Document:

Warrant, dated as of April 18, 2011

 Exhibit 4.2 
 THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THIS WARRANT NOR ANY SUCH SHARES
MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT. 
 WARRANT 

To Purchase Common Stock of 
 MHI Hospitality Corporation 
 THIS IS TO CERTIFY that each of the entities
listed on Schedule 1 hereto (each an “Initial Holder”), having its principal place of business at 375 Hudson St., 12th Floor, New York, NY 10014, or its registered assigns, is entitled upon the exercise hereof at any time during the
Exercise Period (as hereinafter defined) to purchase the number of shares set forth opposite such Initial Holder’s name on Schedule 1 (subject to adjustment as provided herein) of duly authorized, validly issued, fully paid and
nonassessable Common Stock, $0.01 par value per share, of MHI Hospitality Corporation, a Maryland corporation, at an Exercise Price of $2.25 per share (such Exercise Price and the number of shares of Common Stock purchasable hereunder being subject
to adjustment as provided herein), and to exercise the other rights, powers and privileges hereinafter provided, all on the terms and subject to the conditions hereinafter set forth. 

ARTICLE I 

DEFINITIONS 

The terms defined in this ARTICLE I, whenever used in this Warrant, shall have the respective meanings hereinafter specified. 

“Affiliate” of any entity means a Person which directly or directly through one or more intermediaries controls, or is
controlled by, or is under common control with, such entity. The term “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract or otherwise. 
 “Assignment”
has the meaning set forth in Section 3.2. 
 “Closing Date” means April 18, 2011. 

“Commission” means the Securities and Exchange Commission or any other Federal agency from time to time administering
the Securities Act. 

 “Common Stock” means shares of the Company’s common stock, $0.01 par
value per share, and any stock into which such stock shall have been converted, exchanged or reclassified following the date hereof. 
 “Company” means MHI Hospitality Corporation, a Maryland corporation, and any successor corporation. 
 “Convertible Securities” means evidences of indebtedness, shares of stock (other than Common Stock) or other securities which are convertible into or exchangeable for, with or without
payment of additional consideration, additional shares of Common Stock, either immediately or upon the arrival of a specified date or the happening of a specified event. 
 “Current Market Price” as to any security on any date specified herein means the average of the daily closing prices for the thirty (30) consecutive trading days immediately prior
to, but not including the day in question (or in the event that a security has been traded for less than thirty (30) days, each of the trading days prior to the day in question on which such security has been traded). The closing price for each
date shall be (i) the mean between the closing high bid and low asked quotations of any such security in the over-the-counter market as shown by the National Association of Securities Dealers, Inc. Automated Quotation System, or any similar
system of automated dissemination of quotations of securities prices then in common use, if so quoted, as reported by any member firm of the New York Stock Exchange selected by the Company, or (ii) if not quoted as described in clause (i), the
mean between the high bid and low asked quotations for any such security as reported by the National Quotation Bureau Incorporated or any similar successor organization, as reported by any member firm of the New York Stock Exchange selected by the
Company, or (iii) if any such security is listed or admitted for trading on any national securities exchange, the last sale price of any such security, regular way, or the mean of the closing bid and asked prices thereof if no such sale
occurred, in each case as officially reported on the principal securities exchange on which any such security is listed. If any such security is quoted on a national securities or central market system in lieu of a market or quotation system
described above, the closing price shall be determined in the manner set forth in clause (i) of the preceding sentence if bid and asked quotations are reported but actual transactions are not, and in the manner set forth in clause (iii) of
the preceding sentence if actual transactions are reported. 
 “Event of Default” means (a) the breach of
any warranty, or the inaccuracy of any representation, made by the Company herein or (b) the failure by the Company to comply with any covenant contained herein. 
 “Exercise Period” means the period commencing on the Closing Date and terminating on the date that is five years and six calendar months following the Closing Date. 

“Exercise Price” means the price per share of Common Stock set forth in the preamble to this Warrant, as such price may
be adjusted pursuant to ARTICLE IV. 
 “Fair Value” means the fair value of the appropriate security,
property, assets, business or entity as determined by the board of directors of the Company in its good faith estimate. 

“Initial Holder” has the meaning set forth in the preamble. 

 “Issuable Warrant Shares” means the number of shares of Common Stock
issuable from time to time upon exercise of this Warrant. 
 “Issued Warrant Shares” means (a) the
cumulative total of the shares of Common Stock issued from time to time upon exercise of the Warrants, plus (b) any shares of Common Stock issued as a stock dividend with respect to such shares or as part of a stock split affecting such shares.

 “Notice of Exercise” means the form of Notice of Exercise appearing at the end of this Warrant. 

“Opinion of Counsel” means an opinion of counsel experienced in Securities Act or bank regulatory matters, as the case
may be, chosen by the Company. 
 “Other Securities” means any stock and other securities of the Company (other
than Common Stock, Convertible Securities or Stock Purchase Rights) or any other Person which shall become subject to issue or sale upon the conversion or exchange of any stock or other securities of the Company. 

“Person” means any unincorporated organization, association, corporation, individual, sole proprietorship, partnership,
joint venture, trust institution, entity, party or government (including any instrumentality, division, agency, body or department thereof). 
 “Securities Act” means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect from time to time. 
 “Stock Purchase Rights” means any warrants, options or other rights to
subscribe for, purchase or otherwise acquire any shares of Common Stock or any Convertible Securities. 

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association,
joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person
or one or more of the other Subsidiaries of that Person or a combination thereof. 
 “Warrant” means the
warrant dated as of Closing Date issued to the Initial Holders and all warrants issued upon the partial exercise, transfer or division of or in substitution for any Warrant. 
 “Warrant Shares” means the Issuable Warrant Shares plus the Issued Warrant Shares. 
 Whenever used in this Warrant, any noun or pronoun shall be deemed to include both the singular and plural and to cover all genders, and the words “herein,” “hereof,” and
“hereunder” and words of similar import shall refer to this instrument as a whole, including any amendments hereto. 

 ARTICLE II 
 EXERCISE OF WARRANT 
 2.1. Right to Exercise. On the terms and subject to
the conditions of this ARTICLE II, each holder hereof shall have the right, at its option, to exercise this Warrant in whole or in part at any time during the Exercise Period; provided, however, that no partial exercise may result in the
purchase of shares of Common Stock for a consideration of less than $500,000 in the aggregate for all holders without the prior written consent of the Company, which consent may be granted or withheld in its sole and absolute discretion; provided,
however, subsequent to the Holding Period, each holder shall have the right to exercise this Warrant in whole should the consideration for such exercise be less than $500,000. The Company shall not be obligated to cause the exercise of this Warrant
more than two (2) times in any twelve (12) month period. 
 2.2. Manner of Exercise; Issuance of Common Stock.
To exercise this Warrant, a holder hereof shall deliver to the Company (i) a Notice of Exercise in the form of Exhibit 2.2 hereto duly executed by such holder hereof specifying the number of shares of Common Stock to be purchased,
(ii) an amount equal to the aggregate Exercise Price for all shares of Common Stock as to which this Warrant is then being exercised and (iii) this Warrant. At the option of each holder hereof, payment of the Exercise Price shall be made
by (a) wire transfer of funds to an account in a bank located in the United States designated by the Company for such purpose, (b) certified or official bank check payable to the order of the Company, (c) deducting from the number of
shares delivered upon exercise of the Warrant a number of shares which has an aggregate Current Market Price on the date of exercise equal to the aggregate Exercise Price for all shares as to which the Warrant is then being exercised or (d) any
combination of such methods. 
 Upon receipt of the required deliveries, the Company shall, as promptly as practicable, and in
any event within five business days thereafter, cause to be issued and delivered to the applicable holder hereof (or its nominee) or, subject to ARTICLE V, the transferee designated in the Notice of Exercise, a certificate or certificates
representing shares of Common Stock equal in the aggregate to the number of shares of Common Stock specified in the Notice of Exercise (but not exceeding the maximum number of shares issuable upon exercise of this Warrant). Such certificate or
certificates shall be registered in the name of the applicable holder hereof (or its nominee) or in the name of such transferee, as the case may be. 
 If this Warrant is exercised in part, the Company shall, at the time of delivery of such certificate or certificates, unless the Exercise Period has expired, issue and deliver to the holders hereof or,
subject to Section 3.2 and ARTICLE V, the transferee so designated in the Notice of Exercise, a new Warrant evidencing the right of the holders hereof or such transferee to purchase the aggregate number of shares of Common Stock
for which this Warrant shall not have been exercised, and this Warrant shall be canceled. 

 2.3. Effectiveness of Exercise. Unless otherwise requested by a holder hereof, this
Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the holders or transferee so designated in the Notice of Exercise shall be deemed to have become a holder of record of such
shares for all purposes, as of the close of business on the date the Notice of Exercise, together with payment of the Exercise Price and this Warrant, is received by the Company. 

2.4. Continued Validity. A holder of shares of Common Stock issued upon the exercise of this Warrant, in whole or in part, shall
continue to be entitled to all rights to which a holder of this Warrant is entitled pursuant to the provisions of this Warrant except such rights as by their terms apply solely to a holder of a Warrant. 

2.5. Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made
in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of a holder be conditioned upon the consummation of such transaction, in which case such exercise
shall not be deemed to be effective until immediately prior to the consummation of such transaction. 
 ARTICLE III 

REGISTRATION, TRANSFER AND EXCHANGE 
 3.1. Maintenance of Registration Books. The Company shall keep at its principal office in Williamsburg, Virginia or Rockville, Maryland a register in which the Company shall provide for the
registration, transfer and exchange of this Warrant. The Company shall not at any time, except upon the dissolution, liquidation or winding up of the Company, and as subject to Section 3.2 of this Warrant, close such register so as to result in
preventing or delaying the exercise or transfer of this Warrant. 
 3.2. Transfer and Exchange. The Initial Holders may
not offer, sell, assign, hypothecate, pledge or otherwise transfer this Warrant during the period ending on the third anniversary following the date of this Warrant (the “Holding Period”) without the prior written consent of the
Company, which consent may be granted or withheld in its sole and absolute discretion; provided, that for the avoidance of doubt, such restriction shall not apply to the offer, sale, assignment, hypothecation, pledge or transfer of any Common
Stock received by any Initial Holder upon the exercise of this Warrant during the Holding Period, subject to, in each case, applicable securities laws. Following the Holding Period, upon surrender for registration of transfer of this Warrant at such
office, the Company shall execute and deliver, subject to ARTICLE V, in the name of the designated transferee or transferees, one or more new Warrants representing the right to purchase a like aggregate number of shares of Common Stock. At
the option of each holder hereof, following the Holding Period, this Warrant may be exchanged for other Warrants representing the right to purchase a like aggregate number of shares of Common Stock upon surrender of this Warrant at such office.
Whenever this Warrant is so surrendered for exchange, the Company shall execute and deliver the Warrants which the holders making the exchange are entitled to receive. 

 Following the Holding Period, every Warrant presented or surrendered for registration of
transfer or exchange shall be accompanied by an Assignment in the form of Exhibit 3.2 hereto (an “Assignment”) duly executed by the applicable holder thereof or its attorney duly authorized in writing. 

All Warrants issued upon any registration of transfer or exchange of Warrants shall be the valid obligations of the Company, evidencing
the same rights, and entitled to the same benefits, as the Warrants surrendered upon such registration of transfer or exchange. 

3.3. Replacement. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (a) in the case of any such loss, theft or destruction, upon delivery of an indemnity reasonably satisfactory to the Company in form and amount, or (b) in the case of any such mutilation, upon surrender of such Warrant for
cancellation at the principal office of the Company, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant. 
 3.4. Ownership. The Company and any agent of the Company may treat the Persons in whose name this Warrant is registered on the register kept at the principal office of the Company as the owners and
holders thereof for all purposes, notwithstanding any notice to the contrary, except that, if and when this Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the owner of this Warrant
for all purposes, notwithstanding any notice to the contrary. This Warrant, if properly assigned, may be exercised by a new holder without first having a new Warrant issued. 
 ARTICLE IV 
 ANTIDILUTION PROVISIONS 

4.1. Adjustment of Number of Shares Purchasable. Upon any adjustment of the Exercise Price as provided in
Section 4.2(a), the holders hereof shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock (calculated to the nearest 1/100th of a share) obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock purchasable hereunder immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment. 
 4.2. Adjustment of Exercise Price. The Exercise Price shall be subject to adjustment from time to
time as hereinafter set forth. 
 (a) Stock Dividends, Subdivisions and Combinations. In the event that the Company
subsequent to the Closing Date shall: 
 (i) declare a dividend upon, or make any distribution in respect of, any
of its stock, payable in Common Stock, Convertible Securities or Stock Purchase Rights, or 
 (ii) subdivide its
outstanding shares of Common Stock into a larger number of shares of Common Stock, or 

 (iii) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock, 
 then the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price per share of
Common Stock immediately prior to such event by a fraction (A) the numerator of which shall be the total number of outstanding shares of Common Stock of the Company immediately prior to such event, and (B) the denominator of which shall be
the total number of outstanding shares of Common Stock of the Company immediately after such event, treating as outstanding all shares of Common Stock issuable upon conversions or exchanges of such Convertible Securities and exercises of such Stock
Purchase Rights. 
 (b) Issuance of Additional Shares of Common Stock. (i) In case the Company shall issue or sell
any shares of Common Stock after the Closing Date, each holder hereof shall be entitled, at its option, to elect to participate in such offering and purchase a percentage of the shares to be issued in such offering equal to the percentage that the
Warrant Shares held by such holder bears to the total number of shares of Common Stock issued and then outstanding on a fully diluted basis as if this Warrant had been exercised and such holder were, at the time of any such offering, then a holder
of that number of shares of Common Stock to which such holder is then entitled on the exercise hereof (such right hereinafter referred to as the “Participation Right”). The Company shall give written notice to the holders hereof of its
intention to issue such securities (the “Participation Notice”), describing the amount and the type of securities and the price and the general terms upon which the Company proposes to issue such securities. Each holder of a Participation
Right shall have ten (10) business days from the date of receipt of any such Participation Notice to agree in writing to purchase up to such holder’s pro rata share of such securities for the price (if the price has been set by the Company
as of the date of the Participation Notice) and upon the terms and conditions specified in the Participation Notice by giving written notice to the Company and stating therein the quantity of securities to be purchased (not to exceed such
holder’s pro rata share). If any holder fails to so agree in writing within such ten (10) business day period to purchase all or any portion of such holder’s pro rata share of an offering of such securities, then such holder shall
forfeit the Participation Right hereunder with respect to such offering. If any holder agrees to purchase all or any portion of such holder’s pro rata share by giving notice within such ten (10) business day period, such holder shall
purchase the portion so elected pursuant to such Participation Right concurrently with the closing of the transaction triggering the Participation Right on the same terms and conditions as offered to other participants in such offering. (ii) In
case a) the Company shall issue or sell any shares of Common Stock after the Closing Date for a consideration less than the Exercise Price per share then in effect and b) any holder hereof elects not to participate in such offering, the Exercise
Price for such holder upon each such issuance or sale shall be adjusted downward to a price determined by dividing: 
 (A) the
sum of (w) the Exercise Price in effect before the issuance of such additional shares of Common Stock multiplied by the number of shares of the Company’s Common Stock then issued and outstanding (calculated on a fully-diluted basis
including shares of Common Stock reserved pursuant to this Warrant) immediately prior to the issuance of such additional shares of Common Stock and (x) the consideration, if any, received by or deemed to have been received by the Company on the
issue of such additional shares of Common Stock by: 
 (B) the sum of (y) the number of shares of the Company’s Common
Stock then issued and outstanding (calculated on a fully-diluted basis including shares of Common Stock reserved pursuant to this Warrant) immediately prior to the issuance of such additional shares of Common Stock and (z) the number of
additional shares of Common Stock issued or deemed to have been issued in the issuance of such additional shares of Common Stock. 

 The provisions of this Subsection (b) shall not apply to any additional shares of
Common Stock which are distributed to holders of Common Stock pursuant to a stock dividend or subdivision for which an adjustment is provided for under Subsection (a) of this Section 4.2. No adjustment of the Exercise Price shall be
made under this subsection and no Participation Right will arise upon the issuance of any additional shares of Common Stock which are issued (i) pursuant to the redemption of units issued by the Company’s operating partnership;
(ii) pursuant to the Company’s 2004 Long-Term Incentive Plan; (iii) in the form of compensation (x) to an employee pursuant to his or her employment agreement or (y) to an officer, director or consultant of the Company as
approved by its board of directors; (iv) pursuant to the exercise of any Stock Purchase Rights or pursuant to the conversion or exchange of any Convertible Securities to the extent that such adjustment shall previously have been made upon the
issuance of such Stock Purchase Rights or Convertible Securities pursuant to Subsection (a), (c) or (d) of this Section 4.2; or (v) pursuant to the exercise or issuance of any Stock Purchase Right or pursuant to the
conversion or issuance of any Convertible Security if the Participation Right shall have been exercised by the applicable holder (in whole or in part) in connection with the issuance of such Stock Purchase Right or Convertible Security pursuant to
Subsection (c) or (d) of this Section 4.2. No adjustment to the Exercise Price then in effect shall be made in connection with the issuance and sale of Common Stock for a price per share greater than or equal to the Exercise
Price. No adjustment to the Exercise Price of a holder shall be made in connection with the issuance and sale of shares of Common Stock for consideration less than the Exercise Price per share then in effect if such holder exercises its
Participation Right (in whole or in part) in respect to such issuance and sale. 
 (c) Issuance of Stock Purchase Rights.
(i) In case the Company shall issue or sell any Stock Purchase Rights after the Closing Date, each holder hereof shall be entitled, at its option, to exercise its Participation Right with respect to such offering and purchase a percentage of
the Stock Purchase Rights to be issued in such offering equal to the percentage that the Warrant Shares held by such holder bears to the total number of shares of Common Stock issued and outstanding on a fully diluted basis. The Company shall
deliver a Participation Notice as set forth in Subsection 4.2(b). (ii) In case (a) the Company shall issue or sell any Stock Purchase Rights and the consideration per share for which additional shares of Common Stock may at any time
thereafter be issuable upon exercise thereof (or, in the case of Stock Purchase Rights exercisable for the purchase of Convertible Securities, upon the subsequent conversion or exchange of such Convertible Securities) shall be less than the Exercise
Price per share then in effect and (b) any holder hereof elects not to exercise its Participation Right, the Exercise Price for such holder shall be adjusted as provided in Subsection (b) of this Section 4.2 on the basis that
(i) the maximum number of additional shares of Common Stock issuable upon exercise of such Stock Purchase Rights (or upon conversion or exchange of such Convertible Securities following such exercise) shall be deemed to have been issued as of
the date of the determination of the Exercise Price, as hereinafter provided, and (ii) the aggregate consideration received for such additional shares of Common Stock shall be deemed to be the minimum consideration

 
received and receivable by the Company in connection with the issuance and exercise of such Stock Purchase Rights (or upon conversion or exchange of such Convertible Securities). For the purposes
of this Subsection, the date as of which the Exercise Price shall be computed shall be the earlier of (A) the date on which the Company shall enter into a firm contract for the issuance of such Stock Purchase Rights, or (B) the date of
actual issuance of such Stock Purchase Rights. 
 No adjustment of the Exercise Price shall be made under this subsection and no Participation
Right will arise upon the issuance of any additional Stock Purchase Rights which are issued (i) pursuant to the Company’s 2004 Long-Term Incentive Plan; (ii) in the form of compensation (x) to an employee pursuant to his
or her employment agreement or (y) to an officer, director or consultant of the Company as approved by its board of directors; and (iii) pursuant to the exercise of any Stock Purchase Rights to the extent that such adjustment shall
previously have been made or the Participation Right shall have been exercised by the applicable holder (in whole or in part) in connection with the issuance of such Stock Purchase Rights pursuant to this Subsection (c) of this
Section 4.2. No adjustment to the Exercise Price then in effect shall be made in connection with the issuance and sale of Stock Purchase Rights for which the consideration per share for which additional shares of Common Stock may at any
time thereafter be issuable upon exercise thereof (or, in the case of Stock Purchase Rights exercisable for the purchase of Convertible Securities, upon the subsequent conversion or exchange of such Convertible Securities) for a price per share
greater than or equal to the Exercise Price. No adjustment to the Exercise Price of a holder shall be made in connection with the issuance and sale of Stock Purchase Rights for which the consideration per share for which additional shares of Common
Stock may at any time thereafter be issuable upon exercise thereof (or, in the case of Stock Purchase Rights exercisable for the purchase of Convertible Securities, upon the subsequent conversion or exchange of such Convertible Securities) for
consideration less than the Exercise Price per share then in effect if such holder exercises its Participation Right (in whole or in part) in respect to such issuance and sale. 

(d) Issuance of Convertible Securities. (i) In case the Company shall issue or sell any Convertible Securities after the
Closing Date, each holder hereof shall be entitled, at its option, to exercise its Participation Right with respect to such offering and purchase a percentage of the Convertible Securities to be issued in such offering equal to the percentage that
the Warrant Shares held by such holder bears to the total number of shares of Common Stock issued and outstanding on a fully diluted basis. The Company shall deliver a Participation Notice as set forth in Subsection 4.2(b). (ii) In case
(a) the Company shall issue or sell any Convertible Securities and the consideration per share for which additional shares of Common Stock may at any time thereafter be issuable pursuant to the terms of such Convertible Securities shall be less
than the Exercise Price per share then in effect and (b) any holder hereof elects not to exercise its Participation Right, the Exercise Price of such holder shall be adjusted as provided in Subsection (b) of this Section 4.2 on
the basis that (i) the maximum number of additional shares of Common Stock necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the date for the determination of the
Exercise Price, as hereinafter provided, and (ii) the aggregate consideration received for such additional shares of Common Stock shall be deemed to be equal to the minimum consideration received and receivable by the Company in connection with
the issuance and exercise of such Convertible Securities. For the purposes of this Subsection, the date as of which the Exercise Price per share shall be computed shall be the earlier of (A) the date on which the Company shall enter into a firm
contract for the issuance of such Convertible Securities, or (B) the date of actual issuance of such Convertible Securities. 

 No adjustment of the Exercise Price shall be made under this subsection and no Participation
Right will arise upon the issuance of any additional Convertible Securities which are issued (i) pursuant to the redemption of units issued by the Company’s operating partnership; (ii) pursuant to the Company’s 2004 Long-Term
Incentive Plan; (iii) in the form of compensation (x) to an employee pursuant to his or her employment agreement or (y) to an officer, director or consultant of the Company as approved by its board of directors; and (iv) pursuant
to the exercise or conversion of any Convertible Securities or Stock Purchase Rights to the extent that such adjustment shall previously have been made or the Participation Right shall have been exercised by the applicable holder (in whole or in
part) in connection with the issuance of such Convertible Securities pursuant to this Subsection (d) of this Section 4.2. No adjustment to the Exercise Price then in effect shall be made in connection with the issuance and sale of
Convertible Securities for which the consideration per share for which additional shares of Common Stock may at any time thereafter be issuable pursuant to the terms of such Convertible Securities for a price per share greater than or equal to the
Exercise Price. No adjustment to the Exercise Price of a holder shall be made in connection with the issuance and sale of Convertible Securities for which the consideration per share for which additional shares of Common Stock may at any time
thereafter be issuable pursuant to the terms of such Convertible Securities for consideration less than the Exercise Price per share then in effect if such holder exercises its Participation Right (in whole or in part) in respect to such issuance
and sale. 
 (e) Minimum Adjustment. In the event any adjustment of the Exercise Price pursuant to this
Section 4.2 shall result in an adjustment of less than $.01 per share of Common Stock, no such adjustment shall be made, but 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 more per share of Common Stock; provided, however, that upon any adjustment of the Exercise price resulting from the reclassification
by subdivision, combination or otherwise, of the Common Stock into a greater or smaller number of shares, the foregoing figure of $.01 per share (or such figure as last adjusted) shall be proportionately adjusted; and provided,
further, that upon the exercise of this Warrant, the Company shall make all necessary adjustments (to the nearest .001 of a cent) not theretofore made to the Exercise Price up to and including the date upon which this Warrant is exercised.

 (f) Reorganization, Reclassification or Recapitalization of Company. In case of any capital reorganization or
reclassification or recapitalization of the capital stock of the Company (other than in the cases referred to in Subsection (a) of this Section 4.2), or in case of the consolidation or merger of the Company with or into another
corporation, or in case of the sale or transfer of the property of the Company as an entirety or substantially as an entirety, there shall thereafter be deliverable upon the exercise of this Warrant or any portion thereof (in lieu of or in addition
to the number of shares of Common Stock theretofore deliverable, as appropriate) the number of shares of stock or other securities or property to which the holders of the number of shares of Common Stock which would otherwise have been deliverable
upon the exercise of this Warrant or any portion thereof at the time would have been entitled upon such capital reorganization or reclassification of capital stock, consolidation, merger or sale, and at the same aggregate Exercise Price. 

 Prior to and as a condition of the consummation of any transaction described in the
preceding sentence, the Company shall make equitable, written adjustments in the application of the provisions herein set forth satisfactory to the holders of Warrants entitled to purchase not less than 66 2/3% of the Issuable Warrant Shares at
such time with respect to the rights and interests of holders of Warrants so that the provisions set forth herein shall thereafter be applicable, as nearly as possible, in relation to any shares of stock or other securities or other property
thereafter deliverable upon exercise of this Warrant. Any such adjustment shall be made by and set forth in a supplemental agreement between the Company and/or the successor entity, as applicable, which agreement shall bind each such entity, shall
be accompanied by an Opinion of Counsel as to the enforceability of such agreement and shall be approved by the holders of Warrants entitled to purchase not less than 66 2/3% of the shares of Common Stock issuable upon the exercise thereof.

 (g) Dilution in Case of Other Securities. In case any Other Securities shall be issued or sold or shall become subject
to issuance or sale upon the conversion or exchange of any stock (or Other Securities) of the Company (or any issuer of Other Securities or any other Person referred to in Subsection (g)) or become subject to subscription, purchase or other
acquisition pursuant to any options or rights issued or granted by the Company (or by any such other issuer or Person) for a consideration such as to dilute, within the standards established in the other provisions of this ARTICLE IV, the
purchase rights granted by this Warrant, then, and in each such case, the computations, adjustments and readjustments provided for in this ARTICLE IV with respect to the Exercise Price shall be made as nearly as possible in the manner so
provided and applied to determine the amount of Other Securities from time to time receivable upon the exercise of this Warrant, so as to protect the holders of the Warrant against the effect of such dilution. 

(h) Determination of Consideration. For purposes of this ARTICLE IV, the consideration received or receivable by the
Company for the issuance, sale, grant or assumption of additional shares of Common Stock, Stock Purchase Rights or Convertible Securities, irrespective of the accounting treatment of such consideration, shall be valued as follows: 

(i) Cash Payment. In the case of cash, the net amount received by the Company after deduction of any expenses paid
or incurred or any underwriting commissions or concessions paid or allowed by the Company. 
 (ii) Securities
or Other Property. In the case of securities or other property, at the Current Market Price, if determinable, and otherwise at the Fair Value of such consideration (in both cases as of the date immediately preceding the issuance, sale or grant
in question). 
 (iii) Allocation Related to Common Stock. In the event additional shares of Common Stock
are issued or sold together with other securities or other assets of the Company for a consideration which covers both, the consideration received (computed as provided in (i) and (ii) above) shall be allocable to such additional shares of
Common Stock as determined in good faith by the Board of Directors of the Company. 

 (iv) Allocation Related to Stock Purchase Rights and Convertible
Securities. In case any Stock Purchase Rights or Convertible Securities shall be issued or sold together with other securities or other assets of the Company, together comprising one integral transaction in which no specific consideration is
allocated to the Stock Purchase Rights or Convertible Securities, such Stock Purchase Rights or Convertible Securities shall be deemed to have been issued at Fair Value. 

(v) Dividends in Securities. In case the Company shall declare a dividend or make any other distribution upon any
stock of the Company (other than Common Stock) payable in either case in Common Stock, Convertible Securities or Stock Purchase Rights (and provided an adjustment is made pursuant to Subsection 4.2(a)), such Common Stock, Convertible Securities or
Stock Purchase Rights, as the case may be, issuable in payment of such dividend or distribution shall be deemed to have been issued or sold without consideration. 

(vi) Stock Purchase Rights and Convertible Securities. The consideration for which shares of Common Stock shall be
deemed to be issued upon the issuance of any Stock Purchase Rights or Convertible Securities shall be determined by dividing (i) the total consideration, if any, received or receivable by the Company as consideration for the granting of such
Stock Purchase Rights or the issuance of such Convertible Securities, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of such Stock Purchase Rights, or, in the case of such Convertible
Securities, the minimum aggregate amount of additional consideration, if any, payable upon the conversion or exchange thereof, in each case after deducting any accrued interest, dividends, or any expenses paid or incurred or any underwriting
commissions or concessions paid or allowed by the Company, by (ii) the maximum number of shares of Common Stock issuable upon the exercise of such Stock Purchase Rights or upon the conversion or exchange of all such Convertible Securities.

 (vii) Merger, Consolidation or Sale of Assets. In case any shares of Common Stock or Convertible
Securities or any Stock Purchase Rights shall be issued in connection with any merger or consolidation in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the Fair Value of such portion of
the assets and business of the non-surviving corporation as shall be attributable to such Common Stock, Convertible Securities or Stock Purchase Rights, as the case may be. In the event of any merger or consolidation of the Company in which the
Company is not the surviving corporation or in the event of any sale of all or substantially all of the assets of the Company for stock or other securities of any corporation, the Company shall be deemed to have issued a number of shares of its
Common Stock for stock or securities of the other corporation computed on the basis of the actual exchange ratio on which the transaction was predicated and for a consideration equal to the Fair Value on the date of such transaction of such stock or
securities of the other corporation, and if any such calculation results in adjustment of the Exercise Price, the determination of the number of shares of Common Stock issuable upon exercise of

 
this Warrant immediately prior to such merger, consolidation or sale, for the purposes of Subsection (g) above, shall be made after giving effect to such adjustment of the Exercise Price.

 (i) Record Date. In case the Company shall take a record of the holders of the Common Stock for the purpose of
entitling them (i) to receive a dividend or other distribution payable in Common Stock or in Convertible Securities or (ii) to subscribe for or purchase Common Stock or Convertible Securities, then all reference in this ARTICLE IV
to the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase,
as the case may be, shall be deemed to be references to such record date. 
 (j) Shares Outstanding. The number of shares
of Common Stock deemed to be outstanding at any given time shall not include shares of Common Stock in the treasury of the Company or held by any Subsidiary. 
 (k) Maximum Exercise Price. At no time shall the Exercise Price per share of Common Stock exceed the amount set forth in the Preamble of this Warrant except as provided in Subsection (a) or
(g) of this Section 4.2. 
 (l) No Adjustments under Certain Circumstances. Anything herein to the
contrary notwithstanding, the Company shall not be required to make any adjustment of the Exercise Price or provide the Participation Right in the case of: 
 (i) the issuance of shares of Common Stock upon the exercise in whole or part of this Warrant; 
 (ii) the issuance of shares of Common Stock upon redemption of the units issued by the Company’s operating partnership; 

(iii) the issuance of any securities pursuant to the Company’s 2004 Long-Term Incentive Plan; or 

(iv) the issuance of any securities issued in the form of compensation (i) to an employee pursuant to his or her
employment agreement or (ii) to an officer, director or consultant of the Company as approved by its board of directors. 

4.3. Certificates and Notices. 
 (a) Adjustments to Exercise Price. Upon any adjustment under this ARTICLE IV of the number of shares of Common Stock purchasable upon exercise of this Warrant or of the Exercise Price, a
certificate, signed (i) by the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company, or (ii) by any independent firm of certified public accountants of
recognized national standing (which may be the regular auditors of the Company) selected by, and at the expense of, the Company, setting forth in reasonable detail the events requiring the adjustment and the method by which such adjustment was
calculated, shall be mailed to the holders of this Warrant specifying the adjusted Exercise Price and the number of shares of Common Stock purchasable upon exercise of such holder’s Warrant after giving effect to such adjustment. 

 (b) Extraordinary Corporate Events. In case the Company after the date hereof shall
propose to (i) pay any dividend payable in stock to the holders of shares of Common Stock or to make any other distribution to the holders of shares of Common Stock, (ii) offer to the holders of shares of Common Stock rights to subscribe
for or purchase any additional shares of any class of stock or any other rights or options or (iii) effect any reclassification of the Common Stock (other than a reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), or any capital reorganization or any consolidation or merger (other than a merger in which no distribution of securities or other property is to be made to holders of shares of Common Stock), or any sale, transfer or other
disposition of its property, assets and business as an entirety or substantially as an entirety, or the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall mail to the holders of this Warrant notice of
such proposed action, which shall specify the date on which the stock transfer books of the Company shall close, or a record shall be taken, for determining the holders of Common Stock entitled to receive such stock dividends or other Distribution
or such rights or options, or the date on which such reclassification, reorganization, consolidation, merger, sale, transfer, other disposition, liquidation, dissolution or winding up shall take place or commence, as the case may be, and the date as
of which it is expected that holders of Common Stock of record shall be entitled to receive securities or other property deliverable upon such action, if any such date is to be fixed. Such notice shall be mailed in the case of any action covered by
clause (i) or (ii) above at least thirty (30) days prior to the record date for determining holders of Common Stock for purposes of receiving such payment or offer, or in the case of any action covered by clause (iii) above at
least thirty (30) days prior to the date upon which such action takes place and thirty (30) days prior to any record date to determine holders of Common Stock entitled to receive such securities or other property. 

(c) Effect of Failure. Failure to file any certificate or notice or to mail any notice, or any defect in any certificate or notice
pursuant to this Section 4.4 shall not affect the legality or validity of the adjustment of the Exercise Price or the number of shares purchasable upon exercise of this Warrant, or any transaction giving rise thereto. 

ARTICLE V 

RESTRICTIONS ON TRANSFER 
 5.1. Legend on Warrants and Certificates. Each Warrant shall bear a legend in substantially the following form: 
 “This Warrant and any shares of Common Stock issuable upon the exercise of this Warrant have not been registered under the Securities Act of 1933, as amended, and neither this Warrant nor any such
shares may be transferred in the absence of such registration or an exemption therefrom under such Act.” 

 In case any shares are issued upon the exercise in whole or in part of this Warrant or are
thereafter transferred, in either case under such circumstances that no registration under the Securities Act is required, each certificate representing such shares shall bear on the face thereof the following legend: 

“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and any transfer
thereof is subject to the conditions specified in the Warrant dated as of 18, 2011 originally issued by MHI Hospitality Corporation (the “Company”) to the entities named the Initial Holders therein to purchase shares of Common
Stock, $0.01 par value per share, of the Company. A copy of the form of such Warrant is on file with the Secretary of the Company at its address in Williamsburg, Virginia or Rockville, Maryland, and will be furnished without charge by the Company to
the holder of this certificate upon written request to the Secretary of the Company at such address.” 
 5.2.
Termination of Restrictions. The restrictions imposed under this ARTICLE V upon the transferability of this Warrant, or of Issuable Warrant Shares or Issued Warrant Shares, shall cease when (a) a registration statement covering
such Issuable Warrant Shares or Issued Warrant Shares becomes effective under the Securities Act or (b) the Company receives an Opinion of Counsel that such restrictions are no longer required in order to ensure compliance with the Securities
Act. When such restrictions terminate, the Company shall, or shall instruct its transfer agent and registrar to, issue new certificates in the name of the holders not bearing the legends required under Section 5.1. 

ARTICLE VI 

CHARTER PROVISIONS 
 6.1. Charter Provisions. All shares of Common Stock will be identical and will entitle the holders thereof to the same rights and privileges. 

ARTICLE VII 

VARIOUS COVENANTS OF THE COMPANY 
 7.1. No Impairment or Amendment. The Company shall not by any action including, without limitation, amending its articles of incorporation, any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders hereof against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of
any shares of Common Stock issuable upon the exercise of this Warrant above the amount payable therefore upon such exercise, (b) take all such action as may be necessary or appropriate in order that the Company may validly issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, (c) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant, (d) not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon the 

 
voluntary or involuntary dissolution, liquidation or winding up of the Company, and (e) not, without the written consent of the holders hereof, amend its articles of incorporation in a
manner which could adversely affect the holders of this Warrant or any Issued Warrant Shares. 
 Upon the request of the holders
hereof the Company will at any time during the period this Warrant is outstanding acknowledge in writing, in form satisfactory to such holders, the continued validity of this Warrant and the Company’s obligations hereunder. 

7.2. Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance, sale and delivery
upon the exercise of this Warrant, a number of shares of Common Stock issuable upon the exercise of this Warrant. All such shares of Common Stock shall be duly authorized and, when issued upon exercise of this Warrant, shall be validly issued and
fully paid and non-assessable with no liability on the part of the holders thereof. The Company shall not at any time while this Warrant remains outstanding allow the par value of its Common Stock to exceed the then effective Exercise Price.

 7.3. Listing on Securities Exchange. The Company shall, at its expense, list on any securities exchange in which its
Shares of Common Stock are listed and, maintain and increase when necessary such listing of, all Issued Warrant Shares and, to the extent permissible under the applicable securities exchange rules, all Issuable Warrant Shares, so long as any shares
of Common Stock shall be so listed. The Company will also so list on each securities exchange, and will maintain such listing of, any other securities which the holders of this Warrant shall be entitled to receive upon the exercise thereof if at the
time any securities of the same class shall be listed on such securities exchange by the Company. 
 7.4. Availability of
Information. The Company will cooperate with the holders hereof and of Issued Warrant Shares in supplying such information as may be necessary for such holders to complete and file any information reporting forms presently or hereafter required
by the Commission as a condition to the availability of an exemption from the Securities Act for the sale of this Warrant or such Issued Warrant Shares. 
 7.5. Indemnification. The Company shall indemnify, save and hold harmless the holders hereof from and against any and all liability, loss, cost, damage, reasonable attorneys’ and
accountants’ fees and expenses, court costs and all other out-of-pocket expenses incurred in connection with or arising from an Event of Default. 
 7.6. Certain Expenses. The Company shall pay all expenses in connection with, and all taxes (other than stock transfer taxes) and other governmental charges that may be imposed in respect of, the
issue, sale and delivery of (a) the Warrant, (b) the Issuable Warrant Shares, or (c) the Issued Warrant Shares. 

7.7. Director. For so long as the holders of Issued Warrant Shares own, in the aggregate, as a result of their ownership of Issued
Warrant Shares the equivalent of ten (10%) percent or more of the Company’s Common Stock on a fully diluted basis (and the Warrant holders do not otherwise have a right to appoint a member of the Board of Directors pursuant to its
ownership of the Company’s Series A Cumulative Preferred Stock), such holders shall have the exclusive right to nominate one (1) member of the Board of Directors. 

 ARTICLE VIII 
 MISCELLANEOUS 
 8.1. Nonwaiver. No course of dealing or any delay or
failure to exercise any right, power or remedy hereunder on the part of the holders hereof shall operate as a waiver of or otherwise prejudice such holders’ rights, powers or remedies. 

8.2. Holders Not Stockholders. Prior to the exercise of this Warrant as hereinbefore provided, the holders hereof shall not be
entitled to any of the rights of a stockholder of the Company including, without limitation, the right as a stockholder to (a) vote on or consent to any proposed action of the Company or (b) receive (i) dividends or any other
distributions made to stockholders, (ii) notice of or attend any meetings of stockholders of the Company (except as provided in ARTICLE IV) or (iii) notice of any other proceedings of the Company (except as provided in ARTICLE
IV). 
 8.3. Notices. Any notice, demand or delivery to be made pursuant to the provisions of this Warrant shall be
sufficiently given or made if sent by first class mail, postage prepaid, addressed to (a) the holders of this Warrant or Issued Warrant Shares at its last known address appearing on the books of the Company maintained for such purpose or
(b) the Company at its principal office at 410 W. Francis Street, Williamsburg, VA 23185, Attention: Andrew M. Sims, Chief Executive Officer. The holders of this Warrant and the Company may each designate a different address by notice to the
other pursuant to this Section 8.3. 
 8.4. Remedies. The Company stipulates that the remedies at law of the
holders of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 

8.5. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company, the holders hereof and (to the extent provided herein) the holders of Issued Warrant Shares, and shall be enforceable by any such holder. 

8.6. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision
contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Agreement, but this Agreement shall be construed as if such unenforceable provision had never been contained herein. 

 8.7. Integration. This Warrant replaces all prior agreements, supersedes all prior
negotiations and constitutes the entire agreement of the parties with respect to the transactions contemplated herein. 
 8.8.
Amendment. This Warrant may not be modified or amended except by written agreement of the Company and the holders hereof. 
 8.9. Headings. The headings of the Articles and Sections of this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 

8.10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK. 
 [remainder of page intentionally left blank] 

 Dated as of April 18, 2011 

 

			
	MHI HOSPITALITY CORPORATION
		
	By:	 	 /s/ Andrew M. Sims

		 	Name:     Andrew M. Sims
		 	Title:       Chief Executive Officer

  

			
	Attest:
		
	By:	 	 /s/ Rhonda Smith

		 	Name:
		 	Title:

 Schedule 1 
 INITIAL HOLDERS 
  

					
	 Initial Holder
	  	Number of Shares	 
	 Essex Illiquid, LLC
	  	 	1,748,000	  
	 Richmond Hill Capital Partners, LP
	  	 	152,000	  
		  	 	 	 
	 Total
	  	 	1,900,000	  
		  	 	 	 

 EXHIBIT 2.2 
 NOTICE OF EXERCISE FORM 
 (To be executed only upon partial or full

 exercise of the within Warrant) 
 The undersigned registered holder of the within Warrant irrevocably exercises the within Warrant for and purchases shares of Common Stock of MHI HOSPITALITY CORPORATION (the “Company”)
and herewith makes payment therefor in the amount of $            , *, $             of such payment to be
made by deducting              shares from the number of shares of Common Stock otherwise issuable upon such exercise,’* all at the price and on the terms and conditions
specified in the within Warrant, and requests that a certificate (or              certificates in denominations of
             shares) for the shares of Common Stock of
                                 hereby purchased be issued in the name of and
delivered to (choose one) (a) the undersigned or
(b)                                 , whose address is
                                , and, if such shares of Common Stock shall not
include all the shares of Common Stock issuable as provided in the within Warrant, that a new Warrant of like tenor for the number of shares of Common Stock of the Company not being purchased hereunder be issued in the name of and delivered to
(choose one) (a) the undersigned or
(b)                                 , whose address is
                                . 

Dated:             ,     . 

 

							
	Signature Guaranteed:	 		 	By:	 	  

		 		 		 	(Signature of Registered Holder)

  

			
	  

		
	By:	 	  

		 	[Title:]

  

	*	to be inserted if Section 2.2(c) of the Warrant is applicable to such exercise. 

  
 21 

 EXHIBIT 3.2 
 ASSIGNMENT 
 (To be executed only upon the assignment 

of the within Warrant) 
 FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant hereby sells, assigns and transfers unto             , whose
address is                                 , all of the rights of the undersigned
under the within Warrant, with respect to                                  shares
of Common Stock of MHI HOSPITALITY CORPORATION (the “Company”) and, if such shares of Common Stock shall not include all the shares of Common Stock issuable as provided in the within Warrant, that a new Warrant of like tenor for the
number of shares of Common Stock of the Company not being transferred hereunder be issued in the name of and delivered to the undersigned, and does hereby irrevocably constitute and appoint
                                 Attorney to register such transfer on the books
of the Company maintained for the purpose, with full power of substitution in the premises. 
 Dated:
            ,     . 
  

							
	Signature Guaranteed:	 		 	By:	 	  

		 		 		 	(Signature of Registered Holder)

  

			
	  

		
	By:	 	  

		 	[Title:]

  

			
	NOTICE:	  	The signature to this Assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change
whatever.

	

  
 22Securities Purchase Agreement

 Exhibit 10.36 
 SECURITIES PURCHASE AGREEMENT 
 SECURITIES PURCHASE AGREEMENT, dated as of
April 18, 2011 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), between MHI Hospitality Corporation, a Maryland corporation (the “Company”), and each of the
entities listed on Schedule 2.01 hereto (each a “Purchaser” and, collectively, the “Purchasers”). 
 RECITALS 
 A. The Company wishes to issue and sell to the Purchasers, and the
Purchasers wish to purchase from the Company, the Securities (as defined below), on the terms and subject to the conditions of this Agreement. 
 B. The Company and the Purchasers now wish to enter into this Agreement to provide for the acquisition of the Securities, all as set forth herein. 

AGREEMENT 
 In
consideration of the premises and the mutual covenants and the agreements herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows: 
 ARTICLE I 
 Defined Terms 
 Section 1.01. Definitions. As used in this
Agreement, the following terms have the meanings stated: 
 “Affiliate” of a Person means any other Person that
directly or indirectly controls, is controlled by or is under common control with, the Person or any of its Subsidiaries. 

“Articles of Incorporation” means the Articles of Amendment and Restatement of the Company, as amended and
supplemented from time to time, including but not limited to, by the Articles Supplementary. 
 “Articles
Supplementary” means that certain Articles Supplementary for Series A Cumulative Redeemable Preferred Stock of MHI Corporation substantially in the form attached hereto as Exhibit 1.01(a). 

“Balance Sheet” has the meaning stated in Section 5.08(a). 

“Closing” has the meaning stated in Section 3.01. 

“Closing Date” has the meaning stated in Section 3.01. 

 “Commission” has the meaning set forth in Section 5.16. 

“Common Stock” means the common stock, par value $0.01 per share, of the Company. 

“Company” has the meaning stated in the introductory paragraph of this Agreement and its successors. 

“Company Indemnified Persons” has the meaning stated in Section 8.01(b). 

“Equity Security” means common stock, preferred stock and any other capital stock, equity interest or other ownership
interest or profit participation or similar right with respect to any entity, including, without limitation, any partnership or membership interest, any stock appreciation, phantom stock or similar right or plan, and any note or debt security having
or containing equity or profit participation features, or any option, warrant or other security or right which is directly or indirectly convertible into or exercisable or exchangeable for any other equity securities. 

“Exchange” means the Securities Exchange Act of 1934, as amended. 

“Filings” has the meaning stated in Section 5.16. 

“GAAP” has the meaning stated in Section 5.08(a). 

“Governmental Body” means any agency, bureau, commission or court, department, official, political subdivision, tribunal
or other instrumentality of any administrative, judicial, legislative, executive, regulatory, police or taxing authority of any government, whether supranational, national, federal, state, regional, provincial, local, domestic or foreign.

 “Indemnification Notice” has the meaning stated in Section 8.02. 

“Indemnitee” has the meaning stated in Section 8.02. 

“Indemnitor” has the meaning stated in Section 8.02. 

“Lien” means any encumbrance, mortgage, pledge, hypothecation, charge, assignment, lien, restriction or other security
interest of any kind securing any obligation of any Person. 
 “Loan Documents” has the meaning set forth in
the Note Agreement. 
 “Losses” has the meaning stated in Section 8.01(a). 

“Material Adverse Effect” means a material adverse effect upon any of (a) the business, operations, properties,
assets or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole or (b) the ability of the Company to perform any of its obligations under this Agreement, any other Transaction Document or the Loan Documents.

 “Note Agreement” means the Note Agreement, dated the date hereof, by and between the Company and each lender
from time to time party thereto. 

  
 2 

 “Permitted Liens” has the meaning stated in the Note Agreement. 

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, other legal entities and
governmental bodies. 
 “Preferred Stock” means the Series A Cumulative Redeemable Preferred Stock, par value
$0.01 per share, of the Company. 
 “Purchasers” has the meaning stated in the introductory paragraph of this
Agreement, and its successors and permitted assigns. 
 “Purchaser Indemnified Person” has the meaning stated
in Section 8.01(a). 
 “Registration Rights Agreement” means that certain Registration Rights Agreement
substantially in the form of Exhibit 1.01(c). 
 “Securities” means 25,000 shares of Preferred Stock and
the Warrant to purchase 1,900,000 shares of Common Stock to be issued to the Purchasers pursuant to this Agreement. 

“Securities Act” means the Securities Act of 1933, as amended, and the related regulations and published
interpretations. 
 “Share Certificates” means the stock certificates representing the shares of Preferred
Stock to be purchased hereunder. 
 “Solvent” means, with respect to any Person, that as of the date of
determination both (a)(i) the sum of such Person’s debt (including contingent liabilities) does not exceed all of its property, at a fair valuation, (ii) the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured, (iii) such Person’s capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction, and (iv) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due, and (b) such Person is
“solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5). 
 “Subsidiary” of a Person
means any Person of which Equity Securities or other ownership interests having ordinary voting power to elect a majority of the board of directors, the general partner, the manager or other persons performing similar functions are at the time
directly or indirectly owned by the Person. Unless the context otherwise requires, references to one or more Subsidiaries are references to Subsidiaries of the Company. 

  
 3 

 “Termination Date” has the meaning stated in Section 7.01(b).

 “Transactions” means the transactions contemplated by, or described in, this Agreement and the other
Transaction Documents, including, without limitation, the issuance, sale, transfer, assignment, conveyance and delivery of the Securities to the Purchasers. 
 “Transaction Documents” means this Agreement, the Articles of Incorporation, the Articles Supplementary, the Share Certificates, the Registration Rights Agreement and the Warrant.

 “Transfer” means a direct or indirect offer, transfer, sale, assignment, pledge, hypothecation or other
disposition of all or any interest. 
 “Warrant” means a warrant or warrants to purchase shares of Common Stock
substantially in the form attached hereto as Exhibit 1.01(b). 
 “Warrant Shares” means the number of
shares of Common Stock issuable from time to time upon exercise of the Warrant. 
 ARTICLE II 

Issuance and Sale of the Securities 
 Section 2.01. Issuance and Sale of the Securities. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Company will issue, sell, transfer, assign,
convey and deliver to the Purchasers, and each Purchaser will purchase, acquire and accept from the Company, such number of the Securities set forth opposite such Purchaser’s name on Schedule 2.01 hereto, for the consideration set forth
in Section 2.02. 
 Section 2.02. The Consideration. Upon the terms and subject to the conditions set forth in
this Agreement, at the Closing, as payment in full for the Securities, each Purchaser will pay, or cause to be paid, to the Company an aggregate amount in cash equal to the purchase price set forth opposite such Purchaser’s name on Schedule
2.01 hereto, by wire transfer of immediately available funds to the Company’s account specified in Schedule 2.01 hereto. 
 ARTICLE III 
 The Closing; Transactions to be Effected at the Closing

 Section 3.01. Time and Place of the Closing. The closing of the issuance, sale, transfer, assignment,
conveyance and delivery of the Securities (the “Closing”) will take place at the offices of Richards Kibbe & Orbe, One World Financial Center, New York, New York 10281, at 10:00 a.m. (New York City time), on April 18,
2011, or at such other location or time as the parties may agree in writing, but in no event later than the Termination Date (the date of the Closing being hereinafter referred to as the “Closing Date”). 

  
 4 

 ARTICLE IV 
 Conditions to the Closing 
 Section 4.01. Conditions Precedent to
the Obligations of the Purchasers. The obligations of the Purchasers under this Agreement are expressly subject to the fulfillment of each of the following conditions, unless waived by the Purchasers in writing, at or before the Closing.

 (a) Representations and Warranties. The representations and warranties of the Company set forth in this Agreement and
in the other Transaction Documents shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. 
 (b) Performance. The Company shall have performed and complied with all of its covenants and other obligations contained in this Agreement and in the other Transaction Documents and the Loan
Documents, including but not limited to the deliverables set forth in Section 9 of the Note Agreement required to be performed or complied with by the Company at or before the Closing. 

(c) Compliance Certificate. The Purchasers shall have received a certificate of the secretary or assistant secretary of the
Company as to the fulfillment of the conditions set forth in Section 4.01(a) and Section 4.01(b). 
 (d) No
Litigation. There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Body that, in the reasonable
opinion of the Purchasers, singly or in the aggregate, materially impairs any of the transactions contemplated by the Transaction Documents, or that could have a Material Adverse Effect. 

(e) Transaction Documents. The Purchasers shall have received the following documents, agreements and instruments, each dated as
of the Closing Date, and each in form and substance reasonably satisfactory to the Purchasers: 
 (i) this
Agreement and the other Transaction Documents, executed and delivered by a duly authorized officer of the Company; and 
 (ii) the Share Certificates, registered in the name of the Purchasers, duly executed and delivered by the Company. 
 (f) Secretary’s Certificate. The Purchasers shall have received a certificate of the secretary or assistant secretary of the Company with respect to (i) the articles of incorporation of
the Company as amended or amended and restated to date, (ii) the by-laws of the Company as amended or amended and restated to date, (iii) the resolutions of the board of directors of the Company approving the Transaction Documents and the
other documents to be delivered by the Company thereunder and the performance of the obligations of the Company thereunder and (iv) the names and true signatures of the officers of the Company authorized to sign the Transaction Documents to be
delivered by the Company under this Agreement and the other Transaction Documents. 

  
 5 

 (g) Good Standing Certificates. The Purchasers shall have received a certificate of
the Secretary of State of the jurisdiction in which the Company is organized, dated as of a recent date, as to the good standing of the Company and as to the charter documents of the Company on file in the office of the Secretary of State.

 (h) Opinion of Counsel. The Purchasers shall have received an opinion of Baker & McKenzie LLP, counsel for
the Company, substantially in the form of Exhibit 4.01(h), and as to other matters reasonably requested by the Purchasers. 
 (i) Expenses. The Company shall pay the Purchasers an amount equal to $250,000 to reimburse Purchasers for expenses incurred in connection with the Transactions. 

(j) Material Adverse Effect. Since the date of the Balance Sheet, no event or circumstance shall have occurred, or be reasonably
likely to occur, which has had, or could reasonably be expected to have, a Material Adverse Effect. 
 Section 4.02.
Conditions Precedent to the Obligations of the Company. The obligations of the Company under this Agreement are expressly subject to the fulfillment of each of the following conditions, unless waived by the Company in writing, at or before
the Closing. 
 (a) Representations and Warranties. The representations and warranties of each Purchaser set forth in
this Agreement and in the other Transaction Documents shall be true on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. 
 (b) Performance. The Purchasers shall have performed and complied with all of their covenants and other obligations set forth in this Agreement and in the other Transaction Documents and in the
Loan Documents required to be performed or complied with by the Purchasers at or before the Closing. 
 (c) Purchaser
Deliverables. The Purchasers shall have delivered: 
 (i) this Agreement, executed and delivered by a duly
authorized officer of the Purchaser; and 
 (ii) the purchase price payable by the Purchasers by wire transfer of
immediately available funds in accordance with the provisions of Section 2.02 hereof. 
 (d) No Litigation. There
shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Body that, in the reasonable opinion of the Company,
materially impairs any of the transactions contemplated by the Transaction Documents, or that could have a Material Adverse Effect. 

  
 6 

 ARTICLE V 
 Representations and Warranties of the Company 
 The Company hereby
represents and warrants to the Purchasers as of the date hereof and as of the Closing Date as follows: 
 Section 5.01.
Existence and Power. Each of the Company and its Subsidiaries (a) is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) has all necessary power and
authority required to execute and deliver this Agreement and the other Transaction Documents and to consummate the Transactions. 
 Section 5.02. Authorization; Binding Effect. The execution and delivery by the Company of this Agreement and the other Transaction Documents, the performance by the Company of its obligations
under this Agreement and the other Transaction Documents and the consummation of the Transactions have been duly authorized by all necessary action on the part of the Company. This Agreement and the other Transaction Documents are the legal, valid
and binding obligation of the Company enforceable against the Company in accordance with their terms, except that such enforcement (a) may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
generally and (b) is subject to the availability of equitable remedies, as determined in the discretion of the court before which such a proceeding may be brought. 
 Section 5.03. Contravention. Neither the execution, delivery and performance of this Agreement and the other Transaction Documents by the Company nor the consummation of the Transactions by
the Company will (with or without notice or lapse of time or both) (a) violate or breach any provision of the Company’s organizational or governing documents, (b) violate or breach any statute, law, rule, regulation or order by which
the Company or any of its assets or properties may be bound or affected or (c) breach or result in a default under, result in the acceleration of, or give rise to a right of termination, cancellation, modification or acceleration or require any
notice under, any material contract or agreement to which the Company or by which the Company or any of its assets or properties may be bound or affected. 
 Section 5.04. Consents. All approvals, consents, authorizations or orders of, notices to or registrations or filings with, or any other action by, any Governmental Body or other person or
entity have been obtained which are required in connection with (i) the due execution and delivery by the Company of this Agreement and the other Transaction Documents and the performance of the Company’s obligations hereunder and
thereunder, (ii) the consummation of the Transactions by the Company and (iii) the exercise by the Purchasers of their rights and remedies under this Agreement and the other Transaction Documents. 

Section 5.05. Laws and Taxes. The Company and its Subsidiaries are in material compliance with all laws, regulations,
rulings, orders, injunctions, decrees, conditions or other requirements applicable to or imposed upon the Company and its Subsidiaries by any law or by any Governmental Body. The Company and its Subsidiaries have filed all required tax returns and
reports that are now required to be filed by them in connection with any federal, state and local tax, duty or charge levied, assessed or imposed upon the Company, its Subsidiaries or their 

  
 7 

 
respective assets, including unemployment, social security, and real estate taxes. The Company and its Subsidiaries have paid all taxes which are now due and payable, or, with respect to those
taxes which are being contested in good faith, the Company and its Subsidiaries have made an appropriate reserve on their respective financial statements for the same. No taxing authority has asserted or assessed any additional tax liabilities
against the Company and its Subsidiaries which are outstanding on this date, and the Company and its Subsidiaries have filed for any extension of time for the payment of any tax or the filing of any tax return or report. 

Section 5.06. The Securities. 
 (a) The shares of Preferred Stock purchased by the Purchasers hereunder will have the terms and provisions set forth in the Articles of Incorporation. 

(b) Upon delivery to the Purchasers at the Closing of the Share Certificates and the Warrant with respect to the Securities for issuance,
sale, transfer, assignment, conveyance and delivery to the Purchasers, and upon the Company’s receipt of the purchase price payable by the Purchasers in accordance with Article II, (i) the Purchasers will become the sole record, legal and
beneficial owner of (A) such shares of Preferred Stock, (B) the Warrant and (C) upon exercise of the Warrant, the Warrant Shares and the Purchaser will have good and marketable title to such shares of Preferred Stock, the Warrant and
the Warrant Shares and each shall pass to the Purchasers, free and clear of any Liens, options, charges and Transfer restrictions of any kind, except for those created by this Agreement and applicable securities laws, and (ii) such shares of
Preferred Stock and upon the exercise of the Warrant, Common Stock will be duly authorized, validly issued, fully paid and nonassessable. 
 Section 5.07. Capitalization. 
 (a) Authorized, Issued and
Outstanding Shares. As of the Closing Date, immediately following the issuance and sale of the Securities pursuant to this Agreement, the authorized Equity Securities of the Company consists of (i) 49,000,000 shares of Common Stock, of
which 9,586,786 shares are issued and outstanding, and (ii) 1,000,000 shares of Preferred Stock, of which 25,000 shares are issued and outstanding. All of the issued and outstanding shares of Common Stock and Preferred Stock have been duly
authorized, validly issued and are fully paid and nonassessable. As of the Closing Date, except as set forth above, the Company will not have any Equity Securities issued and outstanding. The Company has reserved a sufficient number of Warrant
Shares to be issued upon the exercise of the Warrant in the event the Warrant is exercised in its entirety. 
 (b) Rights,
Options, Warrants, Etc. (i) There are no statutory or contractual preemptive or similar rights on the part of any holder of any securities of the Company with respect to the issuance and sale of the Securities, and (ii) other than
(a) 3,354,439 shares of common stock reserved for issuance, at the Company’s option, upon redemption of units in the Company’s operating partnership, (b) any option grants and restricted stock grants issued pursuant to the
Company’s 2004 Long-Term Incentive Plan, (c) any securities issued in the form of compensation (i) to an employee pursuant to his or her employment agreement or (ii) to an officer, director or consultant of the Company as
approved by its board of directors, and (d) the Securities, no securities, options, warrants, conversion or other rights or contracts of any kind are 

  
 8 

 
outstanding that obligate the Company or any Subsidiary, contingently or otherwise, to issue, sell, purchase or redeem any of their Equity Securities or any securities exercisable or exchangeable
for or convertible into any such Equity Securities and no authorization therefor has been given. 
 (c) No Violation. The
Company has not violated the Securities Act or any applicable federal, state or foreign securities or other laws in connection with the offer, sale or issuance of any of its Equity Securities, and none of the offer, sale or issuance of the
Securities hereunder requires registration under the Securities Act or any applicable state securities laws. Other than the registration rights granted pursuant to the agreement of limited partnership of the Company’s operating partnership, the
Company’s 2004 Long-Term Incentive Plan and any securities issued in the form of compensation (i) to an employee pursuant to his or her employment agreement or (ii) to an officer or director of the Company as approved by its board of
directors, there are no contracts or agreements between the Company’s shareholders with respect to the voting or Transfer of any of the Company’s Equity Securities or with respect to any other aspect of the Company’s affairs.

 Section 5.08. Financial Information. 
 (a) Balance Sheets. The audited balance sheet of the Company and its Subsidiaries dated as of December 31, 2010 (the “Balance Sheet”), copies of which were provided to the
Purchasers, were prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis in accordance with the past practice of the Company and fairly present the financial position of the
Company and its Subsidiaries as of their respective dates. 
 (b) Other Financial Statements. The audited statements of
operations, statements of changes in shareholder’s equity and statements of cash flows of the Company and its Subsidiaries for the 12-month period ended on December 31, 2010, copies of which were provided to the Purchasers, were prepared
in accordance with GAAP applied on a consistent basis in accordance with the past practice of the Company (except with respect to the unaudited statements, for the absence of footnotes and subject to normal recurring year end adjustments which will
not be material in amount) and fairly present the results of operations, changes in shareholder’s equity and cash flows of the Company and its Subsidiaries for such periods. 

Section 5.09. Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any material obligation or
liability, whether accrued, absolute, contingent or otherwise, except (a) to the extent fully and specifically reflected or reserved for on the Balance Sheet, or (b) obligations or liabilities incurred since the date of the Balance Sheet
in the normal and ordinary course of business of the Company and its Subsidiaries, and not in violation of this Agreement, which obligations (in the case of clause (b)) are similar in nature and amount to the liabilities which arose during the
comparable period of time in the immediately preceding fiscal period. 
 Section 5.10. Title. Each of the Company
and its Subsidiaries has good and marketable title to their respective assets reflected on the most recent consolidated balance sheet submitted to the Purchasers, free and clear from all Liens, except for Permitted Liens. 

  
 9 

 Section 5.11. Solvency. The Company and each Subsidiary is Solvent. 

Section 5.12. Absence of Material Adverse Effect. There has been no act, condition or event which has had or is reasonably
likely to have a Material Adverse Effect since March 31, 2011. 
 Section 5.13. Litigation. There are no legal
or other proceedings or investigations pending or threatened against the Company or any of its Subsidiaries before any court, tribunal or regulatory authority which would, if adversely determined, alone or together, have a Material Adverse Effect.

 Section 5.14. [Reserved]. 
 Section 5.15. Absence of Defaults. The Company and its Subsidiaries are not in default under (a) its articles of incorporation or by-laws or (b) any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment to which it is a party (by successor in interest or otherwise) or by which it is bound, or any other agreement or other instrument by which any of their properties or assets owned by them or used in
the conduct of their business is affected, which individually or in the aggregate would have a Material Adverse Effect. 

Section 5.16. Exchange Act Filings. The Company has filed or furnished in a timely manner all reports and other information
required to be filed (“Filings”) with the Securities and Exchange Commission (the “Commission”) pursuant to the Exchange Act. On their respective dates of filing or furnishing, the Filings complied in all material
respects with the requirements of the Exchange Act, and the published rules and regulations of the Commission promulgated thereunder. On their respective dates of filing or furnishing, the Filings did not include any untrue statement of a material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and all financial statements contained in the Filings fairly present the financial position of the
Company and its subsidiaries on and as of the dates referenced in such statements and the results of operations for the periods covered thereby in accordance with GAAP consistently applied throughout the periods involved and prior periods, except as
otherwise indicated in the notes to such financial statements. None of the representations or warranties of the Company contained in the Transaction Documents are untrue or incorrect when made and on the Closing Date. 

Section 5.17. Securities Laws. The Company has not offered to sell any portion of the Securities or any interest therein in a
manner which violates any applicable securities law or would require the issuance and sale hereunder to be registered under the Securities Act. 
 Section 5.18. Listing. The Company has made an application and has received all approvals necessary from the NASDAQ Stock Market, LLC for listing the shares of Common Stock to be issued upon
exercise of the Warrants on such exchange. 

  
 10 

 ARTICLE VI 
 Representations and Warranties of the Purchasers 
 Each Purchaser hereby
represents and warrants to the Company as of the date of this Agreement and as of the Closing Date as follows: 

Section 6.01. Existence and Power. Such Purchaser (a) is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and (b) has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to consummate the Transactions.

 Section 6.02. Authorization; Binding Effect. The execution and delivery by such Purchaser of this Agreement and
the other Transaction Documents to which it is a party, the performance by such Purchaser of its obligations under this Agreement and the other Transaction Documents to which it is a party and the consummation of the Transactions by such Purchaser
have been duly authorized by all necessary action on the part of such Purchaser. This Agreement and each of the other Transaction Documents to which it is a party are the legal, valid and binding obligations of such Purchaser enforceable against
such Purchaser in accordance with its terms, except that such enforcement (a) may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and (b) is subject to the availability of
equitable remedies, as determined in the discretion of the court before which such a proceeding may be brought. 

Section 6.03. Contravention. Neither the execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party by such Purchaser nor the consummation of the Transactions by such Purchaser will (with or without notice or lapse of time or both) (a) violate or breach any provision of such Purchaser’s organizational or
governing documents, (b) violate or breach any statute, law, rule, regulation or order by which such Purchaser or any of its assets or properties may be bound or affected or (c) breach or result in a default under, result in the
acceleration of, or give rise to a right of termination, cancellation, modification or acceleration or require any notice under, any material contract or agreement to which such Purchaser is a party or by which such Purchaser or any of its assets or
properties may be bound or affected. 
 Section 6.04. Consents. All approvals, consents, authorizations or orders
of, notices to or registrations or filings with, or any other action by, any Governmental Body or other person or entity have been obtained which are required in connection with (i) the due execution and delivery by such Purchaser of this
Agreement and the other Transaction Documents to which it is a party and the performance of such Purchaser’s obligations hereunder and thereunder, (ii) the consummation of the Transactions by such Purchaser and (iii) the exercise by
the Company of its rights and remedies under this Agreement and the other Transaction Documents to which it is a party. 

Section 6.05. Litigation. There are no legal or other proceedings or investigations pending or threatened against such
Purchaser before any court, tribunal or regulatory authority which would, if adversely determined, alone or together, have a Material Adverse Effect. 

  
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 Section 6.06. Financial Capacity. Such Purchaser has, or will have on the
Closing Date, immediately available cash in an amount sufficient to pay the purchase price payable by the Purchaser. 

Section 6.07. Investment Representations. 
 (a) Purchase for Own Account. The portion of the Securities to be acquired by such Purchaser hereunder will be acquired for such Purchaser’s own account, not as a nominee or agent, and not
with a view to the distribution of any part thereof in violation of applicable securities laws. 
 (b) No Registration.
Such Purchaser understands and acknowledges that the Securities are not being registered under the Securities Act, or any state securities laws. Such Purchaser understands that the Securities cannot be sold unless they are subsequently registered
under the Securities Act and applicable state securities laws or an exemption from such registration is available. 
 (c)
Accredited Investor; Sophisticated Purchaser. Such Purchaser is an “accredited investor” as defined in Rule 501(a) of the Securities Act. Such Purchaser, alone or in connection with its financial, legal and other advisers, is
sufficiently experienced in financial and business matters to be capable of analyzing and evaluating the merits and risks of an investment in the Securities, and to make an informed decision relating thereto, and otherwise to protect its own
interests with respect to the investment in the Securities. 
 (d) Pre-existing Relationship. Such Purchaser acknowledges
that its relationship with the Company leading to the consummation of the Transactions contemplated by this Agreement and the other Transaction Documents was based on a pre-existing relationship commencing in February 2010 and was not a result of
any general solicitation by the Company, including, but not limited to, the filing of the Company’s Registration Statement on Form S-11 with the Commission on June 15, 2010. 

ARTICLE VII 

Termination 
 Section 7.01. Termination. This Agreement and the obligations of the parties under this Agreement may be terminated at any time prior to the Closing by: 

(a) the mutual consent of the Company and the Purchaser; 
 (b) the Purchasers, if the conditions set forth in Section 4.01 shall not have been satisfied by April 30, 2011 (the “Termination Date”), unless the failure of such condition is
the result of a material breach of this Agreement or any other Transaction Document by the Purchasers; or 

  
 12 

 (c) the Company, if the conditions set forth in Section 4.02 shall not have been
satisfied by the Termination Date, unless the failure of such condition is the result of a material breach of this Agreement or any other Transaction Document by the Company. 
 Any such termination shall be in writing delivered to the other parties hereto in accordance with the provisions of Section 9.01. 

Section 7.02. Expenses. Except as set forth in Section 4.01(i), each of the parties hereto shall be responsible for, and
shall pay, its own legal, accounting and other fees and expenses arising from the due diligence review, and the negotiation, preparation and execution of this Agreement and the other Transaction Documents. 

Section 7.03. Effect of Termination. In the event of a termination of this Agreement under Section 7.01, this Agreement
will become void and of no further force or effect, except for the provisions of (a) Section 7.02 relating to the payment of expenses and (b) this Section 7.03. Nothing in Section 7.01 or this Section 7.03 will be
deemed to release any party from any liability for breach by any such party of the terms and provisions of this Agreement and the other Transaction Documents or to impair the right of any party to compel specific performance by the other parties of
their obligations under this Agreement or the other Transaction Documents. 
 ARTICLE VIII 

Indemnification 
 Section 8.01. Indemnification. 
 (a) Indemnification by the
Company. The Company will indemnify and defend the Purchasers and their Affiliates and each of their respective shareholders, partners, members, managers, directors, officers, employees, agents and Affiliates (collectively, the
“Purchaser Indemnified Persons”) against, and hold each Purchaser Indemnified Person harmless from, any and all liabilities, obligations, losses, damages, costs, expenses, claims, penalties, actions, judgments, diminution in value,
disbursements of any kind or nature whatsoever, interest, fines, settlements, costs of preparation and investigation, costs incurred in enforcing this indemnity and reasonable attorneys’ fees and expenses (collectively,
“Losses”), that the Purchaser Indemnified Persons may incur, suffer, sustain or become subject to, arising out of, relating to or due to: 
 (i) any inaccuracy or breach of any of the representations and warranties of the Company contained in this Agreement, any other Transaction Document or in any certificate delivered thereunder; or

 (ii) the nonfulfillment or breach of any covenant, undertaking, agreement or other obligation of the Company
contained in this Agreement, any other Transaction Document or in any certificate delivered thereunder. 

  
 13 

 (b) Indemnification by the Purchasers. The Purchasers will indemnify and defend the
Company and its Affiliates and each of their respective shareholders, partners, members, managers, directors, officers, employees, agents and Affiliates (collectively, the “Company Indemnified Persons”) against and hold each
Company Indemnified Person harmless from any and all Losses that the Company Indemnified Persons may incur, suffer, sustain or become subject to, arising out of, relating to or due to: 

(i) any inaccuracy or breach of any of the representations and warranties of the Purchasers contained in this Agreement,
any other Transaction Document or in any certificate delivered thereunder; or 
 (ii) the nonfulfillment or
breach of any covenant, undertaking, agreement or other obligation of the Purchasers contained in this Agreement, any other Transaction Document or in any certificate delivered thereunder. 

Section 8.02. Indemnification Notice. If there occurs an event which a party hereto asserts is an indemnifiable event
pursuant to Section 8.01 hereof, the party seeking indemnification (the “Indemnitee”) will promptly notify the party obligated to provide indemnification hereunder (the “Indemnitor”) in writing (such written
notice being an “Indemnification Notice”). Such Indemnification Notice shall specify (a) the nature of the claim or Loss, (b) the facts, circumstances, issues and events with respect to such claim or Loss in reasonable
detail and (c) the amount of such claim or Loss, if determined. Delay or failure to deliver an Indemnification Notice to the Indemnitor will only relieve the Indemnitor of its indemnification obligations hereunder to the extent, if at all, that
the Indemnitor is actually prejudiced by reason of such delay or failure. 
 Section 8.03. Contribution. If the
indemnification provided for in this Article VIII is prohibited under applicable law to an Indemnitee (other than by reason of the exceptions, limitations and conditions set forth in this Article), then the Indemnitor, in lieu of indemnifying the
Indemnitee, will contribute to the amount paid or payable by the Indemnitee as a result of the Losses in such proportion as is appropriate to reflect the relative fault of the Indemnitor, on the one hand, and of the Indemnitee, on the other, in
connection with the events or circumstances which resulted in the Losses as well as any other relevant equitable considerations. The relative fault of the Indemnitor, on the one hand, and of the Indemnitee, on the other, will be determined by
reference to, among other things, such Persons’ relative intent, knowledge, access to information and opportunity to correct or prevent the events or circumstances resulting in the Losses. 

ARTICLE IX 

Miscellaneous 
 Section 9.01. Notices. All notices, requests, demands and other communications to any party or given under this Agreement or any other Transaction Document will be in writing and delivered
personally, by overnight delivery or courier, by registered mail or by telecopier (with confirmation received) to the parties at the address or telecopy number specified for such parties on the signature pages hereto (or at such other address or
telecopy number as may be specified by a party in writing given at least five business days prior thereto). All notices, requests, demands and other communications will be deemed delivered when actually received. 

  
 14 

 Section 9.02. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, and by different parties hereto in separate counterparts, each of which when executed will be deemed an original, but all of which taken together will constitute one and the same instrument. 

Section 9.03. Amendment of Agreement. This Agreement may not be amended, modified or waived except by an instrument in
writing signed on behalf of each of the parties hereto. 
 Section 9.04. Successors and Assigns; Assignability. This
Agreement will be binding upon and inures to the benefit of and is enforceable by the respective successors and permitted assigns of the parties hereto. This Agreement may not be assigned by any party hereto without the prior written consent of all
other parties hereto. Any assignment or attempted assignment in contravention of this Section will be void ab initio and will not relieve the assigning party of any obligation under this Agreement. 

Section 9.05. Governing Law. This Agreement will be governed by, and construed in accordance with, the laws of the state of
New York applicable to contracts executed in and to be performed entirely within that state, without reference to conflicts of laws provisions. 
 Section 9.06. Integration. This Agreement and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior negotiations, agreements and understandings, whether written or oral, of the parties hereto. 

Section 9.07. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 
 Section 9.08. No Third-Party Rights. This Agreement is not intended, and will not be construed, to create any rights in any parties other than the Company and the Purchasers, and no Person may
assert any rights as third-party beneficiary hereunder, except as provided in Article VIII. 
 Section 9.09.
Enforcement. The Company hereby acknowledges and agrees that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be accurately compensated for in damages by an action at law, and that the breach or
threatened breach of the provisions of this Agreement by the Company would cause the Purchasers irreparable harm and that money damages would not be an adequate remedy for any breach or threatened breach of the provisions of this Agreement by the
Company. Therefore, the Company hereby agrees that the Purchasers shall be entitled to equitable relief, including, without 

  
 15 

 
limitation, an injunction or injunctions (without the requirement of posting a bond, other security or any similar requirement or proving any actual damages), to prevent breaches or threatened
breaches of this Agreement by the Company and to specifically enforce the terms and provisions of this Agreement, this being in addition to any other remedy to which the Purchasers have or may be entitled to have at law or in equity. 

Section 9.10. Submission to Jurisdiction. Each of the Company and the Purchasers hereby (a) agrees that any action, suit
or proceeding with respect to this Agreement and any other Transaction Document may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, (b) accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of such courts, (c) irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum
non conveniens, which it may now or hereafter have to the bringing of any action, suit or proceeding in those jurisdictions, and (d) irrevocably consents to the service of process of any of the courts referred to above in any
action, suit or proceeding by the mailing of copies of the process to the parties hereto as provided in Section 9.01. 

Section 9.11. Waiver of Jury Trial. EACH OF THE COMPANY AND THE PURCHASERS HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR TO BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, AND AGREES THAT ANY ACTION, SUIT OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 

Section 9.12. No Waiver; Remedies. No failure or delay by any party in exercising any right, power or privilege under this
Agreement will operate as a waiver of the right, power or privilege. A single or partial exercise of any right, power or privilege will not preclude any other or further exercise of the right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies provided in this Agreement and the other Transaction Documents will be cumulative and not exclusive of any rights or remedies provided by law. 

  
 16 

 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first written above. 
  

							
	COMPANY:	 		 		 	
	Address for Notices:	 		 	MHI HOSPITALITY CORPORATION
	MHI Hospitality Corporation	 		 		 	
	410 West Francis Street	 		 		 	
	Williamsburg, VA 23185	 		 	By:	 	 /s/ David R. Folsom

	Attention: Andrew M. Sims,	 		 	Name: David Folsom
	Chief Executive Officer	 		 	Title: President and COO
	Facsimile No.: (757) 564-8801	 		 		 	
				
	with a copy to:	 		 		 	
				
	Baker & McKenzie LLP	 		 		 	
	815 Connecticut Avenue, NW	 		 		 	
	Washington, DC 20006	 		 		 	
	Attention: Thomas J. Egan, Jr.	 		 		 	
	Facsimile No.: (202) 416-6955	 		 		 	

 SIGNATURE PAGE TO
THE SECURITIES PURCHASE AGREEMENT 

							
			
	PURCHASERS:	 		 	ESSEX ILLIQUID, LLC
	Address for Notices:	 		 		 	
		 		 	By:	 	Essex Equity Capital Management, LLC,
	Essex Equity Capital Management, LLC	 		 		 	the Investment Manager
	375 Hudson Street, 12th Floor	 		 		 	
	New York, New York 10014	 		 		 	
	Attention: Ryan Taylor	 		 	By:	 	 /s/ Ryan P. Taylor

	Facsimile No.: 866-642-0014	 		 		 	Name: Ryan P. Taylor
		 		 		 	Title:   Authorized Signatory
	With a copy to	 		 		 	
				
	Richards Kibbe & Orbe LLP	 		 		 	
	One World Financial Center	 		 		 	
	New York, New York 10281	 		 		 	
	Attention: Larry Halperin	 		 		 	
	Facsimile No.: 212-530-1801	 		 		 	
			
	Address for Notices:	 		 	RICHMOND HILL CAPITAL PARTNERS, LP
	Richmond Hill Investment Company, LP	 		 		 	
	375 Hudson Street, 12th Floor	 		 	By:	 	Richmond Hill Investment Co., LP,
	New York, New York 10014	 		 		 	the Investment Manager
	Attention: Ryan Taylor	 		 		 	
	Facsimile No.: 866-642-0014	 		 	By:	 	 /s/ Ryan P. Taylor

		 		 		 	Name: Ryan P. Taylor
	with a copy to:	 		 		 	Title:   Authorized Signatory
		 		 		 	
	Richards Kibbe & Orbe LLP	 		 		 	
	 One World Financial Center
 New
York, New York 10281
	 		 		 	
	Attention: Larry Halperin	 		 		 	
	Facsimile No.: 212-530-1801	 		 		 	

 SIGNATURE PAGE TO THE SECURITIES
PURCHASE AGREEMENT 

 Schedule 2.01 

 

													
	 Purchaser Name
	  	Number of Shares of
Preferred 
Stock	 	  	Number of Shares of Common
Stock to be Purchased Pursuant
to the Warrant	 	  	Purchase Price	 
	 Essex Illiquid, LLC
	  	 	23,000	  	  	 	1,748,000	  	  	$	23,000,000	  
	 Richmond Hill Capital Partners, LP
	  	 	2,000	  	  	 	152,000	  	  	$	2,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]