series of related transactions in which
a Person, or a group of related Persons, acquires more than 51% of the outstanding voting power of AgeX, through stock purchase,
tender offer, merger consolidation or similar transaction, or acquires all or substantially all of the assets of AgeX.

 

3.2
Actions to be Taken. In the event that (i) Juvenescence or its Affiliates, and (ii) the Board, including the BioTime Directors
approve a Sale of AgeX in writing, specifying that this Section 3 shall apply to such transaction, then, subject to satisfaction
of each of the conditions set forth in Section 3.3, each Party agrees:

 

(a)
if such transaction requires stockholder approval, with respect to all Shares that such Party owns or over which such Party otherwise
exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of, and
adopt, such Sale of AgeX (together with any related amendment or restatement to AgeX’s Certificate of Incorporation required
to implement such Sale of AgeX) and to vote in opposition to any and all other proposals that could reasonably be expected to
delay or impair the ability of AgeX to consummate such Sale of AgeX;

 

(b)
to sell the same proportion of shares of capital stock of AgeX beneficially held by such Party as is proportionately being sold
from the AgeX Transaction Shares, and, except as permitted in Section 3.3, on the same terms and conditions as the AgeX Transaction
Shares are being sold;

 

(c)
to execute and deliver all related documentation and take such other action in support of the Sale of AgeX as shall reasonably
be requested by AgeX or Juvenescence or its Affiliates in order to carry out the terms and provision of this Section 3, including,
without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement,
any associated indemnity agreement, or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver,
governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances),
and any similar or related documents;

 

    	 	4.	 

    	 

    

 

(d)
not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares of AgeX owned by
such Party or Affiliate in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of
such Shares, unless specifically requested to do so by the acquirer in connection with the Sale of AgeX;

 

(e)
to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to
such Sale of AgeX;

 

(f)
if the consideration to be paid in exchange for the Shares pursuant to this Section 3 includes any securities and due receipt
thereof by any Party would require under applicable law (i) the registration or qualification of such securities or of any person
as a broker or dealer or agent with respect to such securities; or (ii) the provision to any Party of any information other than
such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors”
as defined in Regulation D promulgated under the Securities Act, AgeX may cause to be paid to any such Party in lieu thereof,
against surrender of the Shares which would have otherwise been sold by such Party, an amount in cash equal to the fair value
(as determined in good faith by the Board) of the securities which such Party would otherwise receive as of the date of the issuance
of such securities in exchange for the Shares; and

 

(g)
in the event that, in connection with such Sale of AgeX, a stockholder representative (the “Stockholder Representative”)
is appointed with respect to matters affecting the Parties under the applicable definitive transaction agreements following consummation
of such Sale of AgeX, (i) to consent to (A) the appointment of such Stockholder Representative, (B) the establishment of any applicable
escrow, expense or similar fund in connection with any indemnification or similar obligations, and (C) the payment of such Party’s
pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such
Stockholder Representative in connection with such Stockholder Representative’s services and duties in connection with such
Sale of AgeX and its related service as the representative of the Parties, and (ii) not to assert any claim or commence any suit
against the Stockholder Representative or the other Party with respect to any action or inaction taken or failed to be taken by
the Stockholder Representative, within the scope of the Stockholder Representative’s authority, in connection with its service
as the Stockholder Representative, absent fraud, bad faith, gross negligence or willful misconduct.

 

3.3
Conditions. Notwithstanding anything to the contrary set forth herein, a Party will not be required to comply with Section
3.2 in connection with any proposed Sale of AgeX (the “Proposed Sale of AgeX”), unless:

 

(a)
any representations and warranties to be made by such Party in connection with the Proposed Sale of AgeX are limited to representations
and warranties related to authority, ownership and the ability to convey title to such Shares, including, but not limited to,
representations and warranties that (i) the Party holds all right, title and interest in and to the Shares such Party purports
to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Party in connection with the transaction have
been duly authorized, if applicable, (iii) the documents to be entered into by the Party have been duly executed by the Party
and delivered to the acquirer and are enforceable (subject to customary limitations) against the Party in accordance with their
respective terms; and (iv) neither the execution and delivery of documents to be entered into by the Party in connection with
the transaction, nor the performance of the Party’s obligations thereunder, will cause a breach or violation of the terms
of any agreement to which the Party is a party, or any law or judgment, order or decree of any court or governmental agency that
applies to the Party;

 

    	 	5.	 

    	 

    

 

(b)
such Party is not required to agree to any restrictive covenant in connection with the Proposed Sale of AgeX (including without
limitation any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Proposed
Sale of AgeX);

 

(c)
such Party and its Affiliates are not required to amend, extend or terminate any contractual or other relationship with AgeX,
the acquirer or their respective Affiliates, except that the Party may be required to agree to terminate the investment-related
documents between or among the Parties or AgeX;

 

(d)
the Party is not liable for the breach of any representation, warranty or covenant made by any other Person in connection with
the Proposed Sale of AgeX, other than AgeX;

 

(e)
liability shall be limited to such Party’s applicable share (determined based on the respective proceeds payable to each
Party in connection with such Proposed Sale of AgeX in accordance with the provisions of AgeX’s Certificate of Incorporation)
of a negotiated aggregate indemnification amount that applies equally to all Parties, but that in no event exceeds the amount
of consideration otherwise payable to such Party in connection with such Proposed Sale of AgeX, except with respect to claims
related to fraud by such Party, the liability for which need not be limited as to such Party; and

 

(f)
except as contemplated by Section 3.2(f), upon the consummation of the Proposed Sale of AgeX each holder of each class or series
of the capital stock of AgeX will receive the same form of consideration and the same amount of consideration per share for their
shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock.

 

4.
Rights to Future Stock Issuances.

 

4.1
Right of First Offer. Subject to the terms and conditions of this Section 4.1 and applicable securities laws, if AgeX proposes
to offer or sell any New Securities (as defined below), Juvenescence shall use commercially reasonable efforts to cause AgeX to
first offer to sell a pro rata share of such New Securities to each Party. Each Party shall be entitled to apportion the right
of first offer hereby granted to it in such proportions as it deems appropriate among itself and its Affiliates. “New
Securities” means, collectively, equity securities of AgeX, whether or not currently authorized, as well as rights,
options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible
or exchangeable into or exercisable for such equity securities other than (a) securities issued pursuant to the AgeX Therapeutics,
Inc. 2017 Equity Incentive Plan or any other equity or other employee incentive plan approved by the stockholders of AgeX, (b)
distributions (whether in the form of stock dividends, recapitalizations or stock splits so long as such distribution is proportionate
with respect to all shareholders eligible to receive such distribution), (c) securities issued as consideration in a merger or
acquisition, asset acquisition or joint venture or other strategic relationship, in each case on an arms’ length basis with
a party otherwise unaffiliated with AgeX, or (d) securities issued in a firm commitment underwritten offering registered under
the Securities Act of 1933, as amended.

 

(a)
Juvenescence shall cause AgeX to give notice (the “Offer Notice”) to each Party, stating (i) its bona
fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms,
if any, upon which it proposes to offer such New Securities.

 

    	 	6.	 

    	 

    

 

(b)
By notification to AgeX within 20 days after the Offer Notice is given, each Party may elect to purchase or otherwise acquire,
at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals such Party’s
proportion of the Common Stock then outstanding (giving effect to all shares of Common Stock issuable (directly or indirectly)
upon conversion and/or exercise of any securities of AgeX then held by the Parties). At the expiration of such 20 day period,
Juvenescence shall cause AgeX to promptly notify each Party that elects to purchase or acquire all the shares available to it
(each, a “Fully Exercising Investor”) of the other Party’s failure to do likewise, if applicable.
During the 10 day period commencing after AgeX has given such notice, each Fully Exercising Investor may, by giving notice to
AgeX, elect to purchase or acquire, in addition to the number of shares specified above, up to the remaining unsubscribed New
Securities. The closing of any sale pursuant to this Section 4.1(b) shall occur within the later of 90 days of the date that the
Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.1(c).

 

(c)
If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b),
AgeX may, during the 90 day period following the expiration of the periods provided in Section 4.1(b), offer and sell the remaining
unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable
to the offeree than, those specified in the Offer Notice. If AgeX does not enter into an agreement for the sale of the New Securities
within such period, or if such agreement is not consummated within 30 days of the execution thereof, the right provided hereunder
shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Parties in accordance
with this Section 4.1.

 

5.
Right of First Refusal.

 

5.1
Grant. Except in connection with a Sale of AgeX, each Party is entitled to a Right of First Refusal to purchase all or
any portion of any Shares that any Party or its Affiliates proposes to sell, at the same price and on the same terms and conditions
as those offered in the proposed sale of Shares (the “Proposed Sale of Shares”).

 

5.2
Notice. The Party proposing to make a Proposed Sale of Shares must deliver a written notice (the “Proposed
Sale Notice”) to the other Party 20 days prior to the consummation of such Proposed Sale of Shares. Such Proposed
Sale Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Sale of
Shares, the identity of the proposed purchaser and the intended date of the Proposed Sale of Shares. To exercise its Right of
First Refusal under this Section 5, the Party must deliver a Notice to the selling Party and AgeX within 15 days after delivery
of the Proposed Sale Notice specifying the number of Shares be purchased by the Party.

 

5.3
Consideration; Closing. If the consideration proposed to be paid for the Shares is in property, services or other non-cash
consideration, the fair market value of the consideration shall be as determined in good faith by the Board, including the BioTime
Directors, and as set forth in the Notice. If a Party cannot for any reason pay for the Shares in the same form of non-cash consideration,
such Party may pay the cash value equivalent thereof, as determined in good faith by the Board, including the BioTime Directors
and as set forth in the Notice. The closing of the purchase of the Shares shall take place, and all payments from the Party purchasing
the Shares shall have been delivered to the selling Party, by the later of (a) the date specified in the Proposed Sale Notice
as the intended date of the Proposed Sale of Shares; and (b) 45 days after delivery of the Proposed Sale Notice.

 

    	 	7.	 

    	 

    

 

6.
Right of Co-Sale.

 

6.1
Exercise of Right. If at least 35% of the Shares then held by Juvenescence are subject to a Proposed Sale of Shares and
are not purchased pursuant to Section 5 and thereafter are to be sold, BioTime may elect to exercise its Right of Co-Sale and
participate on a pro rata basis in the Proposed Sale of Shares as set forth in Section 6.2 on the same terms and conditions specified
in the Proposed Sale Notice. BioTime must give Juvenescence and AgeX written notice to that effect within 15 days of the Proposed
Sale Notice described above, and upon giving such notice BioTime shall be deemed to have effectively exercised its Right of Co-Sale.

 

6.2
Shares Includable. BioTime may include in the Proposed Sale of Shares any Shares held by BioTime equal to the product obtained
by multiplying (a) the aggregate number of Shares subject to the Proposed Sale of Shares by (b) a fraction, the numerator of which
is the number Shares owned by BioTime immediately before consummation of the Proposed Sale of Shares and the denominator of which
is the total number of Shares owned, in the aggregate, by the Parties immediately prior to the consummation of the Proposed Sale
of Shares, including the number of Shares held by Juvenescence.

 

6.3
Purchase and Sale Agreement. The Parties agree that the terms and conditions of any Proposed Sale of Shares in accordance
with Section 6 will be memorialized in, and governed by, a written purchase and sale agreement with the prospective transferee
(the “Purchase and Sale Agreement”) with customary terms and provisions for such a transaction, and
the Parties further covenant and agree to enter into such Purchase and Sale Agreement as a condition precedent to any sale or
other transfer in accordance with this Section 6.3.

 

6.4
Purchase by Juvenescence; Deliveries. Notwithstanding Section 6.3, if any prospective transferee or transferees refuse(s)
to purchase securities subject to the Right of Co-Sale from BioTime or upon the failure to negotiate in good faith a Purchase
and Sale Agreement satisfactory to BioTime, Juvenescence may not sell any Shares to such prospective transferee or transferees
unless and until, simultaneously with such sale, Juvenescence purchases all securities subject to the Right of Co-Sale from BioTime
on the same terms and conditions (including the proposed purchase price) as set forth in the Proposed Sale Notice and as provided
in Section 6.2. In connection with such purchase by Juvenescence, BioTime shall deliver to Juvenescence any stock certificate
or certificates, properly endorsed for transfer, representing the Shares being purchased by Juvenescence (or request that AgeX
effect such transfer in the name of Juvenescence). Any such Shares transferred to Juvenescence will be transferred to the prospective
transferee against payment therefor in consummation of the sale of the Shares pursuant to the terms and conditions specified in
the Proposed Sale Notice, and Juvenescence shall concurrently therewith remit or direct payment to BioTime the portion of the
aggregate consideration to which BioTime is entitled by reason of its participation in such sale as provided in this Section 6.4.

 

6.5
Additional Compliance. If any Proposed Sale of Shares is not consummated within 45 days after receipt of the Proposed Sale
Notice, the Party proposing the Proposed Sale of Shares may not sell any Shares unless it first complies in full with each provision
of Section 6. The exercise or election not to exercise any right by BioTime shall not adversely affect its right to participate
in any other sales of Shares subject to this Section 6.5.

 

7.
Effect of Failure to Comply.

 

7.1
Equitable Relief. Each Party acknowledges and agrees that any breach of this Agreement would result in substantial harm
to the other Party for which monetary damages alone could not adequately compensate. Therefore, the Parties unconditionally and
irrevocably agree that any non-breaching party shall be entitled to seek protective orders, injunctive relief and other remedies
available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales
and other transfers of Shares not made in strict compliance with this Agreement).

 

    	 	8.	 

    	 

    

 

7.2
Violation of First Refusal Right. If any Party becomes obligated to sell any Shares to the other Party under this Agreement
and fails to deliver such Shares in accordance with the terms of this Agreement, such Party may, at its option, in addition to
all other remedies it may have, send to such Party the purchase price for such Shares as is herein specified and transfer to the
name of such Party (or request that AgeX effect such transfer in the name of such Party) on AgeX’s books any certificates,
instruments, or book entry representing the Shares to be sold.

 

7.3
Violation of Co-Sale Right. If Juvenescence purports to sell any Shares in contravention of the Right of Co-Sale (a “Prohibited
Transfer”) and BioTime desires to exercise its Right of Co-Sale under Section 6, it may, in addition to such remedies
as may be available by law, in equity or hereunder, require Juvenescence to purchase from it the type and number of Shares that
BioTime would have been entitled to sell to the prospective transferee had the Prohibited Transfer been effected in compliance
with the terms of Section 6. The sale will be made on the same terms and subject to the same conditions as would have applied
had Juvenescence not made the Prohibited Transfer, except that the sale (including, without limitation, the delivery of the purchase
price) must be made within 90 days after BioTime learns of the Prohibited Transfer. Juvenescence shall also reimburse BioTime
for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred
pursuant to the exercise or the attempted exercise of BioTime’s rights under Section 6.

 

8.
Distributions. The Parties agree
that BioTime has the right to effectuate one or more BioTime Distributions. Following any BioTime Distribution to Asterias Biotherapeutics,
Inc. or OncoCyte Corporation (the “BioTime Subsidiaries”), subject to the BioTime Subsidiaries entering
into a joinder with respect to the obligations and benefits of the Agreement, BioTime shall continue to exercise the rights granted
to BioTime hereunder on behalf of the BioTime Subsidiaries.

 

9.
Legend. Each certificate, instrument,
or book entry representing Shares held by any Party or issued in any permitted BioTime Distribution shall be notated with the
following legend:

 

THE
SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY,
THE TERMS AND CONDITIONS OF A CERTAIN SHAREHOLDER AGREEMENT BY AND AMONG CERTAIN HOLDERS OF STOCK OF AGEX. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF AGEX.

 

Neither
party shall object if AgeX instructs its transfer agent to impose transfer restrictions on the shares notated with the legend
referred to in this Section 9 above to enforce the provisions of this Agreement, and Juvenescence agrees to use commercially reasonable
efforts to cause AgeX to promptly do so. Each Party shall use commercially reasonable efforts to cause AgeX to remove such
legend upon termination of this Agreement at the request of the holder.

 

10.
Term. This Agreement shall be effective
as of the date hereof and shall continue in effect until and, other than with respect to Section 11, shall terminate at such time
as either Party is the beneficial owner of less than 15% of the outstanding Common Stock of AgeX.

 

    	 	9.	 

    	 

    

 

11.
Miscellaneous.

 

11.1
Successors and Assigns. Except as expressly provided herein, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any Party, in whole or in part (whether pursuant to a merger, by operation of law or
otherwise), without the prior written consent of the other Party. Subject to the immediately preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.

 

11.2
Governing Law. This Agreement shall be governed by the internal law of the State of California, without regard to conflict
of law principles that would result in the application of any law other than the law of the State of California.

 

11.3
Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic
mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions
Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and
validly delivered and be valid and effective for all purposes.

 

11.4
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

11.5
Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be
deemed effectively given upon the earlier of actual receipt or (a) personal delivery to the party to be notified, (b) when sent,
if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business
hours, then on the recipient’s next business day, (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one business day after the business day of deposit with a nationally recognized
overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt to the respective
parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance
with this Section 11.5):

 

If
to BioTime, addressed to it at:

 

BioTime,
Inc.

1010
Atlantic Avenue, #102

Alameda,
California

Email:
legal@biotimeinc.com

Attention:
General Counsel

 

With
a copy (which shall not constitute notice) to:

 

Cooley
LLP

3175
Hanover

Palo
Alto, California 94304

Email:
gsato@cooley.com

Attention:
Glen Sato

 

    	 	10.	 

    	 

    

 

If
to Juvenescence, addressed to it at:

 

Juvenescence
Limited

4th
Floor, Viking House

Nelson
Street, Douglas

Isle
of Man, IM1 2AH

Email:
greg@juvenescence.com

Attention:
Greg Bailey, M.D.

 

With
a copy (which shall not constitute notice) to:

 

Locke
Lord LLP

2800
Financial Plaza

Providence,
Rhode Island 02903

Email:
douglas.gray@lockelord.com

Attention:
Douglas Gray

 

11.6
Entire Agreement; Amendment. This Agreement (including any schedules or exhibits hereto) constitutes the entire agreement
among the Parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the Parties with respect to the subject matter hereof. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the Parties. Notwithstanding the foregoing, any provision hereof may be waived by the waiving
Party on such Party’s own behalf, without the consent of the other Party.

 

11.7
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement,
upon any breach or default of the other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching
or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or
of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind
or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of
any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

 

11.8
Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability
of any other provision.

 

11.9
Stock Splits, Stock Dividends, etc. In the event of any issuance of Shares or other voting securities of AgeX hereafter
to any of the Parties (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization,
or the like), such Shares or other voting securities shall become subject to this Agreement as Shares and shall be notated with
the legend set forth in Section 9.

 

11.10
Further Assurances. At any time or from time to time after the date hereof, the Parties agree to cooperate with each other,
and at the request of the other Party, to execute and deliver any further instruments or documents and to take all such further
action as the other Party may reasonably request in order to carry out the intent of the Parties hereunder.

 

    	 	11.	 

    	 

    

 

11.11
Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts
of California and to the jurisdiction of the United States District Court for the Northern District of California for the purpose
of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action
or other proceeding arising out of or based upon this Agreement except in the state courts of California or the United States
District Court for the Northern District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court.

 

11.12
Aggregation of Stock. All Shares held or acquired by a Party and/or its Affiliates shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement, and such Affiliated persons may apportion such rights
as among themselves in any manner they deem appropriate; provided, that for purposes of this Section 11.12, the Affiliates of
BioTime shall be deemed to refer only to the BioTime Subsidiaries.

 

[Signature
Pages Follow]

 

    	 	12.	 

    	 

    

 

In
Witness Whereof, the Parties have executed
this Shareholder Agreement as of the date first written above.

 

	 	BioTime,
    Inc.
	 	 	 
	 	By:	/s/
    Aditya P. Mohanty
	 	 	 
	 	Name:	Aditya
    P. Mohanty
	 	 	 
	 	Title:	Co-CEO

 

Signature
Page to Shareholder Agreement

 

    	 	 	 

    	 

    

 

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

 

	 	Juvenescence
    Limited
	 	 	 
	 	By:	/s/
    Gregory Bailey
	 	 	 
	 	Name:	Gregory
    Bailey
	 	 	 
	 	Title:	CEO

 

Signature
Page to Shareholder AgreementEX-10.51

 Exhibit 10.51 

SOTHERLY HOTELS INC. 

$5,000,000 
 COMMON
STOCK 
 PAR VALUE $0.01 PER SHARE 

Up to 400,000 Shares 

7.875% SERIES C CUMULATIVE REDEEMABLE PERPETUAL PREFERRED STOCK 

PAR VALUE $0.01 PER SHARE 

SALES AGENCY AGREEMENT 

August 31, 2018 
 Sandler
O’Neill & Partners, L.P. 
 1251 Avenue of the Americas, 6th Floor 

New York, New York 10020 
 Ladies and Gentlemen: 

Sotherly Hotels Inc., a Maryland corporation (the “Company”), and Sotherly Hotels LP, a Delaware limited partnership (the
“Operating Partnership” and together with the Company, the “Transaction Entities”), confirm their agreement (this “Agreement”) with Sandler O’Neill & Partners, L.P. (the
“Agent” or “you”), as follows: 
 1. The Company proposes, subject to the terms and conditions stated
herein, to issue and sell from time to time to or through the Agent, shares (the “Common Shares”) of the common stock, par value $0.01 per share (“Common Stock”) of the Company, having an aggregate gross sales price
of up to $5,000,000, and up to 400,000 shares (the “Preferred Shares” and, together with the Common Shares, the “Shares”) of the 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per
share (the “Preferred Stock”) of the Company on the terms set forth in this Agreement. The Company agrees that whenever it determines to sell the Shares directly to the Agent, as principal or otherwise other than as set forth in
Section 3 hereof, it will enter into a separate agreement, which will include customary terms and conditions consistent with the representations, warranties and provisions in this Agreement and which will be agreed upon by the parties thereto
(each, a “Terms Agreement”). 
 At each Delivery Date (as defined in Section 3(i) below), (i) the Company will
contribute the net proceeds from the offering of the Common Shares to the Operating Partnership in exchange for limited partnership units in the Operating Partnership (the “OP Units”), and the Operating
Partnership will issue the OP Units to the Company, and (ii) the Company will contribute the net proceeds from the offering of the Preferred Shares to the Operating Partnership in exchange for 7.875% Series C Cumulative Redeemable Preferred
Units in the Operating Partnership (the “Series C Preferred Units”), and the Operating Partnership will issue the Series C Preferred Units to the Company. 

The Company and the Operating Partnership have filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the
rules and regulations thereunder (collectively, the “1933 Act”), with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (File
No. 333-220369), including a base prospectus relating to the Common Stock and the Preferred Stock, including the Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company and the
Operating Partnership have filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “1934 Act”). The Company has prepared a
prospectus supplement (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement, which Prospectus Supplement specifically relates to the sale of the Shares pursuant to an “at the
market” offering as defined in Rule 415 of the 1933 Act. The Company will furnish to the Agent, for use by the Agent, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement. Except
where the context otherwise requires, such registration statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as
defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the 1933 Act or deemed to be a part of such registration statement pursuant to Rule 430B of the Act, is herein referred to as the “Registration
Statement.” The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the

 
form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act is herein referred to as the
“Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the
Commission via the Commission’s Electronic Data-Gathering, Analysis and Retrieval system (“EDGAR”). 
 As used in this
Agreement: 
 “Applicable Time” means, with respect to any Shares, the time of sale of such Shares pursuant to this
Agreement or any relevant Terms Agreement. 
 “General Disclosure Package” means any Issuer General Use Free Writing
Prospectuses and the Prospectus. 
 “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,”
as defined in Rule 433 under the 1933 Act, relating to the Shares in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the
1933 Act. 
 “Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its being specified in Schedule II to this Agreement. 
 “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus. 

2. The Transaction Entities, jointly and severally represent and warrant as of the date hereof, each Representation Date (as defined in
Section 6(n) below), each Applicable Time (as defined in Section 1 above) referred to herein, and each Delivery Date, and agrees with the Agent that: 

(a) Compliance with Registration Requirements. Each of the Registration Statement and any post-effective amendment thereto have been
prepared by the Company in conformity with the requirements of the 1933 Act. The Company meets all conditions and requirements for the use of Form S-3 to register the offer and sale of the Shares in accordance
with General Instruction I.B.6 of Form S-3. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no notice or
objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act Regulations has been received by the Company, no order preventing or suspending the use of the Prospectus has
been issued and no proceedings for any of those purposes have been instituted or are pending or, to the knowledge of the Company, contemplated. The Company has complied with each request, if any, from the Commission for additional information. 

Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, at each Applicable Time and each
Delivery Date, complied and will comply in all material respects with the requirements of the 1933 Act. The Prospectus and each amendment or supplement thereto, as of their respective issue dates, complied and will comply, in all material respects
with the 1933 Act and the 1933 Act Regulations at each Applicable Time and each Delivery Date. The copies of the Registration Statement and any Rule 462(b) Registration Statement (as defined in Section 2(d) below) and any amendments thereto,
each Issuer Free Writing Prospectus that is required to be filed with the Commission pursuant to Rule 433 and the Prospectus and any amendments or supplements thereto delivered to the Agent for use in connection with the offering of the Shares were
or will be substantially identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations. 
 (b) Accurate Disclosure. Neither the Registration Statement nor any
post-effective amendment thereto, at the respective time it became effective, at each Applicable Time and at each Delivery Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading. At each Applicable Time and at each Delivery Date, neither (A) the General Disclosure Package or (B) any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the 

  
 2 

 
General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with
the Commission pursuant to Rule 424(b), at each Applicable Time and at each Delivery Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. 
 The documents incorporated or deemed
to be incorporated by reference in the Registration Statement, the Prospectus and the General Disclosure Package, when they were filed with the Commission conformed in all material respects to the requirements of the 1934 Act and the 1934 Act
Regulations, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the General Disclosure Package, when such documents are filed with the Commission, will conform in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The Company filed the Registration Statement with the Commission before using any free writing prospectus and each free writing prospectus was preceded or accompanied by the Prospectus satisfying the requirements of
Section 10 under the 1933 Act. 
 The representations and warranties in this Section 2(b) shall not apply to statements in or
omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with the Agent Information (as defined in
Section 9(a) below). 
 (c) Issuer Free Writing Prospectuses. No Issuer Free Writing Prospectus conflicts or will conflict with
the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein, or any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. Each
Issuer Free Writing Prospectus conformed or will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations on the date of first use, and the Company has complied with any filing requirements applicable to such
Issuer Free Writing Prospectus pursuant to the 1933 Act Regulations. The Company has not made any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Agent; provided, that
such consent is deemed to have been given with respect to each Issuer Free Writing Prospectus identified on Schedule II. The Company has retained in accordance with the 1933 Act all Issuer Free Writing Prospectuses that were not required to be filed
pursuant to the 1933 Act. 
 The first sentence of this Section 2(c) shall not apply to the Agent Information. 

(d) Due Registration of the Shares. The sale of the Shares has been duly registered under the 1933 Act pursuant to the Registration
Statement. The Registration Statement has become effective under the 1933 Act, or, with respect to any registration statement to be filed to register the offer and sale of the Shares pursuant to Rule 462(b) under the 1933 Act (a “Rule 462(b)
Registration Statement”), will be filed with the Commission and become effective under the 1933 Act prior to the time of any sale of Shares pursuant to such Rule 462(b) Registration Statement. 

(e) Not Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, and at the date
hereof, the Company is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

 (f) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the
Registration Statement, the General Disclosure Package, and the Prospectus are independent public accountants with respect to the Company as required by the 1933 Act and the Public Company Accounting Oversight Board. 

(g) Financial Statements; Non-GAAP Financial Measures. The financial statements together with
the related schedules and notes thereto of the Company and its consolidated subsidiaries included in the Registration Statement, the General Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of
the 1933 Act and 1934 Act, as applicable, and present fairly the financial position of the entities purported to be shown thereby (including the Company’s predecessor entities and the Company and its consolidated subsidiaries) as of the dates
indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the U.S.
(“GAAP”) applied on a consistent basis 

  
 3 

 
throughout the periods covered thereby, and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein; and the selected
financial data and the summary financial information included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus have been derived from the accounting records of the Company and its
consolidated subsidiaries, including the Operating Partnership, and present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the
Registration Statement. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the
Prospectus under the 1933 Act, the 1933 Act Regulations or the 1934 Act. All disclosures contained or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K of the 1933 Act, to the extent applicable. 
 (h) No Material Adverse Change in Business. Except
as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus,
(A) there has been no material adverse change in or affecting the properties or assets described in the Registration Statement, General Disclosure Package and the Prospectus as owned or leased by the Transaction Entities (each, a
“Property” and collectively, the “Properties”) considered as a whole or in the business, condition (financial or otherwise), results of operations, stockholders’ or partners’ equity, as applicable,
earnings, business affairs or business prospects of the Transaction Entities and their direct and indirect subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”) as one enterprise, whether or not
arising in the ordinary course of business (a “Material Adverse Effect”); (B) there have been no transactions entered into by the Transaction Entities or the Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Transaction Entities and the Subsidiaries considered as one enterprise, (C) there has been no liability or obligation, direct or contingent (including off-balance sheet
obligations), which is material to the Transaction Entities and the Subsidiaries considered as one enterprise, incurred by the Transaction Entities or any of the Subsidiaries, except obligations incurred in the ordinary course of business, and
(D) there has been no distribution of any kind declared, paid or made by the Transaction Entities on any class of capital stock, OP Units, or other form of ownership interests in the Transaction Entities. 

(i) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under
the laws of the State of Maryland and has all corporate power and authority to own, lease, and operate its Properties and to conduct its business as described in each of the General Disclosure Package and the Prospectus and to enter into and perform
its obligations under this Agreement; and has been duly qualified as a foreign corporation for the transaction of business and is in good standing (where such concept is recognized) under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification, except where the failure to so qualify or be in good standing does not have, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. 
 (j) Good Standing of the Operating Partnership. The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State of Delaware, has all limited partnership power and limited partnership authority to own, lease and operate its properties, conduct its business as described in the
Registration Statement, the General Disclosure Package and the Prospectus and enter into and perform its obligations under this Agreement and is duly qualified as a foreign limited partnership to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, singly or in the aggregate,
result in a Material Adverse Effect. The Company is the sole general partner of the Operating Partnership. The Operating Partnership Agreement (as defined in Section 2(p) below), filed as an exhibit to the Registration Statement, is in full
force and effect. 
 (k) Significant Subsidiaries. Except as set forth on Schedule 2(k), none of the Subsidiaries meets the definition
of a “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X). Each of the Subsidiaries set forth on Schedule 2(k) (the
“Significant Subsidiaries”) has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, with power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in each of the General Disclosure Package and the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns, leases or operates properties or conducts any business so as to require such qualification, except where the failure to so qualify or be in good standing does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; all of the issued shares of capital stock of each Significant Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and are owned, directly or
through other Subsidiaries of the Company, by the Company, free and clear of any pledge, lien, encumbrance, or claim. 

  
 4 

 (l) Authorization and Description of the Common Stock and the Preferred Stock. The
Company has authorized the Common Stock as set forth in each of the General Disclosure Package and the Prospectus under the captions “Description of Offered Stock” and “Description of Common Stock and Preferred Stock,” and all of
the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable, and have been issued in compliance with federal and state securities laws and conform to the description of the
Common Stock contained in each of the General Disclosure Package and the Prospectus under the captions “Description of Offered Stock” and “Description of Common Stock and Preferred Stock”; and no such shares were issued in
violation of the preemptive or similar rights of any security holder of the Company. The Company has authorized Preferred Stock as set forth in each of the General Disclosure Package and the Prospectus under the captions “Description of Offered
Stock” and “Description of Common Stock and Preferred Stock,” and all of the outstanding shares of Preferred Stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable, and have been issued
in compliance with federal and state securities laws and conform to the description of the Preferred Stock contained in each of the General Disclosure Package and the Prospectus under the captions “Description of Offered Stock” and
“Description of Common Stock and Preferred Stock”; and no such shares were issued in violation of the preemptive or similar rights of any security holder of the Company. 

(m) Authorization and Description of the Partnership Units. The Registration Statement, the General Disclosure Package and the
Prospectus accurately describe the aggregate percentage interests in the Operating Partnership held by the Company and any limited partners. The outstanding OP Units have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding OP Units was issued in violation of the preemptive or other similar rights of any securityholder of the Operating Partnership. The Series C Preferred Units to be issued by the
Operating Partnership in connection with the Company’s contribution to the Operating Partnership of the net proceeds from the sale of the Preferred Shares pursuant to the Agreement have been duly authorized for issuance and delivery by the
Operating Partnership to the Company, and, when issued and delivered by the Operating Partnership to the Company, will be validly issued and fully paid. None of the Series C Preferred Units will be issued in violation of the preemptive or other
similar rights of any securityholder of the Operating Partnership. Except as contemplated by this Agreement, neither of the Transaction Entities have sold, issued or distributed any Series C Preferred Units 

(n) Authorization and Description of the Shares. The Shares have been duly authorized for issuance and sale by the Company through the
Agent pursuant to this Agreement and, when duly executed, authenticated, issued and delivered against payment therefor as provided herein, will be validly issued, fully paid and nonassessable. The issuance of Shares is not subject to the preemptive
or other similar rights of any securityholder of the Company. The Shares conform in all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such
description conforms in all material respects to the rights set forth in the instruments defining the same. No holder of Shares will be subject to personal liability by reason of being such a holder. Any certificates to be used to evidence the
Shares will, at any Delivery Date, be in due and proper form and will comply in all material respects with all applicable legal requirements, the requirements of the Articles of Amendment and Restatement of the Company, as amended and supplemented
from time to time, and the Second Amended and Restated Bylaws of the Company, and the requirements of the NASDAQ Global Market (“NASDAQ”). The shares of Common Stock initially issuable upon conversion of the Preferred Shares have
been duly authorized and, when issued upon conversion of the Preferred Shares in accordance with the terms of the Articles Supplementary, will be validly issued, fully paid and nonassessable, and the issuance of such shares of Common Stock will not
be subject to or in violation of any preemptive or similar rights of any securityholder of the Company. The Board of Directors of the Company has duly and validly reserved such shares of Common Stock for issuance upon conversion of the Preferred
Shares. 
 (o) Authorization and Description of this Agreement, Articles Supplementary and OP Agreement Amendment. The Agreement has
been duly authorized, executed and delivered by the Transaction Entities and, when duly executed and delivered in accordance with its terms by the other parties thereto, constitutes, as the case may be, a valid and binding agreement of the
Transaction Entities, enforceable against the Transaction Entities in accordance with its terms. The Articles Supplementary to the Company’s Articles of Amendment and Restatement classifying and designating additional Preferred Stock as Series
C Preferred Stock (the “Articles Supplementary”), and Amendment No. 5 to the Operating Partnership Agreement, classifying additional units of the Operating Partnership as Series C Preferred Units (the “OP Agreement
Amendment”), will each be, on or prior to the first Delivery Date, duly authorized and executed. The Agreement, the Articles Supplementary and the OP Agreement Amendment each conform in all material respects to all statements relating
thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such description conforms in all material respects to the terms set forth in the Agreement, the Articles Supplementary and the OP Agreement
Amendment. 

  
 5 

 (p) Authorization and Description of the Partnership Agreement. The Amended and
Restated Agreement of Limited Partnership of Sotherly Hotels LP, dated December 21, 2004, as amended (the “Operating Partnership Agreement”), conforms in all material respects to all statements relating thereto contained in the
Registration Statement, the General Disclosure Package and the Prospectus. 
 (q) Warrants, Options and Registration Rights. Except as
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus and other than pursuant to the terms of the Operating Partnership Agreement, (A) there are no outstanding rights (contractual or otherwise), warrants or
options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity interest in the Company, other than in the ordinary
course of business, consistent with past practice, under the Company’s equity compensation programs and (B) no person has the right to require the Transaction Entities or any of the Subsidiaries to register any securities for sale under
the 1933 Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares. 
 (r)
Absence of Violations, Defaults and Conflicts. Neither of the Transaction Entities nor any of the Subsidiaries is (A) in violation of its articles of incorporation or charter (including, with respect to the Company, the Articles
Supplementary), as applicable, by-laws, certificate of limited partnership, agreement of limited partnership (including with respect to the Operating Partnership, the OP Agreement Amendment) or other
organizational document, as applicable, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease,
hotel management agreement, franchise agreement or other agreement or instrument to which the Transaction Entities or any of the Subsidiaries is a party or by which it or any of them may be bound or to which any of the Properties or any other
properties or assets of the Transaction Entities or any of the Subsidiaries is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, result in a Material Adverse
Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over
the Transaction Entities or any of the Subsidiaries or the Properties or any of their respective other properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not, singly or in the
aggregate, result in a Material Adverse Effect. 
 (s) Issuance and Execution. The issuance and sale of the Shares, the execution,
delivery and performance of this Agreement by the Transaction Entities and the consummation of the transactions contemplated hereby and in the Registration Statement, the General Disclosure Package and the Prospectus and compliance by the
Transaction Entities with its obligations hereunder have been duly authorized by all necessary corporate and limited partnership action, as applicable, and, except as disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon the Properties or any of the Subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in
the aggregate, result in a Material Adverse Effect), nor will such action result in any violation of (i) the provisions of the articles of incorporation or charter, as applicable, by-laws, certificate of
limited partnership, agreement of limited partnership or other organizational document, as applicable, of the Transaction Entities or any of the Subsidiaries or (ii) any applicable law, statute, rule, regulation, judgment, order, writ or decree
of any Governmental Entity, except in the case of clause (ii) only, for any such violation that would not, singly or in the aggregate, result in a Material Adverse Effect. As used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by
the Transaction Entities or any of the Subsidiaries. 
 (t) Absence of Labor Dispute. No labor dispute with the employees of the
Transaction Entities or any of the Subsidiaries exists or, to the knowledge of the Transaction Entities, is imminent, which, in any such case, would, singly or in the aggregate, result in a Material Adverse Effect. 

(u) Absence of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there
is no action, suit, proceeding, inquiry or investigation pending, or, to the knowledge of the Transaction Entities, threatened, against or affecting the Transaction Entities or any of the Subsidiaries, which is required to be disclosed in the
Registration Statement or the Prospectus (other than as disclosed therein), or which would, singly or in the aggregate, result in a Material Adverse Effect, or which would materially and adversely affect the property or assets of the Transaction
Entities and the Subsidiaries, taken as a whole, or the consummation of the transactions contemplated in this Agreement, or the performance by the Transaction Entities of its obligations hereunder. The aggregate of all pending legal or governmental
proceedings to which the Transaction Entities or any of the Subsidiaries is a party or of which any of the Properties or assets is 

  
 6 

 
the subject which are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not
result in a Material Adverse Effect. 
 (v) Accuracy of Exhibits. There are no contracts or other documents required to be described
in the Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as required. 
 (w)
Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by the Transaction Entities
of its obligations hereunder or in connection with the offering, issuance or sale of the Shares hereunder or the consummation of the transactions contemplated by this Agreement or the application of the net proceeds from the sale of the Shares as
described under the heading “Use of Proceeds” as set forth in the General Disclosure Package and the Prospectus, except such as have been already obtained or as may be required under the 1933 Act, the rules of the NASDAQ, the securities
laws or real estate syndication laws of any applicable U.S. state or jurisdiction or the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the filing of the Articles Supplementary with the State Department of
Assessments and Taxation of the State of Maryland (the “SDAT”). 
 (x) Possession of Licenses and Permits. Except as
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Transaction Entities and the Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material
Adverse Effect. The Transaction Entities and the Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material
Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the
aggregate, result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Transaction Entities nor any of the Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. 

(y) Title to Property. (A) The Operating Partnership, any of the Subsidiaries or any joint venture in which the Operating
Partnership or any of the Subsidiaries owns an interest (each such joint venture being referred to as a “Related Entity”), as the case may be, have good and marketable fee or leasehold title to the Properties, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind, other than those that (1) are described in the Registration Statement, the General Disclosure Package and the Prospectus or
(2) do not, singly or in the aggregate, materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Operating Partnership, any of the Subsidiaries or any Related
Entity; (B) except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Operating Partnership nor any of the Subsidiaries or any Related Entity owns any real property other than the
Properties; (C) each of the ground leases, subleases and sub-subleases relating to a Property, if any, material to the business of the Operating Partnership and the Subsidiaries, considered as one
enterprise, are in full force and effect, with such exceptions as do not materially interfere with the use made or proposed to be made of such Property by the Operating Partnership, any of the Subsidiaries or any Related Entity, and (1) no
default or event of default has occurred under any ground lease, sublease or sub-sublease with respect to such Property and none of the Operating Partnership, any of the Subsidiaries or any Related Entity has
received any notice of any event which, whether with or without the passage of time or the giving of notice, or both, would constitute a default under such ground lease, sublease or sub-sublease and
(2) none of the Operating Partnership, any of the Subsidiaries or any Related Entity has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Operating Partnership, any of the
Subsidiaries or any Related Entity under any of the ground leases, subleases or sub-subleases mentioned above, or affecting or questioning the rights of the Operating Partnership, any of the Subsidiaries or
any Related Entity to the continued possession of the leased, subleased or sub-subleased premises under any such ground lease, sublease or sub-sublease; (D) all
liens, charges, encumbrances, claims or restrictions on any of the Properties and the assets of the Operating Partnership, any of the Subsidiaries or any Related Entity that are required to be disclosed in the Registration Statement or the
Prospectus are disclosed therein; (E) no tenant under any of the leases at the Properties has a right of first refusal or an option to purchase the premises demised under such lease; (F) each of the Properties complies with all applicable
codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to the Properties), except if and to the extent disclosed in the Registration Statement, the General Disclosure
Package or the Prospectus and except for such failures to comply that would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect; (G) the mortgages and deeds of trust that encumber certain of the Properties
are not convertible into equity securities of the entity owning such Property and said mortgages and deeds of trust are not cross-defaulted or cross-collateralized with any property other than certain other Properties; and (H) none of the
Operating Partnership, any of the Subsidiaries or any Related 

  
 7 

 
Entity or, to the knowledge of the Operating Partnership, any lessee of any of the Properties is in default under any of the leases governing the Properties and none of the Operating Partnership,
any of the Subsidiaries or any Related Entity knows of any event which, whether with or without the passage of time or the giving of notice, or both, would constitute a default under any of such leases, except such defaults that would not, singly or
in the aggregate, result in a Material Adverse Effect. 
 (z) Joint Venture Agreements. Each of the partnership agreements, limited
liability company agreements or other joint venture agreements (each, a “Joint Venture Agreement”) to which the Transaction Entities or the Subsidiaries is a party, and which relates to one or more of the Properties, has been duly
authorized, executed and delivered by the Transaction Entities or the Subsidiaries, as applicable, and constitutes the legal, valid and binding agreement thereof, enforceable in accordance with its terms, except, in each case, to the extent that
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights or remedies generally or by general equitable principles, and, with respect to equitable
relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity), and with respect to any indemnification provisions contained therein, except
as rights under those provisions may be limited by applicable law or policies underlying such law. 
 (aa) Possession of Intellectual
Property. The Transaction Entities and the Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”)
reasonably necessary, if any, to conduct the business now operated by them, and neither the Transaction Entities nor any of the Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Transaction Entities or any of the Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. 

(bb) Environmental Laws. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus and except
as would not, singly or in the aggregate, be reasonably expected to result in a Material Adverse Effect, (A) none of the Transaction Entities, any of the Subsidiaries, any Related Entity nor any of the Properties is in violation of any
Environmental Laws (as defined below), (B) the Transaction Entities, the Subsidiaries, the Related Entities and the Properties have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no now pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law or Hazardous Material (as defined below) against the Transaction Entities, any of the Subsidiaries or any Related Entity or otherwise with regard to the Properties, (D) there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Properties, the
Transaction Entities, any of the Subsidiaries or any Related Entity relating to Hazardous Materials or any Environmental Laws, and (E) none of the Properties is included or proposed for inclusion on the National Priorities List issued pursuant
to CERCLA (as defined below) by the United States Environmental Protection Agency or on any similar list or inventory issued by any other federal, state or local governmental authority having or claiming jurisdiction over such properties pursuant to
any other Environmental Laws. As used herein, “Hazardous Material” shall mean any flammable explosives, radioactive materials, chemicals, pollutants, contaminants, wastes, hazardous wastes, toxic substances, mold, and any hazardous
material as defined by or regulated under any Environmental Law, including, without limitation, petroleum or petroleum products, and asbestos-containing materials. As used herein, “Environmental Law” shall mean any applicable
foreign, federal, state or local law (including statute or common law), ordinance, rule, regulation or judicial or administrative order, consent decree or judgment relating to the protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Secs.
9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Secs. 5101-5127, the Solid Waste Disposal Act, as amended, 42 U.S.C. Secs. 6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Secs. 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Secs. 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Secs. 136-136y, the Clean Air Act, 42 U.S.C. Secs. 7401-7671q, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Secs. 1251-1387, and the Safe Drinking Water Act, 42 U.S.C. Secs. 300f-300j-26, as any of the above statutes may be amended from time to time, and the regulations promulgated pursuant to any of the foregoing. 

(cc) Utilities and Access. To the knowledge of the Transaction Entities, water, stormwater, sanitary sewer, electricity, and telephone
service are all available at the property lines of each Property over duly dedicated streets or perpetual easements of record benefiting the applicable Property. To the knowledge of the Transaction Entities, each of the Properties has legal access
to public roads and all other roads necessary for the use of each of the Properties. 

  
 8 

 (dd) No Condemnation. The Transaction Entities have no knowledge of any pending or
threatened condemnation proceedings, zoning change or other proceeding or action that will materially affect the use or value of any of the Properties. 

(ee) Accounting Controls and Disclosure Controls. Except as described in the Registration Statement, the General Disclosure Package and
the Prospectus, including any document incorporated by reference therein, the Company (i) has taken all necessary actions to ensure that, within the time period required, the Company will maintain effective internal control over financial
reporting (as defined under Rule 13a-15 and Rule 15d-15 under the 1934 Act Regulations) and (ii) currently maintains a system of internal accounting controls (or
operate under the Company’s system of internal accounting controls) sufficient to provide reasonable assurances that: (A) transactions are executed in accordance with management’s general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general
or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration
Statement, the General Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (2) no change in the Company’s internal control over financial reporting that has adversely affected, or is reasonably likely to adversely affect, the Company’s internal control over financial reporting. The
auditors of the Company and the Audit Committee of the Board of Directors of the Company, have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
that have adversely affected, or are reasonably likely to adversely affect, the ability of the Company and the Subsidiaries to record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the internal control over financial reporting of the Company and the Subsidiaries. The Company and the Subsidiaries have established a system of disclosure controls and procedures
(as defined in Rules 13a-15 and 15d-15 of the 1934 Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files
or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal
executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. 

(ff) Compliance with the Sarbanes-Oxley Act and NASDAQ Global Market Rules. The Company and, to the knowledge of the Company, each of
the Company’s directors and officers, in their capacities as such, has been and is in compliance in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission thereunder or
implementing the provisions thereof (the “Sarbanes-Oxley Act”) and the Company is in compliance in all material respects with the applicable rules and regulations of NASDAQ. 

(gg) Payment of Taxes. All United States federal income tax returns of the Transaction Entities and the Subsidiaries required by law to
be filed have been filed, and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been
provided. The Transaction Entities and the Subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would
not, singly or in the aggregate, result in a Material Adverse Effect, and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken
and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Transaction Entities and the Subsidiaries in respect of any tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional tax for any years not finally determined, except to the extent of any inadequacy that would not, singly or in the aggregate, result in a Material Adverse Effect.

 (hh) ERISA. The Transaction Entities are in compliance in all material respects with all applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”). To the knowledge of the Transaction Entities, no portion of the assets of the Transaction Entities
constitutes “plan assets” of an employee benefit plan as defined in and subject to Title I of ERISA or a plan as defined in and subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”). No
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Transaction Entities would have any liability. The Transaction Entities have not incurred
nor expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412, 403, 431, 432 or 4971 of the Code. Each “pension plan” for which the
Transaction Entities would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred thereunder, whether by action or by failure to act, which would
cause the loss of such qualification, except where the failure to be so qualified would not, singly or in the aggregate, result in a Material Adverse Effect. 

  
 9 

 (ii) Business Insurance. The Transaction Entities and the Subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, and all such
insurance is in full force and effect. The Transaction Entities have no reason to believe that they or any of the Subsidiaries will not be able to (A) renew, if desired, its existing insurance coverage as and when such policies expire or
(B) obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not, singly or in the aggregate, result in a Material Adverse Effect. Neither the
Transaction Entities nor any of the Subsidiaries has been denied any insurance coverage which they have sought or for which they have applied. 

(jj) Title Insurance. The Transaction Entities and the Subsidiaries and each Related Entity carries or is entitled to the benefits of
title insurance on the fee interests and/or leasehold interests (in the case of a ground lease interest) with respect to each Property with financially sound and reputable insurers, in an amount not less than such entity’s cost for the real
property comprising such Property, insuring that such party is vested with good and insurable fee or leasehold title, as the case may be, to each such Property. 

(kk) Investment Company Act. Each Transaction Entity is not and, after giving effect to the offering and sale of the Shares, and after
receipt of payment for the Shares and the application of such proceeds as described in each of the General Disclosure Package and the Prospectus, will not be required, to register as an “investment company” under the Investment Company Act
of 1940, as amended. 
 (ll) Absence of Manipulation. Neither the Transaction Entities nor any of the Subsidiaries or other affiliates
has taken or will take, directly or indirectly, any action which is designed, or would reasonably be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Transaction Entities to
facilitate the sale or resale of the Shares. 
 (mm) Foreign Corrupt Practices Act. Neither the Transaction Entities nor the
Subsidiaries nor, to the knowledge of either of the Transaction Entities, any director, officer, agent, employee, affiliate or other person acting on behalf of either of the Transaction Entities or the Subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA. Each of the
Transaction Entities and the Subsidiaries, and to the knowledge of the Transaction Entities, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued compliance therewith. 
 (nn) Money Laundering Laws. The operations of
each of the Transaction Entities and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the
“Money Laundering Laws”). No action, suit or proceeding, to the knowledge of the Transaction Entities, inquiry or investigation by or before any Governmental Entity involving the Transaction Entities or any of the Subsidiaries with
respect to the Money Laundering Laws is pending and, to the knowledge of the Transaction Entities, no such action suit, proceeding, inquiry or investigation is threatened. 

(oo) OFAC. None of the Transaction Entities, any of the Subsidiaries or, to the knowledge of the Transaction Entities, any director,
officer, agent, employee, affiliate or other person acting on behalf of either of the Transaction Entities or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”). The Company will not directly or indirectly use the proceeds of the offering of the Shares, or lend, contribute or otherwise make available such proceeds to any of the Subsidiaries, joint venture
partners or other persons, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC. 

(pp) Statistical and Market-Related Data. Any statistical and market related data included in the Registration Statement, the General
Disclosure Package or the Prospectus are based on or derived from sources that the Transaction Entities believe to be reliable and accurate in all material respects and, to the extent required, the Transaction Entities have obtained the written
consent to the use of such data from such sources. 
 (qq) Approval of Listing. The Shares have been approved for listing for
quotation on the NASDAQ, subject to official notice of issuance. 

  
 10 

 (rr) Distributions. Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, neither the Transaction Entities nor any Subsidiary thereof is prohibited, directly or indirectly, from making any distributions to the Company, from making any other distribution on any of its equity interests
or from repaying any loans or advances made by the Company, the Operating Partnership or any of the Subsidiaries. 
 (ss) Finder’s
Fees. Except as disclosed in the Registration Statement, the General Disclosure Package, and the Prospectus, the Transaction Entities have not incurred any liability for any finder’s fees or similar payments in connection with the
transactions contemplated in this Agreement, except as may otherwise exist with respect to the Agent pursuant to this Agreement. 
 (tt)
Certain Relationships. No relationship, direct or indirect, exists between or among either of the Transaction Entities or any Subsidiary on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any
Subsidiary, on the other, that is required by the 1933 Act to be described in each of the General Disclosure Package and the Prospectus or by the rules and regulations of the Commission thereunder and that is not so described. 

(uu) Accurate Disclosure in General Disclosure Package. The statements set forth in the General Disclosure Package under the captions
“Description of the Offered Stock” and “Description of Common Stock and Preferred Stock,” insofar as they purport to constitute a summary of the terms of the Common Stock and Preferred Stock, are accurate and complete. 

(vv) Accurate Disclosure in the Prospectus. The statements in the Prospectus under the headings “Summary—The Offering,”
“Description of the Offered Stock,” “Description of Common Stock and Preferred Stock,” “Certain Provisions of Maryland Law and of Our Charter and Bylaws,” “Material U.S. Federal Income Tax Considerations” and
“Plan of Distribution,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings in all material
respects. 
 (ww) Material Lending or Other Relationship. Except as described in the Prospectus, neither of the Transaction Entities
(A) has any material lending or other relationship with any bank or lending affiliate of the Agent or (B) intends to use any of the proceeds from the sale of the Shares hereunder to repay any outstanding debt owed to any affiliate of the
Agent. 
 (xx) Off-Balance Sheet Transactions. Except as described in each of the General
Disclosure Package and the Prospectus, there are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other relationships with unconsolidated
entities or other persons, that may reasonably be expected to have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital
resources or significant components of revenues or expenses. 
 (yy) Forward-Looking Statements. The information contained in the
Registration Statement, the Prospectus and any Issuer Free Writing Prospectus that constitutes “forward-looking” information within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act were made by the
Company on a reasonable basis and reflect the Company’s good faith belief or estimate of the matters described therein. 
 (zz)
Certificates. Any certificate signed by any officer of the Transaction Entities and delivered to the Agent or counsel for the Agent in connection with the sale of the Shares contemplated hereby shall be deemed a representation and warranty by
the Transaction Entities to the Agent and shall be deemed to be a part of this Section 2 and incorporated herein by this reference. 

(aaa) Other Issuances. Since January 1, 2012, except (i) as disclosed in the Registration Statement and the Prospectus,
(ii) for grants under the Equity Plans (as defined in Section 6(r) below), (iii) for redemptions of OP Units pursuant to the Operating Partnership’s Amended and Restated Agreement of Limited Partnership and (iv) for unregistered
sales, issuances or distributions of shares of Common Stock or OP Units that would not be required to be disclosed under Item 3.02 of Form 8-K, the Company has not sold, issued or distributed any shares of
Common Stock and the Operating Partnership has not sold, issued or distributed any OP Units. 
 (bbb) REIT Qualification. Commencing
with its taxable year ended December 31, 2004, the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (“REIT”) under the Code and
continuing through its taxable year ended December 31, 2017, and the Company’s proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending
December 31, 2018 and thereafter. All statements regarding the Company’s qualification and taxation as a REIT and descriptions of the Company’s organization and proposed method of operation (inasmuch as they relate to the

  
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Company’s qualification and taxation as a REIT) set forth in the Registration Statement, the General Disclosure Package and the Prospectus are accurate and fair summaries of the legal or tax
matters described therein in all material respects. 
 (ccc) No Other Materials. The Company has not distributed and, prior to the
later to occur of (i) the Applicable Time and (ii) completion of the distribution of the Shares, will not distribute any prospectus (as such term is defined in the 1933 Act and the rules and regulations promulgated by the Commission
thereunder) in connection with the offering and sale of the Shares other than the Registration Statement, the General Disclosure Package, and the Prospectus or other materials, if any, permitted by the 1933 Act or by the rules and regulations
promulgated by the Commission thereunder and approved by the Agent. 
 (ddd) Reportable Transactions. Neither the Transaction Entities
nor any of the Subsidiaries has participated in any reportable transaction, as defined in Treasury Regulation Section 1.6011-4(b)(1). 

(eee) Use of Proceeds. The Company intends to apply the net proceeds from the sale of the Shares substantially in accordance with the
description set forth in the General Disclosure Package and the Prospectus under the heading “Use of Proceeds.” 
 (fff)
Officer’s Certificates. Any certificate signed by any officer or other representative of the Company delivered to the Agent or to counsel for the Agent shall be deemed a representation and warranty by the Company, as applicable, to the
Agent as to the matters covered thereby. 
 (ggg) Outstanding Voting Stock. As of the close of trading on NASDAQ on the Trading Day
(as defined in Section 3(b) below) immediately prior to the date of this Agreement, the aggregate market value of the outstanding voting stock of the Company held by persons other than affiliates (as defined in Rule 405 of the 1933 Act) of the
Company was equal to approximately $85,517,639. 
 3. (a) On the basis of the representations, warranties and agreements herein contained and
subject to the terms and conditions set forth herein, upon the Agent’s acceptance of the terms of a Placement Notice (as defined in Section 3(b) below) or such other instructions provided by the Company to the Agent pursuant to
Section 3(b) or upon receipt by the Agent of an Acceptance (as defined in Section 3(c) below), as the case may be, and unless the sale of the Placement Shares (as defined in Section 3(b) below) as described therein has been declined,
suspended or otherwise terminated in accordance with the terms of this Agreement, the Company agrees to issue and sell through the Agent, as sales agent, and the Agent agrees, subject to the limitations and provisions in this Section 3 or as
may otherwise be agreed to between the parties from time to time, to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell as sales agent for the Company, the Shares. Sales of the Shares, if any,
through the Agent acting as sales agent will be made by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. 

(b) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Agent on any day that is a trading day
for the NASDAQ (other than a day on which NASDAQ is scheduled to close prior to its regular weekday closing time) (each, a “Trading Day”), and the Company has instructed the Agent to make such sales. Prior to the commencement of the
offering, when the Company wishes to issue and sell the Shares hereunder, it will notify the Agent at least one or five (as applicable) “business days,” as defined in Rule 100 of Regulation M (a “Regulation M Business
Day”), prior to the Trading Day on which sales are desired to commence by e-mail notice (or other method mutually agreed to in writing by the parties) containing the parameters in accordance with
which it desires the Shares to be sold, which shall at a minimum include the amount or number of Shares desired to be issued (the “Placement Shares”), a form of which containing such minimum sales parameters necessary is attached
hereto as Annex I (a “Placement Notice”). The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule I (with a copy to each of the other individuals from the Company listed on such
schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule I as shall be set forth in a written notice from the Agent to the Company from time to time. On any Trading Day that the Company wishes to issue and
sell the Shares hereunder (each, a “Placement”), the Company may instruct the Agent by telephone (confirmed promptly by telecopy or email, which confirmation will be promptly acknowledged by the Agent), or such other method mutually
agreed to in writing by the parties, as to the maximum amount or number of Shares to be sold by the Agent on such day (in any event not in excess of the number available for sale under the Prospectus and the currently effective Registration
Statement) and the minimum price per Share at which such Shares may be sold. For purposes of this Agreement, whenever a party is required to take action or refrain from taking action one or five Regulation M Business Days prior to a particular date,
the determination as to whether the applicable period shall be one or five Regulation M Business Days will depend on whether, at the particular time in question, the applicable “restricted period,” as defined in Rule 100 of Regulation M,
for the Shares is one or five Regulation M Business Days. 

  
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 (c) If the Agent wishes to accept such proposed terms included in the Placement Notice
(which it may decline to do for any reason in its sole discretion) or, following discussion with the Company, agrees to accept amended terms, the Agent will, prior to 4:30 p.m. (New York City Time) on the business day following the business day on
which such Placement Notice is delivered to the Agent, issue to the Company a notice by e-mail (or other method mutually agreed to in writing by the parties) addressed to all of the individuals from the
Company and the Agent set forth on Schedule I) setting forth the terms that the Agent is willing to accept. Where the terms provided in the Placement Notice are amended as provided for in the immediately preceding sentence, such terms will not be
binding on the Company or the Agent until the Company delivers to the Agent an acceptance by e-mail (or other method mutually agreed to in writing by the parties) of all of the terms of such Placement Notice,
as amended (the “Acceptance”), which e-mail shall be addressed to all of the individuals from the Company and the Agent set forth on Schedule I. The Placement Notice (as amended by the
corresponding Acceptance, if applicable) shall be effective upon receipt by the Company of the Agent’s acceptance of the terms of the Placement Notice or upon receipt by the Agent of the Company’s Acceptance, as the case may be, unless and
until (i) the entire amount of the Placement Shares set forth in the Placement Notice has been sold, (ii) the Company issues a subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice,
(iii) this Agreement has been terminated under the provisions of Section 10 or (iv) either party shall have suspended the sale of the Placement Shares in accordance with the terms of this Agreement. It is expressly acknowledged and
agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and either (x) the Agent accepts the
terms of such Placement Notice or (y) where the terms of such Placement Notice are amended, the Company accepts such amended terms by means of an Acceptance pursuant to the terms set forth above, and then only upon the terms specified in the
Placement Notice (as amended by the corresponding Acceptance, if applicable) and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice (as amended by the corresponding Acceptance, if applicable),
the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable) will control. 
 (d) Notwithstanding the
foregoing, the Company shall not authorize the issuance and sale of, and the Agent shall not be obligated to use its commercially reasonable efforts to sell, any Shares (i) at a price lower than the minimum price therefor authorized from time
to time, or (ii) in a number in excess of the aggregate number of Preferred Shares or aggregate gross sale price of Common Shares authorized from time to time to be issued and sold under this Agreement, in each case, by the Company’s board
of directors (the “Board”) or a duly authorized committee or subcommittee thereof (the “Designated Subcommittee”), and notified to the Agent in writing. In addition, the Company or the Agent may, upon notice to the
other party hereto by telephone (confirmed promptly by e-mail to those individuals specified on Schedule I), suspend or terminate the offering of the Shares for any reason and at any time; provided, however,
that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder or which an investor has agreed to purchase but which have not been delivered by the Company and paid
for by such investor as contemplated hereby, prior to the giving of such notice. 
 (e) Under no circumstances shall the aggregate gross sale
price of Common Shares or aggregate number of Preferred Shares sold pursuant to this Agreement exceed the aggregate gross sale price or number of shares, as the case may be, of Shares (i) set forth in paragraph 1 of this Agreement,
(ii) available for issuance under the Prospectus and the then currently effective Registration Statement or (iii) authorized from time to time to be issued and sold under this Agreement by the Board or the Designated Subcommittee and
notified to the Agent in writing. In addition, under no circumstances shall any Shares be sold at a price lower than the minimum price therefor authorized from time to time by the Board or the Designated Subcommittee and notified to the Agent in
writing. Notwithstanding anything to the contrary contained herein (other than the following sentence), the parties hereto agree that compliance with the limitations set forth in this Section 3(e) regarding the aggregate offering price of the
Shares issued and sold under this Agreement shall be the sole responsibility of the Company, and the Agent shall have no obligation in connection with such compliance. The Agent covenants and agrees not to make any sales of the Shares on behalf of
the Company other than as permitted by the terms of this Agreement. 
 (f) Subject to the terms of the Placement Notice (as amended by the
corresponding Acceptance, if applicable) or such other instructions provided by the Company to the Agent pursuant to Section 3(b), the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 of the 1933 Act, including without limitation sales made directly on the NASDAQ, on any other existing trading market for the Common Stock or Preferred Stock or to or through a market maker. Subject to the terms of
the Placement Notice (as amended by the corresponding Acceptance, if applicable) or such other instruction provided by the Company to the Agent pursuant to Section 3(b), the Agent may also sell Placement Shares by any other method permitted by
law, including but not limited to privately negotiated transactions subject to the prior written approval of the Company. Notwithstanding anything to the contrary herein and for a period of time beginning one or five Regulation M Business Days, as
applicable, prior to the time when the first sale pursuant to a Placement Notice occurs and continuing through the time such Placement Notice is in effect, the Agent agrees that in no event will it or

  
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any of its affiliates engage in any market making, stabilization or other market or trading activity with regard to the Shares if such activity would be prohibited under Regulation M or other
anti-manipulation rules under the 1933 Act or the 1934 Act. 
 (g) The compensation payable to the Agent for sales of Shares shall not exceed
2.5% of the gross sales price of the Shares; provided, however, that such rate of compensation shall not apply when the Agent acts pursuant to a Terms Agreement, provided further, that in no event shall the compensation payable to the Agent exceed
8.0% of the gross sales price of the Shares. The remaining proceeds, after further deduction for any transaction fees, transfer taxes or other similar fees, taxes or charges imposed by any federal, state, local or other governmental, regulatory or
self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”). The Agent shall notify the Company as promptly as practicable if any deduction described
in the preceding sentence will be required. 
 (h) The Agent shall provide written confirmation (which may be by e-mail) to the Company following the close of trading on the NASDAQ each day on which Shares are sold under this Agreement setting forth the amount of Common Shares or number of Preferred Shares sold on such day,
the gross sales prices of the Shares, the Net Proceeds to the Company and the compensation payable by the Company to the Agent under this Agreement with respect to such sales. 

(i) Settlement for sales of Shares will occur on the second business day that is also a Trading Day following the trade date on which such
sales are made, unless another date shall be agreed to by the Company and the Agent (each such day, a “Delivery Date”). On each Delivery Date, the Shares sold through the Agent for settlement on such date shall be delivered by the
Company to the Agent against payment of the Net Proceeds from the sale of such Shares. Settlement for all Shares shall be effected by book-entry delivery of Shares to the Agent’s account at The Depository Trust Company against payment by the
Agent of the Net Proceeds from the sale of such Shares through the Agent in same day funds delivered to an account designated by the Company. If the Company or its transfer agent (if applicable) shall default on its obligation to deliver Shares on
any Delivery Date, the Company shall (A) indemnify and hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (B) pay the Agent any commission to which it would otherwise be
entitled absent such default. If the Agent breaches this Agreement by failing to deliver the applicable Net Proceeds on any Delivery Date for Shares delivered by the Company, the Agent will pay the Company interest based on the effective overnight
federal funds rate until such proceeds, together with such interest, have been fully paid. 
 (j) The Company agrees that any offer to sell,
any solicitation of an offer to buy, or any sales of Shares or any other equity security of the Company shall only be effected by or through the Agent, from the period beginning one or five Regulation M Business Days, as applicable, prior to the
time when the first sale pursuant to a Placement Notice occurs and continuing through the time such Placement Notice is in effect; provided, however, that the foregoing limitation shall not apply to (i) exercise of any option, warrant, right,
unit or any conversion privilege set forth in the instrument governing such security or any other security of the Company or the Subsidiaries or (ii) sales solely to employees or security holders of the Company or the Subsidiaries, or to a
trustee or other person acquiring such securities for the accounts of such persons. 
 (k) The Company consents to the Agent trading in the
Common Stock for the Agent’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement. 

(l) The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling the Shares,
(ii) the Agent may not solicit any offers to buy the Shares, (iii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell the Shares for any reason other than a failure by the Agent
to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Shares as required under this Section 3, subject to the limitations and provisions in this Section 3 or as may otherwise be
agreed to between the parties from time to time and (iv) the Agent shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company in a Terms Agreement.

 (m) At each Applicable Time, each Delivery Date, each Representation Date, the Transaction Entities shall be deemed to have affirmed each
representation, warranty, covenant and other agreement contained in this Agreement. 
 4. Alternative Arrangements. 

(a) If the Company wishes to issue and sell the Shares other than as set forth in Section 3 of this Agreement (an “Alternative
Placement”), it will notify the Agent of the proposed terms of such Alternative Placement. If the Agent, acting as principal or agent, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion)
or, following discussions with the Company wishes to accept amended terms, the Agent and the Company will enter into a Terms Agreement, setting forth the terms of such Alternative Placement. 

  
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 (b) The terms set forth in a Terms Agreement will not be binding on the Company or the Agent
unless and until the Company and the Agent have each executed such Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of
such Terms Agreement will control. 
 5. (a) Notwithstanding any other provision of this Agreement, (i) the Company shall not offer or
sell, or instruct the Agent to offer or sell, any Shares, (ii) the Company, by notice to the Agent given by telephone (confirmed promptly by e-mail), shall cancel any instructions for the offer or sale of
Shares, and (iii) the Agent shall not be obligated to offer or sell any Shares, (x) unless otherwise agreed to in writing by the parties hereto (which agreement may be contained in a Placement Notice or in such other instructions provided
by the Company to the Agent pursuant to Section 3(b)) during any period in which the Company’s insider trading policy, as it exists on the date of this Agreement, would prohibit the purchases or sales of the Company’s Common Stock by
its officers or directors, (y) at any time or during any period that the Company is in possession of material non-public information or (z) except as provided in Section 5(b) below, at any time
from and including the date (each, an “Announcement Date”) on which the Company shall issue a press release containing, or shall otherwise publicly announce, its earnings, revenues or other results of operations (each, an
“Earnings Announcement”) through and including the time that is twenty-four (24) hours after the time that the Company files (a “Filing Time”) a Quarterly Report on Form
10-Q or an Annual Report on Form 10-K that includes consolidated financial statements as of and for the same period or periods, as the case may be, covered by such
Earnings Announcement. For purposes of this Section 5(a) and Section 5(b) below, references to “twenty-four (24) hours” shall exclude any hours in a day that is not a business day. 

(b) If the Company wishes to offer or sell Shares on any date during the period from and including an Announcement Date through and including
the time that is twenty-four (24) hours after the corresponding Filing Time, the Company shall (i) prepare and deliver to the Agent (with a copy to counsel to the Agent) a Current Report on Form 8-K
which shall include substantially the same financial and related information as was set forth in the relevant Earnings Announcement (other than any earnings projections or similar forward-looking data) (each, an “Earnings 8-K”), in form and substance reasonably satisfactory to the Agent, and obtain the consent of the Agent to the filing thereof (such consent not to be unreasonably withheld or delayed), (ii) provide the Agent
with the officers’ certificate and accountants’ letter called for by Sections 6(n) and (p), respectively, and (iii) file (and not furnish) such Earnings 8-K with the Commission. If the Company
fully satisfies the requirements of clauses (i) through (iii) of this Section 5(b), then the provisions of Section 5(a), except as otherwise provided herein, shall not be applicable for the period from and after the time at which the
foregoing conditions shall have been satisfied (or, if later, the time that is twenty-four (24) hours after the time that the relevant Earnings Announcement was first publicly released) through and including the time that is twenty-four
(24) hours after the Filing Time of the relevant Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be. For purposes of clarity, the
parties hereto agree that (A) the delivery of any officers’ certificate or accountants’ letter pursuant to this Section 5(b) shall not relieve the Company from any of its obligations under this Agreement with respect to any such
Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, including, without limitation, the obligation to deliver officers’ certificates,
accountants’ letters and legal opinions and related letters as provided in Section 8 hereof, (B) this Section 5(b) shall in no way affect the provisions of clause (x) of Section 5(a), which shall have independent
application and (C) the provisions of this Section 5(b) shall in no way affect the Company’s ability to file, subject to compliance with other applicable provisions of this Agreement, Current Reports on Form 8-K relating to earnings or other matters. 
 6. The Company agrees with the Agent as follows: 

(a) The Company will prepare the Prospectus in a form approved by the Agent and file such Prospectus pursuant to Rule 424(b) under the 1933 Act
on or prior to the date that is one business day following the date hereof unless otherwise agreed to by the Agent and will make no further amendment or any supplement to the Registration Statement or Prospectus (other than through any documents
incorporated therein by reference) which shall be reasonably disapproved by the Agent promptly after reasonable notice thereof; to advise the Agent, promptly after it receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and during the Prospectus Delivery Period (defined as such period of time after the first date of the public offering of the
Shares as in the opinion of counsel for the Agent a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the 1933 Act) in connection with sales of the Shares) to furnish the Agent
with copies thereof; to advise the Agent, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Issuer Free Writing Prospectus or Prospectus, of the
suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement, any Issuer Free Writing Prospectus or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Issuer Free Writing Prospectus or
Prospectus or suspending any such qualification, promptly to use its commercially reasonable efforts to obtain the withdrawal of such order. 

  
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 (b) The Company will, during any period when the delivery of a prospectus is required in
connection with the offering or sale of Shares (including, without limitation, pursuant to Rule 173(d) of the 1933 Act), if any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or, if for any other reason it shall be necessary to
amend or supplement the Prospectus (including, without limitation, any document incorporated by reference therein) in order to comply with the 1933 Act or the 1934 Act, notify the Agent and, upon its request, file such document and prepare and
furnish without charge to the Agent as many copies as the Agent may from time to time reasonably request of an amended or supplemented Prospectus (or incorporated document, as the case may be) that will correct such statement or omission or effect
such compliance. Upon such notification, the Agent will cease selling the Shares on the Company’s behalf pursuant to this Agreement and suspend the use of the Prospectus until such amendment or supplement is filed; provided, however, that such
suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder or which an investor has agreed to purchase but which has not been delivered by the Company and paid for by such
investor as contemplated hereby, prior to the giving of such notice. 
 (c) The Company represents and agrees that, unless it obtains the
prior written consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Shares that would constitute an “issuer free
writing prospectus,” as defined in Rule 433 under the 1933 Act, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the 1933 Act, required to be filed with the Commission. Any such free writing
prospectus consented to by the Company and the Agent is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus
as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping. The Company represents that it has satisfied the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show. 

(d) Promptly from time to time to take such action as the Agent may reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as the Agent may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the
Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction. 

(e) During the period in which a prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with any sale of
Shares (including, without limitation, pursuant to Rule 173(d) of the 1933 Act), to furnish the Agent with copies of the Prospectus or a supplement to the Prospectus in New York City in such quantities as the Agent may from time to time reasonably
request. 
 (f) To make generally available to its securityholders as soon as practicable an earnings statement of the Company and its
consolidated subsidiaries (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158). 

(g) To furnish to its stockholders, as soon as practicable after the end of each fiscal year, an annual report (including a balance sheet and
statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by an independent registered public accounting firm) and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), to make available to its stockholders consolidated summary financial information of the Company and its consolidated
subsidiaries for such quarter in reasonable detail. 
 (h) Until the earlier of the Shares ceasing to be outstanding or the third year
anniversary of the latest effective date of the Registration Statement, to furnish to the Agent copies of all reports or other communications (financial or other) furnished to stockholders, and to deliver to you as soon as they are available, copies
of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; provided the Company will be deemed to have furnished such reports and
financial statements to the Agent to the extent they are filed on the Commission’s EDGAR system. 
 (i) To use the net proceeds received
by it from the sale of the Shares pursuant to this Agreement in the manner specified in each of the General Disclosure Package and the Prospectus under the caption “Use of Proceeds”. 

(j) To use its reasonable best efforts to list for quotation the Shares on the NASDAQ. 

  
 16 

 (k) To file with the Commission such information on Form
10-K or Form 10-Q as may be required by Rule 463 under the 1933 Act. 

(l) To comply, and to use its reasonable best efforts to cause the Company’s directors and officers, in their capacities as such, to
comply, in all material respects, with all effective applicable provisions of the Sarbanes-Oxley Act and the rules and regulations thereunder. 

(m) The Company will reasonably cooperate on a timely basis with any reasonable due diligence request from, or review conducted by, the Agent
or its counsel from time to time in connection with the transactions contemplated hereby, including, without limitation, and upon reasonable notice, providing information and making available documents and appropriate corporate officers, during
regular business hours and at the Company’s principal offices and/or by telephone, as the Agent or its counsel may reasonably request (each such process, a “Due Diligence Process”). 

(n) Upon commencement of the offering of Shares under this Agreement, promptly after each (i) date the Registration Statement or the
Prospectus shall be amended or supplemented (other than (1) by an amendment or supplement providing solely for the determination of the terms of the Shares, (2) in connection with the filing of any report or other document under
Section 13, 14 or 15(d) of the 1934 Act or (3) by a prospectus supplement relating to the offering of other securities (including, without limitation, other shares of Common Stock)) (each such date, a “Registration Statement
Amendment Date”), (ii) date on which the Company shall file (x) an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Earnings 8-K or (y) an amendment to any such document (each such date, a “Company Periodic Report Date”) and, (iii) reasonable request by the Agent; provided, that such request follows a Due
Diligence Process (each date of any such request, a “Supplemental Request Date”) (each of the date of the commencement of the offering of Shares under this Agreement and each Registration Statement Amendment Date, Company Periodic
Report Date and Supplemental Request Date is hereinafter referred to as a “Representation Date”), the Company will furnish or cause to be furnished to the Agent (with a copy to counsel to the Agent) a certificate dated such
Representation Date (or, in the case of an amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K, Quarterly
Report on Form 10-Q or Earnings 8-K or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with
the Commission of such supplement or any such Form 10-K, Form 10-Q, Earnings 8-K or amendment thereto, as the case may be), in a
form reasonably satisfactory to the Agent to the effect that the statements contained in the certificate referred to in Section 8(j) of this Agreement which was last furnished to the Agent are true and correct as of the date of such certificate
as though made at and as of the date of such certificate (except that such statements shall be deemed to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such
certificate) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 8(j), but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package
as amended and supplemented to the date of such certificate. As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on or prior to the
next succeeding Applicable Time. 
 (o) Upon commencement of the offering of Shares under this Agreement, and promptly after each other
Representation Date, the Company will furnish or cause to be furnished to the Agent (with a copy to counsel to the Agent), unless the Agent otherwise agrees in writing, the written opinion and letter of counsel to the Company, dated such
Representation Date (or, in the case of an amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K or Quarterly
Report on Form 10-Q or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with the Commission of such supplement or any such Form 10-K, Form 10-Q or amendment thereto, as the case may be), in a form and substance reasonably satisfactory to the Agent and its counsel, of the same tenor as the opinions and
letters referred to in Section 8(c) of this Agreement, but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such opinion and letter or,
in lieu of such opinion and letter, counsel last furnishing any such opinion and letter to the Agent shall furnish the Agent with a letter substantially to the effect that the Agent may rely on such counsel’s last opinion and letter to the same
extent as though each were dated the date of such letter authorizing reliance (except that statements in such last opinion and letter shall be deemed to relate to the Registration Statement, the Prospectus and the General Disclosure Package as
amended and supplemented to the date of such letter authorizing reliance). As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on
or prior to the next succeeding Applicable Time. Solely for the purposes of this paragraph, the term “Representation Date” shall not include the date of filing of any Earnings 8-K or any amendment
thereto. 
 (p) Upon commencement of the offering of Shares under this Agreement, and promptly after each other Representation Date, the
Company will cause each of Dixon Hughes Goodman LLP, or other independent accountants reasonably satisfactory 

  
 17 

 
to the Agent, to furnish to the Agent (with a copy to counsel to the Agent), unless the Agent otherwise agrees in writing, a letter, dated such Representation Date (or, in the case of an
amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Earnings 8-K or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with the Commission of
such supplement or any such Form 10-K, Form 10-Q, Earnings 8-K or any amendment thereto, as the case may be), in form reasonably
satisfactory to the Agent and its counsel, of the same tenor as the letter referred to in Section 8(e) hereof, but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and
supplemented to the date of such letter. As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on or prior to the next succeeding
Applicable Time. 
 (q) The Company will not, and will cause the Subsidiaries not to, and use reasonable efforts to cause its affiliates and
any person acting on their behalf not to, directly or indirectly, (i) take any action designed to or that has constituted or that reasonably would be expected to cause or result in the stabilization or manipulation of the price of any security
of the Company or (ii) sell, bid for or purchase the Shares to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Shares to be issued and sold pursuant to this Agreement other than the
Agent. 
 (r) During the pendency of any Placement Notice (as amended by the corresponding Acceptance, if applicable) given hereunder,
(i) the Company shall provide the Agent notice no less than one or five Regulation M Business Days, as applicable, before it or any of the Subsidiaries or any person acting on their behalf, directly or indirectly, offers to sell, contracts to
sell, sells, grants any option to sell or otherwise disposes of any Common Stock (other than Placement Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire Common Stock; provided, that no such restriction shall apply in connection with (1) the issuance, grant or sale of Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of
options or other equity awards pursuant to any stock option, stock bonus or other stock or compensatory plan or arrangement described in the Prospectus (the “Equity Plans”), (2) the issuance or sale of Common Stock pursuant to any
dividend reinvestment plan that the Company may adopt from time to time, provided the implementation of such is disclosed to the Agent in advance, or (3) the redemption of OP Units pursuant to the terms of the Operating Partnership Agreement;
(ii) the Company shall not, and shall cause any affiliated purchasers (as defined in Rule 100 of Regulation M) of the Company to not, bid for, purchase or induce any other persons to bid for or purchase Shares; and (iii) the Company shall
provide the Agent notice no less than one or five Regulation M Business Days, as applicable, before it or any of the Subsidiaries or affiliates or any person acting on their behalf engages in any special selling efforts or selling methods with
regard to Shares, including but not limited to presenting at any investor conference or other similar meeting where potential investors may be present. 

(s) During the period beginning on the date hereof and ending on the later of the fifth anniversary of the Applicable Time or the date on which
the Agent receives full payment in satisfaction of any claim for indemnification or contribution to which it may be entitled pursuant to Section 9 of this Agreement, the Company shall not, without the prior written consent of the Agent (which
consent shall not be unreasonably withheld, conditioned or delayed), take or permit to be taken any action that could result in the Common Stock becoming subject to any security interest, mortgage, pledge, lien or encumbrance; provided, however,
that this covenant shall be null and void if any federal or state agency having jurisdiction over the Company, by regulation, policy statement or interpretive release or by written order or written advice addressed to the Company and specifically
addressing the provisions of Section 9 hereof, permits indemnification of the Agent by the Company as contemplated by such provisions. 

(t) The Company will use its best efforts to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year
ending December 31, 2018 and for each subsequent year thereafter, unless and until the Board determines in good faith that it is no longer in the best interests of the Company and its stockholders to be so qualified. 

(u) Until completion of the distribution of the Shares, the Company will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder. 
 (v) The
Company shall have duly executed, delivered and filed with the SDAT the Articles Supplementary on or prior to first Delivery Date. Until completion of the distribution of the Shares, the Articles Supplementary shall be effective under the Maryland
General Corporation Law. 
 (w) The Company, as the sole general partner of the Operating Partnership, shall have duly authorized, executed
and delivered the OP Agreement Amendment on or prior to the first Delivery Date. 

  
 18 

 (x) The Company shall ensure that there are at all time sufficient shares of Common Stock to
provide for the issuance, free of any preemptive rights, out of its authorized but unissued shares of Common Stock, of the maximum number of shares of Common Stock issuable upon conversion of the Preferred Shares. 

7. The Company covenants and agrees with the Agent that the Company will pay or cause to be paid the following: (i) the reasonable out-of-pocket expenses incurred by the Agent in connection with the transactions contemplated hereby (regardless of whether the sale of the Shares is consummated), including,
without limitation, disbursements, fees and expenses of the Agent’s counsel, reasonably incurred, and travel expenses; (ii) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the
registration of the Shares under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Permitted Free Writing Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Agent; (iii) the cost of printing or producing this Agreement, any Blue Sky memorandum, closing documents (including any compilations thereof) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iv) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 6(d) hereof, including the fees and
disbursements of counsel for the Agent in connection with such qualification and in connection with any Blue Sky memorandum (v) all fees and expenses in connection with listing the Shares on NASDAQ; (vi) the filing fees incident to, and
the fees and disbursements of counsel for the Agent in connection with, securing any required review by FINRA of the terms of the sale of the Shares; (vii) the cost of preparing stock certificates; (viii) the cost and charges of any
transfer agent or registrar; and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. 

8. The obligations of the Agent hereunder shall be subject, in its sole discretion, to the condition that all representations and warranties
and other statements of the Transaction Entities herein or in certificates of any officer of the Transaction Entities delivered pursuant to the provisions hereof are true and correct as of the time of the execution of this Agreement, and as of each
Representation Date, Applicable Time and Delivery Date, to the condition that the Transaction Entities shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: 

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the 1933 Act on or prior to the date hereof and the
Company shall have complied with all other requirements applicable to the Prospectus or any supplement thereto under Rule 424(b) (without giving effect to Rule 424(b)(8)). The Company shall have complied with all filing requirements applicable to
any Issuer Limited-Use Free Writing Prospectus used or referred to after the date hereof. No stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the
Prospectus or any Issuer Limited-Use Free Writing Prospectus shall have been issued and no proceeding or examination for such purpose shall have been initiated or threatened by the Commission, any request of
the Commission for inclusion of additional information in the Registration Statement or the Prospectus (including, without limitation, in any document incorporated by reference therein) or otherwise shall have been complied with, and the Commission
shall not have notified the Company of any objection to the use of the form of the Registration Statement or any post-effective amendment thereto. 

(b) The Agent shall have received a letter from CT Corporation, or a similar firm, indicating based on available electronic databases the good
standing of the Transaction Entities in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Agent may reasonably request. 

(c) Baker & McKenzie LLP, counsel for the Transaction Entities (or, subject to the sole discretion of the Agent in the case of any
written opinion or opinions required to be delivered after the commencement of the offering of the Shares under this Agreement, the in house legal counsel for the Transaction Entities) shall have furnished to you such written opinion or opinions on
each date specified in Section 6(o), as the case may be, in form and substance satisfactory to counsel for the Agent, to the effect set forth in Annex II and Annex III hereto and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. 
 (d)
Morrison & Foerster LLP, counsel for the Agent, shall have furnished to you their written opinions in such form as you may reasonably request, on each date specified in Section 6(o). 

(e) On each date specified in Section 6(p), and except as otherwise agreed by the Agent, Dixon Hughes Goodman LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery thereof, in form and substance as previously provided to counsel to the Agent. 

(f) (i) Neither the Company nor any of the Subsidiaries shall have sustained since the date of the latest audited financial statements
included in each of the General Disclosure Package and the Prospectus any loss or interference with its business 

  
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from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the General Disclosure Package or Prospectus, and (ii) since the respective dates as of which information is given in each of the General Disclosure Package and the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or any of the Subsidiaries or any change, or any development involving a prospective change not set forth or contemplated in the General Disclosure Package or Prospectus, in or affecting the Properties, the
general affairs, management, financial position, stockholders’ equity or results of operations of the Company and the Subsidiaries, otherwise than as set forth or contemplated in each of the General Disclosure Package and the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in the reasonable judgment of the Agent so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered on the terms and in the manner contemplated in each of the General Disclosure Package and the Prospectus. 
 (g) On or after
the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or material limitation in trading
in the Company’s securities on NASDAQ; (iii) a general moratorium on commercial banking activities declared by either federal or state authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or a material adverse change in general economic, political or financial conditions, including without limitation as a result of terrorist activities after the date hereof (or the
effect of international conditions on the financial markets in the United States shall be such), or any other calamity or crisis, if the effect of any such event specified in this clause (iv) in the reasonable judgment of the Agent makes it
impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus. 

(h) To the extent required, the Shares to be sold shall have been duly listed for quotation on NASDAQ. 

(i) If within the Prospectus Delivery Period, the Company shall have complied with the provisions of Section 6(a) hereof with respect to
the furnishing of prospectuses on the business day next succeeding the date of this Agreement. 
 (j) The Transaction Entities shall have
furnished or caused to be furnished to you on each Representation Date specified in Section 6(n) certificates of officers of the Transaction Entities satisfactory to you as to the accuracy of the representations and warranties of the
Transaction Entities herein at and as of such Representation Date, as to the performance by the Transaction Entities of all of its obligations hereunder to be performed at or prior to such Representation Date, and as to the matters set forth in
subsections (a) and (f) and (m) of this Section 8 and such other matters reasonably requested by the Agent. 
 (k) Upon
commencement of the offering of Shares under this Agreement and on such other dates as reasonably requested by Agent, the Company will furnish or cause to be furnished promptly to the Agent a Placement Notice or such other instructions provided
pursuant to Section 3(b) as requested by the Agent. 
 (l) The Transaction Entities and the Agent hereby agree that the date of
commencement of sales under this Agreement shall be the date the Transaction Entities and the Agent mutually agree (which may be later than the date of this Agreement). 

(m) Each Subsidiary of the Company which meets the definition of “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X) has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, with power and authority
(corporate and other) to own, lease and operate its properties and conduct its business as described in each of the General Disclosure Package and the Prospectus; each such Subsidiary is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify, or be in good standing would
not, individually or in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock or other equity interest of each such subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and
is owned by the Company, directly or through subsidiaries free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of capital stock or other equity interest of each such subsidiary were
issued in violation of the preemptive or other similar rights of any security holder of such security; and the Company has all necessary consents and approvals under applicable federal and state laws and regulations to own its assets and carry on
its businesses as currently conducted, except for those consents and approvals that would not have a Material Adverse Effect. 
 9. (a) The
Transaction Entities, jointly and severally, shall indemnify and hold harmless the Agent against any losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject, under the 1933 Act or

  
 20 

 
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure
Package, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will
reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither of the
Transaction Entities shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any such
amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use therein (provided that the Company and the Agent hereby acknowledge and agree that the only information that
the Agent has furnished to the Company specifically for inclusion in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus,
when considered together with the General Disclosure Package, or any amendment or supplement thereto, are (i) the statements set forth in the last sentence of paragraph 1, the first sentence of paragraph 3 and the last sentence of paragraph 7
under the “Plan of Distribution” in the Prospectus Supplement and (ii) such other statements as the Agent may, by notice given to the Company in writing after the date of this Agreement, have been furnished to the Company by the Agent
specifically for inclusion in the Registration Statement, the Prospectus, the General Disclosure Package, any Issuer Limited-Use Free Writing Prospectus or any amendment or supplement thereto (collectively,
the “Agent Information”). 
 (b) The Agent shall indemnify and hold harmless the Company against any losses, claims, damages
or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the General Disclosure Package, the Prospectus, or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with
the General Disclosure Package, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the General Disclosure Package, the Prospectus or any
individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use therein, provided that the Company and the Agent hereby acknowledge and agree that the only information that the Agent has furnished to the Company specifically for inclusion in the
Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any
amendment or supplement thereto, is the Agent Information; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are
incurred. 
 (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect
to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party. 
 (d) If the indemnification provided for in this Section 9 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect 

  
 21 

 
thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Transaction Entities on the one hand and the Agent on the other from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Transaction Entities on the one hand and the Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Transaction Entities on the one hand and the Agent on the
other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total commissions received by the Agent. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Transaction Entities on the one hand or the Agent
on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Transaction Entities and the Agent agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Agent shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares distributed to the public were offered to the public exceeds the amount of any damages which the Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 

(e) The obligations of the Transaction Entities under this Section 9 shall be in addition to any liability which the Transaction Entities
may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls (within the meaning of the 1933 Act) the Agent, or any of the respective partners, directors, officers and employees of the Agent or any
such controlling person; and the obligations of the Agent under this Section 9 shall be in addition to any liability which the Agent may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company), each officer of the Company who signs the Registration Statement and to each person, if any, who controls the
Transaction Entities, as the case may be, within the meaning of the 1933 Act. 
 10. Termination. 

(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate this Agreement in its sole discretion at
any time. Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale through the Agent for the Company, the obligations of the Company, including in respect of compensation
of the Agent, shall remain in full force and effect notwithstanding such termination and (ii) the representations and warranties in Section 2 and the provisions of Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full
force and effect notwithstanding such termination. 
 (b) The Agent shall have the right, in its sole discretion, by giving written notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the representations and warranties in Section 2 and the
provisions of Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full force and effect notwithstanding such termination. 

(c) This Agreement shall remain in full force and effect unless terminated pursuant to Section 10(a) or (b) above or otherwise by
mutual agreement of the parties; provided, that any such termination by mutual agreement or pursuant to this clause (c) shall in all cases be deemed to provide that the representations and warranties in Section 2 and the provisions of
Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full force and effect notwithstanding such termination. 
 (d) Any
termination of this Agreement shall be effective on the date specified in such notice of termination or the date mutually agreed by the parties, as the case may be; provided, that such termination shall not be effective until the close of business
on the date of receipt of such notice by Agent or the Company, or the date mutually agreed by the parties, as the case may be. If such termination shall occur prior to the Delivery Date for any sale of Stock, such sale shall settle in accordance
with the provisions of Section 3(i) hereof. 

  
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 11. The respective indemnities, agreements, representations, warranties and other statements
of the Transaction Entities and the Agent, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of the Agent or any controlling person of the Agent, or the Transaction Entities, or any officer or director or controlling person of the Transaction Entities, and shall survive delivery of and payment for the
Shares. 
 12. If this Agreement is terminated, neither of the Transaction Entities shall then be under any liability to the Agent except as
provided in Section 9 hereof, which provisions shall survive termination. 
 13. The Company acknowledges and agrees that: 

(a) in connection with the sale of the Shares, the Agent has been retained solely to act as sales agent, and no fiduciary, advisory or other
agency relationship between the Company and the Agent have been created in respect of any of the transactions contemplated by this Agreement; 

(b) it has been advised that the Agent and its respective affiliates are engaged in a broad range of transactions which may involve interests
that differ from those of the Company and that the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and 

(c) it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach
of fiduciary duty and agrees that the Agent shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company. 
 All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Agent shall be delivered or sent by mail, telex or facsimile transmission to you at 1251 Avenue of the Americas, 6th Floor, New York, NY 10020, Attention: General Counsel with a copy (for informational purposes only) to
Morrison & Foerster LLP, 2000 Pennsylvania Avenue, NW Suite 6000, Washington, D.C. 20006, Attention: Justin Salon, Esq.; and if to the Transaction Entities shall be delivered or sent by mail to Sotherly Hotels Inc., 410 W. Francis Street,
Williamsburg, Virginia 23185, Attention: Andrew M. Sims, with a copy (for informational purposes only) to Baker & McKenzie LLP, 815 Connecticut Ave., NW, Washington, DC 20006, Attention: Thomas J. Egan, Jr., Esq. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof. 
 14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Agent, the Transaction Entities and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Transaction Entities or the Agent, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares shall be deemed a successor or assign by reason merely of such purchase.

 15. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the
Commission’s office in Washington, D.C., is open for business. 
 16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. 
 17. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 

[Signature Page Follows] 

  
 23 

 If the foregoing is in accordance with your understanding, please sign and return to us four
counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement among the Agent, the Company and the Operating Partnership. 

 

			
	Very truly yours,
	
	SOTHERLY HOTELS INC.
		
	By:	 	/s/ Andrew M. Sims
	Name:	 	Andrew M. Sims
	Title:	 	Chief Executive Officer

  

			
	SOTHERLY HOTELS LP
		
	By:	 	 Sotherly Hotels Inc.,
 its general
partner

		
	By:	 	/s/ Andrew M. Sims
	Name:	 	Andrew M. Sims
	Title:	 	Chief Executive Officer

  

			
	Accepted as of the date hereof:
	
	SANDLER O’NEILL & PARTNERS, L.P.
		
	By:	 	 Sandler O’Neill & Partners Corp.,

the sole general partner

		
	By:	 	/s/ Robert Kleinert
	Name:	 	Robert Kleinert
	Title:	 	An Officer of the Corporation

  
 24

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