Exhibit 10.39

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE HOLDER,
REASONABLY ACCEPTABLE TO THE CORPORATION, TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE CORPORATION.

COMMON STOCK PURCHASE WARRANT

SUPERTEL HOSPITALITY, INC.

Warrant Shares: 21,000,000

Initial Exercise Date: February 1, 2012

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Real Estate Strategies L.P., a Bermuda Limited Partnership, and, or
its assigns (the “Holder”) is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the
close of business on January 31, 2017 (the “Termination Date”) but not
thereafter, to subscribe for and purchase from Supertel Hospitality, Inc., a
Virginia corporation (the “Company”), 21,000,000 shares (subject to adjustment
hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).

Section 1. Definitions. In addition to the definitions provided throughout this
Agreement and unless the context otherwise requires, the following terms, when
capitalized, shall have the following meanings for the purposes of construing
this Agreement:

 

  (a) “Affiliates” means, with respect to any person, any person directly or
indirectly controlling, controlled by or under common control with, such other
person. For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”) when used
with respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management or policies of such person, whether
through the ownership of voting securities by contract or otherwise.

 

  (b) “Base Exercise Price” has the meaning ascribed to such term in
Section 3(d).

 

  (c) “Beneficial Ownership Limitation” has the meaning ascribed to such term in
Section 2(f).

 

  (d)

Business Day: means any day except a Saturday, Sunday or other day on which
banks in New York, New York and Ciudad Autónoma de Buenos Aires, Argentina are
authorized by law to close, other than the Jewish holidays listed by Bloomberg
under CDR-JW

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  (including Pesach 1st day, Pesach 2nd day, Pesach 7th day, Pesach 8th day,
Shavuot, Shavuot (yizcor), Rosh Hashanah, Yom Kippur, Sucot, Shemini Atzeret and
Simjat Tora).

 

  (e) “Company” is defined in the first paragraph of the Warrant.

 

  (f) “Conversion Price” has the meaning assigned to it in the Company’s Series
C Cumulative Convertible Preferred Stock.

 

  (g) “Exempt Issuance” has the meaning ascribed to such term in Section 3(d).

 

  (h) “Exercise Price” has the meaning ascribed to such term in Section 2(b).

 

  (i) “Holder” is defined in the first paragraph of the Warrant.

 

  (j) “Initial Exercise Date” is defined in the first paragraph of the Warrant.

 

  (k) “Notice of Required Exercise” has the meaning ascribed to such term in
Section 2(j).

 

  (l) “Permitted Transferees” has the meaning ascribed to such term in
Section 4(a).

 

  (m) “Preferred Shares” means the Company’s Series C Cumulative Convertible
Preferred Stock.

 

  (n) “Purchase Agreement” shall mean that certain agreement dated November 16,
2011 by and among Real Estate Strategies L.P., Supertel Limited Partnership, and
the Company.

 

  (o) “Termination Date” is defined in the first paragraph of the Warrant.

 

  (p) “Trading Day” means a day on which the Nasdaq Stock Market LLC (or if the
Common Stock are not listed or admitted for trading on the Nasdaq Stock Market
LLC, on the principal national securities exchange on which such securities are
listed, or if not so listed, the OTC Bulletin Board (or any successors to any of
the foregoing)) is open for trading.

 

  (q) “VWAP” means (i) the volume weighted average price of the Common Stock on
the Nasdaq Stock Market LLC, or if such securities are not listed or admitted
for trading on the Nasdaq Stock Market LLC, on the principal national securities
exchange on which such securities are listed or admitted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:00 p.m. (New York City time)), (ii) or if not listed or admitted for trading
on any national securities exchange, the volume weighted average price of the
Common Stock for such period in the applicable securities market in which the
securities are traded or (iii) if the Common Stock is not then listed or quoted
for trading on any securities market the average fair market value of a share of
Common Stock for such period as determined by an independent appraiser selected
in good faith by the Company, the fees and expenses of which shall be paid by
the Company and which determination shall be final, conclusive and binding.

 

  (r) “Warrant” is defined in the first paragraph of the Warrant.

 

  (s) “Warrant Shares” is defined in the first paragraph of the Warrant.

 

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  (t) “Warrants” means this Warrant and the other warrants issued pursuant to
the Purchase Agreement.

 

  (u) “Warrant Register” has the meaning ascribed to such term in Section 4(c).

Section 2. Exercise.

(a) Exercise of Warrant. Subject to the Beneficial Ownership Limitation (set
forth below), exercise of this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at
the address of the Holder appearing on the books of the Company) of a duly
executed copy of the Notice of Exercise form annexed hereto. Within five
(5) Trading Days following the date of exercise as aforesaid and upon delivery
by Holder of this Warrant and the aggregate Exercise Price for the shares
specified in the applicable Notice of Exercise (by wire transfer or cashier’s
check drawn on a United States bank, unless the cashless exercise procedure
specified in Section 2(c) below is specified in the applicable Notice of
Exercise), the Company shall issue and cause to be delivered to Holder the
certificate or certificates (or electronic equivalent thereof) representing the
number of fully-paid and non-assessable Warrant Shares for which the Warrant is
being exercised. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased and, following such partial exercise, the Company shall deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

  (b) Exercise Price. The exercise price per share of the Common Stock under
this Warrant shall be $1.20, subject to adjustment hereunder (the “Exercise
Price”).

 

  (c) Cashless Exercise. This Warrant may be exercised, in whole or in part, by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

 

  (A) = the VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a “cashless exercise,” as set
forth in the applicable Notice of Exercise;

 

  (B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 

  (X) = the number of Warrant Shares that would be issuable upon exercise of
this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.

 

  (d) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

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  (e) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

 

  (f) Beneficial Ownership Limitation. The Company shall not effect any exercise
of this Warrant, and a Holder shall not have the right to exercise any portion
of this Warrant, to the extent that, after giving effect to the exercise set
forth on the applicable Notice of Exercise, such Holder (together with such
Holder’s Affiliates, and any Persons acting as a group together with such Holder
or any of such Holder’s Affiliates) would beneficially own in excess of the
Beneficial Ownership Limitation. For purposes of this Section 2(f), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder (except that a person
or group shall be deemed to have beneficial ownership of shares of Voting Stock
that such person or group has the right to acquire regardless of when such right
is first exercisable), it being acknowledged by such Holder that the Holder does
not have the right to acquire Warrant Shares in excess of the Beneficial
Ownership Limitation. To ensure compliance with this restriction, each Holder
will be deemed to represent to the Company each time it delivers a Notice of
Exercise that such Notice of Exercise has not violated the restrictions set
forth in this section. For purposes of this Section 2(f), in determining the
number of outstanding shares of Voting Stock, a Holder may rely on the number of
outstanding shares of Voting Stock as stated in the most recent of the
following: (i) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (ii) a more recent public announcement by
the Company or (iii) a more recent written notice by the Company or the
Company’s Transfer Agent setting forth the number of shares of Voting Stock
outstanding. Upon the written or oral request of a Holder, the Company shall
promptly confirm orally and in writing to such Holder the number of votes
represented by the Voting Stock then outstanding. In any case, the total voting
power of the outstanding shares of Voting Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the
Warrant, by such Holder or its Affiliates since the date as of which such number
of outstanding shares of Voting Stock was reported. The “Beneficial Ownership
Limitation” shall be 34.0% of the total number of votes represented by the
Voting Stock outstanding immediately after giving effect to the issuance of
Warrant Shares otherwise issuable pursuant to the applicable Notice of Exercise.
The provisions of this section shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(f) to
correct this section (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation contained herein
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.

 

  (g)

Required Exercise. After January 31, 2015, the Company may from time to time
upon a written notice to the Holder require Holder to exercise of some or all of
this Warrant under Section 2(a) using the cashless procedure specified in
Section 2(c) (a “Notice of Required Exercise”) if the last sales price of the
Common Stock equals or exceeds $2.63

 

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  on the Trading Day immediately preceding the date the Notice of Required
Exercise is delivered and the VWAP for the Common Stock has equaled or exceeded
$2.63 for the prior thirty (30) consecutive Trading Days immediately prior to
the date the Notice of Required Exercise is delivered. On the first Trading Day
thereafter the Holder shall deliver a Notice of Exercise to the Company
exercising this Warrant in whole or part as specified in the Notice of Required
Exercise, subject to the Beneficial Ownership Limitation. Any portion of this
Warrant that cannot be exercised by Holder to the extent specified in the Notice
of Required Exercise because of the Beneficial Ownership Limitation, shall be
exercised by Holder at the time or times thereafter if and when the Beneficial
Ownership Limitation would not then be exceeded, provided that this Warrant may
not in any event be exercised after the close of business on the Termination
Date. Further, there will be no required exercise on any day if the VWAP used to
calculate the cashless exercise pursuant to Section 2(c) would be less than
$2.63 per share.

 

  (h) No Approval Required. No approval of the Company’s Board shall be required
to convert any of the Preferred Shares or exercise any of the Warrants;
provided, however, any such conversion or exercise shall be made in compliance
with the Beneficial Ownership Limitation and with applicable law including any
regulatory notices or approvals.

 

  (i) Legend. The Holder agrees that all certificates or other instruments
representing the Warrant Shares will bear a legend substantially to the
following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

Section 3. Certain Adjustments.

 

  (a) If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or makes a distribution to holders of any class or series of
capital stock of the Company in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant or warrants issued concurrently with or prior to this
Warrant), (ii) subdivides outstanding shares of Common Stock into a greater
number of shares, (iii) combines its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issues any shares of its capital stock by
reclassification of the Common Stock, then the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding any treasury shares of the Company) outstanding
immediately before such event, and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.

 

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  (b) If the Company sells any Common Stock or grants any option or right to
purchase Common Stock and as a consequence reduces the Conversion Price then the
Exercise Price shall be reduced to equal 120% of such Conversion Price as
adjusted (or as it would have been adjusted in the event the Preferred Shares
were no longer outstanding).

 

  (c) If at any time the Company issues any rights, options or warrants pro rata
to all holders of Common Stock to purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) (the “Purchase Rights”), then
each Holder shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete exercise of such Holder’s Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for
the issuance of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined
for the issuance of such Purchase Rights (provided, however, to the extent that
the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not
be entitled to participate in such Purchase Right to such extent and such
Purchase Right to such extent shall be held in abeyance, for a period not to
exceed 71 days, for the Holder until such time during such 71 day period, if
ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

  (d) If the Company, at any time while this Warrant is outstanding, distributes
to all holders of Common Stock (and not to the Holders) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security (other than the Common Stock, which
shall be subject to Section 3(c)), then in each such case the Exercise Price
shall be adjusted by multiplying such Exercise Price in effect immediately prior
to the record date fixed for determination of shareholders entitled to receive
such distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness or rights
or warrants so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors of the Company in good faith. In
either case the adjustments shall be described in a statement delivered to the
Holders describing the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

 

  (e) Whenever the Conversion Price is adjusted pursuant to any provision of
this Section 3, the Company shall promptly deliver to each Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment. Notwithstanding anything
herein to the contrary, no adjustment of the Exercise Price shall be made
pursuant to this Section 1 in an amount less than $.01 per share, and any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any adjustments
so carried forward shall amount to $.01 per share or more.

 

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Section 4. Transfer of Warrant.

 

  (a) Transferability. Until the effectiveness date of the Shelf Registration
Statement, to be filed with the SEC, in connection with the Registration Rights
Agreement entered into by and between Real Estate Strategies L.P., IRSA
Inversiones y Representaciones Sociedad Anónima, and Supertel Hospitality, Inc.,
dated as of January 31, 2012, and subject to compliance with any applicable
securities laws, this Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part, to
Holder’s Affiliates or, with the consent of a majority of the directors of the
Board of Directors who are not designee directors of Real Estate Strategies L.P.
or its affiliates pursuant to the Directors Designation Agreement dated
January 31, 2012, to a non-affiliate (“Permitted Transferees”), such approval
shall not be unreasonably withheld by such Directors (if approval is withheld,
such reasons for withholding approval shall be presented in writing to the
Holder). Such transfer will be accomplished upon surrender of this Warrant at
the principal office of the Company or its designated agent, together with a
written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as applicable, and
in the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. The
Warrant, if properly assigned in accordance herewith, may be exercised by a new
holder for the purchase of Warrant Shares without having a new Warrant issued.

Once the Warrants have been registered, such Board consent shall no longer be
required.

 

  (b) New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the Permitted Transferees and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the Initial Exercise Date and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

  (c) Warrant Register and Registration Rights.

 

  (i) The Company shall register this Warrant, upon records to be maintained by
the Company for that, in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes. The Warrants, and the shares issuable
upon its exercise will be registered for its resale, on a registration statement
to be filed with the SEC pursuant to the Registration Rights Agreement dated
January 31, 2012 unless such Warrants or shares may be publicly resold under the
safe harbor of Rule 144 of the SEC without regard to limitations as to volume or
manner of sale thereunder. Such shares shall be transferable to affiliate
entities of Purchaser and/or SPPR Board approved third parties.

 

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Section 5. Miscellaneous.

(a) No Rights as Shareholder. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a shareholder of the Company.

 

  (b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

  (c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

  (d) Authorized Shares. The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Exchange upon which
the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of this Warrant and payment for such Warrant Shares
in accordance herewith, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

  (e)

Governing Law and Forum. This Warrant 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 of the parties hereto hereby
irrevocably consents, to the maximum extent permitted by law, that any action or
proceeding relating to this Warrant or the transactions contemplated hereby
shall be brought, at the option of the party instituting the action or
proceeding, in any court of general jurisdiction in New York County, New York,
in the United States District Court for the Southern District of New York or in
any state or federal court sitting in the area currently comprising the Southern
District of New York. Each of the parties hereto waives any objection that it
may have to the conduct of any action or proceeding in any such court based on
improper venue or forum non conveniens, waives personal service of any and all
process upon it, and consents that all service of process may be made by mail or
courier service directed

 

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  to it at the address set forth herein and that service so made shall be deemed
to be completed upon the earlier of actual receipt or ten days after the same
shall have been posted or delivered to a nationally recognized courier service.
Nothing contained in this shall affect the right of any party hereto to serve
legal process in any other manner permitted by law.

 

  (f) Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered in accordance
with the notice provision of the Purchase Agreement.

 

  (g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder.

 

  (h) Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holders of a
majority in interest of the then outstanding Warrants (calculated based on the
number of shares of Common Stock issuable upon the exercise of such Warrants).

 

  (i) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

  (j) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.

 

  SUPERTEL HOSPITALITY, INC.

  /s/ Kelly A. Walters

  By: Kelly A. Walters   Title: President and Chief Executive Officer

Acknowledged and accepted

 

REAL ESTATE STRATEGIES L.P By: JIWIN S.A. General Partner

/s/ Eduardo Elsztain

Name: Eduardo Elsztain Title: Chairman

 

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NOTICE OF EXERCISE

TO: SUPERTEL HOSPITALITY, INC.

(1) The undersigned hereby elects to purchase                      Warrant
Shares of the Company pursuant to the terms of the attached Warrant, and tenders
herewith payment of the exercise price in full, together with all applicable
transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

¨ in lawful money of the United States; or

¨ [if permitted] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
2(c).

(3) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:

 

 

   

The Warrant Shares shall be delivered to:

 

 

   

 

   

(4) Accredited Investor. The undersigned is an “accredited investor” as defined
in Regulation D promulgated under the Securities Act of 1933, as amended.

The undersigned further requests that if the number of shares elected to be
purchased herein shall not be all of the shares purchasable pursuant to the
terms of the attached Warrant, that a new Warrant of like tenor for the balance
of the shares purchasable hereunder be delivered to the undersigned.

 

[SIGNATURE OF HOLDER] Name:  

 

 

Signature of Authorized Officer:  

 

 

Name of Authorized Officer:  

 

 

Title of Authorized Officer:  

 

 

Date:  

 

 

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [            ] [all of or             ] shares of the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

 

  whose address is

 

 

 

   Dated:                    ,                         Holder’s Signature:   

 

   Holder’s Address:   

 

     

 

Signature Guaranteed:  

 

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

 

12

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NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE HOLDER,
REASONABLY ACCEPTABLE TO THE CORPORATION, TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE CORPORATION.

COMMON STOCK PURCHASE WARRANT

SUPERTEL HOSPITALITY, INC.

Warrant Shares: 9,000,000

Initial Exercise Date: February 15, 2012

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Real Estate Strategies L.P., a Bermuda Limited Partnership, and, or
its assigns (the “Holder”) is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the
close of business on January 31, 2017 (the “Termination Date”) but not
thereafter, to subscribe for and purchase from Supertel Hospitality, Inc., a
Virginia corporation (the “Company”), 9,000,000 shares (subject to adjustment
hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).

(a) Definitions. In addition to the definitions provided throughout this
Agreement and unless the context otherwise requires, the following terms, when
capitalized, shall have the following meanings for the purposes of construing
this Agreement:

(b) “Affiliates” means, with respect to any person, any person directly or
indirectly controlling, controlled by or under common control with, such other
person. For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”) when used
with respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management or policies of such person, whether
through the ownership of voting securities by contract or otherwise.

(c) “Base Exercise Price” has the meaning ascribed to such term in Section 3(d).

(d) “Beneficial Ownership Limitation” has the meaning ascribed to such term in
Section 2(f).

(e) Business Day: means any day except a Saturday, Sunday or other day on which
banks in New York, New York and Ciudad Autónoma de Buenos Aires, Argentina are
authorized by law to close, other than the Jewish holidays listed by Bloomberg
under CDR-JW (including Pesach 1st day, Pesach 2nd day, Pesach 7th day, Pesach
8th day, Shavuot, Shavuot (yizcor), Rosh Hashanah, Yom Kippur, Sucot, Shemini
Atzeret and Simjat Tora).

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(f) “Company” is defined in the first paragraph of the Warrant.

(g) “Conversion Price” has the meaning assigned to it in the Company’s Series C
Cumulative Convertible Preferred Stock.

(h) “Exempt Issuance” has the meaning ascribed to such term in Section 3(d).

(i) “Exercise Price” has the meaning ascribed to such term in Section 2(b).

(j) “Holder” is defined in the first paragraph of the Warrant.

(k) “Initial Exercise Date” is defined in the first paragraph of the Warrant.

(l) “Notice of Required Exercise” has the meaning ascribed to such term in
Section 2(j).

(m) “Permitted Transferees” has the meaning ascribed to such term in
Section 4(a).

(n) “Preferred Shares” means the Company’s Series C Cumulative Convertible
Preferred Stock.

(o) “Purchase Agreement” shall mean that certain agreement dated November 16,
2011 by and among Real Estate Strategies L.P., Supertel Limited Partnership, and
the Company.

(p) “Termination Date” is defined in the first paragraph of the Warrant.

(q) “Trading Day” means a day on which the Nasdaq Stock Market LLC (or if the
Common Stock are not listed or admitted for trading on the Nasdaq Stock Market
LLC, on the principal national securities exchange on which such securities are
listed, or if not so listed, the OTC Bulletin Board (or any successors to any of
the foregoing)) is open for trading.

(r) “VWAP” means (i) the volume weighted average price of the Common Stock on
the Nasdaq Stock Market LLC, or if such securities are not listed or admitted
for trading on the Nasdaq Stock Market LLC, on the principal national securities
exchange on which such securities are listed or admitted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:00 p.m. (New York City time)), (ii) or if not listed or admitted for trading
on any national securities exchange, the volume weighted average price of the
Common Stock for such period in the applicable securities market in which the
securities are traded or (iii) if the Common Stock is not then listed or quoted
for trading on any securities market the average fair market value of a share of
Common Stock for such period as determined by an independent appraiser selected
in good faith by the Company, the fees and expenses of which shall be paid by
the Company and which determination shall be final, conclusive and binding.

(s) “Warrant” is defined in the first paragraph of the Warrant.

(t) “Warrant Shares” is defined in the first paragraph of the Warrant.

(u) “Warrants” means this Warrant and the other warrants issued pursuant to the
Purchase Agreement.

(v) “Warrant Register” has the meaning ascribed to such term in Section 4(c).

 

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(w) Exercise.

(x) Exercise of Warrant. Subject to the Beneficial Ownership Limitation (set
forth below), exercise of this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at
the address of the Holder appearing on the books of the Company) of a duly
executed copy of the Notice of Exercise form annexed hereto. Within five
(5) Trading Days following the date of exercise as aforesaid and upon delivery
by Holder of this Warrant and the aggregate Exercise Price for the shares
specified in the applicable Notice of Exercise (by wire transfer or cashier’s
check drawn on a United States bank, unless the cashless exercise procedure
specified in Section 2(c) below is specified in the applicable Notice of
Exercise), the Company shall issue and cause to be delivered to Holder the
certificate or certificates (or electronic equivalent thereof) representing the
number of fully-paid and non-assessable Warrant Shares for which the Warrant is
being exercised. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased and, following such partial exercise, the Company shall deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

(y) Exercise Price. The exercise price per share of the Common Stock under this
Warrant shall be $1.20, subject to adjustment hereunder (the “Exercise Price”).

(z) Cashless Exercise. This Warrant may be exercised, in whole or in part, by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

 

(A)   = the VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a “cashless exercise,” as set
forth in the applicable Notice of Exercise; (B)   = the Exercise Price of this
Warrant, as adjusted hereunder; and (X)   = the number of Warrant Shares that
would be issuable upon exercise of this Warrant in accordance with the terms of
this Warrant if such exercise were by means of a cash exercise rather than a
cashless exercise.

(aa) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

(bb) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

 

3

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(cc) Beneficial Ownership Limitation. The Company shall not effect any exercise
of this Warrant, and a Holder shall not have the right to exercise any portion
of this Warrant, to the extent that, after giving effect to the exercise set
forth on the applicable Notice of Exercise, such Holder (together with such
Holder’s Affiliates, and any Persons acting as a group together with such Holder
or any of such Holder’s Affiliates) would beneficially own in excess of the
Beneficial Ownership Limitation. For purposes of this Section 2(f), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder (except that a person
or group shall be deemed to have beneficial ownership of shares of Voting Stock
that such person or group has the right to acquire regardless of when such right
is first exercisable), it being acknowledged by such Holder that the Holder does
not have the right to acquire Warrant Shares in excess of the Beneficial
Ownership Limitation. To ensure compliance with this restriction, each Holder
will be deemed to represent to the Company each time it delivers a Notice of
Exercise that such Notice of Exercise has not violated the restrictions set
forth in this section. For purposes of this Section 2(f), in determining the
number of outstanding shares of Voting Stock, a Holder may rely on the number of
outstanding shares of Voting Stock as stated in the most recent of the
following: (i) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (ii) a more recent public announcement by
the Company or (iii) a more recent written notice by the Company or the
Company’s Transfer Agent setting forth the number of shares of Voting Stock
outstanding. Upon the written or oral request of a Holder, the Company shall
promptly confirm orally and in writing to such Holder the number of votes
represented by the Voting Stock then outstanding. In any case, the total voting
power of the outstanding shares of Voting Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the
Warrant, by such Holder or its Affiliates since the date as of which such number
of outstanding shares of Voting Stock was reported. The “Beneficial Ownership
Limitation” shall be 34.0% of the total number of votes represented by the
Voting Stock outstanding immediately after giving effect to the issuance of
Warrant Shares otherwise issuable pursuant to the applicable Notice of Exercise.
The provisions of this section shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(f) to
correct this section (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation contained herein
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.

(dd) Required Exercise. After January 31, 2015, the Company may from time to
time upon a written notice to the Holder require Holder to exercise of some or
all of this Warrant under Section 2(a) using the cashless procedure specified in
Section 2(c) (a “Notice of Required Exercise”) if the last sales price of the
Common Stock equals or exceeds $2.63 on the Trading Day immediately preceding
the date the Notice of Required Exercise is delivered and the VWAP for the
Common Stock has equaled or exceeded $2.63 for the prior thirty (30) consecutive
Trading Days immediately prior to the date the Notice of Required Exercise is
delivered. On the first Trading Day thereafter the Holder shall deliver a Notice
of Exercise to the Company exercising this Warrant in whole or part as specified
in the Notice of Required Exercise, subject to the Beneficial Ownership
Limitation. Any portion of this Warrant that cannot be exercised by Holder to
the extent specified in the Notice of Required Exercise because of the
Beneficial Ownership Limitation, shall be exercised by Holder at the time or
times thereafter if and when the Beneficial Ownership Limitation would not then
be exceeded, provided that this Warrant may not in any event be exercised after
the close of business on the Termination Date. Further, there will be no
required exercise on any day if the VWAP used to calculate the cashless exercise
pursuant to Section 2(c) would be less than $2.63 per share.

(ee) No Approval Required. No approval of the Company’s Board shall be required
to convert any of the Preferred Shares or exercise any of the Warrants;
provided, however, any such conversion or exercise shall be made in compliance
with the Beneficial Ownership Limitation and with applicable law including any
regulatory notices or approvals.

 

4

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(ff) Legend. The Holder agrees that all certificates or other instruments
representing the Warrant Shares will bear a legend substantially to the
following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

(gg) Certain Adjustments.

(hh) If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or makes a distribution to holders of any class or series of
capital stock of the Company in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant or warrants issued concurrently with or prior to this
Warrant), (ii) subdivides outstanding shares of Common Stock into a greater
number of shares, (iii) combines its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issues any shares of its capital stock by
reclassification of the Common Stock, then the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding any treasury shares of the Company) outstanding
immediately before such event, and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.

(ii) If the Company sells any Common Stock or grants any option or right to
purchase Common Stock and as a consequence reduces the Conversion Price then the
Exercise Price shall be reduced to equal 120% of such Conversion Price as
adjusted (or as it would have been adjusted in the event the Preferred Shares
were no longer outstanding).

(jj) If at any time the Company issues any rights, options or warrants pro rata
to all holders of Common Stock to purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) (the “Purchase Rights”), then
each Holder shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete exercise of such Holder’s Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for
the issuance of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined
for the issuance of such Purchase Rights (provided, however, to the extent that
the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not
be entitled to participate in such Purchase Right to such extent and such
Purchase Right to such extent shall be held in abeyance, for a period not to
exceed 71 days, for the Holder until such time during such 71 day period, if
ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

5

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(kk) If the Company, at any time while this Warrant is outstanding, distributes
to all holders of Common Stock (and not to the Holders) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security (other than the Common Stock, which
shall be subject to Section 3(c)), then in each such case the Exercise Price
shall be adjusted by multiplying such Exercise Price in effect immediately prior
to the record date fixed for determination of shareholders entitled to receive
such distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness or rights
or warrants so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors of the Company in good faith. In
either case the adjustments shall be described in a statement delivered to the
Holders describing the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

(ll) Whenever the Conversion Price is adjusted pursuant to any provision of this
Section 3, the Company shall promptly deliver to each Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Notwithstanding anything
herein to the contrary, no adjustment of the Exercise Price shall be made
pursuant to this Section 1 in an amount less than $.01 per share, and any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any adjustments
so carried forward shall amount to $.01 per share or more.

(mm) Transfer of Warrant.

(nn) Transferability. Until the effectiveness date of the Shelf Registration
Statement, to be filed with the SEC, in connection with the Registration Rights
Agreement entered into by and between Real Estate Strategies L.P., IRSA
Inversiones y Representaciones Sociedad Anónima, and Supertel Hospitality, Inc.,
dated as of January 31, 2012, and subject to compliance with any applicable
securities laws, this Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part, to
Holder’s Affiliates or, with the consent of a majority of the directors of the
Board of Directors who are not designee directors of Real Estate Strategies L.P.
or its affiliates pursuant to the Directors Designation Agreement dated
January 31, 2012, to a non-affiliate (“Permitted Transferees”), such approval
shall not be unreasonably withheld by such Directors (if approval is withheld,
such reasons for withholding approval shall be presented in writing to the
Holder). Such transfer will be accomplished upon surrender of this Warrant at
the principal office of the Company or its designated agent, together with a
written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as applicable, and
in the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. The
Warrant, if properly assigned in accordance herewith, may be exercised by a new
holder for the purchase of Warrant Shares without having a new Warrant issued.

 

6

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Once the Warrants have been registered, such Board consent shall no longer be
required.

(oo) New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the Permitted Transferees and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the Initial Exercise Date and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

(pp) Warrant Register and Registration Rights.

 

  (i) The Company shall register this Warrant, upon records to be maintained by
the Company for that, in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes. The Warrants, and the shares issuable
upon its exercise will be registered for its resale, on a registration statement
to be filed with the SEC pursuant to the Registration Rights Agreement dated
January 31, 2012 unless such Warrants or shares may be publicly resold under the
safe harbor of Rule 144 of the SEC without regard to limitations as to volume or
manner of sale thereunder. Such shares shall be transferable to affiliate
entities of Purchaser and/or SPPR Board approved third parties.

(qq) Miscellaneous.

(rr) No Rights as Shareholder. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a shareholder of the Company.

(ss) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

(tt) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

(uu) Authorized Shares. The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Exchange upon which
the Common Stock may be listed. The Company covenants

 

7

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that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of this Warrant and
payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges created by the Company in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue).

(vv) Governing Law and Forum. This Warrant 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 of the parties hereto hereby
irrevocably consents, to the maximum extent permitted by law, that any action or
proceeding relating to this Warrant or the transactions contemplated hereby
shall be brought, at the option of the party instituting the action or
proceeding, in any court of general jurisdiction in New York County, New York,
in the United States District Court for the Southern District of New York or in
any state or federal court sitting in the area currently comprising the Southern
District of New York. Each of the parties hereto waives any objection that it
may have to the conduct of any action or proceeding in any such court based on
improper venue or forum non conveniens, waives personal service of any and all
process upon it, and consents that all service of process may be made by mail or
courier service directed to it at the address set forth herein and that service
so made shall be deemed to be completed upon the earlier of actual receipt or
ten days after the same shall have been posted or delivered to a nationally
recognized courier service. Nothing contained in this shall affect the right of
any party hereto to serve legal process in any other manner permitted by law.

(ww) Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered in accordance
with the notice provision of the Purchase Agreement.

(xx) Successors and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder.

(yy) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holders of a majority in
interest of the then outstanding Warrants (calculated based on the number of
shares of Common Stock issuable upon the exercise of such Warrants).

(zz) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

(aaa) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

8

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[SIGNATURE PAGE FOLLOWS]

 

9

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.

 

  SUPERTEL HOSPITALITY, INC.

 

  By: Kelly A. Walters   Title: President and Chief Executive Officer

Acknowledged and accepted

 

REAL ESTATE STRATEGIES L.P By: JIWIN S.A. General Partner

 

Name: Eduardo Elsztain Title: Chairman

 

10

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NOTICE OF EXERCISE

TO: SUPERTEL HOSPITALITY, INC.

The undersigned hereby elects to purchase              Warrant Shares of the
Company pursuant to the terms of the attached Warrant, and tenders herewith
payment of the exercise price in full, together with all applicable transfer
taxes, if any.

Payment shall take the form of (check applicable box):

¨ in lawful money of the United States; or

¨ [if permitted] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
2(c).

Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified below:

 

 

   

The Warrant Shares shall be delivered to:

 

 

   

 

   

Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

The undersigned further requests that if the number of shares elected to be
purchased herein shall not be all of the shares purchasable pursuant to the
terms of the attached Warrant, that a new Warrant of like tenor for the balance
of the shares purchasable hereunder be delivered to the undersigned.

 

[SIGNATURE OF HOLDER] Name:  

 

 

Signature of Authorized Officer:  

 

 

Name of Authorized Officer:  

 

 

Title of Authorized Officer:  

 

 

Date:  

 

 

11

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [            ] [all of or             ] shares of the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

 

  whose address is

 

 

 

   Dated:                    ,                         Holder’s Signature:   

 

   Holder’s Address:   

 

     

 

 

Signature Guaranteed:   

 

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

 

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