Form 10-Q Summit Hotel Properties, For: Jun 30

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August 2, 2016 4:36 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________________________________

FORM 10-Q

___________________________________________________________________________________

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35074

SUMMIT HOTEL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

___________________________________________________________________________________



Maryland		27-2962512
(State or other jurisdiction		(I.R.S. Employer Identification No.)
of incorporation or organization)

12600 Hill Country Boulevard, Suite R-100

Austin, TX 78738

(Address of principal executive offices, including zip code)

(512) 538-2300

(Registrant’s telephone number, including area code)

___________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company in Rule 12b-2 of the Exchange Act.



Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes ý No

As of July 29, 2016, the number of outstanding shares of common stock of Summit Hotel Properties, Inc. was 87,275,082.

TABLE OF CONTENTS



		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets — June 30, 2016 (Unaudited) and December 31, 2015	1
	Condensed Consolidated Statements of Operations (Unaudited) — Three and Six Months Ended June 30, 2016 and 2015	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) — Three and Six Months Ended June 30, 2016 and 2015	3
	Condensed Consolidated Statements of Changes in Equity (Unaudited) — Six Months Ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) — Six Months Ended June 30, 2016 and 2015	5
	Notes to the Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4.	Controls and Procedures	39

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	42

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Summit Hotel Properties, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)



	June 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Investment in hotel properties, net	$	1,416,633		$	1,333,407
Land held for development	5,742			5,742
Assets held for sale	69,162			133,138
Investment in real estate loans, net	17,582			12,803
Cash and cash equivalents	76,437			29,326
Restricted cash	25,363			23,073
Trade receivables, net	14,937			9,437
Prepaid expenses and other	8,319			15,281
Deferred charges, net	3,694			3,628
Other assets	9,307			9,559
Total assets	$	1,647,176		$	1,575,394
LIABILITIES AND EQUITY
Liabilities:
Debt, net of debt issuance costs	$	622,397		$	671,536
Accounts payable	4,830			2,947
Accrued expenses and other	46,982			42,174
Derivative financial instruments	2,477			1,811
Total liabilities	676,686			718,468

Commitments and contingencies (Note 8)

Equity:
Preferred stock, $.01 par value per share, 100,000,000 shares authorized:
9.25% Series A - 2,000,000 shares issued and outstanding at June 30, 2016 and December 31, 2015 (aggregate liquidation preference of $50,385 at June 30, 2016 and $50,398 at December 31, 2015)	20			20
7.875% Series B - 3,000,000 shares issued and outstanding at June 30, 2016 and December 31, 2015 (aggregate liquidation preference of $75,492 at June 30, 2016 and $75,509 at December 31, 2015)	30			30
7.125% Series C - 3,400,000 shares issued and outstanding at June 30, 2016 and December 31, 2015 (aggregate liquidation preference of $85,505 at June 30, 2016 and $85,522 at December 31, 2015)	34			34
6.45% Series D - 3,000,000 shares issued and outstanding at June 30, 2016 (aggregate liquidation preference of $75,040 at June 30, 2016)	30			—
Common stock, $.01 par value per share, 500,000,000 shares authorized, 87,267,662 and 86,793,521 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	873			868
Additional paid-in capital	968,262			894,060
Accumulated other comprehensive loss	(2,309		)	(1,666		)
Accumulated deficit and distributions	(447		)	(40,635		)
Total stockholders’ equity	966,493			852,711
Non-controlling interests in Operating Partnership	3,997			4,215
Total equity	970,490			856,926
Total liabilities and equity	$	1,647,176		$	1,575,394

See Notes to the Condensed Consolidated Financial Statements

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share amounts)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Revenues:
Room	$	119,285		$	113,714		$	229,880		$	215,139
Other hotel operations revenue	7,910			6,963			15,397			13,186
Total revenues	127,195			120,677			245,277			228,325
Expenses:
Hotel operating expenses:
Room	26,985			27,729			54,254			53,235
Other direct	16,843			15,860			33,083			30,895
Other indirect	32,929			31,688			63,558			60,415
Total hotel operating expenses	76,757			75,277			150,895			144,545
Depreciation and amortization	17,685			15,403			35,828			30,667
Corporate general and administrative	5,391			5,363			9,970			9,878
Hotel property acquisition costs	1,728			113			2,282			113
Total expenses	101,561			96,156			198,975			185,203
Operating income	25,634			24,521			46,302			43,122
Other income (expense):
Interest expense	(7,123		)	(7,655		)	(14,606		)	(14,902		)
Gain (loss) on disposal of assets, net	2,726			(208		)	39,506			(711		)
Other income	853			546			1,193			785
Total other income (expense)	(3,544		)	(7,317		)	26,093			(14,828		)
Income from continuing operations before income taxes	22,090			17,204			72,395			28,294
Income tax expense	(135		)	(903		)	(1,706		)	(1,402		)
Net income	21,955			16,301			70,689			26,892
Less - Income attributable to Operating Partnership	(90		)	(97		)	(339		)	(154		)
Net income attributable to Summit Hotel Properties, Inc.	21,865			16,204			70,350			26,738
Preferred dividends	(4,147		)	(4,147		)	(8,294		)	(8,294		)
Net income attributable to common stockholders	$	17,718		$	12,057		$	62,056		$	18,444
Earnings per share:
Basic net income per share	$	0.20		$	0.14		$	0.72		$	0.21
Diluted net income per share	$	0.20		$	0.14		$	0.71		$	0.21
Weighted average common shares outstanding:
Basic	86,433			85,831			86,396			85,768
Diluted	87,355			87,008			87,264			86,947

See Notes to the Condensed Consolidated Financial Statements

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Net income	$	21,955		$	16,301		$	70,689		$	26,892
Other comprehensive income (loss), net of tax:
Changes in fair value of derivative financial instruments	(15		)	465			(647		)	(296		)
Comprehensive income	21,940			16,766			70,042			26,596
Less - Comprehensive income attributable to Operating Partnership	(90		)	(102		)	(335		)	(152		)
Comprehensive income attributable to Summit Hotel Properties, Inc.	21,850			16,664			69,707			26,444
Preferred dividends	(4,147		)	(4,147		)	(8,294		)	(8,294		)
Comprehensive income attributable to common stockholders	$	17,703		$	12,517		$	61,413		$	18,150

See Notes to the Condensed Consolidated Financial Statements

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2016 and 2015

(Unaudited)

(in thousands, except share amounts)



	Shares of Preferred Stock	Preferred Stock		Shares of Common Stock		Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit and Distributions			Total Stockholders’ Equity			Non-controlling Interests in Operating Partnership			Total Equity
Balance at December 31, 2015	8,400,000	$	84	86,793,521		$	868	$	894,060		$	(1,666	)	$	(40,635	)	$	852,711		$	4,215		$	856,926
Net proceeds from sale of preferred stock	3,000,000	30		—		—		72,307			—			—			72,337			—			72,337
Common stock redemption of common units	—	—		53,636		—		447			—			—			447			(447		)	—
Dividends paid	—	—		—		—		—			—			(30,162		)	(30,162		)	(118		)	(30,280		)
Equity-based compensation	—	—		482,127		5		2,165			—			—			2,170			12			2,182
Other	—	—		(61,622	)	—		(717		)	—			—			(717		)	—			(717		)
Other comprehensive loss	—	—		—		—		—			(643		)	—			(643		)	(4		)	(647		)
Net income	—	—		—		—		—			—			70,350			70,350			339			70,689
Balance at June 30, 2016	11,400,000	$	114	87,267,662		$	873	$	968,262		$	(2,309	)	$	(447	)	$	966,493		$	3,997		$	970,490

Balance at December 31, 2014	8,400,000	$	84	86,149,720		$	861	$	888,191		$	(1,746	)	$	(107,779	)	$	779,611		$	5,590		$	785,201
Common stock redemption of common units	—	—		114,947		1		666			—			—			667			(667		)	—
Dividends paid	—	—		—		—		—			—			(28,587		)	(28,587		)	(168		)	(28,755		)
Equity-based compensation	—	—		308,310		3		1,988			—			—			1,991			17			2,008
Other	—	—		(36,385	)	—		(453		)	—			—			(453		)	—			(453		)
Other comprehensive loss	—	—		—		—		—			(294		)	—			(294		)	(2		)	(296		)
Net income	—	—		—		—		—			—			26,738			26,738			154			26,892
Balance at June 30, 2015	8,400,000	$	84	86,536,592		$	865	$	890,392		$	(2,040	)	$	(109,628	)	$	779,673		$	4,924		$	784,597

See Notes to the Condensed Consolidated Financial Statements

Summit Hotel Properties, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



	Six Months Ended June 30,
	2016			2015
OPERATING ACTIVITIES
Net income	$	70,689		$	26,892
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	35,828			30,667
Deferred finance cost amortization	1,103			819
Equity-based compensation	2,182			2,008
(Gain) loss on disposal of assets	(39,506		)	711
Other	274			453
Changes in operating assets and liabilities:
Restricted cash - operating	(357		)	(1,232		)
Trade receivables, net	(5,560		)	(4,821		)
Prepaid expenses and other	175			(2,193		)
Accounts payable	1,883			(4,158		)
Accrued expenses and other	2,830			5,932
NET CASH PROVIDED BY OPERATING ACTIVITIES	69,541			55,078
INVESTING ACTIVITIES
Acquisitions of hotel properties	(109,182		)	(96,614		)
Investment in hotel properties under development	—			(76		)
Improvements to hotel properties	(18,205		)	(26,040		)
Proceeds from asset dispositions, net of closing costs	134,511			121
Funding of real estate loans	(27,500		)	(2,634		)
Proceeds from repayments of real estate loans	2,000			—
Restricted cash - FF&E reserve	(1,933		)	4,441
Escrow deposits for acquisitions	6,996			—
NET CASH USED IN INVESTING ACTIVITIES	(13,313		)	(120,802		)
FINANCING ACTIVITIES
Proceeds from issuance of debt	195,000			287,000
Principal payments on debt	(243,509		)	(192,522		)
Proceeds from preferred stock offering, net	72,337			—
Payment of debt-related financing costs	(1,948		)	(1,164		)
Dividends paid	(30,280		)	(28,755		)
Other	(717		)	(453		)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(9,117		)	64,106
Net increase (decrease) in cash and cash equivalents	47,111			(1,618		)
CASH AND CASH EQUIVALENTS
Beginning of period	29,326			38,581
End of period	$	76,437		$	36,963
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	13,016		$	14,207
Capitalized interest	$	—		$	76
Cash payments for income taxes, net of refunds	$	868		$	1,231

See Notes to the Condensed Consolidated Financial Statements

SUMMIT HOTEL PROPERTIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - DESCRIPTION OF BUSINESS

Summit Hotel Properties, Inc. (the “Company”) is a self-managed hotel investment company that was organized on June 30, 2010, as a Maryland corporation. The Company holds both general and limited partnership interests in Summit Hotel OP, LP (the “Operating Partnership”), a Delaware limited partnership also organized on June 30, 2010. On February 14, 2011, the Company closed on its initial public offering ("IPO") and completed certain formation transactions, including the merger of Summit Hotel Properties, LLC, our predecessor company, with and into the Operating Partnership. Unless the context otherwise requires, “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries.

At June 30, 2016, our portfolio consists of 80 Upscale and Upper-midscale hotels with a total of 10,716 guestrooms located in 23 states. We have elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes commencing with our short taxable year ended December 31, 2011. To qualify as a REIT, we cannot operate or manage our hotels. Accordingly, all of our hotels are leased to subsidiaries (“TRS Lessees”) of our taxable REIT subsidiary (“TRS”). We indirectly own 100% of the outstanding equity interests in all of our TRS Lessees.

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of the Company consolidate the accounts of the Company and all entities that are controlled by the Company’s ownership of a majority voting interest in such entities, as well as variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in the Condensed Consolidated Financial Statements.

We prepare our Condensed Consolidated Financial Statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Act of 1934 (the “Exchange Act”). Accordingly, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation in accordance with GAAP have been included. Results for the three and six months ended June 30, 2016 may not be indicative of the results that may be expected for the full year of 2016. For further information, please read the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Segment Disclosure

Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. We have determined that we have one reportable segment for activities related to investing in real estate. Our investments in real estate are geographically diversified and the chief operating decision makers evaluate operating performance on an individual asset level. As each of our assets has similar economic characteristics, the assets have been aggregated into one reportable segment.

Investment in Hotel Properties

The Company allocates the purchase price of acquired hotel properties based on the fair value of the acquired land, land improvements, building, furniture, fixtures and equipment, identifiable intangible assets or liabilities, other assets and assumed liabilities. Intangible assets may include certain value associated with the on-going operations of the hotel business being acquired as part of the hotel property acquisition. Acquired intangible assets that derive their values from real property or an interest in real property, are inseparable from that real property or interest in real property, and do not produce or contribute to the production of income other than consideration for the use or occupancy of space, are recorded as a component of the related real estate asset in our Condensed Consolidated Financial Statements. Identifiable intangible assets or liabilities may also arise from assumed contractual arrangements as part of the acquisition of the hotel property, including terms that are above or below market compared to an estimated fair market value of the agreement on the acquisition date. We determine the acquisition-date fair values of all assets and assumed liabilities using methods similar to those used by independent appraisers, including using a discounted cash flow analysis that uses appropriate discount or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. Acquisition costs are expensed as incurred.

Our hotel properties and related assets are recorded at cost, less accumulated depreciation. We capitalize the costs of significant additions and improvements that materially extend a property’s life. These costs may include hotel refurbishment, renovation, and remodeling expenditures, as well as certain indirect internal costs related to construction projects. We expense the cost of repairs and maintenance as incurred.

We generally depreciate our hotel properties and related assets using the straight-line method over their estimated useful lives as follows:



Classification		Estimated Useful Lives
Buildings and improvements		6 to 40 years
Furniture, fixtures and equipment		2 to 15 years

We periodically re-evaluate asset lives based on current assessments of remaining utilization, which may result in changes in estimated useful lives. Such changes are accounted for prospectively and will increase or decrease future depreciation expense.

When depreciable property and equipment is retired or disposed, the related costs and accumulated depreciation are removed from the balance sheet and any gain or loss is reflected in current operations.

On a limited basis, we provide financing to developers of hotel properties for development projects. We evaluate these arrangements to determine if we participate in residual profits of the hotel property through the loan provisions or other agreements. Where we conclude that these arrangements are more appropriately treated as an investment in the hotel property, we reflect the loan as an investment in hotel properties under development in our Condensed Consolidated Balance Sheets. If classified as hotel properties under development, no interest income is recognized on the loan and interest expense is capitalized on our investment in the hotel property during the construction period.

We monitor events and changes in circumstances for indicators that the carrying value of a hotel property or land held for development may be impaired. Additionally, we perform at least annual reviews to monitor the factors that could trigger an impairment. Factors that could trigger an impairment analysis include, among others: i) significant underperformance relative to historical or anticipated operating results, ii) significant changes in the manner of use of a property or the strategy of our overall business, including changes in the estimated holding periods for hotel properties and land parcels, iii) a significant increase in competition, iv) a significant adverse change in legal factors or regulations, and v) significant negative industry or economic trends. When such factors are identified, we prepare an estimate of the undiscounted future cash flows of the specific property and determine if the carrying amount of the asset is recoverable. If an impairment is identified, we estimate the fair value of the property based on discounted cash flows or sales price if the property is under contract and an adjustment is made to reduce the carrying value of the property to its estimated fair value.

Intangible Assets

We amortize intangible assets with determined finite useful lives using the straight-line method. We do not amortize intangible assets with indefinite useful lives, but we evaluate these assets for impairment annually or at interim periods if events or circumstances indicate that the asset may be impaired.

Assets Held for Sale

We periodically review our hotel properties and our land held for development based on established criteria such as age, type of franchise, adverse economic and competitive conditions, and strategic fit to identify properties that we believe are either non-strategic or no longer complement our business. Based on our review, we periodically market properties for sale that no longer meet our investment criteria.

We classify assets as Assets Held for Sale in the period in which certain criteria are met, including when the sale of the asset within one year is probable. Assets classified as Assets Held for Sale are no longer depreciated and are carried at the lower of carrying amount or fair value less selling costs.

Variable Interest Entities

We consolidate variable interest entities (“VIE”) if we determine that we are the primary beneficiary of the entity. When evaluating the accounting for a VIE, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance relative to other economic interest holders. We determine our rights, if any, to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE by considering the economic interest in the entity, regardless of form, which may include debt, equity, management and servicing fees, or other contractual arrangements. We consider other relevant factors including each entity’s capital structure, contractual rights to earnings or obligations for losses, subordination of our interests relative to those of other investors, contingent payments, and other contractual arrangements that may be economically significant.

Additionally, we have in the past and may in the future enter into purchase and sale transactions in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (“IRC”), for the exchange of like-kind property to defer taxable gains on the sale of properties (“1031 Exchange”). For reverse transactions under a 1031 Exchange in which we purchase a new property prior to selling the property to be matched in the like-kind exchange (we refer to a new property being acquired by us in the 1031 Exchange prior to the sale of the related property as a “Parked Asset”), legal title to the Parked Asset is held by a qualified intermediary engaged to execute the 1031 Exchange until the sale transaction and the 1031 Exchange is completed. We retain essentially all of the legal and economic benefits and obligations related to the Parked Assets prior to completion of the 1031 Exchanges. As such, the Parked Assets are included in our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations as a VIE until legal title is transferred to us upon completion of the 1031 Exchange.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At times, cash on deposit may exceed the federally insured limit. We maintain our cash with high credit quality financial institutions.

Restricted Cash

Restricted cash consists of certain funds maintained in escrow for property taxes, insurance, and certain capital expenditures. Funds may be disbursed from the account upon proof of expenditures and approval from the lender or other party requiring the restricted cash reserves.

Trade Receivables and Credit Policies

We grant credit to qualified customers, generally without collateral, in the form of trade accounts receivable. Trade receivables result from the rental of hotel guestrooms and the sales of food, beverage, and banquet services and are payable under normal trade terms. Trade receivables are stated at the amount billed to the customer and do not accrue interest.

We regularly review the collectability of our trade receivables. A provision for losses is determined on the basis of previous loss experience and current economic conditions.

Deferred Charges, net

Initial franchise fees are capitalized and amortized over the term of the franchise agreement using the straight-line method.

Deferred Financing Fees

In accordance with ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, debt issuance costs are presented as a direct deduction from the carrying value of the debt liability on the Condensed Consolidated Balance Sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. All periods have been reclassified to conform to this presentation.

Non-controlling Interests

Non-controlling interests represent the portion of equity in a consolidated entity held by owners other than the consolidating parent. Non-controlling interests are reported in the Condensed Consolidated Balance Sheets within equity, separately from stockholders’ equity. Revenue, expenses and net income attributable to both the Company and the non-controlling interests are reported in the Condensed Consolidated Statements of Operations.

Our Condensed Consolidated Financial Statements include non-controlling interests related to common units of limited partnership interests (“Common Units”) in the Operating Partnership held by unaffiliated third parties.

Revenue Recognition

We recognize revenue when guestrooms are occupied, services have been rendered or fees are earned. Revenues are recorded net of any sales and other taxes collected from customers. All discounts are recorded as a reduction to revenue. Cash received prior to guest arrival is recorded as an advance from the customer and is recognized at the time of occupancy.

Sales and Other Taxes

We have operations in states and municipalities that impose sales or other taxes on certain sales. We collect these taxes from our customers and remit the entire amount to the various governmental units. The taxes collected and remitted are excluded from revenues and are included in accrued expenses until remitted.

Equity-Based Compensation

Our 2011 Equity Incentive Plan, which was amended and restated effective June 15, 2015 (as amended, the “Equity Plan”), provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other stock-based awards. We account for the stock options granted upon completion of our IPO at fair value using the Black-Scholes option-pricing model and we account for all other awards of equity, including time-based and performance-based stock awards, using the grant date fair value of those equity awards. Restricted stock awards with performance-based vesting conditions are market-based awards tied to total stockholder return and are valued using a Monte Carlo simulation model in accordance with ASC Topic 718, Compensation — Stock Compensation. We expense the fair value of awards under the Equity Plan ratably over the vesting period and market-based awards are not adjusted for performance. The amount of stock-based compensation expense may be subject to adjustment in future periods due to a change in forfeiture assumptions or modification of previously granted awards.

Derivative Financial Instruments and Hedging

All derivative financial instruments are recorded at fair value and reported as a derivative financial instrument asset or liability in our Condensed Consolidated Balance Sheets. We use interest rate derivatives to hedge our risks on variable-rate debt. Interest rate derivatives could include swaps, caps and floors. We assess the effectiveness of each hedging relationship by comparing changes in fair value or cash flows of the derivative financial instrument with the changes in fair value or cash flows of the designated hedged item or transaction.

For interest rate derivatives designated as cash flow hedges, the effective portion of changes in fair value is initially reported as a component of accumulated other comprehensive loss in the equity section of our Condensed Consolidated Balance Sheets and reclassified to interest expense in our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. The ineffective portion of changes in fair value is recognized in current earnings in Other Income (Expense) in the Condensed Consolidated Statements of Operations.

Income Taxes

We have elected to be taxed as a REIT under certain provisions of the IRC. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute annually to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, which does not necessarily equal net income as calculated in accordance with GAAP. As a REIT, we generally will not be subject to federal income tax (other than taxes paid by our TRS at regular corporate income tax rates) to the extent we distribute 100% of our REIT taxable income to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.

Substantially all of our assets are held by and all of our operations are conducted through our Operating Partnership. Partnerships are not subject to U.S. federal income taxes as revenues and expenses pass through to and are taxed on the owners. Generally, the states and cities where partnerships operate follow the U.S. federal income tax treatment. However, there are a limited number of local and state jurisdictions that tax the taxable income of the Operating Partnership. Accordingly, we provide for income taxes in these jurisdictions for the Operating Partnership.

Taxable income related to our TRS is subject to federal, state and local income taxes at applicable tax rates. Our consolidated income tax provision includes the income tax provision related to the operations of the TRS as well as state and local income taxes related to the Operating Partnership.

Where required, we account for federal and state income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for: i) the future tax consequences attributable to differences between carrying amounts of existing assets and liabilities based on GAAP and the respective carrying amounts for tax purposes, and ii) operating losses and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of the change in tax rates. However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized based on consideration of available evidence, including future reversals of taxable temporary differences, future projected taxable income and tax planning strategies.

We perform a review of any uncertain tax positions and if necessary will record expected future tax consequences of uncertain tax positions in the financial statements.

Fair Value Measurement

Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:



Level 1:		Observable inputs such as quoted prices in active markets.
Level 2:		Directly or indirectly observable inputs, other than quoted prices in active markets.
Level 3:		Unobservable inputs in which there is little or no market information, which require a reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of the following valuation techniques:



Market approach:		Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Cost approach:		Amount required to replace the service capacity of an asset (replacement cost).
Income approach:		Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models).

Our estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

We elected not to use the fair value option for cash and cash equivalents, restricted cash, trade receivables, prepaid expenses and other, debt, accounts payable, and accrued expenses and other. With the exception of our fixed-rate debt (See “Note 4 — Debt”), the carrying amounts of these financial instruments approximate their fair values due to their short-term nature or variable interest rates.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts reported in previous periods have been reclassified to conform to the current presentation primarily as a result of adopting new accounting standards in the current year. Reclassifications had no net effect on the Company’s previously reported consolidated financial position or consolidated results of operations.

New Accounting Standards

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting requirements surrounding the measurement of financial instruments and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. ASU No. 2016-01 is effective for our fiscal year commencing on January 1, 2018. We do not anticipate that the adoption of ASU No. 2016-01 will have a material effect on our consolidated financial position or our consolidated results of operations.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which changes lessee accounting to reflect the financial liability and right-of-use asset that are inherent to leasing an asset on the balance sheet. ASU No. 2016-02 is effective for our fiscal year commencing on January 1, 2019, but early adoption is permitted. We are evaluating the effect that ASU 2016-02 will have on our Condensed Consolidated Financial Statements and related disclosures. We have not yet selected a transition date nor have we determined the effect of ASU No. 2016-02 on our consolidated financial position or consolidated results of operations.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies the accounting for income taxes for certain equity-based awards to employees. ASU No. 2016-09 is effective for our fiscal year commencing on January 1, 2017. We do not anticipate that the adoption of ASU No. 2016-09 will have a material effect on our consolidated financial position or our consolidated results of operations.

NOTE 3 - INVESTMENT IN HOTEL PROPERTIES, NET

Investment in Hotel Properties, net

Investment in hotel properties, net at June 30, 2016 and December 31, 2015 is as follows (in thousands):



	June 30, 2016			December 31, 2015
Land	$	161,914		$	149,996
Hotel buildings and improvements	1,311,348			1,222,017
Construction in progress	15,006			6,555
Furniture, fixtures and equipment	124,388			123,332
	1,612,656			1,501,900
Less accumulated depreciation	(196,023		)	(168,493		)
	$	1,416,633		$	1,333,407

Assets Held for Sale

Assets held for sale at June 30, 2016 and December 31, 2015 include the following (in thousands):



	June 30, 2016		December 31, 2015
Land	$	11,688	$	24,250
Hotel buildings and improvements	49,581		97,249
Furniture, fixtures and equipment	7,413		10,906
Franchise fees and other	480		733
Total	$	69,162	$	133,138

On June 2, 2015, the Operating Partnership and certain affiliated entities entered into two separate agreements, as amended on July 15, 2015 (collectively, the "ARCH Agreements"), to sell a portfolio of 26 hotels containing an aggregate of 2,793 guestrooms to affiliates of American Realty Capital Hospitality Trust, Inc. ("ARCH") for an aggregate cash purchase price of approximately $347.4 million. As a result of the ARCH Agreements, we classified the hotel properties to be sold pursuant to the ARCH Agreements as Assets Held for Sale. The hotels were to be sold in three separate closings. The first closing of 10 hotels containing 1,090 guestrooms was completed on October 15, 2015 for an aggregate cash payment of $150.1 million and was executed through forward and reverse 1031 Exchanges to defer taxable gains on the sale of the hotels.

On December 29, 2015, we and ARCH agreed to terminate the ARCH Agreement with respect to ARCH’s right to acquire fee simple interests in 10 hotels containing a total of 996 guestrooms for an aggregate purchase price of $89.1 million at a closing that had been scheduled to occur on December 29, 2015 (the “Terminated Purchase Agreement”). As a result of the termination, ARCH forfeited and we retained the $9.1 million earnest money deposit made by ARCH under the ARCH Agreements and the parties were released from further obligations, except those which expressly survive the termination of the ARCH Agreement pursuant to its terms.

On February 11, 2016, we completed the sale of six hotels to ARCH for an aggregate purchase price of $108.3 million. We provided seller-financing (as described below) to ARCH of $20.0 million to consummate the transaction. The proceeds from the sale were used to complete certain reverse 1031 Exchanges. The hotels acquired by us to complete the reverse 1031 Exchanges included the 179-guestroom Courtyard by Marriott in Atlanta (Decatur), GA on October 20, 2015 for a purchase price of $44.0 million and the 226-guestroom Courtyard by Marriott in the West End of Nashville, TN on January 19, 2016 for a purchase price of $71.0 million. The completion of the reverse 1031 Exchanges resulted in the deferral of taxable gains for tax purposes of approximately $74.0 million and the pay-down of our unsecured revolving credit facility by $105.0 million. Additionally, we repaid a mortgage loan totaling $5.8 million related to the assets sold to ARCH. The sale to ARCH resulted in a $56.8 million gain, of which $20.0 million was initially deferred related to the seller financing. Through June 30, 2016, we have recognized $2.0 million of the deferred gain upon receipt of scheduled repayments of the principal balance of the loan from ARCH.

On February 11, 2016, the Company and American Realty Capital Hospitality Portfolio SMT ALT, LLC, an affiliate of ARCH, as substitute purchaser (“New ARCH Purchaser”), entered into a letter agreement (the “Reinstatement Agreement”) and agreed, subject to the terms and conditions of the Reinstatement Agreement, to reinstate the Terminated Purchase Agreement in its entirety, except as modified by the Reinstatement Agreement (the Terminated Purchase Agreement, as reinstated and modified by the Reinstatement Agreement, is referred to herein as the “Reinstated Purchase Agreement”), to make null and void the prior termination of the Terminated Purchase Agreement and to proceed with the proposed sale of the 10 hotels (the “Reinstated Hotels”) pursuant to the Reinstated Purchase Agreement for an aggregate purchase price of $89.1 million. The Reinstated Hotels are being sold to the New ARCH Purchaser as part of the ARCH Sale.

The Reinstatement Agreement required the New ARCH Purchaser to deposit non-refundable earnest money in the amount of $7.5 million (the “New Deposit”) with an escrow agent to support the closing of the Reinstated Hotels. The New Deposit is non-refundable to the New ARCH Purchaser except in limited circumstances. The prior earnest money deposit in the amount of $9.1 million that was retained by us in connection with the termination of the Terminated Purchase Agreement will not be credited to the New ARCH Purchaser against the purchase price for the Reinstated Hotels, and the purchase price remains the same. The closing of the sale of the Reinstated Hotels is scheduled to occur on or before December 30, 2016 (the “New Closing Date”), or at such later date as the closing may be adjourned or extended in accordance with the express terms of the Reinstatement Agreement. If the closing of the Reinstated Hotels does not occur as required by the Reinstatement Agreement because of a default by the New ARCH Purchaser, then the New ARCH Purchaser will forfeit the New Deposit to us as liquidated damages.

Prior to the New Closing Date, we have the right to continue to market and ultimately sell, without the consent of the New ARCH Purchaser, any or all of the Reinstated Hotels to bona fide third-party purchasers that are not affiliates of ours. If we sell some, but not all of the Reinstated Hotels to bona fide third-party purchasers, then the purchase price to be paid by the New ARCH Purchaser for the remaining Reinstated Hotels will be reduced, but the New Deposit will remain with the escrow agent except in limited circumstances. We are actively marketing the Reinstated Hotels to other potential buyers. During the three months ended June 30, 2016, we completed the sale of two of the Reinstated Hotels to purchasers that are unrelated to the New ARCH Purchaser. Accordingly, the $89.1 million selling price of the Reinstated Hotels will be reduced as provided above.

On February 11, 2016, the Operating Partnership entered into a loan agreement with ARCH, as borrower, which provides for a loan by the Operating Partnership to ARCH in the amount of $27.5 million (the “Loan”). The proceeds of the Loan were required to be applied by ARCH as follows: (i) $20.0 million was applied toward the payment of a portion of the $108.3 million purchase price for the six hotels containing 707 guestrooms, which were acquired by ARCH on February 11, 2016 as part of the ARCH Sale; and (ii) the remaining $7.5 million was applied by ARCH to fund the New Deposit under the Reinstated Purchase Agreement. The Loan is recorded net of deferred gains in Investment in Real Estate Loans, net on our Condensed Consolidated Balance Sheet at June 30, 2016.

The entire principal amount of the Loan, and any accrued and unpaid interest, will be due and payable on February 11, 2017 (the “Maturity Date”), unless extended pursuant to the Loan agreement. During the three months ended June 30, 2016, ARCH made scheduled principal payments of $2.0 million and subsequent to June 30, 2016, ARCH made an additional scheduled principal payment of $1.0 million. ARCH has two additional scheduled principal payments prior to the Maturity Date of $1.0 million each due in August and September 2016 (the “Amortization Payments”). The Loan may be prepaid in whole or in part at any time by ARCH, without payment of any penalty or premium. ARCH may extend the maturity date of the Loan under certain conditions by up to two years pursuant to two one-year extension options (each an “Extension Option”).

Interest will accrue on the unpaid principal balance of the Loan at a rate of 13.0% per annum from the date of the Loan to the initial Maturity Date, 14.0% per annum during the first extension period and 15.0% per annum during the second extension period. An amount equal to 9.0% per annum is to be paid monthly (the "Monthly Interest"). The remaining 4.0%, 5.0% and 6.0%, as the case may be, will accrue and be compounded monthly (the “PIK”). The PIK must be paid to exercise any Extension Option, otherwise the PIK is payable at the initial Maturity Date. The PIK may be paid in cash prior to the initial Maturity Date, or any extension thereof. ARCH is current with respect to the payment of the Amortization Payments and Monthly Interest.

To secure the payment of the Amortization Payments, ARCH will cause the rents from certain hotel properties or assets of its taxable REIT subsidiaries to be deposited into a separate controlled account (the “Control Account”) and ARCH has granted the Operating Partnership a continuing security interest in all of its right, title and interest in and to the Control Account until the Amortization Payments have been satisfied in full in accordance with the terms of the Loan agreement.

On May 13, 2016, we completed the sale of the Holiday Inn Express & Suites in Irving (Las Colinas), TX for $10.5 million. On June 1, 2016, we completed the sale of the Aloft in Jacksonville, FL for $8.6 million. On June 7, 2016, we completed the sale of the Holiday Inn Express in Vernon Hills, IL for $5.9 million. The proceeds from the sale of these properties were used to complete certain 1031 Exchanges. The hotel acquired by us to complete the reverse 1031 Exchange was the 160-guestroom Residence Inn by Marriott in Atlanta, GA on January 20, 2016 for a purchase price of $38.0 million. The completion of the reverse 1031 Exchange resulted in the deferral of taxable gains of approximately $5.1 million. The sale of the properties during the second quarter of 2016 resulted in the realization of a net gain of $0.6 million.

At December 31, 2015, we held two notes receivable totaling $2.7 million included in Investment in Real Estate Loans, net on our Condensed Consolidated Balance Sheet related to seller-financing for the sale in a prior year of two hotel properties in Emporia, KS (each an "Emporia Property"). The loans had matured and the buyer was in payment default under the terms of the loans. We were awarded legal title to one Emporia Property through foreclosure. We also purchased an additional note receivable from the first priority lien holder for the Emporia Property for which foreclosure proceedings were ongoing to facilitate the completion of the reacquisition of this Emporia Property through a foreclosure.

On April 15, 2016, we completed the sale of the reacquired Emporia Property to a third party purchaser that is unrelated to the prior owner. On May 18, 2016, we completed the sale of the first and second lien notes related to the remaining Emporia Property to the same purchaser. The aggregate selling price of the Emporia assets was approximately $4.5 million. As a result of the foreclosure activities and the sale of the notes, we have no further interest in either Emporia Property.

In addition to the hotel properties related to the ARCH Agreements noted above, Assets Held for Sale at December 31, 2015 included land parcels in Spokane, WA, Fort Myers, FL and Flagstaff, AZ, which were being actively marketed for sale. In addition to the hotel properties related to the ARCH Agreements noted above, Assets Held for Sale at June 30, 2016 included the Hyatt Place in Irving (Las Colinas), TX, which was sold on July 6, 2016, and land parcels in Spokane, WA and Flagstaff, AZ. The land in Fort Myers, FL has been reclassified from Assets Held for Sale during the six months ended June 30, 2016 as the Company no longer intends to sell the parcel.

Hotel Property Acquisitions

A summary of the hotel properties acquired during the six months ended June 30, 2016 and 2015 is as follows (in thousands):



Date Acquired	Franchise/Brand	Location	Purchase Price
First Six Months of 2016
January 19, 2016	Courtyard by Marriott	Nashville, TN	$	71,000
January 20, 2016	Residence Inn by Marriott	Atlanta, GA	38,000
			$	109,000	(1)
First Six Months of 2015
April 13, 2015	Hampton Inn & Suites	Minneapolis, MN	$	38,951
June 18, 2015	Hampton Inn	Boston (Norwood), MA	24,000
June 30, 2015	Hotel Indigo	Asheville, NC	35,000
			$	97,951

(1) The net assets acquired totaled $109,182 due to the purchase at settlement of certain working capital assets and liabilities related to the properties that was in addition to the purchase price of $109,000.

The hotel properties were acquired using funds advanced on our senior unsecured credit facility (See "Note 4 - Debt").

The allocation of the aggregate purchase prices to the fair value of assets and liabilities acquired for the above acquisitions is as follows (in thousands):



	Six Months Ended June 30,
	2016				2015
Land	$	12,173			$	7,602
Hotel buildings and improvements	95,358				83,105
Furniture, fixtures and equipment	2,130				7,017
Other assets	383			(1)	375
Total assets acquired	110,044				98,099
Less other liabilities	(862		)	(1)	(148		)
Net assets acquired	$	109,182			$	97,951


(1)	The net assets acquired totaled $109,182 due to the purchase at settlement of certain working capital assets and liabilities related to the properties that was in addition to the purchase price of $109,000.

Total revenues and net income for hotel properties acquired in the six months ended June 30, 2016 and 2015, which are included in our Condensed Consolidated Statements of Operations, are as follows (in thousands):



	2016 Acquisitions		2015 Acquisitions				2016 Acquisitions		2015 Acquisitions
	For the Three Months Ended June 30,		For the Three Months Ended June 30,				For the Six Months Ended June 30,		For the Six Months Ended June 30,
	2016		2016		2015		2016		2016		2015
Revenues	$	6,267	$	6,462	$	1,912	$	10,511	$	10,513	$	1,912
Net income	$	1,738	$	1,187	$	190	$	2,715	$	370	$	190

The results of operations of acquired hotel properties are included in the Condensed Consolidated Statements of Operations beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information presents the results of operations as if all acquisitions in 2016 and 2015 had taken place on January 1, 2015 and all dispositions had occurred prior to that date. Additionally, the unaudited condensed pro forma information excludes the operating results from discontinued operations and disposed properties that were not classified as discontinued operations after the adoption of ASU No. 2014-08 on January 1, 2015. The unaudited condensed pro forma financial information is for comparative purposes only and is not necessarily indicative of what actual results of operations would have been had the hotel acquisitions and dispositions taken place on or before January 1, 2015. The pro forma amounts exclude the $2.7 million and $39.5 million gain on the sale of the hotel properties during the three and six months ended June 30, 2016, respectively. This information does not purport to be indicative of or represent results of operations for future periods.

The unaudited condensed pro forma financial information for the three and six months ended June 30, 2016 and 2015 is as follows (in thousands, except per share):



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016 (1)		2015		2016 (1)		2015
	(unaudited)				(unaudited)
Revenues	$	125,602	$	118,073	$	239,906	$	224,805
Income from hotel operations	$	50,127	$	45,274	$	93,294	$	84,505
Net income before taxes	$	19,231	$	17,298	$	32,641	$	30,269
Net income	$	19,096	$	16,394	$	30,935	$	28,866
Net income attributable to common stockholders, net of amount allocated to participating securities	$	14,819	$	7,999	$	26,562	$	20,342
Basic net income per share attributable to common stockholders	$	0.17	$	0.09	$	0.31	$	0.24
Diluted net income per share attributable to common stockholders	$	0.17	$	0.09	$	0.30	$	0.23

(1) The pro forma amounts exclude the $2.7 million and $39.5 million gain on the sale of hotel properties during the three and six months ended June 30, 2016, respectively.

NOTE 4 - DEBT

At June 30, 2016, our indebtedness is comprised of borrowings under a $450.0 million senior unsecured credit facility, the 2015 Term Loan (as defined below), and indebtedness secured by first priority mortgage liens on various hotel properties. At December 31, 2015, our indebtedness was comprised of borrowings under the former $300.0 million senior unsecured credit facility, the 2015 Term Loan, and indebtedness secured by first priority mortgage liens on various hotel properties. The weighted average interest rate, after giving effect to our interest rate derivative, for all borrowings was 3.84% at June 30, 2016 and 3.90% at December 31, 2015.

Information about our debt, net of debt issuance costs, is as follows (in thousands):



	June 30, 2016			December 31, 2015
Revolving debt	$	—		$	95,000
Term loans	290,000			215,000
Mortgage loans	338,588			367,096
	628,588			677,096
Unamortized debt issuance costs	(6,191		)	(5,560		)
Debt, net of debt issuance costs	$	622,397		$	671,536

Our total fixed-rate and variable-rate debt, after giving effect to our interest rate derivative, is as follows (in thousands):



	June 30, 2016		December 31, 2015
Fixed-rate debt	$	380,460	$	402,673
Variable-rate debt	248,128		274,423
	$	628,588	$	677,096

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



	June 30, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value		Valuation Technique
Fixed-rate debt	$	305,460	$	311,888	$	327,673	$	321,841	Level 2 - Market approach

At June 30, 2016 and December 31, 2015, we had $75.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between the carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value as a result of changes in the current market rate of interest on the valuation date. For additional information on our use of derivatives as interest rate hedges, refer to "Note 5 — Derivative Financial Instruments and Hedging."

Former $300 Million Senior Unsecured Credit Facility

At December 31, 2015, we had a $300.0 million senior unsecured credit facility. The senior unsecured credit facility was comprised of a $225.0 million revolving credit facility (the “$225 Million Revolver”) and a $75.0 million term loan. At December 31, 2015, the maximum amount of borrowing permitted under the senior unsecured credit facility was $300.0 million, of which we had borrowed $170.0 million and $130.0 million was available to borrow. The $300.0 million senior unsecured credit facility was replaced by the $450 million senior unsecured credit facility as described below. The outstanding principal balance of $170.0 million on the former $300.0 million senior unsecured credit facility was transferred to the $450 million senior unsecured credit facility and the former $300.0 million unsecured credit facility was paid off in full and terminated.

$450 Million Senior Unsecured Credit Facility

On January 15, 2016, the Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the loan documentation as a subsidiary guarantor, entered into a $450.0 million senior unsecured facility (the “2016 Unsecured Credit Facility”). The 2016 Unsecured Credit Facility is comprised of a $300.0 million revolving credit facility (the “$300 Million Revolver”) and a $150.0 million term loan (the “$150 Million Term Loan”). At June 30, 2016, the maximum amount of borrowing provided by the 2016 Unsecured Credit Facility was $450.0 million, of which we had $150.0 million borrowed and $300.0 million available to borrow.

The 2016 Unsecured Credit Facility has an accordion feature which will allow the Company to increase the total commitments by an aggregate of up to $150.0 million on the $300 Million Revolver and $150 Million Term Loan. The $300 Million Revolver will mature on March 31, 2020 and can be extended to March 31, 2021 at the Company’s option, subject to certain conditions. The $150 Million Term Loan will mature on March 31, 2021.

The Company pays interest on revolving credit advances at varying rates based upon, at the Company’s option, either (i) 1, 2, 3, or 6-month LIBOR, plus a LIBOR margin between 1.50% and 2.25%, depending upon the Company’s leverage ratio (as defined in the 2016 Unsecured Credit Facility agreement), or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, the federal funds rate plus 0.50%, and 1-month LIBOR plus 1.00%, plus a base rate margin between 0.50% and 1.25%, depending upon the Company’s leverage ratio. The interest rate at June 30, 2016 was 2.13%.

Financial and Other Covenants. We are required to comply with a series of financial and other covenants to borrow under this credit facility. At June 30, 2016, we were in compliance with all required covenants.

Unencumbered Assets. The 2016 Unsecured Credit Facility is unsecured. However, borrowings under the 2016 Unsecured Credit Facility are limited by the value of hotel assets that qualify as unencumbered assets. At June 30, 2016, the Company had 44 unencumbered hotel properties supporting the 2016 Unsecured Credit Facility.

An interest rate swap entered into on September 5, 2013 with a notional value of $75.0 million, an effective date of January 2, 2014 and a maturity date of October 10, 2018 remains outstanding. This interest rate swap was designated as a cash flow hedge and effectively fixes LIBOR at 2.04% and the interest rate on borrowings under a portion of the $150 Million Term Loan to a fixed rate of 3.64%.

Unsecured Term Loan

On April 7, 2015, our Operating Partnership, as borrower, the Company, as parent guarantor, and each party executing the term loan documentation as a subsidiary guarantor, entered into a $125.0 million unsecured term loan (the “2015 Term Loan”). The 2015 Term Loan matures on April 7, 2022 and has an accordion feature which allows us to increase the total commitments by an aggregate of $75.0 million prior to the maturity date, subject to certain conditions. On April 21, 2015, the Company exercised $15.0 million of the accordion and added American Bank, N.A. as a lender under the facility.

At closing, we were advanced the full $125.0 million amount of the 2015 Term Loan and on April 21, 2015, we were advanced the $15.0 million exercised on the accordion. All proceeds were used to pay down the principal balance of our $225 million revolver provided under the former $300.0 million senior unsecured credit facility. We pay interest on advances equal to the sum of LIBOR or the administrative agent’s prime rate and the applicable margin. We are currently paying interest at 2.43% based on LIBOR at June 30, 2016.

Borrowings under the 2015 Term Loan are limited by the value of hotel assets that qualify as unencumbered assets. As of June 30, 2016, 44 of our hotel properties qualified as, and are deemed to be, unencumbered assets supporting the 2015 Term Loan.

Term Loans

At June 30, 2016, we had $628.6 million in secured and unsecured term loans outstanding (including the $150 Million Term Loan and the 2015 Term Loan described above). Term loans totaling $338.6 million are secured primarily by first mortgage liens on certain hotel properties.

NOTE 5 - DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Information about our derivative financial instruments at June 30, 2016 and December 31, 2015 is as follows (dollars in thousands):



	June 30, 2016						December 31, 2015
	Number of Instruments	Notional Amount		Fair Value			Number of Instruments	Notional Amount		Fair Value
Interest rate swaps (liability)	1	$	75,000	$	(2,477	)	1	$	75,000	$	(1,811	)
	1	$	75,000	$	(2,477	)	1	$	75,000	$	(1,811	)

Our interest rate swap has been designated as a cash flow hedge and is valued using a market approach, which is a Level 2 valuation technique. At June 30, 2016 and December 31, 2015, our remaining interest rate swap was in a liability position. The interest rate swap expires on October 1, 2018. We are not required to post any collateral related to this agreement and are not in breach of any financial provisions of the agreement.

The table below details the presentation in the financial statements of the gain or loss recognized on derivative financial instruments designated as cash flow hedges (in thousands):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Loss recognized in accumulated other comprehensive income on derivative financial instruments (effective portion)	$	(318	)	$	40		$	(1,256	)	$	(1,146	)
Loss reclassified from accumulated other comprehensive income to interest expense (effective portion)	$	(303	)	$	(425	)	$	(609	)	$	(850	)
Loss recognized in Other Expense (ineffective portion)	$	(19	)	$	—		$	(19	)	$	(1	)

Amounts reported in accumulated other comprehensive income related to derivative financial instruments will be reclassified to interest expense as interest payments are made on the hedged variable-rate debt. In the next twelve months, we estimate that an additional $1.2 million will be reclassified from other comprehensive income as an increase to interest expense.

NOTE 6 - EQUITY

Common Stock

The Company is authorized to issue up to 500,000,000 shares of common stock, $0.01 par value per share. Each outstanding share of our common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors and, except as may be provided with respect to any other class or series of stock, the holders of such shares possess the exclusive voting power.

Changes in common stock during the six months ended June 30, 2016 and 2015 were as follows:



	For the Six Months Ended June 30,
	2016		2015
Beginning common shares outstanding	86,793,521		86,149,720
Common Unit redemptions	53,636		114,947
Grants under the Equity Plan	446,280		320,845
Annual grants to independent directors	32,180		30,440
Common stock issued for director fees	4,073		3,055
Forfeitures	(406	)	(46,030	)
Other	(61,622	)	(36,385	)
Ending common shares outstanding	87,267,662		86,536,592

Preferred Stock

The Company is authorized to issue up to 100,000,000 shares of preferred stock, $0.01 par value per share, of which 88,600,000 is currently undesignated and 2,000,000 shares have been designated as 9.25% Series A Cumulative Redeemable Preferred Stock (the “Series A preferred shares”), 3,000,000 shares have been designated as 7.875% Series B Cumulative Redeemable Preferred Stock (the “Series B preferred shares”), 3,400,000 shares have been designated as 7.125% Series C Cumulative Redeemable Preferred Stock (the “Series C preferred shares”), and 3,000,000 shares have been designated as 6.45% Series D Cumulative Redeemable Preferred Stock (the "Series D preferred shares").

The Company completed the offering of 3,000,000 Series D preferred shares on June 28, 2016 for net proceeds of $72.3 million, after the underwriting discount and offering-related expenses of $2.7 million.

The Series A preferred shares, Series B preferred shares, Series C preferred shares, and Series D preferred shares (collectively, the “Preferred Shares”) rank senior to our common stock and on parity with each other with respect to the payment of dividends and distributions of assets in the event of a liquidation, dissolution, or winding up. The Preferred Shares do not have any maturity date and are not subject to mandatory redemption or sinking fund requirements. The Company may not redeem the Series A preferred shares, Series B preferred shares, Series C preferred shares or Series D preferred shares prior to October 28, 2016, December 11, 2017, March 20, 2018, and June 28, 2021, respectively, except in limited circumstances relating to the Company’s continuing qualification as a REIT or in connection with certain changes in control. After those dates, the Company may, at its option, redeem the applicable Preferred Shares, in whole or from time to time in part, by payment of $25 per share, plus any accumulated, accrued and unpaid distributions up to, but not including, the date of redemption. If the Company does not exercise its rights to redeem the Preferred Shares upon certain changes in control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of the Company’s common shares based on a defined formula, subject to a share cap, or alternative consideration. The share cap on each Series A preferred share is 5.92417 shares of common stock, each Series B preferred share is 5.6497 shares of common stock, each Series C preferred share is 5.1440 shares of common stock, and each Series D preferred share is 3.9216 shares of common stock, all subject to certain adjustments.

The Company pays dividends at an annual rate of $2.3125 for each Series A preferred share, $1.96875 for each Series B preferred share, $1.78125 for each Series C preferred share, and $1.6125 for each Series D preferred share. Dividend payments are made quarterly in arrears on or about the last day of February, May, August and November of each year.

Non-controlling Interests in Operating Partnership

Pursuant to the limited partnership agreement of our Operating Partnership, beginning on February 14, 2012, the unaffiliated third parties who hold Common Units in our Operating Partnership have the right to cause us to redeem their Common Units in exchange for cash based upon the fair value of an equivalent number of our shares of common stock at the time of redemption; however, the Company has the option to redeem with shares of our common stock on a one-for-one basis. The number of shares of our common stock issuable upon redemption of Common Units may be adjusted upon the occurrence of certain events such as share dividend payments, share subdivisions or combinations.

At June 30, 2016 and December 31, 2015, unaffiliated third parties owned 462,385 and 516,021, respectively, of Common Units of the Operating Partnership, representing less than a 1% limited partnership interest in the Operating Partnership.

We classify outstanding Common Units held by unaffiliated third parties as non-controlling interests in the Operating Partnership, a component of equity in the Company’s Condensed Consolidated Balance Sheets. The portion of net income allocated to these Common Units is reported on the Company’s Condensed Consolidated Statement of Operations as net income attributable to non-controlling interests of the Operating Partnership.

Leasehold Venture

At December 31, 2015, we owned a majority interest in a joint venture that owns a fee simple interest in a hotel property and we also owned a minority interest in a related joint venture (“Leasehold Venture”) that holds a leasehold interest in the property. On June 30, 2016, our joint venture partner in the Leasehold Venture exercised a put option to sell its joint venture interest in the Leasehold Venture to us for $0.4 million. We expect to finalize the transaction in August 2016 such that we will own 100% of both the Leasehold Venture and the joint venture that owns the fee simple interest in the hotel property effective June 30, 2016.

NOTE 7 - FAIR VALUE MEASUREMENT

The following table presents information about our financial instruments measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, we classify assets and liabilities based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Disclosures concerning financial instruments measured at fair value are as follows (in thousands):



	Fair Value Measurements at June 30, 2016 using
	Level 1		Level 2		Level 3		Total
Liabilities:
Interest rate swaps	$	—	$	2,477	$	—	$	2,477



	Fair Value Measurements at December 31, 2015 using
	Level 1		Level 2		Level 3		Total
Liabilities:
Interest rate swaps	$	—	$	1,811	$	—	$	1,811

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Restricted Cash

The Company maintains reserve funds for property taxes, insurance, capital expenditures and replacement or refurbishment of furniture, fixtures and equipment at our hotel properties in accordance with management, franchise or mortgage loan agreements. These agreements generally require the Company to reserve cash ranging from 3% to 5% of the revenues of the individual hotel in restricted cash escrow accounts. Any unused restricted cash balances revert to the Company upon the termination of the underlying agreement or may be released to the Company from the restricted cash escrow accounts upon proof of expenditures and approval from the lender or other party requiring the restricted cash reserves. At June 30, 2016 and December 31, 2015, approximately $25.4 million and $23.1 million, respectively, was available in restricted cash reserve funds for property taxes, insurance, capital expenditures and replacement or refurbishment of furniture, fixtures and equipment at our hotel properties.

Ground Leases

We lease land for one hotel property in Duluth, GA under the terms of an operating ground lease agreement expiring April 1, 2069. We also have two prepaid land leases for two hotel properties in Portland, OR which expire in June of 2084 and have a remaining prepaid balance of $3.3 million at both June 30, 2016 and December 31, 2015. We have one option to extend these leases for an additional 14 years. We lease land for one hotel property in Houston (Galleria Area), TX under the terms of an operating ground lease agreement with an initial termination date of April 20, 2053 with one option to extend for an additional 10 years. We lease land for one hotel property in Austin, TX with an initial lease termination date of May 31, 2050. We lease land for one hotel property in Baltimore (Hunt Valley), MD with a lease termination date of December 31, 2019 and twelve remaining options to extend for five additional years per extension. Total rent expense for the three months ended June 30, 2016 and 2015 was $0.5 million and $0.4 million, respectively. Total rent expense for the six months ended June 30, 2016 and 2015 was $0.8 million and $0.6 million, respectively.

In addition, we lease land for one hotel property in Garden City, NY under a PILOT (payment in lieu of taxes) lease. We pay a reduced amount of property tax each year of the lease as rent. The lease expires on December 31, 2019. Upon expiration of the lease, we expect to exercise our right to acquire a fee simple interest in the hotel for a nominal consideration.

Franchise Agreements

All of our hotel properties operate under franchise agreements with major hotel franchisors. The terms of our franchise agreements generally range from 10 to 20 years with various extension provisions. Each franchisor receives franchise fees ranging from 2% to 6% of each hotel property’s gross revenue, and some agreements require that we pay marketing fees of up to 4% of gross revenue. In addition, some of these franchise agreements require that we deposit a percentage of the hotel property’s gross revenue, generally not more than 5%, into a reserve fund for capital expenditures. During the three months ended June 30, 2016 and 2015, we expensed fees related to our franchise agreements of $10.0 million and $9.9 million, respectively. During the six months ended June 30, 2016 and 2015, we expensed fees related to our franchise agreements of $19.1 million and $18.4 million, respectively.

Management Agreements

Our hotel properties operate pursuant to management agreements with various third-party management companies. The terms of our management agreements range from three to twenty-five years with various extension provisions. Each management company receives a base management fee, generally a percentage of total hotel property revenues. In some cases there are also monthly fees for certain services, such as accounting, based on number of guestrooms. Generally there are also incentive fees based on attaining certain financial thresholds. Management fee expenses for the three months ended June 30, 2016 and 2015 were $5.7 million and $5.2 million, respectively. Management fee expenses for the six months ended June 30, 2016 and 2015 were $10.7 million and $9.9 million, respectively.

Litigation

We are involved from time to time in litigation arising in the ordinary course of business; however, we are not currently aware of any actions against us that we believe would have a material adverse effect on our financial condition or results of operations.

NOTE 9 - EQUITY-BASED COMPENSATION

Our currently outstanding equity-based awards were issued under the Equity Plan which provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based awards or incentive awards.

Stock options granted may be either incentive stock options or non-qualified stock options. Vesting terms may vary with each grant, and stock option terms are generally five to ten years. We have outstanding equity-based awards in the form of stock options and restricted stock awards. All of our outstanding equity-based awards are classified as equity awards.

Stock Options Granted Under our Equity Plan

There was no stock option activity for the six months ended June 30, 2016 and the number of stock options outstanding and exercisable totaled 470,000 with a weighted average exercise price of $9.75 per share, weighted average contractual term of 4.7 years and an aggregate intrinsic value of $1.6 million.

Time-Based Restricted Stock Awards Made Pursuant to Our Equity Plan

On February 24, 2016, we granted time-based restricted stock awards for 22,010 shares of common stock to certain of our non-executive employees. The awards vest over a four-year period based on continued service (20% on March 9, 2017, 2018 and 2019, and 40% on March 9, 2020). On March 8, 2016, we granted time-based restricted stock awards for 169,707 shares of common stock to our executive officers. The awards vest 25% on March 9, 2017, 25% on March 9, 2018 and 50% on March 9, 2019, based on continuous service through the vesting dates or in certain circumstances upon a change in control.

On March 3, 2015, we granted time-based restricted stock awards for 149,410 shares of common stock to our executive officers and management. With the exception of 37,230 shares that cliff vest in total on March 9, 2018 based on continuous service through the vesting date or a change in control, 25% of the awards vested on March 9, 2016 and the remaining awards vest 25% on March 9, 2017 and 50% on March 9, 2018, unless vesting is accelerated upon a change in control.

On April 24, 2015, we granted a time-based restricted stock award for 16,930 shares of common stock to one of our executive officers. This award vested during the third quarter of 2015.

The holders of these grants have the right to vote the related shares of common stock and receive all dividends declared and paid whether or not vested. The fair value of time-based restricted stock awards is calculated based on the market value of our common stock on the date of grant.

The following table summarizes time-based restricted stock award activity under the Equity Plan for the six months ended June 30, 2016:



	Number of Shares		Weighted Average Grant Date Fair Value		Aggregate Current Value
			(per share)		(in thousands)
Non-vested December 31, 2015	250,011		$	12.03	$	2,988
Granted	191,717		11.35
Vested	(82,869	)	11.06
Forfeited	(406	)	10.27
Outstanding at June 30, 2016	358,453		$	11.89	$	4,746

Performance-Based Restricted Stock Awards Made Pursuant to Our Equity Plan

On March 8, 2016, we granted performance-based restricted stock awards for 254,563 shares of common stock to our executive officers. Our performance-based restricted stock awards are market-based awards and are accounted for based on the fair value of our common stock on the grant date. The fair value of the performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model. These awards generally vest based on the Company’s percentile ranking within the SNL U.S. REIT Hotel Index at the end of the period beginning on March 8, 2016 and ending on the earlier of March 8, 2019, or upon a change in control. The awards require continued service during the measurement period and are subject to the other conditions described in the Equity Plan or award document.

On March 3, 2015, we granted performance-based restricted stock awards for 154,505 shares of common stock to certain of our executive officers. Our performance-based restricted stock awards are market-based awards and are accounted for based on the fair value of our common stock on the grant date. The fair value of the performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model. These awards vest based on the Company’s percentile ranking within the SNL U.S. REIT Hotel Index at the end of the period beginning on January 1, 2015 and ending on the earlier of December 31, 2017, or upon a change in control. The awards require continued service during the measurement period and are subject to the other conditions described in the Equity Plan or award document.

The number of shares the executive officers may earn under these awards range from zero shares to twice the number of shares granted based on the Company’s percentile ranking within the index at the end of the measurement period. In addition, a portion of the performance-based shares may be earned based on the Company's absolute total shareholder return calculated during the performance period. The holders of these grants have the right to vote the granted shares of common stock and any dividends declared will be accumulated and will be subject to the same vesting conditions as the awards. Further, if additional shares are earned based on the Company’s percentile ranking within the index, dividend payments will be issued as if the additional shares had been held throughout the measurement period.

The following table summarizes performance-based restricted stock activity under the Equity Plan for the six months ended June 30, 2016:



	Number of Shares		Weighted Average Grant Date Fair Value (1)		Aggregate Current Value
			(per share)		(in thousands)
Non-vested December 31, 2015	308,367		$	12.95	$	3,685
Granted	254,563		13.77
Vested	(113,903	)	7.10
Forfeited	—		—
Outstanding at June 30, 2016	449,027		$	14.90	$	5,945

(1) The amounts included in this column represent the expected future value of the performance-based restricted stock awards calculated using the Monte Carlo simulation valuation model.

Director Stock Awards Made Pursuant to Our Equity Plan

Our non-employee directors have the option to receive shares of our common stock in lieu of cash for their director fees. During the six months ended June 30, 2016, we issued 4,073 shares of our common stock in lieu of cash for director fees and we made an annual grant of 32,180 shares of common stock to our independent directors. The fair value of director stock awards is calculated based on the market value of our common stock on the date of grant.

Equity-Based Compensation Expense

Equity-based compensation expense included in Corporate General and Administrative expenses in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015 was as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Stock options	$	—	$	148	$	55	$	295
Time-based restricted stock	420		354		757		576
Performance-based restricted stock	575		437		956		704
Director stock	394		433		414		433
	$	1,389	$	1,372	$	2,182	$	2,008

We recognize equity-based compensation expense ratably over the vesting period of the equity awards granted. Unrecognized equity-based compensation expense for all non-vested awards was $8.0 million at June 30, 2016 as follows (in thousands):



	Total		2016		2017		2018		2019		2020
Time-based restricted stock	$	3,338	$	840	$	1,505	$	819	$	165	$	9
Performance-based restricted stock	4,706		1,151		2,192		1,168		195		—
	$	8,044	$	1,991	$	3,697	$	1,987	$	360	$	9

NOTE 10 - INCOME TAXES

Income taxes for the interim periods presented have been included in our Condensed Consolidated Financial Statements on the basis of an estimated annual effective tax rate. Our effective tax rate is affected by the mix of earnings and losses by taxing jurisdictions. Our earnings, other than in our TRS, are not generally subject to federal corporate and state income taxes due to our REIT election. However, there are a limited number of local and state jurisdictions that tax the taxable income of the Operating Partnership. Accordingly, we provide for income taxes in these jurisdictions for the Operating Partnership.

We had no unrecognized tax benefits at June 30, 2016. We expect no significant changes in unrecognized tax benefits within the next year.

NOTE 11 - EARNINGS PER SHARE

We apply the two-class method of computing earnings per share, which requires the calculation of separate earnings per share amounts for our non-vested time-based restricted stock awards with non-forfeitable dividends and for our common stock. Our non-vested time-based restricted stock awards with non-forfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. Our non-vested time-based restricted stock awards with non-forfeitable dividends do not have such an obligation so they are not allocated losses.

Below is a summary of the components used to calculate basic and diluted earnings per share (in thousands, except per share):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Numerator:
Net income	$	21,955		$	16,301		$	70,689		$	26,892
Less: Preferred dividends	(4,147		)	(4,147		)	(8,294		)	(8,294		)
Allocation to participating securities	(51		)	(38		)	(80		)	(60		)
Attributable to non-controlling interest	(90		)	(97		)	(339		)	(154		)
Net income attributable to common stockholders, net of amount allocated to participating securities	$	17,667		$	12,019		$	61,976		$	18,384
Denominator:
Weighted average common shares outstanding - basic	86,433			85,831			86,396			85,768
Dilutive effect of equity-based compensation awards	922			1,177			868			1,179
Weighted average common shares outstanding - diluted	87,355			87,008			87,264			86,947
Earnings per share:
Basic	$	0.20		$	0.14		$	0.72		$	0.21
Diluted	$	0.20		$	0.14		$	0.71		$	0.21

All outstanding stock options were included in the computation of diluted earnings per share for the three and six months ended June 30, 2016 and 2015 due to their dilutive effect.

NOTE 12 - SUBSEQUENT EVENTS

Debt and Equity Transactions

On August 1, 2016, we repaid a mortgage loan that had an interest rate of 6.22% and a principal balance of $17.0 million at June 30, 2016. There was no prepayment penalty related to the early repayment of the mortgage loan, which was scheduled to mature on November 1, 2016.

On July 1, 2016, 7,420 Common Units were tendered for redemption and were redeemed for an equivalent number of shares of our common stock.

Dispositions

On July 6, 2016, we completed the sale of the Hyatt Place in Irving (Las Colinas), TX for $14.0 million. This hotel was sold in anticipation of completing certain 1031 Exchanges. As such, the proceeds from the sale of this property are currently held by a qualified intermediary engaged to execute the 1031 Exchanges until the expected transactions are consummated and the 1031 Exchanges are completed.

Acquisitions

We are currently under contract to purchase a 157-guestroom hotel property for $61.4 million. This transaction is expected to close in August 2016.

Dividends

On July 29, 2016, our Board of Directors declared cash dividends of $0.1325 per share of common stock, $0.578125 per share of 9.25% Series A Cumulative Redeemable Preferred Stock, $0.4921875 per share of 7.875% Series B Cumulative Redeemable Preferred Stock, $0.4453125 per share of 7.125% Series C Cumulative Redeemable Preferred Stock and $0.28219 per share of 6.45% Series D Cumulative Redeemable Preferred Stock. These dividends are payable on August 31, 2016 to stockholders of record on August 16, 2016.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2015 and our unaudited interim Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Unless stated otherwise or the context otherwise requires, references in this report to “we,” “our,” “us,” “our company” or “the company” mean Summit Hotel Properties, Inc. and its consolidated subsidiaries.

Cautionary Statement about Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “forecast,” “project,” “potential,” “continue,” “likely,” “will,” “would” or similar expressions. Forward-looking statements in this report include, among others, statements about our business strategy, including acquisition and development strategies, industry trends, estimated revenues and expenses, ability to realize deferred tax assets and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to:


•	financing risks, including the risk of leverage and the corresponding risk of default on our existing indebtedness and potential inability to refinance or extend the maturity of our existing indebtedness as well as the risk of default by borrowers to which we lend or provide seller financing;


•	national, regional and local economic conditions;


•	levels of spending in the business, travel and leisure industries, as well as consumer confidence;


•	adverse changes in, or declining rates of growth with respect to, occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”) and other hotel operating metrics;


•	hostilities, including future terrorist attacks, or fear of hostilities that affect travel;


•	financial condition of, and our relationships with third-party property managers and franchisors;


•	the degree and nature of our competition;


•	increased interest rates and operating costs;


•	increased renovation costs, which may cause actual renovation costs to exceed our current estimates;


•	changes in zoning laws and increases in real property taxes;

•

risks associated with potential hotel acquisitions, including the ability to ramp up and stabilize newly acquired hotels with limited or no operating history or that require substantial amounts of capital improvements for us to earn stabilized economic returns consistent with our expectations at the time of acquisition, and risks associated with dispositions of hotel properties, including our ability to successfully complete the sale of hotel properties currently under contract to be sold, including the risk that the purchaser may not have access to the capital needed to complete the sale;


•	the nature of our structure and transactions such that our federal and state taxes are complex and the risk that successful challenges of our tax positions by the Internal Revenue Service or other federal and state taxing authorities could have a material adverse effect on our financial position or results of operations;


•	the recognition of taxable gains from the sale of hotel properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (the “IRC”)


•	availability of and our ability to retain qualified personnel;


•	our failure to maintain our qualification as a real estate investment trust (“REIT”) under the IRC;


•	changes in our business or investment strategy;


•	availability, terms and deployment of capital;


•	general volatility of the capital markets and the market price of our common stock;


•	environmental uncertainties and risks related to natural disasters; and


•	the other factors discussed under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Overview

Summit Hotel Properties, Inc. is a self-managed hotel investment company that was organized in June 2010 and completed its initial public offering in February 2011. We focus primarily on owning premium-branded, select-service hotels in the Upscale segment of the U.S. lodging industry as this segment is currently defined by Smith Travel Research (“STR”). At June 30, 2016, our portfolio consisted of 80 hotels with a total of 10,716 guestrooms located in 23 states. Except for seven hotels, six of which are subject to ground leases and one of which is subject to a PILOT (payment in lieu of taxes) lease, we own our hotels in fee simple. Our hotels are typically located in markets with multiple demand generators such as corporate offices and headquarters, retail centers, airports, state capitols, convention centers, and leisure attractions.

The vast majority of our hotels operate under premium franchise brands owned by Marriott ® International, Inc. (“Marriott”) Hilton ® Worldwide (“Hilton”), an affiliate of Hyatt ® Hotels Corporation (“Hyatt”) and Intercontinental Hotels Group ® (“IHG”).

We have elected to be taxed as a REIT for federal income tax purposes. To qualify as a REIT, we cannot operate or manage our hotels. Accordingly, all of our hotels are leased to wholly-owned subsidiaries (our “TRS lessees”) of Summit Hotel TRS, Inc., our taxable REIT subsidiary, and are operated pursuant to hotel management agreements between our TRS lessees and professional third-party hotel management companies that are not affiliated with us as follows:



Management Company	Number of Properties	Number of Guestrooms
Interstate Management Company, LLC and its affiliate Noble Management Group, LLC	41	4,996
Select Hotels Group, LLC	12	1,681
InterMountain Management, LLC and its affiliate, Pillar Hotels and Resorts, LP	7	723
Affiliates of Marriott, including Courtyard Management Corporation, SpringHill SMC Corporation and Residence Inn by Marriott	6	973
White Lodging Services Corporation	4	791
Kana Hotels, Inc.	3	315
Affiliates of IHG including IHG Management (Maryland) LLC and Intercontinental Hotel Group Resources, Inc.	2	395
American Liberty Hospitality, Inc.	2	372
OTO Development, LLC	2	260
Stonebridge Realty Advisors, Inc.	1	210
Total	80	10,716

Our typical hotel management agreement requires us to pay a base fee to our hotel manager calculated as a percentage of hotel revenues. In addition, our hotel management agreements generally provide that the hotel manager can earn an incentive fee for generating revenue or Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") over certain thresholds. Our TRS lessees may employ other hotel managers in the future. We do not have any ownership or economic interest in any of the hotel management companies engaged by our TRS lessees.

Our revenues are derived from hotel operations and consist of room revenue and other hotel operations revenue. As a result of our focus on select-service hotels in the Upscale segment of the U.S. lodging industry, substantially all of our revenues are related to the sales of hotel guestrooms. Our other hotel operations revenues consist of ancillary revenues related to food and beverage sales, meeting room rentals and other billable guest services provided at our hotel properties.

Industry Trends and Outlook

Room-night demand in the U.S. lodging industry is generally correlated to macroeconomic trends. Key drivers of demand include growth in GDP, corporate profits, capital investments and employment. The recent volatility of the economy and lodging industry and the risk that global and domestic economic conditions may cause economic growth to slow or stall, could adversely affect industry growth expectations.Also, increasing supply in our markets may reduce growth expectations.

The U.S. lodging industry experienced a positive trend through 2015 that we expect to continue at a slower pace through 2016. According to a report prepared in May 2016 by PricewaterhouseCoopers, LLP, U.S. RevPAR growth for Upscale hotels and Upper-midscale hotels for 2016 is projected at 3.5% and 4.5%, respectively.

Our Hotel Property Portfolio

At June 30, 2016, our hotel property portfolio consisted of 80 hotels with a total of 10,716 guestrooms. According to STR’s current chain scales, 60 of our hotel properties with 8,277 guestrooms are categorized as Upscale hotels and 20 of our hotel properties with 2,439 guestrooms are categorized as Upper-midscale hotels. Information for our hotel properties by franchisor as of June 30, 2016 is as follows:



Franchise/Brand	Number of Hotel Properties	Number of Guestrooms
Marriott
Courtyard by Marriott	12	1,903
SpringHill Suites by Marriott	6	874
Residence Inn by Marriott	9	1,109
Fairfield Inn & Suites by Marriott	3	290
Total Marriott	30	4,176
Hilton
Hilton Garden Inn	9	1,146
Hampton Inn	3	327
Hampton Inn & Suites	8	1,116
DoubleTree by Hilton	1	210
Homewood Suites	1	91
Total Hilton	22	2,890
Hyatt
Hyatt Place	16	2,224
Hyatt House	2	291
Total Hyatt	18	2,515
IHG
Hotel Indigo	1	115
Holiday Inn Express	1	66
Holiday Inn Express & Suites	3	433
Holiday Inn	1	143
Staybridge Suites	2	213
Total IHG	8	970
Starwood
FourPoints by Sheraton	1	101
Carlson
Country Inn & Suites by Carlson	1	64
Total	80	10,716

Hotel Property Portfolio Activity

We continuously consider ways in which to refine our portfolio of properties to drive growth and create value. In the normal course of business, we evaluate opportunities to acquire additional properties that meet our investment criteria and opportunities to recycle capital through the disposition of properties. As such, the composition and size of our portfolio of properties may change materially over time. Significant changes to our portfolio of properties would have a material effect on our Condensed Consolidated Financial Statements.

Dispositions to Affiliates of ARCH

On February 11, 2016, we completed the sale of six hotels to affiliates of American Realty Capital Hospitality Trust, Inc. ("ARCH") for an aggregate selling price of $108.3 million. We provided seller-financing to ARCH of $20.0 million to consummate the transaction (See "Note 3 - Investment in Hotel Properties, net" to the Condensed Consolidated Financial Statements). The sale to ARCH resulted in a $56.8 million gain, of which $20.0 million related to our seller financing was deferred and will be recognized when principal payments on the seller financing loan are received. Through June 30, 2016, we have recognized $2.0 million of the deferred gain upon receipt of scheduled repayments of the principal balance of the loan by ARCH. The loan is recorded net of deferred gains in Investment in Real Estate Loans, net on our Condensed Consolidated Balance Sheet at June 30, 2016.

The Company has also entered into a letter agreement with American Realty Capital Hospitality Portfolio SMT ALT, LLC, an affiliate of ARCH (“New ARCH Purchaser”), for the reinstatement of the purchase agreement related to the sale of ten hotels (the "Reinstated Hotels") for an aggregate purchase price of $89.1 million (See "Note 3 - Investment in Hotel Properties, net" to our Condensed Consolidated Financial Statements). The closing of the reinstated sale of the ten hotels is scheduled to occur on or before December 30, 2016 (the “New Closing Date”), or at such later date as the closing may be adjourned or extended in accordance with the express terms of the letter agreement.

Prior to the New Closing Date, we have the right to continue to market and ultimately sell, without the consent of the New ARCH Purchaser, any or all of the hotels to bona fide third-party purchasers that are not affiliates of ours. If we sell some, but not all of the hotels to bona fide third-party purchasers, then the purchase price to be paid by the New ARCH Purchaser for the remaining hotels will be reduced, but the $7.5 million escrow deposit made by the New ARCH Purchaser will remain with the escrow agent except in limited circumstances. We are actively marketing the remaining properties subject to the agreement to other potential buyers. We completed the sale of two properties previously contracted for sale to the New ARCH Purchaser to third parties unrelated to the New ARCH Purchaser. The first sale was related to the Aloft in Jacksonville, FL for $8.6 million on June 1, 2016. The second sale was related to the Holiday Inn Express in Vernon Hills, IL for $5.9 million on June 6, 2016. Accordingly, the $89.1 million selling price of the Reinstated Hotels will be reduced as provided above.

Other Dispositions

On May 13, 2016, we completed the sale of the Holiday Inn Express & Suites in Irving (Las Colinas), TX for $10.5 million. The proceeds from the sale of this property and the Holiday Inn Express in Vernon Hills, IL were used to complete certain 1031 Exchanges. The hotel acquired by us to complete the reverse 1031 Exchange was the 160-guestroom Residence Inn by Marriott in Atlanta, GA on January 20, 2016 for a purchase price of $38.0 million. The completion of the reverse 1031 Exchange resulted in the deferral of taxable gains of approximately $5.1 million. The sale of the properties during the second quarter of 2016 resulted in the realization of a net gain of $0.6 million

On July 6, 2016, we completed the sale of the Hyatt Place in Irving (Las Colinas), TX for $14.0 million.

Hotel Property Acquisitions

A summary of the hotel properties acquired during the six months ended June 30, 2016 and 2015 is as follows (dollars in thousands, except Cost per Key):



Date Acquired	Franchise/Brand	Location	Guestrooms	Purchase Price		Renovation Cost			Cost per Key
First Six Months of 2016:
January 19, 2016	Courtyard by Marriott	Nashville, TN	226	$	71,000	$	300	(1)	$	315,000
January 20, 2016	Residence Inn by Marriott	Atlanta, GA	160	38,000		—			238,000
			386	$	109,000	$	300		$	283,000

First Six Months of 2015:
April 13, 2015	Hampton Inn & Suites	Minneapolis, MN	211	$	38,951	$	—		$	185,000
June 18, 2015	Hampton Inn	Boston (Norwood), MA	139	24,000		2,300		(1)	189,000
June 30, 2015	Hotel Indigo	Asheville, NC	115	35,000		370		(1)	308,000
			465	$	97,951	$	2,670		$	216,000

(1) The amounts reflect actual-to-date and estimated remaining costs to complete.

The purchase price and renovation costs were funded by advances on our senior unsecured credit facility, cash generated by the sale of properties, and operating cash flows. There is no assurance that our actual renovation costs will not exceed our estimates.

Foreclosure Activities

At December 31, 2015, we had two notes receivable totaling $2.7 million included in Investment in Real Estate Loans, net on our Condensed Consolidated Balance Sheet related to seller-financing for the sale in a prior year of two hotel properties in Emporia, KS (each an "Emporia Property"). The loans had matured and the buyer was in payment default under the terms of the loans. On March 28, 2016, we were awarded legal title to one Emporia Property through foreclosure. On February 26, 2016, we also purchased an additional note receivable from the first priority lien holder for the Emporia Property for which foreclosure proceedings were ongoing to facilitate the completion of the reacquisition of this Emporia Property through a foreclosure.

Non-GAAP Financial Measures

We consider funds from operations (“FFO”) and EBITDA, both of which are not measures that conform to Generally Accepted Accounting Principles (GAAP), to be useful to investors as key supplemental measures of our operating performance. We caution investors that amounts presented in accordance with our definitions of FFO and EBITDA may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. FFO and EBITDA should be considered along with, but not as substitutes for net income (loss) or other GAAP information as a measure of our operating performance. FFO and EBITDA may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, debt service obligations and other commitments and uncertainties. Although we believe that FFO and EBITDA can enhance the understanding of our consolidated financial condition and results of operations, these non-GAAP financial measures are not necessarily better indicators of any trend as compared to a comparable GAAP measure such as net income (loss).

Funds From Operations

As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO represents net income or loss (computed in accordance with GAAP), excluding preferred dividends, gains (or losses) from sales of real property, impairment losses on real estate assets, items classified by GAAP as extraordinary, the cumulative effect of changes in accounting principles, plus depreciation and amortization related to real estate assets, and adjustments for unconsolidated partnerships and joint ventures. Unless otherwise indicated, we present FFO applicable to our common shares and common units of our Operating Partnership ("Common Units"). We present FFO because we consider it an important supplemental measure of our operational performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. We also use FFO as a basis for determining certain management incentives. FFO is intended to exclude GAAP historical cost depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization related to real estate assets, gains and losses from real property dispositions and impairment losses on real estate assets, it provides a performance measure that, when compared year over year, reflects the effect on operations of trends in occupancy, guestroom rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from GAAP net income (loss). FFO should not be considered as a substitute for GAAP net income (loss) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. References to FFO are based on the NAREIT-defined measure unless otherwise indicated.

The following is a reconciliation of our GAAP net income to FFO for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share/unit data):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Net income	$	21,955		$	16,301		$	70,689		$	26,892
Preferred dividends	(4,147		)	(4,147		)	(8,294		)	(8,294		)
Net income applicable to common shares and Common Units	17,808			12,154			62,395			18,598
Real estate-related depreciation	17,599			15,301			35,656			30,446
(Gain) loss on disposal of assets	(2,726		)	208			(39,506		)	711
FFO applicable to common shares and Common Units	32,681			27,663			58,545			49,755
FFO per common share/Common Unit	$	0.37		$	0.32		$	0.67		$	0.57
Weighted average diluted common shares/Common Units (1)	87,355			87,008			87,264			86,947


(1)	Includes Common Units in the Operating Partnership held by limited partners (other than us and our subsidiaries) because the Common Units are redeemable for cash or, at our election, shares of our common stock.

During the three months ended June 30, 2016, FFO increased by $5.0 million, or 18.1%, over the comparable period in the prior year primarily due to an increase in revenues of $6.5 million partially offset by a $1.5 million increase in hotel operating expenses and a $1.6 million increase in hotel acquisition costs. The increase in revenues was due to occupancy and ADR growth across our portfolio as discussed below under “Results of Operations.”

During the six months ended June 30, 2016, FFO increased by $8.8 million, or 17.7%, over the comparable period in the prior year primarily due to an increase in revenues of $17.0 million partially offset by a $6.4 million increase in hotel operating expenses and $2.2 million increase in hotel acquisition costs. The increase in revenues was due to occupancy and ADR growth across our portfolio as discussed below under “Results of Operations.”

Earnings Before Interest, Taxes, Depreciation and Amortization

EBITDA represents net income or loss, excluding: (i) interest, (ii) income tax expense and (iii) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it provides investors with an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures and to fund other cash needs or reinvest cash into our business. We also believe that it helps investors meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our asset base (primarily depreciation and amortization) from our operating results. Our management also uses EBITDA as one measure in determining the value of acquisitions and dispositions. EBITDA is used as a basis for determining certain management incentives and debt compliance.

The following is a reconciliation of our GAAP net income to EBITDA for the three and six months ended June 30, 2016 and 2015 (in thousands):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
Net income	$	21,955		$	16,301		$	70,689		$	26,892
Depreciation and amortization	17,685			15,403			35,828			30,667
Interest expense	7,123			7,655			14,606			14,902
Interest income	(1		)	(260		)	(5		)	(491		)
Income tax expense	135			903			1,706			1,402
EBITDA	$	46,897		$	40,002		$	122,824		$	73,372

During the three months ended June 30, 2016, EBITDA increased by $6.9 million, or 17.2%, over the prior year primarily due to an increase in net income of $5.7 million during the period. The increase in net income was primarily driven by an increase in revenues of $6.5 million partially offset by a $1.5 million increase in hotel operating expenses and a $1.6 million increase in hotel acquisition costs. The increase in revenues was the result of increases in occupancy and ADR as discussed under "Results of Operations."

During the six months ended June 30, 2016, EBITDA increased by $49.5 million, or 67.4%, over the prior year primarily due to an increase in net income of $43.8 million during the period. The increase in net income was primarily driven by an increase in revenues for the period of $17.0 million that resulted in an increase in operating income of $3.2 million and the net gain on the sale of assets of $39.5 million during the six months ended June 30, 2016.

Results of Operations

The comparisons that follow should be reviewed in conjunction with the unaudited interim Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Hotel properties classified as discontinued operations prior to our adoption of ASU No. 2014-08 on January 1, 2015 are not included in the discussion below.

Comparison of Three Months Ended June 30, 2016 with Three Months Ended June 30, 2015

The following table contains key operating metrics for our total portfolio and our same-store portfolio for the three months ended June 30, 2016 compared with the three months ended June 30, 2015 (dollars in thousands, except ADR and RevPAR). We define same-store hotels as properties that we owned or leased as of June 30, 2016 and that we have owned or leased at all times since January 1, 2015.



	For the Three Months Ended June 30,
	2016						2015						Dollar Change				Percentage Change
	Total Portfolio (80 hotels)			Same-Store Portfolio (71 hotels)			Total Portfolio (93 hotels)			Same-Store Portfolio (71 hotels)			Total Portfolio (80/93 hotels)		Same-Store Portfolio (71 hotels)		Total Portfolio (80/93 hotels)		Same-Store Portfolio (71 hotels)
Total revenues	$	127,195		$	105,461		$	120,677		$	99,329		$	6,518	$	6,132	5.4	%	6.2	%
Hotel operating expenses	$	76,757		$	64,185		$	75,277		$	62,148		$	1,480	$	2,037	2.0	%	3.3	%
Occupancy	82.8		%	82.6		%	80.7		%	80.4		%	n/a		n/a		2.6	%	2.7	%
ADR	$	144.59		$	142.22		$	132.79		$	137.11		$	11.80	$	5.11	8.9	%	3.7	%
RevPAR	$	119.65		$	117.44		$	107.12		$	110.26		$	12.53	$	7.18	11.7	%	6.5	%

Revenue. Total revenues, including room and other hotel operations revenue, increased $6.5 million in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The increase in revenues is due to an increase in same-store revenues of $6.1 million and an increase in revenues of $18.2 million from the seven hotel properties acquired in 2015 and two properties acquired in 2016 (the “Acquired Hotels”), partially offset by a reduction in revenue of $17.8 million related to disposed hotel properties.

The same-store revenue increase of $6.1 million, or 6.2%, was due to increases in occupancy to 82.6% in the three months ended June 30, 2016 compared with 80.4% in the three months ended June 30, 2015, and an increase in ADR to $142.22 in the three months ended June 30, 2016 from $137.11 in the three months ended June 30, 2015. The increases in occupancy and ADR resulted in a 6.5% increase in same-store RevPAR to $117.44 in the three months ended June 30, 2016 compared with $110.26 in the three months ended June 30, 2015. These increases were due to the continued transformation of our portfolio by selling assets, including nine hotels in 2016 and ten hotels in 2015, with lower operating margins and RevPAR growth expectations and purchasing assets with higher operating margins and RevPAR growth expectations, the improving economy, our strong revenue and asset management programs, hotel industry fundamentals and strategic and brand-required renovations made at our same-store hotel properties.

Hotel Operating Expenses. Hotel operating expenses increased $1.5 million in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The increase is due in part to the additional operating expenses from the Acquired Hotels of $10.0 million. In addition, the increase in same-store hotel operating expenses is due to $2.0 million of variable costs related to the increase in revenues. These increases were offset by a reduction in expenses of $10.5 million related to sold hotel properties. Expenses at the same-store hotels decreased as a percentage of revenue from 62.6% in the three months ended June 30, 2015 to 60.9% in the three months ended June 30, 2016, due to consistent fixed expenses and increasing revenues at the same-store hotel properties.

The following table summarizes our hotel operating expenses for our same-store portfolio (71 hotels) for the three months ended June 30, 2016 and 2015 (dollars in thousands):



	For the Three Months Ended June 30,				Percentage		Percentage of Revenue
	2016		2015		Change		2016		2015
Rooms expense	$	22,566	$	22,753	(0.8	)%	21.4	%	22.9	%
Other direct expense	14,264		13,133		8.6	%	13.5	%	13.2	%
Other indirect expense	27,355		26,262		4.2	%	25.9	%	26.4	%
Total hotel operating expenses	$	64,185	$	62,148	3.3	%	60.9	%	62.6	%

Depreciation and Amortization. Depreciation and amortization expense increased $2.3 million in the three months ended June 30, 2016 compared with the three months ended June 30, 2015 primarily due to depreciation associated with the Acquired Hotels.

Corporate General and Administrative. Corporate general and administrative expenses remained the same at $5.4 million for the three months ended June 30, 2016 and 2015 due to management of consistent corporate operations during these periods.

Gain on Disposal of Assets. Gain on disposal of assets increased by $2.9 million during the three months ended June 30, 2016 compared with the three months ended June 30, 2015. This increase was primarily due to the recognition of $2.0 million of the deferred gain related to the sale of six hotel properties to ARCH on February 11, 2016 upon receipt of scheduled repayments of the principal balance of the loan from ARCH.

Comparison of Six Months Ended June 30, 2016 with Six Months Ended June 30, 2015

The following table contains key operating metrics for our total portfolio and our same-store portfolio for the six months ended June 30, 2016 compared with the six months ended June 30, 2015 (dollars in thousands, except ADR and RevPAR).



	For the Six Months Ended June 30,
	2016						2015						Dollar Change				Percentage Change
	Total Portfolio (80 hotels)			Same-Store Portfolio (71 hotels)			Total Portfolio (93 hotels)			Same-Store Portfolio (71 hotels)			Total Portfolio (80/93 hotels)		Same-Store Portfolio (71 hotels)		Total Portfolio (80/93 hotels)		Same-Store Portfolio (71 hotels)
Total revenues	$	245,277		$	203,007		$	228,325		$	191,631		$	16,952	$	11,376	7.4	%	5.9	%
Hotel operating expenses	$	150,895		$	124,927		$	144,545		$	120,900		$	6,350	$	4,027	4.4	%	3.3	%
Occupancy	79.6		%	80.0		%	77.5		%	77.6		%	n/a		n/a		2.6	%	3.0	%
ADR	$	142.44		$	141.25		$	132.59		$	137.87		$	9.85	$	3.38	7.4	%	2.5	%
RevPAR	$	113.31		$	112.94		$	102.77		$	107.00		$	10.54	$	5.94	10.3	%	5.5	%

Revenue. Total revenues, including room and other hotel operations revenue, increased $17.0 million in the six months ended June 30, 2016 compared with the six months ended June 30, 2015. The increase in revenues is due to an increase in same-store revenues of $11.4 million and an increase in revenues from the Acquired Hotels of $34.2 million, partially offset by a reduction in revenue of $28.6 million related to disposed hotel properties.

The same-store revenue increase of $11.4 million, or 5.9%, was due to increases in occupancy to 80.0% in the six months ended June 30, 2016 compared with 77.6% in the six months ended June 30, 2015, and an increase in ADR to $141.25 in the six months ended June 30, 2016 from $137.87 in the six months ended June 30, 2015. The increases in occupancy and ADR resulted in a 5.5% increase in same-store RevPAR to $112.94 in the six months ended June 30, 2016 compared with $107.00 in the six months ended June 30, 2015. These increases were due to the continued transformation of our portfolio by selling assets, including nine hotels in 2016 and ten hotels in 2015, with lower operating margins and RevPAR growth expectations and purchasing assets with higher operating margins and RevPAR growth expectations, the improving economy, our strong revenue and asset management programs, hotel industry fundamentals and strategic and brand-required renovations made at our same-store hotel properties.

Hotel Operating Expenses. Hotel operating expenses increased $6.4 million in the six months ended June 30, 2016 compared with the six months ended June 30, 2015. The increase is due in part to the additional operating expenses from the Acquired Hotels of $19.8 million. In addition, the increase in same-store hotel operating expenses is due to $4.0 million of variable costs related to the increase in revenues. These increases were partially offset by a reduction in expenses of $17.4 million related to sold hotel properties. Expenses at the same-store hotels decreased as a percentage of revenue from 63.1% in the six months ended June 30, 2015 to 61.5% in the six months ended June 30, 2016, due to consistent fixed expenses and increasing revenues at the same-store hotel properties.

The following table summarizes our hotel operating expenses for our same-store portfolio (71 hotels) for the six months ended June 30, 2016 and 2015 (dollars in thousands):



	For the Six Months Ended June 30,				Percentage		Percentage of Revenue
	2016		2015		Change		2016		2015
Rooms expense	$	45,069	$	44,234	1.9	%	22.2	%	23.1	%
Other direct expense	27,394		25,808		6.1	%	13.5	%	13.5	%
Other indirect expense	52,464		50,858		3.2	%	25.8	%	26.5	%
Total hotel operating expenses	$	124,927	$	120,900	3.3	%	61.5	%	63.1	%

Depreciation and Amortization. Depreciation and amortization expense increased $5.2 million during the six months ended June 30, 2016 compared with the six months ended June 30, 2015 primarily due to depreciation associated with the Acquired Hotels.

Corporate General and Administrative. Corporate general and administrative expenses increased $0.1 million during the six months ended June 30, 2016 compared with the six months ended June 30, 2015 primarily due to an increase in stock based compensation expense during the six months ended June 30, 2016.

Gain on Disposal of Assets. Gain on disposal of assets increased by $40.2 million during the six months ended June 30, 2016 compared with the six months ended June 30, 2015. This increase was primarily due to the $38.8 million net gain recognized on the sale of six hotel properties to ARCH on February 11, 2016, including scheduled repayments of the principal balance of the related loan by ARCH through June 30, 2016.

Liquidity and Capital Resources

Liquidity Requirements

Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotel properties in accordance with internal and franchise brand standards, capital expenditures to improve our hotel properties, acquisitions, interest expense, settlement of interest swaps, scheduled principal payments on outstanding indebtedness, restricted cash funding obligations and distributions to our stockholders.

Our long-term liquidity requirements consist primarily of the costs of acquiring additional hotel properties, renovations and other non-recurring capital expenditures that periodically are made with respect to our hotel properties and scheduled debt payments, including maturing loans.

On January 15, 2016, the Company entered into a new $450 million senior unsecured credit facility that replaced our former $300 million senior unsecured credit facility. The new credit facility extended the maturity date of the revolving line of credit under the former credit facility from 2017 to 2020 and the maturity date of the term loan component under the former credit facility from 2018 to 2021 (See "Note 4 - Debt" to our Condensed Consolidated Financial Statements). At July 29, 2016, we had $337.9 million in outstanding indebtedness secured by first priority mortgage liens on 34 hotel properties.

On June 28, 2016, the Company completed an offering of 3,000,000 shares of its 6.45% Series D cumulative redeemable preferred stock for net proceeds of $72.3 million. The proceeds were used to repay the outstanding balance on our revolving line of credit and the remaining proceeds, which are in our cash balance at June 30, 2016, will be utilized to complete an acquisition that is under contract and expected to close in August 2016.

To satisfy the requirements for qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually at least 90% of our REIT taxable income to our stockholders, determined without regard to the deduction for dividends paid and excluding any net capital gains. We intend to distribute a sufficient amount of our taxable income to maintain our status as a REIT and to avoid tax on undistributed income. Therefore, if sufficient funds are not available to us from hotel dispositions, our senior unsecured credit facility and additional mortgage and other loans, we will need to raise capital to grow our business and invest in additional hotel properties.

We expect to satisfy our liquidity requirements with cash provided by operations, working capital, short-term borrowings under our $450 million senior unsecured credit facility, term debt, repayment of notes receivable, the strategic sale

of hotels and the release of restricted cash upon satisfaction of the usage requirements. In addition, we may fund the purchase of hotel acquisitions and cost of required capital improvements by borrowing under our senior unsecured credit facility, assuming existing mortgage debt, issuing securities (including Common Units issued by our Operating Partnership), or incurring mortgage or other types of debt. Further, we may seek to meet our liquidity requirements by raising capital through public or private offerings of our equity or debt securities. However, certain factors may have an adverse effect on our ability to access these capital sources, including our degree of leverage, the value of our unencumbered hotel properties, borrowing restrictions imposed by lenders, volatility in the equity and debt capital markets and other market conditions. We will continue to analyze which sources of capital are most advantageous to us at any particular point in time, but financing may not be consistently available to us on terms that are attractive, or at all. We believe that our cash provided by operations, working capital, borrowings available under our $450 million senior unsecured credit facility and other sources of funds available to us will be sufficient to meet our ongoing liquidity requirements for at least the next 12 months.

At June 30, 2016, we had $17.0 million of outstanding mortgage debt that matures in 2016. Additionally, we have other scheduled principal payments on debt through the remainder of 2016 totaling $4.1 million. Although we believe that we will have the capacity to satisfy these debt maturities and pay these scheduled principal debt payments from operating cash flows or draws on our senior unsecured credit facility, there can be no assurances that our senior unsecured credit facility will be available to repay such amortizing debt as draws under our senior unsecured credit facility are subject to certain financial and other covenants. At June 30, 2016, we were in compliance with all of our covenants under the $450 million senior unsecured credit facility.

We anticipate making renovations and other non-recurring capital expenditures with respect to our hotel properties pursuant to property improvement plans required by our franchisors and our internal quality standards. We expect capital expenditures through the remainder of 2016 for these activities at hotel properties we own as of June 30, 2016 to range from $24.0 million to $30.0 million. Actual amounts may differ from our expectations. We may also make renovations and incur other non-recurring capital expenditures in 2016 related to hotel properties that we acquire during the remainder of 2016.

Cash Flows

Total cash provided by operating activities increased to $69.5 million from $55.1 million for the six months ended June 30, 2016 and 2015, respectively. The increase of $14.5 million primarily resulted from a $9.0 million increase in net income, adjusted for non-cash items, and a difference in the net decrease in working capital of $5.4 million between the current period and the prior period.

Net cash used in investing activities decreased by $107.5 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 primarily due to an increase in proceeds from asset dispositions of $134.4 million and a reduction in capital expenditures of $7.8 million. These inflows were partially offset by an increase in acquisitions of hotel properties of $12.6 million and an increase in funding of real estate loans net of repayments of $22.9 million.

Net cash (used in) provided by financing activities decreased by $73.2 million for the six months ended June 30, 2016 compared with the six months ended June 30, 2015 due to a decrease in net borrowings of $143.0 million during the six months ended June 30, 2016 compared with the six months ended June 30, 2015 and an increase in dividends of $1.5 million, partially offset by the net proceeds from our preferred stock offering of $72.3 million.

Outstanding Indebtedness

At June 30, 2016, we had $338.6 million in outstanding indebtedness secured by first priority mortgage liens on 34 hotel properties. We also had borrowed $150.0 million on our $450 million senior unsecured credit facility and we had borrowed $140.0 million on our unsecured term loan, both of which were supported at June 30, 2016 by a borrowing base of 44 unencumbered hotel properties. At June 30, 2016, the maximum amount of borrowing permitted under the $450 million senior unsecured credit facility was $450.0 million, of which we had borrowed $150.0 million and $300.0 million was available to borrow.

At July 29, 2016, we had borrowed $150.0 million on our $450 million senior unsecured credit facility and we had borrowed $140.0 million on our unsecured term loan, both of which were supported by 43 hotel properties included in the

credit facility borrowing bases. In addition, we have two other hotels with a total of 310 guestrooms unencumbered by mortgage debt that are available to be used as collateral for future loans.

In addition to the $72.3 million net proceeds from the completion of the Series D preferred stock offering, we intend to secure or assume term loan financing or use our senior unsecured credit facility, together with other sources of financing, to fund future acquisitions and capital improvements. We may not succeed in obtaining new financing on favorable terms, or at all, and we cannot predict the size or terms of future financings. Our failure to obtain new financing could adversely affect our ability to grow our business.

We intend to maintain a prudent capital structure and, while the ratio will vary from time to time, we generally intend to limit our ratio of indebtedness to EBITDA to no more than six to one. For purposes of calculating this ratio, we exclude preferred stock from indebtedness. We have obtained financing through debt instruments having staggered maturities and intend to continue to do so in the future. Our debt includes, and may include in the future, debt secured by first priority mortgage liens on certain hotel properties and unsecured debt.

We believe we will have adequate liquidity to meet requirements for scheduled maturities and principal repayments. However, we can provide no assurance that we will be able to refinance our indebtedness as it becomes due and, if refinanced, whether such refinancing will be available on favorable terms.

A summary of our debt at June 30, 2016 is as follows (dollars in thousands):



Lender	Interest Rate (1)	Amortization Period (Years)	Maturity Date	Number of Properties Encumbered		Principal Amount Outstanding
$450 Million Senior Unsecured Credit Facility
Deutsche Bank AG New York Branch, as Administrative Agent
$300 Million Revolver	2.13% Variable	n/a	March 31, 2020	n/a		$	—
$150 Million Term Loan	(2)	n/a	March 31, 2021	n/a		150,000
Total Senior Unsecured Credit Facility						150,000
Unsecured Term Loan
KeyBank National Association
Term Loan	2.43% Variable	n/a	April 7, 2022	n/a		140,000
Mortgage Loans
Voya	5.18% Fixed	20	March 1, 2019	2	(3)	41,959
	5.18% Fixed	20	March 1, 2019	4	(3)	37,608
	5.18% Fixed	20	March 1, 2019	3	(3)	24,254
	5.18% Fixed	20	March 1, 2019	1	(3)	17,229
KeyBank National Association	4.46% Fixed	30	February 1, 2023	4		27,735
	4.52% Fixed	30	April 1, 2023	3		21,489
	4.30% Fixed	30	April 1, 2023	3		20,826
	4.95% Fixed	30	August 1, 2023	2		37,051
Bank of America Commercial Mortgage	6.41% Fixed	25	September 1, 2017	1		7,791
Western Alliance Bank (formerly known as GE Capital Financial, Inc.)	5.39% Fixed	25	April 1, 2020	1		9,012
	5.39% Fixed	25	April 1, 2020	1		4,853
MetaBank	4.25% Fixed	20	August 1, 2018	1		6,721
Bank of Cascades	2.48% Variable	25	December 19, 2024	1	(4)	9,423
	4.30% Fixed	25	December 19, 2024	—	(4)	9,423
Compass Bank	2.88% Variable	25	May 6, 2020	3		23,705
Western Alliance Bank (formerly known as General Electric Capital Corp.)	5.39% Fixed	25	April 1, 2020	1		5,103
	5.39% Fixed	25	April 1, 2020	1		5,976
U.S. Bank, NA	6.22% Fixed	30	November 1, 2016	1		16,993
	6.13% Fixed	25	November 11, 2021	1		11,437
Total Mortgage Loans						338,588
Total Debt				34		$	628,588


(1)	The interest rates at June 30, 2016 give effect to interest rate swaps, where applicable.

(2)

We entered into an interest rate swap to effectively produce a fixed interest rate of 3.64% on $75.0 million of the $150 Million Term Loan; however, the interest rate spread over LIBOR may change based upon our Leverage Ratio, as defined in the credit facility documents. We are currently paying interest at 2.08% based on LIBOR at June 30, 2016 on the remaining balance of the $150 Million Term Loan.


(3)	The Voya mortgage loans are cross-collateralized and cross-defaulted.


(4)	The Bank of Cascades mortgage loans are cross-collateralized and cross-defaulted.

Equity Transactions

On June 28, 2016, the Company completed the offering of 3,000,000 shares of its 6.45% Series D cumulative redeemable preferred stock for net proceeds of $72.3 million, after the underwriting discount and offering-related expenses of $2.7 million. The proceeds were used to repay the outstanding balance on our revolving line of credit, and the remaining proceeds, which are in our cash balance at June 30, 2016, will be utilized to complete an acquisition that is under contract and is expected to close in August 2016.

On July 1, 2016, 7,420 Common Units were tendered for redemption and were redeemed for an equivalent number of shares of our common stock.

Capital Expenditures

During the six months ended June 30, 2016, we spent $18.2 million on capital expenditures. We anticipate spending a total of $24.0 million to $30.0 million on hotel property renovations in the remainder of 2016. We expect to fund these expenditures through a combination of cash provided by operations, working capital, borrowings under our $450.0 million senior unsecured credit facility, or other potential sources of capital, to the extent available to us.

Contractual Obligations

The following table outlines the timing of required payments related to our long-term debt and other contractual obligations at June 30, 2016 (dollars in thousands):



	Payments Due By Period
	Total		Less than One Year (4)		One to Three Years		Four to Five Years		More than Five Years
Debt obligations (1)	$	790,225	$	48,687	$	74,088	$	248,754	$	418,696
Operating lease obligations (2)	112,314		1,275		2,349		2,368		106,322
Purchase obligations (3)	7,625		7,625		—		—		—
Total	$	910,164	$	57,587	$	76,437	$	251,122	$	525,018


(1)	Amounts shown include amortization of principal, maturities, and estimated interest payments. Interest payments on our variable rate debt have been estimated using the interest rates in effect at June 30, 2016, after giving effect to our interest rate swap.


(2)	Amounts consist primarily of non-cancelable ground lease and corporate office lease obligations.


(3)	This amount represents purchase orders and executed contracts for renovation projects at our hotel properties.


(4)	Balances include amounts through June 30, 2017.

Critical Accounting Policies

Deferred Financing Fees

In accordance with Accounting Standards Update ("ASU") No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability on the Condensed Consolidated Balance Sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. The implementation of ASU No. 2015-03 did not have a material effect on our Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. In pursuing our business strategies, the primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure is to 30-day LIBOR. We primarily use fixed interest rate financing to manage our exposure to fluctuations in interest rates. On a limited basis, we also use derivative financial instruments to manage interest rate risk.

At June 30, 2016, we were party to an interest rate derivative agreement, with a total notional amount of $75.0 million, where we receive variable-rate payments in exchange for making fixed-rate payments. This agreement is accounted for as a cash flow hedge and currently would cost an estimated $2.6 million to settle the instrument.

At June 30, 2016, after giving effect to our interest rate derivative agreement, $380.5 million, or 60.5%, of our debt had fixed interest rates and $248.1 million, or 39.5%, had variable interest rates. At December 31, 2015, after giving effect to our interest rate derivative agreements, $402.7 million, or 59.5%, of our debt had fixed interest rates and $274.4 million, or 40.5%, had variable interest rates. Assuming no increase in the level of our variable rate debt outstanding as of June 30, 2016, if interest rates increased by 1.0%, then our cash flow would decrease by approximately $2.5 million per year.

As our fixed-rate debts mature, they will become subject to interest rate risk. In addition, as our variable-rate debts mature, lenders may impose interest rate floors on new financing arrangements because of the low interest rates experienced during the past few years. At June 30, 2016, we have $17.0 million of fixed rate debt maturing through the remainder of 2016. Additionally, we have other scheduled payments of principal on debt through the remainder of 2016 totaling $4.1 million.

Item 4. Controls and Procedures.

Controls and Procedures

Disclosure Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2016. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2016, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three month period covered by this Quarterly Report on Form 10-Q, which were identified in connection with management’s evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved from time to time in litigation arising in the ordinary course of business. However, we are not currently aware of any actions against us that we believe would materially adversely affect our business, consolidated financial condition or consolidated results of operations.

Item 1A. Risk Factors.

There have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On August 2, 2016, the Company and the Operating Partnership entered into separate sales agreements (the “Sales Agreements”) with each of Robert W. Baird & Co. Incorporated, Raymond James & Associates, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., RBC Capital Markets, LLC, KeyBanc Capital Markets Inc., Canaccord Genuity Inc. and Jefferies LLC (collectively, the “Bank Group”), pursuant to which the Company may issue and sell from time to time up to $125.0 million in shares of its common stock, $0.01 par value per share, and shares of its 6.45% Series D Preferred Stock, $0.01 par value per share (collectively, the “Shares”), through members of the Bank Group, acting as agents or principals (the “2016 ATM Program”). At the same time, the Company terminated the sales agreement entered into in connection with its prior ATM offering program, which was established in August 2015 and under which no shares were sold.

Pursuant to the Sales Agreements, the Shares may be offered and sold through members of the Bank Group in transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the New York Stock Exchange or sales made to or through a market maker other than on an exchange or, with the prior consent of the Company, in privately negotiated transactions. Members of the Bank Group will be entitled to compensation equal to up to 2.0% of the gross proceeds of Shares sold through members of the Bank Group from time to time under the Sales Agreements. The Company has no obligation to sell any of the Shares under the Sales Agreements and may at any time suspend solicitations and offers under, or terminate, the Sales Agreements.

The Shares will be offered and sold pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-212118). The Company will file a prospectus supplement, dated August 2, 2016, to the prospectus, dated June 20, 2016, which forms a part of and is included in the Registration Statement, with the Securities and Exchange Commission in connection with the offer and sale of the Shares pursuant to the Sales Agreements.

The Company and the Operating Partnership may engage in commercial banking, investment banking, brokerage and other dealings with members of the Bank Group in the ordinary course of business and would expect to pay customary fees and commission for its services on those transactions.

The foregoing description of the Sales Agreements is not complete and is qualified in its entirety by reference to the Sales Agreements, copies of which are filed as Exhibits 10.1 through 10.8 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

In connection with the filing of the Sales Agreements, the Company is filing as Exhibit 5.1 to this Quarterly Report on Form 10-Q the opinion of Venable LLP, its Maryland counsel.

On August 2, 2016, in connection with establishing the 2016 ATM Program, the Company filed, with the State Department of Assessments and Taxation of the State of Maryland, Articles Supplementary (the “Articles Supplementary”) to the Articles of Amendment and Restatement of the Company, as amended and supplemented, classifying and designating an additional 5,000,000 of the Company’s authorized preferred shares of preferred stock, $0.01 par value per share, as Series D preferred shares. A copy of the Articles Supplementary is filed as Exhibit 3.3 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

On August 2, 2016, in connection with establishing the 2016 ATM Program, Summit Hotel GP, LLC, a wholly owned subsidiary of the Company and the sole general partner of the Operating Partnership, on its own behalf as general partner of the Operating Partnership and on behalf of the limited partners of the Operating Partnership, amended the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the “Partnership Agreement”) to provide for the issuance of up to an additional 5,000,000 6.45% Series D Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) (the “Series D Preferred Units”). A copy of such amendment is filed as Exhibit 3.5 to this Quarterly Report on Form 10-Q and incorporated herein by reference. The Company expects to contribute the net proceeds from any sales of Series D preferred shares under the 2016 ATM Program to the Operating Partnership in exchange for the same number of Series D Preferred Units. The Series D Preferred Units have economic terms that mirror the terms of the Series D Preferred Stock. The issuance of the Series D Preferred Units will be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.

Item 6. Exhibits.

The following exhibits are filed as part of this report:



Exhibit
Number		Description of Exhibit
3.1		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. designating the Company’s 6.45% Series D Cumulative Redeemable Preferred Stock, $0.01 par value per share ("Series D Preferred Stock") (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form 8-A filed with the SEC on June 24, 2016).
3.2		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. prohibiting election under Sections 3-803, 3-804(a), 3-804(b) and 3-805 of the MGCL without stockholder approval (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2016).
3.3†		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. designating additional shares of Series D Preferred Stock.
3.4		Fifth Amendment to the First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on June 24, 2016).
3.5†		Sixth Amendment to the First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP.
5.1†		Opinion of Venable LLP, dated August 2, 2016, regarding the legality of the Common Stock and the Series D Preferred Stock.
10.1†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Robert W. Baird & Co. Incorporated.
10.2†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Raymond James & Associates, Inc.
10.3†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Merrill Lynch, Pierce, Fenner & Smith, Incorporated.
10.4†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Deutsche Bank Securities, Inc.
10.5†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and RBC Capital Markets, LLC.
10.6†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and KeyBanc Capital Markets, Inc.
10.7†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Canaccord Genuity, Inc.
10.8†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Jefferies, LLC.
23.1		Consent of Venable LLP (included in Exhibit 5.1 hereto).
31.1†		Certification of Chief Executive Officer of Summit Hotel Properties, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†		Certification of Chief Financial Officer Summit Hotel Properties, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†		Certification of Chief Executive Officer Summit Hotel Properties, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Certification of Chief Financial Officer Summit Hotel Properties, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document ⁽¹⁾
101.SCH		XBRL Taxonomy Extension Schema Document ⁽¹⁾
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document ⁽¹⁾
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document ⁽¹⁾
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document ⁽¹⁾
101.PRE		XBRL Taxonomy Presentation Linkbase Document ⁽¹⁾

† - Filed herewith

(1) - Submitted electronically herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	SUMMIT HOTEL PROPERTIES, INC. (registrant)

Date: August 2, 2016	By:	/s/ Greg A. Dowell
		Greg A. Dowell Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer)

EXHIBIT INDEX



Exhibit
Number		Description of Exhibit
3.1		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. designating the Company’s 6.45% Series D Cumulative Redeemable Preferred Stock, $0.01 par value per share ("Series D Preferred Stock") (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form 8-A filed with the SEC on June 24, 2016).
3.2		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. prohibiting election under Sections 3-803, 3-804(a), 3-804(b) and 3-805 of the MGCL without stockholder approval (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2016).
3.3†		Articles Supplementary to the Articles of Amendment and Restatement of Summit Hotel Properties, Inc. designating additional shares of Series D Preferred Stock.
3.4		Fifth Amendment to the First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on June 24, 2016).
3.5†		Sixth Amendment to the First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP.
5.1†		Opinion of Venable LLP, dated August 2, 2016, regarding the legality of the Common Stock and the Series D Preferred Stock.
10.1†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Robert W. Baird & Co. Incorporated.
10.2†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Raymond James & Associates, Inc.
10.3†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Merrill Lynch, Pierce, Fenner & Smith, Incorporated.
10.4†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Deutsche Bank Securities, Inc.
10.5†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and RBC Capital Markets, LLC.
10.6†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and KeyBanc Capital Markets, Inc.
10.7†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Canaccord Genuity, Inc.
10.8†		Sales Agreement, dated as of August 2, 2016, by and among Summit Hotel Properties, Inc., Summit Hotel OP, LP and Jefferies, LLC.
23.1		Consent of Venable LLP (included in Exhibit 5.1 hereto).
31.1†		Certification of Chief Executive Officer of Summit Hotel Properties, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†		Certification of Chief Financial Officer Summit Hotel Properties, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†		Certification of Chief Executive Officer Summit Hotel Properties, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Certification of Chief Financial Officer Summit Hotel Properties, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document ⁽¹⁾
101.SCH		XBRL Taxonomy Extension Schema Document ⁽¹⁾
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document ⁽¹⁾
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document ⁽¹⁾
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document ⁽¹⁾
101.PRE		XBRL Taxonomy Presentation Linkbase Document ⁽¹⁾

† - Filed herewith

(1) - Submitted electronically herewith

Exhibit 3.3

SUMMIT HOTEL PROPERTIES, INC.

ARTICLES SUPPLEMENTARY

6.45% Series D Cumulative Redeemable Preferred Stock

Summit Hotel Properties, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) as follows:

FIRST: Under a power set forth in Article VI of the Articles of Amendment and Restatement of the Corporation, as amended and restated and as supplemented by Articles Supplementary accepted for record by the SDAT on June 22, 2016 (which, as hereinafter amended, restated or supplemented from time to time is herein called the “Charter”), the Board of Directors of the Corporation (the “Board of Directors”), by resolution duly adopted, classified and designated 5,000,000 authorized but unissued shares of preferred stock (the “Additional Shares”), $0.01 par value per share, of the Corporation as additional 6.45% Series D Cumulative Redeemable Preferred Stock (the “Series D Preferred Stock”), having the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Series D Preferred Stock set forth in the Charter.

SECOND: The Additional Shares have been classified and designated by the Board of Directors under the authority contained in the Charter. After giving effect to the classification and designation of the Additional Shares set forth herein, the total number of shares of Series D Preferred Stock that the Corporation has authority to issue is 8,000,000 shares.

THIRD: These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.

FOURTH: The undersigned officer of the Corporation acknowledges these Articles Supplementary to be the act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by the undersigned officer and attested to by its Secretary on this 2nd day of August, 2016.



ATTEST:	SUMMIT HOTEL PROPERTIES, INC.

/s/ Christopher R. Eng	By:	/s/ Greg A. Dowell (SEAL)
Name: Christopher R. Eng		Greg A. Dowell
Title: Secretary		Executive Vice President, Chief
		Financial Officer and Treasurer

Exhibit 3.5

SIXTH AMENDMENT TO THE

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP OF

SUMMIT HOTEL OP, LP

DESIGNATION OF ADDITIONAL 6.45% SERIES D

CUMULATIVE REDEEMABLE PREFERRED UNITS

August 2, 2016

Pursuant to Section 4.02 and Article XI of the First Amended and Restated Agreement of Limited Partnership of Summit Hotel OP, LP (the “Initial Partnership Agreement”), as amended by the First Amendment to the Initial Partnership Agreement, dated as of October 26, 2011 (the “First Amendment”), the Second Amendment to the Initial Partnership Agreement, dated as of April 11, 2012 (the “Second Amendment”), the Third Amendment to the Initial Partnership Agreement, dated as of December 7, 2012 (the “Third Amendment”), the Fourth Amendment to the Initial Partnership Agreement, dated as of March 20, 2013 (the “Fourth Amendment”), and the Fifth Amendment to the Initial Partnership Agreement, dated as of June 24, 2016 (the “Fifth Amendment” and, together with the Initial Partnership Agreement, the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment, the “Partnership Agreement”), the General Partner hereby amends the Partnership Agreement as follows:

1.Designation and Number. The number of authorized 6.45% Series D Cumulative Redeemable Preferred Units shall be 8,000,000.

1.
Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and confirms.

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first set forth above.

GENERAL PARTNER:

SUMMIT HOTEL GP, LLC

a Delaware limited liability company

By: Summit Hotel Properties, Inc., a Maryland corporation, its sole member

By: /s/ Greg A. Dowell_________________


Name:	Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

[Signature page for Amendment re: Additional Series D Preferred Units – August 2016]

Summit Hotel Properties, Inc.

August 2, 2016

Page 1

[LETTERHEAD OF VENABLE LLP]

August 2, 2016

Summit Hotel Properties, Inc.

12600 Hill Country Boulevard, Suite R-100
Austin, Texas 78738

Re: Registration Statement on Form S-3 (File No. 333-212118)

Ladies and Gentlemen:

We have served as Maryland counsel to Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law relating to the sale and issuance by the Company of shares (the “Common Shares”) of common stock, $0.01 par value per share (the “Common Stock”), of the Company and shares (“Preferred Shares” and, together with the Common Shares, the “Shares”) of 6.45% Series D Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series D Preferred Stock”), of the Company having a maximum aggregate offering price of up to $125,000,000, from time to time in at-the-market offerings, covered by the above-referenced Registration Statement, and all amendments thereto (collectively, the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):


1.	The Registration Statement and the related form of prospectus included therein, in the form transmitted to the Commission under the Securities Act;


2.	The Prospectus Supplement, in substantially the form to be filed with the Commission under the Securities Act;


3.	The charter of the Company (the “Charter”), certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);


4.	The Bylaws of the Company, certified as of the date hereof by an officer of the Company;


5.	A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;


6.	Resolutions adopted by the Board of Directors (the “Board”) of the Company (the “Resolutions”), relating to, among other matters, the sale and issuance of the

Summit Hotel Properties, Inc.

August 2, 2016

Page 2

Shares and the classification of the Preferred Shares, certified as of the date hereof by an officer of the Company;


7.	A certificate executed by an officer of the Company, dated as of the date hereof; and


8.	Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.

In expressing the opinion set forth below, we have assumed the following:


1.	Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.


2.	Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.


3.	Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.

All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.


5.	The Shares will not be issued or transferred in violation of the restrictions on transfer and ownership contained in Article VII of the Charter.


6.	Upon the issuance of any Common Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter.


7.	Upon the issuance of any Preferred Shares, the total number of shares of Series D Preferred Stock issued and outstanding will not exceed the total number of shares of Series D Preferred Stock that the Company is then authorized to issue under the Charter.

Summit Hotel Properties, Inc.

August 2, 2016

Page 3


8.	Prior to the issuance of any of the Shares, the Board or a duly authorized committee of the Board will determine the price and certain other terms of issuance of such Shares in accordance with the Resolutions (the “Corporate Proceedings”).

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:


1.	The Company is a corporation duly incorporated and validly existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.


2.	The issuance of the Shares has been duly authorized and, when and if delivered against payment therefor in accordance with the Registration Statement, the Resolutions and the Corporate Proceedings, the Shares will be validly issued, fully paid and nonassessable.

The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability or effect of any federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q (the “Quarterly Report”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Quarterly Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act.

Very truly yours,

/s/ Venable LLP

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Robert W. Baird & Co. Incorporated

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with Robert W. Baird & Co. Incorporated (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through the Agent, acting as agent and/or principal, up to an aggregate value of $125,000,000 (the “Maximum Amount”), of shares of (a) the Company’s common stock, $0.01 par value per share (the “Common Stock”), and/or (b) the Company's 6.45% Series D Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock” and, together with the Common Stock, the “Placement Shares”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in this Section 1 relating to the issuance and sale of Placement Shares not in excess of the Maximum Amount pursuant to this Agreement shall be the sole responsibility of the Company, and the Agent shall have no obligation in connection with such compliance, provided that the Agent strictly follows the trading instructions provided by the Company pursuant to any Placement Notice. The issuance and sale of Placement Shares through the Agent shall be effected pursuant to the Registration Statement, although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement (as defined below) to issue and sell Placement Shares pursuant to this Agreement.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc.,

Raymond James & Associates Inc. and RBC Capital Markets, LLC (collectively, the “Other Sales Agreements”) with additional sales agents (collectively, the “Alternative Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

The Company agrees that whenever it determines to sell Placement Shares directly to an Agent as principal it will enter into a separate written Terms Agreement (each, a “Terms Agreement”), in substantially the form of Annex I hereto, relating to such sale in accordance with Section 6(f) hereof. References herein to “this Agreement” or to matters contained “herein” or “hereunder,” or words of similar import, mean this Agreement and any applicable Terms Agreement.

The Company has filed with the Securities and Exchange Commission (the “Commission”), in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), a Registration Statement on Form S-3 (No. 333-212118), including a base prospectus, relating to certain securities, including the Common Stock and preferred stock of the Company, $0.01 par value per share (the “Preferred Stock”), to be offered from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”). The Company has prepared a prospectus supplement to the base prospectus included as part of such registration statement specifically relating to the Placement Shares. The Company will furnish to the Agent, for use by the Agent, copies (which may be in electronic form) of the base prospectus included as part of such registration statement, as supplemented by the prospectus supplement specifically relating to the Placement Shares. Except where the context otherwise requires, such registration statement, as amended by any post-effective amendments thereto, 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 Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B under the Securities Act (the “Rule 430B Information”), as well as any comparable successor registration statement filed by the Company for the sale of shares of its Common Stock or Preferred Stock, including the Placement Shares, collectively are herein called the “Registration Statement.” The base prospectus included in the Registration Statement, as supplemented by the prospectus supplement specifically relating to the Placement Shares, including the documents incorporated by reference therein, in the form in which such base prospectus and such prospectus supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with the then issued Issuer Free Writing Prospectus(es) (as defined herein), is herein called 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 (the “Incorporated Documents”). 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 pursuant to its Electronic Data Gathering Analysis and Retrieval System or, if applicable, the Interactive Data Electronic Applications (collectively, “EDGAR”).

2. Placements.

Each time that the Company wishes to issue and sell the Placement Shares hereunder (each, a “Placement”), it will notify the Agent by email notice (or other method mutually agreed to in writing by the parties) (a “Placement Notice”) containing the parameters in accordance with which it desires the Placement Shares to be sold, which shall at a minimum include the number of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one Trading Day (as defined in Section 3), any minimum price below which sales shall not be made and any maximum price above which sales shall not be made. A form of Placement Notice, which contains such minimum required sales parameters, is attached hereto as Exhibit A. A Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 2 (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 2, as amended from time to time. Each Placement Notice shall be effective upon receipt by the Agent unless and until (i) in accordance with the notice requirements set forth in Section 4, the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares to be sold pursuant to such Placement Notice have been sold, (iii) in accordance with the notice requirements set forth in Section 4, the Company or the Agent suspends or terminates such Placement Notice, (iv) the Company issues a subsequent Placement Notice with parameters superseding those set forth in such Placement Notice, or (v) this Agreement has been terminated under the provisions of Section 11. The amount of any discount, commission or other compensation to be paid by the Company to the Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 1 and shall not exceed 2.0% of the gross sales price for such Placement Shares. It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement Notice or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. Notwithstanding anything to the contrary contained herein, no Placement Notice shall be delivered by the Company at any such time as the Company’s directors and officers would not be permitted to buy or sell securities of the Company in the open market because of the existence of material nonpublic information or applicable blackout periods (such as under the Company’s insider trading policy). In the event of a conflict between the terms of

this Agreement and the terms of any Placement Notice, the terms of such Placement Notice will control.

3. Sale of Placement Shares by the Agent.

Subject to the terms and conditions herein set forth, upon the Company’s issuance of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its customary trading and sales practices to sell such Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Agent acting under a Placement Notice will provide written confirmation to the Company (including by email correspondence), no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which sales of Placement Shares have been made hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company. 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 Securities Act, including without limitation sales made directly on the New York Stock Exchange (the “NYSE”), on any other existing trading market for the Common Stock and/or the Series D Preferred Stock or to or through a market maker. With the prior consent of the Company, the Agent may also sell Placement Shares in privately negotiated transactions. During the term of this Agreement and notwithstanding anything to the contrary herein, the Agent agrees that in no event will it or any Agent Affiliate (as defined in Section 9(a) below) engage in any market making, bidding, stabilization or other trading activity with regard to the Common Stock or the Series D Preferred Stock if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Securities Act. Notwithstanding anything to the contrary herein, the Agent shall not sell shares of the Series D Preferred Stock at a price per share higher than the Maximum Price. For purposes hereof, “Maximum Price” means: (a) from August 2, 2016 and through December 27, 2016, $27.50; (b) subsequent to December 27, 2016 and through June 28, 2020, the product of (i) $25.00 plus any accrued and unpaid dividends per share to, but excluding, the date of sale and (ii) the sum of (A) 1.0 and (B) (x) the number of complete years until the optional redemption date (June 28, 2021) remaining at the date of sale multiplied by (y) 0.0050; and (c) on June 29, 2020 and thereafter, $25.00 plus any accrued and unpaid dividends per share to, but excluding, the date of sale. For the purposes of this Agreement, “Trading Day” means any day on which shares of the Common Stock and/or the Series D Preferred Stock may be purchased and sold on the NYSE.

4. Suspension or Termination of Sales.

individuals of the other party set forth on Schedule 2), suspend or terminate any sale of Placement Shares; provided, however, that such suspension or termination shall not affect or impair the other party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice under this Section 4 shall be effective against the other unless it is made to one of the individuals named on Schedule 2 hereto, as such schedule may be amended from time to time.

5. Representations and Warranties of the Company and the Operating Partnership.

The Company and the Operating Partnership, jointly and severally, represent and warrant to the Agent that as of the date hereof, as of each Representation Date (as defined below) on which a certificate is required to be delivered pursuant to Section 7(q), and as of the time of each sale of any Placement Shares pursuant to this Agreement:

(a) No order preventing or suspending the use of the Prospectus has been issued by the Commission, and the Prospectus, as of its date and as of the date of any amendment or supplement and on any Settlement Date, did not, does not and will not contain any untrue statement of a material fact or 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; provided, however, the Company and the Operating Partnership make no representation and warranty with respect to any Agent Information (as defined in Section 9(a) hereof).

(b) (A) At the original effectiveness of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Securities Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Securities Act, and (D) as of the date hereof, the Company was and is a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act (“Rule 405”)).

(c) The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405) and the Securities have been and remain eligible for registration by the Company on such automatic shelf registration statement. The Registration Statement became effective upon filing with the Commission. No order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering of the Placement Shares has been initiated or, to the knowledge of the Company and the Operating Partnership, threatened by the Commission. The Registration Statement, as of the date hereof, and any post-effective amendment thereto, as of its applicable effective date and at each deemed effective date with respect to Agents pursuant to Rule 430B(f)(2) and at each Settlement Date, complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the

date of the Prospectus and any amendment or supplement thereto, will not contain any untrue statement of a material fact or 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; provided, however, that the Company and the Operating Partnership make no representation and warranty with respect to any Agent Information. The documents incorporated, or to be incorporated, by reference in the Registration Statement and the Prospectus, at the time filed with the Commission, complied or will comply, in all respects to the requirements of the Exchange Act.

(d) Other than the Registration Statement and the Prospectus, the Company (including its agents and representatives, other than the Agents in their capacity as such) has not prepared, used, authorized, approved or referred to and will not prepare, use, authorize, approve or refer to any Issuer Free Writing Prospectus (other than as referred to in clause (i) below) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) each electronic road show and any other written communications approved in writing in advance by the Agent. Each such Issuer Free Writing Prospectus complied and will comply in all material respects with the Securities Act (to the extent required thereby), and did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein that has not been superseded or modified and, when taken together with the Prospectus accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not and will not contain any untrue statement of a material fact or 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; provided, however, that the Company and the Operating Partnership make no representation and warranty with respect to any Agent Information.

(e) The Company was not an “ineligible issuer” (as defined in Rule 405) as of the eligibility determination date for purposes of Rules 164 and 433 under the Securities Act with respect to the offering of the Placement Shares contemplated by the Registration Statement and the Prospectus.

(f) The Placement Shares have been authorized for listing on the NYSE, subject to official notice of issuance and the Company is in material compliance with the rules of the NYSE, including, without limitation, the requirements for continued listing of the Common Stock, the Company's 9.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”), the Company's 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series B Preferred Stock”), the Company's 7.125% Series C Cumulative Redeemable Preferred stock, par value $0.01 per share (the “Series C Preferred Stock”), and the Series D Preferred Stock on the NYSE, and there are no actions, suits or proceedings pending or, to the knowledge of the Company and the Operating Partnership, threatened or contemplated, and the Company has not received any notice from the NYSE regarding the revocation of such listing or otherwise regarding the delisting of shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock from the NYSE.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

(h) To the knowledge of the Company and the Operating Partnership, there are no affiliations or associations between (i) any member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and (ii) the Company or any of the Company’s officers, directors, or 5% or greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately preceding the date of the Prospectus, except as has been disclosed to the Representatives in writing.

(i) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Maryland, has the corporate power and authority to own and lease, as the case may be, its property and to operate its property and conduct its business as described in the Registration Statement and the Prospectus and is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not (i) have a material adverse effect on the assets, business, condition (financial or otherwise), earnings, properties, management, results of operations or prospects of the Company, the Operating Partnership and the Subsidiaries (as hereinafter defined), taken as a whole, or (ii) prevent or materially interfere with consummation of the transactions contemplated hereby (the occurrence of any such effect, prevention, interference or result described in the foregoing clauses (i) or (ii) being herein referred to as a “Material Adverse Effect”).

(j) The Operating Partnership has been duly organized, is validly existing as a limited partnership in good standing under the laws of the State of Delaware has the full power and authority to own or lease, as the case may be, its property and to operate its property and conduct its business as described in the Registration Statement and the Prospectus and is duly qualified to transact business and is in good standing as a foreign limited partnership in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.

(k) Each “significant subsidiary” (as defined in Rule 1-02(w) of Regulation S-X) of the Company other than the Operating Partnership (each a “Subsidiary” and collectively the “Subsidiaries”) has been duly organized, is validly existing as a corporation, limited partnership or limited liability company in good standing under the laws of the jurisdiction of its organization, has the full power and authority to own or lease, as the case may be, its property and to operate its property and conduct its business as described in the Registration Statement and the Prospectus and is duly qualified to transact business and is in good standing as a foreign corporation, limited partnership or limited liability company, as the case may be, in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. All of the issued shares of capital stock, units of

limited partnership interest and units of membership interest of each Subsidiary of the Company or the Operating Partnership have been duly authorized, are validly issued, fully paid and non-assessable, have been issued in compliance with applicable securities laws and were not issued in violation of any preemptive or similar rights. Except as disclosed in the Registration Statement and the Prospectus, the Company or the Operating Partnership, as the case may be, owns, directly or indirectly, all of the issued and outstanding shares of capital stock, units of limited partnership interest and units of membership interest of each Subsidiary are owned by the Company or the Operating Partnership directly or indirectly, free and clear of all security interests, liens, mortgages, encumbrances, pledges, claims or other defects of any kind (collectively, “Liens”). Schedule 3 hereto specifically identifies all subsidiaries of the Company that are “significant subsidiaries” of the Company within the meaning of Rule 1-02(w) of Regulation S-X.

(l) The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and all corporate action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and consummation by it of the transactions contemplated hereby have been duly and validly taken.

(m) The Operating Partnership has the partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder and all limited partnership action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation by it of the transactions contemplated hereby have been duly and validly taken.

(n) The Articles Supplementary to the Company’s Amended and Restated Articles of Incorporation setting forth the terms of the Series D Preferred Stock (the “Articles Supplementary”) have been duly authorized and duly executed by the Company and accepted for record with the Maryland State Department of Assessments and Taxation (the “SDAT”).

(o) The statements in the Registration Statement and the Prospectus under the captions “Description of Common and Preferred Stock,” “Certain Provisions of Maryland Law and Our Charter and Bylaws,” “Material Federal Income Tax Considerations,” and “Plan of Distribution” insofar as such statements summarize agreements, documents or governmental proceedings discussed therein, are accurate, complete and fair summaries of such agreements, documents or governmental proceedings in all material respects.

(p) The authorized and outstanding capitalization of the Company is as set forth in the Registration Statement and the Prospectus (except for subsequent issuances, if any, pursuant to (i) this Agreement, (ii) pursuant to reservations, agreements, employee benefit plans or dividend reinvestment or stock purchase plans referred to in the Registration Statement and the Prospectus, (iii) pursuant to the exercise, redemption, or exchange of convertible or exchangeable securities, options or warrants referred to in the Registration Statement and the Prospectus, including OP Units or (iv) unregistered issuances not required to be disclosed pursuant to the Exchange Act, the Securities Act or any rule or regulation promulgated thereunder). The authorized capital stock of the Company conforms and will conform in all

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

(q) The Common Stock and the Series D Preferred Stock conform and will conform as to legal matters to the descriptions thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

(r) Except as described in the Registration Statement and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, units of partnership interest in the Operating Partnership (“OP Units”) or other ownership interests in the Operating Partnership are outstanding.

(s) Except as described in the Registration Statement and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding.

(t) The Placement Shares to be sold by the Company have been duly authorized and, when issued and delivered against payment therefore in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Placement Shares will not be subject to or in violation of any preemptive or similar rights. Upon payment of the purchase price and issuance and delivery of the Placement Shares to be issued and sold by the Company in accordance herewith, the purchasers thereof will receive good, valid and marketable title to such Placement Shares, free and clear of all Liens. The certificates, if any, to be used to evidence the Placement Shares will be in substantially the form filed as an exhibit to, or incorporated by reference in, the Registration Statement and will be in proper form and will comply in all material respects with all applicable legal requirements, the requirements of the Articles of Amendment and Restatement, as amended or supplemented through the date hereof (the “Charter”), and Bylaws, as amended, of the Company and the requirements of the NYSE.

(u) The shares of Common Stock initially issuable upon conversion of the Series D Preferred Stock have been duly authorized and, when issued upon conversion of the Series D Preferred Stock 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. The Board of Directors of the Company has duly and validly reserved such shares of Common Stock for issuance upon conversion of the Series D Preferred Stock. The certificates, if any, to be used to evidence such shares of Common Stock will be in substantially the form filed as an exhibit to, or incorporated by reference in, the Registration Statement and will, as of the time of each sale of any Series D Preferred Stock pursuant to this Agreement, be in proper form and will comply in all material respects with all applicable legal requirements, the requirements of the Charter and Bylaws, as amended, of the Company and the requirements of the NYSE.

(v) The Company is the holder, directly or indirectly, of the OP Units of each class and series and in the respective percentages described in the Registration Statement and the Prospectus. Summit Hotel GP, LLC, a wholly owned subsidiary of the Company, is the sole general partner of the Operating Partnership. The OP Units to be issued by the Operating Partnership to the Company upon contribution of the net proceeds from the sale of the Placement Shares have been duly authorized and, when issued and delivered against payment therefor, will be validly issued, fully paid and nonassessable, and the issuance of such OP Units will not be subject to or in violation of any preemptive or similar rights.

(w) Neither of the Company’s nor the Operating Partnership’s securities are rated by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.

(x) Neither the execution and delivery by each of the Company and the Operating Partnership of, nor the performance by each of the Company and the Operating Partnership of its respective obligations under, this Agreement will conflict with, contravene, result in a breach or violation of, or imposition of, any Lien upon any property or other assets of the Company, the Operating Partnership or any Subsidiary pursuant to, or constitute a default (or give rise to any right of termination, acceleration, cancellation, repurchase or redemption) or Repayment Event (as hereinafter defined) under: (i) any statute, law, rule, regulation, judgment, order or decree of any governmental body, regulatory or administrative agency or court having jurisdiction over any of the Company, the Operating Partnership or the Subsidiaries or any of their respective properties or other assets; (ii) the Charter or Bylaws, as amended, of the Company, the Certificate of Limited Partnership and the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”), or similar organizational documents of any Subsidiary; or (iii) any contract, agreement, obligation, covenant or instrument or any term condition or provision thereof to which the Company, the Operating Partnership or any Subsidiary or any of their respective properties or other assets is subject or bound, except, in the case of (i) and (iii) above, for such conflicts, breaches, violations, lien impositions or defaults that would not, individually or in the aggregate, have a material adverse effect. As used herein, “Repayment Event” means any event or condition which, without regard to compliance with any notice or other procedural requirements, 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 any of the Company, the Operating Partnership or the Subsidiaries.

(y) No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE), or approval of the Company's stockholders, is required to be made or obtained by any of the Company, the Operating Partnership or the Subsidiaries in connection with the issuance and sale of the Placement Shares or the consummation of the transactions contemplated hereby, other than (i) such as have been obtained or made by the Company or the Operating Partnership are in full force and effect, (ii) the filing and acceptance of record of the Articles Supplementary with the SDAT as may be required under

the Securities Act, (iii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Placement Shares are being offered by the Agent and (iv) such approvals as have been obtained in connection with the approval of the Placement Shares for listing on the NYSE, and (v) such approvals (if any) as have been obtained under the rules and regulations of FINRA.

(z) There are no actions, suits, claims, investigations or proceedings pending or, to the knowledge of the Company and the Operating Partnership, threatened or contemplated to which any of the Company, the Operating Partnership or the Subsidiaries or any of their respective directors, managers, partners, officers or members is or would be a party or of which any of their respective properties or other assets is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, (i) other than any such action, suit, claim, investigation or proceeding described in the Prospectus which, if resolved adversely to any of the Company, the Operating Partnership or the Subsidiaries, would not, individually or in the aggregate, have a Material Adverse Effect, or (ii) that are required to be described in the Prospectus and are not so described. There are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement and the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

(aa) None of the Company, the Operating Partnership or any of the Subsidiaries is, and after giving effect to the offering and sale of the Placement Shares and the application of the proceeds thereof as described in the Registration Statement and the Prospectus will be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(bb) (i) Ernst & Young LLP, which has certified certain financial statements (including the related notes thereto) and supporting schedules incorporated by reference in the Registration Statement and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and by the rules and regulations of the Public Company Accounting Oversight Board (the “PCAOB”); and (ii) PricewaterhouseCoopers LLP, which has certified certain financial statements (including the related notes thereto) and supporting schedules incorporated by reference in the Registration Statement and the Prospectus is an independent registered public accounting firm as required by the Securities Act and by the rules and regulations of the PCAOB.

(cc) The financial statements incorporated by reference in the Registration Statement and the Prospectus, together with the related notes and schedules, present fairly the consolidated financial position of the Company, as of the dates indicated, and the Company’s consolidated results of operations, cash flows and changes in equity for the periods specified and have been prepared in compliance with the requirements of the Securities Act and the Exchange Act and in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved. The financial statements of the certain hotels acquired or proposed to be acquired, if any, included or incorporated by reference into the Registration Statement and the Prospectus present fairly in all material respects the information set forth therein, have been prepared in conformity with GAAP applied on a consistent basis and

otherwise have been prepared in accordance with the financial statement requirements of Regulation S-X applicable thereto. All pro forma financial statements or data incorporated by reference in the Registration Statement and the Prospectus, if any, comply with the requirements of the Securities Act and the Exchange Act, and the assumptions used in the preparation of any such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data. The other financial and statistical data contained in the Registration Statement and the Prospectus are accurately and fairly presented and prepared on a basis consistent with the consolidated financial statements of the Company incorporated by reference in the Registration Statement and the Prospectus and the books and records of the Company, the Operating Partnership and the Subsidiaries. There are no financial statements (historical or pro forma) that are required to be included in the Registration Statement or the Prospectus that are not included or incorporated by reference therein as required. None of the Company, the Operating Partnership or the Subsidiaries have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), that are not described in the Registration Statement and the Prospectus. All disclosures contained or incorporated by reference in the Registration Statement and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G under the Exchange Act and Item 10 of Regulation S-K under the Securities Act and the Exchange Act, to the extent applicable. The Company's ratios of earnings to combined fixed charges and preferred stock dividends included in the Registration Statement and the Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K under the Securities Act.

(dd) All statistical or market-related data included or incorporated by reference in the Registration Statement and the Prospectus are based upon or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required. Each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the Registration Statement and the Prospectus has been made with a reasonable basis and in good faith.

(ee) Each of the Company, the Operating Partnership and the Subsidiaries possesses such permits, licenses, approvals, consents and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct their business as described in the Registration Statement and the Prospectus (collectively, “Governmental Licenses”), except where the failure so to possess would not, individually or in the aggregate, result in a Material Adverse Effect. Each of the Company, the Operating Partnership and the Subsidiaries is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, individually or in the aggregate, result in a Material Adverse Effect. Neither the Company nor the Operating Partnership has received any

notice and each is otherwise unaware of any proceedings relating to the revocation or modification of any such Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

(ff) Except as would not have a Material Adverse Effect: (i) each of the Company, the Operating Partnership and the Subsidiaries and their respective properties or other assets have been and are in compliance with, and none of the Company, the Operating Partnership or the Subsidiaries has any liability under, applicable Environmental Laws (as hereinafter defined); (ii) none of the Company, the Operating Partnership or the Subsidiaries has at any time released (as such term is defined in Section 101(22) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”)) or otherwise disposed of or dealt with Hazardous Materials (as hereinafter defined) on, to or from the properties or other assets owned by the Company, the Operating Partnership or the Subsidiaries, except such as would not cause the Company, the Operating Partnership, the LLC or the Subsidiaries to incur liability and that would not require disclosure pursuant to Environmental Laws, or that have been remediated in accordance with Environmental Laws; (iii) the Company, the Operating Partnership and the Subsidiaries do not intend to use the properties or other assets owned by any of the Company, the Operating Partnership or the Subsidiaries or any subsequently acquired properties and other assets, other than in compliance with applicable Environmental Laws; (iv) none of the Company, the Operating Partnership or the Subsidiaries has received any notice and each is otherwise unaware of any seepage, leak, discharge, release, emission, spill, or dumping of Hazardous Materials into waters (including, but not limited to, groundwater and surface water) on, beneath or adjacent to the properties, or onto lands or other assets owned by any of the Company, the Operating Partnership or the Subsidiaries from which Hazardous Materials might seep, flow or drain into such waters; (v) none of the Company, the Operating Partnership or the Subsidiaries has received any notice of, or has any knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to a claim under or pursuant to any applicable Environmental Law or common law by any governmental or quasi-governmental body or any third party with respect to the properties or other assets described in the Registration Statement and Prospectus, or arising out of the conduct of the Company, the Operating Partnership or the Subsidiaries, except for such claims that would not cause the Company, the Operating Partnership or any Subsidiary to incur liability and that would not require disclosure pursuant to Environmental Laws; and (vi) neither the properties nor any other assets currently owned by any of the Company, the Operating Partnership or the Subsidiaries is included or, to the knowledge of the Company and the Operating Partnership, proposed for inclusion on the National Priorities List issued pursuant to CERCLA by the United States Environmental Protection Agency (the “EPA”) or, to the knowledge of the Company and the Operating Partnership, proposed for inclusion on any similar list or inventory issued pursuant to any other applicable Environmental Law or issued by any other federal, state, local, municipal or other administrative, regulatory, governmental or quasi-governmental authority (a “Governmental Authority”). To the knowledge of the Company and the Operating Partnership, there have been, and are, no (i) aboveground or underground storage tanks, (ii) polychlorinated biphenyls (“PCBs”) or PCB-containing equipment, (iii) asbestos or asbestos containing materials, (iv) lead-based paints, (v) dry-cleaning facilities, or (vi) wet lands, in each case in, on, under or adjacent to any Property or other assets owned by any of the Company, the Operating

Partnership or the Subsidiaries the existence of which has had a Material Adverse Effect. As used herein, “Hazardous Material” shall include any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, toxic substances or related materials, asbestos or any hazardous material as defined or regulated by any applicable federal, state or local environmental law, ordinance, statute, rule or regulation including, without limitation, CERCLA, the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5128, the Solid Waste Disposal Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7671q, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, as any of the above statutes may be amended from time to time, and in the regulations promulgated pursuant to any of the foregoing (including environmental statutes not specifically defined herein) (individually, an “Environmental Law” and collectively, “Environmental Laws”) having or claiming jurisdiction over the properties and other assets described in the Registration Statement and the Prospectus.

(gg) Except as disclosed in the Registration Statement and the Prospectus, there are no contracts, agreements or understandings granting any person the right to require the Company or the Operating Partnership, as the case may be, to file a registration statement under the Securities Act with respect to any securities of the Company or the Operating Partnership, as the case may be, or to require the Company to include such securities with the Placement Shares registered pursuant to the Registration Statement.

(hh) Subsequent to the respective dates as of which information is given in each of the Registration Statement and the Prospectus, (i) there has not occurred any material adverse change, any development involving a prospective material adverse change or any development that would reasonably be expected to result in a material adverse change, in the assets, business, condition (financial or otherwise), earnings, properties, management, results of operations or prospects of the Company, the Operating Partnership or the Subsidiaries, taken as a whole; (ii) none of the Company, the Operating Partnership or the Subsidiaries has incurred any material liability or obligation, direct or contingent, or entered into any material transaction; (iii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iv) there has not been any material change in the capital stock, short-term debt or long-term debt of any of the Company, the Operating Partnership or the Subsidiaries, except in each case as described in the Registration Statement and the Prospectus.

(ii) (i) Each of the Company, the Operating Partnership and the Subsidiaries has fee simple title or a valid leasehold interest to all of the properties and other assets described in the Registration Statement and Prospectus as owned or leased by the Company, the Operating Partnership or the Subsidiaries (the “Properties”), in each case, free and clear of all Liens, except as such as would not have a Material Adverse Effect; (ii) all Liens on or affecting the Properties that are required to be disclosed in the Registration Statement and the Prospectus are

disclosed therein and none of the Company, the Operating Partnership or the Subsidiaries is in default under any such Lien except for such defaults that would not have a Material Adverse Effect; (iii) all of the leases and subleases material to the business of the Company, the Operating Partnership and the Subsidiaries, taken as a whole, and under which the Company, the Operating Partnership or any of the Subsidiaries holds Properties described in the Registration Statement and the Prospectus, are in full force and effect, and neither the Company nor the Operating Partnership has received any notice and each is otherwise unaware of any material claim of any sort that has been asserted by anyone adverse to the rights of any of the Company, the Operating Partnership or any Subsidiary under any of such leases or subleases, or affecting or questioning the rights of any of the Company, the Operating Partnership or such Subsidiary to the continued possession of the leases or subleased premises under any such lease or sublease; (iv) none of the Company, the Operating Partnership or the Subsidiaries is in violation of any municipal, state or federal law, rule or regulation concerning the Properties or any part thereof which violation would have a Material Adverse Effect; (v) each of the Properties complies with all applicable zoning laws, laws, ordinances, regulations, development agreements, reciprocal easement agreements, ground or airspace leases and deed restrictions or other covenants, except where the failure to comply would not have a Material Adverse Effect; (vi) neither the Company nor the Operating Partnership has received from any Governmental Authority any notice of any condemnation of or zoning change materially affecting the Properties or any part thereof, and neither the Company nor the Operating Partnership knows and each is otherwise unaware of any such condemnation or zoning change which is threatened and which if consummated would have a Material Adverse Effect; and (vii) except as otherwise described in the Registration Statement and the Prospectus, no tenant under any of the leases at the Properties has a right of first refusal to purchase the premises demised under such lease.

(jj) (i) The mortgages and deeds of trust encumbering the Properties owned or leased by the Company, the Operating Partnership or any Subsidiary are not convertible into equity interests in the respective Property nor will the Company, the Operating Partnership, the Subsidiaries, or any person affiliated therewith, hold a participating interest therein, and (ii) such mortgages and deeds of trust are not cross-defaulted or cross-collateralized to any Property not owned, directly or indirectly, by the Company, the Operating Partnership or any Subsidiary.

(kk) There are no material business relationships or related party transactions involving any of the Company, the Operating Partnership, the Subsidiaries or any other person required to be described in the Registration Statement and the Prospectus which have not been described therein.

(ll) Each of the Company, the Operating Partnership and the Subsidiaries own or possess all inventions, patent applications, patents, patent rights, licenses, trademarks (both registered and unregistered), trade names, service names, copyrights, trade secrets, know-how and other proprietary information described in the Registration Statement and the Prospectus as being owned or licensed by it or which is necessary for the conduct of, or material to, its businesses (collectively, the “Intellectual Property”), and neither the Company nor the Operating Partnership has received any notice and each is otherwise unaware of any claim to the contrary or any challenge by any other person to the rights of the Company, the Operating

Partnership and the Subsidiaries with respect to the Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interests of the Company, the Operating Partnership and the Subsidiaries therein. None of the Company, the Operating Partnership or the Subsidiaries has infringed or is infringing upon the intellectual property of a third party, and neither the Company nor the Operating Partnership has received any notice and each is otherwise unaware of a claim by a third party to the contrary.

(mm) No material labor dispute with the employees of the Company, the Operating Partnership or any of the Subsidiaries exists, or, to the knowledge of the Company or the Operating Partnership, is imminent. Neither the Company nor the Operating Partnership has received any notice and each is otherwise unaware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that would reasonably be expected to have a Material Adverse Effect on the Company, the Operating Partnership or the Subsidiaries, taken as a whole.

(nn) Each of the Company, the Operating Partnership and the Subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are adequate in respect of the businesses in which it is or will be engaged as described in the Registration Statement and the Prospectus. Each such policy and instrument is, to the knowledge of the Company and the Operating Partnership, in full force and effect and each of the Company, the Operating Partnership and the Subsidiaries is in compliance with the terms of such policies and instruments in all material respects. None of the Company, the Operating Partnership or the Subsidiaries has been refused any insurance coverage sought or applied for. None of the Company, the Operating Partnership or the Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business as currently conducted or as proposed to be conducted as described in the Registration Statement and the Prospectus at a cost that would not have a Material Adverse Effect.

(oo) The Operating Partnership or a Subsidiary has title insurance on the fee interests and/or leasehold interests in each of the Properties covering such risks and in such amounts as are commercially reasonable for the assets to be owned or leased by them, and such title insurance is in full force and effect.

(pp) Except as would not have a Material Adverse Effect, neither the Operating Partnership nor the Subsidiaries will be prohibited, directly or indirectly, under any agreement or other instrument to which they are a party or are subject, from paying any distributions to the Company, from making any other distribution on the OP Units, from repaying to the Company any loans or advances made to the Operating Partnership or any Subsidiary by the Company or from transferring any of the properties or other assets of the Operating Partnership or the Subsidiaries to the Company, the Operating Partnership or any other Subsidiary of the Company.

(qq) There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of the Placement Shares.

(rr) Each of the Company, the Operating Partnership and the Subsidiaries has filed all federal, state and local tax returns that are required to be filed or has requested extensions thereof (“Returns”) (except in any case in which the failure to so file would not have a Material Adverse Effect), whether or not arising from transactions in the ordinary course of business, and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect whether or not arising from transactions in the ordinary course of business. No audits or other administrative proceedings or court proceedings are presently pending against any of the Company, the Operating Partnership or the Subsidiaries with regard to any Returns, and no taxing authority has notified any of the Company, the Operating Partnership or the Subsidiaries that it intends to investigate its tax affairs, except where any such audit or investigation would not have a Material Adverse Effect.

(ss) Each of the Company, the Operating Partnership and the Subsidiaries has complied in all respects with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), relating to the payment and withholding of taxes, including, without limitation, the withholding and reporting requirements under Sections 1441 through 1446, Sections 1471 through 1474, 3401 through 3406, and 6041 and 6049 of the Code, as well as similar provisions under any other laws, and has, within the time and in the manner prescribed by law, withheld and paid over to the proper governmental authorities all amounts required in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, except in any case in which the failure so to comply would not have a Material Adverse Effect.

(tt) Commencing with the Company’s short taxable year ended December 31, 2011, the Company has been organized and has operated in a manner so as to qualify as a real estate investment trust (a “REIT”) under Sections 856 through 860 of the Code and the Company elected to be taxed as a REIT under the Code effective for its short taxable year ended December 31, 2011. The organization and current and proposed method of operation of the Company as described in the Registration Statement and the Prospectus will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable years ending December 31, 2016 and thereafter.

(uu) Each of the Company, the Operating Partnership and the Subsidiaries is in compliance, in all material respects, with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company or the Operating Partnership would have any liability. None of the Company, the Operating Partnership or the Subsidiaries has incurred or expects to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Code, including the regulations and published interpretations thereunder. Each “pension plan” for which any of the Company, the Operating Partnership or the Subsidiaries would have any liability and that is intended to be qualified under Section 401(a) of the Code is so qualified

in all material respects, and nothing has occurred, 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 have a Material Adverse Effect.

(vv) None of the Company, the Operating Partnership, the Subsidiaries or, to the knowledge of the Company or the Operating Partnership, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company, the Operating Partnership or any of 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, and the Company, the Operating Partnership and the Subsidiaries and, to the knowledge of the Company, the Operating Partnership and the Subsidiaries, their 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.

(ww) The operations of the Company, the Operating Partnership 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 jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company, the Operating Partnership or the Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company and the Operating Partnership, threatened.

(xx) None of the Company, the Operating Partnership nor the Subsidiaries or, to the knowledge of the Company or the Operating Partnership, any director, officer, agent, employee, affiliate or representative of the Company, the Operating Partnership or the Subsidiaries is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company, the Operating Partnership nor the Subsidiaries located, organized or resident in a country or territory that is the subject of Sanctions; and the Company, the Operating Partnership and the Subsidiaries will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation by any

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(yy) None of the Company, the Operating Partnership or any of their Subsidiaries is in violation or default of (i) any provision of its charter or bylaws (or similar organizational documents), (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its Property is subject, or (iii) any statute, law, rule, regulation applicable to it or its properties or to any judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over it or any of its properties, except in the case of clauses (ii) and (iii) above, for such violations or defaults that would not, individually or in the aggregate, have a Material Adverse Effect.

(zz) Except for this Agreement, there are no contracts, agreements or understandings that would give rise to a valid claim against the Company or the Operating Partnership or the Agent for a brokerage commission, finder’s fee or other like payment in connection with the offering contemplated by this Agreement.

(aaa) There is and has been no failure on the part of the Company or any of the Company’s officers or directors, in their capacities as such, to comply in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”), and the Company has taken all necessary actions to ensure that, so long as the Company has a class of securities registered under Section 12 of the Exchange Act, the Company and any officers and directors of the Company, in their capacities as such, will be in compliance with the Sarbanes-Oxley Act.

(bbb) The Company and the Operating Partnership make and keep books and records that are accurate in all material respects and maintain “internal control over financial reporting” (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) in compliance with the requirements of the Exchange Act. The Company’s and the Operating Partnership’s internal control over financial reporting has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) the interactive data in eXtensible Business Reporting Language included as an exhibit to the Registration Statement is accurate. Except as otherwise disclosed in the Registration Statement and the Prospectus, since the Company’s incorporation, there has been (a) no significant deficiency or material weakness in the design or operation of the Company’s internal control over financial reporting (whether or not remediated) which is reasonably likely to adversely affect the Company’s ability to record,

process, summarize and report financial information and (b) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(ccc) The interactive data in eXtensbile Business Reporting Language included as an exhibit to the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(ddd) The Company and its consolidated subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act). Such disclosure controls and procedures are effective to perform the functions for which they were established and are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange 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 and principal financial officer, to allow timely decisions regarding disclosure.

(eee) None of the Company, the Operating Partnership or the Subsidiaries has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to, described or incorporated by reference in, or filed as an exhibit to, the Registration Statement or the Prospectus, and no such termination or non-renewal has been threatened by any of the Company, the Operating Partnership or the Subsidiaries or, to the Company’s and Operating Partnership’s knowledge, any other party to any such contract or agreement.

(fff) The Company has not, directly or indirectly, including through the Operating Partnership, extended credit, arranged to extend credit or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company or the Operating Partnership, or to or for any family member or affiliate of any director or executive officer of the Company or the Operating Partnership.

(ggg) None of the Company, the Operating Partnership or the Subsidiaries nor any of their respective directors, officers, affiliates or controlling persons has taken, directly or indirectly, any action designed, or which has constituted or might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.

(hhh) Throughout the period from its formation through the date hereof, the Operating Partnership and any Subsidiary that has been formed as a partnership or a limited liability company for State law purposes has been properly classified either as a partnership or as an entity disregarded as separate from its parent for U.S. federal income tax purposes and has not been subject to taxation as an association or a “publicly traded partnership” (within the meaning of Section 7704(b) of the Code) taxable as a corporation, for U.S. federal income tax purposes.

(iii) The Company and the Operating Partnership intend to apply the net proceeds from the sale of the Placement Shares substantially in accordance with the description set forth in the Registration Statement and the Prospectus under the heading “Use of Proceeds.”

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

(kkk) Each of the Company and the Operating Partnership acknowledges that the Agent and, for purposes of the opinions to be delivered pursuant to this Agreement, counsel to the Company and counsel to the Agent, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

(lll) The Common Stock and the Series D Preferred Stock are each an “actively-traded security” exempted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.

6. Sale and Delivery; Settlement.

(a) Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will not incur any liability or obligation to the Company or any other person or entity if it does not sell Placement 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 Placement Shares as required under this Agreement and (iii) the Agent shall not be under any obligation to purchase Placement Shares on a principal basis pursuant to this Agreement.

(b) Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the third (3^rd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date “ and the first such settlement date, the “First Delivery Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by the Agent at which such Placement Shares were sold, after deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

crediting the Agent’s or its designee’s account at The Depository Trust Company through its Deposit and Withdrawal at Custodian System (“DWAC”) or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Agent acting under the applicable Placement Notice will deliver the related Net Proceeds in same-day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company will, in addition to and in no way limiting the rights and obligations set forth in Section 9(a) (Indemnification and Contribution), (i) hold the Agent harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and (ii) pay to the Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.

(d) Denominations; Registration. Certificates for the Placement Shares, if any, shall be in such denominations and registered in such names as the Agent may request in writing at least one full business day before the Settlement Date. The certificates for the Placement Shares, if any, will be made available for examination and packaging by the Agent in The City of New York not later than noon (New York time) on the business day prior to the Settlement Date.

(e) Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the number of Placement Shares sold pursuant to this Agreement or any Terms Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement and any Terms Agreement, the Maximum Amount, (B) the dollar amount of securities available for offer and sale under the currently effective Registration Statement and (C) the aggregate dollar amount or number of shares of Common Stock and/or Series D Preferred Stock authorized from time to time to be issued and sold under this Agreement, and any Terms Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares at a price lower than the minimum price authorized from time to time by the Company’s board of directors, duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing.

(f) No Obligation to Purchase Placement Shares. The Agent shall not have any obligation to purchase Placement Shares as principal, whether from the Company or otherwise, unless the Company and the Agent agree as set forth below. Placement Shares purchased from the Company by the Agent, individually or in a syndicate, as principal shall be made in accordance with terms agreed upon between the Agent and the Company as evidenced by a Terms Agreement. The Agent’s commitment to purchase Placement Shares from the Company as principal shall be deemed to have been made on the basis of the accuracy of the representations and warranties of the Company, and performance by the Company of its covenants and other obligations, herein contained and shall be subject to the terms and conditions herein set forth. At the time of each Terms Agreement, the Agent shall specify the requirements, if any, for the

officers’ certificate, opinions and letters of counsel and accountants’ letter pursuant to Section 7(q), (r) and (s), respectively, hereof. In the event of a conflict between the terms of this Agreement and a Terms Agreement, the terms of such Terms Agreement shall control.

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(a) Registration Statement Amendments. After the date of this Agreement and during any period (the "Prospectus Delivery Period") in which a prospectus relating to any Placement Shares is required to be delivered by the Agent under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.

(b) Notice of Commission Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any other order preventing or suspending the use of the Prospectus, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose or any examination pursuant to Section 8(e) of the Securities Act, or if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Placement Shares; and the Company will promptly use its commercially reasonable efforts to prevent the issuance of any stop or other order or to obtain its withdrawal if such a stop or other order should be issued.

(c) Delivery of Prospectus; Subsequent Changes. During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period any event occurs 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 a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

(d) Delivery of Registration Statement and Prospectus. The Company will furnish to the Agent (at the expense of the Company) copies of the Registration Statement and the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during the Prospectus Delivery Period. The copies of the Registration Statement and the Prospectus and any supplements or amendments thereto furnished to the Agent will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. Notwithstanding the foregoing, the Company will not be required to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.

(e) Copies of Amendments. Before amending or supplementing the Registration Statement, or the Prospectus, or a document incorporated by reference therein, the Company shall furnish to the Agent a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Agent objects, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule 424(b).

(f) Agent to be Advised. The Company shall advise the Agent promptly, and confirm such advice in writing, (i) when the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective; (iii) when any supplement to the Prospectus or any amendment to the Prospectus has been filed; (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (v) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or the Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; or (vi) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Placement Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement or the Prospectus or suspending any such qualification of the Placement Shares and, if any such order is issued, will use its best efforts to obtain as soon as possible the withdrawal thereof.

(g) Post-Effective Amendments. If, at or after the time this Agreement is executed and delivered, it is necessary or appropriate for a post-effective amendment to the Registration Statement, to be filed with the Commission and become effective before the Shares may be sold, the Company will use its best efforts to cause such post-effective amendment to be filed and become effective, and will pay any applicable fees in accordance with the Securities Act, as soon as possible. The Company will advise the Agent promptly and, if requested by the Agent, will confirm such advice in writing, (i) when such post-effective amendment has become effective and (ii) if Rule 430A under the Securities Act is relied upon, when the Prospectus is filed with the Commission pursuant to Rule 424(b) under the Securities Act (which the Company agrees to file in a timely manner in accordance with such Rules

(h) Blue Sky. The Company will promptly furnish such information or to take such action as the Agent may reasonably request and otherwise to qualify the Placement Shares for offer and sale under the securities or “blue sky” laws of such jurisdictions (domestic and foreign) as the Agent shall reasonably 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 Placement Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject; and to promptly advise the Agent of the receipt by the Company of any notification with respect to the suspension of the qualification of the Placement Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

(i) Earnings Statement. The Company will make generally available to its security holders as soon as practicable an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act. “Earnings statement” and “make generally available” will have the meanings contained in Rule 158 under the Securities Act.

(j) Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company and the Operating Partnership, jointly and severally, agree to pay or cause to be paid all expenses incident to the performance of their respective obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s and the Operating Partnership’s counsel, accountants and other advisors in connection with the registration and delivery of the Placement Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, the Prospectus, and amendments, supplements and exhibits to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Agent and dealers, in the quantities hereinabove specified; (ii) all costs and expenses related to the transfer and delivery of the Placement Shares to the Agents, including any transfer or other taxes payable thereon; (iii) the cost of printing and producing any securities or blue sky memorandum in connection with the offer and sale of the Placement Shares under the securities laws of the jurisdictions in which the Placement Shares may be offered or sold and all expenses in connection with the qualification of the Placement Shares for offer and sale under such securities laws as provided in Section 7(h) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Agent in connection with such qualification and in connection with the securities or blue sky memorandum; (iv) all filing fees and the reasonable fees and disbursements of counsel to the Agent incurred in connection with the review and qualification of the offering of the Placement Shares by FINRA; (v) all costs and expenses incident to listing the Placement Shares on the NYSE; (vi) the cost of printing, issuing and delivering certificates representing the Placement Shares; (vii) the costs and charges of any transfer agent, registrar or depositary; (viii) the document production charges and expenses associated with preparing, printing and delivering to the Underwriters this Agreement; (ix) all expenses in connection with any offer and sale of the Placement Shares outside of the United States, including filing fees and the reasonable fees and disbursements of counsel for the Agent in connection with offers and sales outside of the United States; and (x) all other costs and

expenses incident to the performance of the obligations of the Company and the Operating Partnership hereunder for which provision is not otherwise made in this Section 7(j); provided, however, that the liability of the Company and the Operating Partnership for fees and disbursements of counsel for the Agent pursuant to clauses (iii) and (ix) shall not exceed $10,000 in the aggregate.

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

(l) Notice of Other Sales. During the pendency of any Placement Notice given hereunder, the Company shall provide the Agent with one day’s prior written notice, or, in the event that the average daily trading volume (as defined under Regulation M of the Exchange Act) of the Common Stock or the Series D Preferred Stock falls below $100,000, five days' written notice, before it offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares of Common Stock or Series D Preferred Stock (other than Placement Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock or Series D Preferred Stock, warrants or any rights to purchase or acquire Common Stock or Series D Preferred Stock; provided that such notice shall not be required in connection with the (i) issuance, grant or sale of Common Stock or Series D Preferred Stock, options to purchase shares of Common Stock or Series D Preferred Stock or Common Stock or Series D Preferred Stock issuable upon the exercise of options or other equity awards pursuant to any employee or director stock option or benefits plan or stock ownership plan, (ii) the issuance or sale of shares of Common Stock or Series D Preferred Stock pursuant to any dividend reinvestment plan that the Company may adopt from time to time, (iii) the issuance of shares of Common Stock or Series D Preferred Stock upon the exercise of any currently outstanding warrants, options or other rights in effect or outstanding and disclosed in filings by the Company available on EDGAR or (iv) the issuance of shares of Common Stock upon the redemption of OP Units.

(m) Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice, advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.

(n) Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by the Agent or their representatives or agents in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.

(o) REIT Status. The Company will use its best efforts to meet the requirements to qualify as a REIT under the Code for its taxable year ending December 31, 2016, and thereafter will use its best efforts to continue to meet the requirements to qualify as a REIT under the Code, as the case may be, until the Board of Directors of the Company determines that it is no longer in the best interests of the Company and its stockholders to qualify as a REIT.

(p) Required Filings Relating to Placement of Placement Shares. The Company will disclose in its quarterly reports on Form 10-Q, in its annual report on Form 10-K and/or, in the discretion of the Company, in a current report on Form 8-K the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, during the applicable period.

(q) Representation Dates; Certificate. Each time the Company: (i) files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares; (ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information or a material amendment to the previously filed Form 10-K); (iii) files a quarterly report on Form 10-Q under the Exchange Act or (iv) files a current report on Form 8-K containing amended financial information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K under the Exchange Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”); the Company shall furnish the Agent with a certificate, in the form attached hereto as Exhibit B within three (3) Trading Days of any Representation Date. The requirement to provide a certificate under this Section 7(q) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide the Agent with a certificate under this Section 7(q), then before the Company delivers the Placement Notice or the Agent sells any Placement Shares, the Company shall provide the Agent with a certificate, in the form attached hereto as Exhibit B, dated the date of the Placement Notice.

(r) Legal Opinion. On the date of this Agreement, within three (3) Trading Days after each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit B for which no waiver is applicable, and the date of the Placement Notice if such Placement Notice is delivered during a period for which the waiver described in Section 7(q) was in effect, unless the Agent agrees otherwise, the Company shall cause to be furnished to the Agent (i) a written opinion, a negative assurance letter and a written tax opinion of Hunton & Williams LLP, counsel for the Company and the Operating Partnership (“Company Counsel”), dated the date such opinions and negative assurance letter are required to be delivered, substantially similar to the forms attached hereto as Exhibit C, Exhibit D and Exhibit E, respectively, and (ii) a written opinion of Venable LLP, special Maryland counsel for the Company (“Maryland Counsel”), dated the date such opinion is required to be delivered, substantially similar to the form attached hereto as Exhibit F, in either case, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented. In lieu of the opinions and negative assurance letter of Company

Counsel and Maryland Counsel required to be furnished to the Agent pursuant to this Section 7(r) on subsequent Representation Dates, Company Counsel and Maryland Counsel may furnish the Agent with a letter (a “Reliance Letter”) to the effect that the Agent may rely on a prior opinion or negative assurance letter delivered under this Section 7(r) to the same extent as if it were dated the date of such Reliance Letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as then amended or supplemented).

(s) Comfort Letters. On the date of this Agreement, the Company shall cause its independent accountants (and/or any other independent accountants whose report is included in the Registration Statement or the Prospectus), to furnish the Agent with a letter (the “Initial Comfort Letter”) in form and substance satisfactory to the Agent (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act, the Exchange Act, and the PCAOB, and (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings. Within three (3) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit B for which no waiver is applicable, the Company shall cause such independent accountants to provide a supplemental comfort letter to the Agent which shall state that such auditors have followed such procedures as they deem necessary to determine that no changes or modifications to the Initial Comfort Letter are necessary except as set forth in such supplemental letter, together with a customary “circle up” of the relevant sections of the 10-Q, 10-K or other documents filed by the Company with the Commission and incorporated or deemed to be incorporated by reference in the Registration Statement.

(t) Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares or (ii) sell, bid for, or purchase the Placement Shares to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Placement Shares to be issued and sold pursuant to this Agreement other than the Agent; provided, however, the Company may bid for and purchase Common Stock or Series D Preferred Stock in accordance with Rule 10b-18 under the Exchange Act.

(u) Filings with the NYSE. The Company will timely file with the NYSE (and/or the Company’s then principal trading market for its Common Stock and its Series D Preferred Stock) all material documents and notices required by the NYSE (or such other principal trading market) of companies that have or will issue securities that are traded on the NYSE (or such other principal trading market).

(v) Securities Act and Exchange Act. The Company will use its commercially reasonable efforts to comply with all requirements imposed upon it by the Securities Act and the Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(w) No Offer to Sell. Other than a free writing prospectus (as defined in Rule 405 under the Securities Act) approved in advance in writing by the Company and the Agent in its capacity as principal or agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in their capacity as such) will, directly or indirectly, make, use, prepare, authorize, approve or refer to any free writing prospectus relating to the Placement Shares to be sold by the Agent as principal or agent hereunder. The Company will treat the Agent-approved Issuer Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act, and will comply with the requirements of Rule 433 of the Securities Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.

(x) No Other Prospectuses. The Company will not, at any time at or after the execution of this Agreement, to offer or sell any Placement Shares by means of any “prospectus” (within the meaning of the Securities Act) or use any “prospectus” (within the meaning of the Securities Act) in connection with the offer or sale of the Placement Shares, except in each case other than the Prospectus

(y) Sarbanes-Oxley Act. The Company will maintain and keep accurate books and records reflecting its assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles, (iii) receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. The Company will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company is made known to them, particularly during the period in which such periodic reports are being prepared.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

(aa) Listing. During any period in which a prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to cause the Placement Shares to be listed on the NYSE (or such other principal trading market for the Company’s Common Stock or Series D Preferred Stock).

(bb) Available Shares. The Company will ensure that there are at all times sufficient shares of Common Stock and/or Series D Preferred Stock to provide for the issuance, free of any preemptive rights, out its authorized but unissued shares of Common Stock and/or Series D Preferred Stock, of the Maximum Amount.

8. Conditions to the Agent’s Obligations.

The obligations of the Agent hereunder with respect to a Placement Notice will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company and the Operating Partnership herein, to the due performance by the Company and the Operating Partnership of its respective obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to the Agent in its reasonable judgment, and to the continuing satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions:

(a) Registration Statement Effective. The Registration Statement shall have become effective and shall be available for the sale of all Placement Shares contemplated to be issued by any Placement Notice.

(b) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose or (iv) the occurrence of any event that makes any statement of material fact made in the Registration Statement or the Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or that requires the making of any changes in the Registration Statement, related Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain any untrue statement of a material fact or

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(c) Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company or any Material Adverse Effect, or any development that could reasonably be expected to cause a Material Adverse Effect, the effect of which, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.

(d) Legal Opinions. The Agent shall have received the opinions and negative assurance letter of Company Counsel and Maryland Counsel required to be delivered pursuant to Section 7(r) on or before the date on which such delivery of such opinions and negative assurance letter is required pursuant to Section 7(r).

(e) Comfort Letters. The Agent shall have received the Initial Comfort Letters and any update letters required to be delivered pursuant to Section 7(s) on or before the date on which such delivery of such letters are required pursuant to Section 7(s).

(f) Representation Certificate. The Agent shall have received the certificate required to be delivered pursuant to Section 7(q) on or before the date on which delivery of such certificate is required pursuant to Section 7(q).

(g) Opinion of Counsel for Agent. The Agent shall have received from Clifford Chance US LLP, counsel for the Agent, such opinion or opinions, with respect to such matters as the Agent may reasonably require, on or before the date of delivery of the first Placement Notice issued hereunder, and the Company shall have furnished to such counsel such documents as it requests to enable it to pass upon such matters.

(h) No Exchange Suspension or FINRA Objection. Neither trading in the Common Stock nor in the Series D Preferred Stock shall have been suspended on the NYSE. FINRA shall have not objected to the fairness or reasonableness of the terms or arrangements under this Agreement.

(i) Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(q), the Company shall have furnished to the Agent such appropriate further information, certificates and documents as the Agent may reasonably request. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof. The Company will furnish the Agent with such conformed copies of such opinions, certificates, letters and other documents as the Agent shall reasonably request.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(k) Approval for Listing. The Placement Shares shall either have been (i) approved for listing on the Exchange, subject only to notice of issuance, or (ii) the Company shall have filed an application for listing of the Placement Shares on the NYSE at, or prior to, the issuance of any Placement Notice.

(l) Termination of Agreement. If any condition specified in this Section 8 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Agent by notice to the Company, and such termination shall be without liability of any party to any other party except as provided in Section 7(j) hereof and except that, in the case of any termination of this Agreement, Sections7(j), 9, 10, 12(a), 12(e) and 12(f) shall survive. Notice of such cancellation shall be given in writing and addressed to each of the individuals of the Company set forth on Schedule 2.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

(a) Company and Operating Partnership Indemnification. The Company and the Operating Partnership agree to indemnify and hold harmless the Agent, and its respective directors, officers, partners, employees and agents and each person, if any, who (i) controls such Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or (ii) is controlled by or is under common control with such Agent (an “Agent Affiliate”) from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable investigative, legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), as and when incurred, to which the Agent, or any such person, may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430B Information, or in the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability, expense or damage arises from or is caused directly or indirectly by an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with information furnished in writing to the Company by or on behalf of the Agent expressly for inclusion in the Registration Statement (or any amendment), including the Rule 430B Information, or the Prospectus (or any amendment or supplement thereof), it being understood and agreed that the only such information furnished by the Agent as aforesaid consists of the third paragraph of the Plan of

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

(b) Agent Indemnification. The Agent agrees to indemnify and hold harmless the Company, the Operating Partnership and the Company’s directors and each officer of the Company who signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company (a “Company Affiliate”) against any and all losses, liabilities, claims, damages and expenses to which the Company, or any such person, may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, as and when incurred, but only insofar as such loss, liability, claim, damage or expense arises from or is caused directly or indirectly by an untrue statement or omission or alleged untrue statement or omission in the Registration Statement (or any amendment), including the Rule 430B Information, or the Prospectus (or any amendment or supplement thereof), made in reliance on and in conformity with Agent Information.

(c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 9 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on the written advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on the written advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of

which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees, disbursements and other charges of more than one separate firm (in addition to any local counsel) and all such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 9 (whether or not any indemnified party is a party thereto), unless (i) such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding and (ii) such settlement 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) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the agents, if any), to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Agent, respectively. The relative benefits received by the parties hereto shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company and the Agent, respectively, with respect to the statements or omissions that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or

alleged omission to state a material fact relates to information supplied by the Company or the Agent, respectively, and their relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Operating Partnership and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 9(d) shall be deemed to include, for the purpose of this Section 9(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), the Agent shall not be required to contribute any amount in excess of the aggregate commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), any person who controls a party to this Agreement within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and any affiliates, officers, directors, partners, employees or agents of the Agent, will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 9(d), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9(d) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 9(c) hereof.

10. Representations and Agreements to Survive Delivery.

All representations and warranties of the Company and the Operating Partnership herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers who sign the Registration Statement or any directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefore or (iii) any termination of this Agreement.

11. Termination.

(a) Termination; General. The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any change,

or any development or event involving a prospective change, which individually or in the aggregate, in the sole judgment of the Agent, has or could have a Material Adverse Effect and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in the Placement Shares has been suspended or limited by the Commission or the NYSE, or if trading generally on the NYSE has been suspended or limited, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred and be continuing or (6) if a banking moratorium has been declared by either U.S. Federal or New York authorities.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

(d) Automatic Termination. Unless earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and sale of the Maximum Amount of Placement Shares through the Agent pursuant to this Agreement and any Terms Agreement.

(e) Effectiveness of Termination. Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date specified in such notice by the Agent or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.

(f) Survival. The provisions of Sections 7(j), 9, 12(a), 12(e) and 12(f) hereof and the obligation herein to pay any discount, commission or other compensation accrued, but unpaid, shall survive any expiration or termination of this Agreement.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, Facsimile:

414-298-1058, Attention: John Roesner, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York are open for business.

(b) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company, the Operating Partnership and the Agent and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 9 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. No party may assign its rights or obligations under this Agreement without the prior written consent of the other parties.

(c) Adjustments for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock dividend or similar event effected with respect to the Common Stock or the Series D Preferred Stock.

(d) Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company, the Operating Partnership and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

(e) Applicable Law; Consent to Jurisdiction and Process. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the principles of conflicts of laws. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof (certified or registered mail, return receipt requested) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

(f) Waiver of Jury Trial. EACH OF THE COMPANY, THE OPERATING PARTNERSHIP AND THE AGENT HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(g) Specified Courts. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby shall be instituted in (i) the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum

(h) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(a) the Company is a sophisticated business enterprise that has retained the Agent for the limited purposes set forth in this Agreement, and the Agent’s, the Company’s and the Operating Partnership’s respective rights and obligations are contractual in nature;

(b) the Company and the Operating Partnership are each capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;

(c) the Company and the Operating Partnership have 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;

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

(e) the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and the Company and the Operating Partnership have each consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;

(f) the Agent is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transaction for its own account or the account of its customers and hold long or short positions in the Common Stock or the Series D Preferred Stock; and

(g) the Company and the Operating Partnership each 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 or the Operating Partnership in respect to such fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company or the Operating Partnership, including shareholders, partners, employees or creditors of the Company or the Operating Partnership.

[Remainder of Page Intentionally Blank]

If the foregoing correctly sets forth the understanding between the Company, the Operating Partnership and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the parties.



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

ROBERT W. BAIRD & CO. INCORPORATED By: /s/ Steven H. Goldberg Name: Steven H. Goldberg Title: Managing Director

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
Steven Goldberg	Managing Director	[email protected]
John Roesner	Managing Director	[email protected]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

Pursuant to the terms and subject to the conditions contained in the Sales Agreement by and among Summit Hotel Properties, Inc. (the “Company”), Summit Hotel OP, LP (the “Operating Partnership”) and [l] (the “Agent”) dated August 2, 2016 (the “Agreement”), I hereby request on behalf of the Company that the Agent sell up to [l] shares of the Company’s [common stock, $0.01 par value per share][6.45% Series D Preferred Stock, $0.01 par value per share], at a market price per share of not less than $[l] and, with respect to such preferred stock, not more than the Maximum Price. For purposes hereof, “Maximum Price” means: (a) from August 2, 2016 and through December 27, 2016, $27.50; (b) subsequent to December 27, 2016 and through June 28, 2020, the product of (i) $25.00 plus any accrued and unpaid dividends per share to, but excluding, the date of sale and (ii) the sum of (A) 1.0 and (B) (x) the number of complete years until the optional redemption date (June 28, 2021) remaining at the date of sale multiplied by (y) 0.0050; and (c) on June 29, 2020 and thereafter, $25.00 plus any accrued and unpaid dividends per share to, but excluding, the date of sale.

The Company hereby confirms that, as of the date of this Placement Notice, neither the Prospectus, nor any Issuer Free Writing Prospectus, when taken together with the Prospectus, includes an untrue statement of a material fact or omits 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 Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

[ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS THE MAXIMUM AGGREGATE OFFERING PRICE, THE TIME PERIOD IN WHICH SALES ARE REQUESTED TO BE MADE, SPECIFIC DATES THE SHARES MAY NOT BE SOLD ON AND THE MANNER IN WHICH SALES ARE TO BE MADE BY THE AGENT.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

Pursuant to Section 7(q) of the several Sales Agreements (each, an “Agreement”), each dated as of August 2, 2016, by and among Summit Hotel Properties, Inc. (the “Company”) and Summit Hotel OP, LP (the “Operating Partnership”), on the one hand, and each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates Inc. and RBC Capital Markets, LLC, (each, an “Agent”), on the other hand, the undersigned President and Chief Executive Officer of the Company and the undersigned Executive Vice President, Chief Financial Officer and Treasurer of the Company hereby represent and warrant to each Agent that, as of the date indicated next to the signatures below:

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

2.The Company and the Operating Partnership, as applicable have complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such date and the conditions set forth in Section 8 of each Agreement have been satisfied waived in writing as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), proposes, on the basis of the representations and warranties, and subject to the terms and conditions, stated herein and in the Sales Agreement, dated August 2, 2016 (the “Sales Agreement”), among the Company, Summit Hotel OP, LP., a Delaware limited partnership (the “Operating Partnership”), and [●] (the “Agent”), to issue and sell to the Agent as principal for resale (the “Underwriter”), and the Underwriter agrees to purchase from the Company the shares of [Common Stock][Series D Preferred Stock] specified in the Schedule A hereto (the “[Initial]* Securities”), on the terms specified in Schedule A hereto. Capitalized terms used but not defined herein have the respective meanings ascribed thereto in the Sales Agreement.

[The Company grants an option to the Underwriter to purchase up to an additional [●] shares of Common Stock specified in Schedule A hereto (the “Option Securities”, and together with the Initial Securities, the “Securities”) at the price per share set forth in Schedule A hereto, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in whole or in part at any time from time to time upon notice by the Underwriter to the Company setting forth the number of Option Securities as to which the Underwriter is then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Underwriter, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Settlement Date (as defined below). For purposes of clarity, the parties hereto agree that the officers’ certificate, opinions and letter of counsel and accountants’ letter referred to in Section 7(q), (r) and (s), respectively, of the Sales Agreement are required to be delivered by or on behalf of the Company on the Settlement Date.]*

Payment of the purchase price for, and delivery of certificates for, the [Initial]* Securities shall be made at the offices of [●], [●], or at such other place as shall be agreed upon by the Underwriter and the Company, at [●] A.M./P.M. (New York City time) on the third (or fourth, if

the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 9(c) of the Sales Agreement), or such other time not later than ten business days after such date as shall be agreed upon by the Underwriter and the Company (such time and date of payment and delivery being herein called “Settlement Date”).

[In addition, in the event that any or all of the Option Securities are purchased by the Underwriter, payment of the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Underwriter and the Company, on each Date of Delivery as specified in the notice from the Underwriter[s] to the Company.

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Each of the provisions of the Sales Agreement not related solely to the Agent, as agent of the Company, is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if each such provision had been set forth in full herein. Each of the representations and warranties set forth in the Sales Agreement shall be deemed to have been made at and as of the date of this Terms Agreement [and] [,]* the Applicable Time [and any Date of Delivery]]*

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriter and the Company in accordance with its terms.

THIS TERMS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS TERMS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Raymond James & Associates, Inc.

880 Carillon Parkway

St. Petersburg, FL 33716

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with Raymond James & Associates and Inc. (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc. and RBC Capital Markets, LLC (collectively, the “Other Sales

Agreements”) with additional sales agents (collectively, the “Alternative Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

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 (the “Incorporated Documents”). 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 pursuant to its Electronic Data Gathering Analysis and Retrieval System or, if applicable, the Interactive Data Electronic Applications (collectively, “EDGAR”).

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

The Company or the Agent may, upon two business days’ prior notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 2), suspend or terminate any sale of Placement Shares; provided, however, that such suspension or termination shall not affect or impair the other party’s obligations with respect to any Placement Shares sold hereunder prior to

the receipt of such notice. Each of the parties agrees that no such notice under this Section 4 shall be effective against the other unless it is made to one of the individuals named on Schedule 2 hereto, as such schedule may be amended from time to time.

5. Representations and Warranties of the Company and the Operating Partnership.

misleading; provided, however, that the Company and the Operating Partnership make no representation and warranty with respect to any Agent Information. The documents incorporated, or to be incorporated, by reference in the Registration Statement and the Prospectus, at the time filed with the Commission, complied or will comply, in all respects to the requirements of the Exchange Act.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 880 Carillon Parkway, St. Petersburg, FL 33716, Facsimile: (727)

567-8058, Attention: General Counsel, Equity Capital Markets, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]

Very truly yours,



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

RAYMOND JAMES & ASSOCIATES, INC. By: /s/ Doug McDonald Name: Doug McDonald Title: Vice President

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, NY 10036

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James &

Associates Inc. and RBC Capital Markets, LLC (collectively, the “Other Sales Agreements”) with additional sales agents (collectively, the “Alternative Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

2. Placements.

this Agreement and the terms of any Placement Notice, the terms of such Placement Notice will control.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at One Bryant Part, New York, NY 10036, Facsimile: (646) 855-3073,

Attention: Syndicate Department, with a copy to: Facsimile: (212) 230-8730, Attention: ECM Legal, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ William Conkling Name: William Conkling Title: Managing Director Investment Banking

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

Exhibit EEXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Deutsche Bank Securities Inc.

60 Wall Street, 2nd Floor

New York, New York 10005

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with Deutsche Bank Securities Inc. (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates Inc. and RBC Capital Markets, LLC (collectively, the “Other

Sales Agreements”) with additional sales agents (collectively, the “Alternative Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

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

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 60 Wall Street, 2^nd Floor, New York, NY 10005, Facsimile: (212)

797-4561, Attention: Equity Capital Markets – Syndicate Desk, with a copy to Deutsche Bank Securities Inc., 60 Wall Street, 36^th Floor, New York, NY 10005, Attention: General Counsel, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

DEUTSCHE BANK SECURITIES INC. By: /s/ Jay Coleman Name: Jay Coleman Title: Managing Director
By: /s/ Francis Windels Name: Francis Windels Title: Managing Director

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

RBC Capital Markets, LLC

Brookfield Place

200 Vesey Street, 8^th Floor

New York, NY 10281

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with RBC Capital Markets, LLC (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc. and Raymond James & Associates and Inc. (collectively, the

“Other Sales Agreements”) with additional sales agents (collectively, the “Alternative Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

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

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 200 Vesey Street, 8^th Floor, New York, NY 10019, Facsimile: (212)

878-8375, Attention: General Counsel, Equity Capital Markets, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

RBC CAPITAL MARKETS, LLC By: /s/ Mark Hagan Name: Mark Hagan Title: Managing Director

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

KeyBanc Capital Markets Inc.

127 Public Square, 4th Floor

Cleveland, OH 44114

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with KeyBanc Capital Markets Inc. (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, Raymond James & Associates Inc. and RBC Capital Markets, LLC (collectively, the “Other

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

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 127 Public Square, 4th Floor, Cleveland, Ohio 44114, Facsimile:

216-689-0845, Attention: David Gruber, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

KEYBANC CAPITAL MARKETS INC. By: /s/ Jonathan O. Crane Name: Jonathan O. Crane Title: Sr. Managing Director

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
Michael Hawkins	Managing Director	[email protected]
David Gruber	Managing Director	[email protected]
Paul Hodermarsky	Managing Director	[email protected]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Canaccord Genuity Inc.

535 Madison Avenue, 2^nd Floor

New York, NY 10022

Ladies and Gentlemen:

Each of Summit Hotel Properties, Inc., a Maryland corporation (the “Company”), and Summit Hotel OP, LP, a Delaware limited partnership (the “Operating Partnership”), confirms its respective agreement (this “Agreement”) with Canaccord Genuity Inc. (the “Agent”), as follows:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates and Inc. and RBC Capital Markets, LLC (collectively, the

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

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 99 High Street, 12^th Floor, Boston, MA 02110, Facsimile: (617) 788-1533,

Attention: U.S. ECM / General Counsel, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

CANACCORD GENUITY INC. By: /s/ Peter Dippolito Name: Peter Dippolitto Title: Managing Director, Investment Banking

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

SUMMIT HOTEL PROPERTIES, INC.

Common Stock
($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

Sales Agreement

August 2, 2016

Jefferies LLC

520 Madison Avenue

New York, New York 10022

Ladies and Gentlemen:

1.Issuance and Sale of Placement Shares.

The Company and the Operating Partnership are entering into a sales agreement, dated August 2, 2016, with each of Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., Deutsche Bank Securities Inc., KeyBanc Capital Markets Inc., Raymond James & Associates Inc. and RBC Capital Markets, LLC (collectively, the “Other Sales Agreements”) with additional sales agents (collectively, the “Alternative

Agents”) for the issuance and sale from time to time to or through the Alternative Agents of the Placement Shares on the terms to be set forth in the Other Sales Agreements. The Agent and the Alternative Agents are collectively referred to herein as the “Agents.” This Agreement and the Other Sales Agreements are collectively referred to herein as the “Sales Agreements.” The aggregate offering price of Placement Shares that may be sold pursuant to the Sales Agreements shall not exceed the Maximum Amount.

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 (the “Incorporated Documents”). 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 pursuant to its Electronic Data Gathering Analysis and Retrieval System or, if applicable, the Interactive Data Electronic Applications (collectively, “EDGAR”).

2. Placements.

3. Sale of Placement Shares by the Agent.

4. Suspension or Termination of Sales.

5. Representations and Warranties of the Company and the Operating Partnership.

(g) To the knowledge of the Company, there are no contracts or documents of a character which are required to be filed as exhibits to the Registration Statement other than those that are so filed.

material respects to the description thereof contained in the Registration Statement and the Prospectus under the caption “Description of Common and Preferred Stock.”

Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

(jjj) The Company has no present plan or intention to materially alter its investment policies as described in the Registration Statement and the Prospectus.

6. Sale and Delivery; Settlement.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by

7. Covenants of the Company.

The Company covenants and agrees with the Agent that:

(k) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

(z) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the Common Stock and the Series D Preferred Stock.

8. Conditions to the Agent’s Obligations.

omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice

hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) No Termination Event. There shall not have occurred any event or condition that would permit the Agent to terminate this Agreement pursuant to Section 11.

9. Indemnification and Contribution.

Distribution section of the Prospectus Supplement (“Agent Information”). This indemnity agreement will be in addition to any liability that the Company might otherwise have.

10. Representations and Agreements to Survive Delivery.

11. Termination.

(b) Termination by the Company. The Company shall have the right to terminate this Agreement by giving notice as specified herein to the Agent.

(c) Termination by the Agent. In addition to the rights set forth in Section 11(a), the Agent shall have the right to terminate this Agreement by giving three days’ notice to the Company.

12. Miscellaneous.

(a) Notices. Except as otherwise set forth in Section 4 of this Agreement, all notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and effective only on receipt, unless otherwise specified in this Agreement, and, if to the Agent, such notice shall be delivered, mailed or sent to the Agent at 520 Madison Avenue, New York, NY 10022, Facsimile: [●], Attention:

General Counsel, and if to the Company, such notice shall be delivered, mailed or sent to the Company at 12600 Hill Country Boulevard, Suite R-100, Austin, Texas 78738, Facsimile: (512) 538-2333, Attention: Christopher R. Eng, Executive Vice President, General Counsel, Chief Risk Officer and Secretary.

and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

13. Absence of Fiduciary Relationship.

The Company and the Operating Partnership acknowledge and agree that:

(d) the Company and the Operating Partnership each disclaims any intention to impose fiduciary obligations on the Agent by virtue of the engagement contemplated by this Agreement;

[Remainder of Page Intentionally Blank]



	Very truly yours,

	SUMMIT HOTEL PROPERTIES,INC. By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
	SUMMIT HOTEL OP, LP By: Summit Hotel GP, LLC, its general partner By: Summit Hotel Properties, Inc., its sole member By: /s/ Greg A. Dowell Name: Greg A. Dowell Title: Executive Vice President, Chief Financial Officer and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written

JEFFERIES LLC By: /s/ Michael L. Judlowe Name: Michael L. Judlowe Title: MD - ECM

SCHEDULE 1

The Agent shall be paid compensation equal to up to 2.0% of the gross proceeds from the sale of Placement Shares pursuant to the terms of this Agreement.

SCHEDULE 2

Placement Notice Authorized Personnel



Name	Title	Email Address
[●]	[●]	[●]
[●]	[●]	[●]



Name	Title	Email Address
Daniel P. Hansen	President and Chief Executive Officer	[email protected]
Greg A. Dowell	Executive Vice President, Chief Financial Officer and Treasurer	[email protected]
Christopher R. Eng	Executive Vice President, General Counsel, Chief Risk Officer and Secretary	[email protected]

SCHEDULE 3

Significant Subsidiaries

Summit Hotel GP, LLC

Summit Hospitality I, LLC

Summit Hotel OP, LP

Summit Hotel TRS, Inc.

EXHIBIT A

FORM OF PLACEMENT NOTICE

From: Summit Hotel Properties, Inc.

To: [l]

Cc:

Subject: Placement Notice

Ladies and Gentlemen:

The Company hereby confirms that, as of the date of this Placement Notice, it is not in possession of any material non-public information.

EXHIBIT B

FORM OF OFFICERS’ CERTIFICATE

1.The representations and warranties of the Company and the Operating Partnership, as applicable, in the Agreement, are true and correct as if made at and as of such date.

Name: Daniel P. Hansen

Title: President and Chief Executive Officer

Date:

Name: Greg A. Dowell


Title:	Executive Vice President, Chief Financial Officer and Treasurer

Date:

EXHIBIT C

FORM OF OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT D

FORM OF NEGATIVE ASSURANCE LETTER OF HUNTON & WILLIAMS LLP

EXHIBIT E

FORM OF TAX OPINION OF HUNTON & WILLIAMS LLP

EXHIBIT F

FORM OF OPINION OF VENABLE LLP

Annex I

Summit Hotel Properties, Inc.

Common Stock

($0.01 par value per share)

6.45% Series D Preferred Stock

($0.01 par value per share)

TERMS AGREEMENT

[Name of Agent]

[Address]

Ladies and Gentlemen:

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Underwriter.

Very truly yours,

Summit Hotel Properties, Inc.

By: ________________________________

Name:

Title:

Accepted as of the date hereof:

[Name of Agent]

By: ________________________________

Name:

Title:

* Include only if the Underwriter has an option to purchase additional shares of Common Stock from the Company.

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Daniel P. Hansen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Summit Hotel Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statement for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Summit Hotel Properties, Inc.

Date: August 2, 2016	By:	/s/ Daniel P. Hansen
		Daniel P. Hansen
		President and Chief Executive Officer
		(principal executive officer)

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Greg A. Dowell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Summit Hotel Properties, Inc.;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Summit Hotel Properties, Inc.

Date: August 2, 2016	By:	/s/ Greg A. Dowell
	Greg A. Dowell
	Executive Vice President, Chief Financial Officer and Treasurer
	(principal financial officer)

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Summit Hotel Properties, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel P. Hansen, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	Summit Hotel Properties, Inc.

Date: August 2, 2016	By:	/s/ Daniel P. Hansen
		Daniel P. Hansen President and Chief Executive Officer (principal executive officer)

Exhibit 32.2

Certification Pursuant To

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Summit Hotel Properties, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg A. Dowell, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	Summit Hotel Properties, Inc.

Date: August 2, 2016	By:	/s/ Greg A. Dowell
	Greg A. Dowell Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer)

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Form 10-Q Summit Hotel Properties, For: Jun 30

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